$10K First Deal: Lessons They Don’t Teach You

What is up, Facebook Live? If you saw that, I was— I don't know what was going on with my StreamYard, but we are happy. We got Jared, the freaking legend. Morris, what's up, Jared? Good to see you, man.

What's going on, Nathan? Good to see you, bro.

I'm so happy for you guys. If you're tuning in, what we're going to be diving in today is how Jared just got his first deal, and we're not gonna— we're not gonna church it up. We're not— not gonna you know, make it sound prettier than it is. He got his first deal, but it was a doozy, was it not?

It was a doozy and a half, Nathan.

Yes. Well, hey, dude, my first deal, like I was telling you earlier, freaking night, it was crazy, bro. I was like scared to show people the house. I was doing— I was just doing everything wrong, and somehow we got it done. But it taught me that this is real, that there's like— you can make money. This isn't fake. This isn't a scam. And that's kind of— is that that's what you were looking for too. You just want to get the first one across the finish line, right?

Yeah, absolutely. It was, you know, we— I put a lot of work into it, so just wanted to check that off, proof of concept, and have some more rolling in after that.

So let's break it down, man. I think for everybody that's going to watch this, they're going to— they can learn from your experience. This was your first one, and, uh, we want to know how you got it done. So, uh, real quick before we dive into that deal, how much was— did you make on it?

$10K on this one.

You know, that's a— that's a lot. That's a lot of money for some— some people. That's a game changer. But you're saying, hey man, I just want to—

absolutely.

That's great to make money, but I wanted that proof of concept, right?

For sure, for sure.

Let's talk about it, man. How did it happen?

Let's start from the beginning.

You joined the painless— you joined my club and you started learning, bro. You dived in because you were asking me questions and I appreciate that. Not a lot of people dive in and really take hold and learn, but let's start from there. You started learning. Tell me.

Yeah, absolutely. So one of the first things I started doing was A, just building out a strong buyers list and connecting with a lot of buyers. And then B was also just connecting and networking with other wholesalers. So through your program, you connected me with one of the buyers that was in the buy box criteria. Guy's super legit, been doing it 20+ years nationwide. And as opposed to kind of just sending him a message, I connected with him on the phone and stayed in touch with him throughout the weeks, throughout the months, just to make sure I had that solid relationship with him. So he ended up being the buyer on this deal.

Let me ask you a quick question.

Yeah.

Do you feel like if you just would've connected with him over a text, you would've had the same outcome with this deal?

No, definitely not. I mean, I think I built a decent amount of rapport over the phone with him and just continuing to follow up and touch base and stay in touch. So I was top of mind and he'd be receptive to anything that I had for him.

Oh man. And I just want everyone to know, I don't care if you got a million buyers on your buyers list or or 10,000. It's not so much about how many you have, it's about the relationships you have, because I'm sure we're going to get into kind of this deal being tricky and how the relationship you had with him kept it going, I'm assuming.

Yeah, for sure. Absolutely.

Okay, so yeah, so let's continue. So you, you've connected, you found the buyer, then, uh, developed a relationship. What else happened?

Yep. Yeah, so, um, I connected with the wholesaler that brought me this deal on a different deal prior. I had a different buyer go, uh, to look at this property that he under contract. That one didn't work way out, but he continued to send me deals. And he sent me the deal that ended up closing. And I thought, this actually looks really good for what I know this buyer's looking for. So I sent it over to him and he got back to me pretty instantly and was like, we like this. I like it a lot. I can move on it very quickly. So this was on a Friday.

Were you stoked? How did you feel when he responded?

So it's funny. So it's funny. So I sent it to him. It was on a Friday. And that Friday I had a 60-minute massage, so I was off my phone during those 60 minutes. And of course during that, I get a bunch of texts, look at my phone, and he's like, "I like this. I want to move on it. Can submit EMD as long as I can go view it." And that was the beginning of it. So I was pretty excited about that. That's when it kind of started to get tricky. So when I connected back with the other wholesalers, "Hey, my buyer really likes it." just needs a 24-hour inspection to check it out and we'd pretty much be good to go. They were like, there's no— sorry, but there's like, there's no inspection period. We can't allow for an inspection period. They need to submit an EMD without inspection.

This guy's a noob. So they just didn't know.

I'm going to try to keep this as simple as possible to walk you through it. So then what happened was they were going to be able to view the property and I convinced them to go view the property with their inspector. So they were basically going to walk in and inspect it at the same time. But then the problem became that it was going to be a group showing. There was going to be a bunch of people showing up and it was going to turn into a bidding war. And my buyer wasn't about that. So I was able to—

They were going to shop it around at the same time that you, your buyer wanted it. Is that right?

Correct. They were going to have a bunch of people show up at this property and basically take the highest bid. So that wasn't going to work for my buyer. I convinced the other wholesalers to allow my buyer to be the only one that shows up. I told them, you know, I'm looking for a long-term relationship. We can do a lot of deals together, yada, yada, yada. So they agreed and allowed my buyer to be the only one that went and walked the property. My buyer showed up with his inspector. They liked it. He called me back, said, hey, it's going to take about $5K more than we were expecting, or $10K more than we were expecting. Can you take $5K off the price? So what I did, instead of just dropping $5K off mine, I went back to them, asked them if they could drop it as well. Everyone agreed. We agreed on price and that looked good. So that's like first part. Okay. Then they needed to submit a 5K EMD, which was no problem. But where it got tricky was in the contract, there was this line at the end of the contract that said closing must occur 72 hours after vacancy. So there was a tenant occupied and they were going to be there through the end of the following month. Okay. The problem was If my buyer submits $5K EMD and then for whatever reason the tenant decides to move out tomorrow, now he needs to close in 3 days and that's not enough time to get funds for the deal. Right? Right. So went back and forth on trying to get that line out. The agent that they were dealing with was non-responsive. They literally just—

On market?

It wasn't on market, but it was through an agent.

Okay. Gotcha.

So they literally just like crossed it out with a red line. It wasn't even signed. And like, that's not legit, right? This is a contract. Like, it's not legitimate. But, and they're demanding that the EMD is deposited by noon the next day. And I was like, this isn't going to work. So what I had them do is I had them put in the assignment contract, if the agent and sellers don't sign on this updated agreement, my buyer's EMD is refundable, just to give my buyer a little peace of mind. So they agreed, EMD gets deposited, we're good. Now we're waiting for tenant to move out. At the end of the month. Okay. He also put in the contract that he has 14 days to close after vacancy, which is going to be huge as we get to the end of this. So EMD's deposited, everything's good. We're waiting for the tenant to move out and then close. So, and if you have any questions on this as I'm going through it or want to add anything, let me know.

No, it just seems like there's a lot of moving pieces, right? The tenant needs to move out. The EMD, they don't— your buyer's like, I'm not losing $5K if this doesn't go according to plan, right? Is that kind of what's going on?

He didn't even say that, but I just, because I want, I'm looking for long-term relationships. I wanted to protect his end. So that's why I threw that in there. Like if they don't sign, your EMDs are refundable. So now everything's good. We're in the waiting period for the tenant to move out, which was going to be June 30th. And then we have 14 days to close from then. Um, so tenant moves out on June 30th as expected.

Thank goodness.

Thank goodness. I was a little concerned, but that was no issue. Yeah.

Yeah.

So then the buyer goes to walk the property once the tenant is moved out. And when they walked it the first time, so this property is in St. Pete, Florida, has a pool, didn't need that much renovation. When they went and viewed it, pool was blue, looked good. No issues.

Okay.

Tenant moves out, they go to walk the property and the sellers turn the power off in the house. Now this is in Tampa, Florida. I don't know if you've seen the heat in the US right now, but it's like 100+ degrees. The buyer goes, power's off. So now his main concern is the pool's not going to be serviced, it's not maintained. The amount of damage that can occur between tenant moved out and when we close could be thousands of dollars, mold in the house, whatever. And in the contract, it says that sellers will maintain property through closing, including pool. So he's like, sellers, sellers need to turn the utilities back on. This is what it says in the contract., and I'm just like this middleman between my buyer, the other wholesalers, the agent, and the sellers. So I'm basically like brokering this whole deal the whole time. My buyer's saying utilities needs to get turned on. Pool's going to go to crap. House is going to get moldy. The sellers are like, no, like we're not doing it. We're not turning it back on. House is being sold as-is condition. So we're going back and forth on this for a few days. Buyer's not happy about it. Long story short, I get my buyer to put the utilities in his name early and turn the utilities on. Wow. So that the pool can be maintained and the house is good. Okay. So got through that. I have all these notes of like everything that, that happened.

So you were crushing it.

Got through that, set the utilities up, and that was on like, uh, Wednesday, Thursday, and we were set to close on the following Monday. We're supposed to close on July 10th. Okay. Title agent that we're dealing with has a serious family emergency over the weekend, death in the family. She's working the file this whole time. Come Monday, she's not in the office, passed to her colleagues. They're not in the loop on what's going on with the file. Then my buyer is bringing funding to the deal, which shouldn't be an issue, but title's making it seem like it's an issue. So there's all these other issues. Now the lender is saying to title that the name on the deed and the title don't match, and they won't fund. Until it matches. And title is saying that we can provide you an affidavit, we'll guarantee 100%. And the lender's like, no, that's not going to work. We need a hard copy of an updated deed.

And the lender is the hard money lender, correct? Yeah. Okay.

So lender's like, no, that's not going to work. We need a hard copy of the updated deed with everything matching. So title company doesn't know what's going on. The person it was passed to didn't even know we were supposed to close on Monday. Now the lender is demanding a hard copy. And this is why I'm saying the 14 days to close after vacancy is coming into play here because vacated on June 30th was supposed to close on July 10th. And now July 10th was on a Monday. Now this whole week is going by of back and forth between lender, buyer, title, deed, title company doesn't know what's going on. So now we're, now we're on Thursday. 14 days is Friday. Yeah, I know this is all over the place. I hope, I hope you're following.

Well, I'm following. Yeah, yeah, yeah. This, you know, you got a lot of people to go through just to communicate, right? There's a lot of moving pieces. The agents involved, the sellers, you got the wholesalers, and then you're brokering with the buyer, right?

So seller signed on their end, my buyer signs on Thursday, everything is signed, which is good. But now we're waiting for the funding to be deposited. So that was on Thursday that everything is signed. Once it's signed, it should be a few hours after title and lending gets approved. But the title company was such a mess that the title agent that was working the file didn't send what she needed to send to the lender until Friday at 3:00 Eastern.

So wait all weekend, huh?

Well, Friday is 14 days. Right. So if funding doesn't get deposited in 14 days, the contract could cancel. So title really screwed up. They didn't send what they needed to do until Friday at 3 Eastern. So now it's the weekend and I'm not really sure what's going on. I called title on Monday morning. They tell me that, oh, I'm sorry. Let me, let me backtrack real quick. So, um, the lender didn't want to approve the affidavit, right? They wanted the hard copy. My buyer has a really, really strong relationship with the lender, this lending company. And he got on them and pushed it through. So he made them push it through. They deposited their funds. I get a call on Monday morning saying, I got the lender's funds, but I don't have the buyer's funds for the down payment. Meanwhile, my buyer has receipts of depositing his funds on Friday. They were just such a mess at the title company. They didn't even see it, even though it was deposited the whole time. They find the buyer's funds. They got the lender's funds. It closes out and the deal is finally done. But It was like, like you said, it was a doozy.

It sounds like the biggest issue and the biggest struggles we had in this deal was, well, there was a lot, right? But the title company kind of screwed it up, right?

The title company was a little messy on this one.

Yeah. So who chose the title company? Was it your buyer or was it the seller and the agent that were like, we want—

So no, it was, it was the seller and the agent that chose the title company. If it was up to my buyer, they use one title company for every other deal. So yeah, the, The other wholesalers and the agent chose the title company.

So why did you use that title? Like, I know they chose it, but did you suggest using another one? And they were like, no, we'll only go with this one. Or how did that— did that conversation— did you ever have that conversation?

I didn't on this one. But after this closed, because like, I want to do more business with like these guys, these other wholesalers, they're doing a lot of deals. My buyer's doing a lot of deals. There's— I'm fine. My relationship is fine with my buyers and these other wholesalers. I want to do more deals with them. So I reached out to them. I was like, hey, like after this mix-up, my buyer is not going to want to uses title company again. Are you guys open to using their title company?

So, and they were like, yeah, heck yeah. So that just kind of giving you a suggestion on the way this moves the smoothest is the buyer is, um, able to choose the title company so they can have direct communication. They trust whoever. That would solve a lot of these issues. And then, you know, it is— it always gets a little tricky when there's an agent involved with the seller, right? And then yet they communicate with you.

It was like seller, agent who was not a responsive agent. So it's sellers, agents, other wholesalers, myself, buyer. So myself and the other wholesalers are basically brokering this whole deal. The agent did nothing. I said to the other wholesalers, "We deserve this guy's commission. We worked this deal for 2 months." Wow.

And the thing is, look how many people got paid on this, right? You, the wholesaler, and the agent. But the agent, you're right, didn't do much. Right. Dang, that's wild. So Very good lessons learned on this one.

Oh, for sure. Many.

Yeah. Let me ask you a question. On the buyer, on the wholesalers that had the deal, why do you think they went with you? I know you said you convinced them, but you said they had— Yeah, yeah. They're doing deals. Why do you think they went with you versus, you know, just showing it to everybody and doing that route?

Yeah. I mean, I basically, I connected with them and was like, look, like I'm looking for a long-term relationship here. I'm looking to do a lot of deals together. My buyer, he's legit. He's been doing this for a very long time. He's nationwide. And like, "If we can have this work out, I think we can do a lot more deals together." So that was basically the value that I was bringing. And yeah, that's how I was able to kind of set that up.

And they probably liked the fact that, you know, you could just send them through. He was going to bring a specter at the same time and give you a solid answer, right?

Yeah. Yeah.

Yeah. So let me ask you this. So did you have to make an offer to this wholesaler on his deal, or did you just say, "Hey dude, let me ask my buyer." And then you got back to me like, "Dude, my guy wants this." How did that—

All I— So on this one, all I did was mark up their price. So they assigned the contract to me, I assigned it to my buyer. So there was 2 assignment contracts in it. And then at closing, I got wired my assignment, they got wired their assignment, and that was it.

So this technically wasn't even a JV, because a JV is like when you have an agreement and you split it, or you figure out— This was Correct. They signed you their contract and then you signed one to your buyer.

Solid. Yeah.

Yeah. And did this cost you any money in marketing to get this deal? Did you have to spend any money?

No, not a dollar.

So let me tell you something. I know that this was a doozy, but how much worse would this have been if you spent $5,000 to $6,000 in mailers, ads, or whatever? And then after spending $6,000, you went through all this, made 10, and you only got to keep 4.

That's— yeah, for sure. I mean, like, obviously the net is a lot less, but like, for the amount of time and work I put into this, if I had to spend money too, I mean, time is money, right? So the money on this one was my time on this one, for sure.

Just know from all the experiences I have had on doing deals like this, even if you spend money to get deals, there's still tons of issues. I've been working on a deal in Del Rio, Texas for 2 years. For 2 years. And it still hasn't closed yet. It's at title. So imagine that. It's like, bro, like I just spent, I spent all this money and I still— now it'll probably be a $30,000 deal. This could have been a $30,000. I mean, who knows? But I'm just saying like issues arise. And if it's not from like trying to negotiate with everyone or figure out what's going on, it's, you know, other things like title, death, probate. There's some of them go super smooth. Some of them doozies. Yeah. But congrats, man. Thanks for telling us all that. Appreciate it. Anybody that's watching this can definitely be like, okay, I'm going to hit up Jared if I have any problems. And Jared, let me tell you, like, you can help people and you can be like, yo, I'll help you take this to the finish line, but let's— let me get involved. Let me make some money. So yeah, you can definitely work with people.

Yeah, absolutely. Learned a lot through this, like dealing with title, just the contracts, the paperwork. Like, so learned a lot. Absolutely. And happy to help anyone else.

Well, the power of having a good buyer is so important because imagine if you didn't have that relationship where you could just be like, "Hey dude, pay for the utilities." 100%.

And that was no easy ask either, but I'm glad that he was able to set it up and do it. But on top of which, as I mentioned, and I know we're at time, but I'll go a few minutes over. It's all about the relationship building, right? And this guy's been doing this for a long time. He's doing a lot of deals. He's making a lot of money in real estate. And from this deal and just being ethical and a good communicator with him, I'm looking to now partner with him on future deals and invest myself. So it's a win-win-win.

Dude, you find a property that meets his criteria, next time— this is what I do a lot with my buyers now— is I say, dude, pay me a little bit less on the wholesale fee, but cut me back on the flip. Keep me in on the deal. Let me own a percentage. So then you can start owning real estate without even having to worry about managing it. Maybe that's something he might be willing to do because he likes you. Right. So yeah, that's what I did with an Airbnb I have. It's like, hey, I want to start on more real estate instead of taking 10 or 15, just give me 5 and give me ownership. And then that way I can make money without having to worry. But anyway, congrats, bro. I know we're over time. Appreciate it. Yeah, I know. I appreciate you, man. Thanks for helping us out in our community. And you're definitely an inspiration for those that are trying to get there. So thanks for sharing your experience.

Yeah, absolutely. Thank you, Nathan.

And by the way, you have a job, bro. Like a lot of people.

I do. I got a full-time job, baby.

Yeah, you got to get going. Going to your full-time job. But everybody listen, whether you're full-time or not, this is something you can do. So Jared can do it, I can do it, you can do it. Peace out, everybody.

All right, see you guys.