Posted on: July 30, 2020
WI 482 | Wholesaling Deal

 

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!

How One Scrappy 19-Year-Old Just Closed A $45,000 Deal! With Zac Kehren

Episode Transcription

I’ve got an incredible interview here. This is something that’s never been done on this show before. I have one partner that has been doing real estate eight years before the other partner was even born. This is old school and new combined to talk about putting together a massive deal that they did recently. I’m so incredibly excited to bring on Zac Kehren and Alex Deacon to the show. Say hello, guys.

Hi. How are you guys doing?

They are in Pittsburg. Alex, you had said that you had started in real estate in 1992. Talk to us about your journey on how you got started and what you’ve done over the several years.

I was an auto mechanic. When I was 27, the guy next to me was buying real estate. I said, “That’s cool. I’m going to try that.” I bought my first three units before I even owned a house. My wife and I bought a three-unit. 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 1,200 homes in my career as an agent. 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. I knew his dad because his dad does pest control for us. I was impressed with his tenacity. I don’t know if you’re 18 when I met you, but he’s young. Most kids are off drinking beer and partying with their friends. Zac is trying to build a business. I was impressed. 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.

Zac, we don’t have to rewind the tape too long on your life. You started this in high school.

It was my senior year, about going probably halfway into it. I was outside walking the track with one of my friends and he mentioned this thing called wholesaling. I was like, “What the heck is this?” He said, “You can make a ton of money off of it. You don’t have to pay anything or do anything like that.” 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. I decided, “I’ll do some research.” I did. I found you guys and Wholesaling Inc. That’s when it all started. I started listening to it day in and day out. I’d be working out at 8:00 AM, listening to 2 or 3 podcasts a day and trying to soak in as much information as possible.

Weren’t you intimidated? How many conversations with adults have you had at that point? Let alone about buying their house, investing in real estate or talking about their property and their problems. That’s what we’re doing. We’re solving problems of property owners in the community. Here you are, fresh-faced 17, 18 years old, getting thrown into this. It intimidates people that are 40 or that are 30. How do you get over that? What do you think is different about you?

The difference is, it takes it down to even the people who you’re around. You have all these people who tell you, “You can’t do this. You can’t make this money. You can’t have your own business. You need to go to school and get your degree.” That 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. That drove me to go ahead and talk to people every day. Find the problems that people need to have solved. That’s the only way that you can do this business and make it work, is by solving people’s problems.

Alex, you’ve been licensed for so long and done 1,200 deals. 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. It was really difficult for me to turn off the, “I want to list your house. I want to help you get the most amount of money for your house, and have this fiduciary duty that we have.” Versus, “I’m a cash buyer. Let me see what price is your bottom line.” Was that difficult for you to do? Talk to me about that.

Take the initiative and do some research if you really want to learn. Start by listening to podcasts to just soak in as much information as possible.

It can be difficult. I’m very transparent with people, completely open with them. “You could probably sell your home for more money, Mr. and Mrs. Seller. 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 are no guarantees.”

In the beginning, it was referrals from family that had rundown properties. I’d go, 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?” They’d go for the cash offer because it was convenient. It does happen like that.

A lot of people get stuck thinking, “It’s all about price.” The fact is 6% to 10% of the real estate market is in distress. Some of those people want to sell the property as quickly and as easy as possible. It’s not about the price every single time. That’s why we exist. That’s important for people to understand, it’s not always about the price. It’s about solving the problem that they have.

Zac, let’s get back to you. 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? Speak to anybody that’s reading that has never done a deal before. Maybe they’re younger or under the age of 25. They’re excited about this, but maybe they don’t have a tremendous amount of experience in real estate or in having conversations with a lot of strangers about property.

I thought it was hard at first. It was scary. You get those occasional people who will bad mouth you or say whatever to discourage you. I kept going. One thing that I found out that helped me, was every morning 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 Vee. I don’t know if you’ve ever heard of him. I’d go ahead and watch a little video on some motivation and then I get right into the calls. I had some trouble in the beginning, soaking it in. I didn’t know the script too well. I didn’t know what I was talking about. That’s why I’m happy I met Alex. He’s shown me a lot of things I was doing wrong. We’re getting probably 5 to 6 leads a week on the phone. It’s great.

Probably more than that.

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 talking to the people.

He learned a tremendous amount since we started working together. He’s able to price out some things like, “This is what a kitchen costs. That’s a good price. Let’s go look at it.” He had zero market knowledge. Zero street smart knowledge. Real estate IQ was zero. He knew half the battle was having some brains, having a work ethic and don’t take no for an answer. That’s 50% of it.

The huge advantage, I call it squadding up. When you’re starting out in this business, the toughest part is, “Is this a deal or no deal?” There’s a lot of moving parts into what you call a real estate IQ. How much repairs does a property need? What are the actual comparables for that property? How long are properties sitting on the market in that area? How desirable is an area? You know all of these things. You’ve been doing this. You’ve got the real estate IQ mixed with his proactive efforts. It’s a powerful combination.

WI 482 | Wholesaling Deal

Wholesaling Deal: When people dictate what you can and cannot do, it really drives your mindset to go ahead and believe that you can do this.

 

The second hardest part once it’s deal or no deal is, “How big of a deal is it?” I see people starting out and they lock up amazing deals, but somebody swoops in and they only make a little bit amount. Then those people go on and sell it for a fortune. Some people don’t know how big of a deal they have. If you feel you need help with the market knowledge. If you feel you need help or is this a deal or not deal and how big of a deal is this, find somebody like Alex, that you can get together with, squat 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. The more wins, the more experience you have. Like you said, Zac’s light years away from where he was before he started with you. That was February 2020. We’ve had a pandemic and other things. You look into the future a couple of years, it’s going to be absolutely bananas. It’s going to be crazy. I’m excited.

I would recommend squadding up with somebody. You don’t have to prove yourself 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. All that matters is you’re learning about the business and you’re getting deeper into it every day.

You guys have something unique that is important to mention. You know his dad. It’s not like he’s a stranger off the street saying, “Kid, send me some deals.” There’s a business relationship there or a personal relationship. It gives you another layer of comfort to know that, “This person has my best interest in mind. I can work with them.” As opposed to 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 want you to send the deals, they keep 90% and you don’t learn anything.

You’re at his house. That’s beautiful. That’s great. A lot of people don’t have that experience because they think that they have to go find somebody that has these big offices, big teams, 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 is fantastic. Between the two of you guys, what does it look like? Do you guys divide up? Who does what? Is it, Zac, you’re hunting, and Alex, you’re making sure that he’s hunting something you can eat?

He knows the systems like texts. I don’t know any of that. We do talk about where we spend our money, what’s working, what’s not working. We’re still in the infant stages. With your help too, based on what Zac was telling me, you’ve helped him a lot, saving a lot of time because we don’t know what works and what doesn’t. Once he gets a deal, he sends them to me. I’ll probably look at least two a day.

I look at five and he sends them to me. In fifteen minutes, I’ve dissected each one. One is a tremendous potential deal. One is a waste of time. The other one is a waste of time. One has potential, but Diamond has to drive by it first. The other one’s iffy. I tell him all the time, “Half the battle is knowing when not to spend time on something.”

Especially don’t spend time with people that will never do business with you. They will string you along. If their timeline is indefinite, it’s never going to happen. Some people are lonely, want to talk to you and want you to come to their house. People want you to come over, 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.

We break this wholesaling business into three parts. Lead generation, which Zac is in charge of. Conversion, you can see Alex playing in this, making sure that he’s not going after deals that aren’t deals, and then exit strategy. Lead generation, conversion, exit strategy. The exit strategy, you guys have options because you’ve got so much experience. You can wholesale it, wholetail it, you can flip it and keep it.

The one thing I bring to the table that helps Zac tremendously is the capital and the knowledge. We can hold on to the good deals for the long term. The one we sold, we bought it, put it in our name, and then sold it in three months. If we would have rehabbed it and flipped it, we would have made double, maybe triple. Zac and Diamond were looking for now money.

The only way that you can really do this real estate business and make it really work is just by solving people’s problems.

I said, “This is a good one. Let’s sell it. Let’s get now money. Let’s not prolong the potential profit.” The market could collapse and we could end up with the same profit with all that work, time and capital invested. It was a good deal. It was one we may keep in the future, but this one was, “Let’s sell it, make a nice profit and move on.”

The beautiful thing is you’re building a system to be able to source those opportunities. There will be other ones that come along. That can be a trap, but I’m glad that Alex is part of your life, Zac. We get that drug addict feeling where we want to make the money, and it’s all short-term gains. We’re not thinking long-term.

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 buying a bunch of liabilities. Zac, break down this deal for me. Let’s sink our teeth into this big deal. I love talking about getting deals, but I love talking about getting massive deals. Let’s break it all the way down. What list was it? How did you find them, the whole deal?

This is crazy because this deal wasn’t even on a list. I was driving for dollars. I came across a for sale sign. It was in a rough neighborhood. I was like, “I’ll give it a call.” I gave it a call. The lady answered the phone. There were two units, and they were completely demolished inside. Both of them were complete guts.

I talked to her for about three months. She was in a situation where the inside of a place was so bad. It wasn’t even livable. Her son-in-law lived in one of the buildings and had kids in there. I told her, “We’ll help you get these kids into a nicer place. We’ll take this and get rid of it for you. We’ll take care of your problem for you.”

Did the owner live in one of the units?

She lived right down the street. It was a couple of units that they bought in the ‘70s that they had for the longest time. She decided, “This is the day to move on from them.”

This was something that they didn’t necessarily have the budget to keep up, to renovate every so often to keep it looking good. It fell to disrepair, naturally?

Yeah. It was in an up-and-coming neighborhood that’s turning into something beautiful. There were a lot of new houses going up on the street. This area years ago was just terrible. I took the initiative to go ahead, drive for dollars down there, go ahead and call the number. That’s what it’s about is talking to the people.

There was a sign in the front yard with the phone number on it?

WI 482 | Wholesaling Deal

Wholesaling Deal: You don’t have to prove yourself just by doing something yourself. Because at 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.

 

Yeah.

Had nobody called it? Was there a lot of competition or was it just you?

She had one other guy. We offered her $40,000 for both units. She had an offer for $120,000 or $130,000. 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, the people living there or how they can help them because that was her true family. The kids that were living there were her grandchildren. The guy said, “I’ll give you $120,000.” They didn’t even talk about the grandchildren, the kids that were living there or the son-in-law. That’s what separated the whole thing, us versus the other guy.

This guy came in $80,000 higher than you, but came in like a bull and was like, “Here’s your offer?”

Yes, exactly.

How did you help solve her problem? How did you help the family? I assume they got out. Did they get out of the property before you closed? Did you close with them in there?

We closed with them in there. Alex has multiple rentals. We did give options of, “Here are some properties that we have that you can possibly stay in.” It all comes down to solving the problem for the people, going ahead, and diving deeper than being a buyer, being somebody like, “We’ll buy your property.” We went there once, we had coffee with them and we signed the contract. I went there a couple of other times to talk to them and to get to know them better. That was important that I did that. If I wouldn’t have done that, she may have taken the other deal.

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? When we look at objections, they’re questions in the seller’s mind that haven’t been answered. Were there any other hurdles that you had to get over to get her to commit to selling it? She probably owned it free and clear, right?

Yeah.

She’s owned it since the ‘70s. She could have taken her time. Was it utterly to the point where it was almost unlivable?

It’s not always about the price. It’s about solving the problem that people have.

We offered her $40,000 and then she wanted to go see it because she hadn’t been in it for a while.

She hadn’t been there for 10 to 20 years.

She went and saw it.

She lives down the street?

Literally, 2 to 3 minutes away.

She went over there without us and saw it. She was amazed on how terrible the place was. The bathrooms that these people were taking showers in were completely rusted out.

That was in the basement.

It was pretty bad.

Looking at it, the condition of the property needs total rehab. Her timeline was to the point where you had convinced her to go to the property after 10 or 20 years of living down the street not going. Her timeline shortened quickly, as soon as she saw it. Her motivation was, she needed somewhere safe for her family to live, right?

For the most part, she was worried about her grandkids living in the condition that it was after she saw it. She was not happy with the way they were living.

WI 482 | Wholesaling Deal

Wholesaling Deal: Time kills all deals. So when they’re ready to make a decision, you shorten that timeline as soon as possible.

 

The price was $40,000?

We got both those units and a lot for $40,000.

You guys bought it. Did you wait until they were out of it to sell it or did you sell it right away?

As soon as we put it under contract, I had a couple of buyers in mind. I shifted over to one kid and he’s like, “I’ll take it.” That was it. We already had a buyer before we closed. Once we closed it, a week or so went by and then we put it under contract with the new buyer and 45 days later we closed.

Why did you guys choose to close on it and resell it as opposed to assigning it?

I’d prefer to close and be done with it. I promised her, I was going to close at this time. That’s what I did. He wasn’t ready. I said, “You know what? We’ll pay the extra transfer tax and we’ll absorb that. She can get out, and I keep my promise.”

This is such a critical point that Alex mentioned because time kills all deals. 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 difficult for them to make decisions. 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.

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, poured honey in her ear, and told her things that she could get more or don’t sell it or somebody else wants, the family wants to buy it, and all this other stuff that ends up being a tornado of emotions for the seller. Instead, get the deal done. If you’re running into those scenarios, close it. That’s a beautiful strategy. What did you guys sell it for?

We sold it for $90,000.

Do you guys know the bottom line net that you made on it?

Don’t spend time with people that will never do business with you. They will string you along. And if their timeline is indefinite, it’s never going to happen.

We made real close to $45,000 after holding costs, the interest we paid on the hard money loan that I got, and transfer tax, both ways.

$45,000 from calling on a for sale by owner sign in the front of a house. That is incredible. It’s such an inspiration. This isn’t rocket science. We’re not building rockets here. 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 efficient use of our time. We are helping out the community.

I assume that the buyer of that property is going to fix it up. He’s going to increase the values in that area. He’s going to increase the rents. If he decides to keep it, rent it out. 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 you’ve got this property. That was rundown and almost unlivable, totally fixed up, and renovated. It is a three-way win. It’s a blessing. You guys are a blessing to your community. I love it.

It was awesome. It was a great time because I haven’t done any deals before that. We had a little garage that we sold for a nice little profit. That was the first deal that we ever did. It felt amazing. I would totally recommend wholesaling to everybody who wants to get into real estate or even buy and sell. Get into real estate. It’s something awesome to be a part of.

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 joint venture on some stuff. How do they get ahold of you guys?

You can check out our Facebook page at PGHInvestors, or our Instagram page, @PGHInvestors as well.

Thank you guys so much for being on the show. I really appreciate it. Alex, thank you for your wisdom and guidance there for young Zac, who’s on an incredible path. He has closed $45,000. If I closed a $45,000 deal when I was 19, it’s absolutely incredible. It’s mind-blowing. You’re a true inspiration. For everybody out there reading, if you’re interested in joining the most proactive group in real estate investing, it is the TTP family. Go to WholesalingInc.com/TTP. Scroll down, check it all out. If it feels good in your gut, sign up for a call. It will either be with me or one of my right-hand guys. Other than that, thank you guys for being on the show. I appreciate it, representing Pittsburgh. That’s awesome. To everybody out there reading, as always, I encourage you to talk to people. See you guys. Love you.

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About Brent Daniels

Brent Daniels is a multi-million dollar wholesaler in Phoenix, Arizona… and the creator of “Talk To People” — a simple, low cost, and incredibly effective telephone marketing program…

Also known as “TTP”… it helps wholesalers do more, bigger, and more profitable deals by replacing traditional paid advertising (postcards, yellow letters, bandit signs, and PPC) with being proactive and taking action every single day!

Brent has personally coached over 1,000 wholesalers enrolled in his “Cold Calling Mastery” training, and helped 10,000’s of others who listen to him host the Wholesaling Inc. podcast, watch his YouTube channel, and attend his live events…

A natural leader, Brent combines his passion for helping others with his high energy, “don’t-wait-around-for-business” attitude to help you CRUSH your wholesaling goals as quickly and easily as possible!

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