Here’s an advice you’ll hear from this episode that can seem counterproductive: “If you want to win, you need to fail.” If you want to know why this advice makes perfect sense, you have to tune in to this episode!
In today’s show, Mr. TTP himself, Brent Daniels discussed in detail what the wholesaling process is from start to finish. Not only that, he also generously shared some of the most powerful wisdom and insights he has learned along his journey!
If you are still finding your way around the exciting and lucrative wholesaling world, this episode is exactly what you need to hear!
- Why you need to fail to succeed
- How to build your driving for dollars list
- Why you need to look for distressed property owners instead of just regular ones
- How to pre-qualify sellers
- What you need when wholesaling properties
- What ARV means
- Tips on doing lead follow ups
- What offers come down to
- What earnest money is and why it’s important
- Why you need escrow immediately
- The earnest money he requires
- What a “clear to close” is
- Why you need to ensure the buyers funds are in
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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Hey, it is Brent Daniels, Mr. TTP, Mr. Talk To People. I am excited about this one. I am really excited about this one because I wanted to break down, I wanted to go through every single part of the process of a wholesale deal so that you can understand and feel confident and certain what the next step is, because I think when we don’t know what the next step is, it kind of prevents us from taking a lot of action, because we’re kind of worried about making a mistake. Let me just start with this, all right? If you want to win in this business, if you want to win in the wholesaling business, you need to fail, okay?
You need to fail because when you fail, you learn. When you learn, you grow, and when you grow, you win, okay? We need to go out there and take imperfect action. It is about progress, not perfection, okay? With all of this, I understand if you don’t necessarily understand the ins and outs of each one of these steps, but as you’re going through it, it’s going to be more clear and you’re going to get a lot more confidence, so number one starts with find a list to target, okay?
We’re talking a distressed property list. I highly suggest that you get the DealMachine app, right? This is the Driving for Dollars app. Use the coupon code TTP. You have the DealMachine app, you download that, and you start building your Driving for Dollars list.
Basically, all that means is find ugly houses on the streets, in your community, in your neighborhood, and click the link, click the app, and add that to your list, and then start reaching out to those properties, okay, but anyway, you got to find a list. We got to go after a list. That’s the first step, because we’re not going to go with a huge marketing budget, we’re not going to be on TV, we’re not going to be on the radio, we’re not going to put up billboards when we’re just getting started, right? We got to go specifically for distressed property owners. We don’t want to go after just regular property owners.
We’re going to waste our time. Second one is make contact. You have to make contact with the owners of these distressed properties. Isn’t this incredible? You got to make contact with them, and you need to have a quality conversation. A quality conversation comes down to you, asking questions and listening to the answers, okay?
That’s what it is. It’s about having a great tone of voice, it’s understanding how they communicate, and so that they feel comfortable opening up to you about their problem, because every distressed property owner has a problem, okay? That’s without a doubt. Number one is the list. Number two is talk to them.
That’s why this whole thing, TTP is everywhere. You got to talk to them. Most people stop at getting the list, but not you. I know you won’t, so go out there and have a conversation with them. Now, listen, I suggest you be proactive, you pick up the phone or go to the door, and go talk to them today, but if you want to do marketing, if you want to mail, if you want to do something like that, then you can, but I suggest you be proactive.
Either way, you have to have a conversation. Every wholesale deal has that. Number three is pre-qualify them, okay? If you’ve never seen me before or never heard of me before, then let me explain to you how I want you to pre-qualify every single seller every single time. There’s four pillars of pre-qualifying.
Number one is the condition of the property. What repairs does this property need? Is it beautiful or does it need a lot of repairs? Hopefully, they need a lot of love because those are going to be their biggest deals, for sure. Number one is condition.
Number two is their timeline. When do they want to sell the property? We want people with the shortest timelines possible, okay? That’s how we get them to make a decision. That’s how we communicate with them our value so that they can make a decision and shorten down that timeline.
Number three is, what’s their motivation? What’s their problem? Did they just inherit this property? Are they tired landlords? Are they in pre-foreclosure?
Is the property just too much to keep up, they just don’t have the budget to be able to do that? There’s a ton of different reasons why people are motivated to sell their property at a discount. Remember, when people want speed and convenience, they will trade equity for that. They will, so find out what that problem is. Number four is, what’s their price?
What price do they want for this property? Right? We got to get those, condition, timeline, motivation, price. I’m going through this a little bit quick just because we’ve got all 17 to go through here, all right, and I want to keep you in this. I want to keep you until the end so that you get all of this, all right?
Next is due diligence, all right? This is where you do your research. This is where you go and you check out, “What is going on with this property?” This is where you find out first, first, first, first, and nobody ever talks about this, but make sure that the person you’re talking to actually owns the property, okay? Make sure they actually own the property.
They are on the title, all right? Make sure they’re on title. You can look that up at your Tax Assessor website. Make sure that they actually own the property, okay? Make sure that they have equity in the property.
Remember, when we’re wholesaling property, you need two things, you need motivation and you need equity, all right, so they have to have equity in the property, so make sure that you check to make sure that they have equity. Number three is you need to make sure that you understand what the value of that property is. If it’s totally fixed up, what does it sell for? What does it sell for? That is critical.
You need to know what is considered the ARV, after repaired value, okay? Then, from there, depending on what area, what market you’re in, you’re going to determine how much rent do they get for the property. If it’s kind of a lower price property or if it’s a multi-family property, how much rent they get for the property, right? Then, from there, you’re off and running. You’ve got the information that you need, and then obviously, how much repairs does it need, right, but that kind of got into the pre-qualifying, so that’s kind of there.
It’s kind of in pre-qualifying, but you do your due diligence. That’ll give you the numbers, the analytics that you’re looking for so that you can go in and make sure and determine, “Is this a deal or is this not a deal?” Remember, that’s the biggest, biggest, biggest like scary monster when we’re starting out wholesaling is understanding. “Is that a deal or not a deal?” The second scary monster is, “How big of a deal is it?,” because nobody loves getting paid $10,000 when you should’ve gotten paid 80, right?
Just a thought. All right. Next, lead follow up. You got to follow up with these people. Very rarely do you talk to somebody the first time, and then all of a sudden, you’re sitting in front of them and they’re signing the paperwork with you, the agreement with you, so we got to lead follow up.
Let me give you some tips on lead follow up. It’s very simple. Do it. Pick up the phone and call them. If they don’t answer, leave a voicemail and a text message. “Well, how often do I do it?”
As often as you want. It depends on what their timeline is, but if their timeline is short, I want you calling them every single day. I want you following up with them. I want them to know that you’re thinking about them, that you’re there, that you’re available to go see them or send them the offer, or get on some sort of virtual conversation or Zoom meeting or whatever you want to do with them, a FaceTime, whatever you want to do with these people. Get in front of them, but you got to do your lead follow up.
Lead follow up, lead follow up, lead follow up. You will not lose deals from excess lead follow up. You will lose deals from not following up enough, okay? Next, appointment. Now’s the time.
You’ve got your list. You had a conversation with them. It’s a lead. You have pre-qualified them. You’ve done your due diligence. You followed up, and finally, you’re on the appointment.
Ooh, it’s scary. It’s scary. No, it’s not. You’ve already pre-qualified them. You know the condition, the timeline, the motivation, the price. Now, now you’re just meeting them and you’re making sure that everything fits.
Going on the presentation is really just a natural progression of a really good pre-qualifying, and really good lead follow up. You’re going there to meet them, feel good about things so they understand that a human being is buying their property and working with them. They understand who you are. They get to see you and kind of be around you, and then the next step is your offer presentation, right? This is when you sit down at the table, knee-to-knee, belly-to-belly, face-to-face, or if it’s virtual, you do this over the phone, but this is when you present your offer, and remember, offers, deals come down to three things, price, terms, and you, okay, but you already know the price, you already know the terms.
Now, it comes down to you, whether or not they like you, want to do business with you, you see if there’s any further objections coming out of them, and you want to make sure if they have any other thing that’s stopping them from moving forward with you, so you’re presenting the offer. You’re letting them know that the agreed price is there, that the terms that you’re buying it as is, that it’s cash, that you pay the closing costs, all of these things. Next is contract acceptance. Contract acceptance. They signed the contract.
They signed the agreement. Oh, yeah. We are here. It started. It started what? Seven steps, eight steps ago.
Oh, my gosh. It started from a list, and now I got a signed contract. Oh, yeah, but it’s not over yet, because the signed contract doesn’t get you paid, okay? The signed contract gets you the potential of closing and solving that homeowner’s problem, and when you solve that homeowner’s problem, that’s when you get paid. It is just potential, but it feels good to celebrate it a little bit.
I’m being honest. It feels good to celebrate that a little bit. Anyway, don’t celebrate it too much, right? Next, you got to open up escrow and deposit the earnest money, okay? Just check your state. See if you need to put earnest money to make it a valid contract.
I always liked doing it. It shows that I’m serious. If anything gets sticky and the attorneys get involved, they’re like, “Oh, you did put earnest money. It looks better.” I like putting earnest money down and open escrow immediately.
I open escrow, and my acquisition managers open escrow at the table with the owner. We have an app called TurboScan. We literally take a picture of it and email it right to the escrow officer, or in some cases, your closing attorney, all right, so make sure that you do that. Open that up. Next, we got to start marketing this to cash buyers.
You got to market this opportunity to purchase this property to cash buyers. Remember, unless you’re a real estate agent and licensed, you’re not selling the property, you’re selling the potential to purchase this property, which is the contract that you just got signed, okay? Think about it. You are selling a piece of paper. You’re selling the right to purchase that property, and you’re marketing that, and you’re getting as many people that you can, knowing about this potential opportunity, all right?
Then, from there, the next step is your cash buyer inspection. This is when, if your cash buyers need to see the property, they’re going through the house, they’re checking it out, and then they give you an offer. They want you to assign that deal to them. It depends. Now, this is traditional wholesale. This isn’t a double close, this isn’t a double escrow, so we’re talking assigning the contract to them, all right?
There’s going to be people that are going to want to jump all over it, right, but guess what? Sometimes they jump all over it, but they don’t. They just want to win, and they can’t actually buy the property because they’re just fake and they don’t have money, so make sure this next step, when you assign the contract, that’s the next step, you assign the contract to a cash buyer that you pick the one with a good reputation, that isn’t an asshole, that is communicating with you, that is not trying to bully you, and that actually has money to purchase this property, or a good reputation for selling it to a bunch of buyers that they work with, all right? Then, the next step here, step 13 is make sure after you assign that contract, that they deposit their earnest money. We always require a $5,000 earnest money deposit on every single deal, okay?
This keeps them in it, nonrefundable. You’re not getting that money back. Close this deal, cash buyer. That’s where you want to be. You want to be, and depending on the price point I get, if you’re under 100,000, if you want to go 2,500 or 3,000, I’m fine with that, but anything over 100, you better go 5,000.
I want skin in the game. I want them to prove to me that they will actually close in this deal and they are committed to it. I’m telling you, that earnest money needs to be in as soon as that title company opens, or within like … 24 hours is a long time for me. I like it real quick.
I want that earnest money, and it’s made out to the title company or closing attorney. It’s not made out to you, okay? That’s another misconception. Don’t let the title company organize and manage all the money. Trust me, it’s going to save you a lot of headache down the road.
Let the title company manage the finances or the closing attorney. Got it? Perfect. Okay, good. Then, the next step after getting the earnest money deposit, the next step is behind the scenes this whole time.
Remember when I told you that I pulled out my phone and I TurboScanned, and I sent that to the escrow officer? Well, behind the scenes, the escrow officer is there and they’re pulling title, and they’re sending things to the seller to sign identity statements and making sure it’s the right person, and loan payoff information, and all these things, a lien payoff information. They’re behind the scenes working, working, working, working to make sure that they can transfer the title cleanly to the next buyer, all right, without any, what’s called clouds on title. Don’t get stuck with it. If this is your first, if this is confusing or whatever, it just basically means that if they owe money on their property, if they have a lien that says this has to be paid off before they can transfer that property, that all those get paid off, okay?
It’s the same thing with like a car loan, right? If you have a car loan, you can’t just sell it for cash and not pay off that car loan. You can’t get a title for it, right? This is what the title company does. The title company goes out and make sure that all the liens and everything’s taken care of, and they’re working behind the scenes, and they’re like part of your team, and they’re doing it, and then finally, they get what’s called a clear to close.
Clear to close. That means everything’s taken care of, everything’s organized, everything’s ready. All the seller has to do is sign their closing documents. All the buyer has to do, sign their documents and send in the money. Now, here is where the tricky part …
It’s not really tricky, but when you kind of are just waiting, like your palms get a little bit sweaty, just, “When is the buyer’s funds going to be there? When are they going to wire it in? When are they going to bring it in? Are they going to close on time?,” all of these things are going through your head, “I hope things don’t just blow up at the end of this transaction,” that’s why the next step is, step 15, it says it right here, check that the buyer’s funds are in, all right? Don’t go through that anxiety. Don’t go through that stress.
Check that the buyer’s funds are in. Check that they’re wiring it in. If they haven’t called the buyer, “When are you wiring the funds in?” Put it in your contract that they have to get it in 48 hours, 72 hours before the closing date, right? Now, we’re talking. Now, we’re not feeling nervous, and stressful, and anxious, and almost depressed and worried about it, and totally unproductive and not getting other leads and other deals, and oh, it’s in the back of our head going on a different appointment.
Now, we’re screwing that thing up or making calls and it’s weighing on our mind and we’re just, “Oh, I don’t want to do anything today until I get this deal closed. I just want to babysit it and hold it and make sure that it happens.” Just call the title company. Make sure that the buyer’s funds are in. Talk to the buyers. See when they’re going to come in.
Got it? I’m telling you all this from experience. I’m telling you, I’ve gone through all this, all right? The next thing is, number 16 is close the deal. The deal closes. The deal closes.
The buyer’s funds came in, paid the seller, paid the seller’s liens off, paid everything there with the price, everything is done, and it’s over, and it goes to number 17, the 17th step, our favorite, your favorite, my favorite, everybody’s favorite, you get paid, and you get to determine, by the way. This is a sweet, little deal that maybe you didn’t know. You get to determine if you want to get a cashier’s check or wired straight into your account. I suggest for the first one, you get a cashier’s check. It just feels badass, but listen, you don’t have to kill trees. You could get a wire and it’s just as good.
Either way, it goes to the same place, but that’s it. That’s the 17 steps of every single wholesale transaction. The beautiful thing is if you’ve been taking notes, write down these 17 steps, use it as a checklist as you’re going through, and then as you’re building your team, guess what? You are doing all these things in the beginning, but then, you get to decide who on your team in your business is going to do each and every one of these steps. Right now, the only thing that I do on this is number 17, and that’s get paid. My company does all the rest, and that’s where I want you to be, but you got to follow these 17 steps.
You got to go out there with confidence, you got to start building your pipeline of leads, you start got to go on appointments, you got to start really, really, really working this business because it is the most incredible business ever. You are going to have so much fun and it is so incredibly profitable, and the ability for this to change your financial future is absolutely magical. I hope you go out today. I hope you’re taking action. I hope you take these 17 steps, you feel strong, and you go out and get a deal.
Until next time, guys. Love you. See you.