Everything You Need To Know About Real Estate Wholesaling The Simple Way

Hey, it's Mark Podolski, the land geek with your favorite niche real estate website, www.thelandgeek.com and I'm really excited for today's guest. We're gonna be learning about an interesting real estate niche that Scott and I don't talk a lot about. But before I discuss our guest, I'd be remiss but improperly introduce my co host, Scott Todd from scotttodd.net landmodo.com and most importantly, automating your Craigslist and your Facebook postings. Posting domination.com thelandgeek Scott Todd. How are you, Mark?

I'm great. How are you?

I'm great, I'm great. Are you ready for our guest?

I cannot wait to learn more about this topic.

I can't either. And I just wanna mind all the listeners that today's podcast is sponsored generously by landmodo.com they are destroying the land sites.

By the way.

Land and farm is calling me in a panic. Lands of America calling me in a panic. Please put your ads up. Please put your ad. I'm like, no, no, I'm getting sales on landmoto.com at a fraction of the cost. So go to landmoto.com and start listing your properties. Let's talk to Brett snodgrass@simplewholesaling.com you don't know about Brett. He has been wholesaling as a full time guy, like a full time investor for 10 years now and is the CEO of simplewholesaling.com they had years truly on their podcast which was really fun. Brett Snodgrass, how are you?

Hey, what's up? Mark and Scott, so excited to be here. Talk about land and wholesaling and we do a little bit of that as well. So I'm so excited to be with a couple of geeks like yourself. I'm just kidding.

No good. It's all good. I mean, look, if you said nerd, I would, you know, disparaging.

Yeah, that'd be really offensive, right?

Yeah, that would be offensive. But we'll take geek for sure.

My wife didn't marry a nerd.

Yeah, exactly, exactly. So, Brett, let's rewind the tape. Let's go back 10 years. What were you doing before your wholesaling houses and what got you into wholesaling? And then a third question, I'm going to overwhelm you with questions like this is like just a shotgun rapid fire. Why wholesaling? Why not fix and flips? Why not multifamily? Why not land? What's so special about wholesaling. So let's start. Rewind the tape. First how you got into it and then why you got into it.

Yeah, awesome, Mark. Thanks for asking. And I can answer all those questions to my knowledge and very well. So basically, you know, I'll just start back. I've always been an entrepreneur. Always. Just had a heart for entrepreneurship. I remember when, even when I was a kid, I would count my quarters and my piggy banks and just see how much money I had when he put a dollar amount to something. I always was interested in math, always interested in numbers. And in elementary school, I used to buy and sell candy and buy and sell gum during lunch. Just kind of. That was my very first business. And just, you know, I'd buy a pack of gum for a dollar and sell a piece for, you know, or actually, I buy a pack of gum for 25 cents, I sell a piece for 25 cents. So that was my first profit. And so kind of moving forward, I just always had that knack. Always wanted to be an entrepreneur, went to college and started on business, but I never wanted to climb the corporate ladder, never wanted to do any of that. So I only was in business school for about a year, and I decided, well, you know, I didn't have to go to business school to own my own business. So I ended up, you know, getting a bachelor degree in teaching because my parents are both teachers, and it's just kind of what I did. So I got out of college, I taught for about four months, and I realized, man, this is really hard. I taught an inner city geometry class, and this was very difficult. I remember, you know, the kids didn't want to be there. I really didn't want to be there, and it just wasn't for me. So I kind of moved home. And I was 20, about 25, 26 years old. And I just started studying how to be an entrepreneur. Got a couple of books, got Rich Dad, Poor dad by Robert Kiyosaki, read, you know, the Millionaire Next Door. I read the Millionaire Real Estate Investor. And I knew that I wanted to do real estate. A lot of these guys had built their wealth with real estate. So I said, I got to get into this. I don't know how, but I'm going to do it. So my dad introduced me to a land developer. So you guys are going to love this from the Land Geek podcast, a land developer. And what he did was he would buy these large pieces of land. I'm talking 50 acres, 100 acres, 2, 200 acres in Southern Indiana. And he would want bird dogs, basically, to help him find pieces of land for him to buy. And he would basically pay us 10% of how much he bought them for. So that's what I did. I worked straight commission for him, and I remember I was getting ready to help him buy. It was about 100 acres, and me and my dad were both partnering on this deal, and the commission was $14,000. And I've never seen, you know, $14,000. I was going to get seven, dad was going to get seven. And I remember my dad telling me he was a teacher for 33 years before this. He said he had never had a time in his life that he had more than $5,000 in his bank account. And that really resonated with me. So here I am. Dad's getting ready to make 7 more money than he's ever had before in his life. I'm getting ready to make seven grand more money than I've ever had in my life to get this. This land commission. We did the commission, we did that deal, and here I am on my way. I got seven grand. Dad had seven grand. I spent a little bit of it, but I wanted to, you know, do it on my own. So I was scouring the Internet one night looking for houses to buy, and this was back in 2007, and I found this house in Youngstown, Ohio. I've never been to Youngstown, Ohio. I don't know anything about Youngstown, Ohio, but all I know was this house was only $9,000. I decided, dad, you know, I got about, you know, we got this big commission check. I got about five grand left. You got about five grand left. Let's. Let's buy this house in Youngstown, Ohio. Sounds like a great idea. Nine grand. And he's like, yeah, let's do it. So we bought this house for 9,000. I drove all the way to Youngstown, Ohio, about six hours, and I cleaned up the house, and we didn't have any money to fix it up after that. You know, I'd already spent five, dad spent his five, and we didn't have any more money left, so we decided to market it. We marketed on all the websites online, wherever we could market it, put up signs, do whatever we could to sell this house. And we sold it for 15 grand, and we made about six grand split between us. And I knew, wow, I have a business here. If we could do this with 1, could we do it with 10, could we do it with a hundred or a thousand? And that was when it started. About 10 years ago. And a couple years later we did 150 deals in one year. And that was kind of how it all started today.

Scott Todd, what do you think of that?

Well, I mean, I like it. So let's fast forward to today.

Right.

So Brian, here I am, I got some cash and you know, what do I do and what kind of margin am I going to look at? Like do I just drive around looking for houses for sale? Do I mail, do I go to realtors? I mean what am I doing? And then where am I know really, where am I connecting the next piece?

Yeah, so we teach a local real estate meetup to new wholesalers. So we teach a lot of the education piece of what wholesaling is and how we go about doing it. So the market's changed a lot. Back in 2007, 2008, 2009, we would basically put in reo offers online through local brokers, put in a couple hundred offers. We'd get deals that didn't last too long, last about a few years. And then we had to kind of reinvent ourself and then just kind of tell me, let me take you through my journey a little bit after that. So I was watching HGTV shows and we decided, you know what, this wholesaling thing really isn't working anymore because we can't buy any more bank owned properties. And so let's just start fixing them up and flipping them. And that's exactly what we did. Me and my dad, he had a, he was a shops teacher, he could do a lot of hand handyman types of things. And I, and I was just kind of managing everything we did for about three years. And Mark, you asked me why we don't flip and it's because I actually did it for three years and it was really hard. It was a job and I made money, you know, but nothing to really brag about. We kind of made a living and that was about it. But it had a lot of headaches, a lot of stress, a lot of sleepless nights, you know, dealing with contractors, dealing with loans, dealing with FHA loans and all that. So about three years ago I decided, I'm going to do wholesaling, I'm going to do it big, I'm going to do it really well. And that's when we started figuring out exactly how to do it. A gentleman introduced me to direct mail marketing. Never heard of it before but I guess obviously they said, you know, you write these letters or postcards and you mail them out and people call you and you negotiate and you buy their houses. And I say there's. That sounds like the stupidest idea I've ever heard of. But you know, I want to do it and other people are doing it. So let's try it. So we sent out about a thousand letters and we got a deal from it. So we spent about a thousand bucks to send out a thousand letters and we made a deal and I believe we made about 10 grand on that, on that deal. So I said, you know, what if we sent out 2,000 letters? What if we sent out 5,000 letters? And that just kind of brings us up. Today we sent about 25 to 30,000 pieces to mail a month. We've been doing that for about a year now. And we have a couple of other things that we do. So we do pay per click. Google AdWords. So we basically have a lead generation website that we pay for people to what they search, need to sell my house fast in Indianapolis. We pay for it. Our website pops up, they click on it, we pay for that, and then we get about two to three deals a month that way. But a huge one right now is Facebook. That's been, we've been doing that for about six months. And so what we do is we the same thing as pay per click. We put ads on Facebook. We can really target our ads because Facebook has it super dialed in. They have data on everybody. So we can find, if I want to find, hey, I want to send this ad out to somebody who enjoys rock music and likes to play golf and they don't have very good credit score. I can target them on Facebook and that's what we do. So we've been getting a few deals a month through Facebook. Those are our three probably top lead generation sources. If somebody were just getting started, our number one is still direct mail to this day. So I would get a list mail to it. You talked about driving around. We call that driving for dollars. That's the best way to get started. So you can really target your list, find out, you know, who you really want to mail to. That's a few of the things that we do to build leads.

So am I mailing to like out of state owners? Am I mailing to like you know, non owner occupied? Who am I mailing to?

I think you got to ask yourself who is going to be motivated to sell your house? So we target basically motivated sellers. So when I think about who is actually motivated to sell their house, think number one is people that are delinquent on their taxes. You know, why are they not paying their taxes? If they're not paying their taxes, eventually it's going to go to tax sale. So they're probably pretty motivated to sell their house. So that's our top list. People that are delinquent on their taxes, you know, especially ones that are more than $1,000 or $2,000 delinquent. That's number one, code enforcement violations. So the city puts code enforcement violations on certain properties. If you don't mow your grass for some reason, the city comes and they put a weed violation on that house. If you're not mowing your grass, why are you not mowing your grass? You're probably pretty motivated to sell that home. So that's one that we target. So that's the second top one. And absentee owners are our top. So somebody who lives in Utah, owns a house in Indianapolis. I don't know their story, but a lot of them have bought maybe house from a turnkey company. The tenant doesn't work out, they have to evict the tenant and they trash the house. So they're probably pretty motivated. And that brings up evictions. You know, if you look at the eviction and go to the local courts, look at all the evictions. People that are evicting tenants are probably pretty motivated to sell their home. So those are probably the top, the top three or four that we mail to.

What about probate deals? Mom and dad both, you know, pass. Kids inherit the house, they gotta get.

Rid of the house.

Yeah, that's another one, top one. We actually have a special specialist company that's called Postal Impact that they help us, you know, that's just what they do. They, we own. They only. We only use them to mail to probate. We update it every month, every other month, and we mail to the probates. There's another website called Successor, and you guys might know a lot. My acquisitions team deal with this, but Successor data, I believe dot com is another one. You can get people that have inherited a home. But yeah, we buy a lot of. A lot of homes from people that, yeah, mom or dad just passed and they don't know what to do with it. And they would rather have, you know, a check than the house. And they want to sell it fast and they don't want to deal with it. So that's another motivated list.

So what was that site? Successor.com successordata.com successordata.com yes. Scott, have you been on that site?

I'm on it right now.

You know, it's funny is, Brett, your model is very similar to our land model, except that you're doing houses.

Yeah.

And. But you're not actually buying the house. Correct. You're just assigning the contract, and that's where the wholesaling magic happens. Is that correct?

Well, I think every industry has a wholesaling component to it, Whether you're buying and selling fruit, food, cell phones, cars, whatever it is. There's wholesaling in every industry. So there's different types of wholesaling. You know, there is the get under contract, assign the contract, and that is a form of wholesaling. A lot of new wholesalers do that strategy because they don't have to have a lot of their own money and skin the game to do that. We have done that. Yes. But now, you know, with our business, I believe that to run a business with, you know, not saying assigning contracts isn't running it with integrity, but I believe it can be messy. When you are building a business and, you know, if you're doing one or two deals a month doing it that way, you can probably do that, no big deal. But as soon as you start scaling and you're getting up to 10 deals, 20 deals a month, 30 deals a month, it can get really messy because you have to explain to the seller, you know, I want to put a lockbox in the house before I own it. Why, you know, so people can see it. You know, I want to market your house. Well, you have to explain that, and it could just get really messy, and you have to explain it 20 or 30 times a month. So we choose to actually buy the house like you guys do on the land, and then we're, you know, we own the house free and clear. We can market it. We can put signs in the yard. We can put it on Craigslist. We can even put on the MLS if we want, because we own it, and that's how we choose to do it today. But going back when I first got started, yes, the signing contracts was a. Was a good strategy that we used.

I love it. I love it. Very, very, very cool. I mean, have you heard the term wholetailing?

I have heard of the whole term wholesaling. And I guess, you know, wholetailing people would say, yeah, you buy the house and you put on the mls. I guess my version of wholetailing is, you know, you buy the house, you don't fix it up all the way. Maybe you paint it, maybe you mow the grass, maybe you cut some trees down, maybe you do a little Bit to improve the property, but not a 20,000, $30,000 rehab. You do a $2,000 rehab and then you list it. So we don't really do that. We whole. So I guess it, you know, I don't really know all the terms, but I call us simple wholesaling because I believe, you know, we buy the house, we don't fix it up at all, and then we sell the house. And I think that that is a kind of a wholesale type of deal.

So Scott, Todd, what do you think of this model? I mean, why don't we do this for houses?

Well, I'm thinking about right now, I'm pulling some data right now, Mark. I mean you're, you're interviewing. I'm like, like taking action back here.

Scott's mailing right now, by the way. We have it so automated. We can just upload a list and the mailings will go out.

I mean, I think that, you know, I think that when you think about like that one piece, I mean, like, you know, essentially, Mark, it doesn't, I mean there are houses I think in every city that are very, very affordable. Right. So like I just did a quick scan of my area. Mean there's houses that you can buy for 20, $30,000. They may not be the best condition, flip it handyman special or something else. And man, you're in business.

Yeah, I mean houses, yeah, it's, you know, and I live in Indianapolis, so. Indianapolis, our bread and butter is 20 to $50,000 houses. You know, it's not LA, it's not out west, it's not in the sand states, but that's what we do. We buy for 20, we sell it for 28 all day. And that's pretty much, you know, and we'll do, you know, I don't talk a lot of numbers, but we'll probably do about a few hundred deals like that this year. And yeah, and it's awesome. But the grass is always greener. You know, land. We actually started doing land and listen to your guys's, you know, show a little bit, listen to some other land shows and we've gotten into that because, you know, I think land is very attractive just from the fact that you don't have to worry about it burning down. People can't really mess up land. You know, we have people that like, for example, quick story, we bought a house for $52,000 last week. I sent my property manager over there and it had a tenant in it and they had moved out. So I said, hey, I want you to go to this property and just check it out. So he goes over this property, and somebody had literally stole all the exterior doors to the property. So we have a house that has no doors. And why. They didn't steal anything else, but they just stole the exterior doors, which is kind of weird, but we just had to mess with that, you know, now I had to hire somebody else to go put a new door on and just kind of crazy. So you don't have to deal with that in land. But yes, you can buy 20,000, 30,000, 50,000. And, you know, and the good thing about it is you can build up a buyers list. So, you know, our top buyer buys. We do about 25, 30 houses a month. Our top buyer probably buys 10 of those every month. So you can really get a good scalable business because you can feed him, he's paying the bills, and then, you know, we get a couple other people like that, and it's a huge business.

So besides the physical aspects of the business, which isn't the best, what about the money side of it? Because you're gonna need, you know, if you're doing 25 houses, that's 25 times 20,000. We're talking, what, 500 grand a month that you've got to deploy, and you got this. Have the speed of closing fast. So where does that 500,000amonth come from?

Well, you know, obviously, I've been doing this for ten years, and I. Very simple, man. Don't, don't buy. You know, I have. I own a lot nicer houses on the investment side than I actually live in. You know, I live in about a 90, $100,000 home and drive used cars. So I don't really spend a lot on myself. So a lot of the money that we do make, you know, we put it back into the business, you know, take 20 grand a month, 30 grand a month, you know, times the last five, six, seven, eight years. And just kind of. So we use a lot of our own resources, number one. And then number two, I have a lot of private investors, you know, through the years, just kind of word of mouth. I go to my local RIA meetings, I tell people what we're doing. I said, hey, I'm looking for private individuals that want to invest. These aren't traditional banks. These are mom and pop, just investors that have a hundred grand, two hundred grand, five hundred grand, sitting in an ira, sitting in a checking account. You know, for example, one of our top private investors, a doctor, and I don't know how much money he has, but seems like it's unlimited. But he, you know, I use him as private investment money and he charges, you know, a rate and we pay him interest upon that. So our own money mixed with private investors, that's how we come up with the resources. But again, if I was just getting started and I didn't have those resources, I would partner with somebody that has those resources or assign contracts until you can get those resources.

I love it. I love it. Scott, Todd, any, anything else before we get to the tip of the week?

No. Live below your means. And man, it's, it's amazing. Like you can create freedom any which way you want if your expenses are low enough.

Yeah, absolutely. And you know, it's so funny when you get off that hedonic treadmill how life becomes so much simpler, so much, you know, more stress free and you kind of get back to what's really important in your life. And you know, usually it's, it's, I would say usually it's pretty much 99.9% of the time not more stuff. Right. It's going to be experiences and all that type of stuff. So not to digress, but I'm really getting into like stoicism and like philosophy about all this, so it's really interesting.

Yeah. A quick book, you know, as I was going to kind of mention, is a book that really changed my life. The most expensive car I've ever owned is actually when I was completely dead broke and I just wanted to look rich basically. And there's a book out there called the Millionaire Next Door. Read that when I was about 26 years old. Absolutely changed my life. I sold that car. I bought a $700 Ford Festiva, I think it was. I drove around that for a couple years and just kind of lived, live below that because the book really talks about the average millionaire is not the guy driving a brand new Bruins, brand new BMW, living in the mansions. Those guys are actually acting rich and they're in a lot of debt. The real millionaires are the guys living next door. You would never have a clue that they are millionaires. And I've just kind of lived that philosophy. I think it's been just my life. And I have to remind myself that every day because when you're making 20, 30 grand or 50 or whatever it is, you're like, man, I could go out and buy whatever, but you know, it's not going to bring that to me. So I'd rather just pour into helping people and all that stuff.

So I love It, I love it. Well, Brett, we're at that time of the podcast now. You gave a good, great tip, but I'm going to ask you for another tip of the week. A website, a resource, another book, maybe that auto passive income listeners can go right now, improve their businesses, improve their lives. What have you got?

Yeah, definitely. I just learned about this resource about four months ago. A lot of your listeners probably use Gmail and this is basically an extension of Gmail. And this company has been coming out with a lot of great extensions for gmail. It's called cloudhq.net cloudhq.net and one thing that I've used this for, for example, is I gave a presentation a couple of weeks ago about how to personalize your business. So One extension that CloudHQ. Net has is it puts something in your Gmail. So right next to my send button I have a little camera. I click on that camera and it actually pulls up on my laptop, the video and I can create a video to that person and kind of talk to them. Now you can do this with a lot of different softwares, I know, but when you do this, it takes that video and embeds it right into the email. So I don't know about you guys, but I hate writing long emails. I'm kind of a four sentence type of guy. I don't really like reading long emails. But if I can do a quick one minute video, number one, it's more personal, number two, it's so much faster. And number three, I don't have to click here, do the video here, upload it to Google Drive, uploaded here, embedded the link into here. It does it all for you. So for example, we were having a tough time getting reviews, Google reviews, Facebook reviews, Better Business Bureau reviews, and we're trying to build up our reviews. I would email everybody links, everybody would say, yeah, we had an awesome experience with your company. It's been great. I said, great, leave me a review. Crickets, nothing. So I started implementing this video thing. So now I say, hey, hate leaving reviews. I know that you do too, but this really helps our business. And I, and I'm able to talk to them for one minute. It brings my personality out. It's more personal. And last week I tried this. I sent 5 video emails out to people that we bought a house from or sold a house to. And we got five out of five reviews, 100%. So number one, it's more personal and it just is so much easier. And CloudHQ has other resources too. So like they have the video extension, they have a screen share. So if you have a VA or you have an assistant that doesn't is not in your office, let's say they have a quick question about your list saying, hey, I don't really know how to do this list. You can again do a screen cast share. So it's going to record your, your screen. You tell them how to do it really quick and it embeds it right into the email. So again, I know there's other softwares out there, but you have to, you know, get the software and it's going to take you 10, 15, 20 minutes to do everything this you can do in one minute. So that's, I think that's my tip. CloudHQ. Net, they got other resources as well, but those are the two that really help us.

I love it. I love it. I use cloud HQ and I also love the video thing. And if you want to do audio, Brett, sometimes it's quicker even just to do audio. Like let's say like, you know, you look like me right now and you haven't showered. You don't want to do a video clip clyp a great app on the phone, record a quick video, email it out. It's real personal. It sounds great. So that's a great tip, Scott. Todd, what's your tip of the week? Wait, Scott, you're on mute, man.

Sorry about that. I would like for our listeners to go check out this book. It is on Amazon. It's available in audible as well. And if you're struggling, I know a lot of people, they struggle and it comes really to me, it comes back down to their self confidence. Right. And the book is called you are a badass how to stop doubting your greatness and start living an awesome life. Like, you know, sometimes we just need that like motivational speech and who's there.

To give it to you?

It's not, you know, it's not me all the time or Mark all the time.

Listen to this book.

It will help you.

Wow, I love that. That's. Yeah, you know, I've read some of the book and I'm a huge Brene Brown fan. She loves Jen Sincere talks about that book as well. So my tip of the week is learn more about wholesaling@simplewholesaling.com we'll have a link to it simplewholesaling.com Brett Snodgrass I gotta tell you man, the generosity of the information that you gave on this podcast was really refreshing because Scott, would you agree we get a lot of people come on and they'll give you more high level stuff. You really dug deep. It was almost like having, you know, going on like our own webinar on wholesaling.

He did, Yeah, I agree.

So phenomenal. Phenomenal. I want to thank the listeners and remind them the only way we're going to get the quality of guests like a Brett Snodgrass from simplewholesaling.com is if you do us three little favors. And just like Brett said, I know you don't want to do it but it's going to really help. You got to subscribe, got a rate, you got to review the podcast, send us a screenshot using CloudHQ to support thelangeek.com we're gonna send you for free the $97 passive income launch kit. So please do that. Just another reminder, today's podcast is sponsored by landmoto.com Go there today, start listing your land and getting it sold. All right? Let freedom ring. Thanks, Brett. Really appreciate it.

Thanks, guys.