Posted on: December 23, 2019
WI 336 | Wholesaling Strategies

 

While some wholesalers get extremely lucky and close their first deals without a hitch, others experience challenges and setbacks that sometimes paralyze them and hinder them from taking further action. Fortunately, with the right mentor, developing the right mindset, seeing areas for improvement, and getting back on track is a lot easier!

In today’s episode, we’ll listen in as our very own Cody Hofhine provided expert help and guidance to new rhino John Dreher. Together, Cody and John dissected a deal that went awry and figured out a way to avoid a similar scenario from happening again.

If you’re looking for real-time instruction, expert guidance, and practical wisdom, you can’t afford to miss this episode. Cody not only dished out all 3, but he also provided some much-needed inspiration (and pep talk!), so you can get back on track and steer your wholesaling business in the right direction!

RESOURCES:

A Candid Conversation With A Struggling Wholesaler With John Dreher

Episode Transcription

John, how are you?

I’m here and ready to help you out.

How are things going?

Overall, life is good. As far as my business goes, I’m having some difficulty here. I want to say, first, I appreciate you and Anne setting this up. I can’t thank you enough.

You are very welcome. Without even a word saying, it’s an honor to be on this episode with you.

Thank you. It’s so funny. I finished reading The Go-Giver. One of the things that stuck out to me about it was how the chairman, the older man was thankful to the young guy looking for the help when he came to his house for the very first time, and the guy was surprised by him saying that, and it’s funny that you said that to me. Thank you. You’re thanking me. You guys live it.

We try every day. We’re not perfect, but we sure do try. We sure do care about our students. John, remind me what market you’re in again.

I’m in Central New Jersey. I’m a New Yorker, but in Staten Island, New York. I’m right across the bridge from Jersey, and to me, it seemed like a better market to be in. Not like I knew anything, but I knew a few people who seemed like a better idea at the time. I’m all in now.

John, let’s talk through some of the maybe hiccups and any challenges you face. Let me assure that the hiccups, the struggles, and the challenges you’re facing, first and foremost, there are two things I want to tell you. We’re all filling those at some point. I had to go through them. Tom had to go through them. Every student goes through them.

I want you to know you’re not anything uncommon. I don’t want you to ever look at this and say, “Is it me?” I want you to know if you’re feeling pains and struggles, you’re doing it right because what wholesaling can produce, the success that it can produce, doesn’t come easy. The fact that it’s hard already lets me know you’re out there doing something. If it were easy, it wouldn’t be called wholesaling. Wholesaling is not easy, but it’s worth it.

The second thing I wanted to tell you, and rest assured, hopefully, is to take a ton of confidence in what I’m about to tell you. Life is not happening to you. Life is happening for you. I want you to think about this. Any of these struggles that you’re feeling are meant for you. They’re going to teach you incredible things to help you become someone better so that as you become someone better, you’re going to have a new set of struggles and challenges presented to you in the future.

The struggles that you’re feeling are meant for you because they’re going to teach you incredible things to help you become someone better.

They won’t be there to happen to you, but they’ll be there to happen for you. You’re going to continue to become better and better as days go on as long as you look at it this way. There’s no such thing as a loss. You either win or you learn. In all these challenging moments, make sure we’re taking time to reflect on what we can learn from this? How do I learn from this? If we don’t learn something from it, we’re going to repeat it. When we repeat it, it’s now on us, if that makes sense.

It does, believe me. That thought even popped into my head after I spoke with Anne earlier and knew I would speak to you. I have had some wins, but obviously, I haven’t closed a deal yet. I certainly had a lot of what I would call failures. I’m not afraid to say failures, but they were all learning experiences. I’ve definitely taken a lot out of the ups and the downs.

I’m in a way different spot than when I started, that’s for sure. I’m feeling like I’m in quicksand now. It’s a weird feeling where I feel almost paralyzed by I don’t know what. I’m paralyzed even to take action where I was taking a ton of action, and I’m now paralyzed out of doing anything, which is a weird feeling. I believe everyone feels the struggles I’ve seen on the forum or even on the Facebook page help a lot. There are a lot of successful runs I was on there that I see talking about things that they’ve gone through before they start to hit this stride. I’m like, “I’m going through that.” I’m not out of the ordinary. I believe it.

Let’s talk and work through these with the time we have. Let’s start working through what you’re facing and see if we can come up with some real-time instruction. All you have to do is turn on that imperfect action, act upon what we talk about, and let’s see what the results are. If we need to, let’s see if this comes back to, “I went out and did this, here are the results, and now I’m even more confused.”

Maybe it’s like, “That was it. That fixed it.” What we’re going to establish, what this episode is all about, is simply getting the instruction on what you need to do going forward. I want you full blast. Go out and get going on it. It’s going to produce a result and come back to me with the result. Talk to me, what are some of the pain points?

I’ve done my marketing and direct mail. I’m doing everything I can to avoid the shiny object syndrome. It’s been out there. I’ve been getting leads coming in. I remember speaking with Tom on a coaching call before. He put me at ease when he said, “90% of the people you speak to you’re not going to do business with.” It’s probably even higher than that, I bet. Either way, that was fine.

I have dealt with people that were motivated. I’ve had two contracts that I had to cancel and had probably 3 or 4 other deals that seemed like absolute shoe-ins and never progressed forward. When they say you steal defeat out of the hands of victory, that’s the way I felt. It’s like maybe I got to a certain point, and I blew it. I don’t know how or why.

I could give you an example. The last setback that I had felt like a major one because I had built up such great rapport, at least I thought I did, with the seller. I had gone through a number of different options as far as him not selling me his house even. There was a guy who took the title from his father’s house. His father was still alive and living with him now, but he took the house over and was taking care of it, but it was vacant and needed a full rehab, all this stuff, like the prototypical house for an investor. I had built up a very good relationship with the guy speaking with him on the phone. He mentioned to me that he was hoping to try and flip the house himself and then rehab and sell it himself.

I thought to myself, “Okay, that’s great.” Going off of what we’re taught in the tribe, I know 100% what we want to do is provide value to the person we’re talking to, whatever that means. It doesn’t mean necessarily, at the end of the day, we’re going to buy that house, but it could be. I knew some hard money lenders that I had been in contact with. I had a private money lender who was a very good friend. I was like, “Let me talk to these people and see if I could connect him with them,” because he was having a hard time getting the financing to do it.

He says, “All right.” I said, “Let me tell you something. I have some people I could talk to, and maybe they can help you out with this, and ideally what you’d like to do.?” He says, “Yes.” That was the beginning of all kinds of relationships. After a couple of days, I checked back with him. After giving him the info, I said, “Did you get in touch with these people?” “I got to tell you. I want to be done with it.” Am I wrong when they say I want to be done with it and that he is super motivated?

That’s a good person getting back out there to the house.

WI 336 | Wholesaling Strategies

Wholesaling Strategies: If you’re feeling pain and struggles, you’re doing it right. Because what wholesaling can produce doesn’t come easy. And so the fact that it’s hard already means you’re out there doing something because if it was easy, it wouldn’t be called wholesaling.

 

I may have even seen the house already at that point. His nephew met me and showed me the house. His nephew lives in the area. Long story short, I couldn’t get a number out of him. I could not. I asked 5, 6, and 7 different ways. I couldn’t get one. I was very clear to him and said, “This is the deal. I want to get a price from you because I want to know your needs. My needs are the same. They’re unchanging. The people that I deal and speak with, their needs are always different, and I want to be able to base everything off of what you need.”

“I’m not sure.” I said, “I’m going to give you a number, and it’s going to be excruciating low because I need to assure myself that it’s a good deal for me, and I want it to be a good deal for you, but I don’t know what’s a good deal for you.” He says, “I get it, no problem.” I gave him a number, and it was low. I said, “It’s $120,000.” He goes, “I was hoping to get $150,000.” Finally, he gave me a number.

Eventually, we left it at $130,000. That was the best I could do, and I didn’t hear from him again. I said, “Let me know if anything changes.” A week later, he called me back and said, “Is that offer still on the table?” “Yes. The offer is still on the table.” “Can I squeeze $135,000 out of you?” I called him back 30 minutes later and said, “The absolute best I could do is $132,000.” We agree on $132,000, and now the whole thing starts here. I’m totally inexperienced, obviously, Cody.

I do have a lawyer and title in place. He wants his attorney to see the contract because he doesn’t know what he’s signing. Obviously, I tried to go out there right away to get the contract signed, but I had been on the phone with this guy for over several weeks now. We have spent hours on the phone talking about nothing important, but especially not his house or anything like that, talking about stuff.

I felt like I trust the guy enough. I give my contract to my attorney. He says, “I could send the contract over to his attorney,” a blank contract to see the terms. This drags on for about two weeks when I think we have a deal. We had an agreed price, and the next thing he calls me, he says, “Here’s where we are. We got a different offer on the table. We’re going to go with that.” I’m obviously devastated because I thought I had a deal.

I’m listening to what’s going on, and here are things that I think each of us goes through these, and now it’s going to be like crystal clear implementation going forward. John, here’s the thing I’m looking at. The biggest thing that stands out of all of them, and I’m going to ask you questions so you can help reveal it yourself without even my help. Are you more likely to do business with me over the phone, or are you more likely to do business with my face to face?

Face to face.

You’re doing it over the phone in every one of these scenarios that you’re talking about. Here’s the thing, you can’t get anyone to commit over the phone because now there’s a process. “You do want to do that, $130,000, awesome. Let’s do it. Perfect.” You hang up the phone, and it’s like, “I either still have to drive to the house or I’ve got to send an email.” Essentially what happens in person is you take away all of that. It’s gone.

You’re right there in person, and he says, “$130,000 you can do, awesome.” What you do is this, where you can take a minute and sit back and say, notice I used the word if, “If I can do $130,000, is this something you’re ready to move forward?” Here’s my commitment question. If I can do $130,000, is this something you’d move forward now?” When they say yes, you sit there, and you’re like, “If we can move forward, let’s put an agreement together for $130,000,” and you pull out the agreement and put it to work because you’ve got the commitment.

What are they signing a contract for at the end of the day? There are no terms. He’s signing, for one thing, he agreed to receive $130,000, and I plan on putting $130,000 in your bank account by this date. When they say, “I need to review with my attorney,” 9 times out of 10, what this means is to send over the contract so that I can use your contract to talk to five other cash buyers so I can start bidding on this thing up.

That’s what happened.

Whenever you want to talk to find the motivation, you can totally do that over the phone, but whenever we’re negotiating or putting terms or prices together, that’s always face-to-face.

It’s because all this took place over the phone. You lost control. The control is no longer in your favor. The control is all in his favor. It’s on his timeframe. Whenever you want to like talk to find motivation, that’s fine. You can totally do that on the phone. Whenever we’re negotiating or putting terms together or saying prices, that’s always face to face. Why? It’s because you said so yourself, and it’s true.

You’re more likely to do business with me face to face than you are over the phone because you’re now sitting there. You are now face to face. You can now get the commitment, and when you get it, there is no other process other than you pulling out the agreement and having them sign it versus, “I’ll drive there.” “I can’t drive right now because I won’t be able to be at the house until 6:00.” You lost authority again, position, or control.

The control always has to be in your favor. The only way you can do that is face to face. Whenever you talk numbers, you do it. When you want to present something, you’re presenting it because he’s already given you the commitment. I don’t even talk price or that I will pay the price until I get that he’s committed. Notice how I say it. Let’s go over this again. “John, you’re going to do $130,000. If you can do $130,000, I’ll do it.”

You’re saying, “If I could do $130,000, you’d be willing to move forward?” “Yeah.” “If I can do $130,000, are you ready to move forward now?” “Yeah, I’m ready to move forward now.” “I think I’m willing to do $130,000,” You pull out the agreement because he committed before you said yes, you could do it. The second thing is if he says no, then say, “What’s holding you back? You said if I could do $130,000, so help me understand this because now I’m confused.”

“If I could do $130,000, what’s stopping you?” “I want it reviewed by the attorney.” “Help me through this, John. Help me understand what you mean. You agree on a price, and if I can get you that price, what else is there that needs to be reviewed?” “I don’t know what I’m signing.” Maybe it’s your contract, so it’s like, “We don’t even have to use my two-page contract. Why don’t we use the ones that realtors use? It’s already been put together by attorneys. It’s already been drafted up. I’ll use that for one if you want.”

You’re talking through the problems now. Ultimately either solve his problem or find out the real problem in all reality. The real problem is that he wants someone to commit at $130,000, so he can go to the next person and say, “If you can give me $135,000, I’ll do it.” He gets to $135,000 and says, “If you can do $140,000, I’ll do it because this guy’s got me already $135,000.” All he’s doing is using that, and that’s probably the reality or the truth.

Those people exist even in my book. When we talk about making it a win-win, I’m talking about it, and it’s got to sound like a win for them in the sense of, “I got John uncomfortable. He was only at $120,000, and I got him up to $130,000.” That’s a win to him. It’s a win for you because you got them from $150,000 to $130,000. That’s where you get that true win-win scenario. You also have to be face to face so that when you get that win-win scenario and a commitment, you bring out the piece of paper and say sign here.

I had a tough time getting face-to-face with him. The night we spoke on the phone, as you said, I did make the mistake of negotiating over the phone, but I said, “We’re ready to go. I can drive out to you tonight, and we can take care of the paperwork.” “I want to send it to the attorney.” I’m like, “I don’t have to say back.” Even after that, there was another time when I said, “The attorneys said okay. We’re all good to go. I’ll bring the contract out to you, and then we’ll get it signed.”

By that time, there had already been some games being played. I trusted this guy. I have faith that people will always do the right thing or have better intentions. I don’t want to assume that something shady is going on, and maybe it’s shady. Maybe it’s not. Maybe it’s business. I think that ethically it wasn’t the right thing to do. I could have done things to prevent this from happening anyways in the first place.

John, the best thing you’re saying that makes me super proud is the fact that you’re willing to take action on yourself versus you take action on him in the sense of you look in the mirror and say, “It’s my fault in the first place. I should’ve done this face to face,” because most people want to find fault in something else because it’s easier. It’s easier to pass the buck and the crotch on to something else.

“It wasn’t the right time, so I didn’t get the deal.” You can look in the mirror and say, “Is your lack of follow-up.” I’m sorry. I’m saying this particular story. My point is when you can look in the mirror and say, “What do I learn from this?” There’s room for improvement. There’s an actual possibility you’re going to become someone better. When you become someone better, this isn’t going to happen.

WI 336 | Wholesaling Strategies

Wholesaling Strategies: There’s no such thing as a loss. You either win, or you learn. In all these challenging moments, make sure we’re taking time to reflect on what and how we can learn from it. Because if we don’t learn something from it, we’re going to repeat it.

 

Listen to what’s happening right now. You and I are now talking, and you’re like, “This happened for me for a reason.” In the future that when I’m talking on the phone, I will never talk numbers and negotiate. That’s always done in person. When someone says, “What can you offer?” “That’s a good question, John.

What I need to do is I need to come out and look at the house because I don’t even know what to make an offer on because I don’t know what condition it is.” “It’s in great condition.” “Awesome. I still need to check that out because I need to verify what it is for me on what I would need to do. I’d love to come out Wednesday at 2:00. Does that work?” Now you’re finding ways to get in front of him all the time because most businesses want face to face, not over the phone.

I believe it. It’s been very humbling. If I’m not looking at what I’m doing and the mistakes I’m making, I’m not going to learn anything. If I turn around and say, “This guy is a jerk, and his attorney are both jerks and have taken advantage.” What am I going to do? I’m going to go looking for sellers that don’t do that and attorneys that don’t do that. I get that part of it and feel like, “You know what happened? This thing happened a couple of weeks ago.”

At the same time, my leads started to slow up, coming in now. I’ve also been trying to look at every lead I have and say, “Is this somebody going to do business, or they’re not going to business? What should I do with them as far as follow-up goes? Send an offer in the mail or bring them to a yes or no, or maybe, in the future,” and I’m trying to weed out the people that are wasting my time.

I know it’s not all about me. I want to be able to help anybody and everybody I speak to on the phone. If they’re picking up and calling about their house, that’s a ballsy thing. It’s not something I think I would do if they reached out in one fashion or another. I don’t want to blow people open. I don’t have a lot of time. I’ve got a busy personal life.

Fortunately, I learned this maybe months ago. I asked a dear mentor of mine that I said, “I want to understand this balanced piece. I try to do my best in business as a husband and a father. I try to do my best in my church calling. Sometimes I struggle with the balance of it.” His answer was unique, a cool answer, and a Christian-based answer.

He’s a guy that I seek advice from, and he said, “Cody, here’s the cool thing. No matter where we go or where we’re at, there is no such thing as balance first and foremost.” I’m thinking, “Wait, what?” He’s like, “There’s no such thing as balance. Wherever you stand, simply lift.” Wherever you’re at, lift people.” He said this in a Christian-based way and in the sense of, “Bring people closer to God.”

 “If you’re at work. Is it work, Cody?” I’m like, “No, it’s not now that I’m thinking where you’re gone.” He’s like, “No. All it is just lifting and building people up.” When you’re at home, is it home?” I was like, “I get what you’re saying.” He’s like, “No. Your whole focus as a father and a husband is to build your spouse and your kids up. Lift them and bring them closer to God. When you’re at church, is it church? No, it’s another opportunity to bring the people you are surrounded with closer to God.”

I sat there, like, “That is so true. There is no balance.” It’s wherever you simply stand, bringing people to a higher place. Whether you’re Christian-based or not, that doesn’t matter. The whole point is you’re helping people become better individuals. You’re lifting them to a higher place. Wherever you stand, simply lift, and that lesson will stay true to me going forward. There is no balance. It’s wherever you stand. Simply lift. Going forward, you’re going to know how to do this better. You’re going to be able to do it face to face because I can lift better when I’m face to face versus lifting someone over the phone or lifting them through an email. Yes. Does it work? It does. If you want, these are small shifts.

I am so pleased to hear that is your problem because I feel like that’s a small shift. I don’t feel like what I’m telling you on the phone is not anything that, A, you don’t agree with, but B, you feel like it is attainable. You look at that and like, “That’s true, and I can do that.” You can and you will, and because of that, you’re going to get better results the next time you have an appointment like that.

I don’t doubt anything. I feel like I got lost somewhere. I almost feel like something’s through the cracks a little. This is humbling and a little embarrassing being this far along and not having closed a deal in certain ways. I felt like it was a humbling experience typing my question and knowing that I would be on the coaching call. I usually hear many successes about people on track, and I feel like I got off track. I don’t mind saying that in front of people, but it’s not easy.

The enemy’s best tool is simply to have you compare yourself with other people.

I should be at a certain point by now, and I’m not. I’m nobody to blame but myself, and maybe I’m doing things out of sequence. Maybe I’m not focusing enough on certain things. I don’t know what. My leads stopped coming in, and now it’s time to start re-upping my marketing again. I’m not sure which way to go with it.

Let’s talk through that too quickly. First and foremost, is that clear you’re negotiating how to do it better next time. Does that give you crystal clear action?

Yes.

Second of all, here is one thing before we move on to marketing, remember the enemy’s best tool is simply to have you compare yourself with other people. Don’t compare John’s beginning with someone’s middle or end. You be John, and that’s it. Don’t compare your story to someone else’s or “This guy did a deal in 50 days. I should be doing a deal on 50 days.” No, because they’re not John, and you’re not Sally. Don’t compare your beginning with someone else’s middle or end. Be where you’re at and stand.

Let’s move forward on the marketing. There are going to be a couple of things that could shift that I see all the time. You said that “I feel like the leads will fall down.” Here we go. Did anything change? Let’s go back 90 days. First and foremost, are you sending out marketing once a month? Are you sending out marketing once a week? What were you doing consistently?

Once a week, somewhere between 700 and 1,000 a week for six months, it was tax delinquent and code violation list. The first cycle through, I got a lot of calls. The second and third cycle through, it was much less. For the first cycle through, I would get maybe, I don’t know, 20, 25 calls a week. By the time this last cycle finished, it was maybe five calls a week. I don’t know if that’s normal.

Has anything shifted? I’m going to keep asking some questions because literally, your quality of life, my quality of life, think about this. Our quality of life rests upon our quality of questions. I’m going to ask you some more questions. You were mailing out to tax delinquent and code violation. Once a week, anywhere from 700 to 1,000 pieces. Over the last 90 days, has anything shifted? Have you missed a week? Has anything gone different from what you told me? Every week I send out 700 to 1,000 pieces. Have you stopped any of the weeks in the last 90 days?

No. As a matter of fact, in the meantime, I’ve been driving for dollars once a week. There are anywhere from 150 to 250 or so properties on my list. I’ve been building up and sending out to that list, too. It might even be more than 1,000. Who the heck knows?

Haven’t you missed any week sending out?

I have not missed a week sending out mail, not once, regarding the tax delinquent and code violation. The last cycle ended. I’m reaching back out to the municipalities, which in Jersey, you have to go to every town and not the county. You have to go to every town to get the lists. I’ve been doing that now.

Let’s stop right here for one sec. Nothing’s changed, which is a good sign. That means you’re staying consistent. I love that. There are two things that come up. Marketing, in general, is cyclical. It means there are turn-on and turn-off cycles, and you never know when they’re going to hit. The second thing I want to say is that it can sometimes be list fatigue, meaning they’ve seen your message how many times? How many times has each seller seen that piece that you’re marketing? Have you mailed to each person 1, 3, or 5 times? What’s the number?

WI 336 | Wholesaling Strategies

Wholesaling Strategies: Always remember the word PEND because it stands for four lists: P stands for probate, E stands for eviction, N stands for Notice Of Default, and D stands for divorce.

 

It’s at least 3, maybe 4 times.

What I want you to do is I want you to start looking at a couple of lists to get some numbers and let’s try another list for a little bit, and we can always come back to this list. I want you to remember the word pend. Why? It stands for four lists, and all the lists are distress lists, not high equity lists. Here’s your distress list. P stands for Probate, E stands for Eviction, N stands for NOD or Notice Of Default, and D stands for Divorce. I want you to go out and see what of those four lists you can get. I want you to start mailing to those. There is a distress list still. They are a great list. We love all four of those lists.

As a matter of fact, I know that I had gotten information when I first started about the eviction notifications. It’s a pain in the butt, which I’m totally cool with doing.

That means no one else is going to work hard to get it, but Rhino tribe members, we’re going to get it.

They said you could use the public computers in the courthouse to use them. I wouldn’t know where to begin to get probate or notice of default.

Here’s the best part. I don’t either, but you can figure it out instead of asking how to ask who. Go find someone that knows how to do it and do it.

Should I do all of them, or does it matter?

Whatever develop the numbers, because maybe you look at probate like, “There’s only 100, but I want to send out 700. Let’s look at eviction. That gave me 500.” Look at all four of them and see what the numbers are. That’s already enough instruction to don’t put too much on the plate. You don’t want 50 action items to do. I want you to hone in on always negotiating in person, never over the phone, and getting those four distressed lists. Take action on it, and then let’s get back together and see what the results bring you back. Go out and take action. It’ll give you a result, and I want you to bring back to me your results.

You got it.

I’m here for you. This is a smile on my face. You couldn’t bug me. When you say, “Thanks for doing this,” it is an honor because my whole focus in life is helping you get one step closer to getting your first deal. All it takes is one deal, and you’ll turn it from face to fact, and that’s when it turns on like wildfire. I’m honored to be here, and I’m here for you, and I want you to know that, and I want you to feel that.

I do. I appreciate it. I will show that by taking action.

Get out there, take action, and let’s talk again.

Thanks, Cody.

Take care. See you.

 

Important Links

 

About Cody Hofhine

Cody Hofhine, a multiple Inc 5000 Business Owner. Co Founder of Wholesaling Inc. the #1 Real Estate coaching program across the nation. Co Founder of Joe Homebuyer the leading Real Estate Franchise. A successful Real Estate investor/mentor and sought after Speaker.

Cody has coached over 3 thousand students on how to successfully Build their Real Estate Business through his real estate training as well as help individuals perform at their highest levels with his one-on-one mentoring.

Cody used his background in sales to quickly build multiple 7 and 8 figure Real Estate Businesses that all start on the foundation of clarity or Vision and Purpose.

Cody loves being with his family and doing crazy tricks behind a boat.

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