Posted on: July 30, 2020

Ever wonder what wholesaling is like for someone so young? Today’s guest is a proactive and determined 19-year-old who’s killing it in wholesaling. Zac Kehren and his partner, Alex are the owners of PGH Investors.

Thanks to Alex’s real estate IQ and Zac’s proactive efforts, they’ve been consistently closing deals in their area. Recently, they even netted $45,000 from a lucrative deal they did!

If you’re curious how to make a partnership work despite the age difference (Alex got into real estate 8 years before Zac was even born!), you’d love today’s awesome episode!

Key Takeaways

  • Alex’s real estate journey
  • How Zac’s wholesaling journey started
  • How Zac gets over his fear of talking to people
  • What Zac’s wholesaling journey has been like so far
  • Why talking to people consistently is crucial
  • What squadding up means and why it’s recommended
  • How they work as business partners
  • Breakdown of a deal they did
  • What made the seller choose them over the others
  • Why it’s important to close the deal as soon as possible
  • How people can get in touch with them

RESOURCES:

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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Episode Transcription

Brent Daniels:
Welcome everybody to the Wholesaling Inc. podcast. America’s number one podcast for new real estate investors, where we know that finding discounted properties is the most proven path to financial freedom. I am your host, Brent Daniels, Mr. TTP, and I am telling you if I can do it so can you. So let’s get started. I’ve got an incredible interview here. This is something that’s never been done on this show before, because I have one partner that has been doing real estate eight years before the other partner was even born. So this is old school and this is new combined, to talk about putting together a massive deal that they did recently. And I’m so incredibly excited to bring on Zac Kehren and Alex Deacon to the Wholesaling Inc. podcast. Say hello guys.

Zac Kehren:
Hi. How are you guys doing?

Alex Deacon:
Hello.

Brent Daniels:
You guys are in Pittsburgh, right?

Zac Kehren:
Yeah, Pittsburgh.

Brent Daniels:
Awesome. So first of all, why don’t I start with you, Alex? Why don’t you give us, right before we went live here, right when we started recording. You had said that you had started in real estate in 1992, kind of talk to us about your journey on how you got started and what you’ve done over the last 28 years.

Alex Deacon:
I was an auto mechanic and when I was 27, the guy next to me was buying real estate. I said, “Well, that’s cool. Well, I think I’m going to try that.” So bought my first three units before I even owned a house, my wife and I bought a three unit. And we rented it out, still rented from my sister at the house we were living in. And then bought another one. Bought another one after that. About two years later, I got my real estate license. I sold about 1200 homes in my career as an agent and in 2002, we started a real estate management company. We manage about 700 units. I own a pretty extensive portfolio. I was on Zac’s wholesale email list. And I knew his dad, because his dad does pest control for us. So I was impressed with his tenacity. He’s only, are you 20 yet?

Zac Kehren:
No, still 19.

Alex Deacon:
He’s 19. I don’t know if you’re 18 when I met you, but he’s young. I mean, most are off drinking beer and partying with their friends. And Zac is trying to build a business. So I was impressed. And after a few months of talking, we started the business of finding deals that are off market and we’ve had some pretty good success.

Brent Daniels:
Awesome. Well Zac, we don’t have to rewind the tape too long on your life. I mean, you started this essentially in high school.

Zac Kehren:
Yeah. I was just my senior year, about going probably halfway into it. It’s funny because I was actually outside walking the track with one of my friends and he mentioned this thing called wholesaling. And I was like, “Oh, what the heck is this?” And he said, “Yeah, you can make a heck ton of money off of it. And you don’t have to pay anything or do anything like that.” So I decided to take some initiative and do some research on it because, I for one was not the one to go to college. I did not do great in school. I couldn’t listen to people well. So I decided, “Oh, I’ll do some research.” And I did. I found you guys and Wholesaling Inc. And that’s when it all started. I just started listening to it day in and day out. I mean, I’d be working out at 8:00 AM, just listening to two or three podcasts a day and trying to just soak in as much information as possible.

Brent Daniels:
Weren’t you intimidated? I mean, how many conversations with adults have you had at that point? Let alone about buying their house or investing in real estate or just talking about their property and their problems. I mean, really that’s what we’re doing. What we’re doing is we’re solving problems of property owners in the community. And here you are, fresh faced 17, 18 years old, getting thrown into this. It intimidates people that are 40, it intimidates people that are 30. You know what I mean? How do you get over that? And what do you think is different about you?

Zac Kehren:
Man, I think what different is, it takes it down to even the people who you’re around. You have all these people who you’re around that tell you, “Oh, you can’t do this. Or you can’t make this kind of money or you can’t have your own business. You need to go to school and get your degree.” And that really drives my mindset to go ahead and believe that I can do this. I don’t need to listen to these people. I can do all these things. I can do what they’re telling me I can’t do. So that really drove me to go ahead and talk to people every day. And just find the problems that people need to have solved. I think that’s the only way that you can really do this business and make it really work, is just by solving people’s problems.

Brent Daniels:
Love it. And Alex, it’s interesting that you said that you’ve been licensed for so long and done 1200 deals. And you have a really deep, traditional real estate background. And so did I. I got licensed in 2004. I was a real estate agent forever and it was really difficult for me to turn off the, “Hey, I want to list your house. And I want to help you get the most amount of money for your house. And have this fiduciary duty that we have.” Versus, “Hey, I’m a cash buyer. Let me see what price is your bottom line.” Was that difficult for you to do or is that just… Talk to me about that.

Alex Deacon:
Well, it can be difficult. I’m very transparent with people, just completely open with them. “You could probably sell your home for more money, Mr. And Mrs. Seller.” But if you want it sold quickly we have a track record, we’re cash buyers, we’re not going to back out of a deal. You’re closing when you sign the agreement with us, this is your option. You sell with us, we’re sold, we’re closed, done, quickly. Or the traditional route, which you possibly can get more money, but there’s no guarantees.

Brent Daniels:
It’s crazy, Alex. I had these conversations with… Just in the beginning, it was referrals from family that had rundown properties. And I’d go and I’d sit down and I’d lay it all out. “Here’s how much you could make if you cleaned up the house a little bit and listed it. Here’s how much I can offer you for cash. It’s $50,000 difference. What do you want?” And they’d go for the cash offer because it was convenient. You know what I mean? It really does happen like that. I think a lot of people get stuck thinking, “It’s all about price. It’s all about price.” But the fact is 6 to 10% of the real estate market is in distress. And some of those people want to sell the property as quickly and as easy as possible. And it’s not about the price every single time.
I mean, that’s why we exist. And I think that’s some really important for people to understand is, it’s not always about the price. It’s about solving the problem that they have. Incredible. So Zac, let’s get back to you. So when you joined, you were making calls, you were getting out there, you were building up your experience level, having these high quality conversations with distressed property owners. Was it scary at first? I mean speak to anybody that’s listening that has never done a deal before, or maybe they’re younger or under the age of 25 or whatever. They’re excited about this, but maybe they don’t have a tremendous amount of experience in real estate or in just having conversations with a lot of strangers about property.

Zac Kehren:
Yeah, absolutely. I thought it was hard at first, it definitely was scary. Because you get those occasional people who will bad mouth you or say [inaudible 00:08:15], whatever they do to discourage you. But I just kept going. And one thing that I found out that really helped me, was every morning before I made these calls or every afternoon before I made these calls, I would either listen to you or I would listen to somebody who motivates me. I recommend Gary V. I don’t know if you’ve ever heard of him? But I’d go ahead and watch a little video on some motivation and then I get right into the calls. But I definitely did have some trouble in the beginning, just kind of soaking it in. Because I didn’t really know the script too well. And I didn’t know what I was talking about.
And that’s why I’m happy I met Alex, because he’s shown me a lot of things I was doing wrong. And now we’re getting probably five, six leads a week on the phone. It’s great.

Alex Deacon:
Probably more than that.

Zac Kehren:
Yeah. I think it’s more so of the consistency that matters. If you’re consistent with it, no matter how terrible you are on the phones, you’re still going to learn every day from just talking to the people.

Alex Deacon:
He learned a tremendous amount since we started working together. He’s able to price out some things now like, “Oh, this is what a kitchen costs and this is what… Oh, okay. And a four unit in this area is… That’s a good price. So yeah, let’s go look at it.” Because he had no zero market knowledge. And zero street smart knowledge. [crosstalk 00:09:40] real estate IQ was zero. But he knew half the battle was having some brains and having a work ethic and don’t take no for an answer. And that’s 50% of it.

Brent Daniels:
Well, I think the huge advantage, and I talk about this a lot, I call it squadding up. When you’re starting out in this business, the toughest part is, is this a deal or no deal, and there’s a lot of moving parts into that. What you call a real estate IQ. How much repairs does a property need? What are actual comparables for that property? How long are properties sitting on the market in that area? How desirable is an area? All of these things you know, you’ve been doing this. So you’ve got that part, you’ve got the real estate IQ mixed with his proactive efforts. I mean, it’s a really, really, really powerful combination.
And then the second hardest part, once it’s deal or no deal, is how big of a deal is it? Because I see people starting out and they get… Just from almost being naive, they lock up amazing deals, but somebody swoops in and they only make a little bit amount. And then those people go on and sell it for a fortune. Because some people just don’t know how big of a deal that they have.
So I mean, you guys know this, I’m really speaking to the audience here. If you feel like you need help with the market knowledge, if you feel you need help, is this a deal or not a deal? And how big of a deal is this? Then find somebody like Alex, that you can get together with, squad up with, partner with so that you can get that experience. And so that you guys can both share. It doesn’t matter if you’re splitting the profits. It matters that you’re stacking the wins. And the more wins that you have, the more experience. And like you just said, he’s light years away. Zac’s light years away from where he was before he started with you. And that was February. And we’ve had a pandemic and we’ve had all others things. You know what I mean? I mean, it’s just… You future pace this and you look into the future a couple of years, it’s going to be absolutely bananas. It’s going to be crazy. I’m really excited.

Zac Kehren:
I would definitely totally recommend squadding up with somebody. You don’t have to prove yourself just by doing something yourself. If you’re having trouble or you can’t make the calls alone. For some reason you got to be with somebody else to make the calls. Go find that person. Because in the end of the day, all that matters is you’re really learning about the business and you’re getting deeper into it every day.

Brent Daniels:
But I think that you guys have something that’s unique that I think is really important to mention is, you know his dad, right? It’s not like he’s a stranger off the street saying, “Hey kid, send me some deals.” There’s a business relationship there or a personal relationship or whatever. And it gives you another layer of comfort to know that, “Okay, this person has my best interest in mind. I can work with them.” As opposed to just trying to find the biggest dude out there, that’s doing the most deals or the biggest gal out, there doing the most deals and trying to partner up with them. Where they just want you to send the deals, they keep 90% or whatever. And you don’t really learn anything.
Now you’ve got firsthand… I mean, you’re at his house right now. I mean, that’s beautiful. I mean, that’s really great. I mean, a lot of people don’t have that experience, but because they think that they have to go find somebody that has these big offices, that have these big teams, that have these big machines and be a cog in the wheel. You don’t have to. Find somebody that you can work with that’s going to pour into you and give you that mentorship. Which I think is just absolutely fantastic. So really great. So between the two of you guys, what does it look like? Do you guys divide up, who does what? Or is it basically Zac you’re hunting and Alex, you’re just making sure that he’s actually hunting something you can eat?

Alex Deacon:
He knows the systems, the texts, I don’t know any of that.

Brent Daniels:
Right, the [inaudible 00:13:25]. Yeah.

Alex Deacon:
Exactly. We do talk about where we spend our money, what’s working, what’s not working. We’re still in the infant stages. And with your help too, based on what Zac was telling me, that you’ve helped him a lot, save a lot of time. Because we don’t know what works and what doesn’t. But once he gets a deal, he sends them to me. I’ll probably look at, I would say at least two a day. Right?

Zac Kehren:
Yeah, two a day.

Alex Deacon:
I think today I looked at one, two, three, four, five today. And he just sends them to me. I literally, in 15 minutes, I’ve dissected each one, total of 15 minutes. And one’s a tremendous potential deal. One’s a waste of time. The other one’s a waste of time. One has potential, but Diamond has to drive by it first. The other ones iffy. So, I tell him all the time, half the battle is just knowing when not to spend time on something.

Brent Daniels:
100%. Especially don’t spend time with people that will never do business with you. They will string you along and string you along and string you along. And if their timeline is indefinitely, it’s never going to happen. Some people are just lonely. Some people just want to talk to you, some people just want you to come to their house. Right, you know? I mean Alex, you’ve been doing this a long… People just want you to come over and check out their property and tell them what you think about it. You’ve got to focus on the people that are going to do business with you.
And we break this business, the wholesaling business into three parts. Lead generation, which Zac is in charge of. Conversion, you can see Alex planning this, making sure that he’s not going after deals that aren’t really deals. And then exit strategy. Lead generation, conversion, exit strategy. And the exit strategy, you guys have options because you’ve got so much experience. You can wholesale it, you can [inaudible 00:15:10] it, you can flip it, you can keep it, you can whatever.

Alex Deacon:
The one thing I bring to the table that helps Zac tremendously is the capital and the knowledge. So we can hold on to the really good deals for long term. And the ones that… The one we just sold, we made a very nice… It wasn’t a commission, we actually bought it, put it in our name and then sold it in a matter of total three months. We just sold it as is. But if we would have rehabbed it and flipped it. We would have probably made double, maybe triple. But right now, Zac and Diamond, they were looking for now money. And I said, “Well, this is a good one. Let’s just sell it. Let’s get now money. Let’s not prolong the potential profit.” Because the market could collapse and we could end up with the same profit with all that work and time and capital invested. So it was a good deal. It was one we maybe will keep in the future, but this one was just let’s sell it and make a nice profit and move on.

Brent Daniels:
I love it. But the beautiful thing is you’re building a system to be able to source those opportunities. So there will be other ones that come along. You know what I mean? But I think that can be a trap, but I’m glad that Alex is part of your life Zac, because we get that drug addict feeling where we want to make the money, make the money, make the money, make the money. And it’s all short term gains. We’re not thinking longterm. Once you get to the point where you’re comfortable, you’re not getting over your skis too much with your expenses. You can start building actual wealth as opposed to just buying a bunch of whatever, liabilities. And so yeah. So Zac, break down this deal for me. Let’s sink our teeth into this big deal because I love talking about getting deals, but I love talking about getting massive deals. So first let’s break it all the way down. What list was it? How’d you find them, the whole deal?

Zac Kehren:
Okay. So this is crazy because this deal wasn’t even on a list. I was actually driving for dollars and I came across a for sale sign. It was in a rough neighborhood and I was like, “Well, you know what, heck with it, I’ll just give it a call.” So I gave it a call. The lady answered the phone. And it was funny because I think it was her son-in-law that lived in one of the buildings, so there was two units, and they were completely demolished inside. Both of them were complete guts.
So I talked to her for about three months and she was in a situation where the inside of a place was so bad, it wasn’t really even livable. And the guy had kids living in there. So I told her, I said, “Listen, we’ll help you get these kids into a nicer place. We’ll take this and just get rid of it for you. We’ll just take care of your problem for you.”

Brent Daniels:
Now the owner, did she live in one of the units?

Zac Kehren:
No, she lived right down the street. It was just a couple units that they bought, I think in the seventies, that they had for the longest time. And she just decided, “Well, you know what? I think today’s the day to move on from them.”

Brent Daniels:
Something that they didn’t necessarily have the budget to keep up, to renovate every so often to keep it looking good. It kind of just fell to disrepair, just naturally.

Zac Kehren:
Yeah. And it was in an up and coming neighborhood that’s really turning into something beautiful. There’s a lot of new houses going up on the street. But just this area before, 20 years ago, was just really, really terrible. But I took the initiative to go ahead and drive for dollars down there and go ahead and call the number. And I think that’s what it’s really about, is just talking to the people.

Brent Daniels:
There was literally a sign in the front yard with the phone number on it.

Zac Kehren:
Yeah.

Brent Daniels:
And had nobody called it. I mean, was there a lot of competition or was it just you?

Zac Kehren:
Yeah, no. So she had one other guy and this was the funny thing. So we offered her 40,000 for the both units. And she had an offer for 120 or 130. And the reason why she went with us is because the other guy didn’t solve her problem. He didn’t want to talk to her about her kids. Talk to her about the people living there, how they can help them. Because, that was her true family. The kids that were living there were grandchildren. And the guy said, “Well, I’ll just give you 120 and they didn’t even talk about the grandchildren or the kid that was living there or the son-in-law. So I think that’s what separated the whole thing was, that versus the other guy, us versus the other guy.

Brent Daniels:
I came in $80,000 higher than you, but just came in like a bull and was like here’s your offer?

Zac Kehren:
Yes, exactly.

Brent Daniels:
It’s so crazy. So how did you help solve her problem? How did you help the family? How did you help? I assume they got out. Did they get out of the property before you closed? Or did you close with them in there?

Zac Kehren:
Yeah, we closed with them in there. And we did give options. Alex has multiple rentals, so we did give options of, “Okay, here are some properties that we have that you can possibly stay in.” So I think it all just comes down to, just solving the problem for the people. And going ahead and diving deeper than just being a buyer. And just being somebody like, “Oh, we’ll buy your property.” I think we went there once, we had coffee with them, we signed the contract. And then I went there a couple other times to talk to them and to get to know them better. And I think that was really important that I did that, because I think if I wouldn’t have done that she may have taken the other deal.

Brent Daniels:
Sure, sure. So you’re closing with them, you’re helping them move. You’re getting them into a position where they feel comfortable. Was there anything else? I mean, when we look at objections, really they’re just questions in the seller’s mind that haven’t been answered. Was there any other hurdles that you had to get over to be able to get her to commit to selling it? Because it sounds like she probably owned it free and clear, right?

Zac Kehren:
Yeah-

Brent Daniels:
Because she’s owned it since the seventies. So she could have taken her time and it could have fell into more… Was it just utterly to the point where it was almost unlivable?

Alex Deacon:
We offered her 40 and then she wanted to go see it. Because she hadn’t been in it for a while.

Zac Kehren:
Yeah, she hadn’t been there for 10 to 20 years.

Alex Deacon:
So she went and saw it.

Brent Daniels:
And she lives down the street?

Alex Deacon:
I mean just literally two, three minutes away. So when she went and saw it, and she’s without us or she just went over there?

Zac Kehren:
Yeah, she went over there without us and saw it. And she was just amazed on how terrible the place was. I mean, the bathrooms that these people were taking showers in were completely rusted out.

Alex Deacon:
In the basement that one. It was in the basement. Yeah.

Zac Kehren:
Yeah, it was pretty bad.

Brent Daniels:
So looking at it, the condition of the property was it needs total rehem. Her timeline was, could be a while, but really it was to the point now where you had convinced her to actually go to the property after 10 or 20 years of living down the street not going. So her timeline shortened quickly, as soon as she saw it. Her motivation was, she needed somewhere safe for her family to live. Right?

Zac Kehren:
Yeah. For the most part. The [crosstalk 00:22:20] was just worried about her grandkids living in the condition that it was after she saw it. She was just not happy with the way they were living.

Brent Daniels:
And then the price was 40,000.

Zac Kehren:
Yeah. Yeah. We got both those units and a lot for 40,000.

Brent Daniels:
Ooh, both units and a lot. Okay. And then, so you guys actually bought it. And then did you wait until they were out of it to sell it or did you sell it right away?

Alex Deacon:
As soon as we put it under contract, I had a couple buyers in mind. I shifted over to one kid and he’s like, “Yeah, I’ll take it.” So that was it. We already had pretty much a buyer before we closed. And once we closed it, a week or so went by and then we put it under contract with the new buyer. And then maybe 45 days later we closed.

Brent Daniels:
Why did you guys choose to close on it and resell it as opposed to just assigning it?

Alex Deacon:
I’d prefer in this case just to close and be done with it. And get her… I promised her, I was going to close at this time and that’s what I did. Because he wasn’t ready. And I said, “You know what? We’ll just pay the extra transfer tax and we’ll absorb that. So she can get out, and I keep my promise.”

Brent Daniels:
This is such a critical point for everybody listening. And if you want to watch this interview, go to Brent Daniels real estate on YouTube, definitely check it out, put a face to a voice. But this is a critical, critical point that Alex just mentioned because time kills all deals. I’m telling you, when you get a property owner that’s owned a property for that long, hasn’t been to the property for a while. It’s really difficult for them to make decisions.
So when they’re ready to make a decision, you shorten that timeline as soon as possible. I don’t care if you need to get a money partner. I don’t care if you need to close that deal, get that deal closed. Because if they would have left it for a 60 day closing period, she could’ve gotten wiggly. You don’t know who could have talked to her and poured honey in her ear and told her things that she could get more or don’t sell it or somebody else in the family wants to buy it. And all this other stuff that ends up being a tornado of emotions for the seller. Instead, just get the deal done. If you’re running into those scenarios, just close it. I think that’s a beautiful strategy. Perfect. What’d you guys sell it for?

Alex Deacon:
We sold it for 90.

Brent Daniels:
$90,000. So do you guys know the bottom line net that you made on it?

Alex Deacon:
We made real close to 45 after holding costs, interest we paid on the hard money loan that I got and transfer tax both ways. Yeah, we made 45.

Brent Daniels:
Awesome. Everybody listening and watching, listen to me. $45,000 from calling on a for sale by owner sign in the front of a house. Come on, one call. Hold on a second guys.

Zac Kehren:
All right. I’ve been waiting for that bell for a long time.

Brent Daniels:
That is incredible. I mean, it’s just such an inspiration. And listen, this isn’t rocket science. We’re not building rockets here. We’re just literally, we’re reaching out to distressed property owners and we’re finding out what their problems are. We’re understanding if they’re going to do business with us, so that we are making really efficient use of our time. And we are helping out the community. Now I assume that the buyer of that property is going to fix it up. He’s probably going to increase the values in that area. He’s going to increase the rents, if he decides to keep it and rent it out. I mean, it is a win win, not only for you guys making 45,000. But for him, for whatever he wants to do with it. And for the neighborhood, because now you’ve got this property that was rundown and almost unlivable, totally fixed up and renovated. It is a three way win. And it’s a blessing. You guys are a blessing to your community. And I love it. So really, really, really amazing.

Zac Kehren:
Yeah, it was awesome. It was definitely a great, great time because I really haven’t done any deals before that. We had a little garage that we sold for a nice little profit. But that was the first, really deal that we ever did. And it really felt amazing. It really did. I mean, I would totally recommend wholesaling to everybody who wants to get into real estate. Or even just buy and sell, whatever. Just get into real estate. It’s something awesome to be a part of.

Brent Daniels:
Awesome. And if people want to reach out to you, what’s the best way for them to reach out? Say, congratulations, maybe send you deals in Pittsburgh or have… You know what I mean? Joint venture on some stuff. How do they get ahold of you guys?

Zac Kehren:
Yeah. You can check out our Facebook page at PGHInvestors or our Instagram page at PGHInvestors as well.

Brent Daniels:
PJH Investors.

Zac Kehren:
PGH, like Pittsburgh, PGHInvestors.

Brent Daniels:
Got it. Love it. Thank you guys. Thank you guys so much for being on the podcast. Really appreciate it. Alex, thank you for your wisdom and guidance there for young Zac, who’s on an incredible path. He’s 19, just closed a $45,000. If I closed a $45,000 deal when I was 19, jeez, [crosstalk 00:27:28] holy cow. It’s just absolutely incredible. It’s mind blowing. It’s absolutely… You’re a true inspiration. And for everybody out there listening and watching, if you’re interested in joining the most proactive group in real estate investing, it is the TTP family. Go to wholesalinginc.com/ttp. That’s wholesalinginc.com/ttp. Scroll down, check it all out. If it feels good in your gut, sign up for a call. It’ll either be with me or one of my right hand guys. Other than that, thank you guys for being on the podcast. I really appreciate it, representing Pittsburgh. That’s awesome. And to everybody out there listening as always, I encourage you to talk to people. See you guys, love you.

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