Posted on: May 05, 2021

Adam Rothenfluh joins Rafael on the show today to share how he went from an employee with zero background in real estate investing to freedom in just four months! Because he wanted out of the rat race, he dived into the wholesaling blueprint, really put in the work, and found ways to stay ahead of the game.

In this episode, Adam will talk about his first deal, giving a preview of Rafael’s system for building a business. He will also share how he overcame challenges, stressing the importance of building a buyer’s list. Tune in to see how far tenacity and commitment can take you in a short amount of time.

Key Takeaways

  • Adam credits the podcast and its coaches for his growth
  • Massive imperfect action is okay
  • How Adam found a lead
  • Have a reference point so you can structure numbers and start to present an offer
  • On building a power team

 

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Episode Transcription

Rafael Cortez:
Welcome to another episode of the Wholesaling Inc Podcast. This is Rafael Cortez here, your wholesaling coach and today I’m very excited because I’m bringing to you guys a case study. All right. So we have Adam here and Adam started literally in January, that’s when he dove deep into the process of the wholesaling business blueprint and then he just started having massive massive results. It’s been insane. He’s somehow some way found a way to stay ahead of the game, almost one or two steps before he even gets there. So. I want to break down his story. It’s an amazing, amazing showcase of commitment, tenacity, and really diving deep into this business can do for you in a very, very short amount of time.
So, welcome on man. Glad to have you, bro.

Adam:
Yeah, what’s up coach? It’s really an honor to be here. First of all, I just want to say, this podcast was really what started it all for me. It’s been so instrumental in my journey, my short journey so far and my growth. And on days when I was feeling down, I would listen to the podcast and Brent Daniels would be on here and I’d be ready to jump into the octagon after he was done. So it’s awesome and I love his podcast and I just have a lot of respect for the whole Wholesaling Inc community, man. So thanks for having me on.

Rafael Cortez:
I love it, man. I love it. Yeah. Brent is magic. He’s one of the most energetic dudes I know. He’s a great, great friend of mine. The whole process really of you tapping into it, you’re coming in from the cold, you didn’t have any background in real estate. I remember jumping on that first phone call and then just kind of throwing some ideas back and forth and you were a little bit hesitant about getting into it, but you’ve managed, you’ve been crushing it since you started just taking massive, massive imperfect action, I remember it was one of the highlights of the conversation that we had. Massive imperfect action, it’s okay, follow the process and you’ve stuck with it. Give us a little bit of insight on you, your background, how you came about, how you found a real estate and how you ended up right here.

Adam:
Yeah. Yeah. Awesome. I’ll give you the cliff notes. I grew up playing sports and was really blessed enough to get a scholarship to play football in college. And so I began working the coachability muscle early in my life and I feel like that’s been probably the trait that I’m most thankful for developing because it pays off in everything. If you can be coachable and just like when I got with you on this. Whatever it was, I just did it. I did exactly what you told me to do, I didn’t try to figure it all out on my own. I think sports had a huge impact on that for me in my life. And coming out of college, I was very fortunate, I got a great job in the pharmaceutical industry with a big company, ended up transitioning to medical device and surgical device sales these last five or six years which has been great.
Like I said, very fortunate to have that job. However, realized that I was still in the rat race and I wouldn’t be able to exit doing what I was doing, wanting to provide a little bit more freedom for my family. I’ve got two young kids and just kind of looking into the future. So I’ve been honing the skills that are paying off in this business for a while. And when I met up with you, it was like when the student is ready and the teacher appears, and it was just beautiful.
Man, I love the way you laid out the system for me, spoonfed it just how I needed. I’m not the smartest, most creative guy in the world, but I can be coachable. And so that’s really what led me to… I got a hold of the podcast and I started listening to it like I said and heard you on here interviewing one of your students. He actually had a very similar background to me, his name was Dan. And once I heard that podcast, I was like, “Man, I think this is it,” because my wife and I had been talking. We knew we needed to start investing in real estate. During these last 10 years, I’d actually watched my brother-in-law exit the rat race going from an employee to freedom through real estate investing.
And so I knew I needed to get into real estate. At the end of last year, I spoke to him and said, “Hey, how can I learn from you? What can we do to work together?” And he said, “You can bring me deals.” And I had no idea what that meant. And that was a little bit before Christmas. And I would say just a few weeks later, my wife actually signed up for this Facebook real estate investing course for women. It was by a lady named Teresa Todd. She did this week long Facebook seminar and my wife really did it so that I would look over her shoulder and watch it. And I did, and I got interested, found the podcast, and here we are.

Rafael Cortez:
Man, man, that’s insane. You said a couple of things in there that are very, very important I think. You said a lot of important things. But two of them that kind of pop up is there comes a point in time where you figure out, “Okay, cool. I’m sitting in almost like a glass ceiling.” Right? It’s almost not a dead end, but you feel like you have more potential, like you can do more, that you want to get further in life and you’re just not completely satisfied and it becomes an itch. It’s almost like it’s hard to get rid of it once you see that through that window. I completely get it. It’s something similar that happened to me too, that’s why it’s happened to all kinds of different things in entrepreneurship ended up in real estate.
But yeah, I love the journey man. And you’re definitely one of the people that I’ve had come across a program that really dives deep, shoot here, and it’s done. It’s really that easy with you. And I think it’s one of the biggest reasons for the result. You’re going through a paved road, right? It’s already something that’s been tried and tested. So it’s very satisfying to see where you’ve gotten so far with it in such a short amount of time. So, let’s break it down. Let’s get into the meat and potatoes of really the last couple of months. So, you started about, three months ago or so, you’re going in and out and then you just closed a deal. Right? Let’s start from the beginning. How did you find that lead, how did you start building up that pipeline? And walk us through the process that you went through.

Adam:
Yeah, sure. So, one of the things that I really appreciated and loved right away about your course was I didn’t know what I was getting myself into. I thought I was going to find something I could make some money at but I realized right away that you were teaching us how to build a business. That one day, on our own terms, we could walk away from or we could work as much as we wanted to. And just the way that all you coaches now do. You have all this time to coach and do other things because you’ve built your business. And so I saw that and I was like, “Wow. This is a system that Rafael’s rolling out,” and I loved it.
It just clicked with my thinking. So, I bought in completely to it and we just started rolling. And so, leading up to this deal, I’m about three and a half months in to get my first deal which I’m kind of hearing, for the people that get committed, that’s kind of about what it is, three to six months. And-

Rafael Cortez:
So, you locked it. Well, you closed on it. So it’s been I guess from zero to close, right?

Adam:
Yeah, exactly four months I would say.

Rafael Cortez:
Cool.

Adam:
Yeah.

Rafael Cortez:
How did you find the lead? Where did the lead come from?

Adam:
The lead came from a code violation list and it was a code violation list that I actually emailed the county for. It wasn’t just a list that I downloaded. I actually emailed, found a couple of emails just on the county, like assessors websites and things like that. Emailed the lady, she emailed me back and she said, “I don’t know how to do this. Or if I did, it’s been years. So let me find out how to do it and I’ll email you back.” I was like, “Wow!”

Rafael Cortez:
I remember that conversation on one of the coaching calls, the live coaching calls, we were talking about that list.

Adam:
So I felt like, “Hey, if I get this list, at least I know nobody else has it.” Right?

Rafael Cortez:
Yeah.

Adam:
So, she emailed me the list, that’s where the lead came from. By this time you had kind of told me, “Hey, I think it’s time for you to start getting a cold caller.” I was a couple of months in and I have a full-time job so I only have a few hours a day to really do the cold calling. And I was doing the cold calling on my own which was great, I’m glad I did it, I’m glad I learned it and so I understand what my cold callers go through.
So, that was great. But this lead came, my cold collar, put it in my Podio, actually it was a Saturday morning I remember. Usually I don’t make any calls or do much on Saturdays. I have a couple little kids so I’m usually playing with them but for some reason I was in, just organizing Podio and I thought, “You know what? Here’s a lead that I haven’t been able to get a hold of. Let me just to call them on a Saturday morning.” I did, lady answered the phone. The property that I was calling about and I was interested in, she didn’t want to sell, I think it was her primary residence. But that magic question that you taught us to ask is, “Do you have any other properties you might be interested in selling?” And as a matter of fact, she did, and she just had one that actually had a fire in it, there was some problems going on with it, she just wanted to get rid of it.
We actually met about 45 minutes later at the property. I ran the script, I think Brent has a podcast he did recently that tells you exactly what to do on a seller appointment. You sign first, then you hand it to them, you show the confidence, all these things then negotiation, it went like clockwork.

Rafael Cortez:
Beautiful.

Adam:
And got it under contract. And it was great. So that was how it happened in just the acquisition phase.

Rafael Cortez:
And you’re in the Bay Area, right?

Adam:
Yeah. I’m in Central California but I also do business in the Bay Area. So Central Valley, Northern California.

Rafael Cortez:
So this property is Central Valley?

Adam:
Central Valley, correct.

Rafael Cortez:
Okay, cool. That’s a very competitive market. It’s one of the the active markets in the country. Whenever you have big metropolitan areas like that, all kind of compiled together, you’re going to have competition there. So, it’s the process, right? It’s amazing how when you go through the conversations or the discovery sessions, you really figure out what the problem is. You can walk away with a big win like this, and also creating a win for the seller, which is ultimately what we’re looking for. Right? What’s a big problem that you solved for this seller?

Adam:
I think that what happened was they had the fire in place, they had tenants in there at some point, there was a fire. After the fire happened, I think that it was an older couple, they were in their sixties, they had planned to do the renovations themselves. And I think what happened was they got into it, they spent about $15,000 cleaning it up and got some quotes from contractors and just realized it was way more than they were willing to deal with at that time. So they just needed to get rid of it. I came in there and honestly, I wasn’t super confident on my comps, there wasn’t a lot of great comps in the area. It was on a very busy street with a lot of businesses around it, but it looked just like a house and it acted just like a house.
So, I went ahead and just went for it. And what I realized after that was, I talked about being coachable, but there was one part of your course that I decided to skip over and I wasn’t so coachable on, and that was building the buyers list early on. So, I had a grand total of zero buyers on my buyers list by the time I got my first property. And obviously that presented a little bit of problem for me because I was scrambling, and you have a lot of great systems to get buyers, but I was behind the eight ball. So, I kind of learned the lesson on that one.

Rafael Cortez:
Let’s break down the numbers. What did the numbers look like? So you’re in this populated area, it’s competitive and everything. What was the ARV of the property?

Adam:
The ARV that I found was about 330,000. But again, it was just hard because there was a lot of businesses around it, there was actually like a car-wash next door, a professional office on the other side. And there wasn’t a lot of great comps. Most of the comps in the area, the houses are much smaller than this one and coming to find out later on that it was actually a zoned commercial main street, which was why there wasn’t a lot of comps because it was much bigger than the houses. It had a lot of room, there wasn’t really a master bedroom so it looked like it had been set up as offices before of some sort. So it was just a little bit strange and not very straightforward.

Rafael Cortez:
Massive imperfect action is okay, right?

Adam:
Yeah.

Rafael Cortez:
That’s what we always talk about. Whenever it comes to comps, sometimes we get caught up in the cycle of trying to dial it in, and perfect comps and really almost to like wear that appraiser hat. But it’s really not what we’re doing. Sourcing the deal, we are looking for a point of reference, a ballpark where we can go off of and it’s going to be a sliding scale depending on the condition, depending on the location of the property and all that. But we want to have a point of reference where we can start to structure the numbers and then start to present an offer. So, you figured out it was somewhere around the $330,000 range and then you met with a seller. What did you lock it up for?

Adam:
Locked it up for 180,000.

Rafael Cortez:
180! Bam.

Adam:
They had had some quotes from contractors and obviously as we know, contractors price is much higher than what a flipper can do it for.

Rafael Cortez:
Right.

Adam:
So they were a little scared away by some of those huge quotes that they had gotten, six figure quotes to do everything, right? I walked them through the process just like you taught me of what I thought I could get for the property once it was all fixed up. Walked them backwards through my expenses, what I thought it would take to get the property up and running and so I showed them exactly how I arrived at my cash offer which made a lot of sense to them. And they did ask for more, we negotiated back and forth just a few times, and went ahead and signed the paperwork.

Rafael Cortez:
So you locked it up for 180K. All right. Now for the big, big question. So, you have this deal, it’s got a ton of equity on it. How much did you dispo it for? What was your spread? How much did you make on that deal? What was [inaudible 00:13:54] ?

Adam:
Yeah. So the dispo ended up being 225, so $45,000 spread.

Rafael Cortez:
Boom! 45K.

Adam:
So it’s great. And at this point-

Rafael Cortez:
All right. Hold on. Pump your brakes, pump your brakes. In the spirit of Wholesaling, Inc.

Adam:
Yeah, baby. Yay man. A secret goal of mine was to be out here and get that bell. Awesome, I love it. Thank you.

Rafael Cortez:
We were talking about that just a couple months ago. Wow. $45,000 spread on your first deal that you come in. I know you went through a couple of things on the dispo side when you were selling the contract to your end buyer. You had a couple of challenges on there, you didn’t have a buyers list, yet. So you were working on that process. How did you handle that?

Adam:
So, started, everything that you coach on getting the buyers list, but obviously I was behind, so I was trying to do everything at once. Plus I was still knee-deep in building all my acquisitions and everything like that. So I realized, “Wow, it’s going to take a lot of time to do this dispo part. I got to go show the property and meet people since I don’t have someone I can just call and they’ll buy it sight unseen.” And so I went through a couple of weeks, had some people come to the house, but it just wasn’t getting the traction that I wanted. And, I was very, very grateful and lucky, I ended up getting connected with another wholesaler in the Valley, a guy named Dean Rogers who’s extremely experienced and he was able, we agreed to JV on the deal and I think within five minutes of hanging up the phone with him, he had like three people on the line that were ready to pay more than I was even looking to get for it.

Rafael Cortez:
Wow.

Adam:
So he was just extremely valuable. And ever since then, we’re actually working on some other deals together and he’s been a great mentor to me and just been kicking down the knowledge and helping me deal with tenant issues in some of my other properties and things like that. So it’s just really goes to show how important the JV can be.

Rafael Cortez:
Oh man. JV is a great tool especially when you’re starting off. You’re tapping into different buckets of experience, right? Different networks. If you really partner up with somebody and you can bring value to somebody who has a good solid business with a buyers list and systematic approach to wholesaling and what they’re doing, a lot of times, these guys or even the end buyers are flippers, right? So they’ll cherry-pick the properties and they’ll keep work with you, they’ll keep whatever the they want for their own portfolio. And then still do the wholesale spread and become an asset, right?
That’s the beautiful thing about building a power team as you’re going through it. So now you have pretty much the second half of your business if you wanted to focus on just the acquisitions for a while, the second part of your business is handled at least in that area where we’re Dean is at. So, that’s amazing brother, it’s amazing. At the end of the day, you’re creating something where everybody wins, right? The seller got rid of their problem, you solved that issue. You came in, you closed your deal, you made a ton of cash on that deal. And then your JV partner, who’s also given you a resource, right? He’s solving a problem for you, also made a ton of cash. So everybody eats right at the end of the day. Amazing, man. I love it. I love it.

Adam:
Even splitting it, I made more than I would have been happy making on my own. I would have been super happy with 15 or 20 and ended up getting 22.5 and being able to have a new mentor, helping me out and showing me the ropes. Just cultivating that’s been awesome so-

Rafael Cortez:
Right. Especially in the area that you’re working, you know what I mean? That’s invaluable. Reach out, and you level up, you partner up. And 45K spread, split between two, it’s not a bad deal. You want to have a grape or you want to have a big piece of the watermelon? What do you want?

Adam:
Yeah, yeah, yeah. And it was a great lesson learned about the buyers list too. It was like, man. That was, like I said, the one part that I skipped over. And there was a reason you had it there, right where you did. So, just kudos to you and your system, man. You know what you’re doing.

Rafael Cortez:
No, thank you, thank you for the feedback, man. I appreciate that a lot. So what does the business look like for you right now as far as the pipeline, your daily activities and stuff like that? Give us a quick little breakdown on that before we sign off.

Adam:
Yeah, sure. So, shout out actually to another wholesaler in our community, Stratton Brown, who you actually hooked me up with.

Rafael Cortez:
Oh, he’s solid.

Adam:
Yeah. He got me connected with my cold caller through Call Magicians which he’s affiliated with. And so just taking those steps as necessary as things began to get a little bit too much from my plate, being able to hand them off to the VA’s. And I didn’t even know what a VA was before Christmas. I’d never even heard the term wholesaling real estate. So all this stuff was just so brand new to me. And it’s so amazing having a coach that can tell you, “Okay, now you’re ready for X, Y, and Z. Okay, now it’s time for you to do this,” and I don’t even have to think about it or ask questions. And so, now I’ve got a VA who’s actually in my Podio now handling follow-ups for me and doing a lot of the busy work that became a little bit too overwhelming, pulling the lists and all these things.
So, I’m just taking the steps down the line and I’ve got a nice little pipeline built up and just realizing that a lot of people when you hear them on the podcast talking about their first deal, they usually have two or three more in the pipe.

Rafael Cortez:
Yeah.

Adam:
And it’s because, it’s the things that you did to get that first one, it’s those habits. You just repeat them over and over again and then you start. So it’s no wonder that the pipeline is a little bit built up. So, got some more things going and just continuing to try to stay consistent, time block and do the things that got me the first one.

Rafael Cortez:
Once you have a linear process, you can come back and plug into it, right? It’s repetitive, I don’t want to say predictable, but it’s manageable. You built this machine, now you have a car that you can actually drive around and get results through. That’s amazing, man. Kudos for the commitment. I’ve seen you go in, get stressed out, get pissed off, get anxious, go through the highs and lows that we talked about initially and then come out on the other end. You’re killing it now. Just out of curiosity, give us a number. What does your pipeline look like right now, potential revenue over the next few weeks?

Adam:
Well, I’ve got a five, actually four now under contract since that one just closed. I feel like I’m pretty close on some others. Yeah. I didn’t have huge expectations for myself, I gave myself a rookie season. I thought, “Man, if I could close three or four deals this year, I’d be really happy.” And so now it’s like, man, my expectations, I’m raising the bar for myself and hopefully we can do some big things.

Rafael Cortez:
You had a rookie quarter, that’s what happened. It wasn’t a year, it wasn’t a season. It was just a little bit of a time there. That’s amazing, man. I love it. I’m looking forward to seeing your progress, you’re killing it, and I totally enjoyed just working with you and helping you build that process that you’re going through, man. Hats off, kudos, biggest respect and I’m so happy. I’m so happy for what’s going on. Thank you so much for sharing your story. The biggest thing is that people can take away the reality, right? I keep saying it. Once that first check kicks in, once it lands, once you see it in your bank account, or you actually go and pick it up and then you touch it and you see the numbers on there, everything becomes real. All that blood, sweat, and tears that you put over the last several weeks become real.
One cool thing that I want to highlight. You told me, “Oh, coach, I closed a deal yesterday,” but you forgot to tell me when the deal closed. That to me just tells me the level of commitment that you have. You were focused on the rest of the stuff, you were focused on the rest of the deals so the money just kind of became a by-product of your operation, right? Of your business. That’s really what it comes down to, just focusing, keeping up that consistency and then creating that flow in your business so that you can have deals and deals and deals come in through the pipeline, through a well-set machine that you’re in the process of building. I love it man. Thanks for stopping by, I appreciate your time, it’s been a blast having you and then sharing your story, man. Very, very, very inspired.

Adam:
Hey, thank you coach. I couldn’t have done it without you. Hats off to everything you’re doing with your coaching program and your system, man. I love it. And that made all the difference in the world, there’s no way I could have done this on my own just trying to do this through YouTube. So, thank you man.

Rafael Cortez:
Thank you brother. I’ll talk to you soon.

Adam:
Okay. Take care.

Rafael Cortez:
Stay on it. Well, there you guys have it for the Rhino Tribe. If you’re interested in finding out a little bit more about what we do at Wholesaling Inc, just go to the Wholesaling Inc website, that’s wholesalinginc.com, set up a call with one of our guys and then have a conversation, see if it matches what you’re looking for. Until then, stay focused, you got this.

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