If you want to run a virtual wholesaling business, you need creativity, strategy, and the right market. This is what Kevin Manuel did by venturing into a lesser-known market. He is still new to the game but has already closed four big deals.
In this episode, Kevin talks about his real estate investing journey. He shares his story on how he grew his business fast from his backyard, applying what he learned from the coaching program. Kevin also talks about his chosen market to do business virtually and shares his plans for his business.
Learn how Kevin made a lot of deals from doing business virtually for a short time. Listen and jot down those important points!
Case Study – How A Newbie Closed 4 Deals (And Has 5 More In Escrow) In One Of The Toughest Markets In The Country! With Kevin Manuel
Creativity, strategy, and the right market are all our guest has to run his wholesaling business virtual and hit big deals. Our guest for this show, Kevin Manuel, is a perfect example of nailing the business virtually by venturing into his chosen market.
I have Kevin Manuel with me. We are going to chat about virtual wholesaling. Kevin is new to the business but he’s already crushing it. He’s closed four deals. He’s got five more in escrow. It’s bananas.
Kevin, welcome to the show.
Thanks for having me. I’m excited to be on.
We’re excited to have you. You are a student of my coaching program. When did you first start real estate investing?
I started in August 2020. Like a lot of people here in Southern California, I tried to do it on my own backyard and it didn’t work out for me. I went virtual wholesaling in December 2020. I’m still pretty new to this whole thing.
Why did you decide to get into real estate or real estate investing?
For the last few years, I have worked for one of the larger real estate and investment, coaching and mentorship programs. One of those companies that travel around the United States and does the three-day seminars. I was on their sales team selling their programs. I was in the real estate industry, but I wasn’t investing in myself.
I always wanted to do it, but in 2020 with the pandemic and everything, my company was affected pretty bad. I think we let go about 90% of our company there. That’s 500 plus employees. I was furloughed three times throughout the year and that freed up my time to allow me to begin thinking about doing this for myself.
You actually worked for a coaching company. I didn’t know that about you.
I kept it on the down-low. I didn’t really want to talk about it, but I never invested. I sold it, I knew the lingo and a lot of the strategies but I never took action, during my time, working there.
What made you come to the show, and specifically my program?
I heard you on the show and I resonated with your story. Anybody who wants to do this that lives in Southern California and they hear your story, if they’re not motivated by that then I don’t know what’s going to get them motivated because I clicked and I related to the path that you went down and started the business, it was like, “That’s what I’m going through,” because I was going to open houses. I was negotiating with sellers here and there are unlivable, horrible properties that are going for $500,000. It’s crazy. As soon as I heard you talk about virtual wholesaling on the show, I figured that’s something that I wanted to do.
Are you from San Diego?
Yeah. I’ve lived here for few years. I’m from the Bay Area, but I’ve always been in California my whole life, but I live in Pacific Beach in a one-bedroom apartment with my fiance, live a really low-key life. I do all my business out of my apartment.
In the wholesale industry, being virtual makes you unstuck to one market.
We are neighbors. I’m in Orange County. I definitely know the San Diego market very well. It’s a very competitive market. Anytime you are in a market where the real estate values are high, let’s say higher than the average median house price in the United States, you’re going to hear that in the seller conversations.
You are going to have a harder time convincing the seller to take a discount on their home because they usually are aware of the value of their home. In California, sellers are very aware of the value of their homes. I’m very open and honest about my struggles when I was in California and every once in a while, I’ll get backlash from the one investor that’s killing it here. There’s always one. They always say, “There’s always an exception to the rule.” The majority of the people that I talk to that try to make real estate investing work in the markets like SoCal, Miami, Seattle, New York, New Jersey, the high price markets, anything above $350,000, struggle. There’s always an exception but that one guy or that one company is killing it.
They’ve maybe honed in their skill and figured out some niche. That’s great, but for the most part, you don’t have to work as hard in other markets. I’ve proven that and you have. You started out in SoCal. You knew enough about investing because you sold coaching programs, so you knew enough about the business. You found my coaching program because I specialize in virtual and then you decided to go completely out of state. What was that like since you’ve tried the business in California and you’re talking with sellers in a completely different state?
It’s a lot easier to talk to them. I would say they’re a lot nicer. When you’re dealing with people that have a lower average home price, they’re more likely to take a discount. I want to be careful with how I say this, but I’m dealing with a lot of less-educated people and people that don’t upkeep their properties as much as other owners. I’m talking in Southern California. I want to say there’s a lot more opportunity to talk to motivated sellers and distressed sellers. It seems like they’re almost a dime a dozen where I’m at.
There’s more seller distress and lower-end markets and markets where the price point is lower. There’s going to be more distress whereas you come to somewhere like Southern California where the average price here where I’m at in Orange County is $800,000. The sellers keep up their homes, and even if they don’t, they could still put the home on the MLS and somebody will buy all cash to live in it and pay market price.
Multiple offers in a bidding war on it too.
We have no competitive advantages and investors here in these types of markets, but in other markets throughout the country, there’s a ton of great places to invest throughout the country where people live, there are jobs, and there’s a good quality of life. With going virtual, it’s nice that you’re just not stuck in the market that you live in, but we do get to enjoy living in Southern California, which is pretty sweet. You started with my program in December 2020 and you, by far, are doing very well. Take me back to December and what did you do to get where you are because you’re killing it?
Honestly, I did exactly what you said and I just took action. I wouldn’t say the first two weeks I’d got in the program. I went through your curriculum. I got everything set up. I found my boots on the ground and the market that I’m in. I probably started marketing the third week in December. I joined the first week in December 2020.
We hit the holidays. I came back in January 2021 and set some goals with my fiance for the year. I was like, “By the end of January, I want to have my first contract.” I think I ended January with five contracts. I blew that goal on the water, though. I’m doing SMS marketing and I stay consistent with it. I probably work four hours a day, four days a week. I always go golfing one day a week.
What a life. Your total deals of the four that have closed, you mentioned it was about $50,000. Let’s just say you started going in January and it’s the beginning of March 2021, so three months, your deal flow was $50,000. I get you at a split that with the JV partner, but you’ve got some deal volume. You might want to consider creating your own buyers’ list, so you don’t have to split anymore.
That’s my next step. My two next steps are doing that, creating my buyers’ list and eventually breaking off, and then scaling them, trying to replace some of the more grindy stuff that I’m doing right now and some of the marketing, so I can focus on more growth. The thing about my JV partner, I don’t think I would have been able to do any of this without him.
He’s been awesome and super helpful. Having that market knowledge and someone on the ground to handle the disposition for you, do the property visits has been invaluable. Breaking off from him, I think it’s going to create a little additional work for myself, so I definitely want to replace some of the stuff I’m doing to my marketing as I’m breaking off from my JV partner as well.
That’s a smart move. How did you find your awesome JV partner because sometimes people struggle with this?
I went into Facebook, typed in my market, real estate investment group. Actually, I didn’t post anything. I went through the history and I searched keywords like joint venture. I noticed a trend of people being mentioned multiple times. What I did is I got a list of five people and I reached out to them on Facebook Messenger, telling them I want a JV partner if they’d like to set up a call.
I think three ended up saying yes. I had phone interviews and I really clicked with this guy. He seemed trustworthy, honest, and loyal and that’s the thing that was the most important for me when I’m working with someone that I really didn’t know in the very beginning. It was a great choice. He was down in San Diego for a business meeting, we met up for lunch and I got to meet him in person.
I’m not going to tell people your markets since we’ve talked about that. Not everybody likes sharing what virtual market they chose, but what I love about the market you chose is it was not one of the main ones that everybody defaults to. The main ones are the major metros. I would say number one would be Indianapolis. Everybody, when they think of going virtual, they go, “I’m going to invest in Indianapolis.” It’s super virtual trendy. Oklahoma City was a big one, too and Louisville, that’s what I hear people say. I don’t know why it’s always like the same market.
I noticed that trend in the program. I’m like, “There’s a lot of other students in here going there too.”
I love that you picked a market that not a lot of people think about. It’s funny because it was actually one, I thought about when I was going to go virtual. It was definitely on my list, but not one that everybody thinks about. In fact, you were the only student I’d ever heard mentioned it, and I was laughing because I’m like, “It’s funny, nobody mentioned this, but I did think about it.” Without saying too much about the market, let’s talk about its characteristics to show that, “You don’t have to be in Indianapolis, guys. You can be in markets that are less well-known and smaller.” What was the population in that market?
I would say that’s the only downside to my market is the population, including the Metro Area. It’s under 500,000. I think it’s somewhere around 350,000 to 400,000. It was a little smaller.
It’s on the smaller side, but Nashville was that small when I started, and then it blew up. You can still get pretty busy with that population. What’s the average house price there?
It is $150,000.
It’s a good price point because you do get the sellers and there’s more seller distress. Usually, a seller that owns a home in the lower-end price point for the median of the country, money can be an issue at times, so when there are repairs, they tend to defer maintenance a little bit longer and we buy fixer-uppers. We’re a perfect match for that type of seller then a seller that is keeping their property up was remodeling it every ten years. I am very honest with sellers like. “I’m not your buyer if you just remodeled your home. Here’s a realtor contact. You should probably list it. That’s the best thing for you.”
It’s a perfect price point. The market that you chose is great. It’s a testament that you don’t have to be in the major metros. You don’t have to go to Indianapolis. There are other places in the United States. It would be really interesting exercise and I haven’t done it, but I probably should. I’m getting every county in the United States and then getting all the populations, then getting all the average house prices and show how many other areas people can pick. There was that one girl on our coaching call. She always talks about DuPage and I’m like, “DuPage? What is that? I’ve never heard of that place ever,” but people invest and go there.
Being trustworthy, honest, and loyal are important qualities when working with someone.
That’s what I literally did. I pulled up a Google map on my computer and I went into the Midwest and the South because that’s where you’re going to find those home prices. I looked at all the major cities and all the states that I might be interested in. I did some tricks that you teach in your course to figure out which ones are going to fit for me. I interviewed JV partners in two different markets. I connected with this one guy, so that’s how I landed where I’m at.
One other thing about that too, as far as the characteristics, that really surprised me because I always thought, as a wholesaler, before I got into the business. I didn’t think about wholesaling and rental properties. I always thought you were wholesaling to flippers. Because I’m in Southern California and I buy rental properties here. Not as frequently, at least but out of the nine contracts that I’ve done, eight of them I’ve been assigned for buy and hold buyers. One has been for a flip. I would say when you’re looking at markets, make sure that market makes sense for rentals and flips. I know that’s something you teach as well, but that’s super important.
Those are my favorite markets, the rental markets to wholesaling. They’re not my favorite to flip in now because you’re flipping a $180,000 house like you could have one unforeseen repair that ate up your profit because the margins are too skinny on all ends, but the rental property areas are great to wholesaling. Landlord buyers pay more than a flipper buyer and you get a lot of newbies.
This is the funny thing. You get a lot of newbies that try to go virtual in these markets, they don’t know what they’re doing, and they offer based on how a flipper would like the 70% minus repair rule. That does not apply in landlord markets. I teach that a lot. I talk about that a lot. I drill that all in your guys’ heads. The roll of that roll away, everyone but the 70% minus repair rule does not work in all scenarios. It probably only works in about 20% of the scenarios. I love that quick tip. I love giving practical advice in every show and do feel like you really gave some good ones. What’s next for you, Kevin?
As I told you, I was furloughed employee. I got furloughed twice in 2020 and then at the end of December 2020, I started to quit my job. I’m completely on my own in the business. I’m really focusing all my time here. What’s next for me is I’m going to continue doing my marketing and daily routine with what I’m doing. I think I’m going to go the VA route, try to get a VA, train them and replace myself a little bit in my SMS marketing and take more of the appointment phone calls so I could free up my time and start breaking off from my JV partner, so I can start securing 100% profits. That’s my big goal.
You are right. Dispositions is its own animal and I know it was a big game-changer from you when I hired somebody to solely focus on dispo. You definitely do need to get some things off your plate before you handle acquisitions and dispo at the same time and then hopefully, you get to a point where you focus on dispo and you hire someone for acquisitions or vice versa like you do acquisitions and hire somebody for dispo.
Honestly, I can’t stress enough with the JV partner and getting one in the beginning because the relationships they have with the buyers, he’s got a few hedge fund buyers as well. Getting these deals across has been super easy with him. I know creaking off, as I said, is going to be bittersweet but I also think about all the money that I could be making with doing this 100%. I’m excited for that next step in my business.
You guys can always keep him and if he brings you a deal and you end up being able to make as much with his buyer, you can still do deals. I always left it very open with my JV partners. They still bring buyers to us. It might not be goodbye forever. You definitely will work with each other or maybe you’ll even get where you’re moving their deals because you’ll build your buyers list so big. I know I gave a bunch of tips on that on how to build a monster buyers list. I’m excited for you. I’m really happy that you joined the program and you found so much success. I’m glad you took that leap of faith of getting out of your local market.
That’s super high price, stressful, and more work than it needs to be. I’m proud of you. Guys, if you are looking for a coaching program on virtual, I’m the girl. Check out www.VirtualInvestingMastery.com. I am the virtual coach for Wholesaling Inc. Apply there and somebody will reach back out to you. Kevin, thank you so much for coming and giving some quick tips. I’m really looking forward to seeing where you are in few months, because already where you are is crazy.
It’s blown my mind too. I thank you enough, Lauren, I appreciate everything you’ve done.
Thank you and thanks for reading, guys. Until next time.
About Lauren Hardy
Lauren Hardy is a Virtual Investing expert and Real Estate influencer who owns multiple companies in the real estate industry including real estate investment, coaching, and software companies. She is also a Wholesaling Inc coach and co-host of the Wholesaling Inc Podcast.
Her experience in the last decade has been focused on real estate investing and creating products and services to serve the real estate investing community. If you are interested in investing in real estate virtually, house flipping, or virtual landlording, Lauren’s your girl.