Lauren co-hosts the #1 wholesaling podcast “Wholesaling Inc” and has had over 350 students go through her coaching program “Virtual Investing Mastery.” Her student’s achievements and growth is what keeps her inspired and motivated every day. She spends most of her time creating content that will help others in the early stages of their entrepreneurial journey.
Welcome to the Real Estate Masters podcast, where we interview the top names in the Real Estate game. If you want to grow your Real Estate business, see more podcasts, or get free resources – Go to www.REMmastermind.com. The only podcast that allows you to directly connect with the guests and many of the highest level names in the real estate game.
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Itunes – www.TonyJavier.com/itunes
Welcome to the real estate masters podcast, where we interview the top names in the real estate game. If you wanna grow your real estate business, see more podcast or get free resources, go to www.remcommunity.com. The only podcast that allows you to directly connect with the guests in many of the highest level names in real estate game, you are in for a treat with our next guest. Do me a favor, subscribe to the podcast, leave us a review. And don’t forget to go to REM community.com to connect with some of the highest level real estate professionals in United States through our community and through our high level masterminds, let’s go,
All right, we go a bunch of people hopping on here.
And I think, and I think we are going live as well. So welcome everybody for those of you that are in, uh, my TV or mastermind program, you know, who I’m interviewing today, uh, for those who of you who are not in those groups, we have a great surprise guest, which is now not a surprise, Lauren Hardy, uh, who is going to talk to us today about virtual wholesaling. Most of you guys know Lauren. Uh, she is the host of the wholesaling podcast, which is one of the top, uh, real estate podcast in the country. And she is the top virtual wholesaling coach in the United in states. Uh, so I don’t know anybody else. Who’s coaching as many people as she is, and she’s not only coaching. Uh, but she also, uh, you know, walks the walk. She talks to talk, but walks the walk cuz she’s investing in multiple markets herself.
So I’m looking forward to diving in on how she sets up. Her markets picks, her markets sets up her team, all that kind of good stuff. And I thought this would be a great call for my, uh, TV clients as well as my mastermind people, but I’m streaming this live now on, uh, Facebook. So all my, uh, people that follow me can see this as well. So if you guys have any questions, uh, type them in the chat box, and I think I’ve got a zoom link on Facebook too. If you guys wanna join the conversation later, I’m gonna bring some people in to ask some questions and kind of deep dive. And I see several of my TV people, uh, jumping on here that are investing in multiple markets with TV. So I would love for some of you guys to jump in and, and conversate. So again, chat box. If you have any questions, raise your hand if you wanna be to con part of conversation later. So what that further ado, Lauren Hardy, what is going on?
What’s up, what’s up guys.
It’s good to have you on. Thanks for doing this for my people.
Hey, it’s good to be here. Thanks for inviting me to meet your people.
Absolutely, absolutely. So, uh, we’ll just jump right in. If you know me, I’m kind of get to the point. So I’m not gonna throw a lot of fluff into this. You’re investing in multiple markets. If you want to talk about those markets or talk about how many markets you’re in, you could more than happy to, to dive into that. Uh, but what it comes down to is is that you live in California. Like I do. Yep. Your, your market’s super expensive, right. And competitive. Right. So you’ve decided to research other markets to figure out what is less competitive. And then, you know, you do your market research. You kind of shared a little bit about that with me, uh, previously. Um, so I’ll let you kind of take it. So let us know kind of like how you pick your markets, um, how set up your teams and we’ll just start diving in from there.
Yeah. Yeah. So I, I, I guess let’s first start with why I went virtual because a lot of you might feel like you’re in the same position. So when I first got started, I was in Southern California and as the years went by, we, the market was increasing. So we, I first started when we were in the recession. So it was actually very easy to find distressed real estate. I didn’t have to try that hard to find a motivated seller who wanted to give away their home. Yep. But every year now this is starting say like 2011 every year, there was less, less distress. There was less properties at the courthouse. Steps sellers were not as motivated. So by about 2016, it got to where I had to spend a ton of money in marketing dollars to get that one deal. And I had to put a lot of effort to get that one deal.
I was talking to hundreds of sellers to get one, to say yes. Now when one would say yes, typically the fee would be larger because these are bigger purchase price or, or larger purchase price properties. So I mean, it felt like a big win. However, those the dollars I had to spend and the amount of time I had to go without my next deal or knowing where my next deal was coming from was very unsettling for me. So I call it elephant hunting versus squirrel hunting. And, and whether you fit the psychology for an elephant hunter versus a squirrel hunter, that’s up to you. But for me, I had mouse to feed. I was a single mom, still am. Um, two girls, you know, I had to pay for childcare and pay for a lot of things. So to go three, four months and not know when my next flip project was gonna come, or my next wholesale deal was gonna come, was very unsettling.
And I had a lot of sleepless nights. Now. Now I noticed a trend. I noticed something. I was listening to all these podcasts and these, these people on these podcasts were like, man, I’m closing 10 deals a month, or I’m closing five deals a month. And it’s, it was just so consistent for them. And yeah, maybe the wholesale fees were a little bit less, but they, when you calculate that all together, they were actually making more than me because they were doing volume to make up for it. So I thought about it and I go, what is the difference between then them and me? And it was always where they were located. It was always the market they were in. So I did research on that. Those markets, I would listen to a podcast, somebody’s killing it in, you know, Philadelphia I’d research about Philadelphia. Somebody’s killing it in little rock, Arkansas I’d research, little rock Arkansas. And the obvious difference was average purchase price in the area. That is the biggest, most obvious in your face difference between little rock in Southern California, say OC San Diego, I’m from orange county. Tony’s from San Diego. We’re neighbors. So our average house price is about 800,000. I haven’t looked at it in a while, but about 800,000, I would say Tony
For starter home, by the way.
Yeah. Right. Like you get a condo. So, um, so there’s a big difference, right? Um, so by 2016, I, I ha it was a make or break point. It was either I’m gonna have to go get a new job or something like, I’m gonna have to figure something out. Cause I can’t live like this. Um, or I’m gonna have to figure out a way to go outta state at that time. Nobody was teaching virtual. I think there was maybe a Chris Chico course on it, but it wasn’t really a coaching program. And I got my hands on that course. Um, but there wasn’t a lot out there virtual wasn’t really like a known thing, a known trendy word. So I had to put these pieces together myself. Um, I thought about it and I thought about how I work with California sellers and California, if you guys not, haven’t been here, we’ve got a serious traffic problem.
So for me, I realized I was virtual before I was actually virtual. I was doing a lot of these things that I do now in, in outstate markets working, you know, my own market because the traffic was so bad. So what something I was doing is I was getting sellers to sign contracts over the phone already. Um, I got good at that. I got good at speaking with sellers and just convincing them to trust me enough to the contract and then meet at their home because I didn’t wanna sit in traffic for four hours to meet with a seller who wasn’t that serious. So that was kind of the big thing, right? Like how do you get a seller to sign over the phone? I that’s, everybody’s first thing that comes to them when they think about going virtuals, but wait, how do I lock up a deal? I’ve never seen, how do I price, right? How do I get a seller to sign over the phone? Right. So anyway, 2016, I decided I’m gonna figure out how to go virtual on my own. Um, and now here in lies, the first mistake I made. So you talk about how to pick a market, right?
Here’s how I first picked a market. I took like a B like, you know, put a map on a board and took a little dart and just chucked it. Okay. And picked a market that way, wherever the dart landed is where I was going.
So that’s seriously how you picked your first market. Not
Really, but I might as well have. OK. That’s that is how little, I mean, I had no training. I didn’t, so I didn’t know. So I just thought Nashville seems like a cool place to visit that. Was it like just, it just seemed like, okay, this is a cool place to visit and homes are cheaper and I was on vacation in Nashville. So I had a chance to drive around and see what the investment game was there. Like what’s everybody doing there? And it turned out it was actually a developer’s market. So I did, my first virtual venture was development. I was building new homes and then I was wholesaling lots to home builders. That was just what you did there. So my, the reason it was my first mistake is because Nashville was also like the number one real estate market at that time.
So like what I thought was a not very competitive market. It stayed that way for about six months. And then all of a sudden it was like blown out. I mean, impossible to compete with people that were local. Um, so in H I would’ve picked a more balanced market. I would not have picked a market that is like in the news for some kind of, you know, substantial development, some sort of boom for whatever reason. Um, I, if I were to do that, it would be a short term strategy. Like, oh, let’s make some quick money in Nashville. Right. You know, for six months, but I didn’t want a short term strategy. Okay. I wanted a home. I wanted somewhere where I could stay for a while and just have that four to five deals a month consistency. So now with the knowledge, you know, that took me by the way, a couple years to, to learn, I, I realized, I went back to the drawing board. I said, what are the, what are all like the correlations that I can put together of people that are doing really well in this business that seem to like, not have to move around. Like I do and seem to get a consistent, at least five deals a month. And I came to renter’s markets. So Mar or landlord friendly markets, markets, where it makes sense to hold rentals. That’s it, it’s very simple.
And is that because you can potentially hold the properties if you want to, or because more investors are buying, buy and hold properties, which can get you closer to retail value
Neither. Oh. It’s because properties that make sense as a rental is typically, like, when you hear in your head, what’s a rental price ratio that you’d like to be at. If you were buying a, a rental, what’s like the minimum rental price ratio.
Yeah. It’s usually 1% is the rule. If I, if I, if actually for me, it’s probably more than the, that I, I was at a higher range, but for most investors, it’s about 1%,
1%. Like that’s kind of the, the trendy number that floats around. Right. So the 1% rule that tells you a lot about what the average prices are probably in the area matched with the average rents. So let’s go back to California. What do you think the rent to price ratio is in California?
It’s like probably 0.6% or something like that.
Right. And like, yeah. So, like for example, I was renting, um, a home that w sold for seven 50. I was renting it for $3,000. If it followed the 1% rule, it should have rented for $7,500. Okay. So if any market follows the 1% rule for the most part, usually the prices are lower. And when the prices are lower, typically there’s less demand for housing, meaning that there’s probably some more seller distress. There’s probably some more motivated sellers there. Um, you used the term blue collar markets. Um, it it’s sort of like that. Um, if you wanna use that term, um, I typically just say, listen, I tell this to all my students, when they pick markets, when the average price starts going above 200,000 in the area, that seller is a different type of seller, you’re talking to, it always works out this way. The seller typically has a little bit more money. They have a more stable job. They don’t get themselves in as many problems. If they do get themselves in problems, they’re kind, they’re more educated and they know how to get themselves out of it. Whereas when it’s sub 200,000, you’re just dealing with sellers that typically have more motivation.
Yeah. And if you’re dealing with over 200,000 kind of like art markets, then the properties have appreciated a lot. And they know that, and they’re not in as much distress. Right. Cause they have more equity they’re yeah. They understand the market is, is hotter. Whereas a blue collar market, they may not be as, um, educated in how their market’s doing. And like you said, the lower price points just breeds a different kind of, um, mentality to the seller.
Yeah. Correct. Yeah. And one thing, you know, I like to boil down our industry, you know, kind of down to this right. Real estate investing house, flipping all, all investing is like buy, buy low, sell high, and to be able to buy low, you need to be able to convince a seller, to take a discount on their home. It just count. That’s all it is. So find a place where it’s easier to convince a seller, to take a discount on their home. It’s that simple. So in Southern California, sellers are very aware of the value of their house. They are like, you’re not gonna go to a seller. You’re not gonna go to a sell seller in Southern California, New York, New Jersey, Seattle, Miami. Okay. You’re not gonna go up to these people and go, you know, Mr. Seller, I I’ve got an offer for you. It’s all cash I can close in 14 days. You don’t even have to clean the house. Okay. And I know your house, like you want $700,000 for your house, but listen, all cash 14 days, no cleaning. You don’t even have to hire a cleaner. I’m gonna offer you 550,000. The seller would be a moron to take that offer. Right?
Well, there are people that do that. So I’m not completely disagreeing, but, but it is less likely. But people in that situation are people that don’t wanna list on the MLS because there areas of the, of their house. They don’t want people coming through if they’re living in it. Um, there’s just a lot of different reasons that a seller would want to sell in a higher price market, like a San Diego or an orange county. Um, so it’s not impossible. Cause I know there are some people on here that are, are whole site and those markets it’s just, if you’re going to go out of market, then it makes more sense to, to pick a lower hanging fruit is kind of what it comes down
To. Right. And this is where I get this. Sometimes every once in a while with like people online. They’re like, but I, I know somebody who flips in California, blah, blah, blah. So did I, up to two years ago, I was flipping houses in California. Okay. Like I, so did I, there’s an exception to every rule guys. I’m not saying this is everybody. Everything you need to listen to. I say, I know everything. It’s back to what I was saying. In the beginning of this conversation with psychology. Are you an elephant hunter or are you a scroll hunter? Do you want to deal with that type of seller? Who’s really savvy and who knows what they’re doing, you know, knows the value of their home. Um, do you wanna make a hundred offers to get that one big deal? Do you wanna go a little bit more time between deals?
Um, most people that are starting out here, like SoCal type type of market, and I’m just using SoCal. This could be anywhere in the country where it’s pretty high priced. Okay. When they’re starting out, it’s really hard. Like it’s really intimidating. These sellers are chewing ’em up and spitting ’em out. And then they come to me like forget, and I wanna go virtual. I wanna go where sellers are nice. And they do. And they do. I’m telling you in the Midwest, they’re much nicer. So, you know, again, it’s like, there’s always an exception to everyone. I don’t want you guys. So like, oh my gosh, like this girl’s just saying you can’t invest in these places. You absolutely can. I just, I’m a squirrel hunter. I didn’t want to.
Yeah. Okay. So let’s okay. So picking the market, um, basically blue collar, um, for me like I’m plugging TV commercials into other markets. So I’m doing it here in San Diego and I’m doing it because I, I can get affordable commercials here and get a, get a large reach. And we only need to do a few deals a year to make really good money in our market. Right. So now I’m looking at smaller markets, cuz I have people that are doing TV like you in smaller markets and just absolutely annihilating it. So for me, I really just use the size of the market. So I’m going into, uh, three different markets here probably in the next six months with my TV commercials. And I pick those markets mainly because of the size, right? So I know that I can spend this amount of money and get potentially these returns.
And then also I’m partnering up with people on those markets. So that’s another reason as well. So when you look at other markets and you choose those markets, you kind of mentioned why you do tell us how hard or easy it is to set up a team. Because obviously you’re not looking at the properties, you’re gonna have to create a buyer’s list. You’re gonna have to get people into the properties. So for me, I didn’t like virtual wholesaling until recently because of, you know, some of the things that I’m working on make, make, make more sense, including the TV. If you would’ve asked me three months ago to go virtual, I would’ve said no way. I do not want to do that. Right. So tell us how, how you set up that market, how long it takes. You just kind of run us through the whole process.
So, um, it’s funny cuz I keep wanting to use this elephant analogy, but there’s people say, how do you eat an elephant one bite at a time. So totally different analogy, same animal. I’ll just, I’ll try to throw in another elephant analogy by the end of this. Um, so here’s the thing. A lot of people think that they should start, should build a buyer’s list front. They should set up a team, they need a team, they need a local guy. They’re gonna, they start putting ads on Craigslist and wise hire and indeed, you know, for a local am and I’m telling you, no, you don’t need to do any of that. You don’t even need to do any of that. Okay. The first thing you need to do is just buy, find somebody to JB with super easy, find someone local who knows what they’re doing and JB would,
But before or after you put a contract together,
I, you can do it before because you wanna start asking the JB some questions like I like to figure out where are the good zip codes to market to? Um, is there any local nuance I need to know about? Okay. So a local nuance could be, um, did you know that you can’t market properties, that you have equitable interest in this market? That’s you know, that’s, that’s the that’s local nuance. Like you wouldn’t know, you know, did you know that you have to have a license? You have to have a wholesale license here, you know, did you know that, um, this is a fun one took me like five hours to figure this out. And then one phone call, someone told me in five minutes, did you know that during COVID it was not, uh, escrow offices and title companies were non-essential they’re considered not essential. So no deeds got recorded basically you that year. So when you’re pulling data, like you’re trying to figure out the absentee owners that have purchased and what zip codes in the last year nothing’s gonna pull up because nothing was recorded. Things
Like that. That’s crazy that there are areas that that’s non-essential that doesn’t make
Any sense. Yes. I found that out. So that’s and I was like, well it makes sense. Cause I was like, my dad is not making sense. I’m doing all my tricks that I do. And this is where I was like stumped for like five hours. Like I was like on a Saturday, like trying different list providers, every list provider was like coming up with the same result and couldn’t figure it out. Then I had to call like several people and then I got the right person that like knows our business and was like, oh yeah, no it’s because like deeds were just like back logged on recording the deeds.
Okay. So local nuances are important like um, in Florida, for example, newer homes, you can actually wholesale houses that are newer, like 2010, you know, houses are newer in Florida. There’s a lot of new houses and you, you could make a lot of money, wholesaling homes like that. But a lot of people, they cut out the new homes. They only do like the older houses, right? Like 90.
Why, why do you think Florida’s easier to wholesale newer homes?
I think it’s just, there’s more a new development and then there’s older people that go there to retire and then they pass away and then the airs get them. So nuance, you know, just all these little nuances that, you know, like in Nashville, did you know that people are building homes? Like, so this house that you’re putting an offer on, you know, I wouldn’t have known this, had I not talked to somebody in Nashville, I would look at a home and I would maybe the typical like, okay, you know, what do I think this house is worth to a landlord buyer? Or if somebody was gonna fix and flip it mentality, but no it’s how many units can you build on this lot? I, would’ve never known to, to look into that and learn, you know, the zoning codes, right? So you need to find that JV partner upfront and have those conversations.
And don’t just find one, find like three JV partners because there’s a lot of people that pose like they know what they’re doing or they think they, they honestly do think they know what they’re doing, you know, or just people have different skills and different, you know, buyer bases like some, some, um, whole sailors like understand development and flipping and they have all the flipper buyers and then some have all the section eight buyers, like they know the landlords, they know the section eight guys like, so it’s important to have multiple JB partners that you can lean on. And you just do some JB deals at first until you start feeling it like you could handle transaction, you know, the local escrow company, you know, the best escrow officer in town, you know, like you start feeling comfortable.
So if someone wants to find JV partners, do you recommend they interview, let’s say three JV partners start sending deals to one and have two on the back burner or send the deals to all three and have them all market the pro. And by the way, I join JVs joint venture. I’m sure most people understand that. So it’s basically utilizing them and their buyers list to, uh, to, to do those deals. Right. So do you recommend all three marketing those deals or do you choose one, utilize them and then have the other two as backups?
You know, that gets really tricky. So you, you know, it’s a small town, like people will notice if multiple JBS are marketing your deal with different pricing and whatnot. So I try to avoid that instead. I like to have the conversations and you start like, feeling like a better vibe with one of ’em it’s just kind of natural. Like at first you’re like, actually I think this is my person and give that person a shot, but let them know, like we’re not getting married. Okay. Like if you you’ve got two days to tell me you’ve got buyers that you can walk into this house and if like you can’t, then I have to give this to another person. Like, cause tick, tick, like, you know, I don’t want eat up my contingency dates. So, um,
So it’s kinda like it’s, it’s kinda like hiring an employee, right? Like you, they tell you they can do what they can do. All that kind of stuff. Yeah. Usually within like the first week to 30 days, you know, whether they’re gonna work out right. Cuz they’re following through, they’re doing their thing. They’re jiving with them and that kind of thing. And then obvious, see if it’s not working out, you just move on to the second JV partner that you’ve interviewed, give them a shot. And then I’m guessing I hate to say it, but it’s probably kind of like, you know, dealing with contractors sometimes. Right? It’s just trial and error. You gotta maybe weed out 2, 3, 4 JV partners before you find a good one.
I’ve had students tell me like complain like, oh my gosh. I just think, you know what it is. I think wholesaling is dead in Kansas city. I just think you can’t do it here. I think, you know, uh, there’s too much competition. Um, it’s not, it just doesn’t work here. And then they switch their JD partner and they come back and they’re like, oh my, okay. Okay. It was the guy I was working with. Didn’t know what he was doing. He kept saying like the, the common thing is that JV says, no, you’ve got it too high. You got it too high. I can’t move that. You know, they can only move houses that are 25% or, or 25, 5% of value. Like, but they can’t move anything else. Like, so then they get, they trade a JV partner. I had a girl do that Philadelphia.
She was like struggling, struggling, struggling, struggling. And then she met like the right guy and it was like, bam, she tied up like several deals all in one week. And it was because that JB partner like looked at all of her, like he gave her a little help. Like he looked at, you know, the top, maybe 10 sellers that she was really working with that she felt like they were more motivated, but like the pricing wasn’t quite right. According to JV, number one. And then that JV was like, actually I can move those. You know, you can come to me in Oklahoma and there’ll be plenty of people in Oklahoma that might say, oh, I can’t move that. I can’t move that. Bring it to us. And we can cuz we have a good buyer’s list, you know? So yeah, the very important step.
Got it. Okay. So I’ve got some questions that have come in. I’m just kind of waiting for Q and a. So I’m gonna jump into those. Is there anything else you wanna add before? I kind of jump into just some Q and a with, oh, let’s some
People we got on here.
All right. Sweet. Um, so one of the things, so you said nuances, so Illinois is one of those states that you have to be licensed to, to wholesaling now. And I’m, I’m guessing that some other states are gonna follow. So Jay asked, you know, which states as of now you would not wholesale in so Illinois and to me would be, uh, would be the number one top market to not wholesale, unless you want to license there. Are there any other states that you’ve found that are not good to, to go in for any reason?
Uh, honestly I can’t think of a state on a state level. It’s more of like, I wouldn’t go into this county, you know, where it’s high price or whatever, but on a state level though, cause they’re even there are whole like, okay, I’m gonna call them. Wholesaling is legal states. That’s not true. But um, you know where there’s some laws in place on how you can market your wholesale deals. People are still doing it and making money. They just figured out the workaround. So you have to figure out the workaround, whatever that is. If you have to get license, get license, if you have to partner up with somebody who, who has a license do that, you know, do have to close on the properties. That actually is nice. You know what, cuz that’s going, that is going to knock out a lot of the newbie, people who can’t close on properties, you know, there’s a state of New York nuanced about New York.
I learned high price market. So there was another question I saw was like, what’s the absolute, highest price market in New York. There is a market in upstate New York around 350,000, right. Way higher than I would recommend. However, there’s a really cool nuance about New York and it’s actually a barrier to entry and that’s why I like it. And it’s because you have to put a large EMD down and most people don’t have that type of money. Most wholesalers don’t. So it throws away all the, you know, your competition. That’s like just trying it out and not really like, you know, serious. I mean a lot of people don’t have that type of money to be able to put EMDs down. Um, so,
And the other thing about New York is it takes a long time to close. So you have to hire an attorney. Yeah. You can’t just do a contract directly with the seller you have to, or yeah, you can’t do it with directly with this celebrate have, have an attorney involved. And I think it’s obviously cuz you know, New York just has all kinds of craziness going on that they don’t want sellers to be screwed by people. So they, um, you know, so they have attorneys involved. So you’re right. That is a huge barrier of entry. And if you can find that barrier of entry, that’s good. And another thing I’ll add to that is, um, finding lists. So if you can find lists that other people can’t in different areas, then that is also very big. I’ve got people going into TV, um, where lists are, are very hard to find. So you’re gonna have a lot less competition cuz people aren’t buying the same lists than marketing to the same people. And so you have less investor. So when they go on TV and they’ll be one of, they’ll be the only investor on TV. So then, you know, they can potentially dominate the market there. So
That’s a really good one. Yeah.
All right. Cool. A couple more questions. Um, so John, uh, said Oklahoma will have that same law that you’ll have to be licensed.
It’s probably going to pass, but from my knowledge of it and maybe John, you know, a little bit more, um, I think the final bill isn’t out yet, so I’m waiting until the final version comes out and then we have me and a bunch of guys have one attorney that we’ve been talking who that’s staying up up on it. And then I’ll like, once it gets passed, I will consult with that. We all are gonna do like a group consultation and just figure out what the workaround is. Is it that you have to have a license? Is it, you know, is it just for me, I might just wanna close on the properties, you know? So that’s my plan for Oklahoma.
Yeah. I need to connect you and John, cause I think you guys are doing some of the same things in same markets. Um,
But that’s a wine cool thing too about going virtual guys, cuz honestly like I was like, oh that stinks with Oklahoma. Like good thing. I have a few other markets that are in Oklahoma, so yep.
Yep. All right, cool. Adam’s in New York. Awesome. Um, let’s see. Chill. Let’s see. Actually, lemme go to the first questions. Um, so Noah says he got another lead from TV commercials. Noah’s uh, implementing our TV commercials. Awesome. Thanks for jumping in there. Um, let’s see, Keith says, uh, how do you structure your pay for your lead manager lead intake, uh, and why it’s structured the, that way. And then what is the highest absolute average of the me area you would go? Where would you draw the line? Okay. Wait, so go, go to, so, so it sounds like let’s just start first lead manager and lead intake. So do you have someone doing the lead management and intake, uh, in your office or does your JV take care of some of that? So kind of talk us through that.
No. So if your JVs doing all your acquisition type activities, then your JV needs to just basically get the entire fee. So, um, we do everything on the acquisition side up to contract signature and then you go to a JV partner and they do everything on the disposition end. Um, so I do have, um, you want, maybe you call ’em lead managers or lead intake. Um, I call them sales reps. So, um, my sales reps are, I have a couple that are virtual and I have a couple, uh, one that is actually local here in California. Um, they get paid a draw against commission earned. So, you know, when they first get started, obviously it takes a while to earn those commissions. So that’s how I paid them. Um, what else? Uh,
And then they get, and then they get paid, uh, percentage of the profit on closing or do they just get paid a, uh, paid a flat fee upon
No, they get paid a percentage. They do. And they’re all on different commission structures. So I don’t wanna get too into it in case they’re watching, but they, I do, I will just say that I think for sales reps and people in that sales type position, it’s very important that they have some sort of commission. And I think when you do a flat fee that discourages better negotiating. Um, so I think doing a commission is smarter. However, if you’re not paying them anything, they don’t feel like they work for you. And I’ve made that mistake. I add people at first as straight commission and they really feel like they could do whatever they want and that they don’t, you know, really owe you anything. Like you’re not really keeping them honest or responsible for their work. So what I found is giving them that draw, that kind of helps when the months are slow, that they always know you’re going to get paid X, you know, to keep you going and then you get your commissions. But the goal is you have to always outearn or draw. And if you don’t, then obviously this isn’t a good fit.
Yeah. And if you start someone on a hundred percent commission, I’ve tried that before and it just doesn’t work out. They just get motivated. Cause they, they don’t see any money coming in. They don’t. Um, and they, and then I’ve heard he able to do a combination of the two where they do a flat fee per deal. But then they also say, if you meet a certain profit, um, you know, certain profit margin on the deal, then they get extra bonuses on top of that. So that could be a, a way to structure it
As well. Yeah. Everybody on my team pretty much gets bonused in some way, you know, the disposition side as well. Like they get draw, but then they get commissions and they have to outearn their draw. Um, you know, it’s part of keeping their job.
So, um, so if I understand key, second question is what’s the highest, uh, average of the Metro area? Are you saying, well, you can aver, I guess you can mention both. What’s the highest price, average price point as well as, uh, kind of the population. If that’s, if that’s a determining factor as well,
You know, the population wouldn’t really be a determining factor as far as how high of a population. Um, but I will say the more dense, usually the higher price or the more competitive with other wholesalers. So I have actually with the students that I’ve had, I’ve noticed a trend that the ones that flock to the major metros are their wholesale fees are lower. They’re getting less deals and it’s just because they’re competing with so many wholesalers. So my, my advice now is find a place that still has a healthy population, like at least 250,000, you know, that that still has, you know, work. And the average house price is like maybe a hundred above 120,000 it’s so a viable area. Um, but is not like so well known that everybody, you know, knows about it. Um, so that was my VI advice to students now, because just everybody, you can’t have everybody flocking to Oklahoma city, you know, like, I mean, that did happen in Oklahoma city.
I’m sure John can, you know, commiserate a little bit. It like, it’s like so many people flock to these metros. Indianapolis is another one, like so many people flock to these metros and then it just kind of blows it out. So that’s sort of my advice. And then the AF the, how the highest price kind of back to my New York statement, that’s a hard one to answer. I don’t have one in my head because I actually would do like this area of New York that like I’m thinking of, you know, like I, I would, which is, I believe like 350,000 average house price and it’s because of that extra nuance. So I don’t have, you know, and it depends on the game that I’m in. Like if I were to get back into like Nashville, the average house price at that time, I think was like in the threes. And it was because they were new homes and that was what I was doing and I was getting into development. And so I don’t have a total answer, but for like a newer student, um, the easiest is just your landlord by targets that are like under 200,000. So between like sweet spots, like one 30 to 200 somewhere between that, it’s just easier. It’s just an easier seller. Um, so that’s my recommendation. If you’re new and then, you know, you venture out, you try different things if you feel like it.
Yep. Yep. All right. Cool. Chelsea has a question. Um, uh, Chelsea’s in our two program doing commercials in Texas and Wisconsin,
Getting so many leads, which I knew she would with TV. You guys know, I love that. Uh, I’m not sure what to do because she cannot good find good, uh, buyers or JVs. Um, she loves Wisconsin, um, for this reason of having an so she has, so she has a good JB in Wisconsin. Ads are going awesome, but I’m finding that I cannot find as many buyers in the east, Texas area. So what would you recommend for her?
Okay, so that kinda reminds me of my days in Tulsa when I got started there a few years ago. Um, Chelsea’s one of my students too. So, um, I, there is a strategy that you need to make sure is kosher in your state. Um, I would might con I might consider teaming up with a realtor and listing the contract if that’s okay. Legal. Um, so we’ve had to do that in the past, and that’s what a lot of us do, um, in areas like that, where it’s hard to find buyers in the traditional ways using the traditional tools. Um, so that’s kind of a little ninja trick that you need to make sure you’re doing things the right way. You need to make sure your contracts are Bulletproof, you know, go seek an attorney, you know, to advise you on this strategy. Um, so that’s one idea.
The other idea, honestly, is like when you get a deal, just look individually in that area. You’re not gonna really rely on a JB as much, um, pulling all the buyers in that area that are absentee owned, um, whether it’s, uh, you know, cash or not, I don’t really care cuz people get loans that are still investors, so absentee own and like call all the absentee owners. Hopefully you’re gonna land on some LLCs, more sophisticated investors and figure out who are the local buyers in town. Um, if the area has a decent population, there’s gonna be some local investors that might be interested in that property, especially if you got it tied up at the right price. So it’s a little bit of an extra step for you, Chelsea, because you’re now gonna have to have like a runner in that area to like open up the door, meet the seller, you know, but I pay runners 20 bucks an hour. I find ’em on Craigslist. Um, and you, you’re gonna have to find someone to help you actually make those calls. And that’s something that I think you’re busy, you’re doing a lot. You might have to like hire help to help you dispose those types of deals.
Yeah. As you mentioned, listing on the MLS, I think that’s great if you can’t list on the MLS for some reason, because of your, you know, state or area that doesn’t allow you to do that or, um, the, the agents broker, whatever that you work with. I have someone on here that’s in my TV program into my mastermind. And I had mentioned to him, I, I, I heard what his wholesale fees were and I said, you know what? You need to close on these properties, clean ’em up and wholesale ’em and put ’em on the MLS and just let people fight over. ’em. So couple deals that he told me about that he, uh, he did on our last mastermind call was, um, he was in a wholesale for about 20 K a piece. And by clean, by closing on them finding private money, putting ’em on the MLS, I think he said he was gonna make over a hundred grand on to those deals.
And, and that that’s the best buyer’s list, right? There is, you know, on the MLS because agents are showing the proper, I mean, it’s just going out to so many people and then they know they have to come up with their best offer. And then you’re gonna find retail buyers. You’re gonna find landlords that can pay more. You’re gonna find investors that for some reason are able to pay more money. So that would be a recommendation too. And that’s something I can help you with Chelsea, as we do have a funding, uh, funding business as well. So if you can close on, ’em put ’em on the MLS, then that is, uh, pretty amazing.
I have a question for you or in the student, was the student virtual or was the student local, like after
They were local, they were local. So yeah, that was the caveat I was gonna
The caveat I wanna say. Yeah. Is rehabbing virtual. Even if it’s a cleanup job is hard. These contractors take advantage of you. So if you can pull that off, you need to be really like you, you interviewed a lot of contractors, like you’re really well connected in that area. Um, it, the rehab part about going virtual is very difficult, even if it’s like a cleanup job. So that’s like, yeah. So,
So yeah, that, that was the, that was the caveat to make sure you have killer numbers so that if you do close on it and something happens, you’re able to hold onto it for a little bit. But you know, when I’m talking about whole tailing, I’m talking, I’m not talking of big rehabs, I’m not talking about major hoard properties. I’m talking about properties that you can pay someone 500 bucks, a thousand bucks to go in and clean up and make the place look 10 times better just by cleaning it up and then putting on the Yep. Okay. Keith, uh, hope I answered your, uh, we answered your questions with price points of single family houses, um, which is Lauren, you said definitely below 200,000, but you know, probably a hundred, hundred 50,000 medium price range is probably the sweet spot for some of the markets that you would recommend.
I, no, it’s more 1 2200 is the
One 20 to 200. OK. Okay. Gotcha. All right. Cool. Uh, drew says when JD partners, uh, when JD partner uses native to market and sell the deal, does the agent’s commission fee come out of their portion or the total?
Yeah. Yeah. I’m assuming that everybody’s
Gotta eat that if an and how to get involved. That’s the cost of the deal.
Yeah. Yeah, for sure.
Um, how do you know the cities? So Jasons, how do you know the cities or markets 200 K population that there’s not high competition?
How do you know that? There’s so not high competition basically in any market really, right. Yeah. Yeah.
You know, that’s, it’s hard because you’re gonna talk to anyone and they’re all gonna say, it’s really competitive here. Yeah. Everybody says that, right? Like everybody says, it’s really competitive, like everywhere. So it’s almost like you can’t go off of what people say, because as you know, it, it’s, it’s, um, it’s how they feel, you know? Um, it’s subjective. So I like to say, this is when you’re talking to, you’re doing your JV reach. So say you’re thinking of a market. I always say, come up with like three markets and you’re thinking about them, try to get a hold of three people in those three markets or right. So now you’ve got, you’re talking to nine people, okay. It’s gonna take you a week and you know, you’re gonna say, so like, you know, how’s it over there? Is it like super competitive? They’re all gonna say that, right?
Yeah. That’s really competitive. But then you go, well, how many deals are you doing a month? And if they give you a number that sounds good to you. And usually this is where they start bragging. Like, cuz they’re all proud of themselves. They’re like, well, but I do five deals a month, you know, but it’s really hard here. I’m just like, you know, the elite, you know, like it always goes that way in that conversation always. Then if you have that feeling, if this person can do it, so can I like write that market down on and give it like a check? Like, okay, this market might have passed that test. You know? So that’s what I tell everybody to do. It’s it’s very anecdotal advice. I wish I can say you can go, go to prop stream, pull this list. And if, if there, if the percentage of absentee owners to population is, you know, under, you know, 5% than, than do it, I wish I tried that in like 20 markets. None of the, none of it made sense. Like there was no correlation that you could actually pull with data. So the best advice, and this is from like, just like, gosh, I think I’ve been doing this. What nine years? Almost 10 years. Um, really is just proof of concept is just talking to people in the area and are there people doing it? So like when I go to California, I don’t know what anyone really wholesaling deals here. Maybe Tony you, but Tony’s like,
Instead of getting ready to wear their TV commercials.
Okay. Okay. So even right now you’re kind of over like you’re not doing, I know Greg Helleck like, I don’t know that many people and even Greg, like will flat out tell you like, no, it’s so competitive. He’s in New York. So he’s my New York. He’s in New York and he’s in California and he’s like, hands down, California is way harder than New York. And it’s mainly the cell it’s seller psychology. Like that’s why it’s like, the sellers are very aware of what they, you know, the price of their home. So yeah. Um,
Yeah. So Michael, Michael and New York says stay outta New York. Just kidding. Um, but Michael teaches people how to do deals in New York, so,
Oh, that’s cool. Maybe ill come to you, Michael, if I ever adventure in New York.
Yeah. Michael’s in a couple of my mastermind. Group’s good guys. So I can connect you guys if you want. Um, let’s see. Adams does in Brooklyn, Queens and long island, ridiculous have put wholesale households, well over 1 million or 100 bucks down. It’s possible. If you explain why we do that 10 K max on contract has again, takes forever. So you’re saying a million bucks people put down on, on, uh, New York deal. So again, that’s one of those things where I guess if he can, yeah. He’s, you know, put those, earn his money, deposits down and make that make sense. Then you can get into that market. Um, oh cool. Chelsea. You’ve already scheduled a call with our funding company. Good.
Ooh. Noah’s Noah’s comment actually. Um, back to Chelsea, it was one I forgot to say, but we just kept going, um, is calling the local agents. So another trick is calling the local agents in town. If you can’t find a buyer and see if they have a buyer.
Yeah. And they, They might shoot you a little more straight than some investors too potentially. So, um, let’s see, got a bunch of comment here. Uh, Andrew said our cleanup was paint and trash five to 10 K done fast. So that’s who I was talking about. Andrew 20 K profit on one deal and K on the other.
I know that’s. That is awesome. I think I would really like if I were to virtual, it would be a market where I really, really have like my people, like my network, my people not just like, oh, I randomly got a deal in Wisconsin, which I’m not in at all. Right. Like it, it would be like, no, if this is a place where I know people, I have property managers, I have like 10 people I could call then I would maybe attempt it. But I don’t know. Every time I ever rehabbed virtually it, I always said, I’m never gonna do this again.
Yeah. I would have to be, have a very light hotel. Right. It
Has to be very light hotel. I had a contractor move. One of the houses like the contractor moved in and squatted.
That’s funny. Yeah. That’s funny. Um, okay. So, uh, Dean says, what is your favorite virtual market and what are your best producing marketing channels? That’s actually on my year, I forgot to get into that marketing channel so we know you’re getting ready. You’re getting into TV. Tell us the market.
I mean, obviously TV,
Well is already in, he’s already in three markets. So what are the other marketing channels you’d recommend in any other virtual markets? You,
You know, I don’t give away any virtual markets guys. I’ve got 250 students and each one would have my head. If I gave a market away where I know someone’s doing particularly well. And I feel like they’re almost like, I’m like, mm, this seems a little like it’s because it’s not com competitive. So I, I don’t give away markets like that. And my team would kill me if I told you guys the markets I’m in, I, I don’t even go into it anymore. Other than Oklahoma, cuz the cat’s out of the bag on that one. Um, there, I will say it’s like markets change like your favorite this year. Won’t be your favorite next year. That’s what I notice from experience. So that’s why I love that I’m virtual because I can go and just move on. When a market feels like it’s super saturated, you know, laws are getting passed, which it sounds like, I guess a week ago that law got passed.
So I gotta phone some friends and see what the deal is. But you know, that’s why I love going virtual. You can kind of pick up wherever, you know, and go wherever you want. Um, so best producing marketing channels, big fan of text message blasting and cold calling all marketing channels. I feel like work if you do them. Well, honestly like direct mail. Some of our highest fees have came from direct mail. Um, cuz it’s a different customer you’re going after than the customer that checks a cell phone. Um, so it’s hard. I know you want me to give you one for a while. It was texting. I’m only getting a little irritated with texting because of legislation right now it’s texting’s probably gonna go away. Like I don’t, I don’t know how much longer we’re gonna be able to text. So I don’t wanna like, you know right now I, I, I’m an honest like person texting because of all the changes.
It’s such a moving target with E CPA laws and the phone carriers trying to block them, it’s getting harder. Um, but that for a very long time was my favorite cuz it was like the cheapest thing to do. Um, now I really do like, I’m hot for TV guys. I’m really hot for TV. I haven’t done it yet, but Tony’s told me so much. And just knowing what I know, I was like, those numbers are good. Sign me up Tony, like and talked to me for, I think 30 minutes before I was like, yeah, no, like let’s do this. I think TV sounds really good because of the person it’s going after.
Um, yeah. And you’re starting is your commercial starting next week or the week after?
Oh, we’re having issues porting the numbers. So I don’t know we had to push it. It was supposed some
Already start. Yeah. We’ll have some data for you soon. So
Yeah, we will, I will keep you guys all updated. Um, I’m very excited. Um, but yeah, these darn the porting phone number thing was our hiccup.
Yep. Yep. Okay. So if you guys want to get a hold of Lauren, she does have, uh, a coaching program. So you guys can go. I made it easy. Read directly link for you guys. It’s uh, Tony javier.com/virtual. Again, Tony javier.com/virtual. Uh, if you wanna learn more about her virtual wholesaling, uh, program coaching and all that good stuff, she teaches more real estate investors around the country and is dialed in on what is working, uh, on a weekly basis. Cuz she gets data from all of her students. I
Awesome. If you guys wanna get in, contact her with her, you can go there. Um, so let’s see. I think there were a lot of question that came through. I think we got, most of ’em answered. If you guys want any other questions answered, please put ’em in the box. Now let me see if there’s anybody on Facebook. I haven’t checked that. Uh, see if anybody’s posted there. Any, anything else Lauren that you want to touch on while I’m switching over there?
No. Um, if you guys are interested in my coaching program, just remind like if you’re a part of Tony, can you let me know in our welcome call that you are doing TV ads, um, because I can help you with like your sales funnel, um, and how to manage those types of leads. So just remind me.
Yeah. Fantastic. All right. Let’s see, we got something else came in. Um, Lauren. Yes. Lauren coming to our mastermind in San Diego in July, right?
Yes. Yeah, I do plan
On it. Yep. She’s gonna come speak in, uh, July. And if you guys have not signed up for that, um, Tony javier.com/event, I believe. Um, I don’t know
How you remember this.
Oh, I don’t know either. Um, I try and make it easy on myself, but make it as short as possible. So yeah, slash event Tony hagger.com/event, we’re doing a two day mastermind for experience investors gonna be amazing. Uh, Lauren’s gonna come speak and we have a lot of our, uh, I was gonna do mostly our TV people and then just decided to, to invite mastermind people, but then I’m opening it up to my, uh, some of my other follow. So if you guys are doing deals, that’s the biggest thing is you guys need to be doing deals in order to come. Cause we want high level conversation and, and share what’s working throughout the country and connect and create some good, uh, relationships and potential partnerships. So cool. Any last words, Lauren?
I, I don’t know. What could I, what could I leave you guys off with? Um, I hope I answered all your guys’ questions. Um, and like I said, a lot of the things that I say, um, there’s always options to every rule. So if you feel like I said something, that’s very just blanket statements, like don’t invest in California. No, I know. I do know people that have done very well in California. I did very well in California for a very long time until I just got, you know, I wanted to go virtual and I do plan on coming back if the market ease up a bit. Um, and you, Tony, you do have me curious about trying TV ads. Cause I don’t know anyone doing it down where I’m from. So anyway, if you guys have any questions or need to like kind of need me to further elaborate or explain, uh, drop it in the comments and I’ll try to answer all of ’em. If you guys also just wanna follow me on Insta, I post a lot there. Um, my handles this mom flips.
Cool. Um, I had a question on the tip of my time. Oh, um, so, uh, I’m looking at the people that are on this call and a lot of them are, uh, pretty experienced investors. You know, they’re either in my TV program, you know, I can see several that are doing 50 to a hundred deals a year are some, a couple doing on over a hundred deals a year. So if they are in their market and they are wholesaling and they want to take on another market, um, what is your thought on those people that are already established or even someone that’s getting into a new market once they get into a market and they do really well. When do you recommend for them to try a second market? Do you feel like there’s kind of something that they need to have set up in their main market in order to jump into a second market,
Do at least 20 deals. You’ve got it down. You’re not JV dependent. You’re doing them. You have your own buyer’s list. Um, you’ve got all your people in place that market can run itself without you. So you have staff, you have people managing, you know, your staff, then you can focus because every new market is like a little baby, you know, and it’s gonna take a lot outta you and you need to figure it out. You need to take six months to really figure it out from what I’ve noticed. It takes about six months to really feel like you’ve got a market figured out. So, um,
And it also depends on your team too, right? Cause like, for me, like we just plug commercials into San Diego. Now we’ve got three other markets we’re gonna plug it into and I’ve got a team that can answer the calls. Yeah. Um, they can do the line lead intake and then I’m finding and JV partners on the ground. Um, they can do the deals. So honestly I’m gonna be pretty hands off. So for me, I don’t mind, you know, plugging in multiple markets at a time. So I think that’s also a big thing is, you know, how is your team set up? How can they handle the leads coming in? And then the JV partner on the ground, making sure you’ve got someone there that can, you know, take it from, uh, and actually the way that I’m doing other markets is I’m having my JVs do the acquisitions. I’m just driving the leads. So what I’m doing is I’m playing my
Yeah. Your deal’s different, your deal’s. And also they have a vested, like, because they’re paying right. They have money in the pocket
I’m more putting it in the JV. Doesn’t have any money in the pot and that’s when you get JVs that don’t work as hard for you. Yeah. So you’re spending money. They’re not, you know,
So have you thought about doing it that way, where they contribute to the ad spend to make them more committed?
I haven’t, I haven’t really thought of that.
That might be a good idea. Cause
I know I just, it just never occurred to me until me and you have talked a little bit, but yeah. Yeah.
I think, I, I think that’d be interest to try out because if you’re sending them leads, they’re like, yeah, I can do this. Right. Yeah. But even if they have $500, like just start with a low amount. Like, but
When they have to put money in it, that’s different. Yeah. It’s like, that’s a really good point. I’ve never, never occurred to me.
Yeah. Yeah. Yeah.
Interesting. It’s a good idea. It’s a great idea.
Yeah. All right. Good stuff. Well, we’re perfect. We’re right on the top of the hour. So again Lauren, thank you again for jumping on and doing this for my people. Uh, my TV people mastermind people and my Facebook audience. Um, again, if you guys wanna go to Tony javier.com/virtual, you can connect with Lauren there and go to our Instagram at this mom flips, right?
Yeah. Thanks for having you
Guys. All right. All right. Good stuff. Thanks Lauren. Have a good one. Thanks everybody for joining.
Thank you. Bye.
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