Posted on: August 28, 2020

With all that’s going on, putting your wholesaling on hold and waiting for things to “normalize” seems like a smart business move. Not if you’ll ask today’s guest!

Michael McDonald is a determined wholesaler who’s doing something unconventional despite the current economic challenges. Rather than put his marketing efforts on hold, he’s doubling down on his efforts. While seemingly counterproductive, the risk he took paid off big-time and he’s now $52k richer!

If you think doing business in today’s current economic climate is futile, consider listening to this episode a must. Michael’s story will surely change your mind. And hey, his courage might just rub off on you, too!

Key Takeaways

  • What he meant by home-based
  • What he did to get a $52k deal
  • What wholetail means
  • What he did with the property
  • Why it pays to slow down your disposition side
  • How long he waited before he got back to the offers
  • What his business looks like right now
  • The importance of keeping the marketing consistent
  • Why it pays not to put your marketing efforts on hold right now
  • What his pipeline looks like right now
  • What he wants to say to the listeners
  • Why it’s recommended to focus on one or two things when first starting out

RESOURCES:

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Episode Transcription

Cody Hofhine:
I have with me my man, Michael McDonald, who is going to be crushing it today, allowing you guys to know how you can still do deals in today’s business, like today’s world. You don’t need to be hiding from the future, you need to be preparing for the future. You need to be scaling up, you need to get ready for the future because real estate should be something that each one of us still should be excited about. So excited to have Michael with us. Michael real quick, kind of give us a little bit of background of who you are and a little bit about yourself.

Michael McDonald:
Absolutely. So honored to be here, man. Thank you so much for having me. I remember it was like a year and a half ago I started listening to Wholesaling Inc. I’m like, “I’m going to be on that podcast someday.” Anyway, a little bit about me. I’m from Lincoln, well, I’m from small town Nebraska started wholesaling two years ago. I did what a lot of people may do and go to one of those free events and get sucked into their first three day workshop, 2000 bucks here, $10,000 later. And then you got to have the mentorship. It’s important, I agree, it’s important. $25,000 mentorship, money I did not have.
Shortly after my wife allowed me to commit to this. She says, “Honey, we’re having a baby.” Here we go, I’m $50,000 in debt on top of a student loan, tired of my corporate job. I went to school for nutrition. So a year into part-time wholesaling, failing, failing, failing. Finally get my first deal. And after about 12 deals, my first year part time, I realized that it was probably time, getting close to time to quit my full time job made more money, part time and formed a partnership you’re number two. And six or seven months into my wife and I thought it’d be a good idea to take our business and move across the country. So I’m sitting here and Las Vegas.

Cody Hofhine:
The city that finally sleeps.

Michael McDonald:
That’s right. That’s right. So we have the wholesaling business and flipping business in Nebraska and I’m out here in Vegas with my family and here we are.

Cody Hofhine:
So this is fantastic. So you went to a course, you get in a ton of debt. Were you able to recap that? Were able to make that back? Or is that something that you had to shift gears to make that money back?

Michael McDonald:
Yeah, so I struggled in the beginning. I think it took me five to six months to get my first deal and the credit cards that I had all this money on had a year and a half of zero interest. And I think I paid back the final lump sum of expenses the month before the 23% interest kicked in.

Cody Hofhine:
Slid in to [inaudible 00:03:47] the last second.

Michael McDonald:
Yeah. So everything I earned was going towards the credit cards. So it felt like I wasn’t making any progress, but I was making some money.

Cody Hofhine:
I think what’s impressive, Michael is the fact that you stuck with it. Because I think many times I have a friend that went through, well kind of the same thing. He went through a program that was about 25,000 and it ended up not delivering what he thought is going to deliver. And it’s still to this day, it knocked them out of, to never want to get into real estate ever again. So the fact that you’re here, I think is just amazing because most people get knocked off hard enough they’re just like, “Man, this isn’t meant for me. I wasn’t meant to make money in real estate.” And I love that we’re here sharing that story because I actually didn’t know this about you. So I’m grateful you shared this because your story needs to be heard often that, yes you can do it. It just means you might have received the wrong action to take and now here you are taking incredible action. And I want people to understand that we’re going to be breaking down how you and it’s a business partner, right? Remind me his name again.

Michael McDonald:
Ryan.

Cody Hofhine:
How the two of you are still doing deals. Are you doing deals right now in today’s economy? Are you doing deals?

Michael McDonald:
We are in fact. Dude, you know what really hit home with me, I listened to your last couple of talks home base. That’s what this is all about, guys. For me, I may have not succeeded in this. Had I not been thinking about my why and home base, you got to dig deeper. But yeah, we’re doing deals.

Cody Hofhine:
I love it. I love it. So when we talk about home base guys, what is referring to is I think right now in this economy, I shared this yesterday in our student group coach call, but home-based I think right now a lot of people are so hesitant to go out there and make money. They think by making money, but that it’s a wrong time to be making money, but let me help you maybe a little bit with your mindset here. If that’s what you’re thinking that, “Oh, it’s not okay to be making money to this time.” Let me tell you what I actually think is worse, not making money. I think not making money during this time is worse.
I’ve got a beautiful wife and four beautiful kids that look at me every day when I head to work, they’re looking at me and they’re relying upon me, Cody Hofhine, trying to bring my best, be my best today. They’re relying on that because I need to take care of them. I’m the financial way of making sure that they have food on the table, that we are able to sustain our way of living.
But more importantly, why each one of you need to be making money in this economy is because you need to take care of home base first. But from there you’re able to help more individuals you’re able to help your neighbor or your friends that might be in a tough situation. Maybe they did lose their job. What a blessing it would be that if you can make a lot of money during this time that not only do you take care of home base, but that you can go to that neighbor or that family member and say, “And I’ve got a little extra for you. How can I help you?” So for those of you in that thought, Is it okay to be making money? Yes, yes, yes, yes. So, Michael, I don’t know if you want to add anything to that by the way.

Michael McDonald:
Yeah, absolutely. I mean, I couldn’t agree any more than that. So I think you said something at the event last time I was with you that once you-

Cody Hofhine:
Wasn’t it out here at Salt Lake at the office?

Michael McDonald:
Yeah, at the Scale event.

Cody Hofhine:
It was so good seeing you and Ryan at the Scale event.

Michael McDonald:
Oh, it’s awesome, man.

Cody Hofhine:
We told everyone, when you guys left me and Mark were like, “Those guys are going to kill it. You watch, you watch.” You guys are killing it. So go for it, share what you’re going to say.

Michael McDonald:
So, what you said, I think was it really resonated with me is, “Once you have your home-based taken care of, or once you have your stuff taken care of,” I think we’re talking about just paying off the house. We’ve been buying some rentals, trying to buy him free and clear, just leave them free and clear because once you have the main expenses taken care of you can help people. You don’t have to worry about yourself anymore, you can give back. And that’s what I loved about that. So that’s my main, that’s my mission, man.

Cody Hofhine:
Did you pay off your home?

Michael McDonald:
So we sold our house, we’re in the home buying business. We sold our house in order to pay off some final debts and then move out here. We actually live in a town home in Henderson, which is South of Vegas right now.

Cody Hofhine:
Henderson, by the way, RC Willey, the furniture store, that was my dad’s business that built that in Henderson.

Michael McDonald:
Really? That’s awesome. We’re looking for seller finance deals, the beauty of real estate out here.

Cody Hofhine:
No, you’re nice. I love it. I love it’s. You’re trying to take care of home base. You’re going to get debt taken care of, which I love. But let’s talk about this 52K deal. What was it that you did to get this 52K deal?

Michael McDonald:
Good old carrot website, man. Somebody submitted a form, it was actually on a Sunday and I think I was just sitting around and hanging out. You know, I’m like “These leads are hot typically.” So picked up the phone.
I called and she’s like, “Wow, that was fast.” Literally two minutes after she submitted the form. So got to talking with her and found out what she needed and whatnot. And I literally closed the deal on the phone because I knew it was a deal and I didn’t even have to negotiate. She literally said, “I have a bridge loan. I don’t need the money. I have a high paying job. I already have a new house. I just want an easy sale.”
I was like, “Okay.”

Cody Hofhine:
You’re like, “Oh, okay I’ll take it.”

Michael McDonald:
Yeah, “If you’re going to pull my arm.”
So yeah, like I said, walked her through the purchase agreement. She said, “I have a bridge loan for a hundred thousand.” I looked at Zillow real quick, it’s estimate was 150.
And I’m like, “All right, you’re telling me the house is in great shape. I think this will work for us. I don’t even have to think about it. Let’s go ahead and I’ll walk you through this and we’ll go ahead and get this deal done right now.”

Cody Hofhine:
Was this in your Vegas market or was this in the other market?

Michael McDonald:
Yes. Let me explain I’m in Vegas. Yeah, this was in Lincoln, Nebraska. Yep, so this is in Lincoln, Nebraska. I know the area, good part of town. Put her under contract for a thousand bucks over her bridge loan, which was 101,000. Yep. Said, “We’ll pay for all the closing costs. I’ll have my business partner come by next week and just confirm that we’re checked out, everything’s good to go.” Yeah. So bought the deal for 101 closed down with private money.

Cody Hofhine:
What was your intent going into this? Was this something that you’re like, “Man, it is a great deal”? Where you going to just do like a typical, find cash buyers that wanted this? Or are you like, “No, there’s a unique strategy I’m going to do with this”?

Michael McDonald:
We knew we had to buy this property because the seller just wanted to close as quickly as possible. We didn’t want to leave money on the table and the market was hot. But basically what happened was we’re like, “Okay, we’re going to wholetail this deal. We’re going to [crosstalk 00:10:24].”

Cody Hofhine:
Let’s break it down real quick. For those that are listening, you got wholesale and you’ve got retail and that’s where the word like you take wholetail and retail and you get wholetail. So you’re finding a deal at a deep discount like Michael just said, and then simply what he’s going to do is put it right back on the market is what he’s going to do. So break it down.

Michael McDonald:
And that is exactly what we did, Cody. We literally bought the house. I think we maybe just touched up a couple of things, maybe spend a few hundred bucks just to kind of clean it up. Put it on the market. Our agent said, “Let’s put it on for 145 just below his estimate. We’ll start a bidding frenzy.” So listed it for, I think it was 144.9. Literally, I think we had 50 people through the house the first day.

Cody Hofhine:
On a showing, because you’re just listed this with a realtor.

Michael McDonald:
We listed it with a realtor. So we were like, “We don’t want to deal with it. You do it, you sell it, you do your thing.” We listed it with a real answer and the price just kept getting driven up. Yeah. It was like, “Full priced offer. Cool. We’re getting ready accept it.” Nope. 150, 155, 161, 165. And a couple of days went by and we’re fielding offers, fielding offers. We’ve got an offer for 168.5.

Cody Hofhine:
Here’s one thing I have to bring up because it’s so worth it, we talked about this at the Scale event in Salt Lake, is slow your disposition side down. You know those times we get an offer and it’s like, “Ooh, I like it. Let’s take it.” But if you slow down, you start to see that more people start chiming in and it starts driving up the price. And so how long from all these offers, from the time the first offer came in at full offer until you got this 168, how long were you needing to wait before you got back to these offers?

Michael McDonald:
Gosh, I think it was actually probably three or four, maybe even five days. And I’m sitting here like, “Accept the offer, accept the offer.”
But my agent’s like, “No, just like that patients they’re going to come through.”

Cody Hofhine:
I love your agent, we need to talk.

Michael McDonald:
I know. So yeah, we accepted the 168.5. And closed in like the month and, I don’t know, 10, 15 days.

Cody Hofhine:
And what ultimately does that look like when you say, “Hey, here was this deal we put under contract, we sold this price.” That was the net, the net was the 52,000?

Michael McDonald:
The net was the 52,000. So of course they have their inspections. And literally, three days before closing, they wanted a sewer pipe that ran from the street that was like a foot into the property, replaced. He had to hire an excavator, had to hire a plumber, come out and dig up the ground and try to miss all these pipes so we didn’t blow up the whole street. We fixed that.

Cody Hofhine:
[crosstalk 00:13:12].

Michael McDonald:
Right, right, right. We fixed that. That was a few thousand dollars expense. And it was just miscellaneous things, just odds and ends. We replaced the dishwasher the day before closing just small stuff, nothing crazy.

Cody Hofhine:
$52,000. Get ready for the school teacher bell yet again Michael, hold on one second.

Michael McDonald:
All right.

Cody Hofhine:
Dude, this is crazy. So you’ve done this deal. That’s a big deal. And I don’t want to glaze over it like, “Oh, let’s move on.” But that’s an incredible deal. Has there been still consistent activity? Is there are any deals going on still today, like homes going under contract? What does that look like?

Michael McDonald:
Well it’s crazy, the phone is still ringing and the business is still happening. We haven’t stepped off the marketing whatsoever.

Cody Hofhine:
Crucial note, guys, take note.

Michael McDonald:
We have not let off the marketing.

Cody Hofhine:
Do not let off the marketing.

Michael McDonald:
So we’re keeping consistent marketing. And if anything, we’re spending more. And what just kind of like, it’s crazy to me some of the, like the bigger players in some of our markets that we’re working in, unplugged. Like, “I’m just sitting on the sidelines until this is all over with.” And that’s fine. That’s fine if that’s what they needed to do.
But for me it’s like, “Okay, well that’s an opportunity. Now there’s more opportunity for us to get in there and be in touch with those people and help these people who are struggling out.”

Cody Hofhine:
This is so good, Michael, this is so good. I hate that I have to slow you down because this is so good. I want people to realize what you just said. Right now, I believe as the old adage goes, “The last mile is the least crowded.” Right now if you will stay consistent and get out there and keep consistently sending out marketing, now is the time that you are going to be leaps and bounds above that word competition. Because many people right now have allowed what’s going on to allow them to slow down and step on the brake. Where Michael has done the opposite, he has stepped on the gas, full throttle.
And I’m telling you guys the last mile is the least crowded. I believe this is the time to not sit back. This is the time to get consistent. And I’m starting to see an uptick on every marketing perform, but we even saw it direct mail, the response rates going through the roof, deal flows going through the roof. The action you do today, you’re going to see the fruits of it for the next 30, 60, 90 days where the people that aren’t taking action, they’re going to be hurting for the next 30, 60, 90 days.

Michael McDonald:
Yeah, exactly. And it’s just crazy because we’ve been getting calls, people asking, “Are you guys still buying right now? A lot of people aren’t buying.”
It’s like, “Yes we are. We’re still buying, we’re still doing business.” So you asked about what the pipeline looks like I’m just looking at some notes.

Cody Hofhine:
Yeah, let’s hear it.

Michael McDonald:
I had to take some notes here.

Cody Hofhine:
You’ve been consistently doing three to five deals since we last spoke in Salt Lake, you’ve been doing like consistently almost five deals a month, right?

Michael McDonald:
Yeah.

Cody Hofhine:
That’s awesome, man. This is awesome. Keep going. What does your pipeline look like?

Michael McDonald:
Yeah. So just leading up until now and then first of all, we had a deal close before that we had to deal close, two deals close before that two wholetail deals again-

Cody Hofhine:
Wholetail, where [crosstalk 00:16:27] market and just put on the retail market?

Michael McDonald:
Yep. And one of them was a gutted house. It was really rough, but sold it right away. Another, we have, looks like two wholesale deals close on Tuesday.

Cody Hofhine:
Just recently, Tuesday, like two days ago, Tuesday.

Michael McDonald:
Just two days ago, Tuesday.

Cody Hofhine:
Nice. When did those go under contract? How far back?

Michael McDonald:
I think the one was probably 20 days ago, 25 days ago. And then the other one, it was quick. It went under contract last week and it closed this week.

Cody Hofhine:
Wow.

Michael McDonald:
We have a few others in the works. We have another wholetail that we’ll be buying. Well, actually we’re selling a flip this month. This has been in the works for a long time. We’re selling a flip on Friday and then we just contracted one today, actually, I just signed it. She signed it a few days ago and I just signed it now because we’re just working out some logistics.

Cody Hofhine:
Isn’t it funny how every day is like Groundhog Day. So you don’t want to have to think like, “Was it yesterday I signed that contract. Oh no, it was actually this morning. That’s funny, I just thought it was yesterday.”

Michael McDonald:
Yeah. So our goal this month is eight. We’re shooting for eight. I think we’re at five, right now.

Cody Hofhine:
You’re at five, you got three more in the next seven or eight days.

Michael McDonald:
We’ve got to get busy.

Cody Hofhine:
You’ve got this dude. You’ve got this. But, I want to put this out here. I think this is why I love the mindset of you and your business partner, Ryan, because of this. You’ve already set a goal. You put the destination and we talk about this all the time, how crucial it is to have that destination. Because if you know the destination, you don’t know the road to get there. You won’t know how to map out how you’re going to get there. But because you know, “I want eight deals this month.” You’re going to start to hear the pathway to get there.
But most people just go through the day and they just keep doing their thing. They just keep like, “Well, I’m just going to go through the day and see what happens. I’m just going to keep going through the day.”
And that’s much like me just hopping in the car with my wife and kids and saying, “Hey, we’re going on vacation?”
My wife’s like, “Where are we going?”
“I don’t know. We’re just going to hop in the car and we’re just going to find out where we’re going to go.” And you just start going wherever you want and there’s just no direction. You would never do that. But yet most people run their business that way, they don’t even know what they want. They just start getting in the car and start putting in drive. And it’s like, “Wherever it goes, it goes.” And it’s like, “No, we got to take control.” Because once you know you want eight deals, you now know just from your experience that you’re going to have to say no to a lot of paths and only say yes to very few paths so that you can obtain that goal of eight deals. So I’m excited for you guys and I’m confident you guys are going to get it.

Michael McDonald:
Thanks man. Yeah, we learned a lot and we’ve definitely made a lot of money from one simple thing that we learned at Scale event. I don’t know if I can even talk about it here because it’s so much value.

Cody Hofhine:
Is it the famous text?

Michael McDonald:
Oh, it’s a disposition text, man.

Cody Hofhine:
That’s the best. No, you got to keep that gold in your pocket, man. [crosstalk 00:19:15].

Michael McDonald:
Okay, that’s what I thought.

Cody Hofhine:
Keep it. Yes, that one’s solid gold.

Michael McDonald:
Right, right, right.

Cody Hofhine:
Who was it? Was it Scott that used that text and it was like an $8,000 bump in like a one hour time.

Michael McDonald:
Yeah. Every time, every time we’ve done it so far since then, it always jacks the price up. It hasn’t not went up once since we’ve done that.

Cody Hofhine:
I love it. So you’re using the text that we talked about in Salt Lake. We give away the farm at that place. We give away the farm at Scale, but it’s because we want to see it work. And I just love the fact that you’re using it. And the fact that you’re saying every time you use it, it’s like, boom, boom, boom, boom, boom, increase, increase on what you make on your deal. Phenomenal, phenomenal, phenomenal.
Anything else you want to share with everyone that’s listening that maybe they’re on the fence post of maybe, “Do I get into real estate?” Because there’s some people watching this that they’re not even in the game, they’re just on the sidelines right now. And then there’s some people that are in the game, but they’re kind of, “Ooh, do I hold off right now?” What would you say to those people?

Michael McDonald:
I would say don’t wait. It’s scary, there’s a lot involved with real estate, but it’s really pretty simple. The thing that I think a lot of people struggle with when they first get started is doing too many things at once, going this way and that way. So for me, once I started focusing on like one or two channels of marketing, I started seeing some progress. And that right there is the main thing I think when you’re starting in this business, focus on one or two things and just crush it, dominate, be the best at that one or two things until you have that on autopilot. And then you can move on to your next marketing channel and hopefully start seeing some results from that too.

Cody Hofhine:
Huge, huge. Michael, I know you’re busy. I know you’re not sitting back. I know you’re out there still doing deals, but I want to thank you because I think this is going to inspire a lot of people. I know that this is going to motivate a ton of people. There’s no reason to sit back. Now’s the time to take care of home base. Don’t be afraid to make money. It’s okay to make money. You got to take care of home base. And then more importantly, money is not evil. Money is a good thing. Money with the right heart it’s a good thing. And if you’ll use it to bless other people’s lives, this will give you just that much more motivation to say, “I got to be my best today because not only is my family need to be taken care of, but there’s a lot of people that could use my help right now.” And if you have that mindset, it’ll get you up there to just start taking action. And it’s that action. That’s going to lead you to results. So thank you so much. The wisdom you just shared today was priceless. Guys, I hope you got enough from this that motivates you to just get out there, keep doing it, go do it.
Michael again, thank you so much for joining us. And for those of you on the fence post, if you are needing help to build your real estate business so you can just get out there and do deals, head on over to wholesalinginc.com fill out a quick questionnaire, it’s not hard. Hop on the phone with our team and just see if it’s a fit. And if so, let’s get you out there. We’re going to give you the simple instructions so you too can get out there and start doing deals in today’s market. Guys, thank you so much. Michael, you’re the man. God blessed you and you’re a cute little family. Go take care of them and keep serving them.

Michael McDonald:
Thanks brother. Appreciate it.

Cody Hofhine:
Take care guys. See ya.

Michael McDonald:
Later.

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