While there are plenty of other options available for those who would like to escape their 9 to 5 jobs, only very few have proven to be as lucrative as wholesaling. And this is something our guest in this episode can definitely attest to.
Mike Whitehead closed his first deal in 2013 after completing a real estate education program. He earned roughly $30, 000 from the deal and got hooked since then. However, it was only after hearing Tom on BiggerPockets (and listening to every Wholesaling Inc. podcast) that he decided to give wholesaling a try.
If you think you need extensive experience to find and close wholesaling deals, make sure you don’t miss this episode. Mike’s story will not only prove you wrong, it might even inspire you to try wholesaling for yourself!
- Mike sent postcards to the code violations list.
- From there, he found a very motivated seller who has been trying to get rid of the property for quite sometime already.
- After all was said and done, Mike walked away $20, 000 richer from the transaction. Not bad for someone who does not have much wholesaling experience but is exceptionally driven and courageous enough to take action!
- Start with Why by Simon Sinek
- Rich Dad Poor Dad by Robert Kiyosaki
- Biggerpockets Podcast
- Wholesaling Inc – Testimonials
- Wholesaling Real Estate Summit 2018
If you are Ready to Explode Your Wholesaling Business, Click here to Book a Free Strategy Session with me right now!
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Speaker 4: You’re listening to another episode here on Wholesaling Inc. My name is Cody Hofhine. I’ll be hosting today’s podcast and for those of you that might be joining us for the first time, what we’re going to be talking about is a strategy called Wholesaling. Now, what is wholesaling? We’re going to be specifically talking about wholesaling real estate. What it is is really … to break it down so simple that you can understand it. It’s just how to locate deeply discounted properties that you can then turn for huge profits and there’s multiple ways you can do that. We have people that go out there and fix and flip properties. We have people that just simply assign contracts to other cash buyers that do all the fix and flipping and they just make a little bit of a like what we call an assignment fee. There’s many ways of doing it, but again, to not dig too deep in the weeds, just to get you up to up to snuff and up to par.
What we’re simply here is on this podcast we’re going to deliver ways, strategies, tips and tricks and we interview guests that recently just did a wholesale transaction, a wholesale deal, and they’re going to share with you step-by-step how they did it so that you can adopt some of those principles and put into action and implement the things that we’re talking about on today’s podcast episode. That’s what this podcast is all about. It’s to help each one of you get better in the game of wholesaling, which is just simply finding and locating these deeply discounted most of the time off-market properties so that you can turn them for huge profits. Today we have Mr. Mike Whitehead and he currently lives in Kansas city and he’s got a pretty cool story is he’s visiting in Oregon right now, family because of real estate. He’s able to kind of go out and visit family who is in need at this time and be able to just walk away and things are going still.
It’s kind of cool what real estate has been able to provide for him. Recently he just did a big deal and I won’t talk about the money right now because he’s going to share that story so we can get the victory bell ringing for him. He just did a recent deal that will inspire each one of you because he’s not even in … like gone through a coaching program. He hasn’t gone through our coaching program. This is just a gentleman that’s motivated as all get out. He listened to our podcast, implemented the things that were, that were said on the podcast and went out and started doing deals. We wanted to bring him on here as a guest to inspire each one of you and motivate each one of you to let you know you can do this, you can do this.
There’s so many gold nuggets that will be given during this episode and get that pen and paper ready, get ready to jot down some stuff. Without saying any more, let’s get Mr. Mike Whitehead on here. My man talk to me.
Speaker 5: How’s it going?
Speaker 4: Good, good, good. So you’re out in Oregon visiting, you said your grandpa who had had a fall recently and you’re also grateful that you’re in real estate doing wholesaling because you’re able to actually drop things and just go out and visit.Talk to us, bring us up to speed about a little bit about you and what real estate is done for you.
Speaker 5: Yeah, so like you were saying, I just did a fairly big size deal. People have the ability to basically drop everything and come out and be around my family when they’re in need. It’s a somewhat of a helpless feeling if you don’t have that ability. If you got a nine to five and, and you have an 83 year old grandfather who didn’t belong up on a nine foot ladder in the first place but was up there way and fell off and broke both his tib fib and really bad fracture for a gentleman over over 80 in order to be able to drop everything and come out here and be around him and make sure that he’s getting the care that he needs. That’s a big deal. Two and a half weeks now, and he just actually got surgery this morning to have the halo taken off his legs. I’ll probably head back to Kansas city here soon. Just to be able to have that ability is huge. To have that freedom.
Speaker 4: That’s amazing Mike. I love the fact that you take it though because not just does real estate create that, right? You’re still have the mindset to actually use what you’ve been blessed with, with some of these deals that you’re doing to actually benefit and help your family where it still would be. I guess to why I bring that up is you’re a good individual. Not only did you do some deals, but when family needed you, you actually took action and went to go visit them. It’s not like, “Oh sorry, I’m busy doing, doing business.” You’re a good man just for doing that. I love it. Talk to us. What got you into real estate, my friend? What got you into this? Tell me a little brief history about you and what got you hooked on the podcast and why Wholesaling.
Speaker 5: I did my first deal in 2013, it was a flip. I did it shortly after I got my first real estate education back the day. You know, just like with this, I took action right away. It was three weeks almost to the day after I finished the first real estate education program that I got and I closed on my first, on the buy side of my first flip, did the flip here in Roseburg, Oregon and finished it, actually in the middle of a move. At that time I was moving down to Las Vegas, so I finished the flip, made around 30 grand and was hooked from there. Did some stuff down in Vegas with mobile homes and notes, note investing, always knew about wholesaling but never really looked into it until really recently.
I would say basically the first of the year or the end of end of last year. Really what I did is I seen Tom on the bigger pockets podcast from there researched him and then got hooked on the wholesaling podcast. I literally listened to it from number one all the way up to whatever you guys are at now at once, 150, 160, and then went ahead and went reversed. I would say in the middle of going backwards is when I got this first big deal and the deal came from a-
Speaker 4: Let’s talk about this. I’m going to set this up a little bit for the listener. This is going to be great. You’re listening to podcasts, you get the bug, you start getting involved in wholesaling. Now to break it down, even to prep this for, for our listeners so they can kind of implement, no different than what you’ve done. Where did this lead come from to first to start this, like to prep them on understanding on how to get these leads? How did you get in contact with this lead?
Speaker 5: This was a code violation list. A little town, I shouldn’t say a little town, but it’s a town next to Kansas city called Independence and it had its own city hall and all that. I didn’t have to get any of the information from Kansas city or the County. This was its own city hall that I got. Went down to the city hall, got in touch with the guy that did the code violations and the data entry and I knew that I was onto something when I went down and met with this guy and he was like totally like taken back on why I wanted this information and that he’s like, “No one’s ever asked for this,” that he’s like, “I’ve worked here for 12 years and no one’s ever asked her this before.” I knew right then that I was onto something and so-
Speaker 4: To be open and honest … I guess not honestly, we’re always here honest, but to be open with everyone that’s listening today, what’s great about this, the code violations, simply people that, I don’t know if it’s the same in Kansas city, like people here in, if you have your lawn that’s grown, it’s now 12 inches high. You’re going to get a tag by the city was a code violation or your windows are boarded up, you’re going to get tagged and fined by the city saying, “Hey, clean this up,” and it’s a code violation is that the same for Kansas city?
Speaker 5: For Independence it’s exactly the same. To go further with the story and the conversation with this guy, he actually took out, and maybe this was a bad thing, but I thought it was helpful at the time, but now thinking about it, it might’ve been a bad thing, but he actually took out the ones, he had the ability to take out the ones that were literally like a one month. A person got it and not just one month, but they were the, what he considered the small ones. Someone that owned their own place and their grass was was high in the next week they came out and it was fixed. They didn’t even get a violation. They just got like a warning.
He took out and looking back, maybe I might’ve left those in there. I don’t know how many he took out, but he actually did that little extra step for me. He basically broke it down to me that that those really weren’t code violations. They’re more of like a warning and someone was there to fix it. It kind of doesn’t fall into the category of someone’s not there and the grass is growing and they’re just given up on the property.
Speaker 4: Well, Mark. A key thing on that though, that’s cool, that some of our listeners, they could be on a budget as well. You bring up something that’s just a natural tip for those that are listening, that might be on a very tight budget or a strict budget and maybe their budget doesn’t allow them to do a hundred postcards or a thousand postcards or 10,000 postcards. Maybe they have to narrow it down to something so tight and so even though you weren’t doing it for that reason, that’s already a tip and trick in itself saying, “Hey, narrow it down to the hottest ones. Maybe the ones that have been sitting on this violation for a long time or had multiple violations, he really narrowed that search into what he thought would be, man, these would be the hottest leads.” That’s always another way to kind of help that budget grow a little bit too.
Speaker 5: Absolutely. Absolutely. What I’ve found, and I’ve talked to a couple of people within the tribe recently, what I found, my personal experience, if you go down to the city or the County and talk to these people and show them respect and shake their hand and look them in the eye, they will bend over backwards for you. In my experience, these city workers, for the most part, you can tell in their face they don’t like their job. Especially the code violations people. They’re just so used to getting the nasty phone calls and stuff. When you go down there and you smile and you look them in the eye and shake their hand and show them that their job matters in a positive way, they will bend over backwards. At first he was so confused about what I wanted.
He told me that most of the time when people want other lists and I don’t know what those are, but he’s like, “We charge this and that for the amount of hours that it takes to pull this list.” I said, “that’s fine.” It was something small like 25 bucks an hour. I was like, “Sure, that’s fine.” By the time I was done and he got me the list. He again, he goes, “No one’s ever asked for this list. This list was so easy to pull that I’m not even going to charge you.”
Speaker 4: Wow. You got free leads just thrown to you. The only thing you need to do is pay for just marketing and a postcard or something to go out to them.
Speaker 5: Right. I would say that that’s partially because I went down, went down there and met with him and shook his hand. I see a lot of people say, “Well, you know, I’ve called into the County or I’ve called the the city town center town hall, you know, so many times.” Go down there. If you have the ability to go down there, in my opinion you will get so much farther with a lot less time and a lot less effort when you get there in front of those people and you just boost their ego a little bit by telling them like, “Hey, you know, you’re really helping me out. I really appreciate it. I’m going to send your name to other guys that are going to need this list too and help them out as well.” They don’t like their jobs. When you go in there and you give them a little positive boost, they will move mountains for you.
Speaker 4: That’s awesome. That’s awesome. Now from there, now that you have the list in front of you, did you choose to market them by postcard or how did you start marketing to these individuals?
Speaker 5: Yep. I got to give a small shout out to the guys at Yellow Letter HQ who’s them. They were awesome. Easy to work with. They are the ones that have the postcard with the picture of the house, the Google picture of the house or the property on the front of it. Yeah, I got a enormous response rate from that to date now from that one mailing, we’re looking at five deals.
Speaker 4: Five deals.
Speaker 5: And one of those deals were those deals as an eight eight property package. So eight property-
Speaker 4: Wow, that is a great response. Yellow Letter, you use them, you send this out, and then when these people call back, it’s a message saying, or it’s a postcard saying “You’re looking to buy their homes simply that you’d like to buy their home at one, two, three main street for a cash offer. Call me back.” Now when they call back, are you answering these phone calls live or are you send them to a voicemail?
Speaker 5: I try to answer them live. I believe this lady, I didn’t get to her until later on that day. I called her back. She was like so happy that I called her back. She had never received a postcard. Ever.
Speaker 4: You are it. You are the first person to send, “I want to buy your house,” she’s excited you called.
Speaker 5: She owned this house outright for five years now. She had no mortgage on it and she’s on the property for eight years and she’s on an outright for five years and I’m only postcard that she’s ever gotten. However permission slipped through the crack with all the other ways that people go about getting you know, information. She’s like, “Yeah, I’ve never received anything from anybody wanting to buy my, buy this property. I’ve been trying to get rid of it for a year and a half now.
Speaker 4: Wow. You knew there was motivation there. What was the reason, if you could break it down into one or two things, what was like the standout moment that you’re like, “Man, she wants to sell because of,” what was her why?
Speaker 5: Her partner’s basically stepson had gone through some hard times at one time and he basically came to her, not the lady that I’m talking to, but her partner that was the step mom and said, “Hey, I’m going to be a dad soon. I’m really looking to better my life.” Well, this lady, the seller, she basically went and said, “I’ll buy this house and help them get a start and bought the house for them to rent and give them a good start. Over the years things just went South and went South bad. She had not received rent from the stepson of her partner in about three years. She had tried to evict them twice and she did not have the correct paperwork at the court. This guy knew enough of the court system to basically get it thrown out when she didn’t have the right paperwork. She was just frustrated, super frustrated. She tried to do the right thing twice and got told by the judge, “you don’t have the right paperwork.” She just was fed up and yeah. I knew at that point there’s definitely a huge motivation and she just ready to be done.
Speaker 4: You go meet with this seller, you go sit down with her, you found out that she’s really motivated, she wants to get out. Ultimately when you’re looking at this home, if it was all fixed up, it sounds like it might’ve been a distressed property. With it being fixed up, what were you looking at like, “okay, if this home was all fixed up, it would be worth about,” what did that number look like?
Speaker 5: Just over 80, 85 grand,
Speaker 4: Just over 85,000, okay. As you’re talking to her, and now you’re talking numbers and hey, you’re making a cash offer. What were you able to put this home under contract for?
Speaker 5: Twelve thousand five hundred.
Speaker 4: Twelve thousand five hundred. The reason I want to bring these up, these are some key things. You can start to look at, for those of you listening and you’re starting to look at, is it possible, can you get homes at a deep discount? Here’s a perfect example of how you can get a home at a deep, deep discount. In fact, 20 cents on the dollar almost. So with that being said, yes it happens and it’s because, so many times, you can be an answer to so many problems out there and be a solution to so many problems. Really that’s what you’re selling. It’s not real estate that Mike’s going after. It’s not real estate that I’m going after.
Really what it is is how can we help people that have real legitimate problems and be a solution to them. That’s what we buy in everything I buy a pen to write because it allows a solution for me to write a letter or to write notes, right? Everything we buy is because it’s a benefit. It’s a solution to a problem we have. That’s exactly what you need to find in in wholesaling. These situations pop up and if we can be a solution to these individuals, the byproduct is you get a contract that allows you to put there. You get a home that you can put under contract that you can then assign or fix and flip yourself. So $12,000. From there, what did you end up doing? Did you send it out simply to cash buyers or did you fix and flip it? What does that look like?
Speaker 5: I basically had a guy that was somewhat mentoring me at the time with helping me understand the areas. He already had a guy interested in the property and basically I did a little split with him. I made 20 grand, he made, I believe, nine grand and then the rest we sold it to the the cash buyer, he went and made it up, buy and hold and still had a crush of a deal because it didn’t need that much in repairs. It wasn’t in horrible shape at all.
Speaker 4: Awesome. Hold on because you got a victory bell coming. Let me make sure I understand this right. It was a deal ultimately that that paid an assignment of $29,000 your portion of that $29,000 was $20,000?
Speaker 5: Correct.
Speaker 4: My man, hold on, Mike, let’s do this. Right. Hold on.
We’ve got the victory bell rang for Mike Whitehead here. So $20,000 and folks, this is what I’m talking about. Rhino Nation, listen to his podcast. This is real. This is something you can do. Is it easy? No, it’s not easy. Mike would tell you too. In fact, I’ll ask him right after this. It’s not easy. It’s going to be tough. It’s going to be something that you have to really put a lot of determination effort into. I want you to always think about everything that’s brought, maybe joys, successes, smiles and brought your greatest happiness in life. It’s always been the hard road. It’s never been the easy, and it’s not going to be that for wholesaling too. We’re always up front to let you know. Is it going to be tough? Absolutely. Mike, was that tough journey worth it?
Speaker 5: It’s definitely the old adage like it definitely wasn’t easy, but it was simple. You know-
Speaker 4: There you go, I like that.
Speaker 5: It wasn’t easy, but it was simple. When you really draw back what you guys teach in the tribe and what you guys teach in your podcasts, it really was A to B, B to C, C to D. Was there some crooked lines between those letters? Sure. Now that I’ve gone through a couple of deals that it really is just that like writing the deal, so to speak, between the letters, but it really is A to B, B to C, C to D and it’s simple. Yeah, it’s tough. It’s not easy or everybody would be doing it and everybody may be gazillionaires. Go ahead.
Speaker 4: Something you brought up, you said you’ve done five deals since then. From even just the code violation list. To give people a perspective in what timeframe have you done the five deals and what has that in gross income, what does that brought into your household?
Speaker 5: The first one was 20, the second one was four grand. The last three I still haven’t closed yet as far as on the sell side, but I’m under contract with them. But like I said, it kind of threw a wrench in the works. I’m not built up enough yet to where I have systems in place for me to be able to leave Kansas city and still have assistance and acquisition managers. Right now kind of my business is on hold until I get back to Kansas city, but those are ready to go. I believe I, as of this morning, have a buyer for the eight property package. That one’s been a fun deal. I’ve been trying to close it since I’ve been out here and still doing a little bit of work since I’ve been out here. When I get back and be able to really dive back into those, I’ll have those closed in a very short amount of time.
Speaker 4: That’s phenomenal. Let’s say the two that have already closed, the 24,000. In what timeframe has that happened?
Speaker 5: The timeframe from what? From when I first started listening to you guys, when I did-
Speaker 4: No, just from when you actually got your first deal and second deal, those two deals, was it in like a one month time? Was it a two month time, three month time?
Speaker 5: The $4,000 deal, two weeks after I did that $20,000.
Speaker 4: That’s kind of the perspective to look at. There’s even people that for maybe an annual income that 24,000 could be at a thirty thousand, forty thousand. Here we are within a month’s time, $24,000 and that’s the one thing that I want to point out to people is it’s possible. Yes, you see people across this great nation that can do this and are it that are doing this exact same thing where they’re able to make 10, 15, 20 $30,000 a handful of them make over $100,000 every single month in grocery income. It is a very a reality.
Speaker 5: If I close this eight pack, this eight property package the way I want to, I should make over 60 grand.
Speaker 4: Wow. See and that is huge. That is absolutely huge. And this goes back to, and you still have plenty of year left to add to it and that’s already turning into an amazing year.
Speaker 5: Yeah. I may have to get creative with that eight pack because most people don’t want all eight, which I’m fine with because probably what I’ll end up doing is closing on three or four or even five and keeping the other three as rentals.
Speaker 4: That would be sweet. That’s the other benefit of wholesaling. That’s one of the things that I’m glad you brought up is pretty soon you get to the point where revenues in the bank and now you can cherry pick your best deals and keep them for longterm buy and hold, which is truly what is my goal is so that instead of always trading time for money, which me and Mike do currently now we’re working towards a common goal of buying these rentals so that you have passive income, something that you don’t physically have to trade your time for.
Speaker 5: Absolutely.
Speaker 4: I love it. Well, Mike, my man, this has been an amazing episode. I’m glad we were able to, to connect and do this podcast because there’s so many individuals out there that this is going to resonate with, that are looking for a way of how do they escape the nine to five, how do they escape corporate America? How can they actually get into real estate? I truly do believe, and I still am from behind this belief that wholesaling is the best way out there to get involved in real estate. Yes. Can it go into other things? Absolutely. Your initial connection with real estate I have found no easier way or better way than wholesaling. Is that something that you would second or would you say something else?
Speaker 5: Absolutely. You have control of the front end of the real estate deal and now you on the back end you can choose whatever exit strategy you want. To have control of the front side and then control which way you want to go on the backside like that. I mean if you don’t have control the front side you’re at the mercy of other people and then you’re at the mercy of other wholesalers or agents or whatever is going to help bring you that deal if you have control the front side. That’s really ultimately where I’m at now. I’m looking to bring on a VA, I’m looking to bring on acquisition managers and really now that I’ve done this a few times, now it’s time to step back and look, just kind of learn how to scale it and scale it properly and where I’ve done it once, now I need to do it 10 times in a month, 50 times in a month and just scale it.
Speaker 4: I love it, I love it.
Speaker 5: Yeah.
Speaker 4: Okay, brother will always in closing, we like to do it the same way every time. That is if could say one book that has been an inspiration or have been helped to you, what book would you recommend to our listeners here at Wholesale Inc?
Speaker 5: I would say Simon Sinek, Start With Why. It’s one of my faves, obviously all the ones that everybody [inaudible 00:27:02], all those,
Speaker 4: Those are always great mindset books.
Speaker 5: Yeah. In closing, I just want to say a big thanks to you, Cody and Tom and Brian Daniels and just, you guys put out so much content in it and basically gave me the ability to go and do this and I couldn’t have done it without you guys filling in the gaps. Yeah, I’ve been doing real estate awhile, but again, to fill in the gaps with the way you guys give content and give away free information every day. Really. Big thanks to you guys. I appreciate you guys. Awesome. Can’t thank you guys enough.
Speaker 4: Well that’s an awesome, awesome. Thank you. You’re very welcome. If Tom and Brent were on here, they’d say, “You’re very welcome.” We’re here to serve. We’re glad that you’re able to find something that you could implement and actually see a big old ROI on that investment. We’re glad to have you on the podcast. Thank you for joining us. We will catch you on the maybe next one when we do an update to see how it’s been maybe a few months down the road.
Speaker 5: Awesome. Would be happy to.
Speaker 1: Perfect. Okay. Rhino nation, this has been another amazing episode where we’ve just heard an individual that hasn’t been in it too long and has already financing great success and is already making a great year his first year in wholesaling. This could be you. The only difference is what are you doing today to get better? Tony Robbins always says it best when he says, “If you want life to change, it’s you that has to change. If you want life to get better, it’s you that has to get better,” and so I always think of ways of what can I do to get better? If I want things to change, it’s me that ultimately has to change and Mike has done a great podcast interview of showing how the changes that he did and all the implementation that he put in place so that he could find these deals and you can do that.
What I want you to do is go over to Wholesaling Inc if you haven’t already, do it now, go to Wholesaling Inc.com forward slash testimonials or just go over just to the WholeSaling.com website and click on the testimonials tab and you will be inspired by people that are going to share their story from all across this great nation on how they’re wholesaling in this great nation and they’re finding success. It will motivate, inspire you to let you know that you guys can do this too. I highly recommend that. Then also go over to wholesaling summit 2000 eighteen.com that is where you can book your seat for our October event in North Carolina. It’s going to be an Asheville. The dates are October, 15, 16, and 17 and we are actually allowing a handful of seats for non-tribe members. This is not just for the students. We’re also people that are not members of the tribe to be at this live event. It’s October, 15, 16, and 17 in Asheville, North Carolina. Go over to wholesaling summit 2000 eighteen.com. Hold on, let me say that again. Wholesaling summit 2000 eighteen.com to book your tickets now as they will be sold out and it will be going quick. Until next time, guys, we’ll catch you on this same great podcast with same great episodes and same great content. Take care.