Get excited as Brent answers the Top Ten most commonly asked Questions for new investors who just started venturing into the wholesaling business.
Know the answers from Brent and get valuable inputs to guide you in handling common hurdles or issues on wholesaling if you are new in the business.
If you are searching for answers, then this is an episode that you do not want to miss!
The Top 10 Questions For New Wholesalers Just Starting Out
We’ve got some amazing questions that you have been asking. Alejandra, first of all, how do you pick these questions out of all the other ones and how many were going through now?
Helping Someone Late On Taxes
Typically, we go over ten questions. How I look at the process is seeing what is the most common questions that we are always getting asked. Let’s get going. Our first question is, “How do you help someone that’s behind the taxes and mortgages that are owed to the IRS? Will the money she gets from selling her house cover all that?”
It depends. You have to make sure that she has a good amount of equity or whoever. If you run across somebody that has an IRS tax lien, it depends on what else is owed on the property. Let’s say that the house is worth $200,000, you need to buy it for $100,000. They owe $60,000 on it but there’s an IRS lien on it for $60,000 as well. Now, it’s over what you can pay for it. You are going to have to do some negotiating either with the IRS, which typically they don’t care about. Sometimes, what they can do is they can take that lien and put it on another asset that the person has or they can settle and only get a certain amount. You can go through that. It’s tricky.
If there’s a huge IRS lien on a property and it squeezes out all the equity, move on to something else. You can find better deals. These are tricky. Can you get them through? Yes. Should you? I don’t think so. Especially if you are starting, you want to get these easy wins. You want to get some people that have significant equity. Remember, when we are looking for wholesale deals, people are going to trade their equity for speed and convenience. Find people that have equity but if there are only small amounts, the title company will take care of it.
What they do is they get a payoff statement from the IRS. That’s going to pay off their mortgage, back taxes and any property taxes that they have, any liens that are on the property get paid through the title company or the closing attorney so let them do their job. That’s their job. Your job is to go out there, find deals and find cash buyers to match them up with. Let the title company take care of all that, that’s what they get paid for.
First Cash Buyer
“Where do you find your first cash buyer and how does that process look like?”
Let’s say you’ve got a deal and you want to sell that. The first thing that I would do is I would find all the Facebook groups in your local market, join them, post that you’ve got a property and see who starts responding there. What you can also do is you can start calling the real estate agents that are selling properties in your area, in that neighborhood, representing people that are buying or flipping properties. Call them up and see if their buyers are ready to do another deal or project. That’s powerful to go after those people.
The phenomenal place that people don’t go to and reach out to is any of the foreclosure auctions that are all done publicly in your areas, go to those auctions, and talk to the people that are bidding down there. They are cash buyers, they represent a ton of people and they are going to move quickly on those deals. Don’t be afraid to go down and don’t interrupt those people while they are bidding at the auction because they are not going to like that. Talk to them while there’s a break in the auction and see if they want to pick up your deal.
If there’s a huge IRS lien on a property and it squeezes out all the equity, move on to something else. You can find better deals.
Daily Text Messages
“How many text messages do you send every day, 70% delivery or what should we expect in responses?”
We send out about 2,000 to 3,000 texts a day with a 70% delivery. Typically, we are going to get about 10% back that have some interest in that conversation. It’s about 200 texts a day from that. If you are sending out 2,000, you are going to get about 200 back and it’s just typing getting through quickly. A lot of times with Chris and Eric, they’ve got responses already cut and paste that they can put in so that they can handle that much volume.
My suggestion for you is to start with 100 texts and see how that feels. If you get ten back, that’s very manageable. Start growing from there. Don’t go crazy, get overwhelmed and miss things that you shouldn’t. If you’ve got too much coming in, then you are going to miss the ones that you need to pay attention to. There are a couple of resources for that if you are wondering. TextMagic is one that you can get into. If Lead Sherpa is available in your area, it’s a phenomenal resource.
Encountering An LLC
Someone says, “I have a question about skip tracing these absentees because a lot of times come back as LLCs. I’m not able to get a phone number. What’s the best approach when you encounter an LLC?”
This happens a ton. With LLCs, you need to go and see where the corporate documents are all gathered. With us, we go to the Arizona Corporation Commission. Look at your corporation commission, look at whoever runs and gives people the LLCs in your area, wherever you have to register them. When you register for an LLC, a company or whatever, it’s public information.
Go find who the managing member and their mailing address, there are on there. It takes a couple of extra steps but it can be powerful because not a lot of people are going to use those extra steps. Remember in this business, if there are hurdles to get past, to get a deal done or to go after distress seller, most people won’t do it. Most people just want to get the easy list, go after and start talking to people.
If you are in an area where you’ve got a rough property, that you want to get after, that you want to take down, go that extra step. Go to wherever the corporation commission is or wherever it is recorded in your area. You can google it, find that information and find who the managing member is, then skip trace their mailing address and their name. You’ve got them. Attach that to the property, reach out to them, ask them if they consider an offer on their property, lock up that deal and sell it to a cash buyer.
Physical And Mailing Address
“When do you upload the data to skip tracing? Do you recommend using the physical address template or do physical address and mailing address templates?”
You are going to put both of them. What they are going to pull off of is the mailing address. That’s going to be the most likely phone number of the owner because that’s typically where they live. That’s where they are going to register most of their phone numbers, too. When you go to BatchSkipTracing.com, you put both of them and they are going to pull it off of the mailing address but attach it to the property address that you are trying to get ahold of. It’s a way better-hit rate.
A lot of skip tracing companies don’t do this or don’t understand that. That’s why people have a low contact rate or they are talking to a lot of wrong numbers or tenants. Batch Skip Tracing has got the whole system figured out, just upload it and they will take care of you. I get that question a lot but they usually go off of the mailing address but they will attach it to the address that you are trying to get ahold of.
When looking for wholesale deals, people are going to trade their equity for speed and convenience.
“Do your cold callers know what to offer when they first call? Do they also know how to run comps and know the ARV?”
First off, get the number out of them, get the price out of them. That is the art of asking great questions and following the TTP Script. It is a numbers game. The more distressed property owners you speak to, the more successful you are going to be, it’s a very simple business. Let’s say that they are not going to give us any information or a price.
You call me, I have no idea but we are asking several different times how we get the price or what price they want and they don’t give it to us. What I will do is my cold callers will look at Zillow because in our dialer is a button. You press the Zillow button, it comes up and they will give about 66% of Zillow as a shot across the bow. It’s very simple, it’s not overthinking.
I need to know if these people are motivated and what their expectations are. Initially on the first call, a lot of times they’re a little bit guarded, they’re going to stiff-arm you a bit, build that shell, and have a lot of reflex noes. To define that, it’s like, when you go to a car lot, then you’re walking around and they’re like, “Do you need some help?” You’re like, “No.” Why are you on a car lot? You have that natural reflex no because you want to protect yourself, you don’t want to be taken advantage of and sold to. It happens the same at a clothing store or wherever you’re going.
Throwing out that number is going to give you some idea if you are going to be in the ballpark with these people or not. If they say that that sounds pretty good or a little bit more, you know that you have got a hot lead and you need to be all over it. Get the number out of them. A lot of times, they are going to ask you, “How much are you going to offer me?” That’s fine.
If you want to take a shot across the bow or you can defer, “My partner runs all the numbers, let me talk to him. Condition is important with this property. Can you tell me if you have done any major remodeling to your kitchen and bathrooms in the last five years? Can you tell me if you were to invest in this house, where would you spend your money? What do you think needs to be improved? What do you think needs to be renovated?”
Those questions are going to draw their condition out of the property. It’s going to open up the conversation and it’s going to allow you to keep asking them what price they want. It’s going to allow them to feel more comfortable in that conversation as opposed to being on the phone for fifteen seconds and be like, “I want $100,000,” and on Zillow, it’s $250,000. It doesn’t happen often but it happens.
Homeowners With Liens
“What do you say to homeowners with liens when calling them?”
The same thing. Don’t overthink this. Ask them if they would consider an offer on their house. It is a little bit creepy. You are going to cause friction in these conversations if you call up and say, “According to public record, I see that you owe $7,800 on a private judgment that you’ve got in 2017.” Do you want to build rapport? That’s not the way to build rapport.
The way to build rapport is simply to ask them if they would consider an offer on their property. Have an unbelievable tone of voice, don’t go too fast and too slow with them. Pacing is important. Be sound like a neighbor, don’t sound like a credit collector that’s asking them about some debts that they owe. Do you know what people don’t want to talk about to a stranger? Debt. They don’t want to come out and be like, “That judgment, I shouldn’t have that. I’m working on it. I’ve got that paid off,” or anything like that.
Pacing is important in real estate deals. Don’t sound like a credit collector asking them about the debts they owe.
Ask them if they would consider an offer on their property. If it gets into the conversation, you can say, “I have worked with a lot of people. I understand that you have a recorded judgment on you here.” You can ask that later in the conversation if you are building that relationship, rapport and then you can bring that up. Don’t bring it up off the bat and hit him in the face with it, thinking that they are so desperate that they are going to sell their house to you. Could it happen? Yes. Does it happen often? No. Trust me, I have tried this.
I’m not saying this because I didn’t try it out. I tried foreclosures, liens, tax default, all of it. I would start the conversation with that and it wouldn’t, then I open it up to being the friendly neighbor that wants to see if they would consider an offer in the house, then they naturally would tell me about it or I would ease it into the conversation. Don’t go crazy with it.
Hiring And Paying Drivers
“How do you hire and pay your drivers?”
This is driving for dollars drivers. A couple of different things. Honestly, I posted it to my personal Facebook page, Instagram, you can post to Indeed but don’t worry about any of these things. Post to your social media and say you are looking for somebody that wants to drive part-time and you are going to find a lot of opportunities there. Find somebody that’s going to be reliable but also has a schedule. My advice is to get somebody that’s retired.
One, they don’t look suspicious driving around and they are much more kind and they will get out of their car and talk to somebody that is in the front of their house but the house is all beat up. It looks like it has potential or they might be putting out a sign like a for sale by owner sign. The older retired people, get out and go talk to him. That’s what I did. I found some great retirees that would drive around. They wanted to make a little bit of extra money to supplement what they were doing and they wanted something to do. To be honest with you, going after retirees is a strong strategy.
“Do you recommend using DocuSign to sign contracts or any other service? Also, do you use it for both in-state and out-of-state?”
We do. Unless we are going to meet face-to-face and get the contract signed or unless people want to come to our office to sign the contract, we will send a DocuSign. I have used it for years. You can use any of them. There are a ton of eSignature resources that you can use. I use DocuSign, it’s simple and easy. It alerts me when the contracts get signed and then the process starts. That’s always exciting when you get that email that the DocuSign is completed. Now you’ve got that signed contract. When you send it to the cash buyers, we almost always exclusively send the DocuSign to our cash buyers.
They are so ready that they are going to sign quickly in-state and out-of-state if we are not meeting with them. If we can meet with them, we will do it face-to-face and get it signed up. If we do get signed face-to-face or anything, I have TurboScan, it’s an app on my phone. We will scan it right there at the table with the seller and then I sent it directly to the title company that fasts so that they know we are serious. A little pro tip there.
Running Comps On Leads
“Do you run comps on all the leads that come in from driving for dollars leads or do you go through them until you pick them first?”
It depends on what you mean by lead. A lead is not that it’s in your database because there are thousands. A lead is when somebody says, “Yes,” or they would consider an offer on their property. When it comes to that, then yes. When they want to offer on the property, we are pre-qualifying them based on the condition of the property, timeline to sell, motivation to sell, and the price, then we will start comping those properties.
Real estate is not all about the property but also the problems about clients’ motivation.
I’m not going to send it to my disposition manager or my acquisition managers to look at the comps unless they want to consider an offer on the property. Don’t do work, hallucinate and assume that you need to know everything about a property before you understand if somebody has a problem that you can solve. “Motivation,” they need to be motivated.
Remember with wholesaling properties, it’s different than traditional property. In traditional, the 94% to 90% of people out there will sell traditionally with a real estate agent they don’t have a problem that you can solve. It is about the property with these people. The 6% to 10% that we go after that are in distress, it is about the person’s motivation and problem. It’s not about the property, it’s about the problems and their motivation.
You need to get that information before you do any work on it. If you want to go and get some experience comping property, that’s fine but don’t get lost in this whole thing of doing too much of the analytics before you understand what people’s problems are. That’s the most important thing in this business. That’s why we get big checks and this is a cash machine. We solve the problems of the seller and then we solve the problems with the cash buyer that needs a property so they can make a profit and you can make money.
If you are interested in joining the most proactive group in real estate investing, it is the TTP program to go to WholesalingInc.com/ttp. I personally mentor you. You get my cell phone, we text, we call. It’s crazy, it’s bananas but it’s the truth because I want you to be as successful as possible. I want to work with you and I love you. If you are interested in that, check it out, scroll down, keep scrolling the little scroll things, tiny because there are so many testimonials. Nobody has more testimonials. Check it out. If it feels good in your gut, sign up for a call. Until next time. You are the best, TTP.
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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!