Posted on: June 03, 2021

On today’s episode, Brent Daniels is joined by “The Queen of Short Sales”, Nicole Espinosa. Nicole talks about how she got started in the real estate industry and has quickly become the authority on all things short sales. 

Nicole is a Licensed Realtor who is super proficient in very complex real estate transactions and she breaks down her process, step by step, for dealing with short sales…and why this is one of the most overlooked (and profitable) niches in real estate (the riches are in the niches).

She shares all of her tips, tactics and, strategies for making a fortune in short sales, quickly. If you want to learn more about short sales or have been thinking about how to bring this profitable real estate niche into your business, this episode is a must-listen!

Key Takeaways

  • How she got started in real estate and her first exposure to short sales
  • She shares the story of getting her first listing as a traditional agent and what it was like being part of a brokerage
  • She breaks down the definition of a short sale and how to generate massive profits from this overlooked real estate niche
  • The process of short sale approval from a bank
  • The benefits of a short sale
  • How she almost quit the industry and the moment that changed everything
  • How she keeps her passion for real estate alive

 

RESOURCES:

If you are Ready to Explode Your Wholesaling Business, Click here to Book a Free Strategy Session with me right now!

Subscribe to Wholesaling Inc

Episode Transcription

Brent Daniels:
Welcome to the Wholesaling Inc Podcast, America’s number one podcast for new real estate investors, where we know that finding discounted properties is the most proven path to financial freedom. I am your host, Brent Daniels, Mr. TTP and I am telling you if I can do this so can you, so let’s get started. This podcast is a long time in the making. This one is going to absolutely blow your mind because this podcast is going to show you step-by-step some solutions that you can implement in your business when you run across property owners that don’t have equity or don’t have a lot of equity. And that is why I brought on the nations short sale queen Nicole Espinosa from Dallas, Texas is here on this podcast, I am absolutely thrilled. Say hello to everybody, Nicole.

Nicole Espinosa:
Thank you so much. Hey guys, just so happy to be here.

Brent Daniels:
I’m happy that you’re on here. Listen to this. Nicole has done over 3,000 short sales. She is in 13 markets that she’s majorly in but really if the deal is right, if the situation is right, can do this nationwide and we’re going to open this up because this is an incredible resource for everybody that is wholesaling real estate. You’re probably wondering, what does short sales have to do with wholesaling? And Nicole is going to explain it and educate us right here so that we can squeeze out opportunity from every single lead that we come across. So, Nicole, first of all, we are going to get in the DeLorean, we’re going to time travel, we’re going to go back, when you first started in your real estate journey, how old were you? What was going on? Who were you at that time?

Nicole Espinosa:
Yeah, so I was 21 and I had just moved to Texas I’m originally from Florida. And my first job here or first experience exposure to real estate was actually in the REO market. So I was doing foreclosures and I was working with asset managers and it was in 2008 where the REOs hit the market, right? And so the first exposure I had was just this completely different experience than most real estate agents or most people in the industry have. And so I was learning the nuts and bolts of it and at the time, we were getting a 100 to 125 listings a month, new assignments. And so the brokerage that I was working with did it at a high volume and it was crazy.

Brent Daniels:
Now, when you say assignments, you’re going to make wholesale people go wait a second, assignment? Like assignment fees?

Nicole Espinosa:
No, you’re right.

Brent Daniels:
Right. And when Nicole is talking about REOs that stands for real estate owned. So a lot of 2008, ’09, ’10 people were losing properties to foreclosure, they go back to the bank, into their REO department. That means that the bank owns those properties and when they do, they assign these properties to be sold on the open market, to certain real estate agents that have an account with them. And I assume you were a part of a team that was one of those brokerages.

Nicole Espinosa:
Yes, exactly. So the brokerage had a lot of relationships with different asset managers that worked for the bank that would give us those listings. And we had to manage it from evictions, evicting the homeowners, down to getting it listed. So I saw how it works behind the scenes, worst job I ever had, right? It was heartbreaking because I had to see people get evicted with families and all of that and people don’t understand the psychology of it. And back then there was no process to really help people before that point, right? It was craziness. If you’ve been in the industry a while you’ll know majority of the market was filled with foreclosures and there wasn’t that much information about short sales which is what we’ll get into.
And so I had left that job, I had my license and got into my first listing as a traditional agent and it was a short sale. And so it was one of those things where I’m like, okay, I can figure this out, right? Because I already have this background of working with these lenders. And I did, and I did my first short sale and I started developing the process that we utilize today. Fast forward 10, 11 years later and it’s what we do with the banks and we were doing it when the banks weren’t fully establishing their processes. So kind of learning with the banks as they were setting that up and short sales became more prominent.

Brent Daniels:
Yeah. It’s really interesting Nicole. I mean, it’s like you’re taking me down memory lane because at the time I owned a brokerage in ’08 and we had started to do short sales. We had 300 ready to go, I mean, it was unbelievable, and there was no departments, there was nobody to talk to, it was overway, we didn’t know what to do. I mean, a lot has changed which is phenomenal and it’s exciting now that you can find an opportunity. But let’s make it real simple here, okay? What is a short sale and how does this help this wholesaling, this rhino tribe, all these wholesalers that are watching and listening, how do we use short sales to our benefit?

Nicole Espinosa:
Yeah, absolutely. So a short sell is where a homeowner has some type of financial hardship where they can’t afford the mortgage anymore and in order to sell, they would have to bring money to closing that they don’t have. So what we do is we go to their bank and we negotiate for the bank to take the loss instead of the homeowner. So it allows the homeowner to be able to sell the home without owing anything and walking away free and clear from their debt. So they’re getting to avoid foreclosure and they’re walking away with settled debt. So how it plays with wholesalers and investors is as investors and especially a lot of new investors, of course you’re taught, go after properties with equity, right? A high equity.
But what people don’t understand is that there is opportunity for properties that don’t have equity. So if the numbers do not make sense, most investors are like, okay, throw away the lead let’s move forward, right? And instead of doing that, guess what? The homeowners still need help so you have an opportunity to be able to not only help these people but an opportunity to buy a house at a discount where normally you wouldn’t be able to, because you’d be buying it through the bank instead of the homeowner directly.

Brent Daniels:
Got it. So just for simple math, if somebody owes 150 and their property is worth 155, they don’t really have enough equity in there to pay a real estate agent, to pay the title and escrow fees, to be able to kind of get that done and they have a hardship. Whether it be now obviously with the pandemic and with anything, with that or maybe it’s just a financial hardship, maybe they lost a job or maybe they can’t afford it anymore, it’s not necessarily only people in foreclosure, right?

Nicole Espinosa:
Correct. So you’re absolutely right. They don’t have to be in foreclosure, they just have to have a hardship. And now what they’re doing, I actually did a video on this today, the CFPB, which is the Consumer Financial Protection Bureau, what they’re proposing for people that have a financial hardship due to COVID is that COVID isn’t a permanent hardship. So all you have to say is I was affected by COVID and they have to approve assistance.

Brent Daniels:
Wow. And then what happens is, so let’s just say I’m an investor, well, I am an investor, so let’s just say it’s me. Let’s say I’ve got a deal here in Phoenix, they owe 300, I want to buy this thing for 270 to make it make sense, they’ve got a hardship and then, what? Do I bring my offer to somebody at the bank and say, hey, would you consider this? They’ve got a hardship, this is what I can pay for it, will you accept it?

Nicole Espinosa:
So you would actually need an agent to be involved in the process because you’re the buyer you can’t negotiate on behalf of the homeowner, the homeowner has to have representation. So you would work with someone like me and my company where we would submit and negotiate your offer with the bank. It’s not as simple as just saying, hey, we have a hardship, there’s a lot of documents involved and a lot of proof with their financials that we collect so we take care of the whole process. And what we do is we go to a bank, there’s two parts of getting it approved, one, the financial hardship and then your offer by getting an appraisal by the bank and it’s going to be an as-is.
Because like let’s go with your scenario of 155 and 150, not only is it closing cost but you have to think about most of the time when someone’s behind on one thing they’re generally behind on more than one thing, right? On everything else. So a lot of times we see second liens, HOAs, taxes, judgements and then a lot of times the houses are not in the best shape. So where we get the biggest discount is by getting repair bids and working with the investor to try and get that price down as low as possible.

Brent Daniels:
Love it. Now, this is a little bit different than a traditional wholesale, when I submit that offer to you, you get that offer accepted by the bank, I have to close that, right? I can’t just assign my interest for more on that deal, right? I have to close it.

Nicole Espinosa:
So you can wholesale it in the sense where you can do a double close. So you can get transactional funding where you can do same day, but you’re right, the person that it puts the offer in you can’t assign it and then assign the contract. But you can do a double close where you close on the front end and give it to the backend buyer.

Brent Daniels:
So they don’t put any flip contingencies that you have to own it for a certain amount of time? Is that bank by bank? What does that look like?

Nicole Espinosa:
Well, it’s completely bank by bank. I can tell you that we saw a lot of deed restrictions, which is what you’re talking about which doesn’t allow resale. We’re not seeing as much anymore in the last couple of years, the biggest or the most often that we see is generally with Freddie Mac loans but after it became conventional we’re not seeing-

Brent Daniels:
Wow, that is huge because listen, for everybody listening, back in the day if it was a short sale, if you were the buyer on that short sale, they would make you have that property for a minimum 90 days before you can resell it to anybody. And some of them had some deed restrictions where you could only sell it a certain amount of times within a certain timeframe, like you could only sell to three different owners in 12 months or something like that.

Nicole Espinosa:
Yeah. They don’t do that anymore. You have to remember too that because time has evolved, right? They just want to protect to make sure that they’re not getting screwed over, right? They want to make sure that there are getting the highest for the property. At the end of day if the house needs to be discounted for repairs, it’s not going to finance so it’s going to sell to an investor. So even if they foreclose, they would have to sell it at a discount so why not go through the short sale? Now, I will tell you a lot of times the deed restrictions come up if the bank is taking a significant loss. So we’ve seen that happen if the bank is taking hundreds of thousands of dollars of loss, where they’re like, okay, if we’re going to take this loss we want to make sure that it’s not warranted. So.

Brent Daniels:
Got it. Totally understand. So just to simplify this, if you’ve got a property that doesn’t have a lot of equity but it needs a lot of work for whatever reason, maybe they got a home equity line and pulled out their equity or maybe they just refinanced or did something where they just don’t have a lot of equity. The best deals for us wholesalers from a traditional wholesale standpoint is probably properties that need an as-is appraisal, right? It’s not effective to think that we can go into a property that’s beautiful and totally great done and has 15 comps in this master plan community and all of a sudden this house should appraise at 500 but we’re putting in an offer at 300,000, that’s not going to fly.

Nicole Espinosa:
Right. Exactly. I mean, not every lead is going to work out because of what you’re saying, because there is going to be some pretty properties that don’t warrant the deep discount but we do pay for the leads. So if you’re not purchasing it or you don’t have the ability to, we pay 25% of whatever we make so you’re still getting compensated. Because here’s the thing, direct marketing is expensive. So if you can find a way to have a tool or a solution for every single lead, your cost per lead is going to go down significantly, which is so important because how hard is it to get the right lead, someone on the phone and then find a motivated seller and not be able to do anything with it, right? So finding those solutions is going to help tremendously.

Brent Daniels:
I love it. And you’re absolutely right. I mean, either way, if we’re coming from a standpoint of serving our community what is the best way to avoid somebody getting kicked out of their property, right? If it’s a short sale, they know when they have to be out, they know what’s going on, there’s no mystery there. It’s not some weird auction situation that happens and then all of a sudden it doesn’t happen and the auction gets postponed and they don’t know if they own the house, if they don’t own the house. The uncertainty is taken care of because you know when this short sale is going to close. And I’m thinking here and I wrote down my notes here, you’ve helped 3,000 homeowners, families, people in the community, avoid probably one of the most embarrassing social event of all time, right? Getting kicked out of a house that you owned in front of people that you know and everything. How do you feel about that? You got to feel just outstanding.

Nicole Espinosa:
It’s so rewarding. Not only being and being able to help them in this situation but also being able to help them almost press the reset button, right? Because not only do they get out of this debt free, right? Because we’re settling everything but they’re going to be able to purchase in the next two to three years. So a lot of times what we do is we tell them, hey, this is your chance to get everything right and then get into a new mortgage where you’re in positive equity because the idea of home ownership is to build equity, right? So you’re getting out of this bad situation, bad memories, and being able to start over. And so we have the best clients, I mean, at the very end, I mean, we have so many reviews from just people that are so grateful because it’s not easy, if it was easy everybody would do it, right?

Brent Daniels:
Listen, I’ve done it. It’s so much work. And if you’re just doing it on your own for the first time, I mean, get ready for the longest learning experience of all time. I suggest anybody that is focused on their wholesaling business, on finding deals, on doing flips, on doing these things, do not negotiate these yourself, go with a pro like Nicole, go with Nicole. I mean, it’s way too much work and the learning curve is so high. It’s a lot of fist fighting, a lot of brain damage, and it’s just not worth it in the end, you should be out going after some better opportunities. But what Nicole is basically saying is, listen, if you go into a situation with a lead, they’re telling you that they’re in some form of distress, they have a problem, but they don’t have equity and the property is in rough condition, ding, ding, ding, ding, ding, the solution that should be ringing in your head is for them to do a short sale and if you refer them over to Nicole’s company, then they take it from there.
I assume you will reach out to these owners and then walk them through the process and educate them. And not only that, just so that your sellers, your leads will answer that phone call when Nicole’s company calls, you got to let them know the difference between what happens to your credit score and your credit report if you foreclose on that property versus if you do a short sale, it’s the difference between two years to three years versus seven? Am I right?

Nicole Espinosa:
Yes. Seven to 10 whenever they actually report it, so absolutely. Plus not only that, you’re leaving yourself open to liability if you go through foreclosure, right? Because you still have the debt, that deficiency, which is the difference between what they sold it for and what you owed. And you can get taxed, you can get 1099 for that difference as well. So there’s a lot of benefits to doing the short sale and we make it super easy if you’re referring it over, you literally just go to our website, thessqueen.com and we get it instantly notified of the lead, we call within 10 to 15 minutes and then we connect with you. So what people love about our system is that we give weekly updates. So you’re going to know every step of the way what’s going on, which is huge, right? Because so many people work so hard to get referrals but do nothing to keep it. We’re a 100% referral so we want to make sure everybody is on the same page and they know that we’re on top of it.

Brent Daniels:
I love it. And listen guys, this is just another resource. And now these deals aren’t going to come up all the time but when they come up there should be an option for every lead that you have. If you run across somebody that is a distressed property owner, there is something that you can do every single time, I’m telling you. And what I like to do, I’m just telling you Nicole, and I’m speaking to the audience as well, and if you’re just listening to this make sure that you go to Brent Daniels YouTube channel to put a face with the voice. But what I want is, I want it as hands-off for me as possible, if I’m going to look for a different solution, whether it’ll be creative finance, whether it’ll be subject to, whether it’ll be wholesaling, whether it’ll be flip or whatever else, I know that my bread and butter is wholesaling.
This is what’s paying the bills, this is what’s the cash machine, this is the ATM. I’m going to focus my mental abilities and attention to that and I need somebody that I can pass this things off to and not have to think about and basically get passive income, is essentially what happens. Unless obviously you negotiate, I’m the buyer and you negotiate and I’m able to buy that and flip that property or double escrow it then obviously that’s going to stay in my wheelhouse. But if it’s something that maybe it’s a little bit too tight, it doesn’t really fit and I give it over there, now I get a referral fee and life is good. So there’s actually two different ways to add income to my business’s bottom line by reaching out to thessqueen.com, right?

Nicole Espinosa:
That’s it.

Brent Daniels:
I love it. It’s just a phenomenal resource for the rhino tribe here. And guys and girls, if you’re running into any of those situations, definitely reach out. Nicole, you’re 21, you get a real estate license, who are you? For real, and then you go off and do 3000 deals. Internally, what told you that you could do this?

Nicole Espinosa:
Honestly, it was an evolution, right? Like everything else it evolves, like who I was as a person, who had to step up as a leader in my organization. I mean, I wrote a book on how to master short sales, right? That’s the book that we wrote and I could write a whole other book on how to fail, right? How to fail forward because I had made every mistake possible. And let me tell you, even though it was very painful and I was broken more times than I feel like I made money through learning all of this, it really developed who I needed to be and who I needed to show up as. And a part of me was I felt like in the beginning I had something to prove because I was so young, right? And there’s not that many women in this industry that are running organizations like this, we know that, in the real estate industry.
I mean, it just took so much for me to evolve, a lot of work on myself as like, hey, I know I can do this I just have to figure out how. I mean, I’ve rebuilt my company twice and that second time I fired everybody at once and I was like, I am either going to do this or I’m not, I’m all in or I’m out right? And so it’s crazy because they don’t teach you how much you need to work on yourself in order to be able to have a successful business, right? Your perspective, your mindset, the way that you show up every day, is literally the results that you’re going to get. And people don’t get that because mindset is thrown around so much in this industry and entrepreneurship but people don’t understand, it is literally the difference between you keep going forward or you just quit.
And it takes somebody that’s literally almost insane to just keep going despite being broke, despite failing and especially with something that I deal with short sales, there was no resource, it’s not like I could have had a mentor or a coach. People have so much great resources for wholesaling like watching your stuff, being coached by you. But with short sales there wasn’t anything because no one was able to really figure it out or establish and the people that did, didn’t want to share. And so having to learn the hard way was very painful. And then finally getting to a point in my journey where I had to humble myself and I was like, okay, I need to network with people that are much smarter than me, because if I’m going to build out this organization, I don’t know what I don’t know.
And that’s what I did, I was a part of masterminds, I read Scaling Up, which was the reason why I fired everyone at once, it’s a phenomenal book. It said this one really key thing and it said, if you had to rehire everyone in your organization, would you? Look at each other position and I was like, I wouldn’t. And so I realized, okay, I need to hire intentionally, as a leader, I have to know what position is important in my organization and what that looks like. So it was a journey, having to show up as that person and then getting past the stigmas of, oh, you’re a woman, you’re young, you’re this, you’re that, so over the last 10, 11 years it’s just been that growth.
And then it turned into having this following of people that are like, oh my God, she’s doing it, I can do it, you’re inspired me by just being honest and authentic with your journey. Because I would post on social media like, not everything is perfect, this is what’s going on, I lost money here, I did this, but I kept moving forward. And so for me that’s what moved me forward because I realized it was so much bigger than me and now my why just kept evolving. At first, it was my children and then it was something to prove and then now it’s the people in my organizations and the clients we serve and the community that we’re consistently outreaching to. So.

Brent Daniels:
I love it. And you’re hanging around amazing people. I mean, obviously that’s the external part, right? The internal part, you had that drive, you knew that you had the capacity for greatness, for doing something that was really special and you just had that motor. And I think that everybody that’s listening or watching, we’re just a small group, anybody that’s listening and watching has that, you know what I mean? But just feeling it and seeing it and giving real life examples I think we need that and I think you’re showing that and I love that. But who do you surround yourself with? How do you stay sharp? I mean, you’ve been so successful, how do you not just like, it’s Rocky III and you buy a robot and you get lazy and get knocked out, you know what I mean? How do you keep the fire alive and keep the passion going?

Nicole Espinosa:
So honestly, I mean, it’s just constantly learning. It’s constantly finding things that excite me because going through from salesperson to CEO to just full on entrepreneur, it was like, okay, I was used to day-to-day, right? So we are sales people so we love the hustle and the grind, that’s what makes us great, that drive. And then when I got out of production, I was like, what do I do now? I’m so used to hustling and working 80 hours a week and I’ve bought my time back. Going into that phase it was almost like I was depressed for a little bit because that was my motivation every morning waking up.
And so what I learned in this phase of my life is, now my time is everything, right? The people that I’m spending it with, the conversations that I’m having, is it helping me grow? Is it helping me grow my mindset? Are the things that I’m listening sparking ideas for my growth. So I’m constantly trying to learn new things and constantly perfect our processes and that gets me excited, my mentorship gets me excited. So right now I’m just really blessed to be in a position where I can focus on whatever I want, right? My business is running like a well-oiled machine and now it’s just a matter of overseeing it and doing things that I’m passionate about.

Brent Daniels:
I love it. So how do we get ahold of you? How do we say that we’ve got an opportunity? I mean, is there somebody that they can reach out to? Can we get a little bit past the gatekeeper, which is the website? Can we get a little bit of bonus here for everybody listening and watching, what’s the best way.

Nicole Espinosa:
So you can call us directly and I can give the number it’s 972-832-2621, there’s always someone that’s going to answer.

Brent Daniels:
One more time.

Nicole Espinosa:
972-832-2621. So you can call us directly. We always say, use us as a resource even if you just want to have a conversation about a deal that’s not involved with us, we’ve no problem helping.

Brent Daniels:
And if people want to just tell you that you’re great or reach out to or say, hey, I’m in Dallas or whatever, what’s the best way to reach out to you? Is it Instagram? Is it email?

Nicole Espinosa:
Yeah. So email’s the best way. I’m on Instagram, thenicoleespinosa. I have a YouTube channel, The Short Sale Queen. And then they can always shoot me an email, nicole@thessqueen.com. I’m accessible that way.

Brent Daniels:
I love it. Guys, that’ll be in all the show notes here so that’s easily accessible. You don’t have to just write it down or rewind this, it’ll be in the show notes so you guys can check that out. Nicole, thank you so much. I mean, it gives us another tool to be able to use in our wholesaling business to not only get some deals at a discount that were too tight before but also to help out these people that were kind of like nobody really wants to help them out, they’re kind of getting left behind, and also to be able to get a potential referral fee from that. So it’s just a win, win, win all the way across so I love it. Thank you for being on here, you were amazing. And by the way, guys, Nicole has an incredible, just perfect reputation among the top, top, top companies around the country.
Everybody is using her company to do their short sale so there you go. Awesome. Thank you so much, Nicole. And for everybody out there that is interested in joining the most proactive group in real estate investing, it is the TTP family, the TTP program. Go to wholesalinginc.com/ttp, that’s wholesalinginc.com/ttp, scroll down, check out what it’s all about, check out all the testimonials. If it feels good in your gut, sign up for a strategy call today, I look forward to working with you personally. Nicole, you’re the best, everybody out there, I love you and I encourage you as always to go out there and talk to people. Till next time, love you guys. See you.

Leave a Reply

Your email address will not be published. Required fields are marked *

Wholesaling