Pre-Foreclosure Secrets To Success With Christian Hernandez

Hey, what's up, you guys? Welcome back to the podcast, The New and Experienced Investor Podcast. I'm one of your hosts, Alex Barnett. I'm the new guy.

And I'm Joe Homs. That makes me the old guy. Oh, I'm sorry, the experienced guy.

That's right. Joe has that joke every single time and it never gets old. Uh, we're super excited for the podcast today. We have a guest in studio, Mr. Christian Hernandez, Mr. Southern California, Mr. Texas, Mr. Nationwide, Mr. Pre-Foreclosure, Mr. Creative Finance. Did I get all of them right?

Yeah. Yeah. Pretty good.

Awesome. Yeah. I met Christian through the Sub2 mentorship and just seeing where he came from to where he is now has just been a super inspiration. And I know he's super busy, so I appreciate him coming in to drop some knowledge to all you guys. So welcome, man. How have you been?

Man, I've been pretty good. Pretty busy. The foreclosure deals, they're really stressful. Really a lot to deal with, but I'm happy. I got a good, decent lead flow size, so I'm happy.

Awesome. Cool. Well, we'll get into that. We'll hear all the ins and outs of pre-foreclosure. And it's always, you're stepping into a lot of stuff. So hopefully we'll get some good nuggets going. Why don't you go ahead and introduce yourself to everybody and kind of give a background what you did before real estate and then What got you into it?

Yeah, my name is Christian Hernandez. Before real estate, I was in the US Army for 4 years. I was a behavioral health specialist. So basically people came in when they had suicidal thoughts, depression, that sort of stuff. And I was kind of like the first person that they talked to. So that's what I did when I was in the service. And then I got out and I started working in the IT field. I got a lot of IT certifications, and I was just in the background fixing computers and stuff like that. And honestly, the thing that really got me into real estate was just like all the idle time that I had during the IT business, right? A lot of time it was driving and just stuck in traffic and not making money. And I hated it. I hated it. I hated just driving from one location to the next and just like an hour and a half in traffic. And this hour and a half, I'm just like wasting my life away because I'm not making any money and I'm not doing anything. productive. So the idea really began right there where I was like, okay, I need to find something where I can just make money while I'm stuck in traffic, you know, that it doesn't require me to necessarily be all up in it. And that's kind of how I started looking for alternatives, and that's how I found real estate.

Awesome. Yeah, it's kind of going from that hourly mentality to, you know, how can I make money in my sleep? Or in traffic, I guess.

That's very good.

Okay, nice. So did you jump like directly into sub-2, or what was kind of your first—

My first introduction, my first thought was, at first I wanted to do a fix and flip, and I was like, okay, I want to do a fix and flip. And, and, you know, my uncles, they all work construction and stuff like that. So I was like, okay, if I find a deal and I can gather some of the money, I could get my uncles to help me, you know, do some— raise some of the money and we could do a flip. And then I started like really looking into it, like, okay, how do I even find a deal? How do I know it's a deal? How do I negotiate a deal? So I dove into that, and the next thing you know, I'm like, okay, well, I'm just gonna do wholesaling, you know? Like, I can't really find a good flip. I feel like it was really hard for me to find a good flip where I was gonna make money unless I was like the one sourcing it, you know? So that's how basically I started wholesaling and stuff like that. I started wanting to flip, and then I realized that it wasn't that easy. So I was like, okay, let me let me go ahead and start looking for the deals. And then I was I was wholesaling, and and as I was wholesaling, I was trying to be a part of like a lot of like local investment groups, right? So I would go to I'd go to the any meetup that they had on on. on meetup.com or anywhere, Facebook, anything. I'd go, I'd try to introduce myself and stuff like that. And there was one guy that actually had a creative finance class. Like, he told everybody about his previous deals and stuff like that, and he was kind of just generating leads and, you know, trying to get wholesalers to bring him leads. So I understand that now, but that's what got me to thinking, like, okay, there's this wholesaling, there's this flipping, and then there's this, you know?

Right.

Which got me into joining TUB2.

Awesome.

Yeah.

And I think that's a lot of people's maybe their path, because I kind of did the same thing where you're like, okay, I need to buy real estate. How do I do this? I need money. Okay, maybe I'll just flip properties. And then that's kind of how I met Joe. And then Joe always is like, start wholesaling. I mean, just get your feet wet. What's the reason you tell people to start wholesaling?

It's easier. It's easier to begin with. It teaches you how to source the deals, which is probably the most important thing when you're flipping properties is where are you going to get your, your deal flow? You know, over the years, we've been on the MLS, we've been at the courthouse steps. Right now we're working with wholesalers. You're wholesaling deals for you, for me, for other people. So it's just, it's just really, it's just a beginning point. And it seems to be the— I don't want to say easy, but the easiest beginning point. And then go from there. And then, you know, just keep learning your craft until you get to, you know, your ability to flip a property. Right.

Yeah, exactly. And then that's a whole nother set of skills in itself. So have you gotten into the flipping part yet, or?

I've done some. I'm picking and choosing.

Okay, nice.

I'm not trying to do anything that's like a major rehab or anything like that, because like he said, really, I personally, I believe wholesaling is way better than flipping, right? I've gotten into a few flips and then, you know, it's way more stressful for sure, right? Like, and your money's on the line. I'm going to get my money back.

Yeah.

The contractors, are they going to do the right thing? For sure. A lot of more babysitting. So personally, And I've had really good assignments where I'm making $40,000, $45,000. So when I see that, I'm like, okay, do I want this headache for 3 months and deal with all this? Because that really adds up. Or do I just assign the contract to this guy and then I move on and I find another contract? There you go. But if it's a really good deal or a really easy deal, sure, I'll do it. But I kind of prefer wholesaling overall.

Sure. Yeah. And we talked to Sam the other day at the meetup and he was saying his mentality is they go wholesaling first and then it's like if they can make significantly a lot more, then they'll do the flip. But you're totally right because you can get halfway through the flip and get stuck with something real weird that you didn't know about in the beginning.

Yeah.

So might as well just keep it moving. Now, you became known as the pre-foreclosure guy in SoCal Sub-2. How did you stumble upon pre-foreclosures, or how did you get into that space specifically?

Yeah, you know, I used to do something called list stacking, right? So basically I'd got— I'd pull all the lists, bankruptcies, you know, code violations, every single list, and I'd try and find like which properties were multiple lists, and I'd put my emphasis on those properties and stuff like that, right? So I'm spending all this energy, all this time trying to find which is the best Combination and stuff like that, and then eventually really after like a few months I realized like okay out of this you know six seven deals four of them were foreclosures. When then why am I spending all this time and all this energy on all these other lists? Like if all this is what's bringing me you know results, let me just like double down and instead of buying all these other lists, I'll just call the foreclosures more. I'll just text the foreclosures more. I'll try and touch them more times. And that's kind of how I shifted, right? Just because I noticed that that's where my results were coming from.

That's great. And did you know how to deal with the foreclosure process?

No.

OK.

No.

So how do you get around not knowing everything? Because I feel like a lot of people when they're starting out, they're like, I need to know everything about everything before I can even take action.

Oh, I think it's the opposite. I think you just need to get in front of somebody that's willing to work with you and like willing to listen. And then that's the first step. If you have that right, you could find— I don't know, I think I could go on my phone and find like 50 other people that know what to do and know how to do it and know how to stop it and do that sort of thing, right? So instead of me taking all that whole stress and trying to figure out from day one, I call Alex, I call somebody like myself, and I say, hey, Look, man, I got this lead. They're wanting this. I don't know what to do. What should I do? And just have somebody just take it from wherever you're stuck, you know, and to the finish line. And you're going to learn a lot along the way. You're going to learn of what to do. And, you know, in certain sense, in that scenario at least, right? What not to do. Like, you're going to learn a lot more and you might actually get paid versus you trying to figure out yourself. And, you know, maybe somebody gets foreclosed on.

Right.

Yeah. Okay. I mean, what's different now between the foreclosure process now and then, like back in 2008? Because I don't think we were doing anything back then. I wasn't.

No. 10 times more. Okay. The process has always been the same. It's just exploded back then. And I always tell people that are starting to wholesale, Do pre-foreclosures. I call it the low-hanging fruit because it's the easiest one that you can identify that, you know, somebody is having difficulty with. You know, they're having a problem that needs to be resolved. And it's on you to figure out, okay, how am I going to resolve this for them? And there's different ways. And I'm sure you use, you know, all these different ways and suggestions, you know, subject to, Just buying it out right before the foreclosure, just different ways to do it. So yeah, it's really much, pretty much all the same.

It was the tsunami that they've been talking about for the last 4 years we were supposed to have.

Oh yeah. No, that's not coming.

Where's the tsunami, Christian?

Yeah. And I'll tell you, as somebody that pulls data every month, I haven't seen a huge inflection that I see, oh, Yeah, look, there's a big difference. I haven't seen—

You're calling everyone on YouTube a liar? Uh, I don't know.

That's all about the gurus, at least.

That's all the clickbait is like, yeah, there's a tsunami of foreclosures coming.

No.

Yeah, but I, I don't see that personally.

Yeah, I know. Well, I think that what happened was people got equity, I guess, and then if they couldn't make the payments, you know, it's all—

There was a, there was a point Maybe like, uh, 2 years ago, but it was just because COVID had them held up and they weren't happening, right? And then they said, okay, now foreclosures could happen again. And then sure, there was a difference, but other than that, I haven't, I haven't noticed a spike.

Okay. Now, do you diff— um, do you put more attention on the trustee sale or people going to auction, or is it kind of just notice of default and auction, you lump them together?

Me, I don't have that big of a team or that much bandwidth. So I'm just going to the trustee sale. I'm just going to the people that are about to go to auction within the next 30 days.

Nice.

A quick question. So when, when you do a pre-foreclosure, does it— have you found, does it matter if you're the first call or the last call?

No, I think It's always kind of about timing. Yeah. You know, like, I don't know what could happen in your life that one day you decide, you know what, I'm done. I'm sick of it. Yeah. You know, and—

But do you think that happens more at the beginning of the process or the end of the process?

Personally, I see it more towards the end of the process.

Okay.

You know, maybe like the past, the last week.

Yeah. 'Cause they, you know, they get along the way, they get beat up by Alex and then they get beat up by somebody else and somebody else. And then you finally call 'em and then they're ready.

Yeah. Yeah.

Yeah.

And that's why, you know, for them, them sometimes, you know, no matter what happens, no matter how the conversation goes, you might want to follow up regardless, you know, a week before, you know, a couple of days before, because things change. You know, maybe the guy— they were counting on somebody to give them an offer and then they find out that person's not legit or that person is, you know, offering way less than they thought.

A lot.

And, you know, now they feel different. Now your offer actually makes sense for them.

Uh, let me ask you this too. Do you target a particular group of people, um, or just everybody?

I just do everybody.

Okay. Yeah, like, I'm assuming you speak Spanish?

I do.

Okay, so do you target like, you know, Santa Ana?

No, I tell you, initially, initially when I started, I did, I did use— I actually used to send direct mail in Spanish to Spanish speakers.

Okay.

Um, by now I just, I'm, it's fair game. I just target all of them. You know, I don't, I don't.

And when you, when you pick up the phone and you speak to somebody and obviously, well, at least I know, you know, that they speak Spanish. Do you start speaking Spanish right away or you just wait until the conversation gets to that point?

No, I'll start speaking Spanish right away if I feel like they have any, Any little bit of an accent.

Okay. You know, that makes them feel more comfortable.

Yeah. Yeah. That's what, that's what I'm going for. You know, I want them to be more comfortable and to be more open about talking about it and stuff like that. So if, you know, even just that being their native language, they might tell me some stuff that they won't tell me in English.

What's the longest period of time that you've talked to somebody? Because this guy, he can talk for hours and not get anything done. Is there like, You know, 10 minutes, 20 minutes into it, you, you're like saying like, um, yeah, I don't want to really hear about your golf game anymore.

You know, it's like, yeah, let me start cutting this guy off. I'll tell you, I'm like, uh, like the max I'll do is like 30 minutes. 30 minutes is like, I'm already—

You're listening?

Yeah, I know. I've kind of done like 40. I do 40 tops.

Yeah. Okay.

Especially if it's not going anywhere, you're like, this is nothing. Um, yeah, you know, but They haven't spoke to someone in like 10 years and they're finally— you called.

Yeah, they're like 80 and, oh my God, somebody's calling me. Yeah, they're talking to me. Oh my God, let me keep them on the phone as long as I can. You know, this is fun.

Yeah, especially with the, uh, the foreclosure stuff, you get dropped right into somebody's like life that's blowing up and, you know, they just want to unload on you.

And I'll tell you, a lot of times, especially when you're starting out, That's like the biggest thing I thought, you know, because you're like, even you on your— on this end is like, oh, somebody is talking to me. Yeah, they must be motivated, right? They're telling me everything.

Yeah, that's a great point and a great reason I tell people, you know, when you first start out wholesaling, you need to get into the trenches. You need to make those calls. You need to figure out how long I can be on the phone with somebody before it's just not making me any money at the end of the day. And then once you have that figured out, then you can start hiring virtual assistants or other people to help you, you know, with what you're doing. So then you can start concentrating on the warmer leads and stuff. Yeah. So that's good. You've gone— it looks like you've gone through that process. So where are, where are you today? Do you have any deals in the pipeline right now that you're talking to?

So I closed something today. I'm closing 2 next week. Um, wholesale deals. So I'm closing, um, total probably like $37,000 in assignments in the past— in the next few, few days.

Okay. And, and the deals that you're closing, who are you sourcing those deals to? Do you have like a, a go-to flipper that you give them to, or—

No, not necessarily. Um, I have Investor Lift, so—

Okay.

I use that a lot, you know, and I just blast it out to everybody on Investor Lift.

I've seen his buyers list. There's like 400,000 people on there.

Yeah, it's pretty good. Yeah, yeah, it's pretty good. And I just blast it out there and schedule an appointment and, you know, have them all go through at the same time and, yeah, knock it out.

Yeah, well, that's cool. So, um, you know, you brought up another point. Well, how is it that you get, you know, well, obviously we've gotten to the point where they agree to do a sale. So you were saying You just show it once. And how do you explain that to the seller?

So I have an inspection period and I set my inspection period and I tell the seller that too. I tell them, look, I don't want to— there's, there's, there's a few steps to this process and I don't want to overwhelm you and have somebody come today and come somebody next week, right, for an appraisal and come somebody else, you know, for, for one of my partners comes in a few days. So instead of doing that, What I'm going to do is I'm going to have everybody, everybody come in the same day.

Okay.

And we're going to knock it all out. And after that appointment, there's going to be no more appointments. Okay.

Okay. Did you go through a period of time where, you know, you weren't that sophisticated? You didn't know that's probably the best way to do it. Did you ever get into a situation where you couldn't sell the property? And now what do you do? I mean, I hear this all the time from new wholesalers. Joe, what, what if I can't sell the property? Well, if you do what I tell you, you can bring it back to me and I'll buy it from you. Okay. But if not, what do you do?

Yeah. So, I mean, what I like to do is I like to reach back out to the buyers that were interested and see if they have a number that they feel comfortable at. Right. If I'm going to have to negotiate it down. Right. I want to know that information. I also reach out to other wholesalers. Right. I'm not against, like, just because I found buyers or I found the highest price buyer doesn't mean I'm going to do it every time. So I might reach to somebody like Alex, I might reach out to somebody, you know, the local companies like New Western or whoever, and say, hey, look, this is what I got, what do you think? And see who else, you know, could be a part of it, or, you know, buy the deal from me or find a buyer for me. Um, I do, I do a lot of that. I do reach out to people, you know, from time to time and try and get extra help. Because I believe, you know, shoot, I'd rather make half of it than none of it.

Do you ever go back and negotiate again with the seller?

I do, but I try not to. I try not to do it as often. And I'll tell you why. Because a lot of times, I'm, I'm not necessarily like stopping the foreclosure and, and, and doing that myself. I'm hiring somebody to do it. So if I'm already out of pocket, if I'm going to be spending money, I want to make sure that I have it at a good price that is actually going to, you know, sell, you know, because I'm invested, I'm going to lose if it doesn't. So I try to come in at the— at a good price. But yeah, if it doesn't happen, I do go back and try and negotiate. Okay.

Well, that's good. So I'm just kind of like making a through line to like when you said you were in the Army and you were working with people that had, um, I guess, I don't know, what was it, PTSD, or is it just mental?

Yeah, anything along those lines. Okay.

And so did, did any of those skills are you using? Because like in foreclosure, um, situations, you need a lot of empathy usually, and you're talking to people going through something really hard. Is there stuff that you learned back then that you're using today?

Oh yeah, that makes that very easy.

Okay, wow. Yeah, so that's kind of cool. So you're just like totally made for this?

Yeah, in a sense, I guess. Yeah, because, you know, that's essentially what I did, right? Somebody comes and they're really stressed, right, in a really bad situation, and you got to make them feel comfortable and you got to make them feel like they can trust you and tell you the whole story and, you know, not feel like they're being judged, not feel like they're You know, like they're not being heard and stuff like that. So yeah, I think it helped a lot, honestly.

That's great. That's— wow. And so you— now that I know you're— or I know that you from Sub2 and you learned a lot of creative finance, how has that helped you during these foreclosures?

I think where— for me, what's helped me is helped me get some rentals. Okay. Just because not all of— not all the deals that we find through the foreclosure, they're not all going to be fitting for cash. Right. And sometimes there's going to be some good situations where it's like, oh, you know, if I just catch that up and I give this guy X amount, right, it's going to cash flow X amount and it's going to make sense. So I've been able to pick some up at a pretty, pretty low rate, you know, pretty low entry fees where I'm spending like less than $20,000 to get into. So that's how I benefit from it the most. And also right here too, other opportunities that wouldn't work for cash, right? Like, okay, if it doesn't work for cash, maybe you could do a novation.

Right.

Maybe you can just, maybe it'll save you some money to do the novation. So you do the novation and you end up making more, the seller ends up making more. So yeah, it definitely opens up A lot of opportunities.

Yeah. And, uh, you mentioned how, you know, sometimes you'll be reaching out to someone and they'll, they'll say, oh, I got it, I got it covered. Someone else is gonna gimme an offer. And then they'll reach back out to you. What's the smallest amount of time that you had to stop the sale and help somebody outta that situation?

The day before.

Oh, the day before.

Okay. The day before.

Like, yeah. Which is like sketch.

Somebody like reached out to me like at 11. Signed the contract and they were getting foreclosed the next day.

Wow, that's pretty good. Um, helicopter view of your systems. What is it, you know, um, cold calling, texting? What is it that you do like on a daily basis?

Texting, right? I have 2 VAs for texting. Okay. I have, um, a TC. Okay. And I have one, one, one VA for updating my deals and stuff like that on the Investor Lift and helping me with the admin and dispo side. And that's basically it.

And who's closing the deals? You?

Me. I'm on the phone.

Okay.

All day.

Okay. So you, you're getting all the warm leads and then you're, you're closing on them. Okay.

2 VAs for texting. What's, what's that for?

Yeah, just for the volume. And really, I prefer— I think that, that, like, for example, if you do an 8-hour shift, I feel like you're not getting good responses from a time, from a certain time to a certain time. Mm-hmm. Right. So from like 8 to like 2, mm-hmm, there I get way less interactions.

Mm-hmm.

Right. So I'd rather have them, 2, 2 of them work part-time during 3, between 3 and 7 or 3 and 8, just because I feel like that's when I'm getting the most responses.

Oh, interesting idea.

Good idea.

Yeah. I like that. I like that. Okay. What's, um, platform of choice for texting?

Uh, let's go HighLevel, you know.

Okay.

Variation of GoHighLevel, I like.

Nice. And have you noticed anything? Because there's— everyone's freaking out about the, you know, the restrictions and the carriers and all that stuff.

It's gonna get harder.

Okay. So it's a battle every day, you know, like changing up your script of what you're saying and, and all that.

Or is it like all the time and it's constantly changing and the only way you're gonna stay in it is if you're constantly updating it and constantly changing, changing with it. Right. And at the same time, you know, I think it's a good thing for me just because some people, a lot of people are gonna give up.

Yeah.

A lot of people are gonna say, you know what, I can't, I can't be changing this every 2, 3 days. I'm gonna find some other thing to do.

Okay.

And where are you focusing? What, you know, city, county, state?

Texas.

Texas.

Texas. Yeah.

Really?

Yeah. So mainly I like the bigger cities in Texas— San Antonio, Houston, Dallas, you know, those— that's where I like to market.

Yeah. And I take it Texas is a trustee state?

Yeah. Okay. Yeah.

Yeah.

So, um, when you're going to stop the sale, what's like your go-to methods to, to get it handled?

Well, the first— I mean, the first thing that you always want to do is you want to do the, the purchase agreement, right? You want to make sure you have a good proof of funds, purchase agreement, send that over and, and, and see how it goes. I've seen a lot recently they've been asking me for HUD statements too, you know. So I don't know, I don't know if a lot of people experiencing that, but lately they've been asking me for HUD statements instead of the purchase agreement. Oh, but Um, yeah, that's—

oh, oh, like you're already in escrow, right? Okay, gotcha.

That's, that's what I got out of it.

Yeah.

Okay, it's a little bit more serious.

Yeah, yeah, yeah. Okay.

Yeah, so I've sent a lot of purchase agreements recently and they're like, okay, yeah, but show me the HUD.

Yeah.

And so how do you open up escrow if it's—

Well, I have— I do a lot of business with, with some, some title companies, so if I send something, they'll, they'll do it for me.

Okay.

Relationship.

Exactly.

Thank you.

Yeah.

Thank you.

Yeah. We had one that we, we had in Huntington Beach where we were trying to— we stopped it within 3 days. Um, but the, the lender was just like a pain in the butt to work with. So we had to give 'em everything. And luckily, like Joe has like 40 years of relationships that we can kind of rely on, even with title, escrow, and all that stuff, just to get all the paperwork to them. And, and then even then we had to, we had to close like by a certain date. So. That definitely helps to have those relationships.

Oh, definitely.

Yeah. And so do you ever use, like, you have them file a bankruptcy or anything like that, or is that like last resort?

That's like the last resort.

Okay.

Yeah, that's the last resort.

Gotcha. Okay. And I guess, when you go to, like, let's say you stop the auction, everything goes fine. And you, you know, you get it locked up. Do— are you finding like your end buyers are wanting to do anything creative after the fact or just, just—

I don't really entertain that if that's what they want to do. You know, usually I package the deals. Like, I don't know if I get a cash deal, I know it's going to sell as a cash deal. And, you know, and if I understand if it's not, you know, I understand if the numbers don't make sense and I'm going to have to go back and negotiate and we find there's more repairs than I need to be. I'll do that. But, you know, most of the times I don't go back and, and lock it up a different way. But I'll tell you, for the foreclosures, most of the time I don't do creative unless cash absolutely doesn't work.

Right.

If, if the cash offer covers the loan and all the liens and everything, I don't feel like— like, I feel like if you do, you start talking about creative and you can cover everything, you're not really good at negotiating.

Right.

Giving up too fast on the cash.

Sure.

So, and I might do it, but if I end up getting a creative deal that's like close to cash, you know, it's really deep. It's always at a discount. I'm paying a little bit more than the cash offer. So I've had it a lot of times where the seller tells me, hey, I'm gonna sell it cash, but I'm only gonna make $1,000. I'm gonna make $5,000. And I tell them, hey, what if I make What if I give you 15? What if we 10? What if I give you 20? You know, I actually got one in the market right now that that's what happened. He was going to get $5,000. He was going to get it was for it's in Garland, right? He was going to get $5,000 cash, and if he sold it to another to a flipper, and I told him, you know, what if I give you what if I give you 20? So $15,000 more dollars, right? But the property was turnkey. The property is ready to go. I have— I didn't do anything to the property. So, you know, I got into that property for $20,000 at around $215,000 is the total purchase price. And I paid $5,000 to clean it up and do some pressure washing. And right now it's listed for $320,000.

Okay.

So, you know, it's going to be a good, good-sized profit there. And yeah, I just bought it a little bit higher than the Cash offer, not really. So I don't know, that's why the only times I'm really going for creative, when, when the cash offer still works, when I'm going a little bit higher, right?

Yeah, you're not gonna like give them retail or— No.

Yeah, and I hear that a lot with people that bring me leads. Yeah, yeah, go for them. What? Yeah, yeah, pretty sure.

That was the one you weren't sure if you were gonna keep or not, right? Like you got it and then you were gonna keep it as a rental, or you did have it as a rental for a little bit, right?

Well, this is what yeah. Well, this is what happened. The guy went and got a loan modification on his own, and they extended his term to like 48, 48 years. But it was still cash flowing like 800 bucks.

I want to do that. Mm-hmm.

Yeah.

I want a loan for 48 years. Yeah.

Go ahead.

Yeah.

So that's what they ended up doing. So then I was like, okay. So I keep this loan for 48 years, or should I? sell it and get my cash out and, yeah, invest in it. Because I have these other properties in San Antonio that I want to fix up. So I was like, oh, maybe I'll just sell this one and put my money on the San Antonio ones. So that's what I decided to do.

Yeah. How do you protect yourself from seller overstays?

Oh, um, I don't do it.

You don't let them?

I don't let them stay over. Now, if we're gonna stay over, I want to do a leaseback. So I want to do like, they should leave behind like $10,000.

We, we do about $50,000 here.

Oh, in Texas it should be right here. I've said I wouldn't do less than $40,000.

Yeah, yeah, yeah. We, we always hold back at least $50,000. And even the last one that we did, he was supposed to be out Friday. He didn't move till Sunday.

And they'll push it as much as they can.

Yeah. And, you know, he's— I told him, I said, dude, You knew the time. You were in here for 2 months. You've lost your 50 grand. He's calling Alex saying, you know, please, please, please give me my money. I'll take you out to a nice dinner. You know, talk Joe into it. He never liked me from the beginning. We ended up giving his money back, but I, I was just curious what you do.

Yeah, in Texas, most people do between 10 and 20.

Okay.

Right. It's not as hard. To get a mouse that is here, right? But even right here, every time I've done this, it's been like $40,000. Yeah.

And then in Texas, you're allowed to show up with a shotgun after, right?

Probably. That's what I've heard.

How many of those properties that you've wholesaled have you actually seen in person?

Maybe probably like three or four. Okay.

And why why? Why did you see those 3?

I ended up buying them. Okay, got it. But other than that, most of them, I never see them. That's what I tell people. Like, I don't— recently I started putting like the picture of the house in the CRM just because I want to have a visual. But most— I don't know, some of the houses I've done, I don't know. I don't remember what the pictures look like and I don't know what the seller's face looks like. Yeah, it was just all over the phone.

Yeah.

Yeah, it's amazing.

Good way to do business.

It is. I know. It's like once I started doing virtual, I mean, even out here because of how vast California is, it's like, it's the same thing. You're gonna be, um, you know, driving around all day going to these properties and most of them aren't gonna be deals.

That's what I used to do.

Drive around?

Drive around.

Well, yeah, it was before like cell phones, wasn't it?

Yeah.

Like, I'll call you from a payphone at exactly 3:15. That's awesome.

Yeah, we've got it set up.

Yeah, it's so good. Remember pagers, right?

Yeah, yeah, yeah.

They have pagers.

I'll page you. I'll page you if it's a good deal. I'll page you like, you know, whatever. 911, call me quick.

Yeah.

Which is crazy because I mean, what, what's kind of cool about real estate, it's like all the fundamentals have stayed the same. I guess the only thing that has changed is how people are getting data immediately. And then plus AI and all that stuff. Are you implementing any new tech technological advancements into your—

No, I mean, I do the data and I do the number validation.

Okay.

So that I'm not calling a bunch of spam numbers and stuff like that. But other than that, okay, yeah, I'm not good with— I, I kind of wanted to not be so much involved with like building the CRM and stuff like that, just, just because I feel like I could get really invested and end up wasting a bunch of time and not spend my time actually talking to people. Nice. So I kind of like, I've been like avoiding it.

That's good. Yeah. Cause like, I mean, especially if you're in IT or something, do you have that like proclivity to nerd out on stuff?

I do. It's like, oh, there's been 3 days.

Yeah.

None of it worked.

Wow.

Okay. So are you doing any like chatbots or anything like that? Or is that okay? So that's what you have the VA for?

Yeah.

VA is just lining it up. Live chatbot. Live chatbot.

Yeah, basically.

So they line it up.

Are you guys doing any of that?

Yeah, yeah. I'm using Rick Sheldon's, his open dispo. So he's all nerding out on chatbots. So it's pretty good. It's pretty good. And then we're doing some of the low equity stuff. I started doing that.

Oh, cool.

And so they'll hit up the agents, but I think everyone's doing it. So they're so pissed about sub-2 and yeah, they're just like, my client will not accept any creative offers, like right off the bat. So it's kind of crazy how that, that stuff like blows up.

Well, yeah, yeah, I know. It's, it's been a, like a low-hanging fruit for a little bit, right? Like, for sure, everybody's doing it.

So yeah, everybody's doing it. Yeah, it's that type of thing. I mean, once, uh, because if I feel like it was new and like Kevin Cho did it like first or whatever on his first one, and then Pace kind of like got onto it, and then, uh And then everybody started doing it. So like, they're like, you know, talk to some of these agents, they're like, I have 75 LOIs in my email right now. And like, people are automating everything too. It's like pulling every low equity and then automatically doing an LOI and then automatically sending it out. So it's like—

I wonder how effective it is though, because I feel like a lot of this is kind of like relationships, right?

Totally.

Yeah, but it's, it's also a numbers game. I mean, you know, you have to deal with the same thing. You have a giant list and, you know, you weed it down to the ones that you're actually talking to. So it's just a numbers game and that's what they're doing. That's not nothing new.

No, of course not.

Forever, you know, but it's, it's just, it used to be where if I was an investor, I'd find a real estate agent and I'd say, here, let's just start putting lowball offers in. And I could put 100 in, maybe get 1 or 2. It's just the same thing. It's not anything different. You know, it's just more automated.

That's what I'm saying. So the volume is like with the click of a button, you're sending out like 10,000.

Yeah.

And then I don't know, eventually—

This is right, like that before I feel like maybe one person had it, 2 people had it, but now it's like you can have one, you can have one. Yeah, you can have one for sure.

Yeah, no, it's crazy. So I think I kind of like your, your plan of like going for a more niche list but hitting them from a bunch of different A bunch of different ways. Um, now that you're in— or you're mostly in Texas, so have you hired on door knockers, or how are you— are you doing any of that? It's just the texting and the calling, and that gets— that gets you?

Yeah, that's been— that's been all I've been doing.

That's great. Yeah, that's crazy.

Whatever works.

I know, you know, it's like people overthink it so much. So when people reach out to you, because I know you worked with a lot of people doing JV stuff, have you— are you still doing— are you working with a lot of JV?

Are you doing a lot of JV deals? Probably maybe like 6 out of 10, 7 out of 10 are JV deals for me. Oh nice, a ton.

Okay, so you're finding buyers or what? Closing? All the above?

All of them. Sometimes they call me and they just have a lead and I close it. Sometimes they call me and they already have it locked up and I help them sell it. So yeah, it depends, depends where I could, you know, wherever I could fit in.

Amazing. Okay, so what does that look like for you, um, like for a typical day? Are you— do you have like a bunch of leads you have to look at and see if it's even a deal?

So I have my deals, yeah, that I have to look at that people send me and see if it's a deal, right? I respond to those people and I'm calling them, right? My leads that I'm generating, right? I even have— I have some Facebook leads too. Okay, right. Not a lot, and I don't spend a lot on that, maybe Maybe 3 of those leads a day or something like that.

Okay.

Um, but I'm just calling my leads, my leads, and as I'm going through it, right, if somebody calls me, I'll just pick up the phone and be like, okay, tell me the details.

Right.

So I pick up my phone on the spot a lot, and I'm just going through it a lot.

Heck yeah.

Um, but yeah, so I'm just doing my stuff, and somebody calls me, I just pick it up. Now that's what I tell people, right, if they, they want to get, get a hold of me Right. The best way is just to call me.

Awesome.

Okay.

Um, obviously, so if you put your number out there, people are sending you a lot of deals. And I mean, are you working with a lot of noobs? So you're getting like trash deals or what? What do you think the ratio is to actually good deals to trash deals?

Yeah. Yeah. And I've, it's hard. Like, I don't think everybody's not ready to be working, you know, together all the time. Just because some people are so early on, there's like, okay, hold on. You don't even have a lead.

Mm-hmm.

You just have a— you just know of a house that's in foreclosure. Yeah.

Okay.

Like, look, this is what you need to do. And I might guide them towards it. Like, this is what you need to do. You go door knock them, do something. Once they— if you get a hold of them and they want to talk to you, reach back out, you know? And but yeah, you get all kinds of levels. And really there's some people that, you know, kind of started with me and like go back and forth. We go back and forth a lot that they'll ask me a lot of questions and stuff like that. But those people, you know, they get to a point where they need me less and less, and they just bring me even better, better leads or even better deals. Or just like, hey, I already have it locked up. Oh, this is it. Can you help me sell it? Can you help me do this? You know, so, but it's all kinds of levels. But like I said, there's some people that are closer to, to, you know, doing most of it on their own or all of it, if not.

Yeah, and being like a true partner in that sense. Okay, gotcha. Have you thought about expanding into other states, or— I know you, you were dabbling in other stuff before, but yeah, now you're just focused?

Not at the moment. I'd rather go harder on these, these states that I, I, I'm working on right now than going to different, different areas. Yeah, I mean, I like San Antonio a lot right now for holding stuff. And I like Houston and Dallas a lot for wholesaling. Okay. Good spreads there. So, you know, if anything, I'd double down in those areas.

All right. One thing I've been finding doing the low equity stuff is Texas's taxes. Texas's taxes to where it's like it'll be a bomb house. All the numbers work out, low entry fee. And then all of a sudden it's just like, that's the taxes? Dear God. And then, you know, you look at the rent rate and it's just I don't know what to do at that point.

Yeah, so that happens a lot in Texas, and the, the cash flow is not, not so big unless you're getting it at a discount.

Okay.

Um, yeah, I mean, right now I have a house that I'm thinking maybe, maybe I'll mark it as my primary residence.

Oh.

Just because I'm a— as a veteran, and I'm like 50% disabled because I hurt my ankles while I was in the military.

Okay.

I could get like a Discount on the taxes. Oh, primary residence. So I might do that because the taxes are stupid.

But yeah. So you're gonna move?

No.

Or you'll live there for 6 months and 1 day and then live out here for—

yeah, something like that.

Or whatever, whatever the move is.

Rent the rest of the rooms, rent the room by room.

Okay.

Rent 6 rooms of them. I don't know.

Nice. Um, do you know any like midterm operators out there? I don't midterm.

I don't do anything. Any midterm rentals.

You don't.

That's something I wish I did more. Yeah, but that's not something I've been doing. I've just been doing like long-term rentals and for sure wraps.

I know there's only so much you can focus on.

Yeah.

Finding wrap buyers. I know you're good at that as well. What's the move?

Well. I like to do the Facebook Marketplace stuff, right? That works well, especially with advertising, right? If you put advertising behind the Facebook Marketplace, you'll get a lot of eyes on it. That's one way of doing it, right? You could always reach out to agents too. If you have really good agents that understand creative financing, right, they'll save you some time and some money just finding you those type of buyers, right? There's some agents that have helped me a lot in the past too. So I would say those two that are the best things that work for me is like having relationships with other people that are familiar with this. And, and yeah, the Facebook Marketplace.

Amazing. What's the— back to pre-foreclosures, I meant to ask you before, because you're dealing with such insane stuff sometimes, what's one that really stands out that was like just so hard to make happen and then And I had one maybe 2, 3 months ago that it was just so hard because they both thought it was a husband and wife and they were getting divorced.

The husband thought I was on the lady's side.

Yeah.

The lady thought I was on the husband's side.

Yeah.

And they were just both so hard to deal with, just like pulling teeth. And really, I ended up, I ended up giving the, the, the the lady like $3,000 ahead of closing. Yeah. So she could put it as a down payment for her apartment so she could move out right before closing. Right. So I'm just doing it so that all the pieces could move and I could hit that property vacant. The guy was so mad about it because she got money before him. It was like, dude.

And of course she went and told him.

No, she didn't tell him.

He found out somehow.

He just found out. Oh man.

I can imagine that call. Hey, honey, he gave me $3,000.

Yeah, but that was so hard just because they both thought I was on the other person's side. Yeah, I definitely wasn't.

Just the spite. The spite for each other.

Yeah.

Makes things so hard.

Yeah, I thought that deal was dead, honestly. The first, the first day that I go. So I tell the guy, I told him, hey, you know, he told me that he wasn't living there, but other people were. And I know that. When that's the case, you have to schedule it, right? Schedule it or it's not going to happen. Okay, so I'm telling him, can we schedule it with your wife and your son so that they can— so that there's no issue? Hey, it's my house. I pay for it. I could go in. That's whatever I want. I have a court, you know, paper document that says that I could do whatever I want. Okay, fine. We'll be— we'll meet you there at 11. We go there and his key doesn't work anymore. He's turning the key. He's turning the key. The key doesn't work. He gets a crowbar from the door and he starts like jimmying it. And the son comes out with another crowbar and they just start arguing. So, you know, that whole argument breaks out. You know, our buyers are there waiting, just watching this whole thing. They ended up just leaving, but it was like a big fight. The cops had to be called. You know, it was just a mess from the beginning like that. That when that happened, right? That's the first day that we get we are supposed to go see the property. That happens. I'm like, okay, yeah, this deal's dead. This isn't happening. But you know, little by little, just pulling just one thing at a time, we were able to get it done.

Oh wow!

Good for you.

Releasing funds before you close. Does that scare you?

It's what he did.

I know. That's what I'm saying.

Yeah.

Because I was gonna do that with a guy and Joe's like, don't do that. I was like, I was gonna give him some.

Don't do that.

No.

Yeah, you're, you're just betting on yourself at that point that you can get it done.

And so many things, right? Like, that's what I was trying to tell the guy. Like, you know how many things could go wrong between Friday and Monday where I never see my money back?

Yeah.

And you're mad at me? Like, you should be thankful that I was willing to put $3,000 on the line so that everything moves, you know? But he didn't see it that way. He's like, no.

Yeah, no, you gave her money before. Yeah. Oh man.

So why, why did you give her money and not him?

Because she was living in the house.

Okay. He wasn't.

He wasn't living in the house.

Okay.

So she needed a place to move.

I thought that was a favoritism thing, but no, no, no. Got it.

Yeah, no favorites. Right down the middle. Yeah. The only person that works.

I'm telling you, it never works.

Yeah. Like the only thing I care about is this house. Okay. Okay. So what do we got planned for the future? Like big, big plans. What do we got?

Um, now I don't know about big plans right now, man. I think, you know, a lot of times people try to, try to move on to the next thing before you perfect the first thing in the first place. So, you know me, I'm just, I'm still in this. journey trying to, you know, acquire rentals, you know, little by little.

And nice.

I don't feel like I should like deviate my focus at this point. I just need to keep on doing what I'm doing and double down and, you know, stay on the course for a little longer and before I try and find something else.

Wow. Okay. Well, do you have an end game of like how many rentals or cash flow that you want?

Man, I think maybe like $30,000 in cash flow would be nice. Okay.

Yeah, a month.

Yeah, that'd be nice.

Yeah, cool. How many rentals do you think you need?

I don't know, a lot, like 50 or—

Okay, nice. How many do you have right now?

Um, I have 12 rentals and about 10 wraps.

Oh, let's go! Okay, you're on the way. Yeah, awesome. Heck yeah. Now, do you ever buy deals from other wholesalers?

Yeah, sometimes.

Okay.

Sometimes.

Nice. Just has to be a screaming deal.

Yeah. Yeah. There's, there's sometimes where wholesalers brought me deals and I was like, oh, you know, like even I didn't even use my money. I just used private money and I couldn't pass out on it, you know?

Yeah.

One of wraps too that I was like, oh, I could wrap that.

Okay.

You know, but so when it's like that, I would buy it, but I'm not necessarily like seeking it all the time.

Yeah. Because you'll just— you can just cherry-pick whatever comes down the pipeline. Nice. Okay, now how come— how have you been able to stay disciplined as far as like not getting like 10 VAs and start, you know, buying all this stuff when things are going good?

Uh, I made that mistake before. I'll be honest, I made that mistake before and I did go crazy before, and then I realized When that, when that was happening, I was like, well, I don't even have a process to train all these people right now. And then it takes all my time just to train them. And, and, you know, then, then when that happened, I was like, okay, before I train somebody, I should have a bunch of training videos and stuff like that that they can watch and plug and play and stuff like that. Yep. So yeah, we got that, you know, we're working on it.

I mean, but that takes a minute to make as well.

It does take a minute to make. It does. But I feel like, I don't know, I made the mistake and I hired too many people and it's just hard to— it was so hard to manage that I was like, nope, nope, nope.

Yeah.

Cut the fat and let's start over with the bare minimum. Nice. That's how I ended up where I'm at right now.

Gotcha. Are you going to eventually bring someone in to like be a closer for you or do you just love doing it?

No, no, definitely. I need to bring some. I don't know what's the best route, right? Maybe the best route is to train like a virtual assistant or something that could take it that far. But I don't know how— that's hard too. Yeah, it's very hard.

Oh yeah, I know. It's like being a leader and training and stuff is a whole set of skills that I took for granted myself. And I was just like, I don't know, you just bring them in. You're just like, just do that. And they're like, what? What do I do? And then you're over here doing that, not closing deals. And then that's the scary part. Okay. Gotcha. So you have an office here in OC, right?

Yeah.

Okay, nice. And that's where you're just going every day and just locking in?

Yeah, just going every day. And I kind of got the office so that I could meet with people and, and, you know, like if people that were like trying to start out, nice, they could come and they could call out of my office and I could hear them and give them some pointers and stuff like that.

Perfect.

Just to help them, you know, get closer to getting a deal. And if they do find something while I'm there that, you know, that looking like a deal, I can help them out.

Gotcha. Okay, so what's the best way if people want to submit like leads to you or deals or like what's the best way?

Text me, call me, you know, I put my phone number everywhere. My IG, message me through IG. Okay, Facebook is the worst place to reach me. Yes, if you reach me on Facebook, I'm sorry.

What?

It's just so hard. I get so much stuff and I don't know what's spam and what's not spam.

Right, totally.

I'm on the same page with you. It's like Facebook.

And someone's like, dude, I hit you up like 6 months ago, you didn't read it. You're like, oh, I did?

I was supposed to do something? You double-click this? Or is that Instagram? If you want to like something, you double-click it or whatever.

I think you just single-click everything. Oh, I don't know. Okay, that's why you're never liking something. This is because you're liking it and then you unlike it right after.

See, that's probably it. You know, yeah, I get, I get a call. How come you didn't like that? I go, I did. I touched it twice.

It didn't work that way.

I go, well, there's your answer.

Yeah, this is the world we live in. Um, the future of real estate in general, how are you seeing it going? Give us some crystal ball moments here.

I don't know, man. It's a little scary, you know. I don't know. I don't know where this This interest rates are going, right? I don't think they're gonna go lower for a while.

They're not going down.

You're gonna have to ride out this wave.

Yeah.

And see what happens. I, I don't know. I mean, he, he might be able to tell us better than I would.

No, no, I'm, I'm the same. I, you know, I don't think anything's going to go down. You know, if anything, it's just going to start going back up again, especially if they start lowering the interest rates. But yeah, I, I don't I wish I had a crystal ball.

You're calling everyone on YouTube a liar?

Yeah.

There's a lot of predictions out there.

Yeah.

Yeah. Clickbait.

Yeah. You got to— that's what people want to know. So you're just— I mean, but you're still buying. So how do you get around that? How do you get around these high interest rates?

Oh, I'm just buying sub-2s.

You just make it sound so simple. How can someone find these sort of deals?

Well, I mean, if you really wanted to find one, I mean, there's a bunch of wholesalers that have some, right, that you— that work. They really work, right? I bought from wholesalers, like I said, and I bought them deep enough where I made money, my private money— my private lender made money, and I own it still. So I mean, there's, there's good deals out there. That's one way. Or me, right, the best way for me is if I source them, right? If I source them, then That's how I find the best. I actually, I looked one up, I think yesterday. It's like 2 houses in Houston in one lot. And the rent for one pays off the other. The other, basically.

Amazing.

Basically, you know, and that one, the interest rate is like a 6%. But the only reason it works, the only reason I'm actually considering is because there's 2. And I know that cash flow for this is going to pay off the debt. And this one is just free money.

Oh, that's nice. Okay.

There's situations like that, but yeah.

Um, so you said you use private money sometimes to purchase your own properties. How do you do that?

Um, I'll tell you, I, I don't like to do a lot of them at the same time with private money. I might do like 1 or 2 with private money because, right, it's, it's even more responsibility than using your own money, I feel like, right? You have to be— you're using somebody's savings and stuff like that to Do the deal and stuff like that. So you have to make sure it really works out. You want to make sure that I think it's I don't know. I'd rather lose my money than somebody else's money. So that's the first thing I'll say. So that's why I don't try to do. I see some people get a lot of them at the same time, and it's a lot to manage. You know, like right now I'm at the I have three properties that I'm in the middle of doing something, but like I'm looking for tenants and things like that. So I'm not looking for any more right now. Until I stabilize these, just because I know that that's a lot, you know. One thing can, can make a big expense and stuff like that. But, um, yeah.

Yeah. Okay. Um, quick question.

Yeah.

Who taught you how to be so ethical?

Like, how do you get to this point?

Yeah, it's a serious question. Like, mom and dad at home? When you joined the military? I don't hear Statements like that too often.

Oh, good. I don't know. I guess maybe a combination, right?

Okay.

Of being in the military and and you know, I want to be here for for a long term, right? And I know that if you do right by people, right, they're more likely to do it again and again and again. So I don't know. It's just for me is like the thing that makes more sense, right? I see a lot of people like not do the ethical thing and then. They ruin up— they, they basically, you know, chop off the tree that's giving them fruit.

Yeah.

And now they have nothing, you know. That mentality, when somebody does that, that's something I don't understand.

Yeah. Well, good for you. Whoever it was that gave you your ethics, they did a really good job.

Oh, thank you.

Yeah. And it's— I mean, you see it, like, Christian has a great reputation in all the circles, and that's, I think, why people keep working with you and And then you see the other side where people are getting blacklisted and it's like you're using your own name. So the second it gets tied up with something, it's like not good. So not worth it. Um, okay, awesome. Well, um, we enjoyed having you today. Appreciate it, man. Like I said, I know you're super busy or you're on the phone. And so, um, I know every hour you're, you know, shooting the crap with us that you're not You know, locking somebody up. So I appreciate it, man. And, uh, we definitely got to do more deals.

Do we have any questions?

Uh, no questions, but Diana just said, I like this guy, I'd lend him my money.

Hey, we got private money! We got private money coming in. Yeah, I think we did that. Thank you, Diana, for another person too. Wow, we gotta turn it into this private money club over here. Thank you. Awesome. So, um, well, I guess maybe you could briefly touch on if someone wants to invest with you You know, how does that— how does— what does that look like?

Yeah, um, reach out to me, you know, give me a call, um, or send me a message on Instagram. What I usually do, I do post opportunities there and I do send opportunities when I, when I have them. Now again, I'm not picking up anything for probably the rest of the month, so I wouldn't expect anything, you know, for the rest of the month. But once I do, you know, I do have— I do blast them out through there. And, you know, I talk to everybody, see who wants to be a part of it and go from there.

Love it. All right, you guys. So reach out to Christian if you have any other questions regarding just real estate in general. Um, he's a wealth of knowledge and appreciate you coming on again. And Joe, anything to add?

Nope. Thank you very much.

Appreciate it. Awesome. Uh, we might, I'm thinking I might reach out to you to be like a speaker at one of our meetups, if you don't mind.

Yeah, let's do it.

Yes. All right, let's do it. All right, you guys, we'll catch you on the next one. We'll see you next week.

If you want some more advice on real estate investing, reach out to us one-on-one.