Posted on: April 29, 2021
WI 677 | Explosive Profits

 

We’ve got an amazing guest on the show today—John Osai. He went from janitor to master mechanic to an attorney to real estate investor; and in today’s episode, he’ll talk about an even more amazing deal that he was able to close by following Brent’s TTP script.

Today is all about holding your ground against cash buyers but stick around to learn about working with opportunities that you might find in your own backyard.

Episode 677: How to Achieve Explosive Profits in a Tiny Market

Episode Transcription

This is going to be an incredible conversation here between myself and an incredible wholesaler out of Shelley, Idaho. This is interesting. He went from a janitor to a master mechanic, to an attorney, to a real estate investor. We’re going to learn about all of that and then that whole evolution into getting into this beautiful business of real estate investing. Not only that, he closed an incredible transaction and made a great amount on this deal that we’re going to break down at the back-end of this show. This show is all about holding your ground against cash buyers. That is the moral of the story. I want to sprinkle that in at the beginning of this show so that you’re looking for the nuggets that you’re going to get from this incredible guy. It is my pleasure to introduce John Osai to the show.

I’m glad to be here.

You are in Shelley, Idaho which is like an offshoot of an offshoot. You are out there, right?

Yes, in Shelley, Idaho just outside of Idaho Falls.

Is that the market that you focus on?

I focus on the markets that are around me. There are Shelley and Blackfoot. There are pretty small towns all around and mostly in Idaho Falls, Idaho.

The reason I asked you that is because one of the biggest questions that I get time and time again is, “Should I start in my own market? Should I go virtual if I’m in the smaller markets?” This is going to give people a great look at the potential of working and finding good opportunities in your backyard. At some point, as you’re growing and doing this, some expansion is probably necessary as you’re starting to go through these lists and have good conversations with all of the distressed property owners in your area. To give an idea to everybody, what’s the population of your service market in your area?

We’re in Bonneville County. The last time I took a look at the population of Bonneville County, it was 140,000.

It’s almost impossible to screw up a truly motivated property owner.

Tell me about you. You were a janitor turned master mechanic, turned attorney, turned real estate investor. Walk me through this. How does this happen?

My dad came from the islands and came out here to Idaho and met my mom. He was trying to figure out a way how to get his family out from the Tonga Islands. He moved to San Francisco to work for the airport and he became a custodian out there. He owned a custodial business. That’s who I worked for doing yardwork and custodial work. He convinced me to go to college. I came out here to Rexburg, Idaho. I went to college there and got my Automotive degree. I went to Weber State in Utah to get my Advanced Automotive degree and then went to work for the Ford Motor Company. I became a field service engineer for Ford and became an arbitrator eventually for them. The attorneys there convinced me to go back to law school.

I went to law school and graduated from Brigham Young University in their law school. I came out to Idaho and nobody would hire me. I opened up my own practice and decided that I was going to make a practice for ten years and that’s what I’m committed to doing. During that time, I got into some investments with some people that I knew and they all fell apart. They threw all the real estate that was failing. In 2009, they threw it all on me and I was stuck with all the debt. I crawled my way out of it and kept plugging away. I kept working late at night at 1:00 in the morning fixing pipes and everything.

I was mechanically inclined so I learned how to do construction during this time period. I got a lot of people to help me when I didn’t know what I was doing. From there, I finally got the one apartment building sold. I started to buy houses to fix and flip them and try to utilize my attorney skills to write the contracts and try to find properties, but I was still missing something. That was the one thing. I knew there was a better way out there to try to find properties because I was out there knocking on doors and looking at people.

It was difficult to find properties so I decided to look on YouTube university. On there, I looked through several different people that were on YouTube teaching this stuff and then I found you. I kept watching what you were doing for a while and watching your podcast until finally, I was like, “This guy is talking to me. He is saying what I’m looking for and telling me what I need to do. I got to find a way how to join into that.” That’s how I got to TTP. I was working my way through and then finally seeing that the missing link was in what you were talking about.

It’s incredible because now you’re on the channel. To everybody out there, that’s the path to progress there. You’re a real inspiration from just sitting back there to taking action and now being on here, celebrating and sharing your success. It is going to be fantastic when we break down this deal because it’s a unique deal that has a lot of lessons baked inside of it. You’re an attorney. You’re working attorney hours and doing well. You were like, “I need to put my money somewhere. I’ll start investing in real estate.” Is that how you found it or was real estate always in the back of your mind?

Real estate was in the back of my mind. While I was working for Ford, another gentleman came up to me and said, “This isn’t the path to retirement.” He said that what he did was he came out and found an apartment complex that had 30 people in Phoenix, Arizona. He purchased that 30-unit building and said, “I move people in and move them out in a box.” I didn’t know what he meant. He said he would move people in on a fixed income. He would keep them in there and never raise their rent. He said, “That’s my contribution. As I bring them in, I never raise their rent. They can live there as long as they choose. This is how I’m retiring.”

He was about to retire when I left to go back to law school. He kept talking to me about it. I did get involved in the No Money Down. I’ll get the binder and CDs and listen to them. I would listen to it as I was driving down the road. I had it on the back of my mind for a lot of years, especially through law school and through the ten years of practicing. Right before I became an attorney, I was sick and ended up becoming a realtor for a little while and trying to practice while I was trying to prepare for the bar. It was crazy. That’s how I got it.

WI 677 | Explosive Profits

It’s incredible all the different experiences that you’ve had and hats that you’ve worn. You’ve got a great perspective on understanding what is a deal and what’s not a deal when it comes to real estate. Also, you come into it with the mind of somebody that has done and looked for fix-and-flips, bought and looked at rentals and cashflow on all of those assets. When you get an opportunity or a lead coming in, you can put it through those filters because of your experience, and understand what is the highest and best strategy for this property which is fantastic. That’s what happened with this deal that we’re going to talk about. Are you still doing flips? Is flipping properties your passion? Do you love doing that? Is it just part of your real estate lifestyle?

I like doing them but it’s time-consuming to be able to get a fix-and-flip. That’s why I was looking at the wholesaling side of things because the market is pretty hot in Idaho Falls so if you can help somebody. You mentioned reading The Go-Giver. I read The Go-Giver. That’s the way I choose to look at it. I’m looking for people to help, those who are in foreclosure here in my local market. You talked about local markets. I read the book Acres of Diamonds which you mentioned also. I realized that there’s got to be something here in Idaho Falls, so I started doing that.

It’s interesting that as I’ve been picking up these properties, I’ve been doing fix-and-flip, so people know me here. We all meet at Lowe’s it on a daily basis. They come over and they’re like, “What are you working on now, John?” I tell them and they’re like, “I tried to get that.” I’m like, “I already have it. Are you going to buy it from me?” That’s how it has been for the past little while. I wanted to do the wholesaling. Eventually, I’ll want to get back into rentals again. I felt like finding the properties, getting them under contract, and then moving them onto somebody else to do the fix-and-flips is the area that I wanted to get into, and then eventually getting back in. I wanted to build up my cash reserves first.

When you are flipping a property, what do you think the average is from the time that you buy that property to the time that you get your money back and get paid on it? Do you have an average amount of days or months that it takes?

I was doing a lot of it myself. It was about six months. It wasn’t what I was hoping. I was hoping for a 60-to 90-day turnaround and then it ended up being a six-month turnaround. One of them went two years. That was the worst one.

That gives us a great perspective into why did he decide to get into wholesaling. It’s a lot faster. The people, companies or a lot of subcontractors that either have much larger budgets or capacity, you can move these deals over to them and get paid. They still have enough meat on the bone to be able to do what they need to do and you’re already onto the next one, which is fantastic. A lot of people take for granted that once you have a flip going, it consumes your mind so much. We’re remodeling bathrooms in our cabin and we got to pick out the door handles, knobs, colors, countertops, cabinets and all these things. You’re like, “Do whatever. I don’t have enough brainpower right now to worry about this.” It takes up a lot.

Instead of worrying about all these little things about flips, you can focus on being proactive and sourcing the deal. You can go and find the discounted property. I’ve always found that being far more profitable and more in tune with my personality. It’s different for everybody but I totally get you. Let’s break down this deal and talk about this one that you talked about. First of all, how are you getting your deals and generating leads? For everybody who just came across this, there are three ways to get leads in wholesaling real estate or source these deals. One is that you market for them. You spend money to have people call you. This is going direct-to-seller. Two, you wait for referrals from your network, sphere of influence or people that know you. Three, you go out, be proactive and earn it by either door knocking or picking up the phone and call. Which way did you find this deal?

First, after I signed up with you, I signed up for PropStream. I was going through your course and it told me how to find vacant properties and pre-foreclosures in PropStream. I took that and went right to Batch Skip Tracing. I got the phone numbers, but I didn’t get as far as Mojo yet. Right after I got that and I got the phone numbers, I started calling and took your script.

Were you just hand-dialing?

Yes, I started hand-dialing. It was horrible. When I was talking to them, I barely looked at your script and I started to go for it. This deal was my fourth call. It was the first day, fourth call. I got a hold of his mother and then the father had the power of attorney. She said, “Hold on.” All I did was use your script. I was stumbling through it, “This is John. Is so-and-so there?” I asked him if he is interested in an offer and he was like, “Maybe.” I was looking on your script for the maybe, and the big long pauses in between. I started talking to him about the maybe and just reading through the maybe. All of a sudden, he turned and said, “Yes, I’m interested.” I stopped and switched over to the yes. I followed what you said on yes, and then he asked me if we could meet the next day.

The crazy thing is it’s almost impossible to screw up a truly motivated property owner. You were entering their life and asking them if you could help. All of a sudden, they opened up the flood gates. Some of them, not all of them. I don’t want to give people the wrong impression but sometimes they’re ready. You caught them at the right time.

It was mostly flyers. They said I was the first person that called them and got through to them. It was off Batch Skip Trace. There were about nine numbers that looked like Batch Skip Trace. I dialed each one. It was about the fourth number that I got the guy’s mother. The father talked to me. We met in the Subway in Walmart. He sat down and interviewed me, seeing if I was real or not. I had my contract sitting there. I was shaking and seeing if he is going to do it. He said, “Do you have a pen?” He started signing.

That’s one of the best questions that a property owner can ask you, “Do you have a pen?”

One of the best questions that a property owner can ask you is, “do you have a pen?”

That was what he said. We started signing. I took pictures of his power of attorney. We went through and signed the contracts. He said he didn’t want to wait. He asked me which title company we wanted to use and he said, “I’ll follow you over there.” We took the contract over to the title company. They got copies of everything. We started opening up a title at that point and went through that process. I started cleaning up the property and tried to get it to sell to the cash buyers, but I hadn’t developed my cash buyer list yet. All the guys that I was getting were offering me less than what I paid for it. I got it for just paying it off. During that time, I got it for $140,000.

Don’t reveal it yet. I want to leave them hanging a little bit. Did you see the property before you met at Walmart to sign it?

I did.

Did you see the inside?

I did not see the inside. I drove past it. I peeked through all the windows and looked through them. Somebody had kicked in the door on the basement to the crawl space. I went down and walked through the basement. At that point, I saw the carpets were in decent shape. I went down, looked at the furnace, pulled the filter and looked at it. I made sure that it wasn’t all super bad. I looked at the plumbing. Being a flipper, I could see where they had winterized it, and then I saw that there was one crack in the pipe. That was where I came up from the main pipe. It was something that I knew could be fixed quickly. I got a chance to look underneath it and see all the bones from underneath the house but not actually inside.

Did they owe $140,000? You said $140,000.

Yes.

How long was the property vacant?

WI 677 | Explosive Profits

Explosive Profits: It’s time-consuming to be able to get a fix and flip. That’s why you should look at the wholesaling side of things.

 

The property was vacant for two years.

They’ve got a $140,000 mortgage payment on that and nobody has lived there for two years. This is just draining them.

I don’t know if the mortgage company didn’t foreclose on it quickly and then COVID hit. They said that they did try to list it through another realtor and they couldn’t get it sold. I don’t know what the reason was. I found out later that realtor took the listing agreement but never put it on the MLS. It never got out there. It sat like that for a year and then COVID hit. It’s coming in the second year.

People ask, “How do you get these discounted properties? Nobody wants to sell for a discount. What’s going on? How about the people that have vacant properties for two years?” Let’s say that they’ve been in forbearance during COVID. Nobody is foreclosing on them and they’re not making their payments. They still have to pay that at some point. It’s still going to be part of the payoff if they sell that property or they’re going to have to catch it up or restructure the loan. This is distressed. They’ve got a vacant property for two years that nobody is paying the rent and it’s costing them money every single month. You found them. They’re ready to go. You drive by the property. The guy meets you at Subway at Walmart and you locked up the deal. Now, you’re giving it out to your buyer. How did you get access to it to show your buyer this property? Did he just give you a key for it?

They said they didn’t have keys. They told me to go ahead and break the lock. I broke it and then they let me in and do some work on it. I did two ways. I did a purchase-and-sale and I did a lease option to buy. I leased it so I could turn on the heat and gas so I could warm it up to make sure that I didn’t have any leaking pipes. I was able to get in there.

That’s smart and incredible. Nobody ever talks about that. Do a little lease with an option to purchase so that you can get into these vacant properties and get the utilities on to show your cash buyers the functionality of this property and what is going to be the rehab and repair costs of this. That is beautiful. I’ve never heard of that. I love that.

The nice part is people would walk by. They could see that I had my dump trailer out there that I started throwing things away so people would stop by and ask as well.

You get it out to your cash buyers. How many people did you get it out to?

I was trying to get it sold to about eight cash buyers. I was trying to get it for $140,000 and they were offering me $120,000. That was how it started. The foreclosure date was on March 11th. I called and tried to cure the mortgage. My next avenue was trying to get ahold of the mortgage company and trying to cure it, but the attorney there came back and said, “In order to cure it, we’re going to do $5,000 with the paperwork.” That’s what they were going to charge me to cure it. I had been flipping for a little while so I had some money, so instead, I went in and purchased it and saved myself $5,000.

The awesome part about buying it was when I went into closing, one of my old friends was a closer there. She came up to me and said, “What are you going to do with your extra lot, John?” I was like, “What are you talking about an extra lot?” This house ended up having an extra. It was built on three building lots. The house was built centered on two of the lots and there was an extra lot on the west side of it. It was wide enough for somebody to build a skinny home. I felt very blessed that my property value instantly went up. I put it out to the cash buyers again. This time, instead of offering me $120,000, they were fighting over $215,000.

It was all because of the lot.

I did some cleanup on it and paint it. That was the extent of what I did. I did pay somebody to come through and clean the vents.

You got it for $140,000 and put it out at $215,000. What did you end up closing it for, and then what did you end up netting on this deal?

You have to be proactive and have those conversations. If you do that, then all of a sudden, you get these opportunities.

I did end up closing it for $215,000. I had other guys that came in. They told me they were going to give me the $215,000 offer and the offers came in at $200,000. I watched your video and your video said, “Do not let them beat you up. You need to hold your ground.” I was already giving them a good deal. When I looked at everything, I cut the lot price in half and dropped the house price by $10,000 to try to get it moved quickly. They kept coming in and saying they wanted to pay less. I held that $215,000. Finally, I said, “Take it or leave it.” They took it and then we closed the deal. All in all, with what I had into it, I ended up netting $42,500 and some change.

That’s awesome, $42,000 and some change from your fourth phone call hand-dialing. What an incredible story. You’re one quality conversation or one call away from a potentially life-changing amount. You’ve made a lot in your life. To encourage everybody that maybe you make that in a salary or that seems like a ton of money because you’re younger or whatever else, I’m telling you, this is how it happens. You got to be proactive and have those conversations. If you do that, then all of a sudden, you get these opportunities. The important thing to mention here that John said is he knew he had a deal. They’re going to try to bargain with him when he knows that he has a deal. He held strong and knew that he had his deal.

It’s not that I buy drugs but I would assume that you’re not haggling with a drug dealer to lower their price on drugs. They’re going to sell those drugs anyway. They’re drugs. If you’ve got a great deal, you’ve got a great deal. There’s no haggling like, “This is the price. Take it or leave it.” That’s what you did. That ended up netting you an extra $15,000 that turned a potentially $27,000 and some change deal into $42,000. That’s a big difference and I congratulate you. That’s incredible. Everybody out there, hold your ground when you know you have a deal.

The other thing I would tell you that you might want to know is I’ve only spent a few hours in calling, but I committed to start doing it. I’m going to sign my next deal. Here’s the thing about that one. I’m picking it up for $100,200. A realtor came to me with a $170,000 offer already. We’re signing both agreements.

You’ve called for four hours total. You’re looking at a potential $110,000. You’re making $25,000 an hour. That’s way more than an attorney.

That’s incredible. It’s more money than I’ve ever made even doing anything. I came in and talked to my wife. She said, “You made double what you do on all your flips in half the time doing wholesaling.” I made a call. I went out and looked at the property. We’re meeting to lock up the deal. This is another foreclosure guy. He owes $86,000 and $22,000 in medical bills. He asked me if I would pay this and pay off his medical bills. He needed help. He went through a nasty divorce. He is paying child support and spousal support. He was like, “I need this garnishment of this medical lien off of me.” He was selling it to me for that. The realtor came over with a buyer and made the offer, “I’ll buy it from you for $170,000.” I’ll get the keys and I’m starting to clean it out.

It pumps me up. This is real life. Thank you for that breakdown and for giving us what’s going to happen after this show. I’m excited about that. Text me once that’s done after we get off. How do people get ahold of you? How do they say congratulations and reach out to you? Maybe they’re in Idaho and they want to meet up and network with you.

WI 677 | Explosive Profits

Explosive Profits: There are three ways to source real estate deals: you market for them, spend money to have people call you, or be proactive and earn it by either door knocking or picking up the phone and call.

 

I can give you my phone number. You can Facebook me. I do have my Facebook account. It’s Osai Law.

What an incredible start. You have got out of the gates super fast, closed the $42,000 and have the $70,000 in the pocket. There are some resources that he mentioned. PropStream, you can get that at TTPData.com. Check that out. You get a trial of that and it’s a phenomenal tool. Everybody that is serious about real estate investing truly has PropStream. The second one you pulled is a vacant and pre-foreclosure list. That’s so strong. As John was saying, BatchSkipTracing.com. There are a lot of skip tracing companies. They’re all white-labeling the same info. Batch is not. They get it from the best resources. It’s not even close. Use that so you don’t go through so much brain damage of calling a lot of people and not getting connected with anybody.

John, thank you so much. You’re incredible. Everybody out there, if you’re interested in joining the most proactive group in real estate investing, it is the TTP family and TTP program. Go to WholesalingInc.com/ttp. Scroll down. Check out the testimonials and what the program is about. If it feels good in your gut, sign up for a call. That’s it. That’s our show, John. You absolutely crushed it. Text me and let me know how that deal goes, and that you got that locked up and sold. We can celebrate that. For everybody out there, as always, I encourage you to talk to people. Until next time, I love you guys. See you.

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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!

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