Spencer Shadrach used to be a realtor, but he has been Wholesaling full-time for the past two years, and he’s made more than 50 deals in that time. He has built an awesome process, from marketing to close, and he’s kind enough to share it with the tribe.
IN THIS EPISODE YOU’LL LEARN:
- The mindset shift that pushed Spencer to go full-time
- The streamlined, repeatable process that helps Spencer make so many deals
The Wholesaling Mindset
While working as a realtor, Spencer was contacted by a Wholesaler looking to sell a number of similar properties. They locked up the deals but, as a realtor, Spencer had to give 25% of his fee to a broker.
That’s the moment when Spencer saw the freedom that Wholesaling offers.
Finding & Making the Deal
Spencer has a great process for finding deals. When he was starting up, he put in the man hours to make the deals. After reinvesting the profits of his first few deals (which is critical when you’re first starting a business), he was able to grow the business, start outsourcing, and close more deals.
Spencer finds most of his leads by posting bandit signs.
- He purchases the signs from DirtCheapSigns.com.
- He outsources that job and pays $1/sign, and he uses the SimpleCrew app to track those signs are being posted. In the three days before this interview, he had about 500 signs posted.
- In total, it costs approximately $2 / sign to get them delivered and posted.
- He’s constantly repeating this marketing process, so he’s constantly bringing in more deals.
Spencer tracks his calls and leads carefully.
- Calls come through an application called CallRail, which integrates with the Podio Customer Relationship Manager (CRM) platform.
- On the call, their goal isn’t to learn more about the property – they want to learn why the caller wants to sell their property.
- He outsources most of these calls to VAs, who either answer calls live or respond to voicemails.
- They build in 10-12 followups, with automated reminders, over the next couple weeks.
Spencer doesn’t like to put the property under contract with his own money
- Spencer’s investor will put up the cash, and then Spencer pays interest until the deal is closed.
- It’s a win-win opportunity because Spencer doesn’t risk his own money, and the investor doesn’t have to do any work to make more money.
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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Cody Hofhine: Welcome to another episode of Wholesaling Inc brought to you by Investor Grit. We are here today to deliver yet another episode of how an investor here a wholesaler is making good money doing what he loves doing and that’s wholesaling. And so he’s going to deliver some gold nuggets. So if you guys are listening, everyone out there Rhino Nation, get ready. Get a pad of paper, get a pen, get ready to write down some of these golden nuggets here and give me released today in this episode. Today we have a gentleman by the name of Spencer Shadrach and he is from Memphis, Tennessee. He’s been in real estate for about three years total and for the last two years he has done strictly wholesaling. And so this guy has switched hold gears and has been doing it full time for about two years now.
And in these two years he’s done 50 plus wholesale deals, which is pretty dang impressive. And so today he’s going to help deep dive one of those deals to help each one of you realize what you can do, something that you can implement today so that you can take massive imperfect action and apply it to your wholesale businesses today so that you can capitalize on this great market that continues to be good. All right. Without further more to say, let’s bring on Mr. Spencer Shadrach, Spencer, how are you doing my friend?
Spencer: Hey, what’s up?
Cody Hofhine: All right, we’ve got you live. I can hear you well, good old Memphis, Tennessee. I remember going back there, was that in August that we met back there? August, September. What was that?
Spencer: I guess you put together an impromptu training session. We have our online friends, we got together and booked a trip to get some training and exposure to other wholesalers and other investors. And so I think that was in August of 20 2016 that we first met and I’m excited, really excited about this next event. I really think it’s going to be blown out of the water at the end of the month here in Salt Lake City.
Cody Hofhine: Perfect, I remember still, by the way, to this day, I tell everyone, it was like, “Hey man, where’s the best barbecue place?” And I, we just barely went to San Antonio last year as well, but we went to a good one there. But it still comes back to man, that Rendezvous that we went to when we were in Memphis, Tennessee. So if all the people out there, if you’ve never been to Memphis or live in Memphis, go to Rendezvous. That was one heck of a barbecue place I’ve ever eaten that. That was awesome.
Spencer: Yeah, it was a great time and it’s interesting that dynamic of online friends meet in person. So it’s funny just to see all the personalities and all the people that come together in person after we know each other through the online world. And so it’s obviously good to put a name with a face and in person. So that was awesome.
Cody Hofhine: Cool, so Spencer tell us this, you’ve been in real estate for like three years. Where was the shift in that whole mentality when you started saying, “Hey, you know what, instead of just doing like traditional real estate or being in this arena, I’m now going to focus strictly on wholesaling.” What was the big mind shift there?
Spencer: I was a real estate agent. I’m working for a property management company and I had quit my full time job as a property manager and I was doing full time real estate agent activity and a wholesaler I think out of California and got these houses under contract in Memphis and he got them for like 15K a piece and he said, “Man, if you find a buyer, I’ll split whatever fee comes up.” And obviously as a realtor, I have to put that money through my brokerage and so he locked up those deals, those six houses, they were in the lower end area, all rented for like 600 a month for 102000 so what’s 102 divided by six.
Cody Hofhine: 102000 divided by six you say?
Spencer: Yeah, so like 17 a piece?
Cody Hofhine: Yeah, you’re about 17000 a piece.
Spencer: So I found a buyer out of Canada working as a realtor. I was posting stuff on Craigslist and posting stuff on Zillow, houses that I had for sale. So I found a buyer out of Canada on that had reached out to me, one of my ads. And said they’re looking for a small package of houses. And at the time I was moving investment properties 10, 20 at a time to these investors and I think we ended up splitting a… I got them to buy the properties at 142, so we split a $40000 fee. So roughly 18 or 19 came to me and then 18 or 19 went to this other wholesaler out in California and I had to give 25% of that to my broker. So I end up only walking with maybe 13 of that. At that point that was the shift for me was why am I giving away four or five, six grand on the deal when this other wholesaler he’s not giving away any of his portion. I didn’t think so, that was the shift for me was I want to keep the lion’s share of the proceeds.
Cody Hofhine: Now with that being said, what’s cool about this is that’s still a great payday compared to like the typical, let’s say traditional 3% that realtors get out there. This ends up being a huge win even with that split to the broker, right?
Spencer: Yeah, so in order to get a $20000 check, let’s say you sell a $500000 house times 0.03 you’re going to collect a $15000 check.
Cody Hofhine: Okay.
Spencer: So if I sold a $750000 house, that would have been 22.5. So I would have had to find a client that was willing to let me sell their house for $600000 and close on it in 20 days. And to get $20000 commission check that quick. And so what I found as a realtor was I could cash checks a lot quicker. I can improve my real estate fees because these wholesalers were willing to give away a good portion of the profit as a brokerage fee. And so that was where I inched my way closer to becoming a full time investor and wholesaler was realizing that those fees, I could get a portion of those fees if I asked for more of the pie as a real estate broker.
Cody Hofhine: Cool, I like it. So two years now, you’re focused on wholesaling, you’ve done 50 plus deals. Lets deep dive maybe a recent deal and I think we’ve talked a little bit about this even maybe a deal that’s going on right now. Let’s deep dive this and help the listeners understand of maybe some gold nuggets of what they could implement today. Let’s start right from the beginning on maybe how you got this deal and lets go through the whole entire process.
Spencer: Yeah, so when I first got started, I was just new out of the gate and I didn’t really know exactly what marketing I wanted to do. I knew that if I put out marketing, people were going to call and it was just a numbers game. And so my first method of marketing was bandit signs and so I’ve been using that method ever since. The first deal that I did was a bandit sign and I made 11 grand off that first deal.
Cody Hofhine: How many signs when you say like you’re putting out these bandit signs just to Rhino Nation understands our listeners, you’re putting out these like a 12 by 24 sign that says you-
Spencer: Bandit sign is a sign you put out that the city mayor or may not have regulations against it, they’re probably going to pick them up. Realtors don’t like them, sometimes they, people the city complaints because they don’t look great being on the side of the road. So it’s a just about 18 by 24 plastic sign that has a wire stake in it and it says we buy houses cash and it has a phone number there. And so I’ve got some things I could share on how to decrease your costs on some of those things but what we can talk about that later. So I’ve got someone who puts out signs for me. I’ve got a proprietary system that I’ve set up where I give them the signs, they go put them out, I’m able to track how many signs go out per day and I pay them per sign, I pay them a dollar per sign and I’m able to track with this app called SimpleCrew.
And it’s basically just an abandoned sign that they started it off, I don’t know how they started off at is just a tracking software, but they realize that the majority of their people who were using the app were real estate investors using it for their bandit signs. So they switched gears and it’s really just geared towards investors now. So SimpleCrew just the tracking software app pays 45 bucks a month and I’m able to track my employee on pinpointing out signs. And so the past three days he’s put out something like 500 signs or something like that, I’m able to track all those signs that he puts out and pick him on.
Cody Hofhine: Holy smoke! So that’s the difference right there, it’s not just placing out maybe 10 or 15 signs but good quantity number of signs. Is that what it took to get that first deal that you ever did? That was $11000 was it like 10 signs, 50 signs, 100 signs?
Spencer: Like 7 to 5. And then I was eating dinner and then I would go out and put out a 100 signs a night or whatever that equated to. So I was really busting my hump in the beginning when I was working my 9:00 to 5:00 to get that first deal, I guess my 7.00 to 5.00. And that first deal, I made more in that first deal than my employer was paying me-
Cody Hofhine: To work full time.
Spencer: Two or three months worth of income, so I didn’t need the income, so I just put that money back into marketing and that was really where that set me up for success is… I am going to start this off right, start this off as a business and as a business owner you got expenses and overhead that you need to take care of in order to keep your business growing and going. So I put 25% back into my business each month for marketing and expenses. So anyways, this one deal if you want, so that’s the setup that I have for the bandit signs-
Cody Hofhine: And that’s really how you got started, which is key. But then the key part that he just gave out, if you’re listening to that, which I think is super key, is knowing that you need to put money back into that marketing channel. And so he threw out the number of 25%, so we took 25% of that 11000 threw it back into marketing so that he can continue to grow that marketing budget to get more deals. Because at the end of the day, it’s all about the numbers, it’s how many signs you put out there, it’s how many marketing pieces you put out there, it’s how many people see your message that you buy homes and so super smart. I love the fact that when you got that check, you didn’t just think of, “Hey, we’re going to Disneyland, like let’s go party, let’s go have fun.” But you instantly thought I’m putting 25% right back into my marketing.
Spencer: Yeah, and it’s different for every deal. I mean, if you’ve got $40000 deals you don’t necessarily need to put 25% back in, that’s 10 grand. I mean if you really want to, you can. But I just set aside 25% because you’re in a hot market, you’re going to see marketing campaigns that just go bust or you want to try new things like Facebook campaigns or Google campaigns or you want to pay people to cold call. And so in order to get those campaigns started, you need to set aside experimental funds to do that as well. And if it doesn’t work, then you’re not had a whole ton of money, you’re not struggling to find that next deal. So that’s why I put that much aside. And it’s not a, “Hey, I’m taking 25% of that and just setting it aside.” I just have a mental idea of what I want to put aside. You know what I mean?
Cody Hofhine: Sure.
Spencer: It’s not like I’m taking $2500 out of $10000 and putting it in a checking account and then doing that, which may be good for some people to do, but I don’t do that right now. So that’s how that is so…
Cody Hofhine: Okay, so let’s deep dive. Fast forward now to today, you start with bandit signs, it’s able to feed your marketing budget. And now let’s deep dive a deal that we’re going to go right now and start right from the beginning like, this is where the marketing piece came from, here’s what we did and lets break it down step by step.
Spencer: Yeah, so I ordered online from dirtcheapsigns.com, it’s 18 by 24 corrugated plastic sign that says cash for homes on one side with a red coloring and the other side says, “I buy homes” and just has my phone number there. And we cut those in half, so don’t worry, they’re like a dollar 70 per piece. And so we cut them in half, so we have a, I guess a 9 by 18 sign instead of 18 by 24. So I cut that in half and then put a steak on it and so the one ends up costing me about a dollar per sign. So I’m may able to pay someone now to go put them. I’m saving money on signs so may have now be able pay someone a dollar per sign to go put them out. So it cost me about $2 a sign, so let’s say I put out a thousand a month, it’s going to cost me about two grand in marketing per month for bandits.
So a lady called us back in February, she wanted to sell her house quick. We use CallRail to have all of our calls come in through Podio, so CallRail is basically just a call tracking software that integrates with Podio, which is a CRM, Customer Relationship Management Software. That software just allows you to track everything, all your calls, all your missed calls or your voicemails. And we do a lot of our follow up through that system. And so the call came in, we answered it and we asked them what they wanted for the house and I think they said they wanted 20 or 25 or something. And I think we got them down to 15 on the phone and then after we got them down to 15 on the phone, we set the appointment. And-
Cody Hofhine: So tell me this, when you’re talking to these, now you’re talking to them, you have this maybe a script you go through. Is that, do you, I guess you go through us, you have a script that you use on when you do stuff like this?
Spencer: Yeah, it’s a script and it’s the basic script and it really gets more fluid as you talk, the more people you talk to, the more it just comes out on what information you’re trying to gather. And our goal is really not to like figure out like a lot of information about the house, but just more about the situation.
Cody Hofhine: The why.
Spencer: Yeah, the why. Some of those questions, “Hey, thanks for calling, tell us why you called today, you have a house to sell for cash, correct.” That weeds out anybody who’s not interested in selling their home, maybe they’re pissed off or they’re-
Cody Hofhine: Or maybe looking for full retail, right?
Spencer: Or retail or looking for a house to rent or whoever. There’s no talent who could be calling maybe it’s the city, whatever. So we go through a script and just say how much the basic script you guys gave us I basically just gave that to my virtual assistant and they go through the script with them and just ask them why are you selling the house? Are you behind on mortgages? Are you behind on taxes? Does the house need repairs? Who owns the house? Do you own the house? What are you going to do after you sell the house? These are all really important questions.
Cody Hofhine: And are these people answering these virtual assistants or are like your assistant that doing this or the answering live or is this something that’s going to voicemail and then call them back?
Spencer: It’s a mix, just obviously you can’t unless you hire a team of people to be there around the clock, you’re not going to have someone that’s answering live for that service. So we try to answer it live, but if it doesn’t do live, it goes to voicemail. And so we call those people back and talk to them. And then there’s a followup process that we have with that, if they call us and then we call them back and then we’re able to set a reminder to call them back the next day. And that reminder automatically sends them a text message. And it also us to call them back the next day. So it’s like an automated system.
Cody Hofhine: Cool, so they’re getting like a two touch approach the next day.
Spencer: Yes, because some people don’t want to talk on the phone, they just want to text or they’re really passive, some people are passive like that are passive. So you need to attack it with a different approach, so we have like I guess a 10 or 12 sequence follow up where we’re every time if they call us, we’re going to call them back that day and then maybe later on that day and then we call him back the next day and then the next day and the next day. And then we do a two day window for like three times and then we’d do like a seven day window and then we’d do like a three week window and then like a month window. So it’s like a 10 or 12 sequence. I set it all up like a year and a half ago to do that and so…
Cody Hofhine: But the power is it how many times you’re connecting. That’s the power behind everything you’re saying right now is you’re not just touching these people one time like, you’re reaching out to him multiple times. Follow up, follow up, follow up, follow up and we hear that all the time that the secret is in the followup. And I can hear that 100% like when you’re saying this, like it just puts a smile on my face and makes me sit there and think, Cody am I following up this many times? Because that’s huge.
Spencer: Yeah, there’s one lady, I think I called her for nine months, this is a different deal but I called her for nine months and my wife, she said quit pestering and that lady quit pestering and that lady, I said no she has not told me to piss off. She has not told me that she doesn’t want to sell and she hasn’t sold the house so something’s going on other than what’s going on. And so I kept following up every single week. The house is made.
Cody Hofhine: Till nine months later.
Spencer: It’s later and finally I got the deal and made a ton of money off that deal and I said I told you so. And she was like, “Well, we’re going on vacation.” And I said, I’m going on vacation, no am just kidding. [crosstalk 00:19:46]
Cody Hofhine: Do you now sleep on the couch?
Spencer: Yeah, now I sleep on the couch, right? Yeah, so follow up is a very important part of our game. If they say that someone doesn’t commit until the fifth to seventh time that you follow up with them. And so that may or may not be true depending upon the situation but I think that is definitely true is if you have a system for follow up, then you should be using it, so that system helps me out a lot with my time. My time is very important, I’m really good at talking with people and negotiating with people and being their friend and helping them out in a certain situation. So I’m focused on setting appointments during my day I’m going on appointments, I’m locking up deals, working with contractors, working with rehabbers other parts of the business as well.
But for this particular deal she said she wanted, let’s see I can look back at my notes here. Called on February 4th at 9.30 in the morning, she wanted to move to Oklahoma to be with her daughter and granddaughter. She said there’s nothing major that needs work, just cosmetic, which is a red flag for most people. So it was a three bed, one and a half bath, 1200 square feet. She owed a little bit in back taxes, the estimate was $48000, Oh she said she wanted $10000 cash and she’s willing to negotiate.
Cody Hofhine: So that was just right on the phone live at that moment. She’s like, “Hey listen, I’m ready to move to Oklahoma and if you guys can bring me 10 grand cash, let’s rock and roll.”
Spencer: Yeah, so we set the appointment the next day for 9:30 AM. I went out there and talk to her and she was not actually the owner, she was the daughter of the owner. So that was not really exactly optimal but if she had the power to sell the house and that’s who I wanted to talk to. And so the mom owned the house, it was her grandma’s house. And so I just went out there and talked to her. We agreed on 10000 I left the contract with her because she says she has someone else coming to see the house, which was a red flag for me. I didn’t know that at the time at another, she had someone else coming. So she said this other lady offered her 15000 and I knew who this other person was.
And so I tried my maneuvers to try to get her to sell to me for cheaper, but that didn’t work. So I finally agreed to 15 grand to match this other lady who was a wholesaler and come to find out she had a buyer lined up at 18000 so she was trying to lock it up for 15000 which is not a good way to do deals. Just because you have one buyer at 18 doesn’t mean you need to lock it up for 3000 or less than what you could sell it for. So I wanted to be at 10000 because I would love to have this house at 10000, I’d love to buy it for 10000 and put $10000 into it and keep it as a longterm rental rent for 750 a month, 20000 I’ll land for 750 a months. But it quickly turned into needing to pay 15000 for the property. And then at that point I was like, wow, I don’t really know if I want to keep it for a rental, I’d rather just wholesale it or turn around and sell it. So she agreed to the 15000 and we set a 30 day closing. But there was some issues with title that they had some documents as a people on the deed that were dead, and so we had, it took a little bit longer to take about 45 days-
Cody Hofhine: Now so our listeners can understand that as well. Sometimes when we hear that, it gets like scary, oh Krol, what if I come across the property and all of a sudden they’re like is it something that you physically now have to run through all this? Or is this something that you just turn it over to the title, title starts taking care of it.
Spencer: Yeah, so whenever I’m talking to my seller, I just say, “Hey, I’m committing to closing before 30 days, but there may be some issues that come along if the title is not clear, so I’m going to put an automatic extension in this contract till we get that done.” For instance in Tennessee, if someone passes away and they owned a house, well you’ve got to go back and get a release form from the state to make sure that they don’t have any outstanding debt or medical bills that are owed. And that’s what’s called like a TennCare Waiver and some other documents. But I sent it all to the attorney, I let them handle all of it and they tell me exactly what the process is, how far along. And I just either communicate that to the seller, just, “Hey, we’re working on it, we’re moving forward, I committed to 30 days, but you guys had this stuff that was going on, so we’re still moving forward,” and just keep them apprised.
Because a lot of sellers, they get anxious and they want to close and they don’t know the process and they got to trust the process. And so it’s what I tell them, this is how you trust the process, we’re working towards closing, we need these documents to close and once we get these documents in from the state, we’re good to go.
Cody Hofhine: Well two pinpoints., hold on one sec. I love this, is the two good gold nuggets right there is he goes over to the closing attorney, the attorneys is the one that’s feeding all this like, “Hey, we’re going to need this, this, this, this and this.” So the best part about it is you don’t have to know a whole heck of a lot and how the title process works and how the closing process works. That is the title company or the closing attorney’s job to do that, you may have to relay some message, but the second part about this that I love what Spencer does is he’s consistently staying actively engaged with that seller and letting them know, here’s what’s going on and here’s what this is and we’ve got this process going on, trust the process we’re here.
Because I think so many people think, Oh, we’re just going to put it under contract and then just let it run its course and then I think that’s the time when you can run into trouble and where people may try to back out of the deal or whatnot do the deal because they haven’t heard from the investor. And so I think it’s key to mark down in notes if there’s anything worth listening. Like right now I’ve just pinpoint out is stay in contact with that seller. It’s huge because they don’t know this process, they need to be like their handheld all the way to this process.
So Spencer’s doing a good job on making sure that he helps them through the process, that there’s nothing to be scared of. This is typical, we see this all the time, just trust the process, the attorneys going through it, we’re pulling this, we’re pulling that, but then ultimately those sellers are going to be there and then be calm and they’re going to understand the process because you’re just keeping in contact with them regularly.
Spencer: Yeah, in a normal real estate transaction, you’ve got a seller, you’ve got a buyer, you’ve got their real estate attorney, you’ve got a seller, you’ve got, sorry, you’ve got a seller and their real estate agent, and then their attorney, you’ve got a buyer, their real estate agent and then their attorney. So there’s six people that are involved in a normal transaction, not including title secretaries and home inspectors and insurance people and all the different [crosstalk 00:27:07]
Cody Hofhine: Praisers and…
Spencer: All the and the home originator and all these different people. So if you’re buying a house for cash and you’re just dealing directly with the seller, and you got one title company. You’re wearing the hat of seven different people that sometimes with all that process and so it’s good to over communicate what’s going on to all parties, even the title company. I tell my title company what to do. “Hey, call this person, give them an update.” “Hey, did the title company give you an update on what’s going on?” Because they’re coming from a position of power, they’re the one closing the deal and so a lot of times it’s better to for it to come from a title company them than for me but if I feel like I need to go that route at any given time.
Yeah, so ended up locking up that deal and passing it off to the real estate attorney title company here in Memphis and the property was occupied. But I know of several investors and buyers that buy properties that are not occupied and so this lady was going to move, I gave her an extra week to move out after closing and so I ended up buying the property myself agreeing on the 15000 I think it took a close last Tuesday. So it took what, 40 days? What’s that 40, 45 days from February 4th two months almost. So almost 60 days to get all the documents in and everything so and that’s another reason why you need to stuff your pipeline because some of these deals are going to take one month, six months, eight months. Sometimes it takes take a long time to push them out. So I didn’t want to use my own cash, so I reached out to, I have the cash but I didn’t want to use my own cash because I just didn’t want to.
So I reached out to one of my investors, and I said, “Hey would you want to do to note the short term note on this?” And he and I have an arrangement where he’s actually my insurance guy, he’s an insurance salesman, and we made a deal where I was going to give him a certain amount of money up front and then pay him interest each month that I own the property. And it’s really good for him because he doesn’t have the headache of real estate, but he’s got the, the security and the financial things that are seductive about real estate. He doesn’t know of the headache and all of the fun part in terms of collecting money.
So he dropped off the check, I think for 15 grand met closing and he got some money out of it at closing and then I’ve got to pay him interest each month until I sell that property. So the good thing about that is that I already had found a buyer who wanted the property at 31000 and they just wanted the property vacant. So I’m closing on that one on Tuesday. So about a 10 day turnaround, so about 10 days worth of interest. And then I’ve got two closing costs that I’ve got to incur. So the net on that one should be plus 13000.
Cody Hofhine: I love it in a 10 days, well I guess from the time under contract, 60 days but-
Spencer: But it really is just from the time you bought it, is 10 days or so.
Cody Hofhine: That’s fantastic and you bring up a good point. I think a lot of people think they’ve got to get their own money to get involved in wholesale in that you have to buy the home and you have to do this. And so everyone instantly thinks, well, I don’t have 15 grand or in my state, man you’re not getting a home for 15 grand. It’s going to be a minimum of 60 in some areas, but majority of time you’re going to be about a 100 to 150 in Salt Lake City. And a lot of people think man, I don’t have that money. So its good point to just put out there that there are a lot of ways, there’s a lot of people out there that are willing to lend out money short term so that they can make some money on their own money. They hate it just sitting there dead in their bank accounts. And so why not? If you got a deal where you can land on and you’re only renting and out 10 days and something like this, what’s he going to make on that 10 days? Lending out $15000?
Spencer: So he charged me three points up front. So that was like a what’s three points on…
Cody Hofhine: 150 times three. So you’re looking for 450 bucks?
Spencer: Yeah, 450 bucks to drop, all I did was he drop off, he had his banker drop off a cashier’s check at the closing office, so he didn’t even do it himself.
Cody Hofhine: That’s the best part. He’s automated his own process.
Spencer: 10 days, he’s making, let’s see 150 a month, 150 a month.
Cody Hofhine: Divide by 30.
Spencer: Divide by 30, so 8 bucks a day or whatever that comes out to.
Cody Hofhine: Yeah, so well, five bucks a day, let’s call it times 10 so let’s say 50 bucks. So he lends out $15000 for a month or for 10 days. Sorry. Yeah, so 50 bucks plus the 450 so he’s making $500 for 10 days. There’s not a stock market out there, so a lot of people are willing to lend out, especially with those terms, because where can you make 500 bucks doing nothing but just lending out for 10 days? That’s phenomenal.
Spencer: Well, and I made the right pitch when I made the right presentation, whenever I’m requesting funds for somebody to say, “Hey, here’s the opportunity, here’s a way to mitigate risk, I’m buying it for 15 it’s worth 50.” If you have to foreclose on it, then you got your butt covered. You know what I mean?
Cody Hofhine: Yeah, you’re backed by the asset, right?
Spencer: I’ve already got a buyer lined up. I just need the short term funds if you want to make some dollars. So that’s a pretty win, win situation for most investors. And so again, that relationship came through by me just talking about my business with other people and I’m using other people’s money. It’s called OPM and so Other People’s Money. And so now I’m able to, instead of using my own funds I can close 10 deals a month with other people’s money.
Cody Hofhine: Which is super huge.
Spencer: Versus using my own funds and so that’s been really huge for me and building the business. Yeah, so he’s satisfied, he also does a short term notes for me. I’ll buy a house for 15 grand and he’ll put it on a three year note. It’ll rent for 600 to 700 bucks a month. And I’ll put the rehab in myself and so he does some of those for me. And so that’s another reason why I want to keep him happy is because I want him to keep on loaning me money on those little Dinker deals where I can pay him off.
Cody Hofhine: You keep him for rentals.
Spencer: I can pay him off in three years and keep him happy as well, with the short term deals, he’s still making good money on those three year deals, but the sweetheart ones are ones where you can make 500 bucks in 10 days so…
Cody Hofhine: Super smart man well Spencer, I’m telling you him from start to finish, I just love how it’s every deal is unique and you would probably agree with that, but I just love that you have to think outside the box every single time. If there’s any hiccups along the way with titles, you keep in contact with the seller to let them know what’s going on. You’ve got marketing going out consistently, you don’t do the, I think a lot of people feel the roller coaster of wholesaling and usually 9 times out of 10 in fact, I’d be willing to bet it’s 99 times out of 100 is because they never refuel that marketing. They make a deal and then they’re like, “Aw man, let’s see if we can get some more deals.” But they don’t realize the consistent deal flow comes from consistently putting back into that marketing budget like you’ve explained in this podcast.
And then just from top to bottom, you’ve covered how important it is to stay in contact with your seller. And then some unique ways of how you can continue to buy 10 deals a month, because ultimately you’re not using your own money. You can use other people’s money, you’re still going to make your fair share of profit but then ultimately you can get more deals though, because again, we all have a cap on how much money we actually have in the bank and what we can use on purchasing homes every single month. So absolutely love it my man.
Spencer: That’s it.
Cody Hofhine: Okay, so tell me this to end, if you were to start over from the beginning so we can help Rhino Nation get some last minute nuggets. If you were to start from the beginning all over again, what would be like your gold jam saying here’s what I’d make sure I would do differently or here’s something that I’d make sure I did again because it worked so good for me.
Spencer: I’d say that follow up and persistence on marketing and talking with sellers is pretty important. If I had to do it over again and do something different, I would put aside money. Every time I get a check I would put aside money for taxes. I’ll put aside money for my own income and I put aside money for expenses. So when you’re wholesaling you just, you think about the $10000 check and you don’t think about the $3000 that you need to send out for mailers and then your income, you need to make that month, whether it’s 2000 or 4000 and then the money you got to pay to the government for that check. And so that’s one thing I’d do differently is set aside money each month. I’m in those different buckets so that I’m knowing how to have a balanced business so…
Cody Hofhine: Okay, I’m going to throw out a book and I’m going to ask you for your favorite book, but this book is going to coincide with what you just said that split up that account. There’s a book out there called Profit First. It’s like one of my favorite books and it talks about how you split those buckets up and how you save for taxes, how you save for like expenses, ongoing expenses, how you pay yourself and it gives you some like percentage breakdown. So that is one book I’m going to throw in there but then also Spencer, I know you’re average reader and always look to gain more knowledge. What is a good book that you’ve recently read and lasts maybe let’s say 30, 60 days?
Spencer: The Bible.
Cody Hofhine: The Bible. I love it. I love it. And with that I can tell ya, I agree with you 100% there’s gold nuggets there. A lot of people just tie it gospel wise, but I think there is a lot of wisdom in there on how to run every day of your life, every aspect of your life, not just spiritual side, business side, family side, you name it, it can come from that great book right there. So I appreciate that, that’s awesome.
Cody Hofhine: Okay, my man. Well I appreciate you joining our episode or our podcast today. I appreciate your time, I know your time is valuable, I know right when you get done with this you’re going to go right back out to, to working hard and that’s why you continue to be successful in wholesaling. So thank you so much for joining us today.
Spencer: Man, I’m really excited to see you in a couple of weeks and it’s really going to be a blessing and continue to be a part of the tribe and just learn from other people how they’re doing their business. And I mean just today, I met a guy at one of my projects and he owned 26 houses free and clear, generating $30000 a month in income and he’s still out there hustling deals up himself. And so there’s always someone that’s in front of you that is doing more or has done more or knows something more. And so having a humble mindset like that is key in this business.
Cody Hofhine: Perfect, thank you, thank you. Rhino Nation we’ve heard another powerful episode that you can listen to over and over again. If you have not yet subscribed to the podcast, do so and put this on repeat. I know you can pull some gold nuggets out of here, every time you listen, something that you can implement into your wholesaling business for those new out there, jump in. What are you waiting for? It’s an awesome market. It’s a great time to get involved and you can see step-by-step. It’s really not that difficult. If there’s anything difficult about wholesaling, it’s usually the wholesaler. It’s usually the investor that’s difficult about it. But wholesaling itself is actually a very easy thing. As long as you stay committed, consistent, and always doing something, taking massive action every single day.
If you want to get some more gold nuggets just like that were shared today, you can always subscribe to our email list. Go to wholesalinginc.com that’s wholesalinginc.com and subscribe to our email list and we throw out gold nuggets all of the time and we’ll also email you and let when all the new podcasts released so you can go on there and listen to how people are doing this nationwide. We’ll see you next time on Wholesaling Inc brought to you by Investor Grit. Take care guys.