Posted on: May 03, 2021
WI 679 | Real Estate Wholesale Deals

 

If the previous episode was about working within your area, today is about seeking opportunities in multiple markets. Lauren graces the podcast to give an overview of her experiences in real estate investing.

Using anecdotes, she will present four steps that wholesalers can take when their market is getting too saturated. Stay tuned because Lauren is an example that, with technology, the challenges of closing deals out of state can be overcome.

A Simple 4 Step Strategy For Doing Real Estate Wholesale Deals Anywhere In The Country

Episode Transcription

I want to talk about the four steps to going virtual when you are starting to feel your current market is feeling too saturated. We have all been there. Maybe not we all but if you have some experience in wholesaling, you might have felt this before. When your market started to feel crowded, it’s starting to feel like everybody is getting into this market.

You might be noticing that your wholesale fees are smaller than usual. Maybe you are used to getting $12,000 per deal and lately, all your deals are barely hitting $10,000. These are signs that your fears may be coming true and your market is getting too saturated. I had this exact thing happen to me several times in my career. I have jumped markets a total of three times. I can commiserate.

I can also share with you what I did and what’s helped me. Let me get started by introducing who I am because this might be your first time reading the show or maybe this is the first time you have ever read one with me on it. My name is Lauren Hardy. I live in Southern California, specifically Orange County. It is one of the highest-priced markets in the United States.

I am a mom of two girls named Reese and Presley. I’m also a single mom. I’ve got into real estate investing originally as a house flipper. I was flipping houses in my local market. It was awesome. This was 2012. We were still in a recession. There was still a ton of distressed inventory. It was a completely different market climate. At that time, being a house flipper in the OC LA, Riverside Market was not that difficult. I could send some direct mail out and rely on getting my next flip.

As the years went by, I noticed that I would have to send more direct mail out to get that flip and I noticed that I couldn’t be as aggressive with my offers because my sellers were getting other bids that were higher than what I was able to offer. I realized that my market was getting more and more saturated. As time went on, I learned that it might be easier to do this business in another market. That’s my virtual journey. That’s where it all began. That was around 2016.

I went to Nashville, Tennessee and at that point in Nashville, it wasn’t very saturated. It was still a really good time to get into that market. There wasn’t that much competition for what I was doing. We were building new homes. We were wholesaling lots. We were building houses, ground-up construction. I did some flips there as well but I did a lot of wholesaling. There were some hedge fund activities. Hedge funds were looking for rentals. It was pretty awesome for a couple of years.

I left California, not looking back because the money I was making in Nashville was good and I didn’t have to try that hard. I didn’t have to spend too much money in marketing dollars to get these deals. It was awesome. As with anything, it started to get saturated. I started noticing that it would take more indirect mail. I had to send more postcards to get that one deal and that one deal, the profit was shrinking more and more. It was because other investors were coming into that market and they were.

Take time to network. You’re going to get a lot of data from those conversations.

If anybody is familiar with the Nashville real estate boom, it was like the number one real estate market at that time. Here I was again going, “My cheese moved again.” If any of you have read that book, Who Moved My Cheese? you might know what I’m talking about. It was a time where I had to adapt to what was going on and I had to pivot.

Here I am, pivoting again going, “I need to find another market. I’ve got to pack up and find another market to go to.” That led me to Oklahoma. A lot of you know that Oklahoma is one of my virtual markets but maybe you didn’t know, Nashville was the first one I was in. I have had to pivot quite a few times and Oklahoma is an awesome market. I’m still in it and I have been in it for a few years. We have gotten pretty well-known in the area.

We are one of the largest wholesale companies in Oklahoma. We are both in the major Metros, Tulsa and Oklahoma City. I love it. I love Oklahoma but a lot of things have been going on with Oklahoma that are making me think that I should make sure that not all of my eggs are in one basket. Here’s what’s going on. Number one is its market saturation with other wholesalers. There are a lot more wholesalers doing volume than there were when I’ve got into it. It’s just a fact. There are way more people doing it. They are utilizing all the same marketing methods that I am.

When we speak with sellers, they are saying that they are hearing from other investors as well and they are shopping my offer around and there’s that. There’s also new legislation. Not every state has to go through this but Oklahoma is going through some legislation. Some bills are likely going to get passed that is going to strongly affect the way I market the properties that I have equitable interest in.

I don’t want to dive too deep into that but it’s similar to what happened in Ohio many years ago. They are just changing things up and it’s making it where it’s going to be harder for me to market the contracts I get. Those two things have made me realize that I don’t want to have all my eggs in Oklahoma’s basket and I need to pivot again.

I’m not completely moving out of Oklahoma but I did want another 1 to 2 markets that I could bounce off of. If things do slow down there, I have other options. I want to go into the four steps that I took when I was in this situation and the end result will blow your mind because it absolutely blew my mind. Here’s what I started doing.

I came up with a few counties that I had an interest in and I made sure this time that these counties weren’t overly wholesaler trendy and that you are not hearing a bunch of people are in it. I have the fortunate situation where I am a Coach for Wholesaling Inc. I hear a lot of background data. I have over 250 students.

WI 679 | Real Estate Wholesale Deals

Real Estate Wholesale Deals: You might have felt this before where your market feels crowded. It’s starting to feel like everybody is getting into this market.

 

I thought of areas where I never heard a student say they were going to go. It sounds hilarious but I literally thought of three counties in the United States where you have never heard a student say they wanted to go to. I wanted to avoid anywhere that had a ton of competition. I wrote those states, counties down and here’s the first thing that I did.

I networked with other investors in those areas. I picked up the phone, I went to Facebook and I saw who was doing deals in that area. Looking at the Facebook Real Estate Investment Association a lot of those groups have Facebook pages. I reached out to other investors. I also asked around people that I knew were in that area, “What are you doing in that market? Let’s get on the phone.”

I’ve got on the phone and networked. I networked with at least four different investors in those areas. Take time, this is going to be a week where you are just taking time to network. You are going to get a lot of data from those conversations. You are going to ask them questions like, “How many deals are you doing? What’s the deal size? Are you comfortable sharing? What your average wholesale fee is? What are your favorite cities?”

You could even network with other buyers, landlord buyers, hedge funds, flippers. Ask them about their deals. “How many deals are you buying? How are you able to buy deals off of wholesalers?” Right there, you are going to get a gut feeling about the market once you do this little exercise. That’s step one.

The next step I took, I stalked other wholesalers in the market on the Facebook groups. I went to the local Facebook group for the Real Estate Investment Association. Go to Facebook on the search bar, go Real Estate Investor Association, insert your county or city until you land on one. Almost every major county has a REIA if not five.

You will find something. I went on those Facebook pages, looked at the deals other wholesalers were putting out and what I wanted to see was that a wholesaler would post a deal and buyers would comment. They would say, “Email me the details,” and they would put their email addresses. That shows me that there’s actual activity there with other buyers. I wanted to see that people are doing deals there that’s essentially what I’m doing.

The other thing I was doing is looking at their deals specifically. I wanted to see what the deals looked like. I’ve got on their buyers’ list and I looked at their advertisements for the deals that they had. I call that stalking. It sounds creepier than it is but it does give you an idea of what deals that you are going to be doing. It’s a very important exercise.

Don’t get stuck in your home market. Don’t get stuck in your backyard.

The next thing I did, number three, is I pull a cash buyers list and I look at the transaction details. If you pull a cash buyers list from ListSource, you can do this. I am unsure if you can do it from any other provider but you can put extra details that don’t normally get exported on that Excel list. If you are at the Checkout page of ListSource, to the left, there is a tab in there that says Add Additional Information and you can see there are a ton of additional information like square footage, beds and bath, sale price.

If they had lien, who’s the lender? Lots of stuff. I export as much as I possibly can. I can just see who’s doing the deals. What kind of deals are they? What prices are they paying? I like to see what’s the average size of the homes and the average age of the homes. It helps me get comfortable with that market to see that other investors are buying in it and what type of activity it is. After you have done these three steps like you are feeling pretty good, you are already feeling like, “I’ve got an idea of what the deals are, the price points and the types of homes.”

The fourth step is I test it with a smaller list and I want to see how it goes. I will normally pull a vacant list and I will run it through our marketing methods. I will do some outbound marketing and I will gauge what the sellers sound like. This is funny. It’s a gut feeling again. All this stuff is very gut feeling but you will hear it in the sellers’ voices.

The conversations are either going to go, “I get these all the time. What do you want? What’s your offer,” or the sellers might be nice. You might feel that they seem more willing to talk to you for some reason that they don’t get investors hammering them with postcards, text messages and calls every day. I also want to hear the seller’s reception of my offer.

When we make the offer to sellers because we don’t just talk to them, we make offers and try to lock up a deal. We hear the seller’s feedback on our offers. It is a fact that you go to a higher-priced market where there are a ton of competition. The sellers are going to be not as receptive to your offers, where if you go to an area that there’s not as much competition and maybe the price point is a little bit lower like $200,000 and below, you are going to hear a different tone out of the seller. That’s going to help with that gut feeling. You are going to start feeling like, “This is a great market for me to be in or this is no better than what I’m doing here in Oklahoma.”

I did all these steps and I went for it. I did a small list. It had about 3,000 addresses that I was working. It’s pretty small for me. I just worked the list and we made a bunch of offers. We talked to sellers. We noticed some things. There were setbacks. We noticed that it was hard to comp properties. We weren’t used to this type of neighborhood. The properties were all very different.

We weren’t as experienced with this type of geography. There were some challenges with coming up with offer pricing but we just worked through it. We kept making offers, even if we were not super confident in our pricing and we locked up three contracts. One we locked up in an area we learned nobody likes so that was not ideal but we learned something. It was a learning experience.

The other two were literal home runs of the year. No joke, we have not seen fees like this in our local market where we were in Oklahoma for a very long time. Collectively, if I’m not getting this right, both of those contracts together made about $36,000. We are just testing something. It was our first go to be able to put those under contract and have them sold that quickly was incredible for us. That was that gut feeling. The thing that happens where you are like, “This is my sign that this is the market we need to move to.” After then, our whole team was excited about this new market. We are going gangbusters.

WI 679 | Real Estate Wholesale Deals

Real Estate Wholesale Deals: The market in Nashville was awesome for a couple of years. The money was good and you didn’t have to try that hard and spend too much money on marketing.

 

I pulled more lists. I’ve got fully committed. We started building a buyers list. We went all in. That was it. Four steps I took and they are not always going to have that home run result. You might do the test and you are like, “Nope, struck out.” This is where you need experience in being virtual because I have the experience. I know what to listen for.

I know that by step four, I know what it’s supposed to look like and if it doesn’t look like that, then I’m out. I also don’t make other mistakes. There are so many other mistakes people might make with their sales funnel management. I’m lucky I have that experience. Not everybody does. I highly recommend getting some mentor that’s experienced in virtual.

I happen to have a coaching program. I’m not trying to shamelessly plug it but I have helped several people do this exact thing, these steps. If you are interested in my coaching program, you can check out www.VirtualInvestingMastery.com. You will find out all the details there. I do recommend getting some help with somebody who’s gone virtual if this is the first time you have ever gone virtual. You are not going to know what to look out for. By the time you’ve gotten to step four, it might be unclear to you.

I hope that you guys got something out of this. This experience for us was very exciting. I keep thinking that I’m thankful that I have the skill of going virtual because I’m not stuck in Oklahoma anymore. I could pick up and leave. There are several people in Oklahoma going, “How do you do it? How do you even do that? I can’t even wrap my head around doing deals that are not in my backyard. How is that even possible?” It is.

I’m lucky. I thought this was a curse. I thought that living in Southern California was a curse because I couldn’t do the business that I wanted to do here in my local market but now I look back going, “It was such a blessing that I was forced to learn the skill of virtual because now I can pick up and I can leave when a market starts to feel too saturated or when there’s legislation getting passed that I’m not happy about.”

It’s an amazing thing to be able to do that. That’s why I came up with the coaching program was so I can teach other people that you are not stuck in your home market and your backyard. You can live anywhere and invest wherever you want. That’s it. I hope that you liked the story. Please feel free to follow me on Instagram. Shout out and tell me if you’ve got anything out of this episode and I will see you next time.

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About Lauren Hardy

WI 684 | Most Profitable ListsLauren 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.

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