What if there is a way to attain financial freedom in doing real estate and still keep the work you love? In today’s episode, Jose Varela talks about using radio marketing to reach more people and create deeper connections than cold calling or message blasting. He explains how JV deals give him flexibility and a steady income stream while maintaining his full-time job as a private jet mechanic. Listen as Jose delves into how this unique approach to wholesaling allowed him to earn $65,000 deals in just four and a half months.
A Unique Approach to Building a Real Estate Business that Runs Without You
This is going to be a fun talk. There are some interesting layers here that I have not found in some of the guests that I have interviewed so far. I’m excited to introduce you to Jose Varela. This is a real estate investor that has been in the game for a few years and we are going to talk about a couple of things here. First of all, what he does for a living is one of those things that are sexy.
Also, this concept of like, “What if I’m working a 9:00 to 5:00 but I love what I do? I’m not trying to get out of the rat race but I do want to create some additional income.” How might you structure your business differently if you are not trying to scale this thing? You are only trying to create some income. The way that Jose has structured how he’s doing his deals, I’ve got to be honest with you, I haven’t come across someone that’s focused on this model. If you hear it, you might be like, “That might be a fit for me.”
I’m going to tell you this. He has probably more freedom of time doing wholesaling the way that he’s doing it than most people are doing it as well. Also, he has been utilizing radio. He is already on five stations after being in REI Radio for four months. That should tell you something if someone already scales up to five stations. We are going to touch a little bit on each of these things. Jose, welcome to the show. I’m excited to have you.
Chris, I’m excited to be here.
Let’s go back to 2016 because I asked you the question, “Why?” Why did you decide to pick up real estate as a side hustle to make more income? I was like, “Are you doing it for family security, long-term legacy?” You said, “Actually, I had a situation that came up that made me rethink how I set up my life and particularly what I want to allow people to be able to do or not do to my overall wellbeing.” Let’s start with the why. What happened in 2016 for you?
Back in 2016, there was the gentleman that I worked for who sold this company. It was an oil company. He sold it in 2013 and 2016, the oil market wasn’t doing too well. The new people who bought the company decided that they didn’t need the department where I was working. They hacked everybody. I thought I was at a pretty secure place.
The guy that I worked for, which I still do now, is a great guy but when he sold it, there was new ownership. They thought differently than he did. They hacked at the root there. They’ve got rid of all of us. I didn’t like that somebody in some high-rise, wherever they were sitting, decided to give us all the boot and my family’s financial security was gone by somebody’s decision over there.
You didn’t even know. Some person in some corporate office decided to make some decision and that trickled all the way down. You sat back and go, “That person’s decision affected my livelihood. I’m not going to let that happen again.” You step back and that was an a-ha moment for you.
I told myself, “I will never put myself in this spot again. If where I work goes away, I’ve got to be okay to step into something else.”
Your mindset was diversified to have a stream of income, doing what you love to do but also, have this additional stream of income via real estate and wholesaling that can’t be taken away from you that you could also fall back on as well. That was a defining moment for you. Now, you are a real estate investor that’s doing deals in a few cities, Corpus, Beaumont, Houston, etc. Let’s get to what you do for a living because this is cool. Tell the audience what you do and where you are at now as we are talking.
I work for an individual that has his own private jet for him and his family. I’m in charge of taking care of the airplane in regards to maintenance and some of the legalities that come from the FAA, scheduling the maintenance and budgets for the maintenance. Things related to maintenance on his airplane.
That’s pretty cool. To be able to be around a private jet, to focus, that’s like your baby. That’s your jet. That family expects you to take care of it to ensure its safety. Again, I know you are reading. You didn’t see it but he literally took his camera, scrolled over out the window and you can see the private jet sitting right there in the hangar. For those that might be like, “I love jets and I follow that type of stuff?” What type of private jet is it?
A good JV deal partner must always be available and exert good communication skills.
The one right outside the window is a Falcon 50 but the one that he has that was off to the side is a Citation Latitude.
How long have you been in the arena of like, “I love being a mechanic and working on private jets and so forth.” When did you find out that’s your passion and your thing?
I’m from South Texas. When I was fifteen, I was visiting an uncle of mine. He brought a flyer for my cousin to see if he would be interested in doing that. He was 18 or 19. He said, “He didn’t want anything to do with it.” I asked my uncle if I could keep that flyer. I ended up going back to South Texas. He gave it to me. I kept it. In ’98, when I ended up making my way up here to Houston, I was 17 or 18, I started to pursue that because I didn’t even know it existed until my uncle brought that flyer because I wasn’t around that stuff.
You have been doing this a long time. Here’s what I love that you said, you love what you do. You are not the person that maybe I typically interview that’s doing a 9:00 to 5:00 where they go, “I’m trying to get out of the rat race.” You wake up every day and you are like, “I have a lot of enjoyment into the career that I poured myself into.”
I have been doing it basically for many years. I absolutely work for the best family in Houston. I love the guys that I have worked for. They treat us very well in every way, with pay. I love it. I don’t have any intentions of leaving here. Unless they fire me, then I will go.
I’m curious, is there any type of cool perk that you get of working for a family in the private jet? Anything you love most about what you do?
No. One of the benefits is if the airplane is away since I’m only in charge of one airplane, then I come to the office to get out of the house but the airplane is gone. There’s nothing for me to do on the airplane. If the airplane is here, I make sure everything is good. The pilot didn’t give any squawks. I turn it over. I make sure it’s ready for the next flight and I wait until the next flight.
You have flexibility with what you do. That’s the perk and the benefit. It’s not like you show up every day and you are constantly working on this plane. Hence, the fact that you’ve got some time to pick up this side hustle wholesale, you’ve got some freedom in what you do. Not only do you love what you do but it’s also a company with the fact that you’ve got some freedom.
Now, let’s talk about this. This is where it gets interesting. You are doing deals but you are doing it differently. You have figured out that you want to be the guy that creates motivated seller leads, so fundamentally a marketer but you don’t want to be the boots on the ground. You don’t want to be out there shaking hands with sellers, converting these deals, getting contracts signed and dispoing. What you do is you only focus on the marketing side and you refer these leads out to some key JV investors that you have relationships with and you do a 50/50 split. Is that right?
That’s right. As the calls come in from the radio, I vet them. If they need follow-up, I will do the follow-up but if they are ready to go, I send them to my JV partners. They go out, meet with the seller, lock it up, find a buyer and sell it. At the title company, they distribute the assignment feed between the both of us.
Besides the obvious reason that this gives you a lot more time because you are not out there converting deals. Number two, it helps you to be focused on getting good at one thing and that’s only marketing. You don’t have to worry about your sales conversion process. You don’t have to worry about dispoing all the other aspects. What was the main motivator for structuring your business this way to where you go, “I’m going to be fine doing 50/50 JVs all day? I will let them do all the grunt work out there and be the boots on the ground.” It’s fascinating to me. What’s the motivation behind this for you? Why?
In reality, it’s the freedom of the schedule because here, if a flight pops up now, then I have to be here. I have to be available. Although there’s some freedom and schedule when the airplane is here, if they decide to fly, we have to be ready for that. I can’t be visiting a seller two hours down South or an hour the other way or anywhere in Houston that is about an hour drive. Houston is a pretty big city. I can’t be stuck with a seller in an appointment, and they have a flight and I can’t be here.
You are a little bit on call. You might not be sure when the family needs to say, “Gear the jet up. We are heading to this place or that way.” You can’t be two hours away to do that. Let’s break this structure down because some people might be hearing this and going, “This is interesting.” First of all, how do you find the right JV partner? There are a lot of investors out there. I would imagine the key part of the equation is aligning yourself with the right investor. How did you go about finding the right people that you could trust your leads with that you spent money marketing to generate?
I went on Facebook groups and in the markets that I’m in Houston, I saw who was doing deals pretty regularly. I reached out to several of them to talk. There were some that I connected with, some that I didn’t. The ones that are connected the best, took the conversation to the next thing and say, “This is what I’m doing in your market. I would like to see if you would be interested in JV-ing. Here’s how I see it working.” They are like, “Yes.” They agreed. I agreed. I sent a letter to them and make sure that things are being followed up and doing their process. There are a few trust issues in the beginning because it’s obviously somebody you don’t know but you’ve got to trust people, too. Until they prove to me that I can trust them, I’m going to trust them.
Now, how long did it take you to find the right ones? It sounds like you go on Facebook and you are looking for people that are seasoned. Again, you can tell a lot about an investor in forums and what questions they are asking. I liked that’s a good level one prequalification. Once you started these conversations and you brought someone, did you find you’ve got it right the first time or did you make a couple of mistakes and have to replace some until you’ve got the ones that you wanted?
Darren Corpuz, I love Darren. I made the right decision right off the bat. He has been great. I did that with agents too but then in Beaumont, I have had to go through a couple and find the one that matches. Try it a little bit, then the conversations go south or you get the feeling they are not following up on something, then I leave it alone. I don’t say anything more. I go find another one.
Let’s say someone is reading to this and going, “I might look at doing something like this. Maybe virtually in another market that I don’t want to do the deals in myself.” What do you feel are the top maybe a couple of characteristics? Let’s say your Corpuz person that you liked so much that’s worked out well. What are the top two characteristics that make a great investor do this JV model?
For me, it was availability. Sometimes he’s in that market and if I’m talking to a seller and I’m not sure it’s going to be a deal, I text him quickly, “What do you think about this? Where would we need to be?” He’s very responsive and along with the availability, the back half of that is the updates on, “We went with them. We met with the seller. We locked it up. It’s going to title.”
Availability and good communication are the two key pieces. When you reached out, were they super interested that you didn’t have to convince them about this? They were all over the idea or did you feel like you had this sell them on the concept a little bit?
Darren Corpuz was all about it. He said, “I do that all the time. This is how we do it.” It’s perfect. That’s how I see it working. He was already doing some of that with some other wholesalers there in the area. Over here in Beaumont, it was a struggle like, “You want 50% for me to go out, lock it up and do all the work?” I’m like, “Yes.” He’s like, “Are you crazy?” “Do you want to pay for half of the marketing?” He’s like, “I don’t want to do that.”
It’s a great objection handling, by the way. “Do you want to pay for half of the marketing?” “No, I will do the 50/50 on that as well.” You also have structured this to be a 50/50 split. You cover the marketing costs. You provide the lead. You do a little bit of pre-qual then you pass it over. Is there anything else about this model that someone needs to understand if they think that they might want to pursue this a little bit more or is that most of it right there?
That’s most of it. The number one thing for me and the way I have so much piece of it is because I believe I’ve got the right people here and they can communicate well. Without that, I would be a little anxious to see if things are happening to where they need to but if you only get that one piece right, then you will be at peace.
If you are newer, I want to explain something a little bit different. There’s the concept of co-wholesaling. This isn’t co-wholesaling. Co-wholesaling is, “I have a great buyers list. I’m going to go find newer investors that have locked up a deal but they don’t know how to move it so, therefore, I’m going to be the backend and I’m going to dispo that property.” That’s co-wholesaling.
You might have heard about the key lead model, AstroFlipping, etc. This isn’t co-wholesaling. This is a guy that fundamentally says, “I’m going to be the Chief Marketing Officer of the front end. I’m not even going to get it under contract. I’m only going to make sure it’s a good lead and I’m going to pass it along.” At that point, Jose is done. What he’s saying is, “As long as they are accessible and more importantly, I don’t have to chase them because they are calling me constantly and updating.”
When choosing a mentor, think of it as if you are getting married.
For the most part, he’s waiting for his check to come in. I love the split, Jose, that you negotiate on that. Fifty-fifty is great for the fact that you are paying for the marketing and they are pretty much doing all of the sweat work that’s involved in that. I think it’s a cool model. If someone reading, I’m thinking to myself, maybe it’s a good hybrid model. Maybe in your town, you are doing your own deals but you want to go to another market virtually, whatever that looks like and you are like, “I don’t necessarily want to hire an acquisition manager and manage all of that and so forth.” You could potentially do a little bit of a JV relationship like this.
Jose, it’s cool that you don’t close any of the deals. You pass the lead along and take the 50/50 split. It’s super interesting and I applaud you. This is why I love real estate. It’s wide open to creativity. You can do deals however you want to structure deals if you look at Jose’s story. Number one, “I never want to be caught like I was in 2016, where someone can pull the rug out from under me, so I’m going to create another stream of income.”
Number two, “I love what I do, so I want to make sure I continue to focus on that.” Number three, “I’ve got to protect my time because my job and what I do requires me to be a little bit more on call.” I feel like you took your life and what you wanted, then you built the business around it to fit that. Most people do it the other way. They bend their lives to fit whatever model they hear about or, “I want to be like this person.”
I, first of all, applaud you for customizing this thing to fit your lifestyle. That’s the way that I think. You build everything around your life in the way you want it to look, either you are going to serve your business or your business is going to serve you. The way you have structured this is your business to serving your lifestyle, which is amazing.
Hats off to you. Let’s talk about the radio. You have been advertising now on the radio for months. You are already on five radio stations. You have snowballed this thing. The first question and I know everyone is wondering, how much is your monthly spend on five radio stations now? If you take all those stations, put them together, what’s your total monthly spend?
$1,800 for five stations. Again, if you guys understand what we show and teach on the radio, we are showing how to buy radio $0.25 on the dollar. That’s how someone like Jose can have a portfolio of five stations. Again, hats off to you that your entire budget is $1,800. Now, before radio, you were doing cold calling. Talk a little bit about that journey. From cold calling, you transitioned to radio. Why did all of this happen? What was the evolution here?
The thing about cold calling there towards the end of the year, was buying the list and seeing the leads that are coming in are good leads, are real leads. For me, it was too time-consuming and the data is super expensive. You’ve got to be buying it all. For me, I didn’t like it. I did not enjoy it.
That’s what I tell everyone that’s reading. You’ve got to find the marketing channel that fits your personality and your style. If you love cold calling, continue to do cold calling. Jose did it and he’s like, “This isn’t a fit for me,” so you started looking for something else. There are a lot of options out there of what you could have picked up next. Why do you choose radio out of all the other channels that are out there?
I chose the radio because when I heard the show, we were in Disney World. You put a show on about your five mentors. It was something like that. You said you had a mentor for your marriage. That is super important. We were on vacation and I told my wife, “I’m going to buy into this. This guy is talking about how he asks mentors and he’s a mentor. He has one for marriage.” That is truly very important to me and because of that, I’m going to go into this. I was already thinking of doing something different. That’s what made me buy the radio. It wasn’t even because I thought it was a good marketing channel. It was because I heard you talk about that but it’s turned out to be a great thing. Things happen for a reason.
Now that you have been doing radio, what are a couple of characteristics that you are enjoying about it versus cold calling? We are comparing that because that’s what you were doing before. What are you liking about radio now from a quality characteristic standpoint?
I love it because the people that are calling in, first, I don’t have to manage anything. Other than I make sure the ads are running when they are supposed to be running.
It’s low maintenance. It’s set it and forget it. It’s not taking a lot of your time to manage the overall channel itself. That’s a big one. I hear that a lot.
The second thing then is the people that are calling are wanting to talk to you. My experience has been where I almost don’t have to vet them very much. When they have called, they start spilling their story and telling me what they want for the property. I’ve got to get into condition and stuff like that but I don’t have to dig a whole lot of the old things that I was having struggled so much with cold calling. They are telling me their story.
You are finding that the quality of lead that’s coming via radio is a lot higher. More importantly, they want to talk to you. I do find there are two different starting points. If you use a spam-based approach, like text blasting or RVM-ing, that’s a long journey to get to a place where someone begins to open up and know, like and trust you but you are right. Radio is like being someone that cuts hair. When you sit down in the chair, you open up and trust that person because you know what they do. That’s how radio is.
People call in and they are like, “I know I can trust this person because people that are on the radio are seen to be credible. They are seen to be experts in what they do.” They call in and get right to the point like, “I already know you are good because radio has vetted you. You wouldn’t be on the radio if you didn’t know what you are doing.” You bypass the vetting process and you get right into their story and their motivation for selling. Is that what you are finding?
That’s right. Some of the people are surprised that I’m the one answering the phone. I’m like, “That’s me.”
Do you know what’s funny? You are probably about the 4th or 5th person that said that on the show because you are elevated and have celebrity status. People do not expect the person recording the ad to answer the phone. I don’t care what company we are talking about. If you see a company on television or something like that, you don’t expect a call in and the owner and CEO answered the phone.
That’s the power of mass media. They are surprised that they get to talk to you, which in my opinion, then helps with the conversion because they are like, “I’m talking to the head honcho here. This is the person that runs the company. If anyone is going to be able to figure out if they can help me or not, or the final decision maker, I’m already talking to the final decision maker because I heard him or heard her on the radio ad itself.” Those are some great qualities to point out about radio. Some of the ones that I like as well.
Now, let’s get down to the numbers because I know that’s what people care about the most. Let’s talk about what has been accomplished. On the books, you have already closed out two transactions and that’s a total of about $25,800 already closed out. Again, if we are doing the math on your return right there over four months, it’s a super solid return but you already have two more deals that you have already dispoed waiting to close. Those are a combined two deals of another $40,000. Fundamentally, you are at $65,000 so far when these next two deals close. How do you feel about that?
I am loving that, Chris.
You are doing that with doing no labor whatsoever. All you are doing is marketing deals, then you are going out and doing what you love. That’s tinkering on that private jet, being in the office and being available to do what you are super passionate about doing. Jose, I love your story. I love that you do something that you love. What you do is super cool. There’s a sexy element to it. I love the fact that you are kicking ass on the radio and you found a marketing channel that you like. The thing that should challenge most of us is the fact that you are playing the game of real estate the way that you want to play it.
I always tell people, “You’ve got to move from duplication to innovation.” When you get in duplication and the beginning is good, it’s okay. You don’t want to come in and recreate the wheel on everything. At some point, you have to transition from duplication to innovation or you are going to be following the herd and doing what everyone else is doing. Jose, I feel like you came in and said, “I’m going to innovate a model that best fits my life.” I have mad respect for that.
To the rest of you guys, if you are reading and you are like, “This radio thing is cool.” Here’s another guy that’s doing it his own way and already at five stations and got $65,000 coming in within the first few months.” You are like, “This might be a fit for me.” We would love for you to check it out and see if we can add value to you and to see if this channel is a great fit for you.
You can go to WholesalingInc.com/reiradio. Book a call, take a look and see if your market is open. Jose, I appreciate your time. It was super fun to do a show while you are sitting in the hangar where you work as well. Thanks for coming in, shaking things up, and getting us to think a little bit differently about how we might structure a real estate business. You are going against the majority, which I always applaud. I appreciate your time.
Thank you so much, Chris. It was my pleasure.
To the rest of you guys, we will catch you soon when we add more value. Talk to you later.
About Chris Arnold
Chris Arnold is a 15 year Real Estate veteran who has closed over 2500 single family real estate transactions in the DFW metroplex. Chris is the founder of multiple companies that are managed by a US virtual team, which allows Chris to run his organizations while living in Tulum, Mexico full time. His passion for leaders has led to the creation of Multipliers brotherhood which serves the top 5% of real estate entrepreneurs out of the US. Most recently Chris has launched his REI Radio coaching program. This program is designed to teach real estate investors the marketing stream that everyone knows about but NO ONE is doing!