Posted on: April 13, 2021
WI 665 | Creative Deal Making

 

Wholesalers often throw away tons of leads because so few of them need the 70% rule, which can’t simply work on certain things. Or so they thought, unless you’re into creative deal making.

Brent Daniels talks to Brian Iregbu today on the show. He is a creative financing expert who has made great deals in real estate through his practical way of doing things. In this episode, Brian shares next-level strategies to profit from almost every deal in an easier way than you think.

How to do things like Brian? Get all the information in this episode.

Creative Deal Making – The Secret To Getting Paid On Every Deal With Brian Iregbu

Wholesalers often throw away tons of leads because so few of them need the 70% rule, which can’t simply work on certain things. Or so they thought. We have Brian Iregbu today in the show. He is a creative financing expert who has made great deals in real estate through his practical way of doing things.

Episode Transcription

Brent Daniels is going to be speaking with Creative Financing Expert, Brian Iregbu. He is going to share some next-level strategies on how to profit from almost every deal. As wholesalers, we are often throwing away tons of leads because so few of them meet the 70% rule. You can’t make it work on these things or so you thought. Imagine for a moment being able to profit, regardless of how much equity is in the house. What would that do for your business? Brian Iregbu is going to show you how to profit from these deals and why it is so much easier than you actually might think? Enjoy.

The majority of sellers don’t want to sell their property for pennies on the dollar. We normally deal with, let’s say, 4% to 8% of the population. What I find is that when you give sellers a cash offer, it’s great if they’re except that for speed and convenience. A lot of times, investors that think if they’re not willing to sell their property for pennies on a dollar, they’re not motivated.

That’s not necessarily true. Sometimes they’re motivated but your offer just doesn’t work. What I find is to give them a couple of options. Both of the options making sense for you and then you’ll find it increases your conversion quite a bit. That’s the reason I do it. I used that strategy when I had a job working 50 to 70 hours a week and it still allowed me to keep up with investors at the time there was working full-time. I barely had a glimpse of time to invest in the real estate business but it still allowed me to pick up deals by adding it to the tool belt. That’s the reason I do it.

We talked about the foundation of real estate investing as finding discounted properties. You’ve got a lot of different things. You’ve got fix and flip, your rental portfolio, development, you got to be in the bank, all these different things but it starts with finding those motivated sellers. Now, they might not be motivated to take a cash offer but they’re motivated to do something.

When a lead comes into you, Brian, what does that look like? Are you putting it through some mental filter that you’re like, “Let’s see their situations, this and this? I think that I’m going to go with this approach and give them a cash offer. If not, I’ll back up and I’ll do something more creative.” How do you process that in your brain?

WI 665 | Creative Deal Making

Creative Deal Making: Give sellers a couple of options, with both of the options making sense for you, and then you’ll find it actually increases your conversion quite a bit.

 

I love your framework. We do the exact same thing you do. I don’t like to make things complicated. People think creative finance is doing mental gymnastics. You can add a couple of more things. This is really simple. You’re doing a layup. Add a little jump shot, a few more things. This is what it looks like. Lead comes in, we qualify the same way you qualify for motivation.

The reason for selling, what happens if you don’t sell the condition, the timeline, the asking price? We then only give an option, an offer range. If we find with a tug of war that this isn’t going to be a fit, then we present another offer. A lot of times, depending on the situation, we’ll make both offers at the same time and assume the close. “Mrs. Seller, based on everything you shared with us, which one seems like a better fit for you?” Just shut up and I’m telling you, it works like magic.

You go in with a cash offer. That’s obviously the price is going to be lower. You then go in with what other option is this? I guess it depends on the situation.

Back it up, you asked about the framework probably it has a mortgage. Obviously, this is going to be subject to. It’s going to be an existing loan. Now, what we’re looking at typically on this is will it cashflow? Can the property paperwork itself? If it doesn’t create cashflow, if it doesn’t pay for itself, does that mean it’s a bad deal? No, we may do something like assigns it. We might assign it to someone else or we might structure it on seller finance, AKA a wraparound mortgage and assign that to a retail buyer.

The Retail buyers are not looking for equity and cashflow. They pay top dollar. If that sub-to won’t cashflow but it’s still at a rate that someone is willing to pay that much because they’re going to lay their head there every night. We’ll still be able to profit off that deal if it’s free and clear, that second offer, seller finance it, of course.

That’s what’s exciting. A couple of different things that I want to pull apart there. One is if they do have a mortgage and maybe there’s not a lot of equity, Brian, this has been bananas in our own business here in Phoenix. We’re locking up sub-to deals and it is like a feeding frenzy when we put it out to assign that deal. I could keep them. I could do that, I choose to keep that side, assign and see what’s going on there but it is a feeding frenzy. Even if they don’t have a tremendous amount of equity, if you’re able to put together a solid sub-to deal, people will pay you for those. People pay you $10,000, $15,000, $20,000 a pop to be able to add that to their portfolio, not have to go get a conventional loan every day of the week.

The second part is, do you want to make a ton? Do you want to assign it? Sell it to somebody that’s going to live there. Just like you said, “Sell it to somebody that’s going to live there.” Now the other side is the creative financing. For everybody that’s not sure what that means, essentially, for the most part, these properties are owned free and clear or they’ve got a very significant amount of equity but let’s say that they’re free and clear for this example.

You then go in and you approach them as being the bank. Now, in your experience, Brian, is it because they don’t want to pay a lot in taxes? Is it because they don’t know what to do with the money? Is it because they want more for the property than you’re willing to give them for a cash offer? That’s it.

It’s usually that they’re not strapped or stress per cash. They don’t have an emergency or pressing need. If there’s a way that you can give them more money and it doesn’t scare them, they’re willing to do it.

How do you structure that? Do you put together a note? Do you put together a lease agreement with a purchase? Do you have somebody handle the paperwork for you like a closing attorney or title company? How does that work?

Sellers respect honesty. They respect if you’re straight upfront with them.

We write up the agreement, whatever. Brent, if I’m looking to purchase your property, seller finance from you, your property is worth $100,000. I shot you a cash offer of $50,000 to $70,000, depending on the repairs. You say, “Kick rocks, get out of my house,” or hang up. Not offer you an offer of, let’s say, $80,000 for that exact same property. I would offer you $40,000 to $50,000 rent. We would write that agreement up, $80,000. I normally don’t just throw out interest. I don’t negotiate against myself. If that sits, we’re probably going to start talking.

I’m going to start it rock bottom but we will put that $80,000. We would put the term. We put the interest rate. At that point, Brent, I’m going to let the experts do what the experts do. I’m a real estate investor. Pass that contract over to a real estate attorney or title company. They’re going to drop a promissory note. They’re going to drop a deed of trust here in the state we’re in Texas. That’s the actual instrument that allows the seller to foreclose and take the property back in the event that I default. They have their protection as well. That’s what happens.

Did you read what he said, everybody? He said he lets the experts take care of it. He’s a real estate investor. His job is to go find the discounted properties, the deals, the opportunities, run a team in the business and cherry-pick the deals that he wants to keep. He’s not going out there getting scientific with every line of the promissory note, the contract or anything.

It’s funny because a lot of people are so scared to create finance because they like, “I don’t know what to say. I’m not the expert.” Check it out. Sellers respect honesty. They respect if you have a straight from upfront with them. If you don’t know the answer to a question, guess one of the best responses. “Mr. Seller, that’s a great question. Let me get my real estate attorney. I’ll have an answer before you booked by 05:00, does that fair? Let me speak with blank experts,” and that they feel that they’re competent because you’re surrounded with a team of experts.

It’s the truth. We don’t need to know everything and don’t lie. Just tell them, “I don’t know. I know we can put this together. I’m going to let them worry about all of the technical paperwork but lets you and I work on the price and terms, and we’ll get this settled and figured out and as smooth as possible.” Remember, when you’re negotiating with a property owner, it comes down to three things, the price, the terms and, whether or not they want to work with you, that’s it.

If they want to work with you, just work out those other two, let the paperwork it’s done by the experts, and you’re off running and looking for other opportunities because you know, as well as I do, Brian, sometimes you fall into the black hole of like, “I need to protect this deal. I need this deal to close. It’s precious. It’s so beautiful.”

You had a 50, 70 hour a week job. You couldn’t afford to do that. Worry about all this, not to sleep and go through all the brain damage. You went and you set it up with people that you trust, and you rock approach. Let me ask you about that. Let me go back in case people don’t know because I want to give them the heat early because that’s so great. How did you get into real estate? It sounded like you had a nice career going on. What happened?

I wanted freedom like you, Brent. You’re inside of set recording videos and doing what you want to do. I wanted that. That’s what happened. I did have a great job, a fortune, three companies. I just want a little bit of freedom. Like everybody else, I was searching on YouTube, ways to make money. I know it sounds shallow. I’ve seen a bunch of scammy-looking stuff. I kept seeing people like you. I was like, “These people are real.” People are really doing this. I took my shot at real estate and you hear people say, “I buy houses with no money, no credit.” I’m going to tell you that sounds like a scam but it’s not and it’s real. It will change your life, for sure.

With your team, how are you guys going out and sourcing your leads? What’s your lead generation look like?

We shifted more so now. Cold-callings are our number one. In 2019 and 2020, honestly, RVMs were our top. We were killing it. Regulations and everything it’s a lot harder. We’ve been new works so many different ways to get those messages through. The delivery way is coming down. We’ve been beefing up cold callers. I think we have eight cold callers at the time. Number two, still do a little bit of RVM, and the third is Facebook. That’s our top three marketing channels. Cold-calling, RVM, then Facebook.

WI 665 | Creative Deal Making

Creative Deal Making: The only reason we would even do creative finance for acquisition managers is if the seller isn’t accepting a cash offer.

 

When these leads come in, who’s working them? Is it going directly to you? Is it going to an acquisition manager, salesperson, maybe a lead manager? Where do they go? You got eight callers. It’s raining leads. You’ve got to filter those.

Once the leads are filtered and it’s a qualified lead, these people are interested in selling. They understand that we’re not retail buyers. They get assigned to one of our acquisition managers. The acquisition managers make that follow-up call, and then they try to close the deal, a contract, a deal. That’s where it goes next. They contract a deal. They got the contract everything’s in Podio. They press a button. It goes to dispositions. Dispositions go does that thing and try to find a buyer for the property. That’s the process. It’s very simple.

Let me ask you about a struggle that I’m having. This is a struggle that I’m having in my business. The struggle is we have them come in. We get big deals, Brian. We do well at that but there’s a lot that we don’t get. In my mind, I don’t want my acquisition managers going cash and creative because I feel like they’re going to lean towards the creative more than the cash. It’s going to throw off the cashflow and then what do I pay them if we get those deals? It’s a confusing thing. How do you balance that out? Do they know if a property comes in that it’s most likely going to be seller finance versus a traditional wholesale? Do they have to work that out on their own?

They work it out on their own and that’s a great thing that you said that to have an issue with. I’m going to tell you an issue that was more prominent because we had licensed acquisition managers. It was like, “If we can’t wholesale it, then we can list it.” They try to convert things into a list, and they will kill the company’s profit. That was more of a problem in what you’re talking about for that? No, because it makes more sense for the acquisition managers to contract that’s a wholesale deal. They’ll make more money. The only reason we would even do creative finance for them is if the seller, like, “It’s no way that we’re getting a cash offer accepted.”

Do you pay them a flat fee if they get it through? I assume that now you own this property. They’re like, “I did all this work.” Do you give them a flat fee or something?

Check it out. It depends on what type of deal it was. You remember earlier I said, “Let’s say the deal doesn’t have any equity and it doesn’t create cashflow either because investors buy for equity and cashflow.” On a deal like that, we would assign it and step away. The assignment fee is the same. It might be a $10,000 assignment fee or $15,000 assignment fee and you’re back to the basics. You pay them or present it’s based on an assignment fee.

However, if it’s something that I keep or one of the partners keeps or somebody within the company keeps, this is how we do it in our company because we promote everybody in our company having ownership or building wealth. We don’t want to just be like, “Employees and we’re working.” What we do is that person, if they’re taking it off the table, that they have to pay the company a $5,000 assignment fee.

By the way, that’s a smoke a deal for them. I mean $5,000.

Everybody wins. Nobody wants to be like, “The company owners are getting rich and one day I’ll be an investor.” That’s how we put that into our company to where employees also can buy deals.

If there’s a way that you can give sellers more money and it doesn’t scare them, they’re willing to do it.

It’s really interesting. For everybody building a team, keep your salespeople happy because they will make or break your business and your conversions. Brian, that is absolutely beautiful what you said there because a lot of times as owners, we go, “I paid for the marketing. I paid for this opportunity. I want to build my own net worth. Why would I pay somebody in an assignment?” That’s what destroys the culture in a business.

It’s me, Brent. I don’t know if anybody else agrees. Matter of fact, I was with Steve Trang and I was talking to Max and Ryan, one of the top acquisition guys to move over out. I was talking to him and we always agree on it. I don’t even like the word employees from being tossed out around the company saying, “My employees.” I say team members, they’re part of the team, whether you’re acquisitions, lead managers, this boat, feel a part of something.

My team comes over and my family’s there. They’re like, “You worked for Brent.” I’m like, “They work with me.” Let’s call this stuff.

Nobody’s inferior.

I’m not over lording in that. Controlling and all that. That’s important because once you start bringing on people, you truly work for them. They don’t work for you. I mean, obviously, they have to have that motor. They have to have that engine to go out and succeed. They have to want to be healthy financially. They don’t need you lording over and hitting them. They need to have the freedom to do what they do. That’s awesome. When you get that property and you turn it in, did you have to find a specific escrow officer that understood how to do those deals?

I noticed this for the audience and you already know the answer to that question. This is for education but of course. It’s the same thing with real estate agents. I’ve been an agent for several years. There are some that still don’t know half of what real estate is. Sometimes you got to teach attorneys. Sometimes you got to teach title companies.

If you don’t have the bandwidth, the patience to do that, you go find someone that is competent, and they understand what is going on now and the things that you actually can pull off. Got to find some people that understand it. I’ll give you an example. I have real estate attorneys that will not touch the subject to. They’ll touch upon a finance deal. There is no underlying lane but a subject to, they won’t touch it. I have some that they’ll do all day.

That was the point. I obviously was setting that up because it’s important. When you’re on the team, go with the experts that already know what they’re doing. You don’t have to learn it all. Just understand that you’re working and you’re trying to bring value to that property owner that’s in distress that 6% to 10%, I think you said 4% to 6%. It depends on the market. Typically, the average is about 6% to 10% are in distress at all times.

There’s plenty of opportunities but if you open up your toolbox a little bit more with some creativity and let the people handle the logistics, then you’re going to get more deals, your team, you and your portfolio are going to be a lot happier. That is awesome. Brian, how do people get ahold of you? How do they find you? How do they be in your world?

I have a little YouTube channel as well. I don’t put out as much awesome content as Brent.

I think it’s fantastic.

I’m most active on Instagram, and I’ve been addicted to Clubhouse.

Follow them on Clubhouse. It’ll alert when he’s on there. You can go in there, pick his brain and get some great questions answered. Follow him on Instagram and check out his YouTube channel. Brian, thank you so much. That was absolutely incredible. You brought a lot of real instruction to this. I know the readers loved it.

I love your channel.

Thank you. See you, Brian. Thank you.

If you are interested in joining the most proactive group in real estate investing, it is the TTP family. Go to WholesalingInc.com/ttp, scroll down, check out the testimonials. You’re going to have to scroll for a long time because nobody has more. We have the absolute best people in the program, but I would love to work with you one-on-one. That’s what it’s all about, mentorship. Check that out. If it feels good in your gut, sign up for a call and that’s it.

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About Brent Daniels

WI 682 | Financial FreedomBrent 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!

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