Posted on: December 03, 2020
WI 572 | Real Estate Deals

 

While today’s guest has only been in the business for 5 years, he has already made his mark in one of the toughest real estate markets—Denver, Colorado.

Just like most people, Daniel Versteeg experienced a few bumps and challenges along the way when he first started. However, he’s now a very successful real estate entrepreneur who does over 60 deals a year while working for only 20 to 30 hours!

In this episode, Daniel not only shared his inspiring real estate journey, he also shared how he runs a very successful real estate business. How Daniel keeps his list fresh, how his business is set up at the moment, and how he sets limits in terms of spending, you’ll learn it all here so don’t forget to tune in!

How to Do 60+ Real Estate Deals Per Year Working Only 20-30 Hours Per Week

Episode Transcription

I’m excited about this show because this interview is with somebody that doesn’t want to be in the spotlight. Still, he has built an incredible real estate wholesaling and flipping business over several years in one of the toughest markets possible in Denver, Colorado. It is my pleasure to introduce to the show Mr. Daniel Versteeg, how are you?

I’m good. Thank you for having me.

You have been on this path for several years. What were you doing before you discovered wholesaling real estate?

I was in college. I played college basketball. I’ve got injured out in Oregon while I was playing out there. From there, I didn’t know what I wanted to do. I finished up school and got in a sales job. I wasn’t feeling that and then got into property management. I realized managing properties isn’t that fun.

Was your door to open up your path to real estate was property management?

I knew I wanted to be in real estate in some capacity. The thing that triggered that was Rich Dad Poor Dad, like everybody else. That’s what planted the seed. From there, I took the internship. I realized it wasn’t exactly what I thought it was. I came across a YouTube video about wholesaling and I was like, “This is the way that I can get in.” I was working from about 7:00 AM to 5:00 PM, and then drive home traffic is about 6:00, so it’s late. From 6:00 to about 1:00, we would be writing yellow letters. That’s how we first started.

The crazy thing is we read this Rich Dad Poor Dad. We are like, “Real estate. That’s what it’s about.” It’s not like an instruction manual. They are not like, “This is how you go out and find a motivated seller and a discounted property.” We are stuck and we go, “I have this real estate passion. I know that I want to find a discounted property, want to own property and have these assets that give me passive income and all of these things.” We are getting excited, and then it’s like, “What do we do next?”

That was the biggest problem for me because I didn’t know how to break into it. That’s why I thought sales could be a commission job to break into it. Not all sales jobs make you a lot of money. I was in industrial and construction sales. It wasn’t that lucrative. As he talks about in the books, I couldn’t build up the capital to get rental income. When you come across the wholesaling, that’s the fastest way to make a good amount of money in a short amount of time.

That is the path, and I have seen it time and time again. Read Rich Dad Poor Dad. Somehow, it finds its way into somebody’s hands. They have sold 40 million copies of Rich Dad Poor Dad. It has been in a lot of people’s hands but number one personal finance for forever. I don’t think a lot of people take that next step. That goes, “How do I do it?” You went into it, and you saw an opportunity. Has somebody allowed you to get into property management?

I was browsing Craigslist to find an internship paid in the real estate field, and I came across a property manager. It was a small company privately owned, and I worked there. I was managing probably 60 to 70 doors. It wasn’t what I thought it was because he’s a developer, too. I was on the side and managing all his properties, a lot of evicting, dealing with tenants, calls, broken stuff, driving around it, and it wasn’t what I wanted to do.

There’s no instruction manual in real estate. You have to gain experience to learn.

You get thrown into real estate in the worst position, which is property management. It’s not worse than a sense of fulfillment and all these other things but it is a lot of dealing with dramas and issues, and you have to go through all of this, and you are almost on call all the time dealing with everybody else’s issues. It sounds crazy but it set the platform for you, building a business to where you are controlling it. You are the one being proactive, going out there, and you started first with yellow letters. How did that go?

It was difficult. That is how I’ve got my first deal. I was writing a ton of yellow letters and sent them out every night. I forget the specifics of it. They handed me $10,000, and right after I made that, I quit my job, which might not have been the smartest thing. I feel like entrepreneurs jump in two feet in because I thought in my mind, “If I can do it once, twice, and three times, it’s not going to take as long,” because, at the time, I was only making about $35,000 a year. If you make $10,000, almost a third of your yearly salary, it makes sense to think that way. After that, it was a little difficult because you didn’t have as much money as you thought.

Let’s time travel for a second. You make $10,000, and you are amazed. It feels like $1 million. I remember the first time I’ve got $85,000 and I was so glad. How do you prevent yourself from spending too much when you are initially making these checks? You and I know this. We talk to people, and we are around people all the time is they go, “I’ve got to spend all of this money into marketing. I’ve got to spend it on hiring people. I’ve got to pay off this and do that.” All of a sudden, that $10,000 goes fast. How do you set limits on your spending in your business?

At the time, I did spend all the $10,000 the wrong way. I had to take out credit cards to try and pay for more mail because I stopped writing them. I started sending out postcards and that’s expensive. In a market like Denver, it’s saturated with mail, that is very hard to get a deal. I ran out of money and that’s how I went virtual. I’m going to Kansas City because it’s a cashflow market, where you have more opportunity as far as having people who flip and buy and hold. In Colorado, it’s mostly people who buy to flip. Some people buy to hold but mostly flip.

That’s a beautiful distinction, and I want to clarify this for everybody that’s reading. It’s important to look at, and you look at your market and you go, “Is this an appreciation market or a growing market? Is this something that people are looking to buy and flip in or is this where primarily, the move is to buy these properties, keep them forever and get the cashflow?” That’s the world. Are you saying that it was Kansas City that was a mix of both?

I thought it would be easier. Even though it’s virtual, it’s different. It wasn’t necessarily easier but then, I had run out of money. My whole thing was I’ve got to pick up the phone and start calling. That’s how we transitioned into cold calling.

The mail wasn’t hidden, you are spending a ton and waiting for these calls to come in. Was there any anxiety when you spent that money and waiting for calls?

Yes, because you don’t know. It’s easier to play offense when you are cold calling but it’s hit or miss when your direct mail. You get a response rate of about 1%, maybe 2%, and you are hoping that you are the person they call out of the stack of cars because it is saturated, you can get this. I’m not going to discount it. You can 100% get deals.

The marketing works. It just depends on how much money you want to keep.

That’s the biggest thing for me. Direct mail is more expensive than what I want to spend on my marketing but it works 100%.

WI 572 | Real Estate Deals

Real Estate Deals: It’s really important to look at your market and identify whether it’s an appreciation or growing market. Get the cash flow, and that’s the world.

 
You see some of these bigger companies even come in the iBuyers of what they are called. Zillow, Opendoor, and Offerpads spent so much money on marketing and have to do much volume but spend millions of dollars in some of these bigger markets. You can’t compete against them. When you are spending even $10,000 or $20,000, you can do a deal here and there. The question is, “How much can you keep?” The point is we would need money to keep so that we can buy assets.

It’s all about profit. It’s not about revenue.

In the introduction, and I have said it a million times, we talk about that the most proven path to financial freedom is finding discounted properties. First, we find them, and then we wholesale them so that we can get the money. When we find the ones that we want to keep, we buy those at a discount. It’s not only are we increasing our net worth but now we’ve got more cashflow because we bought them at a bigger discount. That’s the game and it’s just trading up.

We have been playing it since we are 8, 10 to 12 years old. It’s Monopoly. You buy a single-family house, you sell those and you buy an apartment, multifamily. You do that and all of a sudden, cashflow. It goes back to Rich Dad Poor Dad. Now your passive income is coming in and is covering your expenses.

That’s the whole point of wholesaling. It’s a quick buck but you’ve got to understand I’m doing wholesale so that I can get to the next level. It’s not to say I’m wholesaling the whole time. It’s a good cashflow business to always have but you can always expand on it because you want to be a real estate investor, not a real estate wholesaler.

Do you also flip?

We do and mostly wholetailing, so it was a lot of lipstick stuff. I don’t like big construction. I will purchase some if it’s $20,000 to $30,0000 in renovation costs. I don’t want to go over that because it takes time. It’s the biggest thing.

It’s 60 deals a year he’s doing. This is not a small little operation here. How much time do you spend in your business?

Probably 20 to 30 hours.

It has taken you years to be able to build this up. You have been going for several years and you started this in 2015. This has taken some time to get that consistency. You get your $10,000 check. You don’t have a boss anymore. You are off and running. You start now. Are you making cold calls yourself at the beginning or did you hire right away?

In the beginning, it was just me. I will tell you now, the anxiety of cold calling will never go away. You have to be fearless about it. In the beginning, I didn’t know how many hours I was doing but it was a lot. It was probably 4 or 5 hours a day and I was trying to max it out.

4 to 5 hours and you personally making calls.

Just pick up the phone and start calling. That’s how you get started.

Once I quit my job, it gave me the time to do it. That’s where I was at, especially after I went broke after spending the money through direct mail. I didn’t have a lot of options.

There’s no motivation like having to make something happen.

There was a two-week span where I drove Uber because I needed money to do it. When you are going through it, you will hustle through it.

You are driving Uber to now working 20 to 30 hours in a business that’s doing 60 deals a year. Not only 60 deals but that’s the combination between wholesaling and flipping, and you are not going to flip these things or wholetail it. We call it flipping. For anybody that’s reading this first time, wholetail is when you buy the property or the deal, you clean it up a little bit and put it right back on the MLS. Do you have your license or do you list it with somebody?

No, I listed.

You listed with an agent, and then you sell it fast because it’s still discounted but now you are exposing it to every buyer in the world that’s looking at it, which is on the MLS. That’s the biggest advantage of wholetailing.

It doesn’t take a lot of work to purchase the property because we are already looking for a deeply discounted. If we can buy it super deep, put $10,000 carpet paint, and then put it back on the MLS, the way the market is now. In Colorado, you will get a bigger spread that way than wholesaling it.

Now it went from you. You were doing 4 to 5 hours until you did enough deals to start hiring. Now you’ve got an army of people making calls for you.

We try and keep it 6 to 10 cold callers. I get them from Upwork. We just have them on the phones, pounding the phones the whole time, and then an acquisition who talks to the sellers. Once we get a lead from there, we dispositioned, and that’s pretty much the team.

When Daniel is saying 6 to 10, there’s fluctuation there with the callers because sometimes they are not effective. You need to replace them and you are training people but they are not active yet or your lists are getting a little bit more congested. I want to get into where you are pulling that much data because those are a lot of horsepowers. Are they calling full-time?

We keep them 4 to 5 because after about 4 hours they get tired. We usually keep it about 20 to 25 hours of work per week. It depends on the callers.

You are calling between 150 and 250 hours a week. That’s a lot of numbers that you have to go through. That’s a lot of lists. How do you keep your list fresh?

WI 572 | Real Estate Deals

Real Estate Deals: It’s easier when you’re cold calling because it’s a hit or miss in direct mail, and you get a response rate of about 1%- 2%. It is saturated, and you can definitely get into it.

 
I love absentee lists. We have 4 counties in Denver and 1 in Pueblo, so 5 counties total. We will pull everything as much as we can. We won’t discriminate as far as how many years own, none of that. We will max it out. We’ve got to open it up. Sometimes we will even do 55 and older because we run out of data but we keep rotating them. We use PropStream and REO Pro. We pull a couple of lists. We use lists source too sometimes.

Where do you get your phone numbers from?

We get them from Batch Skip Tracing. They are great data.

You are using a PropStream. If you haven’t used PropStream, check it out at TTPData.com, check that out. It’s a fantastic tool, and then you pull those lists. An interesting thing that you said there was, you are not looking at the length of ownership on these properties. Do you go at least a year?

We go for everything because sometimes we have come across where flippers who are new, they purchased properties that are deeply discounted but they don’t have the funds to finish the project. It’s the same as probate property could go into somebody else’s name within the month. You don’t want to miss that data either.

Something that he’s pointing out here is when you are pulling your list for the first time, I always suggest that you go back ownership for ten years. Have them own the property for ten years because over that ten years, if they are absentee, had tenants and haven’t been updating the property or maybe a tenant have been beaten the hell out of the property and they finally moved out, that’s when you get deep discounted properties. You probably went through that.

I want to point on that, especially when you are starting out, you want to be more targeted because you are not probably going to have the budget. If you are cold calling, you don’t have the budget to expand too wide, so I would go more targeted. If they own the property ten plus years and it’s an absentee, there’s a good chance that they are thinking of retirement. A lot of our properties come from there, “I’m thinking of retiring. I don’t want to be a landlord anymore.” That’s a hotlist that’s worth pulling, for sure.

Did you mention probates and you deal with that?

Yes.

This is a question I get all the time. What do you say differently to probate than you say to an absentee owner?

I don’t say it. It’s the same thing. Motivation is motivation at the end of the day.

That’s it. You have to see if they would consider an offer on their property. You’ve got to see where they are at in the process. With probate, you need a handle with care. They have lost a loved one or at least somebody that’s in their family if they didn’t have a great relationship but they are now dealing with a situation where a lot of people don’t have the money to be able to keep that property up or renovate that property.

The stat is 75% of people sell a property they inherit within the first 90 days of new ownership. It’s hotlist, not only probate but regular inherited. When people do have wills and people inherit the property, they need to do something with it. They get the ownership of the property a little bit faster. You are doing all these deals. Did you get your team set up and an acquisition manager?

Acquisition disposition, a call com manager who manages and makes sure everybody is making their calls.

How does your cash buyer database look? This is up for debate in a lot of cases. Some people say, “Have twenty people that you trust, so nobody goes around your back, tries to steal your deal, and deal with the drama or blast it out to as many people as possible so that you are getting the most out of every deal.”

Marketing works. It just depends on how much money you want.

It depends on the market because when we work in Southern Colorado, we have a handful of people that we sell to because of the fact that there’s less abundance. When we are doing stuff in Denver, it makes more sense to put it out there a little bit more because you want more eyes on it. It depends. I do think at the end of the day, if you have a hot deal, you should be able to sell it. That’s the main thing. There’s a debate about, “Should I get the buyers first or the deal first?” I personally think you should get the deal first but that’s just my opinion.

I do too in this market. I feel like when the supply and demand are shifted that there’s a lack of supply. You are going to find the buyer and what I found is we sell to a lot of real estate agents, not to them personally but to who they represent their clients. Some of them now are bidding on properties, there are 15 to 20 offers on every property. They are now telling their buyers, “You need to go in with cash. Here’s a private money resource for you. Buy it with cash and refinance afterward or you are not going to have a shot.”

That’s the way the market is. Like you said, “If it’s a softer market, find what your buyer wants.” It depends but now in the market in Phoenix too, I’m sure. It’s probably the best. If you have a deal, you will be able to sell it.

Let’s break down a deal that you have done so that we can ring this victory bell here.

In 2021, we had a gentleman. He was distressed in the fact that he had cancer and he needed the money, unfortunately, to plan his funeral. It’s very sad but he wanted to sell the property, so he had the money for that and his family wouldn’t have to pay for it. He had tenants in there. They were pretty good. It was a rental property for him but he couldn’t manage it. He had somebody who was supposed to be managing it but wasn’t. He wasn’t getting a lot of rent for it. We want to get up out from under it. We contacted him and he was nice. We purchased it or got it contracted for $53,000.

This is Pueblo because you can’t buy an apartment spot in Denver.

The average home price of Denver is about $600,000, so this is Pueblo for sure. We can get them cheaper down there but we contracted it for $53,000.

What was the condition?

It was decent on the inside, but the exterior was your shot. It needed all new siding, roof and gutters. It was not in it’s best. The interior needs to update, too. It wasn’t just trash.

Was it a bigger house or a smaller house?

It was a decent size house. It was a four-bedroom hous, but they were nonconforming in the basement. It was technically a two-bed with a finished basement. That’s where we’ve got lucky there.

WI 572 | Real Estate Deals

Real Estate Deals: Wholesaling business is quick money, but you should always be trying to grow.

 
Nonconforming means what?

Nonconforming means that there’s not a crawl space big enough for you to get out of the basement. You can’t call it a living space but there was plenty of space.

I don’t know these things because Arizona doesn’t have basements. Everybody is screaming at me now like, “Are you an idiot?” The condition is cosmetic and his timeline was now. The time’s ticking with his illness and the motivation was he wanted to get rid of it and be able to sell it. Have the cash so that his family didn’t have the responsibility of that. What is the price?

We ended up selling it for $85,000. About $32,000 are our assignment fees. I promise it’s possible to do this.

That’s the thing and it’s interesting seeing your evolution from going from Uber to 4 to 5 hours a day calling to building it up to the point where you are hiring 6 to 10 people to make the calls for you. Now you’ve got an acquisition manager running the sales and a disposition manager selling the deals. At this point, for everybody, when you are at Daniel’s position, your job is to make sure that they are successful. The way to do that is make sure that they have fresh lists, that you are going after the right deals, that you are motivating them and that they are held accountable for hitting the task. Are you going to these properties? Are you meeting the sellers face-to-face? Are you sitting out?

Direct mail is just more expensive than what you want to spend on marketing. But it works 100%.

Every once in a while but not too often. It’s a case-by-case basis but for the most part, I’m not involved. On top of that, we like to make a lot of our offers on the phone. We will make the offer, and then if we need to go out to look at it face-to-face if that’s what they want, then we will do that. For the majority of it, we can go ahead and comp the properties online, and we will know where we need to be.

Is this a business that you want to have for a long time? Do you see it like, “Does this stop?”

I don’t think it will stop. I always want to have a wholesaling business because it’s quick money but I do think that you should always be trying to grow. That’s where the wholetailing and flipping side has come into it. Eventually, we want to get into more multifamily buy and hold commercial stuff.

The point I’m trying to get here is to have patience out there, everybody, and understand that he’s only several years into it. That might sound like a crazy amount of time but you are going to do this forever. You can do this until you are 100 years old. It’s not something that you go home every day and you are like, “I hate this business. I’m exhausted.” You are vibrant, in shape, excited, you have energy.

You’ve got to be excited about it. It’s fun. You wake up and you are passionate about it because you get to help people. Once you realize that you are helping people, and not looking at them as dollar signs, that’s when you get successful.

Everybody out there, if this is your first 90 days, your first year, stick with it. I’m telling you, if you have enough quality conversations with distressed property owners, you can’t lose. It’s impossible. You will find deals. I don’t care how bad you are or how inexperienced you are. You will find opportunities. It’s not like you came from a family and a background of all these real estate tycoons that showed you the path where we are doing all these things. You jumped into it, you read a book, it sparked an interest, you’ve got into the industry through an internship, and then you did your first deal. Now you’ve got a business that you are running 20 to 30 hours a week doing 60 deals. It’s incredible.

You’ve got to work hard. That’s the biggest thing. If you have the work ethic, you can make anything happen.

Speak to somebody that’s starting now. They are getting ready. They are reading this and want to take some action. What do you think they should do?

You’ve got to start. The biggest thing is starting. I know it’s going to be scary like there’s no way around it but you’ve got to be fearless about it. The more practice you get, the better you are going to be and the less scary it’s going to be. That’s the biggest thing and then stay with it because it’s not easy. I know a lot of so-called gurus make it seem so easy. It’s not. You’ve got to put the hours in every single day. Consistency is what gets you successful. Stay consistent with it, even when it’s hard, and then you should be good.

Do you have a way that people can reach out to you if they want to say congratulations if they want to partner up with you or squat up with you in Colorado?

Buy assets. It’s all about profit. It’s not about revenue.

My email is MillennialPropertyInvestments@gmail.com. That will go directly to me. You can reach out there and we can have good talks.

This is real life. He’s doing this every single day and it’s such an inspiration. You can do this but you need to start taking action and understand. It’s hard work but you can do this. You can live this life and follow this man’s path. If you are interested in joining the most proactive group in real estate investing, it is the TTP program and 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. We look forward to talking to you and as I always sign off, I encourage you to talk to people. Until next time, love you.

Important Links:

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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