Posted on: May 01, 2017

A lot of people are interested in finding big opportunities with the Fix And Flip.

Today we’re talking to someone who is making it work for them, and we’re going to cover his first incredible first deal (it’s more than some people make in an entire year!).

Neil Stedman is a former real estate developer who got into Wholesaling two years ago so that he could skip the middleman, find his own deals, and perform his own rehab – and so far it’s working out great.

 

IN THIS EPISODE YOU’LL LEARN:

  • Why Wholesaling lets you cherry pick the best real estate opportunities
  • Simple (and often overlooked) advice for Wholesalers
  • The value of massive action

 

Cherry Pick Your Best Deals

One huge benefit of Wholesaling – being the first person in to put their name on the contract – is that it lets you cherry pick the best deals. Neil finds the best houses to fix and flip, but you can also find the best opportunities to fill out your rental portfolio.

 

Neil’s First (Incredible) Deal

Neil writes out his own mailers – yellow notes, red ink. They’re laborious, but he finds they get results.

He had a lot of misses (he even got kicked out of one house), but then he hit big.

He found a four-story row house in Washington, D.C in disrepair, and it was owned by a very motivated seller. Neil built a good rapport with the seller – it’s simple, but people often overlook the seller, and they’re the most important person in this relationship.

Neil was the 38th person to go through the house, but he got the contract. He signed for $700,000 and received an $850,000 assignment fee.

By thinking outside the box, taking massive action, and putting in the work every day, Neil made a $150,000 deal!

 

Simple Advice for New Wholesalers

  • Don’t overthink things. The only thing that matters is building your system and taking action every day.
  • Don’t worry about rejection. If you take massive action, you won’t always win… but when you do, you’ll win big.

 

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

Cody Hofhine: Welcome to another episode here on Wholesaling Inc brought to you by Investor Grit. Today we have an awesome, awesome podcast, get ready to blow your mind. So guys, Rhino Nation, everyone stop what you are doing. This is going to be worth listening to today.
We’ve got Neil Stedman from Washington, DC. He’s been wholesaling for about two years. Now, he’s been in the real estate arena for quite some time as a successful real estate agent, but also as a developer. He does his own rehabs, fixing and flipping homes, but he got into wholesaling about two years ago so that he could skip the middleman and pretty much find his own deals so that he can rehab himself. So I know a lot of people out there ask the question, “Man, do I want to get into the fix and flip?” Me personally, it doesn’t work for me, but for this guy it works phenomenally. And so he’s going to deep dive some of the stuff that he does as well as share and deep dive a big deal. His first deal that he ever did wholesaling and it’s bigger than some people make in a whole entire year. So without saying any more, let’s bring on Mr. Neil Stedman. Neil, how are you doing, my man?

Neil Stedman: Doing great, Cody. Thank you, it’s a wonderful introduction. Thank you.

Cody Hofhine: Did I cover everything? And if not, help fill in the gaps a little bit about your background. Let people understand a little bit more, who is Neil?

Neil Stedman: Yeah, man. I mean, you covered it pretty well. I started right out of college doing real estate sales. Unfortunately, the timing was pretty poor because I got my license and then the recession hit, so that was pretty poor timing. But through all of that I emerged a better person and real estate investor.

Cody Hofhine: Now did you stick with it though? Like here’s the recession because that’s what’s grit right there is you got into it, recession hit. Did you have to jump ships for a while or did you know like, no, we’ll find a way to make it work and make it work?

Neil Stedman: I pushed through it, very scary. I remember agents in the office that had been doing it a long time were crying and it was just a really, really bad time. It was a horrible …

Cody Hofhine: It was hard and I can only imagine for you as a real estate agent and a brand new real estate agent, you didn’t have really clientele built up. This was all massive grit, massive action. I can only imagine.

Neil Stedman: It was a very hard time. Lost my parents to cancer then the recession hit, I was just like, what is going on? So it was just a very difficult period. But I just made the commitment and I didn’t want to look back, man. I thought that would be worse is to not push through it and it’s a great lesson for anybody that’s listening that if you just keep pursuing it, all good things will happen to you. It’s just a matter of time. If you keep working it and putting 100% in and not giving up. I wanted to give up a million times, but if you just don’t, great things will happen. It’ll just happen.

Cody Hofhine: Wouldn’t you agree that now looking back, I guess with anything in your life, you’ve got multiple arenas where you’ve proven to be successful. Have any of those channels ever been easy, first and foremost?

Neil Stedman: No.

Cody Hofhine: No, and that’s the whole point is it is going to be tough. It’s going to be hard, but that’s okay because the true success that each one of us are looking for is on the other side of comfort. We got to get uncomfortable. And I can tell you by listening to what Neil was just saying, that was very uncomfortable. I can’t even imagine trying to begin in real estate during the recession. I don’t even want to know what that looks like, but I can tell you for sure it wasn’t easy. But was it worth it now looking back?

Neil Stedman: Yeah.

Cody Hofhine: Absolutely, right?

Neil Stedman: And I’m uncomfortable every day. It’s picking up calling people and getting yelled at by people that didn’t like your [inaudible 00:04:40] or whatever. On the other side of that, it’s going to be success. So every call you take, every call you follow up on, every person you follow up with will eventually yield a great deal. It always will happen.

Cody Hofhine: Awesome. So let’s kind of go into … This is what intrigues me, because I actually don’t even do like the fix and flip game or the developing game. So you’ve got some success going in developing, what ultimately turns you on to wholesaling? Because it looks like you’ve been doing developing, rehabbing for quite some time and it’s only been a couple of years that you’ve actually done wholesaling. So what was it that intrigued you, interest you, here’s why I want to do some wholesaling?

Neil Stedman: Well, honestly I hadn’t done development for that long before wholesaling. I’ve only been developing for about five years. I was very lucky to have a business partner that was brilliant at it and we were able to join forces, raise money, find opportunities. But I guess what was, what was happening is kind of instinctually I was writing handwritten letters to houses that needed work. I kind of dabbled a little bit in some lists that were not great, but I had this instinct that I should go right to the homeowner rather than the open market to find deals. And a friend of mine told me to download this app called Stitcher, right? It kind of hosts all these podcasts and I started to go into the real estate investment and I found guys like Sean Terry and I started listening to them and then they started bringing up wholesaling.
And even though I was in a development as a realtor, I never even heard of it. I never even knew it was something you could do. And then I was listening to it, I didn’t give it much thought. And then I remember this one deal that I was working on that I ultimately didn’t get, somebody had bid me up $200,000 and they developed it. On paper it didn’t make any sense.
So it said to me, well, there’s clearly a market out there that’s above what I do and below the regular market, the retail market for investors. That was my big aha moment that this could work, really, really could work. And then I listened to Tom Crow, like many other people, joined the program and it’s been a blessing.

Cody Hofhine: Awesome. Awesome. So here you are, two years into it doing wholesaling and was it two years ago that you actually joined the tribe then as well?

Neil Stedman: Yes.

Cody Hofhine: Okay. So you go through this and then now looking, here you have two years under your belt wholesaling. How many wholesale deals have you done where you’ve actually wholesaled the homes?

Neil Stedman: I don’t do a ton. I do between a eight and 12 a year. But you got to keep in mind that I also …

Cody Hofhine: Keep a bunch of them, right?

Neil Stedman: I keep those of the best … Well …

Cody Hofhine: Cherry picking the best.

Neil Stedman: I do cherry pick, but I also created an expectation from my buyers that I don’t send in anything that’s marginal. So I try to … Anything that we don’t develop, anything kind of in excess that’s still a very good deal then we wholesale.

Cody Hofhine: Okay, so eight to 12 maybe a year wholesale deals and that’s because there could be a lot more, but it’s the fact that hey, those are also what we do. That’s how we develop, that’s what we do. So you’re keeping a bunch of these. But still, it sounds like with what you’re saying, you send out the deals that maybe is more than what you can handle at the time or just one that you don’t want to do, but it still leaves plenty of meat on the bone for the end buyer to still make their money on it as well.

Neil Stedman: Exactly. And you want to keep a good reputation with your buyers and make sure that they get quality product and that way they’ll always be loyal.

Cody Hofhine: I love that. That’s absolutely … Take care of everyone, make it a win, win, win all the way around. But also something to point out to the listeners today which is absolutely huge, is being the wholesaler, being the first guy in and put the home under contract allows you to do exactly what Neil is doing and that’s cherry picking his best deals. The same thing goes for me, now mine’s not for the fix and flip, but it would be to cherry pick my best deals and keep them for longterm buy hold rentals, which I’m loving getting into. That’s why I love wholesaling. It’s almost like to the mindset now of I wholesale it because I don’t want it, otherwise I’m a wholesaler because it helps me find deeply discounted properties that I can keep to build my rental portfolio. So it’s been been great that way as well.
So let’s do this. Let’s deep dive what was your first deal? I still sit here and even pinch myself and it’s not even my deal because of how good it worked out and turned out for you. Let’s kind of deep dive how it all started. Like what was the form of marketing that you did to get your phone to ring and then let’s walk us through this whole entire deal.

Neil Stedman: Sure. It was a few years ago, I sent out, I think it was the … I got a short sale list and this was definitely the one that worked out among many that did not. [inaudible 00:10:06] I’ve always just done handwritten yellow notes with red ink, very simple, quite laborious, but it always ended up working.

Cody Hofhine: Were you writing these yourself or were you …

Neil Stedman: Yeah.

Cody Hofhine: Oh, you were? Good for you.

Neil Stedman: I still write them today. It’s funny. I do big mailing, but I still write them, I still enjoy it.

Cody Hofhine: Good for you.

Neil Stedman: So I got a call and I remember the day before I was really dejected because I went to an appointment and a woman kicked me off her porch because I was like two minutes late in DC, which is nothing. I pulled up and she kicked me off her porch and I was really dejected and the next day it turned out to be my first deal. So another story to keep at it. But when on the appointment, the house was in pretty poor shape. It was a large a row house in DC, it was like four stories. It was near a neighborhood that was really turning over very quickly and I loved it. I wanted it. I was super nervous and just push through it.

Cody Hofhine: So meet with the seller, did you go through … Here’s one thing that’s key that I know you do really well is you go to this appointment, you see not only is the home just in disrepair, it’s distressed, but what is the why? What was the ultimate reason why this individual is wanting to sell the home? Is it just like, “Hey, come make me an offer. See you later.” Or is it like, “Hey, all this stuff’s going on and I’ve got problems and I want you to fix them.” How did that look?

Neil Stedman: It was much more of the latter. When you go on enough of these appointments you really get a sense of the difference between those two positions. Most people are going to tell you, just give me an offer and you do it and some will work out. But every now and then you get somebody that really is distressed and really needs help. This gentleman … He was older, he had health issues, the house was not in good shape and he just wanted to move out and he wanted to … And really, we built really good rapport. I really did care … I cared a lot for the man. Building rapport with somebody is always great for business, but in this case I built a really good relationship with the seller.

Cody Hofhine: Which is so key though. I know you popped that off really quick, but this is what makes Neil successful at wholesaling and finding deals for him to rehab himself is because he takes the time to build a great relationship with these sellers because ultimately, would you agree that people … I feel like so much of what we call the so called competition, just go in there worried about the deal, the deal, the deal, the money, the money, the money where they forget to worry about the most important person and that is that individual, that seller. But when you build that relationship of trust, who ends up walking away majority of the time with the contract?

Neil Stedman: I was the 38th person to go through that house.

Cody Hofhine: 38th person to go through the house.

Neil Stedman: I remember I walked into [crosstalk 00:13:25].

Cody Hofhine: Holy smokes.

Neil Stedman: He showed me a stack of we buy houses cards and I saw a friend of mine actually had sent him something too. I think if you have the mindset that you shouldn’t really worry about competition, let them worry about you. You don’t have to worry about them.

Cody Hofhine: I love it.

Neil Stedman: So if you have that mentality going in, nothing will stop you and if you have a genuine interest in these people’s lives and helping them and really taking that step and don’t treat them as chattel or just another mark in your monthly quota. That’s when success really happens. That’s what I’ve noticed.
I’ve always been very focused on that, which made me kind of a lousy agent because I lost a lot of business because I was probably too thoughtful. I wasn’t much of a shark.

Cody Hofhine: Sure.

Neil Stedman: But that seemed to work out as a developer [inaudible 00:14:22] If you care about these people’s issues, you’ll get great deals. So I was the 38th person through house. He showed me competition cards and things like that and I got the deal.

Cody Hofhine: So you walk away with a home under contract for being the individual that was uniquely different than everyone else in the sense of you showed that you cared for him, loved the guy, wanted to help him through his situation. You put the home under contract. What is the difference? What were you able to put it under contract for and ultimately, you can say what you sold it for, but also did you realize this upfront when you put it under contract? Sometimes we’ll put a home under contract and you think it’s maybe going to be a $5,000 deal and then you realize, “Oh man, that was actually a $20,000 deal. Holy smokes. That was awesome.” Did you already know at hand what you already had or is this something that’s like, well time’s going to tell?

Neil Stedman: No, I kind of knew what I had. I knew that the way the zoning works in Washington, I was able to subdivide this large house into two condos. When you … Condominium’s just by their nature have a higher price per square foot. So then you can kind of extrapolate that and figure out the end price and kind of determine value.
So what happened was I knew that the property was valuable because of the location, the size, and the zoning. Those were very important aspects. My full intent honestly, was to develop it because that’s what I had done in the past. I was kind of in my for way of wholesaling and I realized, I don’t really have the capacity to do this great deal. I should probably just start to build a buyers list and send it out. So that’s kind of the half of it. But I did know the value.

Cody Hofhine: Okay. But did you ultimately, kick it into place where you did all the divide and all that, the rezoning of it or is that something that you had to just present to your cash buyer saying, “Hey, with this, you’re able to do this with it?”

Neil Stedman: Yeah, I wasn’t going to do the development of it and then sell it. I would sell it as is.

Cody Hofhine: Just as is?

Neil Stedman: In Washington and I’m sure every market has a specific type of development that they do. If you keep building your cash buyers list, there’s something for everybody. So that’s incentive to always build a very robust buyers list. I think Tom said it best, the person with the biggest buyer’s list wins.

Cody Hofhine: I agree.

Neil Stedman: That has stuck with me to this day, so.

Cody Hofhine: I love it. So with that being said, what were you able to put it under contract for and then what were you able to sell it to your cash buyers for?

Neil Stedman: My numbers are going to be a little off, but I will say it was 700,000 under contract and I signed it for 850.

Cody Hofhine: Holy smokes. So here … Hold on. You already know what’s coming. Hold on one second.
All right, so we’ve got the victory bell ringing on this because why I’m going to throw this out there, with all the podcasts that I’ve done so far, I would say that’s probably the biggest assignment that I have personally interviewed as a student thus far. So you’ve set some high standards and some high bars with this one, so $150,000 assignment fee by putting this home under contract, knowing that if the end developer wanted to make the most out of the money, they would need to split it up, rezone it, whatever that may be. But they saw the value, the instant benefit there, did it, which allows you to make 150 grand to just walk in and walk out.

Neil Stedman: That’s right. I should have asked for more, they’re making a killing off it.

Cody Hofhine: Now, is this a project that’s still underway or is this something that now hindsight, you’re like, man, me as an investor, as a developer, why did I pass on this?

Neil Stedman: You always have that fear. I definitely … And I’m very open with the person that I [inaudible 00:18:46] to, was actually a friend of mine, but I told her, I was like, “I should’ve kept this deal.” I remember holding the open house and to get all these, sorry, not open house, showing.

Cody Hofhine: Yeah, yeah, like the inspection for it.

Neil Stedman: [inaudible 00:19:01] We had a showing and I remember telling her there, I was like, “I don’t think I should’ve signed this.” But I’m very happy to say, no it’s still under … It actually takes a long time to do a condo conversion. So it’s actually just wrapping up. Maybe what I could do is take some photos of it and upload it to the group and just share some photos.

Cody Hofhine: Man, that’ll be awesome. That is fantastic. $150,000, this is where I want listeners to understand by thinking outside the box, pushing through it, taking massive action and just going out there. The day before he was kicked off someone’s porch because he was two minutes late, which man, that just typically in any state, that’s going to be just fine with two minutes over and it should be in Washington, DC like you said. But he could have got off his horse and just had a pity party, but he didn’t. He knew, I’ve got another appointment tomorrow and I’ve got to shake this one off and I’ve got to be my best and I got to go out there and see if I can help this individual. You end up doing it. You’re the 38th investor, so everyone listen up, you don’t always have to be the first one on the appointment.
He was the 38th investor and he gets the contract, which ultimately leads him to make $150,000 in one deal, which I absolutely love. That’s awesome, Neil.

Neil Stedman: Thanks man.

Cody Hofhine: Okay, so if you were to look back two years ago and we’ve got a lot of new listeners, a lot of people that are upcoming like rockstar rhinos that are going to be the next best wholesaler out there. If you were to go back to the beginning stages and you said, “Hey, if I could do it all over again, this is my one word of advice that I would give to anyone new getting into wholesaling.”

Neil Stedman: Be stupid and just do it. Don’t overthink it.

Cody Hofhine: Deep dive this because I know where you’re going at, but I want to make sure they understand exactly what you mean by be stupid and just get involved.

Neil Stedman: I have derailed my career so many times by overthinking it and I had to make a conscious decision when I became a wholesaler to just do it, just go out and I don’t care if I get rejected 100 times, at least I’ll know that this will work or it won’t. And overthinking about is this the right mailer, is this the right color mailer, is this the right list, will they like me, am I saying the right things on the appointment? All those things are irrelevant. The only thing that I think that matters is if you do the action that causes the result and then you keep following up.
So set up your systems, send out a ton of mailers as most as you can afford to do. I personally like the white ones with the handwritten note. They give me a very good rate of response and don’t worry about rejection.

Cody Hofhine: I love it. [crosstalk 00:21:58]

Neil Stedman: … so much about it and now it doesn’t phase me a bit.

Cody Hofhine: I absolutely love it. Take massive action. I always use the … What is it, where you take the word, an acronym I guess, kiss, keep it simple stupid, meaning just be stupid. Go out there, go out there and take massive action. You’re not going to always win. You’re not going to always be the best, but you are going to make some mistakes. You are going to hear people that tell you to pound sand. You are going to hear people kick you off your porch because you’re two minutes late. You’re going to hear all this, but that’s okay because all of that also led up to $150,000 assignment for Neil Stedman. That is the best part about this is mistake, mistake, mistake, mistake. Go out there, take massive imperfect action. Don’t always 100% know exactly how it’s going to go down, but you go out and take action and it led you to an amazing, amazing year in one deal.

Neil Stedman: Right. And every day I have to remind myself to just to be a big dummy and do it.

Cody Hofhine: Love it. Now are you much of a reader?

Neil Stedman: Oh I read all the time. Absolutely.

Cody Hofhine: Okay. What would be a good book if you’re saying, “Hey, this is the book that helps me.” Whether it’s a mindset book, whether it’s an action item book, what would that book be to tell everyone to say, “Hey, this is one of my favorites. Take a read.”

Neil Stedman: I loved the book called, I think it’s called the pumpkin patch.

Cody Hofhine: Yeah. Is that Mike? Mike, I can’t remember the last name.

Neil Stedman: I don’t remember either.

Cody Hofhine: He’s the one that did Profit First, I believe.

Neil Stedman: Well, the main lesson behind it was just to focus on income producing actions and everything else gets the [inaudible 00:23:36]

Cody Hofhine: I love it. So the pumpkin patch, go look that up because that is a good book and I have read it and I wish I knew the name offhand. Great, great book. Put all the things that are revenue producing like he says and kick out the stuff that’s not, kick out the Facebook, kick out the texting people, kick out all the nonsense and just when you’re focused and laser sharp on the revenue producing things, that’s when you see true growth in your business. I love it. Well Mr. Neil, thank you so much for joining us today on the podcast. I can’t tell our listeners enough that if they would listen to this over and over again, five times, how many gold nuggets they will pull from this of action, being okay with rejection, going out there and just sending … I love this. Here he is, two years into it and more than that when it comes to as an investor and working in real estate and he still personally is handwriting some letters still because it’s something he loves to do.
So there’s things you can do and take away from this podcast that if you will apply it today and actually take massive imperfect action, it would lead you to your next deal. It’d lead you to your first deal and quite frankly, could be just like Neils, $150,000 which is absolutely awesome.
So Neil, thank you so much for joining us. I know you’re a busy man and I know right when you get off this, you’re going to be going right back to work.

Neil Stedman: Yes, sir. You got it.

Cody Hofhine: Okay. Well Neil, thank you again and I know we are going to continue talk to each other, but also we’ve got different live events. I know you can’t make it to the April one, but we’re going to catch you on the January one that we’re going to talk about here in the near future. But it’s always a pleasure talking to you Neil. Thank you so much for joining us.

Neil Stedman: Thanks Cody, anytime buddy.

Cody Hofhine: All right, Rhino Nation, you’ve heard another amazing episode with Neil Stedman. This guy’s a rock star, but it’s because he is not afraid to fail. He’s not afraid to take imperfect action. This guy goes out and gets it done and that’s why he’s successful at what he does. And that’s why his wholesaling business continually grows and his developing business continues to grow because he finds his own deals now, he doesn’t have to buy him from another wholesaler.
So there’s multiple ways that you can use wholesaling and this has been an awesome episode to teach us that. And if you’re not part of the tribe, book a call with our team and you can do it from the exact same website. And if we love what you have to say, we just might invite you to be part of the tribe. Until next time, Rhino Nation, take care.

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