Posted on: June 30, 2021

What if there is a way where you can attain financial freedom doing real estate and still keep the work that you love.

In today’s episode, Jose Varela, a private jet mechanic, introduces a real estate strategy that gives him flexibility and a stream of income with minimal effort. He also talks about the convenience of radio as a marketing channel and earning $65,000 deals in just four and a half months.

Key Takeaways

  • Jose’s motivation for Wholesaling
  • What is a KJV model
  • Finding the right JV partner
  • Choosing the right marketing channel that fits your lifestyle
  • Radio over cold calling

 

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Episode Transcription

Chris Arnold:
Welcome to the Wholesaling Inc. podcast. I’m your host, Chris Arnold, as always excited that you guys are with us today. This is going to be a fun talk. There’s some interesting layers here that I’ve not found in some of the guests that I’ve interviewed so far. And so, I’m really excited to introduce you guys to Jose Varela. This is a real estate investor that’s been in the game for a few years. We’re going to talk about a couple of things here. First of all, what he does for a living, which is super cool. I think it’s one of those things that’s just kind of sexy. If you’re watching the video, we’ll give you a sneak peek of… He’ll be able to actually show it to you, so you’ll be able to see that on YouTube. But also this concept of like, “Well, what if I’m working a nine-to-five, 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’re not trying to scale this thing? You’re just trying to create some income.
The way that Jose has structured how he’s doing his deals, I got to be honest with you, I haven’t really come across someone that’s focused on this model. So I think if you hear it, you might be like, “That might be a fit for me.” Because 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. Of course, he’s been utilizing radio, so already on five stations after just being in REI radio for four months. So that should tell you something if someone already scales up to five stations. So, we’re going to touch a little bit on each of these things today. So Jose, what’s up, buddy? Welcome to the show. Excited to have you, man.

Jose Varela:
What’s up, Chris? Excited to be here.

Chris Arnold:
Yeah. So, 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 income? I was like, “Are you’re doing it for family security, long-term legacy?” You said, “Well, actually, I had a situation that came up that really 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.” So, let’s start with the why. What happened in 2016 for you?

Jose Varela:
Yeah. Back in 2016, there was the gentleman that I worked for sold this company, and then he sold it in 2013. In 2016, it was an oil company, oil market weren’t doing too well. The new people that bought the company, they decided that they didn’t need the department where I was working. And so, they just hacked everybody. I thought I was at a pretty secure place. The guy that I worked for, which I still do today, he’s a great guy, but when he sold it, there was new ownership and they thought differently than he did. So they just hacked it at the root there. They just got rid of all of us. I just didn’t like that somebody in some high rise, wherever they were sitting, decided to just give us all the boot, and then my family’s financial security was really gone by somebody’s decision over there. So anyways, I was [crosstalk 00:04:20].

Chris Arnold:
You didn’t even know. Some person and some corporate office decided to make some decision and that trickled all the way down. You sat back and go, “Wow, that person’s decision just affected my livelihood. I’m not going to let that happen again.” Right? You step back and that was an aha moment for you, right?

Jose Varela:
Correct. Yeah. Actually, I told myself, “I will never put myself in this spot again. If where I work goes away, I got to be okay to just step into something else.”

Chris Arnold:
Your mindset was diversify to have a stream of income, doing what you love to do, which we’ll talk about, 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. So that was a defining moment for you, right? Now, you’re a real estate investor that’s doing deals in a few cities, right? So corporates, Beaumont, Houston, et cetera, but let’s get to what you do for a living because this is cool. So, tell the audience what you do and actually where you’re at right now as we’re talking.

Jose Varela:
Sure. So, I work for an individual that has his own private jet for him and his family. And so, I’m charged with taking care of the airplane in regards to maintenance and some of the legalities that come from the FAA, scheduling the maintenance, budgets for the maintenance, just things related to maintenance on his airplane.

Chris Arnold:
That’s pretty cool. I mean, to be able to be around a private jet, to be able to focus, that’s kind of like your baby, right? That’s your jet. That family expects you to take care of it to ensure safety. Again, I know you’re listening. If you’re on iTunes, you didn’t see it, but he literally just took his camera, scrolled over out the window and you can see the private jet sitting right there in the hanger. So I’m curious, what kind of a jet is it for those that might be like, “I love jets and I follow that type of stuff”? What type of private jet is it?

Jose Varela:
The one right outside the window is a Falcon 50, but the one that he has, so we’re off to the side, that’s a Citation Latitude.

Chris Arnold:
Nice. Nice. And so, how long have you been in the arena of like, “I love being a mechanic and like working on private jets and so forth”? When did you find out that that’s your passion, that’s your thing?

Jose Varela:
Well, I’m from South Texas. When I was 15, 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 like 18 or 19. He said, “Man, he didn’t want nothing to do with it.” I just 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. And then, 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, really because just I wasn’t around that stuff. So yeah, ever since around 15, I guess 15, 16.

Chris Arnold:
Yeah. So, you’ve been doing this a long time. Here’s what I love that you said, you love what you do. You’re not the person that maybe I typically interview that’s doing a nine-to-five, where they go, “I’m trying to get out of the rat race.” You wake up every day and you’re like, “I really have a lot of enjoyment into the career that I poured myself into.” Right?

Jose Varela:
Yeah. I’ve been doing it basically for 20 years. I absolutely work for the best family in Houston. I love the guys that I’ve worked for. They treat us very good in every way, pay, all of it. I just love it. I don’t have no intentions of leaving here, unless they fire me, then I’ll go to them.

Chris Arnold:
Yeah. So I’m just 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?

Jose Varela:
I don’t know a perk. No. If one of the benefits is if the airplane is away, since I’m only charged with one airplane, then I come to the office to get out of the house, but the airplane is gone, right? So there’s nothing for me to do on the airplane. If the airplane’s here, I make sure everything’s good. The pilot didn’t give any squawks. Then, I just turn it over and make sure it’s ready for the next flight. And then I just wait till the next flight is here.

Chris Arnold:
You have flexibility with what you do.

Jose Varela:
Real.

Chris Arnold:
That’s the perk and the benefit. It’s not like you show up every day and you’re constantly working on this plane. Hence, the fact that you’ve got some time to pick up this side hustle wholesale. So, you’ve got some freedom in what you do. So, that’s kind of cool. Not only do you love what you do, 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’re doing it in a different way. 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, dispoing. So what you do is you just focus on the marketing side and then you refer these leads out to some key JV investors that you have relationships with, and then you just do a 50/50 split. Is that right?

Jose Varela:
Yeah, that’s exactly right. As the calls come in from radio, I vet them. If they’re pretty much hotter… If they need follow up, I’ll do the follow-up, but if they’re ready to go, I just send them to my daily partners. They go out, meet with the seller, lock it up, find a buyer, sell it. And then at the title company, they just distribute the assignment feed between the bottles.

Chris Arnold:
So, besides the obvious reason that this gives you a lot more time, because you’re not out there converting deals, number two, it helps you to be really focused at getting good at one thing and that’s just marketing, because 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 just going to be fine doing 50/50 JVs all day and I’ll 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?

Jose Varela:
In reality, it’s the freedom of the schedule because here, if a flight pops up right now, then I can 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. Anywhere in Houston really 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, then I can’t be here and [crosstalk 00:11:07].

Chris Arnold:
Gotcha. Because you’re a little bit on call, right? You might not sure when the family needs to say, “Hey, gear the jet up. We’re heading to this place or that way.” So, you can’t be two hours away to do that. So, let’s break this structure down, because I think some people might be hearing this and going, “This is interesting.” So first of all, how do you find the right JV partner, right? There’s 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?

Jose Varela:
I went on Facebook groups. In the markets that I’m in in Houston, I saw who was doing deals pretty regularly. And then I reached out several of them, talk. There were some that I connected with, some that I didn’t. Then, the ones that are connected the best, I took the conversation to the next thing and say, “Hey, look, this is what I’m doing in your market. I’d like to see if you’d be interested in JV. Here’s how I see it working.” And they’re like, “Yeah, man.” They agreed. I agreed. And then I tested with a… Send a leader to it and make sure that things being followed up and doing their process. There’s a little bit of trust in the beginning because it’s obviously somebody you don’t know, but you got to trust people too. Until they prove me that I can’t trust them, I’m going to trust them.

Chris Arnold:
It makes sense. Now, how long did it take you to find the right ones? Because it sounds like, again, you go on Facebook. You’re looking for people that are seasoned. Again, you can tell a lot about an investor informs and what questions they’re asking. So I liked that that’s a good level one prequalification, right? So once you started these conversations and you brought someone, did you find you got it right the first time or did you make a couple mistakes and have to replace some until you got the ones that you wanted?

Jose Varela:
Darwin Corpuz, I love Darwin. I made the right decision right off the bat. He’s been great. I did that with agents too. But then in Beaumont, I’ve had to go through a couple and just find the one that really meshes, try it a little bit. And then if the conversations go south or you get the feeling they’re not following up on something, then I just leave it alone. I don’t say nothing more. I just go find another one.

Chris Arnold:
That’s interesting. So, what have you found… Let’s say someone is listening to this and going, “I might actually 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 couple of characteristics that like… 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 to do this JV model with?

Jose Varela:
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 just text him really quick, “Hey, man. What do you think about this? Where would we need to be?” He’s very responsive. And then along with the availability, the back half of that is the updates on, “Hey, we went with them. We met with the seller. We locked it up. It’s gone to title.” And then, obviously, when things go to title, [crosstalk 00:14:20].

Chris Arnold:
So, availability and good communication, right? Those are the two key pieces. Now, when you reached out, were they super interested? 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?

Jose Varela:
Darwin Corpuz, he was all about it. He said, “Oh yeah, man, I do that all the time. This is how we do it.” It’s a perfect. That’s how I see it working. And so, he was already doing some of that with some other wholesalers there in the area. The one over here in Beaumont, it was a struggle like, “So you want 50% for me to go out and lock it up and do all the work?” I’m like, “Yeah.” He’s like, “Are you crazy?” “So, do you want to pay for half of the marketing?” And he’s like, “Oh, I don’t want to do that.”

Chris Arnold:
It’s a great objection handling, by the way. “You don’t pay for half of the marketing. No, I’ll do the 50/50 on that as well.” And so, then you have structured this to be a 50/50 split. So, you cover the marketing costs. You provide the lead. You do a little bit of pre-call and 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?

Jose Varela:
Yeah. I think that’s most of it. Obviously, the number one thing for me, the way I have so much piece of it is because I really believe I’ve got the right people there and they can communicate well. I think without that, I’d be a little anxious to see if things can actually happen to where they need to. But if you just get that one piece right, then I think you’ll be at peace.

Chris Arnold:
Right. So if you’re a newer, I want to explain something a little bit different. There’s the concept of co-wholesaling and this isn’t really co-wholesaling. Co-wholesaling is, “Hey, 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 back end and I’m going to dispo that property.” So, that’s really co-wholesaling. It maybe might hurt like the key lead model, AstroFlipping, et cetera. This really isn’t co-wholesaling. This is a guy that fundamentally says, “I’m just going to be the chief marketing officer of the front end. I’m not even going to get it under contract. I’m just going to make sure it’s a good lead and I’m going to pass it along.” And then at that point, Jose is done, right?
What he’s saying is, “As long as they’re accessible and more importantly, I don’t have to chase them because they’re calling me constantly and updating.” For the most part, he’s just waiting for his check to come in. I love the split, Jose, that you negotiate on that. 50/50 is great for the fact that you’re paying for the marketing and then they are pretty much doing all of the sweat work that’s involved in that. So, I think it’s a really cool model. Someone listening, like I’m thinking to myself, maybe it’s a good hybrid model. Maybe in your town, you’re doing your own deals, but you want to go to another market virtually, whatever that looks like and you’re like, “I don’t necessarily want to hire an acquisition manager and manage all of that and so forth.” You could potentially do just a little bit of a JV relationship like this.
But I think, Jose, it’s cool that you just don’t close any of the deals. You just pass the lead along and take the 50/50 split. So I love it, super interesting and I applaud you. This is why I love real estate. It’s just 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 really got to protect my time because my job and what I do requires me to be a little bit more on call.”
So I feel like you took your life and what you wanted, and then you built the business around it to fit that. I think most people do it the other way. They bend their lives to fit whatever model they hear about, or “Hey, I want to be like this person.” And so, 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, and either you’re going to serve your business or your business is going to serve you. The way you’ve structured this is your business to serving your lifestyle, which I think is amazing. So, very cool.

Jose Varela:
Thanks. Thank you, Chris.

Chris Arnold:
Hats off to you. Super awesome. So, let’s talk about radio, right? So, you’ve been advertising now on radio for four months. You’re already on five radio stations, so you have snowballed this thing. So the first question, I know everyone’s wondering is how much is your monthly spend on five radio stations right now? You take all those stations, put them together, what’s your total monthly spend?

Jose Varela:
1,800. $1,800.

Chris Arnold:
$1,800 for five stations. So again, if you guys understand what we show and teach in radio, we’re showing how to buy radio 25 cents on the dollar. So, 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, right?

Jose Varela:
Yes.

Chris Arnold:
So, talk a little bit about that journey. Cold calling, you transitioned to radio. Why did all of this happen? What was the evolution here?

Jose Varela:
The thing about cold calling there towards the end of the year, it was, man, just buying the list, seeing the leads that are coming in are good leads, are real leads, for me, it just was too time-consuming. And then, man, the data is super expensive and you got to be buying it all. For me, I didn’t like it. I just did not enjoy it.

Chris Arnold:
And that’s what I tell everyone that’s listening, right? It’s like 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, “Man, this isn’t a fit for me.” So you started looking for something else. So now, there’s 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?

Jose Varela:
I chose radio because actually when I heard the podcast, we were in Disney World and you put a podcast on about your five mentors. I think it was something like that. You said you had a mentor for… I think it was your marriage, and that is super important. I mean, we were on vacation and I told my wife, I said, “Look, I think I’m going to buy into this. This guy is talking about how he ask mentors and he’s a mentor. He has one for marriage.” And that is really, truly very important to me. Just because of that, I’m going to go into this. I was already thinking of doing something different. That’s what made me buy 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. I don’t know. You don’t think something for a reason.

Chris Arnold:
Honest answer. Honest answer. So now that you’ve been doing radio, what are a couple characteristics that you are really enjoying about it versus cold calling, which is again, we’re comparing that because that’s what you were doing before. But what are you liking about radio now from a quality characteristic standpoint?

Jose Varela:
Okay. I love it because the people that are calling in, first, I don’t have to manage anything, other than I just make sure the ads are running when they’re supposed to be running and-

Chris Arnold:
So, it’s low maintenance. It’s kind of 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.

Jose Varela:
And then the second thing is the people that are calling, they’re actually wanting to talk to you. My experience has been where I almost don’t have to vet them very much. When they’ve called, they start spilling their story and telling me what they want for the property. And then I 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’re just telling me their story.

Chris Arnold:
Yeah. So, you’re finding that the quality of lead that’s coming via radio is a lot higher, and more importantly, they really want to talk to you.

Jose Varela:
Yeah. Yeah.

Chris Arnold:
Yeah. I do find there’s two different starting points. If you use a spam-based approach, like text blasting or RVMing, that’s a long journey to get to a place where someone begins to open up and know you like he trust you. But you’re right, radio is like… I’ll use this analogy. It’s like being someone that cuts hair. When you just sit down in the chair, you just open up and just trust that person because you know what they do. That’s kind of how radio is. People call in and they’re like, “I know I can trust this person because people that are on the radio are seem to be credible and they’re seem to be experts in what they do.” And so, they call in and they just get right to the point like, “I already know you are good because radio has vetted you. You wouldn’t be on radio if you didn’t know what you’re doing.” So, you bypass the vetting process and you just get right into their story and their motivation for selling. Is that what you’re finding?

Jose Varela:
That’s exactly right. Some of the people are actually surprised that I’m the one answering the phone and just [inaudible 00:23:43]. I don’t know. I’m like, “No, that’s me.”

Chris Arnold:
Yeah. You know what’s funny, you’re probably about the fourth or fifth person that said that on a podcast because you are elevated and have celebrity status. So people do not expect the person recording the ad to answer the phone, right? I don’t care what company we’re 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 answer the phone. That’s just the power of mass media. So you’re right, they’re surprised that they get to talk to you, which in my opinion, then helps with the conversion, right? Because they’re like, “I’m talking to the head honcho here. This is a person that runs the company. So if anyone’s 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.” So, those are some great qualities, man, to point out about radio. And so, some of the ones that I really like as well.
Now, let’s get down to the numbers because I know that that’s what people care about the most. So, let’s talk about what’s been accomplished. So far, on the books, you’ve already closed out two transactions and that’s a total of about, let’s see, if I add that together, $25,800 already closed out on the books. So again, if we’re doing the math on your return right there over four months, again, super solid return, but you already have two more deals that you’ve already dispoed just waiting to close, and those are a combined two deals of another $40,000, right? So fundamentally, you’re 40 plus the… Again, I’m just going to put that at 25. So you’re fundamentally at 40, 50, $65,000 so far when these next two deals close over the next week or two in the first four months. How are you feeling about that?

Jose Varela:
Man, I am loving that, Chris. I’m loving that.

Chris Arnold:
That’s awesome, man. You’re doing that with doing no labor whatsoever. All you’re doing is marketing deals, and then you’re going out and doing what you love and that’s tinkering on that private jet and just being in the office and being available to do what you’re super passionate about doing. So, Jose, I love your story. I love that you do something that you love. I think it’s super cool what you do. There’s a sexy element to it. I love the fact that you’re kicking ass on radio and you found a marketing channel that you like. I think the thing that should challenge most of us today is the fact that you’re 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, right? 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, but at some point, you have to transition from duplication to innovation or you’re just going to be following the herd and doing what everyone else is doing. And so, Jose, I feel like you came in and said, “I’m going to innovate a model that best fits my life.” And so, man, just mad respect for that. So, to the rest of you guys, if you’re listening and you’re like-

Jose Varela:
Thank you.

Chris Arnold:
… “Man, this radio thing, pretty 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 four, four and a half months. You’re like, “Man, I think this might be a fit for me.” We’d 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. So, you can go to wholesalinginc.com/REIradio. Again, that’s wholesalinginc.com/REIradio. Book a call and take a look and see if your market’s open. So Jose, brother, I appreciate your time today. Super fun to do a podcast while you’re actually sitting in the hangar where you work as well. Thanks for coming in and shaking things up today and getting us to think a little bit differently about how we might structure a real estate business. So, it’s definitely you’re going against the majority, which I always applaud, so I appreciate your time.

Jose Varela:
Thank you so much, Chris. It was my pleasure. Thank you.

Chris Arnold:
Awesome. To the rest of you guys, we will catch you soon when we add more value. Talk to you later.

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