Posted on: February 06, 2020

In the wholesaling world, the importance of doing follow-ups cannot be overstated. Today’s determined rhino can attest to the amazing power of doing follow-ups. And he’s got $49,500 to show for it!

Michael Ireland Castanon is a steadfast rockstar who’s now crushing it in the wholesaling world. However, his wholesaling journey has not always been easy. In fact, when he first started out, 4 of his first deals fell through and it took him around 6 months to close his first deal.

Fortunately, Michael does not know how to give up. Rather than letting the setbacks he experienced bring him down, he stayed persistent and just kept going. His efforts paid off big time as he was able to close 21 deals in just a few shorts months. Definitely a far cry from the 5 deals he did in a year when he first started!

If want to hear a wholesaling story that exhibits the impressive power of doing follow-ups, you can’t afford to miss today’s episode. Also, in addition to hearing Michael’s awesome wholesaling journey, you’ll also get an insight into the winning mindset that has helped him earn close to $400,000 in just a year!

Key Takeaways

  • How he found wholesaling
  • Why he chose to get into wholesaling
  • Once of the biggest struggles new wholesalers encounter
  • What his current business structure looks like
  • Difference between a hot lead and a cold lead
  • The marketing channel he’s using
  • The top lists that are working for him
  • The four pillars when pre-qualifying sellers
  • What an unknown equity list means
  • Breakdown of a great deal he did
  • What the whole goal of negotiating is
  • Two things you need to have when making an offer
  • His disposition strategy
  • What the 70 percent rule is
  • Game-changing book he recommends
  • How people can get in touch with him

RESOURCES:

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Episode Transcription

Brent Daniels:
Hey everybody. It is Brent Daniels and I want to challenge you right at the beginning of this podcast, I want to challenge you with two words, passion and purpose. Now it is my true belief that passion is great, passion is strong, passion gets it going, passion gives you enthusiasm, but passion is not enough. Okay? Purpose. Purpose is what this is all about. The purpose to go out and solve somebody’s problem in your community. The purpose to not work a nine to five job, the purpose to not live paycheck to paycheck. That has nothing to do with passion. Passion is like a quick flash in the pan. The purpose that is what makes superstars in this business. Purpose is what gets you through the tough times. Purpose is when you have a deal fallout and you feel like the world is crumbling and the sky is falling.

Brent Daniels:
Purpose keeps you. Purpose is the foundation of being successful in this wholesaling business. So I will encourage you and challenge you to really look. Don’t go at this business with just passion. You need to have the strong foundation of purpose. And if you have that, I’m telling you guys, everything else builds on top of that and that leads me perfectly into this interview because I’ve got an incredible wholesaler. He is now almost at $400,000 for the year out of North Houston, which I’m telling you Houston is, there is a lot of activity in Houston and 400,000 and the way that he breaks this down. He’s going to break down an amazing deal. You guys are going to be so impressed. It is my absolute pleasure to bring to the podcast Mr Mike Ireland-Castanon. How are you buddy?

Mike:
I’m good Brent. How’s it going man?

Brent Daniels:
Good. I am awesome. I’m pumped. I’m excited for this because I know what you did last year and I know what you’re doing this year and it’s just been absolutely explosive. But before we get into that, why don’t you break down how you found wholesaling and why real estate, why not something else? Why are you focused on wholesaling real estate?

Mike:
Yeah. So before wholesaling I sold medical devices. So I was always out in the field working with surgeons, always in the hospitals. And I was probably driving maybe about three to 4,000 miles a month. And yeah. And so it was a little taxing on you mentally and physically. So with all that time I started listening to different podcasts, maybe looking for a different avenue to pursue versus just working a nine to five job or being on the road all the time.

Mike:
So then I found some real estate podcasts and I thought I wanted to be a real estate agent, a realtor. So I got my license and just traded one boss and too many little bosses. Did well my first year, but realized that it just really wasn’t for me. The sales process just took much longer from A to Z. At the same time, I didn’t quit my job. I was still working. So I did both and came across Wholesaling Inc. Heard Cody and Tom Krol’s energy on the podcast. And yeah, I mean I decided to join the tribe and I joined at the end of 2017.

Brent Daniels:
Awesome. So this is almost two years ago you joined the Rhino tribe through the Wholesaling Inc program and when you started out, when you started really getting the instruction, when you were putting all this together, what’d you start with? Direct mail?

Mike:
Yeah, I started with direct mail, send out some postcards. My first four deals fell through, but I knew this would work so I just kept going, learning from my mistakes from the previous deal. And then finally in June of 2018, that’s actually when I closed my first deal.

Brent Daniels:
And this is really interesting that you put that. So it was like six months later? Seven months later?

Mike:
Yeah, six months later.

Brent Daniels:
Okay, great. This is perfect. I want to hit on this because this podcast is really good about breaking down good, awesome, amazing deals. But let’s talk about that first seven months that you’re in this. Right? You have four deals that fall out and listen, this happens all the time. I talked to new wholesalers every single day, every single week, and one of the biggest struggles is, they get really excited to get something under contract and it falls out. It’s not really a deal. Or maybe they locked it up too high or maybe there’s some things that weren’t figured out with title issues or whatever else. Or maybe they locked it up at the wrong owner. But what made those four, if you can pull back and go into a time machine and look at that, what prevented those four deals from closing? What was it?

Mike:
Yeah, it a number of things. So mainly I was learning rehab, estimates, didn’t really know what I was doing back then, but just kept going. Secondly, title issues would pop up. Exactly what you just said. I got it under contract with somebody who really couldn’t claim ownership of the property and got at a great price. I signed it. Unfortunately we couldn’t close on it, but I just kept going. I knew what this business could bring and I wanted to change my lifestyle.

Mike:
I wanted to change my professional life. I didn’t want to work anymore and I was doing all this, well, if my previous managers would find out, they would be a little upset. But I was actually doing this while I was in the field. I had a little break, I would go meet with the homeowner, go to the property. And so, I get the same questions too from other wholesalers is, “How long will it take to get your first deal?” And I always say, “It just depends. Everybody’s different. Everybody’s situation’s different. It just depends how bad you want it. Wholesale.”

Brent Daniels:
Yeah. And it just depends on, well there’s consistency there. And I think a lot of people either it’s really interesting, a lot of people start this business with a full time job, right? So you’ve got to negotiate your schedule to fit in times when you can do it and call people back and set up appointments and look at the comps and you get excited and you’re wearing one hat that’s medical device sales. And then you take that off and all of a sudden it’s your wholesaler hat. And it happens with a lot of people. I mean a lot of people are working full time jobs to build up their bank account and build up their mind enough to where they have enough successes to where they believe that they can do this, that they can replace their current profession or job or nine to five with this business.

Brent Daniels:
And it’s amazing if you stick with it. I see people that have full time jobs. I think that you’re right there, at the average it takes to really get through your first deal, which is about six months because you’ve got everything going on. You’ve got your family, you’ve got work, you’ve got your wholesaling business that you’re trying to learn and understand and how do you do comps and how do you know what are you doing in the appointment and all these things. I mean you really cut out a lot of time by joining the Wholesaling Inc program to really understand the fundamentals of wholesaling. So I think that that’s excellent. And, you went through those four deals and learned something from each one. Is that right?

Mike:
Yeah, I learned something from each one and every other deal, every other negotiation, every other meeting with the homeowner, just got better and better.

Brent Daniels:
Yeah. Awesome. And that’s just reps, you know what I mean?

Mike:
Yeah.

Brent Daniels:
That’s just getting in there, that’s getting comfortable with the whole process, and making sure that you’re looking at what is actually happening in your business. Right? What are the actual concerns that homeowners have? I think oftentimes we hallucinate and assume we know what’s going on or what the motivation is for a seller. But if you just ask the right questions that you’re trained to ask and just listen, you’re going to pull out a lot more information to understand if this is somebody that’ll actually do business with you.

Mike:
Exactly. And you know what? At that time also, it was really easy to focus on one deal and to pour all your energy in one deal. And whenever it didn’t work, it could be crushing. And so I made a promise to myself, I want to get to a point where it’s okay if one deal falls through, it’s okay if things that didn’t work out because now I have a pipeline and I have other deals we’re working on and it’s just the law of averages. You can only control the situation so much, but you just had to keep going and be consistent.

Brent Daniels:
Yep. I love it. So it’s 2018, how many deals did you complete in 2018.

Mike:
I did five deals.

Brent Daniels:
Five deals. Beautiful. Now it’s 2019, how are we looking?

Mike:
Yeah, so year to date we’re at 21 deals.

Brent Daniels:
21 deal. Guys, listen to this. This is something. You guys should be so inspired by this. I mean that he went six months, seven months with nothing, then closes the year with five deals. Now he’s in 21. Guys, this is real life. Mike, I mean-

Mike:
Exactly. Yeah.

Brent Daniels:
If you can do it, other people should be able to do it, right?

Mike:
Oh yeah. I mean, I’m not the smartest person. I’m not the most experienced person, but this is something that I wanted and I wanted to do whatever I could to make it work. So yeah, anybody can really do it just as long as they’re dedicated and they’re willing to put the work in.

Brent Daniels:
I love it. So talk to me about what your business looks like now. Is it just you? Is it you and just break down your business structure for me?

Mike:
Yeah, sure. So I have two cold callers. Each of them call 20 hours a week and I just hired a lead specialist, I would say maybe about three weeks ago. So mainly their role and their job is to follow up on cold and medium leads. And so just follow up with that, with the followup sequence, make sure that none of the leads actually fall through. Everyone gets called or contacted and I have an acquisition specialist now. So he’s responsible just for all the hot leads. And meeting with homeowners. It actually helps with the dispositions as well.

Brent Daniels:
Awesome. So what is the difference in your business between a hot lead and a warm lead?

Mike:
A hot lead is someone who wants to sell in the next 60 days. A warm lead is someone who wants to sell down the road or maybe things are just not lined up right now to where they can sell, whether it be a probate or something like that. But if it’s a hot lead, someone that where we can actually get a contract at least in the next 30 days.

Brent Daniels:
Love it. So who are your cold callers? Are they in town, are they just somebody that you got that’s like a virtual assistant type of thing? Who are these cold callers?

Mike:
So my first cold caller is from Call Motivated Sellers Now out of Costa Rica. Love the work that they do and very consistent, very stable, provide consistent results. A second cold caller that I have is actually, we found him through outbounders.com. He just stood out. I mean, I really felt like we got lucky with him, but he’s actually calls out of Detroit. We pay him the same thing as Call Motivated Sellers Now. And he also, he’s very coachable and does a great job. He’s a very good on the phone.

Brent Daniels:
Yeah, I love it. I mean anybody looking into it, it’s callmotivatedsellers.com and I have four of them. I have four of them doing what is it? 120 hours a week. Right. So phenomenal. You send them a list and you get leads. It’s pretty crazy. But once those leads come in, who does that go to?

Mike:
Yeah, so if it’s a cold or a medium lead, it goes to our lead specialist. Her job is to qualify them even further. Try to find some motivation. Not really focused on price so much unless it’s outrageous, but as long as there’s somewhat of a discount and if they’re motivated, if they have some type of pain point or driver, then we’ll pursue the lead-

Brent Daniels:
Love it.

Mike:
If it’s someone that’s really hot that goes directly to our acquisition specialist. They’ll set up the appointment and set up the meeting right away.

Brent Daniels:
Got it. What other marketing are you doing besides cold calling?

Mike:
Well up until now we were just cold calling this year and we just signed up with a Lead Sherpa for their texting platforms. So we’re just starting that process right now. It’s a little different, but-

Brent Daniels:
All 21 of those deals came from calls?

Mike:
Yeah. All [inaudible 00:13:49].

Brent Daniels:
You are a beast. Oh my gosh. That is absolutely incredible. That is, I mean you’re running the… You’ve got a great team it sounds like, and you’ve got great callers and it’s just getting them good lists. Right? What lists are working for you?

Mike:
Yeah, so my top list is tax delinquent lists. It gets updated every six months over here-

Brent Daniels:
Where do you get that Mike?

Mike:
Directly from the County. In Houston, you can actually go to the County, get a CD, have a VA converted to a format they’d like. I’ve mainly focused on Montgomery County, which is about 40 minutes North of Houston. And they have one point of contact where I can email and she sends the tax delinquent lists so anybody could do this. So it’s easily assessable in my area and in Houston.

Brent Daniels:
Awesome. Let’s sink our teeth into an actual deal. You know what I mean? Let’s break this down step by step based on condition, timeline, motivation, price, right? If you’re just listening for the first time, there’s four pillars to prequalify every seller and that’s condition of the property, timeline to sell that property, their motivation or why do they want to sell that property and what price do they want? So whenever you’re looking at or having a conversation with a distressed property owner, okay, you need to put everything through these filters. So you know if you’re wasting your time or not. Okay. Or you’re wasting their time. So let’s talk about that deal where you were talking about before we got live here, because this one is outstanding. So first of all, it was a cold call, right?

Mike:
Yeah. Cold call.

Brent Daniels:
What list was it?

Mike:
This one actually came from the unknown equity list.

Brent Daniels:
Unknown equity list. Explain that to me. What does that mean?

Mike:
It’s just a list from ListSource. Sometimes the results don’t always come through whenever you’re trying to get a list. So there’s an actual setting for unknown equity and those are people that maybe aren’t being marketed to. So it was the list that the Wholesale Inc tribe recommended. And I wanted to give it a try and, split and test it. So.

Brent Daniels:
So there is common practice. Typically, when you’re wholesaling property, you need to make sure that these properties have equity. So what happens is when you’re pulling lists, a lot of the filters that these sites like ListSource or PropStream or some of these other ones have, is that you can get the estimated equity. So typically you want at least 30%, 40%, 50% of equity so that you know that there’s enough juice in there. Right? But sometimes they don’t know what that is. Sometimes they don’t know how to do the math right or it’s not recorded right. So sometimes there’s unknown equity, they just don’t know. That’s what that list is. And it is awesome. So you get this unknown equity list, you put it in. Which one was it? Was it Detroit or was it Call Motivated Sellers? Do you remember?

Mike:
It was Call Motivated Sellers.

Brent Daniels:
Okay. Call Motivated Sellers guy send you in this lead and tell me about it.

Mike:
Yeah, so the first six to seven months of this year, I actually, I only had two cold callers and it was myself doing everything. So I qualified the lead, they pushed it through the remote geo. I further qualified the lead, try to find some motivation, ask them specifically, “Hey, this sounds like a great property. It’s in a great area. Why are you considering selling it?” Basically, his whole family’s already moved to Minnesota and he’s the only one that’s living here. And eventually he wants to get back to his family. So he’s just been traveling back and forth. I asked him, “Have you considered selling with a realtor? Again, this is a great area, you would make more money.” He’s like, “Well, I have considered it, but time is not working with me. I want to get this done as soon as possible. And if it doesn’t work with someone like yourself, then maybe I’ll try to go through the realtor route.”

Mike:
And I said, “Great. What do you think the next step is here?” He was like, “Well, I’m in Minnesota right now. I’m going to be back in town. I’m still cleaning it out. Why don’t you just follow up with me next month?” And so that was in February and I just set up a task to follow up. So every month I gave him a call, “Hey, last time you told me to follow up with you this month. So that’s what I’m doing. How’s everything going?” And he actually appreciated the followup. He said, “Hey, thanks for doing what you said you were going to do. I’m not ready yet, but please give me a call.” And then finally in July I hired my acquisition specialist and trained him how to take over our certain leads and he followed up with him exactly the way I followed up.

Mike:
And then finally he said that the seller said that he was going to be in town and he’s ready. So after all those months of follow up, my acquisition specialist met with them and built a good relationship, good rapport with him and found out exactly what kind of problem he had and what he actually needed in order for him to make that final move to Minnesota. And once he found that out, built a good relationship, he earned that right to ask for a lower price. And so originally he wanted, the seller wanted 170,000. My acquisition specialist offered 130,000 expecting a counter and trying to meet in the middle and he actually accepted 130,000 and took it. I’m sorry, 140,000. Yeah.

Brent Daniels:
140,000.

Mike:
Yeah.

Brent Daniels:
130. How did he know to go lower? Did you talk to him or was this just your acquisition manager just had the instinct that this guy would go lower than 170.

Mike:
Well, when I first brought him on board, he pretty much just shadowed me and I kept mentioning, “You want to give a low price when you felt like you earned it.” The whole goal of the negotiation is to ask for a low price without getting punched in the face. Pretty much. You want them to work with you but you have to earn that trust and know that, hey, you’re trying to find a solution. And as long as they’re happy, and you have a good price that you can assign it for or you have a good price in their contract, it’s a win-win. So he actually just tried to offer lower, a number that made him feel sick to the stomach and all of a sudden he calls me and says, “Hey, a contract is coming your way.” And he goes, “You won’t believe what I got it under contract for.” And yeah, we’re just so excited.

Brent Daniels:
Well, that’s a huge factor that you just mentioned there. They built that relationship, built that rapport, because we always talk about the two things that you need to have when you’re giving a low offer, which is certainty, right? You can’t be like, “Well, I don’t know.” You know what I mean? You got to be certain with your offer. But the best part, the better part I think to that is you need to be likable. Certainty and likability, right? You need to have that likability so that you can communicate and not like you said, you get punched in the face. Right? If you go in all tough guy or weird or you’re just, your tone’s off or you’re trying to… It just doesn’t work. You know what I mean? So, incredible. So, you lock this up for 140 and you want to talk about your strategy here for disposition because you’re pushing the boundaries on what you’re selling these things for, right? You want to talk about that?

Mike:
Yeah, exactly. So, I see a lot of Facebook posts and a lot of other wholesalers talk about the 70% rule. 70% of ARV minus repairs. That’s what you need to assign it for. And that’s all end buyers want. Well, we have about 2,500 cash buyers on our list and I knew we could push this one, especially on average, we’re assigning our deals at 75 to maybe 78% minus repairs. So this one, we actually blasted it out and everybody wanted this property that is just such a great area where you don’t normally get deals. So luckily we actually were able to push it to its limit and we sold it for 85% of ARV minus repairs.

Brent Daniels:
I love it, and this is really important whenever you guys are going out to get valuations of property, yes, comps are important, but you know what else is important? Supply and demand, right? If there is no supply, the demand’s going to go through the roof. So if you’re going into these areas where there’s not a lot of wholesale opportunities, not a lot of off-market opportunities, you’re going to find a lot of different buyers. You’re going to find people that want to buy it and hold it. You’re going to find people that want to fix it up and live in it. You’re going to find people that are going to add square footage and the whole thing. So don’t just be stuck in this little box. Listen to what Mike’s saying here. Push the envelope. Push as high as you can and get as much as you can out of every single deal. So Mike, bottom line, what’d you make on this thing?

Mike:
So we gross $49,500. And it was-

Brent Daniels:
$49,500.

Mike:
Yeah.

Brent Daniels:
From one cold call. Hold on a second. Yes, I am telling you, I’m so excited man. I love it. I mean, how good does that feel to make that big of a check?

Mike:
Oh, it felt amazing. The seller was happy, my acquisition specialist was happy. That was the largest deal he’s done in a contract, so he made a good amount from it. And also the buyer was happy for getting a great property. Not only that, I know there’s a lot of talk about, needing to double close when you have a big assignment fee because you’re afraid that the end buyer will cancel or won’t want to pay that. But when you have a big buyer’s list, it really doesn’t matter. All our assignment contracts actually have our assignment fee on there. So they know from the very beginning. And so he knew exactly from the very beginning what we were going to make, wanted to close on it. And it was just a straight assignment. We actually haven’t doubled closed with all our deals. So, that’s just one thing I wanted to mention with that. That don’t be afraid to show your assignment fee.

Brent Daniels:
100%. Listen, if you have incredible skills in negotiating, 100% you should. You know what I mean? You should never be afraid of that. Yeah, I love that. I think that that’s a really good point. I think people get really nervous if it’s over 20,000 or over 15,000. Come on. Yeah, I’ll have a conversation before the buyer and say, “Hey listen, here’s the deal we’re making. We did really well on this, so you’re going to have a problem. If so, we’ll sell it to somebody else. No problem. But are you going to have a problem?” Nobody has a problem. Nobody has a problem. You know what I mean? It is what it is. Is this a deal to you or is it not a deal to you?

Brent Daniels:
So I think that that’s absolutely huge and people should probably talk to an accountant and see what the difference is between the income you get from an assignment and the income you get if you actually closed on a property. All I’m saying is there’s a difference there. So talk to your accountant about that and you’ll find out that assignment’s a pretty, pretty good way to go. Anyway, I always say, that reading really good books are like a plunger for our brain, right? It just plunges all that crap that we get all day long, whether it’s our personal lives, whether it’s social media, whether it’s news, whatever. Do you have a couple of books that you can recommend to people that have been impactful on your business.

Mike:
Yeah, so I’m actually reading a book right now and I’m almost done with it. It’s called Psycho-Cybernetics by Maxwell Maltz. It’s a really great book. Yeah. So it was written in 1960 but a lot of the principles still apply. Basically what I like about it, you’re going to have goals and it’s good to set those goals. You’ll have external goals, but in order for you to reach those external goals whether it be, make more money or be fit, you have to set inner goals in order for you to accomplish your outer goals.

Mike:
So just different principles and how to do that and how to respond to different situations. So I really like that book. Yeah. Another book that I really like that I just finished reading it also was The Subtle Art of Not Giving a F-U-C-K. That’s a really good book too. If anybody needs a mind shift change or if you get stuck comparing yourself to other people, which is very easy to do in this business, that’s a good book to take a step back and, to just focus on your needs and where you want to go with your business-

Brent Daniels:
Love it.

Mike:
Or even as a person. So.

Brent Daniels:
Mike, how do people get in touch you?

Mike:
Yeah, you could just send me an email. My email address is mike.ic@ichomebuyers.com and yeah, I check it everyday. So if you have any questions about anything or you want to partner up on some deals, I’d be more than happy to help.

Brent Daniels:
I love it. Thank you man. This is incredible. I mean this is a big year. I mean it’s a big year and it just keeps… You’ve got to go on and, I’m really excited to see what the next year holds for your business and really excited for you to fly into Phoenix and come see me at my office one of these days. Every Friday I open it up to my TTP family members to come in and see the craziness that is my whole team. So it’s really awesome. So I’m excited for you to do that. And anybody, if you are interested in joining the most proactive group in real estate investing, it is the TTP Program.

Brent Daniels:
Okay. Go to wholesalinginc.com/ttp. In 36 videos over 10 days you’re going to get the whole, everything laid out for you. Instruction step-by-step on exactly how to absolutely explode your business through making cold calls. Okay, so check that out. Check out the page, scroll down, look at all the testimonials, see what the program’s about. If it feels good in your gut, sign up for a call. I mean, you’re going to be wonderfully pleased with that conversation that they have. So anyway, Mike, you’re the best. This is really, really, really fun, man. So-

Mike:
Yeah, I appreciate that. Thank you Brent. Thank you-

Brent Daniels:
Yeah, you’re incredible. So guys, everybody out there, I always encourage you to go out there and talk to people. See guys. Love you.

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