Posted on: August 21, 2020
WI 498 | Full Time Wholesaler

 

Do you have to be in a massive market to succeed in wholesaling? The story of today’s guest is proof that as long as you work hard, have the right mindset, and stay consistent, no market is too small!

Jarrod Frankum is a former missionary who’s crushing it in a small town. In fact, he’s done over 12 deals in over a year! In this episode, he shared the tips and strategies he used to find leads and close them. However, that’s not all. Jarrod also shared the importance of having the right mindset and consistency—two key things that have contributed to the massive success he’s enjoying.

If you need some actionable steps that can help you find and close deals consistently (plus a few inspiring insights and wisdom thrown in!) this episode is for you!

How A Former Missionary Bagged A $47k Deal And Went From Part-Time To Full-Time Wholesaler With Jarrod Frankum

Episode Transcription

For all new people reading, first and foremost, welcome. Second of all, this is going to inspire you and give you some action items on what you can do because I’m very serious when I tell you this. Our guest is going to share a way that he did a deal that I am confident that every single one of you can implement and be able to do. It didn’t require money and having all this time in the world. It was specific things that he did to get this deal.

Get out a piece of paper and pen. Get ready to jot down some golden nuggets. Jot down the action items and act upon what our guest is going to share with you because this was a big deal. I don’t want to share the numbers yet. He is going to do that. We have Jarrod Frankum from Lubbock, Texas. Here is the cool thing. He lives in a town that has about 250,000 in population. A lot of people would be like, “It’s tough to do deals there.” He has done twelve deals a little over a year. He is doing fine in what people would say is a small town. He is six hours away from any major city and we’re going to break this down. Jarrod Frankum, how are you doing?

I’m doing well. Thanks for having me on here.

The honor is all ours and we’re so excited that you’re on here. I love the fact that you’re six hours away from a major city. You’re in a little college town and making deals happen. This is going to help make people believers that when they call me and say, “I don’t know if I can do deals where I’m at. I only have 200,000 people that live by me,” you can be like, “This show is for you.” Tell us a little bit about you and what got you into real estate in the first place.

In 2015, I had an engineering job. I got a degree in Mechanical Engineering. I was at the desk and looking for something to do while I was working. I stumbled across Rich Dad Poor Dad. I found Wholesaling Inc at that time but I wasn’t too sure about it. Real estate caught my eye. I started picking up books and reading casually. I went to Bible school right after that for two years. I continued to read books on real estate and listen to stuff about wholesaling but more as interest.

In 2018, I moved to São Paulo, Brazil to do missionary work. I planned to move out there permanently and not come back to America. I loved Brazil so much but my situation adjusted and I had to return. I thought, “All this real estate stuff I have been learning, let’s do it.” In January 2019, I moved to Lubbock. I hit the ground running with the stuff I had picked up and started following the show like crazy. I started in March 2019. That’s when I got my foot to the pedal and started going.

Let’s start talking about this because a lot of people are at the beginning stages. I’m curious to read for my own. Was it real estate in general? Was it already out of the gate? It was like, “I want to do wholesaling. I knew everything about wholesaling. I want to do it.” Is it like, “I wanted to get real estate and this sounded like a route that would help me get in there?”

I was looking to do traditional real estate buy-and-hold rentals. That was what I studied and what I was into. I didn’t know a whole lot about wholesaling. At that time, I thought Wholesaling Inc was a bunch of quacks. I accidentally started doing wholesaling. I didn’t even realize it at first. I thought, “If I want to know the market, I better start driving around the street by street and looking for houses.” I started driving around, logging my stuff and thought, “I might be able to sell some of these houses. Some people could mentor me.” As I did my first couple of deals, I thought, “This is awesome. I want to keep doing this for a little while.”

Wholesaling was what you were doing during this time. Were you finding off-market properties and then turning around and selling them to people?

Exactly. I was aware of wholesaling and I wasn’t sure how to start but I listened to BiggerPockets Podcast. I didn’t know what I was doing. I was terrified the entire way. I had something in my being that was like, “You’re going to do this. Get out and go.”

Here is the valuable thing and gold that you’re sharing. You weren’t an expert. Were you doing this full-time or part-time? You had a job doing engineering.

It’s part-time. I was doing campus ministry as my main deal. When I had free time in the afternoons, I would drive for a few hours, upload my deals and send out my letters. It was casual. I didn’t have a business mindset about it at all. People tell me this works so I’m going to trust the process and go for it. The first time I sent mailers, I was blown away when someone called me. I remember calling a business mentor of mine saying, “Even if I never sell a deal, I can’t believe that someone called me off a postcard.”

You knew the market was working. You believed in the process. You’re getting calls. You’re in real estate. Let’s fast forward. Are you in this full-time or are you still doing this part-time?

WI 498 | Full Time Wholesaler

Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!

I transitioned to doing wholesaling full-time. It’s not that I wanted to stop ministry. I had a pretty big internal battle about how I divide my time. I realized if I chased two rabbits, I’m sure to lose them both. What I can do is build wholesaling to be a business that serves me so that I can then live, give and spend my time going with the ministry. I’m still doing things with the ministry in a reduced manner so that way I can give my time to do wholesaling.

What is great about your mindset and where you’re at is you were in ministry in the first place to serve, give back and help individuals become better individuals. I know what you’re talking about when you say this internal battle. Here you are doing incredible things whether that’s youth, college or adults. You’re doing incredible ministry work and you’re thinking, “I’m going back to this, which could be lesser.”

There are people that right from the beginning when you’re talking to a seller that needs your service to help them to get to a better state but then also the money you can make in real estate that you’re already thinking, “How do I give back? How am I going to make this a better place where everyone wins because I’m doing this?”

I realized the more that I’m doing wholesaling, focusing on the checks is becoming less and less. It’s more about meeting people and discovering their crazy situations and then me being the only one that they have come across was able to solve those problems. To me, that’s what is so rewarding. There’s a great need and then being able to find a solution that fits them. I had people who gave me huge hugs even though I have made plenty of money off of it. Otherwise, they would have been in a big pickle.

Here is the cool thing. We have had people listening for years in the show. We have people for the first time that’s learning about this through what you’re saying. The fact that you can get them early on talking to them whether it’s people that have been listening for years, to bring them back to the center. The center is, “This is a business about serving. This is not a business about real estate. Real estate is the by-product. It’s simply getting in there, serving individuals that have problems and being a problem solver. That allows you to get a home at a discount.”

That’s the by-product. The front end is a very good platform to genuinely serve people at a high level. Let’s go right into this deal that we’re going to talk about. Get ready because he is going to break down a deal that he did and the incredible learning that came from it. These were little things. We talked about, “Jarrod’s got to be doing something big. There’s got to be something big going on in his business.”

I want you to know and read this because he is going to share the small little details that most people miss that allowed him to win big on this deal. It wasn’t any big thing that he was doing. It’s him consistently doing the small things that make the difference. Jarrod, let’s take it right from the beginning. How did you find this lead that we’re going to be talking about? How did you come across this lead in the first place?

I was driving for dollars. I got in my car and went street by street.

Driving for dollars is a term that’s out there. If you’re new here, driving for dollars is simply like he said. You hop in your car and drive street by street. What is it that you’re looking for when you’re driving for dollars?

I’m sure I have much broader criteria than most. I’m looking for any sign of distress, whatsoever like if there’s any peeling paint, any trash in the yard, the yard is high or there are missing shingles.

Is it high grass? The grass is unmowed. Will you say that? Is that what you mean?

Yes. They missed it for a little bit. I want to add it. I would rather not miss it. I had a deal that I accidentally added the wrong house and it turned into a deal. It was totally fine. I like to have a shotgun approach when I’m looking for houses. Most people think or say, “Find the worst super turds in your neighborhood.” Those are great. I wanted to keep opening up, add everything I could, go through and call or get a hold of them as much as I could do. That’s where my sweet spot is.

You go out, drive for dollars and find this home. What do you do with it? Are you looking to call the home or send a direct mail piece to? What did you do to get in contact with this homeowner?

The more you do wholesale, the more it becomes about meeting people and solving their problems.

With this one, it was owned by two people. I used the website TruePeopleSearch.com. Sometimes it gives me some info on who it is and sometimes it doesn’t. I typically try to call them directly but in this case, it didn’t give me any info. All I had was two names. I looked at them online. I tried to find if they have social media and sure enough, I found one of them on Facebook. We had no mutual friends, no nothing. I had no clue if they were even going to respond to me but I sent them a message.

This whole thing began with going outside the box. You start to look for numbers. You probably didn’t skip-trace. It sounds you went to this website. You didn’t have anything so then you’re thinking, “What is next?” You go to social media.

In this particular case, I didn’t skip-trace yet I had it in my system. I intended to skip-trace it but in the meantime, I figured, “Let’s add this one.” Whenever I’m driving, I have a little notebook and I’ll put ones that call out to me that have a lot of signals of distress. I’ll give those a little bit more thorough approach like, “I’ll do this. I’ll look them up online and on social media. I’ll see what I can find. I’ll look for obituaries and things like that.” This one happened to be one of those that I thought was a little bit more worth diving into.

Let’s share it. I probably jumped the gun on this by saying the big detail here that it’s easy for my team or myself to even miss on this. I would be willing to bet that over 90% of the investors would pass on this home and not even add it. What unique feature showed that this property could be distressed? What did the house look like from the street? What allowed you to say, “I got to put this on the list?”

I had stopped on the corner of this house while I was driving. My girlfriend at that time was in my car with me. We were changing some music, listening to some worship and talking about the Lord and stuff. I was getting ready to start driving again. I turned over and looked to the side. The house looked great. The yard was mowed. The trees were okay. They even had decorations out on the front porch like a little flowerpot thing. I noticed that behind a big tree, it looked like there was a hole in the roof. I stopped for a second, got out and walked over there. Sure enough, there was a big hole in the roof but it was concealed behind a tree. I would never have seen it if I hadn’t stopped and paid that close attention to it.

Everything on the outside looked like, “This home is fine. I’m not going to put this on the list. Everything looks good. There is nothing distressed about it but there was one key thing. Hiding behind this tree was a big hole in the roof.” You flagged this. You put a star by it. This is when you want to get a hold of. You get on Facebook and reach that person. What does that even begin to look like? Does it get awkward at that point where you’re like, “This may be weird?” How do you even begin to start the conversation by Facebook Messenger?

I reached out and said, “I know this message is wildly out of the blue but I wanted to see if you all would even consider selling this address. I was driving by and saw it. I don’t know the story. I’m nobody special. I wanted to see it.” It was something to that effect. I try to be a non-confrontational, non-salesy and non-boot talker but just, “I want to see if you all want to sell it.”

This ended up being a yes or is this something that led you to work overtime? Was it an instant yes or over six months yes?

They said, “We want to sell it. We have had several offers on it already. I’ll have to get in contact.” It was owned by two people and I got in contact with one. It was owned by a guy and a girl. I have done contact with the girl and I didn’t know. I asked, “Can you get in contact with him or can I get in contact?” She reached out eventually and then I was able to get his phone number and connect. It took a month or so of follow-ups but they were ready to sell.

What was the big why that let you know they were ready to sell?

They said, “Yes, we want to sell it.” I came to find out the house had caught fire on the inside. That’s why there was a hole because something in the attic caught fire and burned a hole clear through the roof.

They want to sell. They have had interest by other people. What was something unique you did that led the people to do business with you over all the other offers?

I kept contacting them. Finally, when I was able to meet with the guy who was in town, she was in Washington. He used to work for the university. I was able to contact him and connect. He goes, “I have had seven other people make offers and look at it. We want to sell. You happened to catch me when I was ready to make something happen.”

WI 498 | Full Time Wholesaler

Full Time Wholesaler: You don’t need to have the scarcity thought. There are more than enough deals for everybody.

 

Be the one that consistently markets out there because people had marketed to him before but he wasn’t ready to sell. It’s he or she who is marketing is in front of them when they are ready to sell and it happened to be at this point.

I wasn’t worried about any other competition. One of the things that helps me a lot is I see my competition as buddies, friends, colleagues or even helpers. I focus on my own business. I don’t want to measure myself according to someone else’s ruler. I thought, “I’m glad that other people were reaching out. I want to help these people but for whatever reason, I was the one that was able to connect.”

When I get to the house, he walks me through it. The whole thing is black like a brisket. It was smoke damaged throughout the whole thing and it has been ransacked. They have got in there and got some stuff. They were out of town when the fire happened. It looked like they took whatever valuables they could and then let it sit in there for a while.

The thing that I realized that he is seriously ready to do business is he goes, “Jarrod, I don’t even know why you’re here. The house needs to be scrapped, done away with and build a new one.” That to me was the golden bill that I realized he was ready to sell this thing because he thought it wasn’t worth anything. He had already insurance money and didn’t want to fix it, just leave it.

Ultimately, what does that do for you? What were you able to put the home under contract for?

I told him, “If the house is pretty much gone, we could buy it for the price of land minus a little bit of demolition cost so we can get back to a raw piece of land.” He was cool with that. He didn’t even argue with my offer or anything. I put it on a contract for somewhere around $11,000.

Before it was burnt down, if it was in a nice condition or sellable condition, what is a home on that land worth?

It’s $150,000 to $160,000.

The key thing here is you have got land at a deep discount. Meaning, this is even better. Knowing that a home has to be taken off or demoed off, people still try and get it for $0.50 a dollar. It’s such a niche thing that you have to get it for no more than $0.20 on the dollar if you’re going to get land. He understands. You put it under contract. What do you do with this land that has a crisp house on it?

I had to wholesale the burned house already by this point. I knew that this house looked in better shape than the other one and we were able to salvage the other one. One of my buyers comes in, who is one of my VIP buyers. He makes decisions quickly and he is good for his money. He always closes on time. He went through there and said, “Jarrod, it needs probably about $50,000 of rehab done to it. Depending on the price, we would be interested.”

I was able to detract from the ARV, After-Repair Value if it’s all fixed up. I looked at it and I was able to sell it for $60,000. I realized that there’s a huge potential here. I had a couple of buyers come in and take a look and they were both super interested. The one guy had sold a burned house too prior and then the first guy as well.

Ultimately, they go through this. You go through your process. What did a buyer buy this from you for?

He paid $61,000 or $57,000 on it. I don’t remember. It was quite some time back.

Focus on your own business and don’t measure yourself according to someone else’s ruler.

This is not a recent deal that he did. This is one of his beginning deals. You go out there and do this. Do you know what you made on it after everything was said and done, the closing costs and all that?

For this one, I double closed on. I purchased it on a Friday and then I sold it that following Monday. After everything was said and done, everybody got their hands in it. I cleared a little over $47,000 on it.

Off these little smoking more ways, we got a firehouse. It’s holy smokes because you had these little details add up. Jarrod, you’re familiar with the show. First and foremost, before we get going any further, I have to ring what is known as the victory bell for what is a huge win. Jarrod, here’s the victory bell. You get out there and do $47,000 on this deal. I want people to understand that even if this was a $10,000 or $12,000 deal, what does it do when you get a win and win this big? What does that do for your lifestyle, mindset or you in general?

I honestly couldn’t believe it. It altered my brain chemistry. That moment no longer was a hobby but something I wanted to pursue seriously. Here is a little bit of backstory. Before I moved back to Lubbock, a few months before that, I was doing ministry work. I made $500 a month and I had no money to my name ever. Before that year, I never had more than $2,000 to my name at all. I have college debt.

I didn’t even comprehend what that kind of income was like. That’s almost what I would make a whole year as an engineer. It was a blessing from the Lord. Everything has to go back to him. My business is there to serve him. I realized that was the Lord confirming that this is a path I should go down. As long as I continue to remain faithful to him, he will remain faithful to me. This was huge evidence of that.

What is cool about this is the fact that most people don’t think you can do deals in what most people would call a small town. Also, more importantly, if you are going to do a deal, it’s going to be a $2,000 or $5,000 deal. That’s your big fish. This is your well. You put a well bait on and caught a well. You didn’t catch a minnow or fish. You caught a well in a small town.

Going forward, let’s think of a ribbon on the package to end this. Knowing what you know is there anything that you would do differently if you were starting over? Is there anything you would do the same to make sure like, “If someone is reading this and they are at the beginning stages, this worked for me. If I went to the beginning, I would make sure I did this again?”

I would have doubled down on looking for properties. With the deal flow, I was doing it halfway and looking around. I’m sure that I missed other huge deals. I know I missed a deal later that year. It was another fat one. I was too late for the party but that’s okay. I realized even in my small market, there are way more than enough deals to go around. I ran some numbers and my goal was to go 3 deals a month and then to 5.

For me to do three deals a month, I need 0.18% of the market share here. It’s a ridiculously small number. In what other business do you need that small of a market share to be profitable? I realized that there are way more than enough deals for everybody and I don’t have the scarcity thought. To answer your question, one thing I would have done differently or even maintain doing was doubling down looking for opportunity properties.

The beginning stages are the crucial time to be saying this because, at the beginning stages, your mind is already playing so many games with you, almost like, “Will it work? Does this work? Am I good enough? Can I do this? Is this fake? Does this only work in big markets?” Your mind is already playing so many games with you that it’s crucial to hear and get out there.

The first couple of times, I was watching money go out the window. 1 day or 2 would go by and I didn’t hear anything. I would get so much this feeling of dread and regret like, “Jarrod, you wasted all this money on mail. You seriously bought all those stamps.” There was something in my being that I had to keep fighting that. I remember almost being to the point of tears like, “What am I doing? Everyone else seems to have success with this but I can’t seem to get off the ground.” I figured, “I’m giving this a shot and I’m not stopping until I get a deal. I’ll keep doing it scared.”

Here is the thing. This is the best part I learned. Courage is not the lack of fear. It’s knowing and recognizing the fear but still moving forward because everyone has their fears. There’s not one person on this Earth that’s fearless that they can say, “I’m fearless. I’ll do whatever.” There are still fears even for that individual.

Courage is not, “It’s because I have no fear.” Courage is you recognize you have fear but you still move forward. The fact that you’re saying, “I was scared to death. I didn’t know what was going to happen but I still moved forward.” That’s courage in its purest form. That’s something that each one of us can learn, listen to and jot down. You move forward.

WI 498 | Full Time Wholesaler

Rhinoceros Success: The Secret to Charging Full Speed Toward Every Opportunity

There are going to be so many voices out there saying, “You won’t be able to do it. You’re not going to make it. You’re not good enough,” but you still move forward. Jarrod, what about a book? Any game-changing books? What is something you have been reading that you’re like, “This is game-changing for me. It helps me with my mindset,” or helps you in any way? What is a book you would recommend to people?

It’s Rhinoceros Success. It’s simple but I read it in an hour. It was a small thin book but it’s packed with these actionable nuggets. Something that gets to me on books is that there are a lot of stories. It’s helpful and everything. There are a lot of quick, actionable steps. That’s the one I read that had a big impact on me.

Scott Alexander is the author of that. He is a super good friend of ours and an amazing, incredible individual. I love that book. He was ten when he read it. He was able to pull out all the gold that we’re trying to say here about this book that Jarrod is even sharing. The book is so simple that my ten-year-old is like, “I love that you do this and this. Don’t act like a cow. Act like a rhino.” I’m like, “Baby. Get it going.”

Jarrod, I want to thank you so much for taking time out in your life. We started even a half-hour later than what we were originally going to so I appreciate the accommodation to get on the show because what you shared is going to inspire individuals to get out there that no market is too small and no fear is too big that you can’t get out there and still have success. Any final words you would like to share with those reading?

Thanks a ton for having me on here. I would like to share my access details if anyone wants to reach out or has any questions. I don’t know how I could help but if there’s any way I could provide value, I would be happy to do that. I have got Facebook and Instagram. You can find me @JarrodFrankum. I’m not on them a whole lot but it’s better to reach me through a text. I would be happy to schedule a time to call you all. My phone number is (806) 319-5423.

Continue serving people not even just the ones that are making money but help people out there that have questions or trying to get into the game. Jarrod, I want to thank you for continuing to be a go-giver, always finding ways to serve people and help people become better individuals. Thank you so much for being on the show and for all you have done.

It has always been a pleasure.

For those who are reading, thank you for joining. You could be at work or with family but you had time to read this blog. I hope you took notes. This show is only as good as the action you take following it. It’s not something you read, get all warm and fuzzy and be like, “I got to get in this real estate game.” The only way to get involved to get in it is to get out of your way and take action.

If you need help building your wholesaling business much like Jarrod’s, you can go over to WholesalingInc.com. You can book out a time to get on the phone with either myself or someone on my team where we can begin to have the conversation to see if we’re a good fit for one another. If so, we’ll get you to be part of the tribe and get you well on your way to doing your first deal or next deal. Until next time. Keep charging forward, taking massive imperfect action and go find your next deal. Take care.

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About Cody Hofhine

Cody Hofhine is the founder of Investor Grit and Utah Sell Now. A few years ago, he was selling insurance. He liked what he did and made a decent living doing it. One day back in 2015, he was introduced to Wholesaling Real Estate. People in his area were making a fortune doing it so he got curious and decided to jump in. He made a TON of mistakes but he was committed to making it work…and he did!

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