OCREIN - Learn How to Wholesale homes in Less than 1 hour

Okay, we're gonna get started. Thank you all for being here. Appreciate it. We are recording this, so if you need to get a copy afterwards, just email me. We're here talking about wholesaling real estate in California, how to find, flip, and profit. Probably one of the most competitive markets in, um, the United States. And let me see here. Nope. Who am I? Grew up in Orange County, started real estate in 1975. I'm a broker, investor, mentor. I'm currently the regional broker for Pelago, founded H&M Real Estate, which I also still run. I've done over 300 flips since about 1975. Here's my contact information. That is my Office number there. Just you'll get an AI that answers it, and just ask for me, and it'll transfer it directly to me. That's my email. There's my website. My Instagram is there as well. Why California is different? Let me high prices and aggressive competition, heavy regulation and compliance environment. Micro market strategy, dominate one zip code. Success requires precision and systems. So I want to stop here just for a minute and basically tell you the only way that you're going to do anything in real estate and be successful is to actually get started. And this is no different. So pick an area, pick a large area. You know, you can, you can pick a county if you want. And I'll talk to you on how to do that and what tools to use towards the end of this presentation. My book on flipping mobile homes should have been available on the website for free for you to download. I would suggest starting there. Finding off-market deals, and that's really the best strategy, is off-market. There are properties that are on market, that are on the MLS as well. Driving for dollars— there is even a company out there that does driving for dollars through Google Maps, and they just look at distressed properties. And you can subscribe to them, and then they will send you the distressed stuff. Mobile homes are a little bit different in that there's— some of them are in communities that Google doesn't drive into, so it's a little bit more difficult. You have to actually get out, get in your car and drive for this stuff. Notice of default and probate leads. You're only going to find these on mobile homes if they're on land that is owned by the individual. You're not going to find NODs or probate leads in parks where there is a general owner of the entire park, and then he leases out the spaces. Those are a different strategy, and, and we'll talk about those, how to find those. Direct mail campaigns seem to work for these type of properties because you're direct mailing to— most of the time you're direct mailing to people that are 55 and older, because you'll find mobile homes clustered in 55-and-over communities. Cold calling and SMS follow-up. So literally pulling lists and cold calling people and asking them if they're interested in selling their mobile homes. Consistent lead nurturing is the name of the game. You can't just call somebody one day, not get an answer, and not follow up. One of my cold callers says you need to triple tap them. Basically call them 3 times. It's like one right after the other, and hopefully they think it's serious enough for them to answer the phone, and then get on the phone and just get into your pitch of what you're going to say. Building rapport with sellers, focusing on solving problems, not pitching. So these situations are, you know, very different and also the same as anything else that you might want to cold call for people that, uh, they just, they can't make their payment for some reason. They can't make their space rent. Um, they're living in a hoarder house situation. A relative may have passed away, husband, wife, they can't afford it anymore. So there's, there's different opportunities out there. Uh, following up creates opportunities. Many deals take months to close. So you have to build that trust, and you have to be consistent and professional with your cold calling, uh, your texting, your, um, reach out by mail campaigns. Whatever it is that you're trying to do, you have to be consistent and follow up. Um, just literally making 10, 20, 30, 40 calls is not going to get you a deal. You need to literally make Hundreds of calls. Contracts in compliance. Always use written agreements in real estate. There is nothing that says that a verbal agreement is good. It is not. In real estate, you have to have a written agreement to be enforceable. Use assignability clauses correctly. Inspection contingencies to protect the buyer. The buyer is you. So you may have to make sure that in your contracts you put down inspection contingencies. Like, I need to come out there, I need to look at it, I need to know what's going on. Do you want to tell me any disclosures? Did somebody pass away in the property? Were they cooking meth here before? All that stuff you need to find out. And that's what you need to do to protect yourself in a written agreement so that you can get out of it. If any of those issues come up without losing any money. Maintain complete disclosure documentation, because you may need that in the future when you go to sell it, or somebody may ask. Um, I, I have purchased houses at the courthouse steps. When you purchase houses at the courthouse steps, you know nothing about the property. So, You know, we're doing an open house on this property we bought at the courthouse steps, and neighbor comes in because they always come in, and they said, wow, you guys really did a good job on that bedroom. And I'm thinking, bedroom? Are you sure you don't like the kitchen and the bathrooms? Oh, no, no, that's the bedroom where the guy killed himself. Okay, we never knew that, that, you know, there was a suicide committed in that property. But make sure that you ask those type of questions and make sure that you can keep all those documents ready in case you do go to sell it. You have 3 years to disclose that. So make sure that you keep all that documentation. DRE compliance is critical, especially if you're an agent. Assignments versus double closings. What we like to do is more of the assignment. The assignment is basically, I talked to a seller. I convince them that I want to buy their mobile home, let's say for $150,000. Then I find some end user who wants to flip it or even live in it, and I sell it to them for $175,000. I literally assign them that contract for $175,000. I get the, the difference in between of what I have it under contract for, which is $150,000. So I'm making $25,000 on that assignment. No money comes into escrow from me. It is put in there by the end user. So I'm not subject to losing any money, even if the end user backs out. Okay, so that's, that's an assignment. That's normal. That's really what's normally done in transactions like this. Double close, buy and resale the same day. Now, what, what, what's, what goes on with that? And, and why is there such a thing as double closing. So let's talk about the same scenario. I buy this mobile home for $150,000, and then the next day I'm going to sell it for $250,000. I'm going to make $100,000 on selling this mobile home, but I don't want the end user to know what I'm making. So what I will do is I will close on the original contract for $150,000, and which means you have to put in $150,000 into the transaction. And then the next day The buyer that I'm selling it to puts in his $250,000. Okay, you can really even do it the same day. He puts in his $250,000, they pay me $100,000, and then that way the seller never knows what I sold it for and the buyer never knows what I purchased it for. So that's why when you are getting leads from companies that do wholesaling a lot and they want to do double closing, that's the reason, is because they're making a lot of money on the double closing. On assignment, normal assignment fees are, you know, between $10,000 and $20,000, around there. Not a big spread, but you do 5 of those a year, you're making $100,000. Choose strategy based on the spread size. Transactional funding can protect larger profits. So again, if you want to make $100,000, but you don't have $150,000 to put down to double close, there are some transactional funding companies or people that will lend you the money. And obviously they're going to take a little bit of that as well. So maybe I'll lend you $150,000, you pay me 10% of that. So I make $15,000 on the deal, but you're still making $85,000 on that deal. Okay, so there's a lot of creative ways to put these deals together. Uh, building a serious, uh, buyers list, uh, networking through REI groups, investor groups, uh, track buyers in a CRM, verify proof of funds. And I'll talk about that in a second. Let me get to the last one. Segment buyers by experience and closing abilities. So verify proof of funds is just simply get a bank statement showing that they have enough funds to close the transactions. And when you're wholesaling property, you're really wholesaling to people who have cash. You're not going to do a wholesale to a person who's going to go out and get a loan. The bank is not going to give anybody a loan again. Let's say I have it under contract for $150,000 and somebody wants to buy it for $250,000, but they need to get a loan. That's not going to work because the bank's going to say, well, wait a second, you bought it for $150,000 today, and then tomorrow you're selling it to my client for $250,000, and I'm making a loan on the $250,000. How does that work? I mean, where is the $100,000 of, um, you know, value that you put into this property. So when you're wholesaling, you're wholesaling to people who have cash, and that's why it makes it easier. So verify their proof of funds. Um, verifying is honestly very difficult to do because they can send you a bank statement that says they have $1 million. Uh, there's no way to prove that. You can't call the bank. The bank's not going to say, oh, Oh yeah, John Doe, the, you know, bank statement you just sent over, he does have $1 million in the bank. Banks don't do that. So just asking for the proof of funds and getting it is going to narrow down your buyers that they're actually serious. So once you find serious buyers, then you literally just go back to them, keep going back to them if they're serious about buying and selling. Avoiding legal landmines. Never market properties without control. Very important. There's wholesalers out there, they have a property under control, and then, you know, another wholesaler comes and says, oh, look, let me just add $5,000 or $10,000 onto this property and send it out to my people who are thinking about buying. That's not going to work without control of that property. You're never, you know, going to make an additional $5,000 or $10,000. $5,000 or $10,000. So you have to make sure that you're actually the one that has control of this property. Use proper legal disclaimers. We'll, we'll go over that in the documents. Operate through LLC structures. LLC structures protect you as an individual so that you're not doing something in your name that somebody's going to come after you in your name and sue you personally. Operate through LLCs. It's a lot easier to do that. You can— if something happens, you literally just close down the LLC. Okay, maintain records of every communication. Extremely important to maintain records of everything that you do, all the conversation that you have with your buyers and your sellers. Scaling through systems. Document workflows and SOPs, standard operating procedures. Features. Okay, use VAs, virtual assistants, and automation tools. We're going to go over some of that stuff. Virtual assistants— if you are not the type of person that likes to make calls or cold calls, you can hire virtual assistants. Make sure that they're reputable. Make sure that they're cold calling people. We use virtual assistants sometimes. We send them a list of 5,000 or 10,000 people to call. They literally go through the list all ask them to do is get a positive yes, I'm interested in selling. That's all I want virtual assistants to do. You can train them to do a lot more, but the ones that we train are just, you know, just get on the phone, uh, and they have systems that, uh, you literally just dial one number after the other, sometimes 3 numbers. First one to pick up, then they ask them, you know, hey, You know, I'm blah blah blah, I work with blah blah blah, and just calling to find out if you're interested in selling your blah blah blah. And if they say yes, that lead comes back to us, and then we follow up on that lead and find out how serious they are, the property address, uh, do after repair values, all that stuff. Track KPIs, which, which means, you know, what, what are your successes? What are you getting successes on? Are you getting successes on cold calling, texting? Are you getting successes on mailers that you send out through a website? What, what is your success? You need to keep track of all that stuff because once you find out what your successes are, you're going to do a lot more of that stuff. Build a reputable acquisition process. So that is just cold calling, Uh, sending back to somebody who's a closer, find out, you know, more, more information, put the deal under contract, then send it out to somebody else who wants to buy it, unless you're going to buy it and flip it. And then repeating that process over and over again. Uh, technology and automations. You should have a CRM system. We use GoHighLevel. Uh, it's really, um, a good program to use. It's, it's not that difficult. SMS, which is texting, you can do it through GoHighLevel. Cold calling, the same thing, you can go do the same thing through GoHighLevel. There's lots of systems out there, you just need to find one that fits within your budget and, um, you know, subscribe to that. Lead tracking dashboards, data-driven decision-making. I mean, you can literally call from, I have a $50,000 mobile home for sale in the middle of the desert, out to, you know, $2, $3, $4 million properties. If, if that's your, you know, what you want to do, what you want to call on, then that's fine. Then you just call on those, those type of leads. So, uh, make sure it's data-driven though. Uh, execution plan for new investors: choose one market and learn it deeply. We like the Riverside markets. Make sure if you're going to do mobile homes like we've been doing lately, that you find mobile homes in that type of market. If you're going to do single family, then that's fine. Then find a place that does single family. I would keep to the center of the values for like single families. And what I mean by that is In Riverside, you're going to probably look for properties that are anywhere between $500,000 and $800,000. In Orange County, you're going to look for properties between $800,000 and $1 million. So depending on where you're at, those are the type of properties you should be looking for. If you're, if you're looking for properties at $3, $4, $5, $6, $8 million, you may find them. But even if you find them and put them under contract, it's going to be very difficult to sell because there's not a lot of people running around with, you know, $10 million in their pocket. Uh, so I, I would start out towards the lower end and then, uh, increase, uh, what you're looking for from there. Uh, focus on, on follow-up discipline. Uh, you, you definitely need to follow up on everything that you do, uh, because if you're not following up, you're not going to get a deal. It, it Follows up. Literally, you know, if you talk to somebody, you tell them, you know, I'm going to follow up with you tomorrow. Make sure you follow up with them. If they tell you call me in a month, call them in two weeks. Don't leave it for a month because it's going to be gone by then. Follow up when you know they least expect it. Protect every deal with proper paperwork. So you need to make sure that you have the paperwork. that's ready, that they sign a contract and they know that you are serious about purchasing their home, but there are some contingencies involved, which means going out looking at the property. Um, you know, if you have a property under contract for $150,000 and you just can't sell it to anybody, um, ask them, you know, hey, I, you know, I know we have it under contract for $150,000, but Um, I can't find anybody for that price. Can we lower it to $125,000? I'll buy it from, from you for $125,000. If not, then I need to step back away from this deal and find a way to get out of that deal. Okay. Um, key lessons, uh, execution beats motivation. Follow-up wins deals. Systems outperform hustle. Compliance protects longevity. Relationships create repeat business. And just Keep going around this circle. Okay, and and the biggest thing is execution. If you do not, if you're sitting on this webinar and you you know you just decide you don't want to do anything, I under I understand that. But you have to do something if you're looking to do anything related to real estate. You have to start someplace. Wholesaling is not an expensive. Endeavor to get started with. Um, and I'll talk about that a little bit more, um, with the following slides. But you, you literally just have to do it. You have to get in there and do it. Um, so how to get started, um, wholesaling. You can go to my website, it's called Get Real Estate Trained, getrealestatetrained.com. Okay, I have another wholesaling course on there that I've recorded. But what's on there as well is all the contracts that I use on a daily basis and all the other companies that I'm associated with, like PropStream. PropStream is a good company to get your leads from, and it's about, I want to say, around $75 to $95 a month for PropStream. But you get all the good information from PropStream that you need. Who is in trouble. They've got divorce leads, they've got probate leads, they've got NODs, which is notice of default leads. They've got every lead that you can think of out there, and you sort through these leads, and then you go on to finding out their phone numbers, and, and you can start cold calling or texting. Um, if it's close by, you can go knock on their door, whatever it is. But anyway, get started by going to getrealestatetrained.com. Uh, take the wholesaling course. It has all the software that you need in there. Uh, and if, if you're like literally, literally just starting out and you want to get some free leads from us, Reach out to Alex at this number, 949-466-7344. Tell him that you were on this webinar and you'd like to get some free leads to follow up on. He'll send you some free leads that you can cold call on. They come from PropStream. They vary in range from mobile home leads to single-family residents. You just need to start calling. There's scripts in, in the training on what you're going to hear and, you know, negative stuff, positive stuff, whatever, what you're going to hear. But literally start calling. For those of you who are local here in Orange County, Alex and I do courses at the office on Thursdays after lunch. So if you're interested in coming in and listening to a live cold call, or if you want to come in and please start cold calling in front of us so that we can kind of coach you through what happened during that call and how you can improve yourself, please reach out to us, Alex or myself, on Thursdays. Let us know that you're coming in and come into the office and we'll, we'll go through cold calling people. Live in, in person in front of you. Okay, final thoughts. Wholesaling is a professional business, so build discipline and consistency. Track your numbers. Dominate one market before expanding. And operate ethically and professionally. And you should do that in any, in any and all walks of your life. Okay, so make sure that You operate professionally and ethically. Questions? Anybody have questions? You can unmute yourself and ask questions, please.

First of all, thank you so much, Joe. I appreciate this webinar. I was looking forward to it. Real quick, so for Uh, the transactional funding, um, do you have specific contacts we can, um, reach out to, or is this something we have to find?

I don't. It's something that you'll need to find. You can find them if you go to meetup groups.

Okay.

Uh, and you'll find— and, and the ones that you're usually going to find are people that have, you know, let's say $100,000 or $200,000 that may not be enough to get into The flipping game.

Okay.

They may be willing to do some transactional funding for you. Um, they usually charge around 10%, 11%, 12%, somewhere around there. Uh, it is a short period of time. Um, I do, I do transactional funding every once in a while, but only for people that I've been doing business with for a while. I don't do You know, like somebody I don't know. Okay. 5:28 PM. Any other questions?

Oh, no, no, that's fine. Oh, I'm sorry. The second question is, so for your— the site that says getrealestatetrained.com, is that a paid— do I got to pay to get that information?

No, it's free. Okay, perfect.

Thank you.

Yes. Any other questions before, before you go? I'm going to share my screen again. I should have kept sharing it here, but let me share my screen again real quick. Okay, let me get out of here.

Great.

Move this down here someplace. This is a property that Stephanie, who's on the call with us, She's doing what's called a novation. So the novation is that her client was trying to sell this mobile home for $250,000. I couldn't sell it because it was in really, really poor condition. And so she put it under what's called a novation contract. And then Stephanie went in and started rehabbing this property. So this, this is the— Final product. Um, at the end of the day, so she's got this on the market for $364,000. The innovation is if she sells it for $364,000, she's going to pay the seller $250,000, and then Stephanie's going to make the difference. So Stephanie could potentially make $100,000 on the sale of this property. Obviously, it needed to be rehabbed. Everything that you see inside, everything was painted. The kitchen was pretty much the same. The furniture she purchased at a consignment. We wanted to stage it and ended up purchasing the furniture at a consignment store because we thought, you know, it'd probably be easier if we do it that way. And plus, you know, we could probably sell it at the end of the day. So this is, this is, you know, the flooring was the same. It was there. The painting was done brand new. The kid— the bathrooms. This is the master. So she painted all the cabinets, and we resurfaced the top countertop areas, and also the shower was resurfaced as well. It used to be a pink shower. So can you imagine that pink shower? This is the other bathroom again, painted the cabinets, resurfaced the top. Trying to keep it under budget so that, you know, she makes a good amount. I think I want to say around $30,000 is what we spent for this rehab. We didn't replace the doors. The doors are the same. The handles were replaced. This again, this was resurfaced to make it look brand new. The appliances were there. They came with the property. This is an outside space. And then this is the front. Any questions on this property? So, um, as you're calling on these deals, there's more than one way to skin a cat, so to speak. Um, and then those of you who are agents on here, if, you know, for example, this was $250,000 and it didn't sell at the end of the day, um, if, if you had offered, let's say, $200,000 for this, And you even— you couldn't even sell it for $250,000. You can put your real estate hat on and say, you know, let's, let's rehab this place, or, you know, let's go to Plan B, and I'll just list it for you. And the difference between listing and wholesaling a property— on a listing, you're actually making a commission. On wholesaling, you're hoping to make a commission or a finder's fee. From the price that you put it under contract for to the price that you sell it to somebody at the end of the day. That's the difference. Okay. Any questions on this property?

Yes. Hi, this is net listing. That means you say, okay, you sell to the Seller $250,000, and then you don't disclose the $100,000 Stephanie own and called net listing.

Now, this is— I know what you're talking about. Um, that would be a straight contract with the seller. Um, what Stephanie did is what's called a novation because she actually went in and did some work. She spent some money on this place. So we have to have a contract in place to say, here, I'm going to spend $30,000 on this place, but I'm going to raise the price. And the seller knows that. And the reason that I'm raising the price is because now I can get a little bit more than what you were asking in the condition that it was in. If we go the route that you're suggesting, um, then Stephanie would have bought it for $250,000, but there's no way that she could have sold it for $350,000, $364,000 because she wouldn't have rehabbed it. You know, you could— we couldn't sell it for $250,000. What makes you think that she could have sold it for $350,000?

Right, right.

She had to do the novation contract so that she could go in and spend some of her own money to make some money at the end of the day. That's the difference.

Yes, thank you.

Anybody else? Okay. Okay, well, there's no other questions. Thank you for showing up. I appreciate it. I do have a live meeting on Monday. So for those of you who are local here in Orange County, Look it up on Meetup. It's Monday. So let me know if you're interested in coming out. And thank you again. Thank you for coming. If you want a copy of this, please just email me, let me know, and I'll send you a copy. Thank you.

Thank you. And see you on Monday.