Posted on: February 21, 2020
WI 368 | Closing Your First Deal

 

For most wholesaling newbies, finding their first ever deal is always the hardest. However, once faith becomes fact, finding the next ones becomes way easier. Case in point: today’s guest has successfully closed his first ever deal and he already has 2 others in the pipeline!

Just like most people, Marco Zapata knew he wanted more from life. He dreamt about having a portfolio of rental properties and becoming financially independent. While his first venture into wholesaling has not been easy (he thought about giving up countless times!), he persevered and his efforts were rewarded big time!

If you’re still in the process of finding that seemingly elusive first deal, you can’t miss today’s episode. You’ll not only learn the techniques Marco used; you’ll also be inspired by his journey!

How To Close Your First Deal With Marco Zapata

Episode Transcription

I’m super excited to be with each of you in this episode, where we will break down what we call wholesaling. For those of you who are new to this show, first and foremost, welcome. Let’s go back to this wholesaling term. What wholesaling is for those who are new reading this is simply the art of finding deeply discounted properties that you can then turn for a profit. Each episode is dedicated to interviewing someone that just found a discounted property and how they were able to turn that into a profit.

There are multiple ways to exit. Some people want to find these discounted properties so they can keep them as rentals. Some of them find them so they can fix and flip them and others find them so they can assign the contract to another investor and keep moving forward. We’re going to break this down in this episode, so bring out a piece of paper and a pen and get ready to jot down some golden nuggets because we’re going to break it down step-by-step how an individual did their first deal, how they’re able to find it, and what was the marketing channel.

They’re going to share everything. Get ready to jot it down. Don’t let this knowledge go to waste. Write it down so that you can get out there and start taking action and get closer to your first deal as well. This individual already has two more deals under contract that are going to be closing. It’s exciting stuff. In this episode, we have Marco Zapata from Houston, Texas. He’s been wholesaling for a few months, part of the tribe, and just did his first deal. He’s going to break this down now, so let’s get ready. Marco, how are you doing?

I’m doing great. Thanks so much for having me.

I am so excited to have you. I remember our Wednesday calls when we get on the phone call and talk through all the different things you’re going through in getting this first deal. I’m so excited we’re at this moment. Here you are. You’ve done your first deal. It’s closed. There’s money in your account. Excitingly enough to add to this is now that you’ve done one deal, you start to see this little snowball effect. You already have two more deals coming in, and we’ll briefly touch on this at the end. Tell us a little bit about you. What is it you do? Why did you get into wholesaling?

It’s been a crazy ride. I’m originally from San Antonio, Texas, born and raised. I’ve had a background in sales my entire life. I moved to the Houston area about a few years ago and started with AT&T. I was working in some retail stores as a store manager. I worked my way into the corporate side. I love the job that I did on the corporate side, where I was negotiating contracts for AT&T to build their fiber services for multifamily new construction projects.

I just felt like there was something more, and I wanted to do something for myself. It’s always been a long-time dream of mine to eventually own a portfolio of rental properties and gain that wealth. I knew that Corporate America wasn’t going to last very long. I thought, “If I want to go in that direction, I need to be a real estate agent.” I went and got my real estate license and started doing the real estate agent thing on the side along with my job at AT&T. I got in that role, and I was like, “It’s cool, but there’s got to be something more.” I then come to find out that in order to get properties, you don’t even need to have a real estate license.

In your mind, were you thinking this? When you got into it, you thought the only way to get into real estate is I have to be a realtor. Is that the belief you had in your mindset?

My entire life, what was holding me back was either I didn’t have the time or the money. Finally, I was at a point in my life where I had both time and money. I’m doing my job and wandering around. My wife’s like, “What are you going to do?” I’m like, “I guess I better get to it.” I thought, “Go get your real estate license and become a real estate agent. That’s how you acquire properties eventually. You’ll come across deals.”

How did you come across wholesaling? You’re in the real estate space. You’re doing the traditional listing of properties or helping buyers find properties. What made you cross paths and start to hear and learn about wholesaling?

One of my long-time best friends from college, Michael Ireland-Castañon, was a college roommate of mine. He got into real estate as an agent a few years before me. As I got my license a few years later, he was at the beginning of his stage of transitioning into wholesaling. I’m working my corporate job, doing these open houses on weekends, and running the rat race. We go out a couple of times, and he’s like, “I made $20,000.” He didn’t tell me he was wholesaling. I’m like, “$20,000 in a month. Wow.” A couple of months later, I’ll see him, and he’s like, “I made $50,000 last month.”

You are like, “Are you selling drugs? What are you doing?”

I was like, “I’m quitting my job. This is crazy.” I started Wholesaling Inc in June 2019. He showed me the ropes and gave me a couple of tips for getting started. He expressed how much Wholesaling Inc has helped him and how it’s the best out there. I trusted him, so I went for it.

To help people understand, here you were working full-time. Are you still working full-time as a corporate job and doing this on the side, or did you say, ” I’m going all-in now?”

Ideally, I was going to keep my corporate job at least until the end of 2019. Right as I started Wholesaling Inc, I got laid off from AT&T, and they gave me about 30 days. I’d never been laid off before.

Did you find that like a curse or a unique blessing? Are you thinking, “How am I going to do this? Now my back’s against the wall. Let’s roll.”

I feel like I perform best when my back is against the wall. I felt like it was God telling me, “Go at it.” I was like, “Six more months in Corporate America.” He was like, “Now.” You hear about it all the time when it happens to friends, family, or people you know, but when it happens to you, it’s a gut punch. I never underperformed. I was always over 100% attainment of my goals. It came as a big surprise to me. At the same time, it awoke me like, “I can take a job anywhere, and they can lay me off at any time no matter what I’m doing or how good I’m doing. I don’t want that to ever happen again.” I got laid off and went full force with wholesaling.

We’ve already got this beginning prep to help people reading this blog understand what it is you can do. We’ve had many walks of life. For those that have read many of our blogs, you’ll see that they come from all backgrounds, from people with real estate knowledge and no real estate knowledge. Some are doing it part-time, and some are now forced to do it full-time, but it works in all areas. You’ll see that you can pick how it’s going to work for you. Let’s break this down. Let’s get going into this. Let’s go right into your first deal and start right with how you were able to come across this lead. What was the marketing channel you were using to acquire this lead?

Technically, I got my first deal under contract about four months in. It was set to close about 2 or 3 weeks later in November of 2019. I was going to make about a $27,000 assignment fee. Long story short, that fell apart on closing day, and I learned a lot from that deal. Looking back but at that moment was another gut punch.

You’re like, “I need this. Don’t do this.” What got you to find it? How does one come across? Where do you do direct mail? What was the marketing channel you used to find this lead in the first place?

That was direct mail tax delinquent.

If you think you’re going to fail, you will. If you think you’re going to succeed, you will. So make sure you’re standing firm on the positive thoughts instead of the negative.

You’re sending out a postcard, and you’re sending it to people that are behind on their property tax.

Yes.

What does one do to find something like that? I know it’s different in every state, but is that something that’s easy that you find online? Is that something you have to go down to the courthouse? How do you come across that?

It’s not hard. It’s just a little tedious, especially if it’s your first time doing it. It takes probably a little longer than you expect because you don’t know what you’re doing and are scared to do the wrong thing, but you all are always about taking massive action and progress, not perfection. I kept that in the back of my mind, and it was easy. Looking back, you go to the tax office downtown. You pay $50, and then they give you a list. The hardest part was getting it converted to a way that the mail house could use it. I was hiring a virtual assistant because it was a big waste of time.

They get this list and put it into perspective. They get over to a mail house. It starts sending out. How much mail were you out per week or month?

At the time, I was sending out 8,000.

Is that all at once or over X amount of weeks?

It was all at once the first time. It was a bit overwhelming, especially the first one.

When you say this, my eyes are dropped because even at the level I’m at, we send out close to it, but we send out 6,500 to 7,000 every single week as a team in place. I can only imagine your phone almost on meltdown since you were the solopreneur wearing all the hats.

All of a sudden, after a few weeks, it went completely quiet like crickets for three weeks. I got on a call with you, and I was like, “I don’t know what’s going on.” You helped me structure it to send it out weekly or every other week and break it down so it’s spread out evenly and I can keep up. This is a good point to hit on, and this is crucial.

Eight thousand is a ton. For those reading this, that is a ton of mail to send out all at once. Especially with a one-man show, that will be very tough to fulfill. In fact, a lot of leads will go to the wayside because you won’t be able to keep up. You’re almost forced to go over the low-hanging fruit and miss on all the deals that aren’t low-hanging fruit, which happens to be that 70% of the deals are not low-hanging fruit.

A ton of deals still sit in your pipeline. This is something crucial. If you’re going to be doing that, the main thing is you break it down into 2,000 and do it over a month. You can do 2,000 pieces a week. That gets to be more consistent where you’re consistently getting on the phone, setting appointments, making offers, and getting contracts versus that big, huge shotgun approach that I imagine sitting here, thinking, “I can’t imagine what you’re doing.”

You’re probably overwhelmed like, “That’s a lot of phone calls. How do I do this?” Keep going. This lead comes in and reaches out to you. They’re behind on taxes. What did it sound like? What was the conversation that allowed you to know that, “There’s some motivation here and an appointment that I want to look at?” Let’s talk about the first deal that closed. Did that come from tax delinquent and mail as well?

No.

Where did that one come from?

That came from driving for dollars. At one point, I didn’t want to sit around waiting for mail and calls to come in. I figured, “Let me just get moving.” I’m full-time on this. I got a lot of time on my hands for the most part. I started driving for dollars through the DealMachine app. I can’t tell you how many neighborhoods I went through and how many properties I added to the list. It seemed like a lot of work, but I started doing this in July 2019. In 5 or 6 months, I didn’t get any leads from that specifically. Finally, once deal one fell apart and not getting any anywhere with driving for dollars, I was down in the dumps and thinking about quitting many times

I love the reality here. I’m grateful you’re being vulnerable enough to share that this is not easy. It’s not a get-rich-quick scheme. This is something that is going to take a lot of consistent imperfect action so that you can move forward. What got you this deal? You said driving for dollars. Is this something that, through time, you call them multiple times? Are you skip tracing and cold calling them? Are you sending postcards to them?

I’m consistently cold calling and leaving messages. Even if you’re not consistently calling, maybe they pick up on the first ring, and it happens to be the right place at the right time. In this specific instance, I called him. It was his first time picking up, and I asked him if he wanted to sell. I followed the script with Brent Daniels.

WI 368 | Closing Your First Deal

Closing Your First Deal: Wholesaling is not a get rich quick scheme. This is something that is going to take a lot of consistent imperfect action so that you can move forward.

 

I said, “Are you looking to sell?” He said, “Yes, I would.” At that point, I froze up because I didn’t even know what to say because I’d never gotten a yes before, so I was like, “Crap.” I went along with it and scheduled the appointment. I went over there and ran the numbers. I’m like, “I need to get it at about this in order to make this.” I go over there and get on the appointment. As soon as I get there, he’s like, “I want to sell my house but not this house I’m living in. It’s next door.” All the numbers I had in my mind, I threw out the door. I was like, “Great.” It’s a smaller house. It’s in worse condition. He had already dropped the price. He wanted it around $60,000.

I can hear that it already sounds like a deal at $60,000, or are you like, “That’s too high with the condition it’s in?”

I thought I was going to make $20,000 to $30,000 on the numbers that I initially thought I was going to see for that house.

What was the motivation behind it? What was driving him to say, “I want to sell this home?”

He had a tenant in the house next door that was behind on their payments, and he wanted them out. He also wanted to use the money to buy a better home for his family because it wasn’t in a very good neighborhood.

There’s the driver, a bad tenant, he wants to upgrade a little bit of his style of living, be in a different neighborhood, cash out, and move on. You hear this. Is there a time crunch on this? Was he like, “I want to move fast, and I’m looking for someone to do an offer now?” What did that look like?

He said he wanted to move pretty much as soon as possible, but he had to talk about it with his wife. He kept using the spouse objection. He was like, “She wouldn’t come out and talk with me.” You know how that can go.

Ultimately, you hear this motivation and go through it. Did you make an offer and then leave? What did that look like so people can start to know how you’re able to put this under contract?

I looked at the property and had to wing it on the numbers. Based on the numbers I had from winging it, I was like, “I got to get it at least in the $50,000 to $53,000 range.” I offered $53,000. He was still dead set on $60,000, and then we came to the middle at about $55,000.

Is this something you got on the spot? Is this something he’s like, “Let me talk to my wife, and I’ll call you back?”

I was prepared. I was like, “I want to get this done now,” but he wasn’t budging. You don’t want to push it too hard at that point. I pushed it as far as I knew and could, but you don’t want to come off desperate. “You don’t want to chase the dog,” as Tom Krol always says. I swallowed it and hoped for the best. I ended up leaving that day. I remember feeling defeated. Tom and Cody always say like, “You got to get that signed.” I can imagine Tom’s voice like, “Get off the phone. Go back over there and get it under contract.”

I was devastated about it. I followed up for weeks and didn’t hear back. He didn’t return my messages. I’m like, “This one’s dead.” I sent him another offer in the mail. I was like, “Sorry, we weren’t able to come to a middle point here on the offer, but here’s my offer in case you’re interested.” Three weeks went by, and Christmas rolled around.

The day after Christmas, I’m about to drive my parents to the airport so they can leave. I get a call, and I pick up. He’s like, “This is Juan. You’re interested in buying my house. Are you still interested in it?” I’m like, “Yeah.” He goes, “We’re ready now. I talked to my wife.” I thought this deal was dead. I got in the truck, and I was staring at my phone. My wife’s like, “What’s wrong?” I was like, “Some guy wants to sell me a house. I couldn’t believe it.”

You’re shocked. She’s like, “It’s like you saw ghosts. What just happened?”

I dropped everyone off, headed over there, and got the deal signed. I put it under contract. I signed it at $55,000. When he came home, I rerun the numbers. I’m looking at it, and I’m like, “In order for me to make money on this deal, I would have had to have gotten the contract under $54,000.” I was like, “I’m going to go for it and see what happens. I at least want to make $5,000 on this deal.” I blasted it out for $65,000, knowing that based on numbers, investors were going to talk me down.

You’re trying to assign it. You put this under contract. It’s an assignable contract, and now you’re marketing the contract to investors and cash buyers so they can come in and buy the home.

That’s correct. At the time, it showed that a lot of people were looking at the property, but due to holidays, I was trying to schedule a time where people could take a look at the property. It was tough because it was the day after Christmas. A lot of people are out of town. New Year is rolling around. I did it the day after New Year, but I got an email from an investor. He’s like, “I don’t even want to look at it. What do I get to do to get it under contract?” Usually, you don’t want to take the first offer you get. In this case, I’m looking back. I’m glad I did because he ended up being the only offer I got on that house.

Did you tell him a price, or did he tell you the price like, “What do you want to buy it for?”

Never quit on yourself and do whatever you can to quickly get out of your own way.

I blasted it at $65,000, so he knew he was at $65,000. We ended up checking out the property the next day after I got it signed. He ran some numbers. He’s like, “It’s at a good price,” but what it came down to was the landlord didn’t let me get into the home initially. He only let me see certain parts of it because there were tenants there. On the appraisal district websites and on Zillow and things like that, they tell you that it’s a 3-bedroom, 2-bath. We finally walked in and saw everything. There was a 3-bedroom, 1-bath, so that threw off the comps.

He’s like, “I’m going to have to add a second bathroom in order for this to even make sense.” He’s like, “Will you do $60,000?” I was like, “That’s where I wanted to be anyway.” It was my first deal. I know there’s a lot, and we agreed on $60,000. I got the earnest money. I got it under contract and closed it within a couple of weeks.

This is phenomenal. You know what’s coming. Let me put this number together, so it makes sense to everyone. You put it under contract at $55,000 and send it out $65,000. He agrees to $60,000. You make $5,000 on this deal. Is that correct?

Yes.

You know what’s coming. How does that feel to know that deal number one is completely out of the way, and you now have this rolling momentum where deals number 2 and 3 are going to be closing as well?

It’s unbelievable. It’s a dream come true. I remembered a few months ago. There were numerous times when I thought, “Why can’t this work for me?” I thought about quitting on a handful of occasions. It was tough emotionally and mentally, but I’m glad. Even though you hear people getting the $20,000, $30,000, or $40,000 assignments, it was a weight off my shoulder to get this deal done, even if it was at $5,000.

You will always remember this first deal. It will always be something you remember. It will never be, “It’s not big like everyone else.” Who cares? It is something you will always remember because this is the day it turns from faith to fact. It’s now something that you don’t have to say, “It’s too good to be true. Will it ever happen for me?” It happened, and because of it, I’ve already seen a confidence boost. I’ve seen your reality change, and you are physically seeing it yourself because, since that deal, you have a 2nd and 3rd. Let’s just high-level talk about this. Your second deal that you’re about to close on, what will you make on that deal?

Twelve thousand dollars.

On the third deal that’s coming up to close, what are you going to make on that deal?

Twenty-six thousand dollars.

This is huge. That’s $38,000 plus $5,000. It’s $43,000 between three deals. That is every bit as good or even bigger than most people’s full-year salaries. This is incredible.

It’s life-changing.

It’s real. You had a struggle. You had the challenges faced you in every form and degree. Your back was against the wall. You didn’t have a job to bring in income. You’re doing everything you can, and here, you kept digging and found the diamond. Here you are doing it over and over again. That is the story that needs to be said and yelled at the top of mountains for people that says it doesn’t come easy. This is a very real-life story. It is tough. Entrepreneurship, in general, is not easy.

That’s why most people won’t do it but look at the game-changing events that now have taken place in Marco’s life, where he has done almost $43,000 in about a 30-day period of closing, and that’s just the beginning of the year. He’s going to keep moving forward throughout this year, doing more than this.

Marco, thank you so much for sharing this story with us, but I will not let you go until we finalize this show how we always do. I have two questions. The first one is, what’s a good book that you’re currently reading or maybe read in the past a little bit that’s been game-changing, which is something that’s helped you become someone better?

This is everyone’s go-to, but I can’t go without saying The Go-Giver.

The Go-Giver is huge. This is a great book. Tell me why you like that. What is it about The Go-Giver that says, “I have to say it even though a lot of people have said this book?”

It opened my eyes to like, “Being open to receiving is just as good as being open to giving.” Sometimes when God tries to bless you with a gift, you’re denying it because you’re too proud of it. You don’t feel like you’re worth it. It’s a game-changer to realize that you also need to be open to receiving. It’s going above and beyond to do whatever you can to help others.

WI 368 | Closing Your First Deal

Closing Your First Deal: You are the only person who can hold yourself back from what you want to achieve.

 

Instead of the go-getter, be a go-giver. I love it.

The one that’s opened my eyes and mind to some things I’ve been dealing with is The New Psycho-Cybernetics by Maxwell Maltz. It’s an old one.

This book, what is it specifically about at a high level? Is it psychology? Is it a mindset? What is it?

It’s both. In a nutshell, it’s psychology and mindset. To put it into simple terms, if you think you can’t, you can’t, and if you think you can, you can. Whatever you want to achieve, imagine it, set your mind to it, and let your automatic mechanism go full force with it. If you think you’re going to fail, you will. If you think you’re going to succeed, you will. It’s making sure you’re standing firm on the positive thoughts instead of the negative.

This is the second question. Looking back now, what would you have done differently or done the same? You can take it either way.

The key here is to never quit on yourself and do whatever you can to quickly get out of your own way right out of the gate. The biggest thing I struggled with was not believing in myself. It came to a point where so many people around me believed in me, and I couldn’t believe that I couldn’t believe in myself. You are the only person who can hold yourself back from what you want to achieve.

That is such a killer mindset, but I love how you took a second to think about that. Never quit. That’s awesome, and that’s going to be valuable to those reading this. Marco, thank you again so much for being on this episode. I know many individuals are reading this for the first time or multiple times. Now, something unique about your story was able to connect with them, resonate with them and help them understand that, “I can do this.” It’s something unique about your story that could push people to that next level. Thank you so much for taking the time to share this.

Cody, thank you so much. It’s an honor.

Rhino Nation, I’m grateful you guys were able to join us in this episode and learn from Marco Zapata, who did his first deal and has multiple deals coming up in the future. This is a real-life story of breaking down the fundamentals, principles, and actions he had to take. Was it easy? No, far from it. Get out there and start taking massive imperfect action. This show is not to just feel good and be like, “That’s cool.” It’s meant to jot down the gold nuggets, the value that comes from these episodes. Get out there and start acting upon those same principles so that you can go out there and consistently find deeply discounted properties.

If you can find deeply discounted properties consistently, you will be able to make a lot of money in real estate. If you need help doing that, go over to www.WholesalingInc.com, where you can then book a call and get on the phone with someone from my team where we can break down your goals, go over them and assist you and show you how we can help you achieve them through wholesaling real estate. Until next time, get out there and take massive imperfect action. We’ll see each one of you on our next episode. God bless and take care.

 

 Important Links

 

About Tom Krol

WI 385 | TTP CallAs the founder of Wholesaling, Inc., Tom Krol shares his insights and expertise in the field of real estate wholesaling with aspiring wholesalers. He established the business by first selling his belongings to provide a funding source for an effective marketing campaign. Mr. Krol closed his first deal as a result of those efforts has built athriving Real Estate Wholesaling business.

Tom Krol has distinguished himself as an in-demand speaker, author, and coach, as well as the creator of the Wholesaling Inc Podcast, which centers on next level tips, tactics and strategies for aspiring wholesale investors. He has appeared as a guest on more than 10 major real estate podcasts, including Bigger Pockets, Real Estate Investment Mastery (with Joe McCall and Alex Joungblood) and Trevor Mauch’s Investor Carrot Podcast.

In gaining such explosive success in the Real Estate Wholesaling arena so quickly, Tom took his expertise and desire to help others and created the Wholesaling Inc coaching program.

The Wholesaling Inc coaching program has created a tremendous amount of successful Real Estate Wholesaling investors. Many of Tom’s students have generated tens (and some even hundreds) of thousands of dollars in income. The reason why Tom’s program has helped so many people find success in Real Estate Wholesaling is his “Instruction over education” approach.

This solves the “information overload” problem that so many aspiring Real Estate investors face. By handing people a step by step “roadmap” to follow (and giving people specific instructions to follow on a daily basis), his program takes all the guesswork out of the equation and is considered one of the best training programs in the Real Estate industry.

 

About Cody Hofhine

403Cody 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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