How I Closed My First Wholesale Real Estate Deal ($5K Profit)

Oh, what's going on? Didn't notice you there. I know why you're here. You're here for another Nathan Payne's Wholesaling Storytime, painless tales from the trenches. You're here because you want to hear about my first deal. If you weren't here on the last one, I talked about how I got started in wholesaling, and today I'm going to be talking about how I got my first deal. All right, so if you want to know exactly how I got my first deal, not only how I got my first deal but the crazy intricacies of the deal, because it was my first one, I did not know I was doing— if you were on the last episode, you would find out that I just tried to figure it out. And that's what we're going to do today is we're going to explain exactly how I did it and how you can learn from the mistakes and a lot of the ups and downs that I went through so you don't have to go through the same pain that I went through trying to figure all this wholesaling stuff out myself. So that's why we got the wholesaling story time today. And again, it is live, so I don't have anything pre-recorded or anything for you guys. It's not perfect. I'm just gonna come and tell you. I got a couple bullet points. I'm going to tell you to my best ability what happened 5 years ago. Okay. I love journaling. And I wrote down since I've started my entrepreneurship journey in real estate, I've wrote down pretty much all my experiences. I've been extremely, extremely consistent with writing. So journaling my stuff. So I'm taking you guys back to the summer of 2018. All right. It's written here, but I'm going to just orally, I'm going to tell you about it. All right. So welcome. If you're watching this live, I appreciate you. And if you're not watching it live and you watch it later, I appreciate you. Again, the reason I'm doing this is because my journey in wholesaling, when I first started, was it It wasn't pretty, okay? And I know there's a lot of ups and downs to it. So my journey and my goal on this journey taking you guys through is to make sure that you guys can not go through a lot of the things you don't have to, a lot of the problems that I faced, all right? So let's dive right in on that first deal I got after 3 months of cold calling, okay? So on the last episode of Nathan Payne's Wholesaling Storytime, I talked to you guys about how we met with a broker and he's like, oh yeah, I just had a dream about wholesaling and you guys, I saw your posts about wanting to get into wholesaling, maybe we can team up. Gave us a spot, he gave us an office to work at, he gave us a Mojo dialer, and he said just call these expired listings lists. So me and Corey, we started hammering the cold calling lists with the, the list that he gave us, and especially the expired listings. And this is actually how we met Donald, who's the star of our episode today, of our story today. Donald is from Croatia, and he is the one that we were able to do a deal with. He came from the expired listings list. It's a pretty interesting story. So this is how it works. We're going to start with Donald. So we're cold calling this list of expired listings, and what's going on is We're calling, calling, everyone's saying, oh man, no, I'm not interested, I'm not interested. We finally get someone, we finally get someone that's interested, and he doesn't honestly sound that interested in selling for cash. He's just like, yeah, what's your offer? And you know, for us, when we first started, we were just like, okay, yeah, I guess he wants an offer. So we set an appointment to go to his house, and it was like 1, 2 o'clock. We went to go see his house, and I'll still remember when he opened the door, he looked sad. He wasn't looking like he was too happy, but it was middle of the day. He looked like he hadn't slept in a while. He's like, come on in, and we go inside his house, And he ends up explaining to us that he lost his job a little bit ago and he tried to sell his house on the MLS but didn't have any luck. That's why he was on the expired listings list, is because he sold, didn't get the offers he wanted. So he was like, whatever, I'm just going to let the bank take it. And he just hadn't made a payment in months and he was just sleeping all day. And, you know, we convinced him, we're like, hey, Donald, look, man, you don't have to just let this house go to the bank. Don't do that. You got equity. We can buy your house for cash. We can buy it as is. We won't ask you to do anything. That's basically what we said because we knew that was the script. We knew that was the value that you would say as a brand new We'll buy it for cash, quick close, fast. So he's like, okay, well, what can you guys offer me? Now, negotiating with Donald, unfortunately, it wasn't like, like we walked in and immediately we were able to come to an agreement. This actually took like many different times of me and Corey going to his house. And as we were able to get to know him better, we ended up finding out that Donald, he's from Croatia. You know, he was, he was living in the United States, but he wanted to get back. He was like, man, I want to just go back to Croatia. I want to start a fish farm. We're like, oh wow, I don't know anything about fish farms, but sounds like you got a dream, you got to go chase it. So that was exciting to get to know Donald. But, you know, he wasn't willing to give us all the information up front. We actually had to go to his house a couple of times. And it was interesting because a lot of the times we would go see Donald, it'd be midday and he'd be sleeping, right? Like in the middle of the day, we'd knock on the door, we'd wake him up and be like, Donald, we're here to talk about the house. We're here to see, you know, we can work something out. And a lot of the times we'd call Donald and he wouldn't answer. We were like, we figured he'd be sleeping. So we would just knock on the door and he'd let us in and we would hang out for a little little bit. He actually became like a pretty good friend. We were just, you know, hanging out until we were able to kind of get to an agreement. And when it came down time to negotiate with Donald, we just threw out an offer. We didn't really know if it was going to work, but we knew as brand new wholesalers, you just got to get it low. So we offered low. We offered $185,000, which we felt was low, and he agreed. He's like, okay, all right, sounds good. When can we close? We set it out for like 2 weeks. So as brand new wholesalers, we had just done the first step of what we've been taught, just find a deal. That's what, that's what we had been taught at the time. That's what most people get taught, which I'm not an advocate for just putting stuff under contract when you don't know if you can sell it, as you're going to find out in this story of like the bad things that can happen. But we got it under contract and now we were like, well, we got to find a buyer. We have to find someone. And we had no clue how to find a buyer whatsoever. And it was a big struggle. It was a very big struggle to find a buyer for this deal because again, we had no idea what to do. So what ended up happening is the broker who we had worked with that had let us work in the office, that gave us the Mojo dialer in the desk asked in the place to work. He's like, hey, um, why don't we send out your deal to all the real estate agents in the state of Utah? We'll just say, hey, look, wholesaling this deal, who has a cash buyer? And he sent— he blasted out to thousands of real estate agents, and which is not a good idea, we, we later found out. He ends up sending out this deal to all the agents, and we start getting tons of calls of agents being like, yeah, can we send our buyers, uh, you know, our families that want to buy the house through? And, uh, you know, we're getting a lot of people that weren't cash buyers. There were agents that had families that wanted to buy, and we were looking for cash buyers because we get a loan on this property. It wasn't in good shape. Like, we needed a quick close. So the agents didn't know what we were doing. And we ended up like a couple of days later getting a call from the Board of Realtors. I didn't know what the Board of Realtors was, but they called and they said, you need to come to the office. We need to talk to you. So I'm a little nervous. I mean, Corey nervous. I'm like, I don't know what the Board of Realtors is. So we go and we sit down with some guy in a suit and he's like, do you mind if I record this conversation? And I'm looking at my business partner, Corey. I'm like, probably not. Like, I don't know. Sure, go ahead. So the guy puts a tape recorder on the table starts recording and he just starts asking us questions about what we're doing with the deal. And we just tell him, hey, man, we're trying to sell this deal. And, you know, what ended up happening is they were just like, hey, you can't do that. You're not licensed. Even though there's no law or no rules at the time and still aren't, they were just trying to scare us. Nothing happened. They let us go. They probably looked at us like these guys aren't going to make it far. They don't know what they're doing. But anyway, the Board of Realtors, they tried to scare us. Whatever. We definitely did not blast out deals to every real estate agent in the state of Utah after that ever again. But what ended up happening next is as we were looking for buyers, we were getting agents that would say they had cash buyers. So we were like, we were scared that if any buyer that we brought, agent or buyer, that they would talk to the seller. This is how stupid we were back in the day that we were that nervous. But it's maybe something that everybody faces. They're scared that they're going to lose the deal and that the buyers are going to talk to the seller and be like, oh, hey, you know, this guy's wholesaling, or hey, just work with me and cut this guy out. So we were scared of that. So we asked Donald every time we had to show the house, we were like, hey, Donald, you mind taking your dogs to the dog park? We'll call you in to come back after the showing. We'll just let you know. We don't want you to get bothered deal with all this. And this happened like 2 or 3 times that we asked him to go to the dog park, and after 30 minutes, 40 minutes, 45 minutes, he'd call, hey guys, can I come back? I'm, you know, the dogs are tired. Yeah, come on back. And we'd be done. But now, knowing what I know now, you don't have to send anyone out of the house. That's so dumb. But again, there was the mindset of like, you know, we didn't know what we're doing, we were scared. So we ended up finding a buyer on one of the Facebook groups, the real estate Facebook groups in Utah, and his name was Roger. And he's like, I'll buy the house. And guess what? He ended up offering exactly what we had it under contract for. He offered $185,000 and we're like, oh, can you pay a little bit more than $185,000? That's what we got it for. He's like, nope. So at this moment we got to freaking renegotiate. I've never renegotiated a real estate deal at this point. So we just sat down with Donald and we said, hey, Donald, we offered the wrong price. We can't buy it at $185,000. We're going to have to renegotiate. And he's like, well, what's the price, guys? And we're like, $180,000. He's like, okay, sure. And we're like, oh, okay. All right. So we re-sign an agreement and this is what This is what he told us after he did this. He's like, after we signed and did the agreement, he's like, do you know the other day someone came to my house, another investor came to my house and came in and started talking about the house. And I told him I was already under contract with you guys. And the investor— this is what Donald told us— he said the investor said, I will buy your house for cash right now. And Donald's like, what are you talking about? The guy goes to the bank, gets $40,000 of cash, and he comes back and he lays the cash on the table. It was like $40,000 or $80,000, something stupid. He lays the cash on the table and he's He says, I'll buy your house right now. Here's cash. And Donald's like, no, I'm under contract. Plus the house was worth way more than $80K. I don't know what that investor was doing where they thought they just laying $40,000 of cash. Like he owed more than $120,000 on the mortgage. So like, I don't know what that investor is doing, but he laid cold hard cash according to Donald on the table. We actually ended up finding out who that investor was. It was one of my mentor's brothers who didn't know what he was doing. And that's the story for another time in the future as we go deeper into the story. But imagine just laying cold our cash to a seller, like, I'll buy it right now. And they're like, what are you talking— that's not how real estate works. After that, we were able to renegotiate the deal, you know, through pain, and get Roger to agree. We signed the assignment, and we assigned the deal to Roger. And guys, when it came down to the closing date, you think we felt confident and comfortable? No, we didn't. We were scared that the guy at close would just like look at the documents and just be like, nah, I don't want to sell. Because again, we didn't know what could happen. So we ended up meeting Donald at the title company. We're like, hey man, we'll meet you there, because we wanted to make sure he would sign. We wanted him, and if there were any issues, we wanted to see if we could overcome those objections at the title company, if there were any, which there's not. So anyway, we go there, and there's like a glass window as he's signing with the title company, and we're watching him sign. Me and Corey were like, looks like he's signing. So he ends up signing, everything's fine, and they hand us— after he signs and it funds, we later get the check for $5,000. That's my first deal, $5,000., I felt great. Now, $5,000, not a lot, but it was the proof of concept that made it exciting about this, this deal. We were like, oh, this is real. And it was crazy because, like I said, $5,000, not a lot after 3 months of work. And we had to split the deal with me and Corey. Anyway, it was a proof of concept and we were excited to get it done and add a cherry on top of all that. Everybody, Donald, as he's moving back to Croatia, he had a bunch of stuff at the house. And I'm a— I don't want to say cheapskate, but I was born like, hey, you know, if something's free, go get it. You know, like I grew up like, hey, I liked going to thrift stores. Growing up. I like doing all that. So when he left, he's like, hey, you can have pretty much anything here. And I was like, word, for real? And I had just moved into a house like, you know, a couple minutes away. And, you know, I didn't have a lot of shovels or garden tools or any of that. And he had a ton of that stuff. So I went over there, picked up a bunch of shovels, a bunch of rakes and hoes and whatever. And I just grabbed whatever I could that I thought was valuable. And I don't do that anymore. That was a cool thing for me to do back in the day. I thought it was fun. It was like a treasure hunt that you could go and get stuff from people's houses if they left and it was good. All right. So anyway, that was the cherry on top. And guys, look, as I reflect on this, there's a lot of lessons learned that you guys don't need to like learn if you just learn from my mistakes. First of all, we locked up this deal at the wrong price because we didn't know what a deal was. We just didn't know. We just threw out a random number. Don't do that. You should know what your properties are worth. You can do a quick analysis. Now look, another thing is we didn't have buyers at all. We just locked it up and we're like, we'll find somebody. It wasn't as easy as you thought. And when you're under the gun, you got like 7 days of due diligence or 5 or 3, sometimes you don't find anyone fast enough. So going back, I would have done what I do, ainless flipping now, and I would have gotten the buyer or had buyers in check and known people, so I would have been able to get buyers' offers quicker, and I wouldn't have sent this deal out to every agent in the state of Utah and gotten in trouble with the Board of Realtors. That's something I would not have done. Okay, so there's a lot of lessons to be learned here, and transparency— it would have been a lot easier if we just said, hey Donald, these are a couple investors we work with, we're gonna have them walk through your house, and, uh, you know, when they're done, they're gonna let us know what they'd be willing to pay us and work with us as we do this deal together. Easy peasy, right? A shout Tom Kroll. Easy peasy lemon squeezy. But that's it, guys. It would have been easy if we were just been transparent. But a lot of the time, like when you're new, you want to hide all this stuff because you feel like you kind of feel shady, right? I felt shady when I was doing this. You don't have to be like that. You're providing a service. We helped Donald. We helped him sell a house. He was just going to let it go to the bank. But we were like, no, man, we can get this done and you don't have to do any work to your house. I know you didn't have any success selling it on the MLS, but we can get it done for you. Have someone buy it or, you know, buy for cash. So anyway, that was the experience. Again, a lot of lessons learned. Don't just lock something up and not know and wait Waste your time and waste everybody's time. Don't send out deals to every real estate agent in your state because you can potentially get in trouble. And, you know, be transparent. So these are the things that I learned from doing my first deal for $5,000. Wherever Donald is, if he's out there in Croatia with his fish, I wish him the best luck. Everybody send out prayers and love to Donald. Hope he's doing well. We're glad that we can help him and get him out and back to Croatia, wherever he is. He might, he might just be in Utah still. I have no idea. We don't, we don't talk anymore. But I hope you enjoyed this episode. Again, guys, this is live, so I'm doing my best to tell the story. I hope it's helpful. If you feel like this is good and it kind of lets you know that, hey, I had that same feeling. If you have that feeling where you're like, oh man, I feel shady, or you don't have to do it like that, guys. I wish I would have had someone that told me that there's a better way. Next time we're going to be talking about how I did my next deal that was $19,000 from flyers. We had flyered neighborhoods and we had gotten a call. And by flyers, we had printed out these yellow notebook papers and wrote on them like handwritten, made it look handwritten, and saying, hey, we want to buy houses in this area. We got a call, and this is a funny story, so you guys are definitely going to want to tune in, but we were up against 3 other buyers on this deal and we ended up negotiating against ourselves. We ended up paying more than the seller even asked because we were terrible negotiators, but we ended up still doing a $19,000 deal. And I want to explain that on the next one and what you can learn from that. So I hope these stories are helpful. Again, this is for me to relive and kind of connect. It's been a while. It's been 5 years since I did my first deal. But as I do this, I'm like, man, I know what you guys are going through. I did it and I know ways to overcome it. Learn from these stories and let me help you out. If you like these stories and you want to be in our email list, where we keep telling stories and telling you how to learn from these experiences. And not only that, but we give you free resources that come, like the cold calling script I use to do that deal, and I— we use to do deals. We're going to just give you resources and the ability to reach out and say, hey Nate, I can relate, or hey Nate, could you help me with this? You can go ahead and hit us up. Either me or my team will respond, because again, this journey, doing it by yourself, it can be tough, it can be painful. But let's not make it painful, let's make it painless. I want to help you out. Join the newsletter. I'm going to be sending that out so you guys can subscribe to that. And again, hope this is helpful, and if it's not, tell me why it's not and I'll make it We'll see you guys on the next episode. Peace out, everybody.