Posted on: December 25, 2020
WI 588 | Leap Of Faith

 

For two decades, today’s hardworking guest had a stable job. While he earned a substantial amount, he knew what he was making won’t make him financially free. So, he took a leap of faith and ventured into something life-changing: wholesaling.

George Aplicano has been running a thriving wholesaling business for four years now. Successful and financially-free, there’s no denying taking a chance is one of the best decisions he has ever made.

In this episode, George shared how his wholesaling journey started, what his current business structure is like, and the three things they track. He also provided a breakdown of one of his most lucrative deals.

If you’re considering taking a leap of faith but unsure if it’s worth it, today’s episode might just give you the clarity you need, so don’t miss it!

Case Study – Leaving a Secure Job of 20 Years to Go All-in on Wholesaling

Episode Transcription

In this episode, you are going to be blown away. Raphael Cortez is going to be talking with someone who left a secure job, a job that he was working at for twenty years. He left this job to go all-in on wholesaling. He dreams of escaping the rat race and building his own business. He was able to do this and Raphael is going to go deep with this guy, and I think this is going to resonate with you.

There are many people who are stuck in a job that they don’t like, or some people even hate their jobs. This episode is going to inspire, motivate and make you go deep within, especially if you are one of those people in that situation and maybe wanting more for yourself and your family. I hope that this episode shows you that you can absolutely do this. If you are struggling with it, I hope that this gives you the permission that you need, so enjoy the episode.

We have Mr. George Aplicano with us. Thanks for being here. I appreciate it.

How are you guys doing? Welcome, tribe.

I am doing great. Thanks for stopping by. You’re crushing it. You’re in my market. Tell us what’s your background and how did you get started in real estate?

I was a mortgage loan officer for twenty years. I came to the realization that at the end of my twenty years, even making loans, I wasn’t making enough to pay for my daughter’s college. I was doing well enough but it wasn’t going to be enough to have my daughter or my son’s college paid off. Financial freedom was far away. I read Rich Dad Poor Dad as most wholesalers do, and that started the mind shift.

From there, it took off. I found wholesaling and figured out how that process worked. I met a lot of different partners here in this wonderful Phoenix market. We’re collaborating with a lot of our peer groups out here. Everybody is pushing everybody to go forward. I’m part of that and I’m blessed to be a part of it. In a nutshell, it’s a four-year spiel in less than a minute.

You’ve been at it for over four years, right?

Correct.

It doesn’t take much to get the wheels rolling. I see you regularly all over my inbox and properties left and right, all over the country, doing a lot of massive stuff, and moving along quite nicely. That’s cool. Let’s dive a little bit into the technical aspect. How many deals do you have on the whiteboard?

We have a total of eight deals. We ended up closing two, so we had ten.

WI 588 | Leap Of Faith

Leap Of Faith: It’s not really the amount of the first check coming in but the stamp on it that confirms its legitimacy.

 

You’re in a competitive market, so finding sellers, what’s working for you guys?

I’ve done it all. I did the bandit signs, direct mail, cold calls, the RVMs, Ringless Voicemails, and also texting. Amazingly enough, it all works to a specific degree. At the end of the day, there are certain things that are more comfortable for some people than others. For me, I found that in cold call. In my mortgage background, I was raised in a call center. I was a manager for a call center. For me, I’m looking at little things like aux times, dials and how effective people are on their calls. To me, that’s something that’s second nature.

For me to look at that report going, “My call center is doing X. My X equals a number of deals every single month,” that’s easy for me. It may not be for everybody but it’s easy for me. At the end of the day, you’re never going to get a deal unless you talk to people. You have to talk to them and sell it. If you’re not making that connection, you’re not building those bridges with the sellers, and you’re not solving those problems, you’re not getting anywhere. We have a call center that calls. We buy our data and a lot of it is absentee owners. We both sit on volume. Based on that volume, we get it. We have about five people at our call center that we hire. We also have two in-house acquisition people as well, and they are calling those hot leads.

Your backbone from marketing is going to be cold calling, which makes perfect sense. I see a lot of people not giving it the time. There are different strategies. Everything works for a period of time until it doesn’t. What I mean by that is sometimes it will get saturated. For example, everybody started doing RVMs, Ringless Voicemail Drops, and then compliance and all kinds of stuff started bubbling up. It stopped working and it got sketchy. I did the same thing and it was working for a while, but the thing is people keep it on the technology side.

For example, if you start getting a lead through SMS and then you start a conversation and actually respond to it, “Do you want to sell your house?” “Yes, I want to sell my house.” They will keep it on the text message instead of jumping on the phone right away and having a one-to-one conversation and a human connection. Nothing is going to convert at the end of the day. It’s the leads and having the actual conversation. That’s why I’m a huge believer. Cold calling is our backbone as well. We supplement it with a lot of different stuff like social media and pay-per-click. We do a portion of all that. We do a lot of SMS but the backbone is cold calling.

My theory is that with SMS and then ringless voicemails, that’s getting a prospect. You get it where they’re warm leads. From there, the call center will now go ahead and capture it and make it into a warm lead. In the end, my acquisition people will convert it. That’s my process. The great thing that helped out in securing that process was the Podio. That was an incredible tool that you blessed me with. It’s an incredible tool because everything that we have is categorized.

Since we’re heavy on social media, we are getting acquisition people from everywhere else going, “I have this deal. I don’t know how to sell it. I don’t know how to dispo it.” We’re able to go ahead and capture that and recognize, “Part of our business is coming from JV deals and cold calls.” Now, we’re about 50/50. It’s pretty incredible that that’s happening and it’s coming from social media.

Other people that are getting into the business are reaching out to me and I’m pretty sure that that’s happening to you as well, saying, “I have this deal. I don’t know what to do with it. Can you walk me through it?” Because of the system that you provided, we’re able to track all of that information now. Before, it was up in the air and trying to figure that out.

Thank you. I appreciate that. It’s one of the key things. You can use whatever you have at your disposal. It can be a spreadsheet or whatever it is. It doesn’t have to be a big, fancy system. If you have it in place, it’s going to be a lot easier. The point is to track where things are coming from. That way, you know where your time is best spent. I spent a lot of time on the wrong stuff at the beginning because I thought it was working. I was getting a lot of busy work coming in.

For example, with ringless voicemails, we would have to sort out through all the phone calls and that took hours. At the end of the day, the leads that we were getting from that type of marketing were hardly converting to prospects and the deal amount was minimum. It’s important to keep an eye out for the stuff that you track. What are you guys tracking? Give me the top three things that you track in your business.

The time is never going to be perfect for getting started.

The first thing is dials per day. We have to ensure that every single person from the call center is dialing at least 300 dials per day. From there, based on that data, how many leads are generated. From a generation standpoint, we are gaining about 25 to 30 leads per week. From those, it easily converts into 1 or 2 contracts. That’s how our KPIs are. On the acquisition side, we want to make sure that those guys get at least two contracts per week. Just like everything else, it’s a challenge and I’m growing. I don’t have everything nailed down to a tee, and it’s not perfect.

It never will.

We’re tracking and paying all these things for the call center. Do I know for sure that my guys are getting two deals a week from the call center? Not really. What happens is that I’m transferring over some of the JV deals that we’re getting from other people to them so that they can get it properly in place inside of our system and then dispo it out. There’s a little bit of that battle. I see down the road that stuff is going to be something fixed. That’s easily fixable.

If you have something that’s wobbly in the business, you know where to peg it once you have a process in place. Nobody starts with a process in place. You start with an idea and then a sense of direction of, “This is what I got to do. Let’s try it out.” Psychologically, it’s one of the hardest things to get through because there’s all that fear of uncertainty and all that, “I’m not sure what to do. I don’t know where exactly to go from here.” It can stop you in your tracks. When you started wholesaling and you got into it, there was a click right there. You decided to jump into it. What did it look like then in comparison to what it is now? Did you start with employees?

No. It was hard. It was a lot of days of ramen. It was a struggle. There’s that saying, “Nothing worthwhile is easy.”

If it were, everybody would do it.

I understood what flipping was. My mom and dad sold high-end shoes. What they would do is they would buy some shoes that needed some adjusting, fixing, or whatever. They would fix them up and then they would try to resell them at half of the price of whatever they were. They flipped shoes. I know it sounds silly.

We’re doing the same with contracts. We’re doing the same thing with paperwork.

That’s the whole thing. Wells Fargo did teach me a little bit about the business. To your point, when I first started, I figured that the easiest way for me to get into this business was to go and work with an investor, somebody that’s already in the business. I did that. I made the phone calls. I did the contracts and it was brutal. It was a ton of rejection and a ton of people saying no, but I figured out a way for me to do it. Unbelievably enough, the first investor that I worked with didn’t pay me my commission when I started. It was at a point where I needed it.

It’s easy to get demoralized like that.

I had a goal, and I was going to see my way through it. Eventually, I started doing cold calls on Craigslist.

People undermine Craigslist all the time but it works. There are certain things that it works well for.

WI 588 | Leap Of Faith

Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine

I called on Zillow as well. That’s how I got my database. Once I got a contract together for myself, I was like, “Now I have a contract, what do I do with it?” I reached out to a couple of different investors and some friends of mine that I met along the way, they helped me disposition it and I made money. Once that happened, my proof of concept was secure and that was it. That was game over. Once I figured out, “This is all I need.”

If you don’t mind me asking, what was the spread on that first deal?

The total spread was $10,000. With my percentages and everybody else wanting a chunk of it or whatever, I ended up making $2,500.

You saw $10,000 rolled in. I always talk about that. It’s not the amount of the first check that’s coming in. It stamps everything. It has a stamp on it that says, “Legit.” You understand that it’s real. It’s like, “I can do this again.” By then, you’re already working on multiple properties, more deals, or more sellers, so it becomes a tangible thing. It’s something that you can touch. It’s not wishful thinking anymore. It’s not an overnight success because it takes a while. There’s rejection and everything that comes into it, but if you stick to it, the grit is always going to pay off especially in this type of work.

One thing I wanted to describe is on the hood, it showed it. The average wholesale deal that we do is about $15,000. I closed one and it was $35,000.

The more comfortable that you get, the better conversations that you start, having the better systems you start and put in place. That’s the thing. A lot of people don’t look at this as a business. They stay in the hustle stage for too long. In the long run, it’s going to drain you. If you’re trying to do all the marketing, all the cold calls forever, it’s going to spend you. You have to start that way. It’s smart to start working on the business instead of in the business.

One big thing is managing your money. Most people don’t talk about this. I read a book, Profit First by Mike Michalowicz. I came from a background where money was not talked about. We never discussed it, we didn’t know how to manage it, and things like that. It was always, “Don’t say what everybody’s making.” Rich people and wealthy people talk about money all the time because that’s the major focus on what they’re going to continue to build their wealth on. I went to YouTube University, and I started learning how to manage money and then I bought the book, Profit First. The way that process and system is has helped me tremendously.

My company has been financially solvent because of that management. There are all kinds of companies that don’t make it because they don’t manage their funds well. By no means am I an expert, but that has helped me out tremendously, especially with the margins that we make in this business. It’s one of those things that’s like, “Now I have the funds to do this, I’ll explore, grow, expand and then reinvest back into my company on how to grow further.”

You’re saying something that hits the nail on the head, and that’s we’re not experts. The time is never going to be right. The time is never going to be perfect for getting started and rolling. If you hadn’t taken the leap years ago, you wouldn’t be where you’re at right now. What does your company look like? What’s the team size?

Once the business mindset starts to shift, people will only begin to talk about money.

When I was barely starting off, after I found that deal and I made $2,500, I was still wholesaling. A buddy of mine that was a real estate agent, Albert Ceja, came over and was like, “I have a wholesale deal. Do you want to JV with me?” I was like, “Sure. Great.” That was the first of many. We started doing some JV-ing on a bunch of deals and we’re like, “Why don’t we start up a company?”

I’m one piece of an equation. My partner is a big piece of what our success is. We started JV-ing on these deals and created the company. We see eye to eye on a lot of things. The difference is that I’m a lot more aggressive and outgoing. He’s a little more conservative. The thing about it is I’m learning from him and he’s learning from me, and that yin and yang helped.

You’re playing on each other’s strengths, so that’s key.

We have five in the call center. We have two acquisitions here. We have two dispositions as well, me and Albert. We are hiring and going through that. That’s a whole separate podcast.

It always is.

We’re in Phoenix, Wisconsin, Atlanta, Georgia, and we’re going into California. We were going to open up in another market but our boots on the ground had different plans. We’re going to be looking for a fifth market.

I love the growth. It’s been fast. Four years go by quickly, especially when you’re moving along and you’re taking massive action. That’s the thing. We call it massive imperfect action. It’s always going to get you further than sitting there and then theorizing about everything that could happen and how it could play out. That’s another common mistake that I see all the time. People don’t have the roadmap laid out to the tee and they never take the first step. Kudos on that.

Inaction is hurtful for you. Also, another thing from my background, we specialize in multi-units. There’s a reason for that even though maybe the expense may be times 3 or 4. It’s always the small family units. The spreads are also times 3 or 5. That has helped out with our fix and flip side of things. We acquire these small little apartments, these 2, 3, 4-unit buildings.

Do you cap it off at four because of residential?

Because it’s residential, they’re easier to sell. They don’t go through the commercial aspect and then the financing is easier for them to get.

1 to 4 units, multifamily for those who don’t know or are not aware, it’s still considered residential. Even though you have up to four doors in that same property, it’s still processed on the lending side as a residential property. A lot of times, it’s easier to qualify. They still treat it as a single-family residence. If you go above four, it’s a different game, it becomes commercial.

WI 588 | Leap Of Faith

Leap Of Faith: You have to change your mindset. In every other business, you are selling something. In wholesaling, you are the buyer.

 

It’s harder to qualify on those. We do turnkey for first-time investors. We usually end up having one of the units available. We buy it, rehab it, and from there, we stabilize the rents for first-time investors. When a first-time investor comes in, they can live in the property if they choose to. From there, they can now know that they can do a little house hacking. They can live in the house and have somebody else pay the rent. That’s our first step into investing.

From there, they’re making a good return. Their home is being paid for by somebody else and that starts the process. We’re getting into bigger projects. We have a 97-unit property that we’re trying to figure out in Texas. It’s no longer scary. It’s just numbers. A $400,000 fourplex that we had here in Phoenix is a $4.6 million project in Texas. It’s more zeros. That’s all it is.

This is a crazy thing. I used to flip cars. I would go to auctions, I would buy cars, and buy them for $1,000 or $2,000. I did that for years. It was a side hustle. I would go buy them at the auction, flip them and then make $500 to $800. Everybody has 24 hours in the day. We can choose to stay in something that pays us $500 or $800 for an amount of work or we can apply all that energy into something else like a 92-unit multifamily deal and come back with massive results. This is crazy. You jumped into wholesaling, left your job, and now you’re looking at 92-door deals in a state that’s not even yours. That’s amazing.

Thank you. It’s been an amazing ride. I’m glad it’s not over. This is phase one. I don’t know where the end result is and I don’t know if there is an end, but I’m enjoying the journey.

That’s what it’s all about. I was talking to a good friend of mine and the point is not the point. It’s in the journey. It came out but it resonated well with both of us. The point of making millions and millions is not the point. It’s everything that’s on the way there. It’s the lessons, growth, and appreciation that you get for everything. It’s the blessings that you’re able to leave behind you. It’s a beautiful thing when you see it that way. If you’re okay sharing this, let’s break down perhaps your most massive deal.

I have a couple of different sources of income. I still do hard money loans, wholesaling, and fix and flips.

All this branched out from you making the decision to wholesale years ago.

All of this came from wholesaling. All of those are my income sources, and I still have my own private portfolio, so all of that stems from it.

On a wholesale deal, what’s the biggest spread that you guys have done?

It’s the one for $34,000. Prior to that, we did another one for $30,000. At this point, we’ve already created the assembly line. I don’t know if you guys call them burgers. Everybody has their own name for the splits on it, but $34,000 was the highest one so far.

Don’t stop the hustle and be consistent. Break through the challenge because on the other side of that is an amazing opportunity.

Where and what type of property was it?

It’s in your hometown in Yuma.

Did you take it from me? Did you beat me to it?

It was a deal in Yuma. That one was also multi-unit. It has a single-family residence in the front.

For Yuma, it’s a big chunk of spread. The market in Yuma is different. The numbers are a lot tighter whenever they do roll-up.

My partner is also from Yuma.

We’ve got an insider. How did you find that lead?

It’s the same thing, cold call. We pulled the data and made the cold call. The guy was like, “I want out of the deal.” My acquisition guy was friendly with them. The guy was like, “I’m tired of renting.” A single-family residence on the front and it was a 3, 1. In the back, it had two additional units, a duplex. Both of those were 1, 1, which is one-bedroom, one-bath.

As an additional rental income, it had two RV slots. We don’t count those as multi-units but it is income. It wouldn’t go into our appraised value. We wouldn’t pay for those two parking spots because of the income that it generates. We didn’t count those when we first started but it was a bonus when we were selling them. That’s rental income. Whoever is going to go and buy it, they’re looking at renting those two locations.

At the end of the day, this guy is buying a fiveplex in Yuma. When you do your cap rates on that and then your return on investment, you’re going, “This thing is a cash cow.” That’s what we ended up getting. We grabbed it, wholesaled it, and there it is. We made some money in our pocket. It was pretty easy. Here’s another thing that most people don’t talk about, which is referrals. That seller has a couple of different properties and he’s already told us, “Go ahead and we’ll give you a shot on those next properties. We’ll see how it goes.” This one went smoothly. I’m happy with the way it goes. There it is.

They will come back. That’s the thing. Most people see sellers as a one-time hit. Sometimes you come across people. For example, I kid you not, we locked a deal. We locked it a little high. The ARV is $250,000, and we locked it at $190,000. It’s started for wholesale but it doesn’t need much. The rehab on it is going to be $10,000. It’s lipstick and paint and carpet. It even has appliances and everything.

WI 588 | Leap Of Faith

Leap Of Faith: When you continue learning, you will realize that not everybody’s perfect, and not all will want to help you grow on your journey.

 

The numbers for a wholesale deal would have been a regular, small deal, maybe $5,000 or $7,000, which is not bad but we have the first pick. We can cherry-pick. That one, we’re wholetailing it. That was a seller that I bought a property from years ago in Avondale. I bought his house in Avondale and he was pretty happy. He gave me a call and said, “The lead didn’t cost a thing.”

At the end of it, we’re looking at the projections after the flip. It’s got to be about a $38,000 deal. It’s an all-right flip for some cosmetics. You pretty much come in, clean it, and then put it up on the MLS. There are ways to ramp up those profits. It’s good whenever they come in from the vine, from the previous marketing that you dropped it for.

That’s a free lead. It doesn’t cost you anything.

I appreciate you spending the time and sharing all that info with us. What are the top three things that new wholesalers or aspiring wholesalers need to be focusing on?

Mindset. You have to change your mindset. In every other business, you’re selling something. In this business, you’re buying. It’s a different mindset. You are selling yourself as a problem solver but that mindset has to change. The sooner you’re making that mindset change, the quicker you’re going to see the fruit of your labor. That’s the way it is. The second thing would be don’t stop the hustle.

The harder it gets, you have to break through that and continue to go through it. On the other side of that is an amazing opportunity. People have come in and out of my office and in my world that they think, “I’m going to be a wholesaler.” They come, they do wholesaling and they end up becoming flippers, noteholders, or separate things that they didn’t even think that they were doing but the only way for them to get there is through wholesaling. That’s the only way for them to understand the rest of these other concepts that’s happening. 

It’s one of the best vehicles out there. I keep talking about that. When it comes to mindset and hustle, one thing that I want to throw out there is the way I like to picture it. It’s like a hockey stick effect. It takes a bit to ramp it up. You get to a point where it does this and it becomes much easier to navigate. You’re on top of the boat at that point and out in the ocean. You’re not trying to build a boat and then get off for a while.

The third thing that I would say is to never stop learning. You cannot stop learning. If you don’t know something, ask somebody. In the Arizona market, we’re in a special peer group. I can reach out to Rafael at any moment in time. I can reach out to any one of our peers here and say, “I’m struggling with this transaction. Is there any way that you can help me?” They are all open to giving their knowledge and giving it away. Most of them are podcasters. All this information is on YouTube.

We can’t keep our mouths shut.

We can’t keep quiet. That’s key. Find other wholesalers that are in your market, know who’s out there, and know who your buyers are for this. We’re known to buy multi-units here in the Valley. That’s the thing. When people come up to us and they want to sell something to us, “I have this deal. I have this multi-unit.” We’re all over it because we’ve already experienced that before. When you continue learning and continue to network, those are going to be some of the keys that are going to make you successful. Not everybody is perfect and not everybody will want to help you grow and help you on your journey but there are people out there. It’s a matter of you finding them.

Thank you so much for spending the time and sharing your journey with us. Tribe, thanks for reading. There has been no better time than now to jumpstart your wholesaling career. If you’re ready to take advantage of the best opportunity out there and create wealth, go to the Wholesaling Inc. website and set up an appointment. Have a conversation and see if it pans out. If it works, you might get an invitation to become a Tribe member. If so, I look forward to working with you personally. In the meantime, stay focused. You got this.

Important Links:

About Rafael Cortez

Rafael is an Organizational Psychologist and real estate professional holding ownership in multiple companies in various verticals. He has profitably invested in wholesale real estate over the last decade, runs an active business doing an average of 15 deals per month and is now passionate about using his investment knowledge, entrepreneurial experience and training as an organizational psychologist to help others learn about real estate investing through the Wholesaling Business Blueprint Coaching program with Wholesaling Inc.

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