In the real estate world, today’s special guest is in a league of his own. Some of his real estate accomplishments have been really impressive—he acquires 150 properties each year and has made a staggering $20M in sales off MLS. And that’s just for starters.
Nathan Brooks is a licensed realtor and a seasoned real estate investor with more than a decade of buying, selling, rehabbing, flipping, and real estate renting under his belt. The loving husband and doting dad is also the principal and partner of Kansas City’s leading turnkey real estate provider, Bridge Equity.
In today’s episode, he candidly shared wisdom, techniques, tips, and insights that have helped him dominate and thrive in an industry that’s exciting, volatile, and highly lucrative.
So have a pen and paper handy, get those distractions out of the way, and pay close attention. The information, knowledge, and inspiration you’ll get might just be what you need to propel your business to greater heights!
- What a turnkey house is
- Why it’s crucial to focus on only one thing
- Determining which properties on MLS to make offers on
- Figuring out the price point
- Finding a high volume of properties on a consistent basis
- Options available for those who don’t have available cash
- Why it’s important to be clear about your target
- How you can mitigate as many risks as possible
- Advice for people who are new in the industry
- The One Thing by Gary Keller
- The 4 Disciplines of Execution by Chris McChesney
- Traction by Gino Wickman
- Good to Great by Jim Collins
- Money Master the Game by Tony Robbins
- The 4-Hour Workweek by Timothy Ferris
- Bridge Turnkey
- Nathan on LinkedIn
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Tom Krol: Hey everybody, welcome to another amazing episode of Wholesaling Inc. We have an amazing guest today guys, I am talking about somebody who I can’t believe he’s on the show. This is a gentleman who is at the top of his game. It is such an honor to have this guest on our show. You guys are going to be blown away. He is at the top of his field and he’s acquiring 150 properties a year. And he’s going to show us in detail how to do that. This show, we’re going to cut through all of that. We’re going to get right to the meat and the potatoes so that you guys can take notes and then do exactly what he does. Welcome to Wholesaling Inc. everybody, my name is Tom Krol, America’s number one wholesaling coach, and today I have Nathan Brooks on the phone, the man, the myth, the legend himself. I can’t believe it from bridgeturnkey.com. Am I saying that right, Nathan? I want to make sure I get it right.
Nathan Brooks: You got it right, Tom. Thank you.
Tom Krol: Oh, yeah. All right. It’s so exciting to have you on the phone, we are going to have a great adventure guys, you are going to need a pen and a piece of paper for this episode, we are going to deep dive some really important strategies that you can implement today to get results right now. There’s no time like today and whoever gets the most results wins. So let’s get started Nathan Brooks, it is such an honor to have you on the phone. I know you’re super busy and you’re running around. Thank you for allowing us to pick your brain here. I really appreciate it.
Nathan Brooks: It’s a great pleasure to be on here Tom and I have the mutual admiration for you and what you do so I’m pumped for the conversation and all the time and learning and there’s always opportunities for you and me and everyone else to learn something so be it’ll be a lot of fun.
Tom Krol: Let’s do it. We are going to put you in the hot seat. We’re going to hold your feet to the fire and we want your top three secrets on how you’re getting so many properties. But before we do that, tell us a little bit about who you are what you do and what is a turnkey and I know you have one of the best names in the industry. I’ve heard all about you and it’s really awesome to have you on the show. What is turnkey? What is the business that you’re in and who are you?
Nathan Brooks: Okay, great. Well, first, I’m Nathan Brooks. I live in Kansas City, in the King City area. I just recently bought my dream house on 11 acres. Oh, it’s awesome. And so we see turkeys and deer and foxes and coyotes and all kinds of stuff. And so, beautiful wife and two kiddos, and we homeschool and we have a ball at our place there. I have been in real estate for a little over 10 years. And about three years ago, my partner and I came together and started Bridge Turnkey Investments. Over the course of the last three years, we’ve basically doubled each year and so we’re on pace to fix and flip 150 houses. And within that organization, we control all of our construction, we control our acquisitions, and then we control the disposition from the client perspective. So we’re a one stop shop. So what is a turnkey? I think I’m getting all three of your questions in one question.
Tom Krol: Awesome. Okay, yeah.
Nathan Brooks: Yep. What is a turnkey house? In a perfect world, a turnkey house is one that is purchased in a neighborhood that you as the client understand, in a market that you have a provider that you trust and have a relationship with, and that property itself is in good or great condition and you understand kind of what type of model… For us, our mantra is we fix or replace anything that doesn’t have a 10 year useful life or more. So, often I think that people or companies are terrified to put those extra dollars in there. And I will tell you, it has been something that has changed the game for us because our clients know on our properties anyway that if it’s even a question it’s going to get fixed or replaced [inaudible 00:05:05] whatever.
So turnkey houses, we buy it, we fix them flip it, we clean it, take professional pictures of every property and then we lease it for that client, exchange one of our property management partners and then we sell it to that client. So it’s a cash flowing investment property for that client when it’s all said and done.
Tom Krol: I love it. So essentially, you find it, fix it, fill it and manage it and the investor just puts it as money and I love that because it’s passive income and that’s what I’m all about. So very, very cool. And you homeschool, which I think is awesome. I asked Julie, my wife, I said, “Kate, hey, would you mind if we could homeschool Logan, Lacey, Lily, Lucas and Levi?” And she was like, “No.” She said no. I even went to my pastor Scott. I said, “Scott…” Because Scott and my brother Todd homeschooled. My sister Shannon homeschools, my pastor Scott homeschools. And he was like, “Tom, it’s so great. It’s so awesome. There’s this event in Orlando once a year. And once you meet all the kids and the families,” and I’m like, “I’m all in.” I was so excited and Julie was like, “No.”
Nathan Brooks: Well, thankfully, my wife Stacy, she’s a rock star mom and she taught elementary school for 15 years and has three undergrads and a masters of technology and education and she is a beast.
Tom Krol: That’s awesome man.
Nathan Brooks: Yeah.
Tom Krol: Joe McCall gave me the idea because he’s like, “Oh, I’m traveling all over Europe in an RV and the kids are home schooled,” like, “Sweetie, this is the only thing tying us down to one location let’s homeschool.” It was like she’s not having it, but I understand with five kids, now one’s in college, but I understand why I got shut down on that one. So I can’t fault it. But that’s awesome man. That’s very cool. I know you brought up this too about trust and integrity when you have a turnkey provider and I’ve heard nothing but like all integrity, all honest. That’s why it’s so awesome to have you here. So thank you again.
Let me ask you this question. I have an idea of what you do, what our listeners are really interested in, is a turnkey provider, you have to find the properties. And you have to do that, obviously, on a large scale, I would imagine and cut me off here if I’m wrong, but how are you finding so many properties? Are you buying them at a discount? How do you find them? What does that all look like? Because our listeners want to know how to find more properties. The cash buyers are kind of a dime a dozen. But for us, it’s always the properties that are really the challenge to get so many of them, how are you doing such high volume so consistently? What are some of the tips or tricks that other people can implement to get those kind of results?
Nathan Brooks: Well, first of all, I think that it’s one of those things and we talked about integrity just a minute ago. And when you bring not only… One of the things I found early on was I would get these calls from a wholesaler whomever and really even thinking two years ago when it wasn’t quite as hot, not like the market is today. But there would be, let’s say I was $2,000 under the other buyers offer, but three days before closing or four days before closing I got a call from the wholesaler saying my buyer can’t execute. I can give you a specific example. I remember it was Christmas, it was the week of Christmas. I got a phone call Tuesday, five o’clock. And Christmas was, well basically we had through Friday. And so I hadn’t been in the house, never heard of it didn’t know anything about it. And so, guy calls me up he’s like, “I really need to sell this house.” I’m like, “Okay.”
Tom Krol: This was a wholesaler?
Nathan Brooks: It’s a wholesaler.
Tom Krol: Okay.
Nathan Brooks: And he says, “Can you do that?” And I’m like, “Well, could you give me the address?”
Tom Krol: Sounds like a wholesaler I love it.
Nathan Brooks: Yeah. And so, literally by 10am or 11am we’d been in it. We are under contract. We were in escrow and we funded that thing on Friday and that wholesaler closed the deal and the seller who desperately needed those funds by Christmas had them. So when you think about it, like you said, there’s a million cash “buyers”, but who is actually executing on the buy, and who is actually making it easier? So for instance, on our end, we make 20, 30 offers a week in various areas, whether it’s MLS and we track every single one of those things. And we know if we’ve missed it, how much we missed it by and we go back and look at them. And by the way, if you’re making offers and you don’t have a track on those things, I cannot tell you, I bet you it’s one or two properties a month that we buy that we did homework on three months ago, that came back on the market.
Tom Krol: Okay. I want to deep dive this a little bit because that gives me a lot of insight. I hope everyone, you guys, you may want to just hit the back button to probably about 30 or 60 seconds on that because Nathan just gave some really key points. So if you notice what he said number one, is you’re getting some of your deals from other wholesalers, which is interesting, but also you’re making how many 20 to 30 offers a week? Is that what you said?
Nathan Brooks: Yeah, correct.
Tom Krol: Okay, so you guys, it’s a volume game. Now, I also heard that you make some of your offers actually on MLS, is that accurate?
Nathan Brooks: That is accurate. And we built out a retail team because initially and I think oftentimes if you are trying to approach realtors right now, there is something very important to understand. Many investors don’t necessarily speak realtor, and many realtors don’t necessarily speak investor. And so we got so tired of working with multiple realtors, they might be great realtors, but they do not understand deals.
Tom Krol: Correct.
Nathan Brooks: And so we said, “All right, let’s build it ourselves.” And so not only did we decide to do that, but we now built out that whole side of our business and we’re on track to do 15 or 20 million in sales in our first year, in our retail team. But the point of that is every single day, I spent one, two, three, four, five hours a day with the first agent that we had on our team Ruston, by the way if Ruston is listening, he’s a killer, the guy is slaying it.
Tom Krol: Hey, Ruston.
Nathan Brooks: Yeah, Ruston is awesome, man. And so we said, “Okay, we’re just going to work on this process.” By the way, it’s like squirrel moments here, but you cannot solve process problems with people. You have to solve process problems with actual processes.
Tom Krol: Oh, man, don’t you go make me fall in love with you now because that’s awesome. That is so true brother. That is so true.
Nathan Brooks: So you’re so upset that you don’t have five deals in a month? Well, guess what, buddy? Go make more offers, and go track them and go figure out what… So we said, “All right. If we’re going to make offers and we’re going to do this, I can write five to 10 offers in the morning, that I’m not even physically touching, me Nathan Brooks, within an hour or two,” because we have a VA, we have somebody boots on the ground who’s checking the docs and we have Ruston, who’s working and looking and reviewing that deal.
Tom Krol: Okay, so I just want to, because you’re using… I totally understand because you guys Nathan is an expert and he is obviously doing very, very, very well. But there’s some like jargon and acronyms that some of our listeners and even myself I don’t understand. I want to really just take this down a few levels and just be, so I have a wholesaling business and I want to acquire properties by making offers on MLS. I have a few basic questions about that. Number one, is you’re making about 20 offers or 30 offers a week, right? How do you determine which properties on MLS to make offers on and how do you determine your price point? Are you just saying like, “Hey, take every house that goes on the market and offer 60%?” Can you kind of share with us some of those details if someone wants to emulate what you’re doing?
Nathan Brooks: Absolutely. So what I did, and by the way, six months ago, I was doing all of this myself. And so we were able to build this out and grow it. And by the way, if you’re the only one sitting in that seat, you are probably the reason why you’re not getting what you want.
Tom Krol: Everyone you should re-listen what… I mean Nathan that is pure liquid gold. Visionaries are not good at repetitive tasks, at detailed tasks.
Nathan Brooks: No.
Tom Krol: So don’t use discipline to try to get good at something you shouldn’t be good at as a visionary, instead just outsource it. So you guys, Nathan is gold.
Nathan Brooks: Or excuses. It’s nobody can do it. Oh, yeah, they can and better than you. So get out of the way and stop making excuses and back to the process versus people, like you need a process and that’s what you don’t want to do.
Tom Krol: I love it.
Nathan Brooks: You’ve got to get it out of your head, put it on paper and be able to have it trainable and repeatable and trackable.
Tom Krol: Oh, man. Oh, I love it. I love it. You guys, every single word of this, write it down and make it part of your personal philosophy. It is absolutely hundred percent you could deposit that at the bank. Okay, so you open up MLS, now, if a lot of our listeners are not agents or brokers, number one, so do they need to make friends with an agent who can make the offers for them I imagine?
Nathan Brooks: I think so. We’ll back into that and I’m sorry I keep going these squirrel moments.
Tom Krol: No, no, it’s fine.
Nathan Brooks: So what we looked at as a turnkey company, years ago, I built a single page document. I have this wholesalers and whomever realtors always all time approached us like, “What’s your list? What’s your criteria?” And I said, “Here you go,” boom, it’s a PDF, it takes five seconds to send it. So the criteria is already there. And so then what we did with Ruston was I was like, “Okay, cool. Let’s work through…” Here in Kansas City, in this market, Kansas City is easy to understand, but there’s all these little subsets cities, and neighborhoods and stuff. So we just started working through by neighborhood. And I would say, “Let’s look at it together.” And so we would screen shares, zoom, whatever for hours, or in person.
But screen share is honestly better a lot of times because then he has this computer I have my computer we can be doing things at the same time that are different activities within that problem.
Tom Krol: So you have your agent friend screen sharing on MLS the properties that you’re considering making offers on?
Nathan Brooks: Exactly.
Tom Krol: Got it. Okay.
Nathan Brooks: And then we work through together and we say, “Okay cool, this looks like its potential,” and we pull it up and then we immediately check the comps on that deal. So we put that address in and then we look at pending and sold in the last either 220 or 360 days. But this is important to know that I know that a lot of times people have a hard time understanding what are deals. Well, you have to start looking at that neighborhood. Have your realtor set up an email and every morning you get, say new listed, any changes and everything that’s in that marketplace or that city in your criteria. So like for us, let’s say it’s up to 120 hundred 150 ARV and there’s no bottom on the price.
Tom Krol: ARV means what? Just remind us.
Nathan Brooks: After repair value.
Tom Krol: Right. After repair [crosstalk 00:16:10]… Okay, so everybody understands that you guys ARV means after repair value meaning the current condition in the home and then what is the home value after it’s repaired. That’s one of the things that Nathan is looking at. And Nathan, my listeners will literally kill me if I don’t ask this uncomfortable question, which is you keep talking about this document. If I don’t ask you to see a copy of this that I can post in the show notes. I don’t know if you’re comfortable sharing it or maybe deleting some [crosstalk 00:16:34].
Nathan Brooks: Happy to.
Tom Krol: That would be awesome. Okay, guys, so we’re going to have this in the show notes if you go to Wholesaling I-N-C, wholesalinginc.com. I will put it in Nathan Brooks, it’s B-R-O-O-K-S for bridge turnkey.com. In those show notes, it’s going to be the actual criteria sheet that he uses so that you guys can take a look at what that actually means and what he’s working with, with his agent.
Nathan Brooks: And I expounded on that I believe in a bigger pockets post at some point, so I’ll check that down. And if that link’s helpful I’m happy to send that one.
Tom Krol: Oh, yes. Send that link to the bigger pockets episode, and we’ll plug that in as well.
Nathan Brooks: Yeah.
Tom Krol: Awesome.
Nathan Brooks: Perfect. So here’s the thing. I think most people first of all, you can’t name the criteria. And that comes back to the process question. And so a lot of times I hear somebody wants to wholesale and then they want to fix some flips, and then they want to buy and hold. All of that’s great and we do that, we do all those things. But it’s so important to focus on one thing, and we use that same principle and of course, it’s a book too. So, one thing-
Tom Krol: Gary Keller. Yeah, anybody who has not listened to Gary Keller or read the book, huge mistake, its a game changer.
Nathan Brooks: It’s a game changer for sure. So what’s the one thing? Okay, well pick an area, like for us we picked an area that was pretty easy to understand. There’s not a bunch of wild comps, there’s not a bunch of stuff that’s really complex, and we just dug in, because there’s all these pieces right? You have to understand, okay, well visually does this make sense? Look through the pictures. What does the rehab look like? Does the price look like it’s in the ballpark? And by the way, just because it’s 15 or $20,000 off does not mean you shouldn’t make an offer. And so we had to get over the fear of saying, “[inaudible 00:18:17], they might be asking too much, or they might be whatever,” who cares? That’s not our problem. Our problem is, we want to find a great property that we can do a great rehab on, that we can serve our clients well in, and it will be a great long term rental for that client.
Tom Krol: So let me ask you a question that a lot of our listeners might be thinking right now. When they’re first starting off in real estate investing they’re saying, “Yeah, but Nathan, you’re a multimillionaire, you have a ton of cash and I don’t have any money. I’m just starting out.” Do you suggest that these people before they start down this process to go to a hard money lender or a national lender and actually start to go down that road? What about all the people who are just starting out and they don’t have any cash, can they still go ahead and make offers with some kind of a contingency? Or what would you recommend there?
Nathan Brooks: Absolutely. And that’s where I started too, and it’s all good. We have private lenders who fund deals for us as well. And so that’s absolutely okay. And I think most people, you don’t need to have your own money. Not having your own money gives you some leverage to do things, but it doesn’t necessarily mean that that’s not the problem to solve.
Tom Krol: So if someone’s listening, and they’re saying, “I don’t have cash, and I need it,” is there a resource that they can go to that you know of that would say, “Hey, this is a lender who can either help me with transactional lending,” meaning that it’s money for the day or hard money or private money. Is there like a resource or even like an education that… What would you suggest there?
Nathan Brooks: There are a ton of them, and I think for somebody starting out, I really think approaching somebody who’s a mentor or a coach or a company that’s not just selling but looking to help you grow, and those people are going to know the lenders. So like in our market, there’s quite a number of them. And it’s not the cheapest money, but you’re not trying to solve that you’re trying to solve somebody who’s going to have your best interest, who’s going to help make sure you get in a good deal. And that’s where your realtor comes in.
So you’ve looked at those numbers, you’ve looked at that, you’ve walked that property with your contractor and said, “Hey, does this actually make sense?” You’ve gone back to your realtor and said, “Hey, I’m not wasting your time. This is what my goal is. I’m going to buy a house in the next 30 days. Here’s my pre-approval from my hard money lender,” and you’ve told them the same story, “Hey, I’m working with a realtor. Hey, you don’t have a title company? Cool. Who do I need to talk to? Do I make sure that my comps are correct? My assumptions are correct. Are they genuinely conservative and reasonable for the outcome that I’m expecting?” Oh, by the way, you better know what outcome you’re expecting.
So, if you’re saying, “Okay, cool. Well, this lender will do up to 75% of LTV, loan to value so I can buy it for 50. I can put 25% into it and I can sell it for 100.” Okay. Now, you go back through and say, “Okay, are all my assumptions correct?”
Tom Krol: Got it.
Nathan Brooks: And so what we’ve done is we’ve said, “Okay, well, how do we do all of that stuff, but we do it in five minutes?”
Tom Krol: Beautiful. Okay. I love it. I love it. Okay, so what does that process look like? You just kind of do that on the fly with the process that you’ve built out?
Nathan Brooks: Yes, exactly. So now what that process looks like is for months, Ruston and I did that together. And we would sit each morning on the phone for hours at a time and we’d look at deals and we’d look at deals and we’d look at deals and I’d send him and I’d harass him and I’d text him and I’d send them another one. “Did you see this? Did you see that? Have you seen this? Did you work it up? Let me look at it.” And pretty soon Ruston’s like, “Dude, I got it.”
Tom Krol: Right. Got it.
Nathan Brooks: I got it. I got it.
Tom Krol: So I just want to reiterate again, you guys, Nathan is finding discount… Here’s the bottom line guys because I know we’re going into a lot of detail and we’re kind of both of us are speaking really fast about this. Nathan is finding a massive high volume of discounted properties on MLS by making offers on the properties. And that means that sellers are accepting those offers because these are people who are interested in speed and convenience, not necessarily getting the highest price. So this is something that he works with an agent on. So make sure you have an agent who’s friendly that you’re friends with that can help you with this. Make sure you have some money lined up. To get money, you can go to national lenders, if you have bad credit, you can go to private lenders, just talk to your title company, they can recommend some transactional lenders or private money lenders or hard money lenders and find out a little bit about that.
But there are deals on… And you said you’re going to do what was a 15 million year projecting on this year on MLS deals?
Nathan Brooks: I think it’s closer to probably 20 million in sales, maybe even a bit more.
Tom Krol: You guys, 20 million in sales off of MLS deals. I mean that is absolutely mind blowing. So if Nathan, he also has been doing this for a while, so he has all these processes but when he started it was all grit in the trenches, hard work persistence, one deal at a time. So comparison is the thief of joy, right? So don’t look at Nathan and say, “Oh, well, he’s already got a…” He built the system one day at a time by doing all of the heavy lifting in the beginning. So you can totally do this if he does this. I mean, Nathan, it’s not because he’s luckier, better looking or smarter. If he can do it, you can do it. That is the big takeaway. So I just wanted to give everybody a little bit of an interruption there. Just make sure because we’re going through all of this stuff, but there are deals on MLS is the bottom line.
Nathan Brooks: Well, something that you touched on too, which is, just because we can do 150 deals, and I love this line, I wrote it down [inaudible 00:23:50]. You have to be clear on what the target is. It doesn’t mean that in my business we have any less problems, we just choose to solve the biggest problems and the ones that are going to make the biggest impact. And as soon as we make decisions that are not in the one thing, and we’re all over the place, and my partner and I talked about this the other day, we’re like, “Man,” all of a sudden, we were solving all these different things. But then we had this realization, which was, “What was the one thing? Oh, this is not it?”
Tom Krol: I mean, were you there when Chris from The 4 Disciplines, was it Chris McChesney?
Nathan Brooks: Yes.
Tom Krol: Yeah. So Chris, from The 4 Disciplines of Execution talks about this. He says, “Reduce your goals, and only fight the battles that are going to win the war.” And I think so many times, especially with new entrepreneurs, you’re fighting the battles that aren’t the outcome is not going to win the war. So you’re totally right about that.
Nathan Brooks: Well, the other thing about that is in the book Traction, Gina Whitman talks about this where, and I’m a visionary “personality”, which sounds really cool, Tom?
Tom Krol: Right.
Nathan Brooks: And so visionary… Gina talks about, “Hey, a visionary said 10 new ideas a week,”
Tom Krol: Right.
Nathan Brooks: “Okay, that’s a-”
Tom Krol: At least.
Nathan Brooks: At least. But there’s a second part to that sense, which is nine of them are terrible. And so it’s these squirrel moments, which you can’t tell that I do at any point. And so, yet you need to have somebody in your life who you can actually say, “Hey, this is an idea.” And I told my partner David, and he’s like, “Dude, that’s a terrible idea. We’re not doing that Nathan.”
Tom Krol: Right. Do you want me to tell you about the three months I wasted on the expendable piggy bank? Or do you want me to tell you about the six months I wasted on the rubber mulch that would absorb more water than a wooden mulch?
Nathan Brooks: Is that it? Just two?
Tom Krol: Oh, no. Brother, how much time do we have? I can on and on and on. Yeah, absolutely.
Nathan Brooks: It’s a whole podcast we could start right there.
Tom Krol: No, good. But yeah, no, I totally agree. Yeah, you got it. It’s the one thing it’s picking the battles that win the war. I totally agree. And I’m going to write these books down guys because I’ll put them in the show notes, we’ll put links to all the books. And again, just from as a side note too, every successful person that I have on this show guys, every single one, listening to audiobooks is awesome, but reading actual books right before we started this podcast, Nathan showed me his 4-Hour Workweek. We were having conversation about that book, it’s loaded with notes and little sticky pads.
Reading is a game changer start by buying a business book that we’re going to suggest a ton to start with. Read eight pages a day, just make that small commitment. You could totally do that don’t believe all the BS about how you can’t read, how you’re a visual learner, how you’re an audio learner. If you have ADD and ADHD and you lose your place you fall asleep, it’s just a whole bunch of lies that you are fed as a kid. Anybody can read. You can read a book it’s super easy and the more you do it, don’t worry about comprehension. Don’t worry about you how much you remember in vocabulary, just go through the eight pages a day after two or three books you’ll be a wiz at it. It’ll be super easy so really important to encourage you guys to do that too.
Nathan Brooks: Huge, that’s huge. And by the way, I actually do the audible and a lot of times the hard copy because then I can take notes and oftentimes I’ll go back and read them two or three times that way, like 4-Hour Workweek. Many of these have great visuals, Jim Collin’s Good to Great, you want to see all those different data and figures and stuff they put in there. But if you want to go back and listen to the story in the book now you know where to go and you can pull up an audible and harness it.
Tom Krol: 100%. Yeah, audible is awesome. I’m doing one right now, audible and reading, which is, Business Secrets from the Bible, which is by Rabbi Lapin. Yeah, listening to it and reading it. Awesome way to do it. All right, cool. So here’s my question. So now you send out all these offers, you’re sending 20 a week. What happens at that point, most people tell you to go pounce and I would imagine because you’re offering low, but some are getting accepted, what does that process look like?
Nathan Brooks: So we have our team and if you are not setting the conditions for what outcome, how you want people to be spoken to, emails written, how you want the phone to be answered, you’re also missing an opportunity. It’s one thing to send a contract that says, “Here’s my offer $50,000,” and another say, “Good afternoon. My name is Nathan, here at Bridge Turnkey and we are one of the number one cash buyers here in Kansas City. And I’ve attached our offer here for you to review. And we look forward to being a trusted buyer partner for you, in your real estate business. Look forward to speaking with you soon.” We set the tone from the beginning. We’re professional, we’re cash, we’re quick, and if we signed this contract, we’re going to close.
So we’re setting that tone and of course we have a lot of them that are turned down but oftentimes it’s not just rejection. By the way, we track everything in Podio. So all our systems are in Podio from this perspective. We can see what we’ve offered on we can see what we have initially wrote it for. And I think kind of at the very beginning of this, we talked about tracking what you have. And so we build our work up as what we call it, which is really just here’s our offer price. Here’s the list price, here’s our assumptions, and it’s all built into Podio, and it’s all automatic. So if it’s 1,000 1,200, and whatever, square feet, you put that in and boom, it gives you a paint number.
Tom Krol: Got it. Okay, okay, I understand what you mean. So you guys, Polio is a CRM, like Highrise, or Act!, or Salesforce. So all of these processes are built into Nathan’s actual CRM and the one he uses is Podio, P-O-D-I-O it’s a great tool. So check that out if you’re interested. Okay, so let me ask you a question. What is for somebody who doesn’t have a lot of rehabbing experience they don’t really know a lot about real estate is there a general way to make an offer based on the asking price, based on what you think the ARV is, based on what Zillow says? I mean, is there something that you can go to just as, “Hey, in general offer 60%?” And are you justifying that in your email? If somebody who just wants to hit the ground running today, is there kind of a general guideline that you can give them to follow?
Nathan Brooks: Yes, although I want to ask you a question. I wrote it down [inaudible 00:30:23] so I can remember this question, but I want to hit one more thing, if you don’t mind from the last question.
Tom Krol: Of course.
Nathan Brooks: So almost always we get an offer back or a counter back. This is where it’s important because we’ll have a conversation internally and say, “Okay, well, it’s listed at 60, we offered 48. And they came back at 56.” Alright, so we’re in the game time, Tom?
Tom Krol: Right.
Nathan Brooks: We’re in the game now. We got somebody who’s trying to play ball with us. And so we go back and look at our work up. And then we talked to our construction manager, we say, “Hey, look at our numbers. Are we actually right? Are we actually going to spend $31,742 or can we really actually spend $30,240?”
Tom Krol: Got it.
Nathan Brooks: And then we say that our assumptions correct because all of a sudden, if my $48,000 offer, and I’m 18, 19, 2,000 off on my construction, now I actually am a $50,000 offer, right?
Tom Krol: Okay.
Nathan Brooks: And so now I’m not 8,000 apart, I’m 6000 apart.
Tom Krol: Got it. Got it.
Nathan Brooks: So now I come back at 50. And they come back to me at 53 or whatever. Well, guess what? We’re now $3,000 apart. And by the way, when I’ve talked about tracking your metrics, and all that stuff, we track our rate of return, our cash rate of return, which we check three things, but I don’t want to get off test with you again. But we track that and so we want to look and see is this matching? Is this within the margin of us to be able to make the money on this? And so then we’ll look at that number and hey, if we’re above what we are cool to sign off on, then guess what? We might already have that $3,000 and now we have a deal.
Tom Krol: Got it. Okay.
Nathan Brooks: Most people don’t have their number to say, “Hey, my rate of return, my expected rate of return on my cash is this and my expected all in construction to my rate of return is this.”
Tom Krol: Got it. Let me preface these guys because Nathan is actually the one buying and rehabbing the property. For a lot of you, you are going to be interested in having a conversation with a real estate attorney, seeing if maybe the contract should be assignable to your cash buyer or your real estate investor or how to buy the property and then quickly resell it to an investor. And the advantage I think you’re going to have is that Nathan is one buyer with one set of expectations for rehab whereas a wholesaler, you’re going to be able to take a look at 20, 40, 400, 1,400 rehabber to say, “This might be a good fit.” So what might not be a good fit for Nathan Brooks might be a really great fit for John Smith and his rehabbing business. That’s a huge advantage that a wholesaler might have over one rehabber.
So consider that guys is that if you can find a way to buy a property at a discounted price, you have more options than just one single rehabber. And I’m sure, I don’t know, Nathan, do you ever a sign a deal that you decided not to take on? Or does that not really ever happen with you?
Nathan Brooks: We do. But really back to that one thing, we just really focus on making sure that we are feeding that construction acquisition machine. And nothing else matters for us as a business, core business than that. But I will say that we have also looked at the things that we’ve passed on and so recently with our retail team, Ruston and the whole team, we have started to send out some of those deals where we know we’ve negotiated say, 56, and we know there’s another investor that would take it down. So we’ve actually been able to monetize that opportunity too and being able to say, “Okay, well, I’ve already done the homework on this thing, who is somebody else I can help bring value?” Because by the way, it can’t be just about you making money, you have to be bringing value to those people that you’re looking to work with. That’s going to create that opportunity.
Tom Krol: Okay. I love that. Let me ask you one other question. I know a lot of our listeners are sitting here thinking, “Well, I don’t want to offend a lot of agents and brokers by making so many offers, they get rejected because they’re too low.” Do you have any that feared? Because I know just from when you’re new, it’s really could be disheartening to say, “Well, I don’t want to put out 50 offers because they’re too low and people are going to make fun of me.” How do you kind of mitigate that fear if you have it at all? I don’t know if you do at this point anymore, but I know that’s what some of our listeners might be thinking.
Nathan Brooks: Part of me says, “Who cares?”
Tom Krol: Yeah, I feel the same. Just so you guys know I feel exactly the same way. Who cares? Because if you want something bad enough it doesn’t matter, what you look doesn’t matter.
Nathan Brooks: It doesn’t matter.
Tom Krol: Yeah.
Nathan Brooks: And the other thing too, is whenever the market is so hot and you’re like, “Yeah, it is absolutely is.” But it’s my job to make sure that I’m helping train our team. We’re not trying to think about ourselves, like passive. We’re the lions. We’re not the lambs. So we’re out there to go buy houses, and that is our job. And in the midst of that, our job is to also help train and teach and really love on the other parties that we’re working with. Because if we’re able to say, “Hey, listen, realtor, I know you listed this and man…” I can’t remember the exact sentence but the other day Ruston says to me something like, “Some of the agents, they might have two listings, and they love these things. They’re like their little babies.” And they is like the biggest insult if you’re going to offer them 10,000 or 15,000, or whatever it is under their lowest price. So you can’t just send that you have to tell the story. Here’s comparable properties. Here’s the cost of the rehab. Have you chatted with sellers about this?
And it’s the same story with your whole seller, direct to seller too because you’re having that same conversation except it’s their home.
Tom Krol: You guys, pure liquid gold. This is why Nathan is getting the results that he’s getting. You’ve got to go back and listen to what he just said. It’s the story. It’s building the rapport. He used lion, we’re rhinos, but I’m going to tell you, this is the thick skin and building the rapport and the message that you’re delivering tell the story. I love because this is all emotion. I mean, this is such pure gold advice. Nathan, I can’t thank you enough. That’s 100% perfect. I love it. Very, very cool.
Nathan Brooks: Thanks. Thanks, man. It’s a terrifying thing when you look at somebody in the eye and you’re like, “Listen, your property is not worth that. Not even close.” And until you realize they actually still have a problem that needs to be solved and you’re standing there with the opportunity to solve it for them. And so don’t miss the opportunity. I tell my clients we want about 1,000 on a rehab because I’m in the turnkey business. I’m in charge of my construction when we screw stuff up, I hate it. I cannot tell you at level I hate it, but I tell them I want about 1,000. I don’t, I don’t bat 1,000, but I will back it up. And I will tell you this, “If we screw something up, we’re going to name it. If we don’t meet your expectations, we’re going to figure out how to solve that.” And if you bring that same type of desire and that same type of language and the same type of transparency and honesty in that cellar relationship and that realtor relationship, you are going to see the difference.
Tom Krol: Transparency and honesty guys. These are the notes, be a truth teller and a truth seeker, build rapport, get to the heart of the matter. Everything that Nathan is, this is exactly, again, I don’t want to keep beating a dead horse here but this is why that the top 1% get the results that they’re getting. Listen to the words that Nathan is using these are the key takeaways.
Nathan Brooks: So you’d asked about value?
Tom Krol: Yes. Yeah, right. Let’s get that answered because I know there’s a lot of people, they’re like, “Hey, this is all great, but I have no idea how to get running.” So somebody, they’re saying, “Nathan, I believe you I want to do it MLS. That’s the way to go. I’m going to start this track today. What do I have to do? There’s a home it’s 150,000 is the asking price. How the heck do I know what kind of offer to make on that property?”
Nathan Brooks: Absolutely. So there’s a couple things, certainly there’s the Zillow, there’s RPR, there’s MLS, there’s I’m sure a million other proprietary software’s out there. The fact is, if you don’t know you need to talk to somebody who does. And I personally went to realtor after realtor after realtor after realtor until I could start to understand and to this day now I can look at a neighborhood and have a pretty darn good idea what that house is worth without having [inaudible 00:38:55] because I just know. So you have to actually… This is called doing the work. There’s no process to solve this. There’s no VA to solve this, if you want to know what the outcome is going to be, you need to figure it out.
And so you call up the realtor ring, ring, ring. “Good morning, John, I’d love to [inaudible 00:39:13] a cash buyer here locally, and I’m looking at 123 Main Street. And if I could please have five or 10 minutes your time and review some comps in the neighborhood. I’d like to make an offer on that property today.”
Tom Krol: Awesome.
Nathan Brooks: Guess what? Not send an email, “Could you please send me the…” You’re asking 100 questions and you brought no value. This is who I am.
Tom Krol: Okay, so you’re trying to determine the ARV of the property?
Nathan Brooks: Absolutely. Because I think that my concern is I don’t want to just send people to Zillow personally, I think oftentimes, from a rent rate perspective, it’s pretty good from a value perspective, at least in my market, it’s not very good. And so I would not be comfortable to say, “Hey, you know what, try look at Zillow, try to look at Trulia,” or whatever. For me, I would want to speak to a professional. And if they’re not willing to do that time, that 10 or 20 minutes on the phone, then go look up one of these books that there’s a million of them on how to value off of what comps are and just ask them to pull the active pending and sold comps in that area within [inaudible 00:40:19] mile or half mile or whatever you’re looking for and email them to you.
Tom Krol: And how far back do you go on sold properties? Is it [crosstalk 00:40:26]?
Nathan Brooks: I personally go 220 days.
Tom Krol: Got it. Okay. 220 days, how many months is that? I’m not good at… 220 divided by 30.
Nathan Brooks: I’m terrible in math. [inaudible 00:40:37]. So yeah, 6, 7, 8 months, something like that.
Tom Krol: I love that it’s specific. Okay, now we’ve determined the ARV on this $150,000 houses let’s just say 200,000. Would you do a percentage off of the ARV plus some kind of an estimate of how much to… Because a lot of our listeners, they don’t have rehabbing experience. What would be a general way to kind of go down that road?
Nathan Brooks: So I touched on this earlier, and I’m happy to share. So for ours, we look at, we want at least 20% cash on cash return. If we’re going to put in 100, we want to make 20, at least. So if it doesn’t meet that criteria, it has to get a triple look. And if it’s much beyond that margin, we’re not doing it. If it’s not at least at 80% LTV or less, and oftentimes, it’s much less than that, or lower than that rather. And then third is the construction. I think a lot of times to… Let’s adjust that 150 example for a second, and let’s say you can buy the house for 50. You can put 100 in it, and it’s worth 200. The problem with that is if you have $100,000 budget, you’re not looking at what the opportunity for overage and opportunity for pain is. And so this was a huge game changer for us. We started looking at what our rate of return was between the construction budget. For instance, if we’re going to spend 50 grand, we have to make at least 25 back on it. So at least 50%.
Tom Krol: Okay, got it. Got it. I understand that. Okay.
Nathan Brooks: Right. So because when you’re looking at these rehab projects, it’s real easy to say, to start letting the good idea fairy tell you that it’s a good idea and a good deal.
Tom Krol: Okay, got it.
Nathan Brooks: So we’re looking at all three of those points, and we’re looking to make sure, “Hey, does this deal actually make sense on paper? Do we actually have a bonafide exit strategy, by the way, and maybe two or three?” Then there are all the assumptions that we’ve made on it and then we look back at the value now and we say, “Okay, this is the beds and baths, let’s double check it. This is the square footage. Let’s double check it. What if we added another bedroom? What are the comps look like?” We look at that kind of stuff all the time, because it changes the value. And then by the way, you make that phone call back to your realtor then and you say, “Okay, these are the assumptions I’ve made. Does this sound correct?” Again, I’ve brought the value not them. You might be totally wrong, but you did the homework.
Tom Krol: I think it’s amazing that you’re finding them on MLS because people are like, “Oh, there’s no deals on MLS,” so this is amazing. And I have one last question for you though because I know this is one other fear and I just always want to address the fears because I think the fears are what stops a lot of people. So Nathan, I’m worried I called up I put a property under contract, but now I took a second look at it and my rehabber friends are saying, “Tom, you paid way too much for this. You made a huge mistake.” How do I get out of this contract? I know it’s a basic question, but I know a lot of our listeners are going to have that fear. I don’t want to put a property under contract, because how much money am I going to lose? Am I obligated to buy the home if I signed the contract? Can you just kind of tell us a little bit about that?
Nathan Brooks: Yes, especially early on. So I would suggest that you’ve done as much homework as possible. There’s a book, Tony Robbin’s Money Mastering the Game, and he interviewed I believe is Ray Dalio. Ray said, “The investor’s job, first is not to make money, it’s not to lose money.” And how do you mitigate as much risk as possible in these? And so for us, it’s all about knowing our numbers, we follow the same process over and over again. And we double check our assumptions. And so if you can follow those principles, and you say, “Okay, well, how much money do I have to tie this up? Is it 500? Is it 1,000? Is it $100?” And then, when you look at that, and you say, “Okay, well, my opportunity is to make 50,000 in this rehab, and that cost me $500 to tie it up, and I feel 95% certain that this is a good deal.” Awesome.
You’ve done your homework, you had your process, you made sure your contractor looked at it, maybe you had to wait a couple days for your financing to come through or maybe as a couple days to confirm the contractor was on it. Maybe you end up calling an inspector or somebody else to look at that property and say, “Hey, is there anything crazy that I’ve missed that you see?” 300 bucks would save you 10,000 in a rehab if you screwed something up.
Tom Krol: Okay. That that book by the way was… Oh, I see it, Money Master the Game.
Nathan Brooks: Money Mastering the Game, yeah.
Tom Krol: Yeah, I see it here, Money Master the Game: 7 Simple Steps…
Nathan Brooks: Awesome book.
Tom Krol: Okay, I’m going to just put that in there too. Okay, so if they tie up a property or if they put it under contract this way through MLS, is there some potential risk that they have to be worried about? Or should they speak to a real estate attorney about that?
Nathan Brooks: I think the most important thing is to understand contractually, what your exit is. So for instance, do you have an inspection clause?
Tom Krol: Perfect.
Nathan Brooks: Okay. Do you have a financing contingency? There are a number of ways you can structure these things, but there’s a positive and a negative to both sides of them. So the hairier your contract, the more difficult I think a lot of times it is to solve these. So instead of asking for seven days or 10 days or whatever free inspection, maybe you actually do two days because you know your contractor can be in day one and you could have that inspection document or the contracts, kill the contract that next day. But you better track it and know what day it is.
Tom Krol: Beautiful. Yeah, that is the key guys, is cover your Heinies. Make sure especially if you’re first starting off, get with your agent broker, get with your real estate attorney and just say, “Hey, listen, I’m planning on…” Tell them what you’re planning on doing. “I’m going make some offers at MLS. How do I write this contract so that I cover my Heinie if I have to cancel it because when you first get started, I’m sure that Nathan canceled more contracts on the first 90 days then he did on the last 90 days?” So that is the key is just make sure you’re covering your Heinie there but that’s awesome brother. That is pretty wild stuff. I am going to read listen to this podcast and I don’t ever say that just so you know. That is 100% true. I don’t think I’ve ever said that ever.
I’m going to go back personally and listen to every word of this podcast because I want to open this channel in my market of Port St. Lucie, Florida. I appreciate you spending this much time with us man I know we’ve been on the phone now for… The podcast I’m sure will only reflect about 25 minutes or 30 minutes but we’ve been on the phone for two hours so it is such an honor to spend this kind of time with you to be able to pick your brain. Really, I can’t thank you enough and our listeners can’t thank you so thank you brother that’s awesome.
Nathan Brooks: It’s been a real pleasure for me too Tom, and I hope its value for people listening. And I hope it’s helpful when people are thinking through the problems that they have in their business and solving them in a way that actually is getting the results that they’re wanting to achieve.
Tom Krol: I am so honored and thank you and you guys if you are an investor, and if you want a place to… I am 100% certain that Nathan has integrity and he is an honest guy. We’re one of the same masterminds together called Collective Genius, that’s where I met Nathan in person. And if you want to find out more about Nathan, about his business, about what he does and how he does it, Bridge Turnkey, B-R-I-D-G-E turnkey.com. Bridgeturnkey.com is the website to visit, we’ll put a link to his site on there. We’re going to put on the show notes, I’m going to give you all of the books that we discussed today. Tony Robbin’s Traction, One Thing, 4-Hour Workweek, Good to Great. We went over a ton of them. And we’re going to actually have his document that he shares… He’s going to share a document with us that is going to be what the criteria he uses with his agent to find these properties and make an offer.
So Nathan, you are a go giver for sure, brother. I am going to listen to this podcast and I am super grateful. Any parting advice you have for our listeners, any advice especially for new people just getting started on either a resource or a book or anything that you would encourage people who are just kind of getting into the game now?
Nathan Brooks: I think it starts with understanding and listening to where your passion is. Because if you’re not 100% fired up about it mentally, in your soul, that you’re not directionally right with what you’re thinking about. It doesn’t matter how big and exciting it sounds, because you’re not going to do it. I think the first thing is just to really, truly do some soul searching and say as a wholesaler as a flipper as a whatever, great next step, “What is my goal? What does it look like when I’m done?” And it’s not too early to say, “In 10 years, I want to make a million bucks or I want to have 20 rental properties or 100, or a business or whatever.” It’s not too early to do that.
Tom Krol: Absolutely.
Nathan Brooks: You have to do it now. Because now you can say, “I know what this looks like.” And then all sudden, you will find yourself there and you’re like, “Oh my gosh.”
Tom Krol: It’s so funny. I can’t agree more. The number one problem with people that can’t reach their goal is they don’t actually know what their goal is. I mean, it’s so crazy, but you ask them say, “Hey, what is your goal? Paint a picture for me,” and they really don’t know. Just a general goal, “I want to make a million dollars.” But you’re never going to get to the place that you’re going if you don’t know where you’re going. Or you’re never going to get to all the place if you’re going to two different places, that’s for sure, too.
Nathan Brooks: Well, that’s it, and you haven’t solved that first problem. And then, the other thing, and I to this day, nine months ago, or so I started journaling every day. And I won’t say I’m 100% on doing that every day, but I would say four times a week, five times a week, I’m consistent out of the seven. It’s made a huge difference and to this day I write about it, I think about it. And I think about not just in my business, by the way, but in my life as a dad and personally am I getting to the gym? Am I taking care of my wife and all these things are big and sexy and awesome. But it’s always important to then come back to the center and say, “Okay, where am I at? What am I doing? How am I in the bigger picture in the grand scheme of things, looking at the world around me and I’m not just so focused inside that I’m losing sight of all the other things.”
Tom Krol: I totally agree. You guys, you will notice there’s a reoccurring theme with the 1%, journaling is key reading is key. I totally agree with you, journaling has changed my life even if I just take one sentence a day, just guys commit to one sentence. Something that you did today, something that you want to do, “Hey, I’m outside. I’m sitting in the pool with Lacey, she’s getting so big,” time’s flying. A little note like that every day, it will trigger a memory that you can go back when you re-read your journal from a year ago. It’ll trigger a lesson learned. I mean, visionaries we’re moving so fast. You don’t want to make the same mistakes twice. I totally agree.
So Nathan, I love it brother. I am looking forward to even going down different roads with you and going on other great adventures. You are a true go giver. A good man, good heart. It’s an honor to have you on the show. You are a massive well in the market and I can’t believe we got a chance to pick your brain, so thank you again and you guys it’s bridgeturnkey.com. And go check out Nathan Brooks, B-R-O-O-K-S if you don’t know him get to know him it will change your life. So Nathan, thank you again man. I appreciate that.
Nathan Brooks: Thanks, Tom. Take care man.
Tom Krol: All right. God bless.