Wholesaling Real Estate with Carlos Jimenez on Zoom @ OCREIN | Feb 22 2021

Okay, looks like we're recording.

Okay, so we'll go ahead and get started. Uh, thank you all for coming. I appreciate it. There's 32 on, on here so far. We had a little bit over 100 that signed up for this meetup. Um, I've got a couple of announcements. I started, uh, this meetup group Let me look it up exactly. That was May 20th, 2015, so about 6 years ago. We normally meet at Round Table Pizza, but obviously COVID hit, and so we stopped. When our first meeting, we had about 36 people. This group has over 2,000 people signed up for it. At any one time, probably 50 to 60 show up every month. We used to have about 30 to 40 show up at the pizza place. It was standing room only. But, you know, I'm kind of proud of that, that it's grown so much in that short period of time. The next thing is, if any of you are agents, I am looking to hire agents. It is $85 a month and only $650 per transaction. You get to keep the rest. The company is really focused on agent investors, whether you're doing your own deals or you're helping others do deals as investors. That's kind of what we really focus on. If you want to look up the website, it's called PelleGo, P-E-L-L-E-G-O.com. And it'll give you all the information there that you need. And if you haven't been on that website and you're an investor, I strongly urge you to go to that website, type in an address in your area that you think might be a good flip, and it'll literally walk you through all the numbers.

Okay.

So with that, Carlos, where are you?

Right here.

There you are. Um, are you able to increase the size of your screen so like it's bigger?

Uh, I don't think so.

No? Like what, what if you shared your screen? What does that look like?

Well, I have the whiteboard, so sharing the screen—

Oh yeah, that's not gonna work, is it?

Okay, so you just have to— people can click on the corner of your name and do pin, and it'll show them like a big screen. Yeah, pin.

Oh, look at that! Wow, you guys are all this technology-oriented. Awesome, that looks really good. Uh, anyways, um, I'd like to introduce Carlos. And, uh, Carlos and I met, uh, what, about a Year ago, maybe a little bit more?

I think it was 2018, like late 2018, I think.

Okay. And we met through BiggerPockets, like I meet most of my folks, correct or no?

Uh, yeah, yeah, yeah, yeah, it was BiggerPockets.

Uh, he was interested in, uh, in, I guess, uh, buying properties, fix and flips back then, and, um, And then COVID hit and it kind of changed his world. And so then a few months ago, 4 or 5 months ago, he came and said that he was interested in doing wholesaling. So we got him started doing that and he's been very successful. And anyways, I'll let you tell them the rest and please take it away.

Awesome. Well, yeah, thank you guys so much for jumping in. I know your time is precious, and I will be here as long as you guys will want to ask questions. So thank you again for giving me your time. Just to tell you a little bit more about myself, I've kind of always been entrepreneurial, and I graduated college not that long ago, 2017, started my first business. And then, like you said in the bio, it was going really well. And with COVID I had to pivot and I called Joe's son-in-law and I was like, hey man, I'm all in. I'm all in, full-time real estate investor. I'll do whatever it takes. So that was in May. So that was maybe 8 months ago. And it was a lot of work. It was a lot of work. I know a lot of you guys come across videos of people showing you checks, $20,000 checks, $30,000 checks, and then they get you hyped up. And then you're like, oh, what's all this about? And I want to get into real estate and passive income and financial freedom and all of that stuff. But just to let you know, it's not easy. It takes a while and it takes a lot of work. But yeah, so first of all, for those of you guys that don't know much about wholesaling, I want to do a basic introduction of what wholesaling is. As you can tell here, this is— I know it's small, but right here, just focus on this. This is a house, so this is a deal. This is you, and this is your buyer. So you're the middleman. You're gonna go find a deal. Let's say I go find a deal here, okay? You're gonna talk to the seller, you're gonna make an offer for their property, and then you're going to put it under contract, a regular purchase and sale agreement. Have the seller sign it, and then you're going to open escrow. And then in escrow, you're going to find an end buyer or a third-party buyer, which will be your cash buyer. Okay? So hope that makes sense. I'll give you guys time to ask whatever questions later on. In escrow, as soon as the buyer wires the funds, escrow will then spit it out to everybody. The seller gets his money, Wholesaler gets his fee, and then the buyer gets the deed and the title. So that's how wholesaling works. First of all, I want to go over how to be successful in this business. The main thing is going to be mindset, okay? And the reason I'm going over that— I know maybe you guys are like, oh, I'm here to hear about real estate. motivation or whatever, right? But it's super important because, like Joe said earlier, I'm pretty active on social media, and as soon as I started seeing some success, I was putting a ton of content out there on Instagram and TikTok, and I was receiving a lot of DMs on how to do it, free mentorship. I was getting a lot of messages, a lot of calls. I was sitting with a lot of people, And what I noticed is that 9 out of 10 are super excited on the first call, they're super excited on the first coffee that I grab with them or they grab with Joe, and then they disappear. The motivation fades, the excitement fades, whatever it is, it goes away, and then they don't do anything, right? So that's the reason I want to talk about mindset. And there's this pretty cool exercise that you can find online. It's called 7 Levels Deep, and it asks you the question, in this case, would be, why do you want to do wholesaling? Well, I want to do wholesaling to make an extra $10,000, $20,000 a year. Why do you want to make $10,000 to $20,000 extra a year? Well, I want to go on more vacation, or I want to have more free time for my kids, or I'm tired of my 9-to-5. Why are you tired of your 9-to-5? And it goes really deep as of as to why you want to do a certain thing. So for me, an example, I'll give you my personal one. So I'm from Mexico, moved here by myself, didn't speak any English. I want to retire my parents. I want to build churches and schools in Mexico and all over the world. I have big dreams. Last month I was able to get 7 deals. that will be over $60,000. We're in escrow for 3 properties this month alone. That should be about $45,000. So that's the average that I'm looking to get a month, right? All of you guys have your own goals, and that's okay. It could be $5,000 extra a month, $2,000, or $100,000 a month. That's on you. But I want you to really dig deep as to why you want to do it. Why? Because you have families, you have bills that you had to take care of, and I know you have full-time jobs. On my team, I have guys that have families, that have kids. I have one guy, he works a full-time job, night shift, has 3 kids, married, and still makes 150 calls a day, puts out about 10 offers a week. So there's no excuses, okay? Really dig in, really dig in as to why you want to do it so that you can stick around. Uh, why 99% of them quit. Okay, so I read a ton of stuff on like successful people and all that, all of that stuff. Uh, I'm super into that. If you're not, then that's okay. But the reason why 99% quit is, is because of the lack of execution. So how are we gonna fix that? You're gonna fix that by having clarity of the objective. Okay, so for you it could be, okay, I want to do 10 wholesale deals this year. All right, just whatever it is, 5 deals or 1 deal a month or 1 deal every 2 months. Be super clear of what you want. Figure it out and be super clear. Be super specific. Okay, once you have that, have the commitment to the goal. All right, so I recommend you guys, if you're gonna jump into wholesaling, that you at least do it for 6 months. 6 months nonstop, every single day. Maybe one day you're like crazy busy, something happens, at least make one call or at least analyze one deal. It'll take you 5 minutes. Person hangs up, it's fine, you did something. Go at least 6 months straight without quitting. Commit to it, okay? The third thing, what to do about the goal. All right, so here's how you're gonna break down. So figure out what you want. This is the end goal. And then reverse engineer or backtrack to what is it gonna take? What, in detail, what steps are you gonna take to get to that end goal? So in my case, here, as you can see, that's our goal for the year. That's 100 deals, okay? And then we keep track. We have a scoreboard of the whole team. What is it gonna take to do 100 deals a year? Okay, that's 8 deals a month. Around there, 8-point-something. So I'm sure some, some, some months we'll do 8, some months we'll do 9, 7, whatever. But what is it gonna take? All right, well, here I'm gonna share my screen really quick just to show you. Um, you guys can see my screen? Yes, thumbs up?

Yep.

Cool.

Okay, so this was, this was our January scoreboard. Okay, we did a total of 4,000 drive-for-dollar leads, close to 15,000 calls in a month, close to 70, uh, uh, hot leads. And then this doesn't include mine, this was from the team. It was, it was a total of like 15 contracts out and we did 7, uh, 7. We closed 7 deals. February, we're at 9,000 calls. We're a little shorter, 1,500. And all this, we gotta update them. But here I'm showing you— the reason I'm showing you this is so that you can get an idea of like the volume that you gotta do in order for you to be successful. Okay, so going back to, going back to this, what to do about the goal. So if you're gonna— if your goal is to do, uh, 5 deals in In a year. Okay, so what is it going to take? I want you to look at your, your regular schedule. Um, when you're, uh, when you're free on the, on, on the day-to-day, block an hour, 2 hours, half an hour a day, whatever it is, whatever it is that you want to put into it. Just make sure that you block it on your calendar and that you stick into it.

Okay.

Whether it's 20 calls a day, 50 calls a day, 100 calls a day, 150 calls a day, 1 lead a day. 1 lead is somebody that says, sure, give me an offer on my property. That's a lead. Is it hot? Are they super motivated? Maybe not, but it's still a lead. Okay, so figure out the numbers that you want and then stick to that. Okay, so now Accountability. Okay, we keep a scoreboard here in the office so that we push each other. We're accountable to each other. Everybody comes up with their own commitments on driving for dollars, leads or lead generation, calls per day, leads per day, contracts per week, and then we push each other. So be accountable to yourself. Share it. If you're married, share it with your spouse. Having a partner on your side is going to be one of the biggest things when you're trying to start a whole new business. This isn't a side hustle. This isn't a hobby. This is a full-time career that could totally change your life, whether it's wholesaling or buying rentals or flipping. Okay, so make sure that you have someone that's going to keep you accountable because it's going to get hard. It's going to get hard. You're going to have to go through 1,000 nos, 500 FUs. And 300, stop calling me, I'll call the cops on you. 2 get 1 deal. Okay, so that's that. I would like to, uh, I would like to jump into sales. So the 3 ways that— so in any industry, that how sales works. Okay, so this is gonna be 3 things. Okay, planting seeds. What does this mean? That means that you're going to tell everybody— your neighbor, the guy at the 7-Eleven, the guy at the grocery store, friends, family, on Facebook, on Instagram— you're going to tell everybody that you're now a real estate investor, okay? You're going to order business cards, you're going to order— you're going to create a Facebook page, you're going to go on social media, you're going to tell your friends, you're going to tell everybody at school. Your sons, everybody. You're gonna tell them that you're a real estate investor. Why? Because you're gonna be planting seeds. You're gonna be planting seeds in different places, and you never know who knows someone that is looking to sell because they inherited the property and now they need money for the funeral. You just never know, okay? The second way is outbound. This is all they call outreach, okay? Okay, so that could be cold calling, SMS campaigns, mailers, driving for dollars, pulling lists from software such as PropStream, FreedomSoft, PropertyRadar, etc. It could also— okay, free, it could also be like Zillow for sale by owner, Craigslist, uh, for sale by owner posts. Those are free ways to get leads, okay? Inbound is what comes to you. So bandit signs, okay? You can order 100 for $100 on dirtcheap.com signs, okay? That's paid. If you have a little bit of a budget for marketing, that's paid. Social media ads or social media budget monthly, it's about $3,000. Which is a lot. You can start with— if you're gonna do social media ads, I would recommend you to start with at least $1,000. That's for you guys that have budget for it, that are willing to invest into some marketing. We've gotten about 4 deals from that, which it will be a total of like close to $200,000 in profit after flipping the property. So $6,000 for 2 months. Close to $200,000 in profit. Do the math, right? PropertyRadar, PropStream, all of those, you're gonna have to pay for them if you want to pull a list. A lot of investors pull lists from these softwares, whether it's probates, pre-foreclosures, notice of defaults, foreclosures, inheritance, equity of 30% or more, etc., etc. And here's what I have. Here's what I— here's my opinion on those lists. Those lists are good. Why? Because you'll make a couple clicks, you'll download, you'll download 1,000 people, and then you can start calling them right away, right? But the only reason, the only con for those lists is that that's the same person that every other investor is calling. So if you pull a list from PropertyRadar and say it's pre-foreclosures. As soon as that person answers the phone, he's going to be like, bro, you're the 20th person that has called me on this property. I'm not selling. So it's going to be really hard to work those leads. Driving for dollars is going to be the most effective way for you to get leads and find your own leads. Why? Because no one else is finding those. Maybe someone, maybe one or two other people that live in the area that are investors, are driving for dollars, right? But the odds of those, uh, getting blasted with phone calls or text messages are very low. Okay, um, so that's, that's that. Okay, I'm gonna erase this really quick, so I'll give you a couple minutes to, to, to throw me some questions, uh, and that I can answer while I, while I erase this. So go ahead. Out of all the paid marketing, what's your best, um, I guess best return? Which one gives you the better return? Uh, Facebook for sure. Don't waste time on Instagram. The people that you want to target are on Facebook. The people that you want to target are 50+ older people that are just gonna be scrolling on their feed and they're not gonna be clicking around on stories or Marketplace or Instagram. I've done a lot of KPI tracking and stuff and the most effective is newsfeed Facebook ad And do by city, don't do by zip code. And then, um, yeah, because housing, housing ads don't allow you to do detailed targeting based on behavior or interest. So you got to make sure that you, you placed it in the right, um, uh, in the right, uh, things. So like on Facebook, it gives you the option to do stories, marketplace, um on websites, like on the sides when you go on a website and little squares pop up on there, and then newsfeed. Only do newsfeed. It's expensive and it's only getting more expensive, but it works.

It works.

And you got to make sure that you know what you're doing. So look into it, pays off if you have the budget for it. Would you recommend learning it on your own or just hiring a company that does it for the first few months to get an idea of it? So first I learned it on my own and it took me about probably 5 months to get results. Um, Facebook, it's its own science. Uh, but now we're paying somebody, but it's a lot more money. So a little more money. So we're paying somebody, we pay them $5,000, and then on that, on top of that, the ad spend. When I was doing it myself, I was just doing the ad spend. which was about $1,200 a month. So it could be a big difference, but then you can also focus on your business and not spend so much time on learning ads, you know.

I'm sorry, did you say do those ads by city or by zip code?

City.

Okay, thank you.

Yeah.

Okay, so after you figure out your sales and your lead generation, this is what I want you to focus on: building your pipeline. Okay, so what is your pipeline in business and in marketing? You're gonna hear about a funnel, right? So you have a cold audience over here, but you have a bunch of people here. Okay, and then you're gonna cold call, you're gonna text them, you're gonna do mailers, you're gonna do a bunch of stuff to try to funnel them in, uh, get them through the funnel, right? So the ones, the ones that say no, they're not interested, or wrong numbers, or they tell you to go, uh, F yourself or whatever it is, like you're weeding them out. And then you're gonna have a few over here that go through the funnel, and you're gonna have a yes here. Yes, give me an offer. And then you're gonna have another yes, and then you're gonna have to start building up your pipeline. Okay, it is huge.

Why?

Because, for example, I'm gonna tell— this is the first thing I tell when people call me and they want to get started. Um, first of all, I want you to go and find 500 properties driving for dollars in a month at least. That's nothing. I have guys that do up to 2,000 a month, okay? Here in California, if you're in Southern California, you can go to the Inland Empire, any of those cities, you'll find 300 properties in an hour. They all need work, all of them. So I will do 500 properties driving for dollars. From there, I'm going to skip trace, okay? Skip tracing is pretty much just researching the owner to get the contact information. You can do batchskiptracing.com, it's 15 cents a skip trace, or you can use guys on Fiverr, the Indian guys on Fiverr, they charge like 5 cents a lead, and it's pretty accurate data. DealMachine, the app itself, they have their own skip tracing and it's 17 cents, but it's not accurate, so don't use it. Batch is pretty good. It's a little more expensive, but it's pretty good, uh, and you can do in bulk. So after that, you're gonna have a list of 500 people and their phone numbers. Once you have that, I'm gonna start calling. I'm gonna start cold calling. Okay, you're gonna start cold calling. And again, refer back to what I was saying earlier— commit to a number a day and then do that. If it's 25 calls, do 25 calls. If it's 50, do 50. If it's 10, do 10. I recommend for you to at least do 100, okay? You gotta do a high volume of calls in order for you to get 3 yeses, okay? So you're gonna cold call in, you're gonna start cold calling, and then after cold call, you're gonna follow up. Hope you guys can see that. You're gonna follow up, okay? So let's say today I cold call 100 people And then I got in my pipeline 5 people that were like, yeah, I'm not really interested in selling, but sure, give me a cash offer. All right, so now I have 5 deals to analyze so I can call them back and give them a cash offer, right? And then tomorrow I'm gonna do another 100 calls and then I'm gonna get 5 more. So now I have those 5 to analyze and then the 5 from yesterday to follow up with. So So that's 10 leads now. And then again, and then again, and then the day after that, and the day after that, and the day after that. So that's how you're gonna start building up your pipeline. And then you're gonna weed out and you're gonna allocate each lead in like buckets of whether they're hot, they're warm, or they're cold, okay? You can call this, we use, we do like, These are cherries, all right? We have red cherry, really hot lead, really, really hot lead. The family passed, um, the mom passed away. They, they don't want to deal with a realtor. They, they're, they're going, they're fleeing out of California. They need to sell tomorrow. They need to sell tomorrow and they need their cash and close escrow. In three days, super hot. Okay, this is our orange cherry. Okay, guys, follow up is huge. So pay attention to this here. Oh, red hot. I'm gonna follow up weekly. Okay, a lot of people are gonna ghost you. A lot of people are not gonna recognize the number that you called them from. A lot of people are not gonna pick up. Follow up daily. You have to be on it. Orange, it's a warm lead. They're interested in selling. They were already thinking about it, but there's not a lot of motivation. Uh, there's no like divorce, there's no like inheritance, there's no like, uh, they're not behind on their payments. They were just thinking about selling, right? And maybe they just want to save up some money on commissions and they don't want to pay a realtor, right? So here I'm going to follow up. Sorry, hot cherry red. gonna follow up daily. Orange, warm, you're gonna follow up weekly. Okay, and then this one is the green one. These are the leads, these are the leads that, that they say yes, but they're, they're really not looking to sell. Like, they just say yes to you for the heck of it, just to see if they'll get $1 million for their property. Okay, okay, I'm gonna tell you why this is still a good lead. You can follow up biweekly or monthly. I don't throw— I don't throw away this lead because you just don't know what hap— what will happen. You don't know if the cousin will have a, an emergency and they need to sell. You don't know if the— if, uh, if tomorrow— if today they don't have any motivation But in three months they really need to sell. You don't know that. Okay, so they're still gonna be in my in my CRM, and I'm still gonna hit them with texts and emails every maybe once a month, once every three months, and then like us in this at the six month mark again. Okay, don't throw them away. I don't throw away leads unless they literally like. just cussed me out and like they're trying to find me or something. All right, uh, other than that, like, I don't really throw away leads. So, oh, quick tip. So let's say you, you, you've been calling for a few weeks. How, how I, I and my team, uh, do our follow-up— let's say that you have your pipeline, let's say you have 5 hot leads and 2 warm ones. First thing in the morning, I'm gonna call my hot ones. These are the deals that are gonna happen. These are the ones that you can close. Okay, I call these ones first thing in the morning. If they don't pick up, don't worry. Now let's say, okay, so let's say 9 AM, I'm calling these ones. Okay, I'm making offers, I'm negotiating, I'm going back and forth, I'm trying to close these ones. All right, after this, let's say that you blocked 1 PM to 2 PM to, to make a call. Now I'm gonna follow up with my warm ones. There's no motivation there. They're warm, but there's not too much urgency on those, okay? So, and then after these ones, after I make all these calls, then I'm gonna call these ones again twice a day, okay? They're hot. That could be a $10,000 check, $15,000, $20,000, all right? And then after I call This once again, then I'll go to my cold ones. These are my cold, my cold, cold, cold, cold leads. Okay, so after that, let's say that you have your pipeline, you find a deal, you have an offer, you have somebody that wants to sell you their house.

Cool.

So how do I, how do I find my buyer? Okay, this is one of the mistakes that I see a lot of people do. I see it all over social media. how everybody worries too much about building a buyers list. Oh, I want to build a buyers list. On every Facebook group, all I see is like, any cash buyers in California? Any cash buyers in wherever? Drop your email, just drop your email below. I'm trying to build my buyers list. And then I send them a message or something and be like, hey man, how many calls have you made? How many properties are you about to close? Like, oh, I haven't talked to anyone. Like, I'm just trying to build my buyers list first. Like, don't worry about a buyers list. Joe will tell you, he's been in the game for 40 years, he will tell you, if you have a good deal, you'll be flooded with buyers. You'll be flooded with investors willing to buy from you, okay? So, but now let's say you have one. So this is what I'm gonna recommend. I'm gonna recommend you to work with 1 or 2 buyers, okay? And here's why. I'm not opposed to the, to the, to the building buyers list, but the reason I'm gonna recommend to only do 1 or 2 buyers is because— one second— It's because you're gonna have a secure buyer. You don't have to put a property under contract, okay? You did your numbers wrong. Maybe you're not so good at doing a CMA, comparable market analysis. You have it in escrow and then you're trying to find a bunch of buyers. And then all these buyers tell you, oh man, like the ARV is wrong. And then the rehab you told me was $40,000 and it's not $40,000. And then you don't know what you're doing.

So—

Now you have to cancel escrow because you didn't find a buyer. I've talked to— me and my team and I have talked to sellers that go into escrow and then these wholesalers end up canceling on them because they couldn't find a buyer. And the reason is they didn't do their numbers right. So find 1 or 2 buyers, build a relationship, someone you can trust, someone that you want to work with long-term. And here's why. Because I'm gonna go— if you come up to me and you're like, hey, Carlos, like, can you be my buyer? I'll be like, great, let's do this. I'm gonna come up with my ARV. I'm going to determine how much I can pay for it. I'm gonna do my own analysis. I'm going to come up with my own ARV, and I'll tell you, hey, um, Johnny, I can pay you for this property $390,000, and that includes you a fee of $10,000. Okay, if you want to get it under $390,000, then that's additional money for you. But now he has the number that I can pay for it, so he puts it under contract. Okay, he has the seller agree to that price. Now he knows that I'm going to close and he doesn't have to stress about finding a buyer. Okay, so find 1 or 2 buyers, know their margins, know their returns that they're trying to get, Know the profit that they're trying to look at, ask for their criteria, and work with them directly. Even offer that you don't have to put it under contract yourself. It's easier for buyers to— for them to put it under contract and then close themselves. And then you might ask, but Carlos, how can I trust a cash buyer that he's not going to screw me and he's not going to take my deal? And this is what I will say. That could happen, but this is what I will say. I believe that you are what you attract. I believe that if I'm being honest and I have integrity and I bring that to me, the guy's not gonna screw me. And if this cash buyer wants me to bring him deals every single month, he's not gonna take— He's not going to try to win one deal and throw me to the side and then sacrifice or jeopardize the long-term relationship of me bringing him tens and twenties and hundreds of deals, you know? So that's what I would say. And yeah, there's no cancellation of escrow. You can fund— this is another reason. You can focus on maximizing your deal acquisition. Okay, why? Because what if you have one deal and then you have to worry about finding a title, a wholesale-friendly title company, and then a wholesale-friendly escrow, and then you're calling a bunch of places, and then from there you open escrow and you'll have to find buyers, and then you'll take a month trying to disposition this one deal. as opposed to having one buyer that you already know is going to buy it, and then you can focus on finding a second, a third, a fourth, and a fifth deal. Okay, so that's what I'll say on that. The last thing I have for you guys is deal analysis. So if you want to get your, your, your pen and pencil or whatever. So this is how we do it. First of all, you're going to come up with your ARV.

Okay.

Do any of you guys have a lead that you would like me to comp live right now? I'll show you how to do it on Zillow if you don't have MLS access.

I got one. Okay, let me get the address really quick.

Okay, everyone on here, don't steal it, okay?

I'm gonna pop it in the chat.

Awesome. Okay, Joe, I'm sharing my screen on my phone so I— so everyone can see how I comp it. Is my screen good?

Yeah, I see it.

Okay, cool. So, I'm ready for the address. Everybody, you can go, you can download Redfin or Zillow if you don't have MLS access, so that you can comp properties. Okay, whenever you're ready.

It's 24690.

24690.

That first one, the top one, E-D-E-L, and crest line.

Okay, all right, so first thing I want you to— I want you to write down Beth and Beth, okay? So it's bed and bath. It's a 3/2. Square footage, 1,376. Okay, everybody's got that? We're good, we're good. Okay, so now I want you to swipe down on your screen. Okay, okay, it's right there. Okay, so the property, it's somewhere right there. It doesn't show because I'm only showing recently sold. But if I, but if I go to like for sale or for rent, you'll see other properties. Okay, so it's, it's in between the $440,000 and the $370,000. Okay, so what you're gonna do now is you're gonna go to the filter, go top right, and you're gonna go to recently sold. You're gonna click that. So if it's on for sale, you're gonna see properties for sale. So you wanna, you wanna go on recently sold. Okay, because active deal, active properties, we don't care about those.

We—

it gives you an idea of how much properties are going for currently, but you want to go off of closed deals. Okay, so recently sold, you're gonna go to home type, houses, uh, bedrooms, you can just leave that, square feet. Okay. Okay, so our subject property is 1,376. I'm gonna go to max of 1,500. Okay, maybe I'll even do 1,750. You can go up to like 200, uh, 200 square feet. Well, let's see. So it's the same results. There's 7 results of 1,500 square feet and 1,700 square feet, so it doesn't matter. Okay, so let's scroll down and you want to go sold in last 6 months. All right, and then you're going to go apply. So those are our comps right there. Now you want to see which ones are similar to this property, okay? You want to compare apples to apples, as close as possible in bed, bath, and square footage. And guys, make sure that you're also looking into, like, you can see in Google Maps, what does it look like in the front? If it's like on a main street or if it's up on a hill, because view, it's a huge thing. School district, all these other factors that go into it that usually wholesalers don't factor in. So, this one's at $3,314 square feet. So, it's only bigger by about 20-something square feet. One extra bedroom. Okay, let's look at it. Yeah, it's decent. It's not remodeled, but it's in good condition. Okay, sold in December for $282,000. I'm not enjoying— okay, so that one sold for $282,000. So you can write it down here, comp. Comp 1, 282. All right, Comp 1, 282. Okay, let's click on the 329. It's a 3212, so it's a little smaller.

Okay.

So, this is up in the mountains. So, this one is a little more trickier because— but it's in pretty good condition as well. 3/2. Also, the lot. The lot is a pretty big important factor as well. Sometimes some properties are the same in terms of beds, square footage, but the lot is like completely different. So, that changes the value as well. So, let's check this one. This is a 2/2, 1,200, smaller, sold in September. Let's click on it. Okay, this one has a view and it's the most expensive one out of the other 2. And this one is remodeled. So, that's why this one sold for $370,000.

Okay.

So, as of now, Alex, what do you have your ARV at?

That last one you were looking at looked like a flip, so I was kind of looking at— it was closer to that one, maybe.

Okay.

Closer to $370,000? Yeah.

Yeah.

So, it's Besides the view, it's smaller and it has 1 bedroom less. So, it's pretty—

I think that the lot on that one is a little bit bigger, too.

Yeah. So, here, this is another reason why you only want to work with 1 or 2 buyers, because what if Alex here determines the ARV at $370,000, but then he sends it to me and then I go into the MLS Here, let's go on the MLS. So, I'll share my— hold on. So, I'm going to stop sharing my phone and I'm going to share my computer. You guys can see my computer, right?

Yeah.

So, right now, we're thinking ARV is $370,000. So, now let's check the MLS. 24690. Also, Zillow and Redfin are good, but sometimes the data is not accurate. accurate. Like, 90% it is, but the other it's not. So, that's why you want to send it to your buyer so that he can confirm that your numbers are good and that he can have the peace of mind that his ARV is the one that you're using and not yours. So, right now, Alex has $370,000 ARV. See, this comp didn't show up on Zillow. This one sold for $440,000.

Okay?

This one sold for $440,000 in July. Uh, let's go to 6 months. I had it a year, so— okay, so that's an older comp. So we have this one, that's the one that we were looking at, $370. Uh, we have $329, $450. Wow, that's expensive. So I'm I'm going to look and see if it's rehabbed. Not really. Lot is small.

Bigger.

Okay. It closed in November. So, you can also see when it was sold because if it was sold in July, right now the market is hotter, so you can use the higher comp, the one that closed most recently. So, these comps are all over the place, so it will take a little bit of a more deep analysis. But for you to— I want you to take away this right here. Let's say that our ARV is $500,000, not for that property, but just like for whatever. $500,000 property, I mean, $500,000 ARV. Okay? I want you to subtract the closing cost, which is 5.5%. We do that because Joe is a broker, so he gets a discount, but you can use— just to be conservative, use 6%.

Okay.

Okay. So 6% of closing costs that you're subtracting to the ARV, then you're going to subtract the rehab. Okay. Coming up with the rehab is not as hard, but make sure that you send it to your buyer so that he can determine the correct rehab estimate or, yeah, the accurate estimate on the repairs. So for a 3/2, 15— 1,300 square feet. I'm gonna go with like $60 grand to make it as nice as the other one that we saw, the flip. Okay? The profit here, we're looking to get a return of 15% of the ARV, which is $75 grand. Okay? And then this wholesale fee, it's a minimum of— with us, it's a minimum of $10,000. You can make it whatever you want, $20,000, $15,000, $20,000, $25,000, whatever. So now, let's say that this is our target offer. So target offer is the 70% rule, okay? You're multiplying 70% of the ARV minus the repairs, okay? That's the lowball offer. That's the offer that you're going to make when you know somebody really needs to sell, or if the property is like a piece of crap and there's squatters in there, The seller is tired of it. He does not care. He just wants to walk away from it. That's that offer, okay? 9 times out of 10, they'll tell you no to that offer, okay? This is our offer that we want. This is what we will pay for it, okay? This is what we will pay for it, getting the returns that we want, the $317,000, okay? So I'm going to go back to Alex or you guys and be like, hey, man, Or gal, I can pay for this $317,500. Now you go back, call back the owner, and be like, hey, Mr. Seller, so right now we're currently at $317,500. And then you let them talk. You see if you get yes, if you get no, and then negotiate from there, right? If they want a little bit more, there's an MAO here. This is a max offer, max allowable offer. It's it's MAO. Alex will come back to me and be like, hey, Carlos, seller is not really buying $317,500. He's got an offer for $325,000 from another investor. So I'm going to go here and I automatically have my max offer. This difference right here of $15,000, $332,000 to $317,000, came from the profit. So your fee's still there. You're not losing any money. Your fee's still there. We're shrinking our profit to be able to win this deal. Okay? So now I'll go back to Alex and be like, hey, Alex, I think $332,500, it's doable, but don't give in so quick. Tell them that the other offer might not perform. They might not be a serious buyer. Tell them that we can do $322,500, and we'll close in 7 days. We'll do $5,000 earnest money, and we're serious. We're ready to go. Okay? So he'll go back and then blah blah blah. You know the deal. We'll get it under contract. He gets paid. We get it. We flip it. Everybody's happy. Okay? This is this is right here. It's pretty easy. I'll go here through the formulas again. It's use. 5.5 times the ARV. Okay, rehab, you come up with that one. Profit, 15% of the ARV. Okay, wholesale fee, whatever you want. This is adding all the costs, so the sales right here. Okay, and then the target offer is the 70% rule, 70 times the ARV minus the repairs. The offer is ARV minus cost, and then the MAO is ARV minus cost, which gives you the target offer, and then you subtract 20%, an additional 20%, from the original return that we wanted from our profit. Okay. I was doing that by— I was gonna do it by pencil here, but hopefully this is more helpful. You can do it on a spreadsheet or on a Google Sheet. And that's all I got for you guys. I hope I brought you a little bit of value, and I hope that it was helpful. Make your list, go driving for dollars, make calls, talk to people. Network with agents. Tell the whole world that you're an investor now and get leads. Get leads. Get leads. Get leads. Get leads. Get leads. Get leads. Get leads. Okay? Thank you, guys.

Anybody have any other questions for Carlos?

Yeah, I do.

Carlos, what CRM system do you use?

The one I use is. We've been using a couple, a couple ones, so I'll show you. You can see my screen, right?

Yeah.

Yes.

Okay, so this is HighLevel. Okay, go HighLevel. It's about $150 a month, I believe. Okay, this CRM is in charge of our inbound stuff, social media. Okay, then we have FreedomSoft. This is our FreedomSoft. FreedomSoft, it's a little bit more complex. It's not complex, but it has a ton of features. A ton of features. With FreedomSoft, you can pull lists from here, you can do SMS drip campaigns, email campaigns, you can send direct mail, you can connect with cash buyers, you can do comps. Uh, if I go— yeah, you can do comes from here, you can come up with, uh, repairs estimates, you can send contracts through DocuSign, DocuSigning. Uh, you can do anything on FreedomSoft. You can text, you can, you can do a ton of stuff. Uh, it's very— you can find buyers and leads and It's kind of like PropStream but a little bit more, uh, it's like PropStream on steroids. And then we have a ton of campaigns here, a ton of leads. But here, I'll show you guys. So these are all of our leads, 20,000 leads. That's, that's probably since A few months ago. 20,000 leads here. I'll show you our Deal Machine leads. This is just from Driving for Dollars. 25,000 right here. So I just want to show you guys so you can get an idea of like How many leads you gotta get in order to find deals.

And the cold calling feature, the cold calling service API integrates with one of your CRMs, right?

Yeah, and we also use Mojo Dialer for calling.

Thanks.

Hey, Carlos, so as an investor, if I want to spend my time, say, doing other things and not worrying about the calls, what do you think would be more beneficial for me to look into? Mailers or maybe social media paid marketing? And if I do have a budget? Yeah, so if you don't want to call, social media, bandit signs, and also It will be better if you— so if you do social media, you still need to cold call. Hire a VA, just hire a virtual assistant. There's a ton of virtual assistants online that you can hire for like $4 an hour or whatever, and they're trained in real estate. I've personally never done it, but I know a lot of investors that do it, and they have like— they built like an acquisitions team. They're in charge of the cold calling. You can do the deal analysis, the underwriting, the disposition, and then, yeah, that's how you can build the team. But yeah, if you don't want to call, I would invest in maybe interviewing a couple VAs and then also doing social media as well. But I wouldn't do social media until you've got some practice on the phone. Because you can get leads from social media, but then if you don't know what you're saying or you don't know how to handle a call or something, you might lose on a deal like that.

Got it. Got it.

What about, do you send any kind of mail campaigns out? Like mailers? Podcasts?

Yeah.

Postcards? No. No. I have not found success with those. And I'm in a lot of other groups that they do it, and it seems like the conversion rate's really, really, really low.

Got it, got it. Thank you.

Yeah, cold calling and cold texting has been the most effective in a lot of— in a big number, like volume.

Carlos, a quick question. Uh, do you hire people, like once you get a hot lead from one of your, uh, you know, VAs, do you personally call them to close the deals, or you have actually someone that you hire that helps you with, with the closing, and then you pay him, you know, a cut or something?

Uh, yeah, so, so you're saying I have a— so the VA gets, gets a lead And then you're asking if I take over after he's already found it or after he puts it under contract?

No, who puts it under the contract? Because the VA could be someone from the Philippines, India. Do they pass that lead to you so you could—

Cash buyer, yeah. Your cash buyer. So if you decide that you don't want to trust cash buyers, and then you don't want to work with 1 or 2 like I suggested, and you want to have a big list, then you should put under contract. So you'll have your CRM that will have your VAs on there. And then just make sure that as soon as you get an offer accepted, then you take over. You have your escrow and title company ready to go. So as soon as the seller signs via DocuSign, you can open escrow the next day. And then from there, you'll start finding your buyer. So you'll bring your buyer in escrow, you'll do an assignment, a contract, an assignment of purchase agreement contract, and then the buyer will pay and then everybody gets paid.

So I'm talking more on the seller side. Who offers the actual offers? Is the VA actually on spot, has the Excel file that you just showed us and And they offer that, or they transfer that call to you and then you do the closing with the seller.

Got it. Okay, so you're talking about how you close them on the phone, not like the actual transaction?

Yeah, correct.

Yeah, so I have this— let me see if I can remember it. So pretty much out of that same funnel that I showed you earlier, let's say that I have, I have 10 guys calling, right? So if there's gonna— every lead is gonna be funneled out into— every lead is gonna say yes or no. So let's say we have a big crowd of 10,000 leads right here, right? And then there's gonna be a yes and then a no. There's gonna be a yes, hot, motivated. There's gonna be a yes, not so motivated, kind of no, no, no, warm. It's like whatever, right? So if it's a no, they automatically go into the VA's pipeline and they're in charge of doing the follow-up there, whether, whether it's a orange or green, and then biweekly or monthly, okay? If it's a yes, if it's a yes warm, they go into that pipeline as well, okay? Because I don't want to waste time with people that say, yeah, give me a cash offer, but I want top dollar for it, you know? So every lead that it's a yes and then it's a hot, it automatically goes Goes to me.

Okay?

So here, is it Rami or Ramay?

Rami.

Rami. So as soon as I get here, I'm gonna call and be like, hello, Rami. This is Carlos. I'm the acquisitions manager at Trusted Investor. My rep, Johnny, talked to you earlier about your property on 123 Main Street. Do you recall? Oh, yeah, yeah, yeah. He told me that you guys can make a cash offer. Yeah, like, I need to sell by tomorrow. Awesome. Yeah, great. So I will look to gather a little bit more information about your property, and then you'll get the condition. You'll confirm all the facts like bed, bath, square footage, condition of the property. Is there a mortgage on the property? What price do they have in mind? How soon are they looking to sell, et cetera, et cetera? From there, I'm the one that is going to give them the number. and close them because I have my number, I have my spreadsheet, and the VA— I don't want the VA spending any time trying to analyze a deal, okay? Because they might go on Zillow and find a wrong comp or whatever. I have access to the MLS. I want to confirm that the number that I'm going to give the VA or the number that I'm coming up with, it's the right one. So I'm closing myself, and then from there we can go into the rest. Does that answer your question?

Yeah, yeah, exactly. I just want to make sure because that's, that's the most important, uh, part of the whole thing is to make sure, because some sellers, they'll be a pain, uh, to actually work with. So you need someone that is caliber enough to, to be able to, you know, walk them through the process and make sure that we're, you know, you're You're legit and all that stuff. So that was the question.

Yeah. And at the beginning, I was— so I'm constantly adding guys to my team and I want them to learn as much as possible and I want them to do eventually flipping or buying wholesales, whatever their goals are. So at the beginning, I was like, you do everything with the lead, right? But then we were missing out on some deals because they would choke on the phone or they didn't really know what to say in certain situations. And then the seller thinks, wow, we're not serious, or we're not a real firm, or something like that. And then now we lost on that deal, right? So that's when I got this. I got this from a book or something. That's when I created this and I showed it to all of them. And I was like, okay, this is how we're going to funnel our leads in. We're Whatever is a hot yes, it automatically goes to me. And then from there I can close it and then you can work everything else. That way there's no deals falling through the cracks because somebody was on their 10th call and got nervous or something.

Thanks, Carlos.

What about your website? What is that? What service do you use? Is it like Carrot or something? No, no. I know some investors that use Carrot. Carrot is good, but we just created our new brand. We rebranded, and I think it's just Wix. But honestly, I wouldn't spend too much time on a website. That's another thing that I see a lot of people do when they're starting. They're trying to— they worry too much about the logistics of the whole business. They worry about getting an LLC, and then they worry about creating a website, and they worry about, um, coming up with, uh, whatever it is. Like, the, the—

this is—

I already erased it, but the fastest ways for you to get results is to do that 4-step that I told you: $500, $500, driving for dollars, leads, Skip trace, cold call, follow up. That's going to be the fastest way. Every other course that you buy online from any investor or guru or whatever, they'll walk you through every step and they'll teach you a lot of things, but it will— 6 months will go by and you won't have a phone call. A year will go by and you won't get a deal. And that's just what I've seen based on my experience. But you can build a website later on, but I wouldn't worry about that right now.

Thanks. Cold calling script, texting script. Is there anything that's working in particular right now?

Uh, yeah, I mean, both. We do both. Because Alex, you use Mojo to call, right?

I just— I'm trying out Batch Dialer right now, but I was using Mojo.

Okay, and then for, and then for texting?

Uh, Batch Leads.

Okay, yeah, and how is that? Can you like mass text or?

Yeah, you can mass text.

And then can you, based on response, can you like put them in buckets for them to get automated responses?

Yeah, it has a built-in CRM that you kind of channel each, all the scripts, or sorry, all the text into different little Okay, cool.

Yeah, so, so we have a drip one that I can, I can probably share with you or something.

But what about your cold calling script? Is there anything special that you guys have been doing, or is it just pretty much the basic kind of—

It's the— yeah, it's, it's the basic. And, and what I, what I will say is don't, don't be like a— don't be like a robot. So So we have one script here, and then there's also a script in my bio on social media that you can download for free. But for everybody else, I will say, don't be a robot. Be yourself, and then worry about the 4— I call it 4x4. It's condition of the property, reason to sell, how soon, is there a mortgage? So that's the 4 things that you got to cover. and then the other 4 are on the condition, okay? HVAC, heater ventilation and air conditioner, roof, electricity, and plumbing. As long as you cover those 4 by 4, like, the rest, just be yourself and then ask like where they're from, like where they went to school. Build rapport. You want to stand out. Stand out. Me personally, I'm I speak Spanish, so as soon as I hear an accent, I start speaking Spanish and I'm like, where are you from? Whether they're from Guatemala, Argentina, or Mexico, I'm like, no way, I was raised here. And maybe we're like— there's been leads where he's from this town where my dad was from in Mexico, and then there's rapport there, there's trust, okay? So build yourself, ask Ask as soon as— whenever you have a chance to ask a personal question, whether it is like if they have a dog or if they play sports or something, find something that you can click with and that you can connect with. And then off of that, the guard will come down. You got to stand out because these people get 10 calls a day and they're tired, and that's why a lot of them cuss you out. And so stand out. Look to add value. A lot of the times when I tell my guys too that most sellers tell you like, no, I'm not interested, don't just hang up there. Don't just be like, okay, have a good night. I say, totally understand. Just so you know, we're at the hottest market that it's been in a long time. It doesn't hurt for me to give you a cash offer, does it? Or, no worries at all. Would you by chance may have any other properties that you might be looking to sell? We've gotten leads like that because they're not selling the one that you're calling them for, but maybe they're tired landlords for another property and they have that one. And then also, if it's no, no, and no, you can also ask, we have a referral fee program, and if you know of anyone Let us know. Follow up with a text with your business card, or just tell them to write your number down. They probably won't, but still, like, now they have in their head that you have a referral fee. Maybe their neighbor, they're getting a divorce or something, and they give you a number. Okay, don't, don't hang up and don't drop leads just because they say no the first time. Try to stay on the phone as long as possible. Do you decide to do texting versus calling? Both. Do both. Texting has a way higher open rate, but also they get to opt out, they get to block you quicker. And call— and calling, you can, you can just be more of a human instead of a scam. You know, a lot of people feel like you're a scam when you blast text, mass text them. You can be yourself, and again, you can build rapport, you can stand out, you can, you can find a way to like add value. Calling is very important. I know cold calling, it's, it's not the best, and a lot of people hate it, but if you get through a couple hundred calls, you'll get comfortable and you'll be fine. It's a huge difference. And once you're tired of it and you're finding you're getting a deal a month, start paying a VA that specializes in that.

Got it.

Hey, Carlos, thank you so much for the information. That was awesome. I just have a quick question for you. And Joe, thank you so much for putting this together. Yeah, this is great. Just have a quick question for you. Are you guys structured to do creative deals or do you already feed those leads to someone? Or what do you do with those? I know you don't throw away leads, but there's always that seller that's not going to sell because they are attached to a price and emotionally attached to that home. Yeah, yeah. A lot of the times seller financing, seller carry, it's offered. Right now we have 4— well, last month we did 2 deals that way, and then we're going to do 2 more this month. That a lot of people are not familiar with that, and they might be a little skeptical. But yeah, see if the numbers make sense. The only way seller financing will work is if you can somehow with the terms— so I'll give you an example of the 2 that we're doing. It's zero down, 10% interest. They carry the note. If there's a mortgage, then they'll carry the note for the difference. If there's no mortgage, they carry the note for the full price that they want. Okay? But there's still going to be enough spread. So if the ARV is $250,000 and they want $200,000, there's still enough spread for us to put $20,000 or $25,000 in repairs, maybe $6,000 in closing costs, and then make $15,000 to $20,000. So if you're making $20,000 on $25,000, that's a little bit more above 100% return. It makes sense, right? But if they want $250,000 and the ARV is $250,000, there's just nothing to be done there. But yeah, it is an option for sure. Offer it when there's not a lot of equity, when the seller is not coming down at all, but they really need to sell. It all depends. It all depends on the deal, but it's, yeah, we definitely do it. What do you say, Joe?

I love any type of seller financing. I just Bought a place that I'm rehabbing in Aliso Viejo, and it was basically pretty much 100% seller financing. He changed the deal on me at the last minute, which was fine, but I got possession of the property a month early while he still owned it, and I was in there rehabbing it. We're almost done with it now. I just closed on that property last week. So yeah, any type of creative financing, any type of deals like that, we're interested in. In fact, if any of you are going to start wholesaling and you're looking for a buyer, please reach out to me because, you know, we plan on buying probably 100 properties this month— I'm sorry, this year— and flipping them. Any other questions?

Yeah, Joe, this is Rami again. Uh, question for you, Joe, is this something— and for Carlos— is sub-to, subject-to, is that a common strategy in California? I know it's used, it's used in Phoenix and, you know, East Coast, but is this something that, uh that you guys do actively subject to?

Subject to, the actual term means that you're taking over the responsibility for the underlying loans. And the reason that we don't do that the way that it sounds is because the banks have the ability to call the loan due. So we use a land trust to accomplish those deals, and we put the property into a trust. The owner remains the property owner of that trust, and then once that's recorded, he sells the actual basically paperwork to us. And so then we become the owners of that property on paper, and, and then, you know, do whatever it is that we want to do. with that transaction at the end of the day.

Oh, I see what you're doing. So you become the beneficial interest of the trust after—

Correct. Yes, absolutely.

Thanks, Joe.

And, uh, Joe, thank you. Uh, this is Ivan. Uh, first of all, thank you very much for putting this together. This is pretty valuable information. And same to you, Carlos. Thank you for your time. On that note, on a subject-to, I'm assuming, it sounds like, I'm new at this, it's still possible to wholesale that, right? You can still, there's still a way to wholesale a deal where the owner is open to a subject-to?

Yeah, absolutely. What that looks like is you put a property under contract, let's say, For $300,000. There's an underlying loan for $250,000, and so there's $50,000 in equity there. Whether, whether you're just gonna give that to the owner or not— probably so, maybe not— it, you know, just depends on how you want to work the deal. Um, you, you put that under contract and then you go out and you sell that contract to somebody else. So let's say you sell it to them for, uh, $350,000. Uh, you're good. You've just built in a bunch of equity in there, and then you're gonna make that money at the end of the day. So there's lots of ways, creative financing ways to do deals. You just have to know how to do it.

Hi, a question for Carlos. So this is Chris, by the way. Can you guys hear me?

Yes, sir.

Oh, Carlos, so really quickly, so in counties like Orange County and LA County, I know the previous example was a $500,000 home. We were estimating ARV like 70%. So in counties like Orange County, LA County, the more like the home prices range from like $600,000 to $800,000, would you still say 70% ARV is what we're shooting for? Because I've heard somewhere They aim for 82, but I'm just trying to see like from a flipper's perspective how they can make money if the spread was 82%.

I mean, that's that's a very tight spread because well let's see. So our 82 spread, so that will be.

What?

82 times 500.

Like, just for like an example, like a home in Anaheim would be like a market that I think like if you were able to find a property there, like let's say the after-repair value would be like $680,000. So let's see, 82 of 6.

I think what you'll find, Orange County is very competitive, uh, so we've had to go up to 80% to buy properties. Um, and since we do this, you know, quite frequently, that what we're doing is, you know, instead of— let's say instead of making, you know, 15% or even 10% on the deal, we're willing to go down to 7 or 8% on the deal, uh, just to have the deal flow to keep our contractors working, uh, things like that. So I think that's what you'll find here in Orange County because it is so competitive, um, is, you know, professional flippers like us are just looking for the deal flow. And that's one of the reasons that we started to do more in wholesaling, and we've gone out to Riverside and San Bernardino areas, which are half the price, and we're able to find a lot more deals out there as well.

I see. Yeah, that makes sense. I think I was looking at neighboring counties, so San Bernardino, Inland Empire being those, but I guess that would make more sense since the homes are like $300,000 to $400,000 out there.

Yeah.

I would add in the more expensive sides, it also depends on something that your cash buyer is going to factor in is the length of the project. So if it's a property in Orange County that does needs maybe very, very minimal repair and it's maybe $20,000, $30,000, just a little cosmetic work, and you can be in and out in 30 days, they'll all day, 100%, will go up to $85,000 for the ARV. It just depends. It depends. But yeah, anywhere outside of Orange County, there's a ton of distressed properties. I'm telling you, Marco, he's in front of me, he goes once a week, every Saturday, driving for dollars, and he finds 600 properties in like 3 or 4 hours, like a week. And these are properties that need work. He goes to Riverside, he goes to Corona, he goes to Banning, he goes to Ontario, he goes to Colton, Bloomington, all of those areas. San Bernardino County is the hottest county in Southern California. Joe will confirm that. Hotter than Orange County. Days on market, it's like houses are flying off. So, those are good, good areas.

I see. Thank you.

Anybody else?

Well, I have another question for Carlos. Carlos, I know you mentioned earlier, so ideally when you go on PropStream, everybody can have any criteria, but like everybody's looking for vacant, everybody's looking for like 40% plus equity. Now those lists are pulled very frequently, right? So you're saying these, these people on these lists probably get called at least 10 to 25 times per week. Is— I mean, I'm not asking for your strategy specifically because I obviously need to find a niche, but like how, how would you Differentiate. So I saw on your, like, your board, you guys keep track of, you know, driving for dollars is what you recommended, but you guys also have an equal list of like cold call. So in that case, like, those are lists that you guys generated not through using PropStream or like through like social media?

No. So those, those calls are, are the driving for dollar leads. So yeah, you want to call those mainly. We'll still pull some lists, but it's like out of 10,000 leads a month, like maybe 2,000 are from lists and then 8,000 are from driving for dollars.

I see. Yeah.

So, the ones you're gonna call are driving for dollars because those are just unique lists. Yeah. Driving might not be as efficient, but it's pretty effective. Yeah. It's not hard to find a lot of properties.

Trust me.

Yeah. Like, especially in all those cities that I just mentioned. But you can try pulling a list of like 1,000 foreclosures or something and just get good on the phone. Get practice. Get practice. Because you're gonna get cussed out, you're gonna get— they're gonna hang up on you. Yeah. So, it'll be good practice, at least.

Yeah. Thank you.

You're welcome.

Anybody else?

Uh, thanks for those contracts there, Joe.

You're welcome.

I appreciate that. Those—

I'm assuming those are the ones that you use for any, any type of deal, even creative, right?

Correct.

Awesome, thank you so much.

Yeah, if anybody needs anything, uh, reach out to me or reach out to Carlos. And we'll try to get you what we need or what you need. And remembering that if you're going to start doing this wholesaling, that we'd like to be your first call. So just give us a call if we're interested in a property. If you've, if you've done it the right way, you know, I'm happy to buy from you and pay you a fee for that. Alex, Sold us a property, what, a month ago, Alex, was it?

I think it closed on the 31st of December. Yeah. So, maybe 2 months.

And Alex started wholesaling literally a couple months before that and ended up finding us a deal. And then we paid him a wholesale fee and we're actually in the process of rehabbing that property right now. It's in Long Beach. So yeah, anything that you have, please reach back out and at least find out if we're interested in it and we'll go from there. Does anybody else have any other questions?

Joe, I have a question for you, but this is unrelated to wholesaling. Is it okay for me to ask here or should I just contact you separately?

Go ahead. Why not?

All right. So it's a real estate related question. So I actually just Got a property now. I'm looking at— I'm in Orange County now. ADUs, how much? So, this is a BRRRR property for me. It's my first BRRRR property. How much do you think adding an ADU would actually increase the, you know, the appraisal value of this property once it's done?

Do you want me to tell you the truth or what everybody says on BiggerPockets?

No, I'll take the truth, Joe. Cold hard truth is okay. Very little.

Very, very little.

Uh-huh.

Very little.

If you're, if you're in a neighborhood, let's say you buy a 3-bedroom and there's 4 bedrooms in the neighborhood, that's what you're going to increase it by with an ADU.

I see.

The appraisers and the banks have not caught up with that at all. They don't know how to evaluate that. All they can do is say, well, okay, you've got basically another bedroom in your house.

I see.

And that's how they evaluate it.

Okay.

And I know that's not what you wanted to hear, anybody wanted to hear, but, um, that, that's the truth.

No, no, that's understandable, Joe. Cause I think for me, it was like a long-term play cause I will eventually convert it regardless. So luckily this property I bought has then, it has like a room built on top of the garage. It's a legal permitted thing, but they never ran any plumbing to there, but I was just going to use it as like a rental eventually if I were to convert it to an ADU, but But it's good to know that that shouldn't be my first thing when I get in there to fix that into an ADU.

Yes. I'm looking for something while you're talking here. Hold on.

Joe, while you look for that, on that note, you said bump it up a bedroom. Do you bump it up a bathroom as well? So if you got a 3/2 SFR and it has an ADU, Do you— is it safe to compare it to a 4/3?

Yes, yes, that's, that's a good way to look at it. Um, I just got an email from a lender and he talked about this subject, and that, that's what I'm looking for. So that I could send you the link here real quick. But of course— oh, here we go. I'm trying to find it, and of course I can't. Okay, I found it. Let me, uh, let me open it up, the website up here, and then I'm gonna send you this link. And he, he answers the question. He's a, he's a lender, so, you know, you You'll probably get the best information from him. But anyway, go to that website and basically it says, how much money does an ADU add? Oh shoot, I spoke a little bit too soon. He's got it under construction. But anyways, if you go to the homepage there and reach out to him directly, it's got his information on there. His name's Daniel Dobbs. He'll, he'll be able to answer that question a lot better than I can. But from what I've seen is that it does not add a lot of value at the end of the day.

Mm-hmm.

You know, if you keep it long-term and, you know, you build it for a reasonable price and you do a cost analysis on it, Then you're going to start breaking even at some point, and then you're going to start making money after that. But that's keeping it for a long time.

Yeah.

Most, most of these, they originally came to being— they were called basically granny quarters, and that's because you moved your grandma and your grandpa into there. Um, you know, when they got older, she could take care of them and not throw them in a nursing home. This ADU stuff is, you know, just a different name for the same thing and a different function, but it— the numbers just, to me, the numbers just don't work out at all.

Yeah, I was always looking at one. I think some companies out there, they're specifically ADUs, but they're charging $100,000. And I was like, that's a down payment for another house.

Correct.

Yeah.

Yes. And then, and then, you know, How long is it going to take you to make that $100,000 back? You know, if you're renting it out, you know, let's say you're making $10,000 a year at $100,000. Obviously it's going to take you 10 years to even break even. You have to hold it for that long of a time.

Yeah, I see. Thank you.

Thank you for the information, Joe.

Anybody else? Silence. Okay, well, if nobody has anything, uh, you know how to get a hold of me. I put Carlos's information on there as well if you want to get a hold of Carlos and you want to talk, uh, to him a little bit more. Please reach out to him or me and, and we'll go from there. Any questions real estate related, I'm always available. Just give me a call. Check out the website Pelago. It's, it's a really, really handy site to have. And if any of you are real estate agents looking to change, please get a hold of me. Okay.

Thank you.

Thank you all for coming.

I appreciate it, guys.

Good luck.

Thanks, everybody.

Thank you. Thank you.

Thank you, guys.

See you, Carlos.

Later.

Let's find some deals.