Posted on: April 05, 2021

Motivation drives people to take action to reach goals. Our guest for this show got his to do better in his real estate investing business from Wholesaling Inc. after being unsuccessful for months.  His drive made it possible for him to hit deals from zero to $150K!

We have Matthew Arnez today in the show. He is a successful student of the Virtual Investing Mastery program who has done wholesaling houses virtually from San Diego, California, a very competitive market for investors.

In this episode, Matthew will talk about learning how to do business virtually through the coaching program. It started making things work for him. He will also talk about his struggles and finding a new niche for his business. He will also share his story of almost giving up on doing the business himself to work for an investor. Also, he will share his struggles in making business work and how it paid off through his big deals.

Find out the reality of doing real estate investing with Matthew. This episode will those who are going through rough times in their business. Listen to this episode and get motivated!

Key Takeaways

  • When, where, and how Matthew started in the real estate business
  • Doing his business in a competitive market
  • Working for an investor vs. doing the business himself
  • On the realization on having the right market matters in the real estate business
  • Finding his niche in Sacramento
  • On having consistent wins and learning the business
  • How much he closed doing business virtually
  • On doing a ton of work to have more deals on Multi-Family properties
  • Where to get a hold of Matthew

RESOURCES:

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Episode Transcription

Lauren Hardy:
What’s up Rhino Tribe? This is Lauren Hardy, and you are listening to the Wholesaling Inc. Podcast. Today, I have one of my students who was wholesaling houses virtually from San Diego, California. His name is Matthew Arnez. What’s up?

Matthew Arnez:
How’s it going guys? Hope everyone’s doing good.

Lauren Hardy:
We are. I am. I am doing very good. What is it? It’s Wednesday. I’m busy. I just hired three new virtual assistants.

Matthew Arnez:
Oh, there you go.

Lauren Hardy:
Yeah. So my brain is fried. Matthew, but more importantly, what’s been going on with you? Hearing you’re closing lots of deals virtually.

Matthew Arnez:
Yeah, it’s been crazy. So just to give a little background about me to everybody who doesn’t know me, I started in the real estate industry probably what, two years ago? And I actually started in San Diego. And for anybody that has been in this market or anywhere in Southern California, you kind of know it’s really difficult and very cutthroat. So I tried and I tried and it was so difficult when I was trying to cold call to get these leads. And I started to think about what’s another option that I could possibly do, right? And I found you, Lauren, on YouTube. Because I was looking up how do I go virtual? How is that?
And you were the very first person that I’ve seen when it comes to try to wholesale in another market that you’re not in. And so right now, guys, I’m in Sacramento and everything has been going so much better. And it has me really excited, just moving forward with all the work that I’m doing.

Lauren Hardy:
Isn’t it night and day when you come from a Southern California market, like San Diego or Orange County? Or any of you guys, I’ve heard the same thing, New York, Miami, if you guys are in Seattle. Basically, if you are in a market that’s above $500,000 purchase price, talking to those sellers, you were saying it was so different when you were cold calling the San Diego sellers. Tell me about that. Why was it so hard? [crosstalk 00:03:08]

Matthew Arnez:
Yeah. So I think the biggest obstacle that people come across, calling a competitive market or calling in a competitive market is it’s competitive. So these people are getting constantly contacted 24/7. There would be times where I’d be like, “Hi, there. I’m looking for Joe.” And they’d be like, “We’re not interested in selling our property.” Just hang up before you even have anything to say. So I just felt personally, for myself, that was the biggest thing, is that there’s so much competition and not that you can’t make it work, but I just felt for the amount of effort I was putting into it, that I could probably reap better benefits in another market because I knew I was doing all the right things, right. And I think that’s the biggest thing that was just… It’s competitive.

Lauren Hardy:
It’s so funny because I remember when I went from Orange County, California and the surrounding areas to do virtual markets, the first thing I noticed was the sellers were just nicer.

Matthew Arnez:
Yes. 100%, yes.

Lauren Hardy:
They’re just nicer. I mean, I don’t want to dummy this down, but literally, Southern California sellers will chew you up and spit you out.

Matthew Arnez:
So bad. It’s so bad. You’ll literally just feel drained, cold calling, especially. They’re just so mean on the phone. And for anybody that cold calls a lot or has that experience, you know it’s already hard as it is, but Southern California, people are aggressive.

Lauren Hardy:
And the main thing about wholesaling houses and real estate investing is you want to buy everything at a discount, right? You want to buy with an equity position. And sellers in high priced markets, and I want to be really specific. Markets that are higher in price, that is such a… What does high price mean, right? That’s subjective. Some people think above 300,000 is high priced. San Diego specifically, it looks like the average house price in San Diego, I just looked it up was 650,000. In Orange County, I think it’s 800,000. So we are dealing with sellers who are very aware of the value of their property.

Matthew Arnez:
Absolutely.

Lauren Hardy:
They don’t just live here and own a house and not know that they own something that’s worth $600,000.

Matthew Arnez:
Yeah. 100%, 100%.

Lauren Hardy:
And we have to convince these sellers to sell to us at a discount so we can make money in the buy. We want to buy with an equity position as a real estate investor, as an investor with anything, you want to buy low and sell high, that’s investing, okay? So convincing a seller to take a 30% discount on their $650,000 home is a bigger pill to swallow for that seller than if that house was worth $180,000. And just for fun, I’m going to calculate that. So say you’re making a offer and you’re just taking 30% right off, that’s $195,000 from 650.

Matthew Arnez:
Crazy, right?

Lauren Hardy:
$195,000, you have to say, “Mr. Seller, I know your house is worth $650,000, but I’m going to offer you 455.”

Matthew Arnez:
Exactly. I think that’s the biggest thing that… And people probably listening, who are in other markets you’re like, “Holy crap. The average price home is $650,000?” And that’s the biggest thing, here was just having to ask for such a big reduction. I mean, anybody just listening in is just like, “Wow, $150,000 reduction. That is crazy. Why would anybody do that?”

Lauren Hardy:
You feel predatory, even it coming out of your mouth. And you’re like, “I feel predatory.”

Matthew Arnez:
Yes. Absolutely. Absolutely.

Lauren Hardy:
So when I went to a Midwestern market where the average house price was 180, a 30% discount on that home was maybe 40 grand. So it was like, “Okay, well yeah, you could get 180 if your property was fixed up all the way and you sold it with a realtor and you waited six months to do it because it takes time and escrows fall through and you have to make repairs. So instead I’m going to offer you 135, Mr. Seller.” And that is an easier from 180 to 135, a seller can kind of justify that, weighing out their time, whatever the seller’s situation is. Maybe they don’t even have time. Maybe they don’t have that option anyway. So it’s a completely different negotiation. And that’s why I chose all day long to just work a market that is priced lower.

Matthew Arnez:
Yeah, absolutely. That was the thing. So, I mean, once I came to that realization and just was really trying to do some research online, I mean, guys, I want to let everyone know that I was struggling. So I mean, I know that a lot of the times people come on podcasts and just talk about their massive success. But even when I was thinking about coming on here, I kind of wanted to just share my experience in San Diego, I was doing it for a year and I really struggled. It was really difficult for me. And I would try every single day and just bust my butt to just really try to make this work. And for some reason, it wasn’t working, but you had that hope knowing that people are doing this, you’re listening to Wholesaling Inc. Podcast and people are doing this.
So it’s just like, “I knew it wasn’t me.” And it was what, July 2020? Last year. And I was looking at part-time jobs. Guys, I’m just like, “I need to pay my bills.” It was totally crazy. And then I was like, “I need to make a change. And I’m going to take this risk.” And I didn’t take any of the jobs that I applied to do part-time because I was like, “No, I’m 100%. It’s all in at this point. Right? I’m all in.” And then that’s when, just kind of started learning about your program and everything like that. And it was-

Lauren Hardy:
Do you remember on our welcome call, I remember you were approached by an investor who you were going to work for. And you said, “Should I just take this? They close a lot of deals in San Diego. Maybe I can learn something from them.” And I said, “Listen, I don’t know how much they’re offering to pay you. But I gave you an idea of what you realistically can make. So why don’t you make that decision for yourself, but I’m going to teach you everything I know.” And you made the decision to not go for that job.

Matthew Arnez:
Yes. I got offered, two people, two different people. Somebody from Sacramento too where I just was running out of marketing dollars. I was running thin and I need to pay bills. And so I got offers from people who had money. They’re like, “Oh, we’ll buy whole bunch of cold callers, right. And you’ll just follow up with people and you’ll get a good percent and this and that.” So it would take away from me having to pay expenses. But I wouldn’t be making 100% commission, right, that I’m making now from just doing it myself. And so I’m glad I took your advice on that because you did tell me, you’re just like, “No, don’t do it.” You’re like, “Don’t do it. Trust me.” You’re like, “You got this. I have so much faith in you. You have the energy.” And I’m like, “I do have the energy. And I am going to make this work.”

Lauren Hardy:
Yeah, no, I knew from when we first talked, you had it in you. I was like, “I just don’t think you should do it.”

Matthew Arnez:
Yeah, I know. You’re straight up. You just cut straight to the point. You’re like, “Honestly, man, I wouldn’t do it if I was you.” I’m just like, “Honestly, Lauren, trust me, I’m feeling that same vibe. I’m just in this weird situation.” But we managed.

Lauren Hardy:
Yeah. So, okay. I want to take just a sec, back a second, because you reminded me when you were saying that you were struggling for a year and you would hear these people on podcasts. “So when I got started, I first started because I read the book, Rich Dad Poor Dad. And I sent out some direct mail and it closed 15 deals by first month. And now I’m a multimillionaire closing 120,000 a month.” That, I totally can commiserate where I would listen to these podcasts of other successful investors, closing all these deals and making a very good income. And they were doing exactly what I was doing.
I mean, I paid for mentoring. I would pick their brain for an hour. I’d ask how much marketing… This is back in the day, by the way, nine years ago when direct mail was the thing. I would say, how much are you spending in direct mail? How many postcards are you mailing? What does your postcard look like? I kept thinking that there was something I was doing wrong. So I dissected every ounce of my business. And I said “I’m just…” The only difference is I’m doing this in Southern California and they are doing it in Texas, Pittsburgh, Phoenix, Oklahoma.
And what is the common denominator? Cheaper area to live. House prices are like a fourth of what [crosstalk 00:11:49] and that was all it was. And it was the day that I, and I want to hear your story of how you figured this out. I’ll tell you mine first. So I was so frustrated that I flew all the way to a seminar in Nashville. It was thrown by some educators in the business. It was just your typical real estate, wholesaling investing seminar, okay? It was all the way in Nashville. I thought, “Whatever, what the heck, I’ll go to it and see if I can figure out what I’m doing wrong.” In that seminar, the educators did not tell me anything that I wasn’t already doing and didn’t already know. So I sat there and I was like, “Yeah. Okay. Well, the actual education part was a waste of time.”
However, what was invaluable was there was 15, it was a small group, it was only 15 people. And we were sitting in a round table and I was able to ask everybody how much direct mail are you guys sending? How many sellers do you need to talk to before you get a deal? What does your deal net you? How many deals are you doing a month? How many hours do you work doing this? And also getting to know them, knowing that learning they weren’t smarter than me, faster than me. They weren’t anything more than I was. It was just their market.
I was like, “This is ridiculous. It’s their market.” And it was that moment that I said, “Forget it. I’m going virtual.” I, from that point, never looked back. I mean, I did do a little straddle where I was doing some of California and I did Nashville just because I was there. I was like, “Oh, you know what? Nashville sounds good. Let’s make Nashville work.” So what was your moment? Did you have the same… Mine was in Nashville. Did you have a moment where you’re like, “Wait a second. All of these people are not in California.”

Matthew Arnez:
Yeah. I think my moment was literally just my experience. I was just so new with it and Lauren, I was just busting my butt, calling the right list and just calling, calling. And I just would watch videos and they would tell me, “Oh yeah. How many contacts did you get per hour? And how many leads did you get? An appointment?” And all my metrics were just wrong and I feel I wasn’t getting any… Nothing would even come close. With price, I was just so far off and competitors were just coming in just much higher. And I’m like, “Am I comping wrong or something? Am I doing something wrong?” But I think that was kind of just it.
I just knew it wasn’t working. And I was doing it for a solid year and actually, that’s not true. I was in it for another year for another real estate investing company here in San Diego, helping them with acquisitions. And that’s how I kind of gotten involved with all the whole real estate investing industry. But yeah, that was pretty much it. And then just everyone else’s success. And then I actually did join TTP, right. Brent Daniels’ program. And then he was even saying too, “What market are you in?” And I was like, “San Diego.” And he’s like, “You should probably maybe look into another market. It’s one of the hardest, most competitive markets in the whole entire U.S., if not the hardest. Just Southern California in general.” And I’m like, “Okay.” That right there.
Even just Brent telling me that was like, “Okay, that totally makes sense. I need to…” And I just need to pay for bills too. And I’m like, “All right, it’s clearly not working fast enough here, I’ve been doing it for a year and we closed what, two deals? This wholesale is so small though. I barely got in there from referrals. But I was just, “I can’t last like this.” And at this point, “I’m sorry. SoCal, but I’m giving up on you and I’m just going to try somewhere else.” And then I was going to start in Sacramento because after I graduated two years ago, I planned on moving to Sacramento to start my own business, within real estate investing. And I decided to just stay here and try to work this market. I knew Sacramento was starting to grow a lot more and people were having a good amount of success, but it wasn’t too competitive.
And also, people were moving over from the Bay Area to Sacramento because a lot of these companies were allowing people to work from home because of COVID. And they realized that they’re just as efficient working at home than they are in the office. So to cut overhead costs for big companies and big buildings, people were starting to move over. So I was like, “All right, I have no idea if this is even going to work, but let me just go for it.” And then I did. Granted, I’m not going to lie, I’ve gotten big deals, but it’s not as consistent. So I feel like in a California market, from my experience, which isn’t too much, but a decent amount in two different markets, I’ve come to learn that you get bigger deals here, but it’s not as consistent, if that makes sense.

Lauren Hardy:
I call that elephant hunting versus squirrel hunting. And it’s up to your temperament, which one do you want to do? Some people just prefer elephant hunting. They want the big deals and they don’t feel like a $10,000 check is worth it. Or even an $8,000 check is worth it. I’m a squirrel hunter all the way. I love that and I kind of break it down more psychological reasons. What is your tolerance for risk? I personally have two children, I have two mouths I need to feed. I’ve got a staff now that I need to pay. But most importantly, it’s just me being a mom and having kids and childcare and private schools. And so if I am relying on that one deal a month and now that one deal is a 25,000 plus deal. That’s my one deal a month I’m relying on to pay my bills and if that deal doesn’t close, I’m going to blow my head off, right? It’s going to be a bad week.

Matthew Arnez:
You have anxiety, right? The whole time, you’re relying on it. And even for myself, [inaudible 00:17:37] probably being in Sacramento and maybe expanding the surrounding areas but I definitely want to dip my toes in other markets as time goes on just to elephant and squirrel hunting. So then that way, at least I’m still getting little wins to kind of be more consistent. And then when I get the big ones, it’s like, “Woo hoo, great!” But at the same time, I’m not stressed out every day just waiting for that next big deal to come. You know what I mean?

Lauren Hardy:
Right. So yeah, you chose to go virtual in a more elephant hunting type market-

Matthew Arnez:
[crosstalk 00:18:05] I didn’t even know I was doing that.

Lauren Hardy:
Yeah, you didn’t know the difference. It’s okay. You guys now know, so I call it elephants and squirrels. So I had a really good episode if you ever want to listen to the one with Greg Helbeck about it because he is more of an elephant hunter. And then we were arguing squirrel versus elephant, what’s better? Greg is exactly you, he lives in San Diego. He’s single, well, I mean, probably has a girlfriend, but not married, doesn’t have children, doesn’t have dependents. So if that deal that was supposed to close in March fell through because of a title issue. Yeah, you didn’t get your $30,000 check, but you’re okay. You live lean, you’re fine. Your bills are pretty manageable. Whereas for me, I love that I have maybe anywhere from five to 10 deals in the pipe at any month. So if any one doesn’t close, not a big deal. It’s like, “Whatever. That one didn’t close. I can still pay all my bills and pay everybody. And I’m fine.” So that’s just my preference. That is a total, you have to do that, inner work.

Matthew Arnez:
[inaudible 00:19:13] I’m not going to lie because that way, it’s just like, you get little wins. You’re like, “All right, my work’s paying off.” And don’t get me wrong. And we’ll probably talk about the big deal that I landed recently, and that was awesome but at the same time, it would be kind of nice to have just more consistent wins. That way, you’re like, “All right, the work I’m putting in, here’s a 10K win, 10K win. 10 K over six months instead of the $60,000 all at once. I feel that probably would have, just been good for my mental health. [inaudible 00:19:41].
But I mean, it’s interesting. I’m still learning. For everyone that’s listening, I’m 24 years old, I just turned 24 last week and just, yeah. I’m still young and learning and I have time to figure all this stuff out. So no matter what, at the end of the day, it’s just like, when you fail, you can always have a backup. I mean, in San Diego, I guess it’s not a failure, it’s more like a learning experience, right. A little more positive way of looking at it. Because then, that way, you kind of know, “Okay, that didn’t work. Let me try something else. And that’s just a part of the process for sure.

Lauren Hardy:
Yeah. So tell everybody how much have you closed since you started with the Tribe?

Matthew Arnez:
Yeah, so I started… Well, how I look at it is starting in Sacramento. I started in July of last year. So it’s been what? Eight months or so and I closed 70,000.

Lauren Hardy:
That’s awesome.

Matthew Arnez:
Yeah. I’m so stoked on it.

Lauren Hardy:
Do you have any in the pipeline right now?

Matthew Arnez:
Oh, I honestly have a ton, I really do. And so I’m pumped. I really don’t stress out at all. And then I have another really big one that I’m going to be closing. The one I was telling you about. Another 55… Okay. So they did a title report and I thought the liens were going to be 10,000 plus. And I think it’s on 3,500.

Lauren Hardy:
Oh, wow.

Matthew Arnez:
[inaudible 00:20:58] the deal, I thought I was going to make 55. I think I’d make 61 or 62.

Lauren Hardy:
Wow. [crosstalk 00:21:03] So you closed the 70 and you have one that is in escrow to close that’s almost 60,000?

Matthew Arnez:
Yeah. [inaudible 00:21:10] how it works. I closed one for 10,000. And so this was a vacant property, right? And I was negotiating with them for so long. It was crazy. They wouldn’t pick up their phone. I think they spoke Mandarin or something. It was difficult and so I had to talk with a real estate agent, but the real estate agent, was just so bad and just would never pick up his phone, never call back. They wanted to sell, but they couldn’t speak English. And so the agent had to handle everything. And so anyways, on that one, I actually joint ventured with somebody on that one like you always say to do, just because I was so broke, I’m just like, “I need any money at this point.” Literally anything in my pipeline was pretty good. So I was just like, “Okay, I just need us to close. This guy’s super connected, right. And he has a buyer and he wants to buy it for sure for $20,000 more than I got it under contract for.” And then we just split it 50-50. And I was just like, “I just needed that.” Right?
And then the next deal though, the one I just closed, what, a month ago, last month was $60,000. And that one was like, “Holy crap.” I knew it was going to be a good deal because… Just to give a little background on the situation, guys. So I was calling a multifamily list, right. So I was calling a multifamily list, individual owner, right. No LLCs or corporations or anything like that, partnerships. And then I got ahold of somebody. I was just like, “Hey, how’s it going? I’m looking for Thomas.” And then just did the normal intro. And this guy just was a older gentleman. And he basically didn’t want the property anymore. So sick and tired of being a landlord and he literally gave me the price, right. I didn’t have to…
Just how we always just say. So what are you looking to get out of the property? And he’s like, “I know you’re honestly going to have to make a profit. I know you’re probably going to make a good profit on this. But for my plans, just moving forward, because he’s going to move out of state. He’s like, I just want $575,000 and it’s yours. So if you can make that happen, then we got a deal.” Right? It was crazy. It was just a really unique situation where there was no negotiation. He just knew what he wanted. And I was just like, “Okay, I can probably make that work. Absolutely.” And then, long story short, I didn’t really have a lot of buyers yet. I was trying to work on it, but not for multifamily.
And this property needed a ton of work. I’m talking a ton of work. Because people think in California, for nine units, $575,000, right, is nothing. But it just wasn’t the best neighborhood, right. And it was just really run down and people were stressed out about COVID because the California law says you can’t evict a tenant even if they’re not paying. For a landlord to evict the tenants, they’re scared about payment issues. Plus the rent was super low. Anyways, long story short, we closed in February. I made $60,000 and it was an absolutely incredible experience.

Lauren Hardy:
That’s amazing. And now you have another one coming. That’s what? Almost 60?

Matthew Arnez:
Another 60. And then I have two more. When I said my pipeline is really nice, but I have a hot lead section and I have four other really hot ones. They’re pretty close to going. And I have another guy… I’m actually flying back to Sacramento in two weeks, a week and a half because I have another guy who wants to sell his property for sure, guaranteed. I try to get them to sign it over the phone. And he’s like, “Hey, I just want you to see the property first to make sure we’re good to go.” But he’s like, “We’re ready to go.” So I know it’s a little bit riskier to wait, right. Because you want to get that contract ASAP, but that one should be looking like more of a 15 to $20,000 deal. If I can get all those closed, I might get 150 by July. So within one year or even more.

Lauren Hardy:
There you go. From zero to 150.

Matthew Arnez:
Crazy. I’m just like, my mind’s blown. I’m so blessed. I’m just so thankful too for it. Because I mean, all you guys, you and Brent, right. You guys really just gave me the knowledge and the foundation, especially you, going virtual. That was the game changer right there. So I’m just excited moving forward. What’s next for my journey. I don’t even want to take my foot off the gas at all. I just want to keep going. At this point, it’s a game. Okay, I did this this year, but now what am I going to do next year? I’m just excited.

Lauren Hardy:
That’s awesome. Well, I can’t wait to see what you do next year. I know you are going to be even more successful than you are right now, but I’m really, really proud of you. I remember talking to you when you first got into my program and I knew you had what it took. So I was very against the idea of you working for anybody else. I really wanted you to just work for yourself and make this work. And I knew you had it in you so I’m super excited that you found success, you found your market, you found what worked.
I think it was like, you had the car built, you just didn’t have gas in it because it was the one thing that was broken in the machine, right? It was just the one thing. And that was your market. You were just in a market that is very difficult and it’s difficult for a lot of people. So you made that switch and yeah, look at you go. Well, I’m super excited. If anybody wanted to maybe get ahold of you to talk Sacramento deals or San Diego deals, how can they reach you? Are you on Instagram or any of that?

Matthew Arnez:
Yes. You guys can all follow me on Instagram. So it’s just my first and last name. So that’s Matthew Arnez. M-A-T-T-H-E-W-A-R-N-E-Z just follow me on there and feel free to reach out to me and I’ll definitely answer any questions you guys might have or anything like that. So even if you guys are trying to squad up, I’m always down to squad up, just like minded people and people who are really motivated, trying to hit this industry hard. I’m all about that.

Lauren Hardy:
I love it. Well, Matthew, thank you so much. And you guys, if you’re listening to this and you’re curious about going virtual, check out my coaching program at www.virtualinvestingmastery.com or if you’re more just curious about me, you can follow me on Instagram. My handle is thismomflips. All right, Matthew, I’m so proud of you. Thank you all for listening. Take care.

Matthew Arnez:
Thank you so much, Lauren. Later, guys. Hope you guys all kill it.

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