More than an exposure to sales, you need tenacity if you want to make it big in real estate. Have the right people in your team, build rapport with your clients, and be more adept to the needs of distressed sellers to gain not just their trust but also more deals.
In today’s episode, Lucas Homan looks back on how his real estate business hit the ground running, utilizing both cold calling and PPC to generate leads. He also talks about 3 deals that he closed within the same week through resourcefulness and the mindset of getting things done.
Case Study – How a Wholesaling Newbie Closed 3 Deals in the Same Week!
I’m sitting down with Mr. Lucas Homan. He’s a part of the Rhino Tribe and made leaps and bounds and the amount of progress that him and his company have made is insane. We’re going to sit down with him. We’re going to break down the actual process that he’s going through to get fresh deals in and keep a healthy pipeline going on as he progresses through the closings, then negotiations and every single part of the process as he breaks it down. Let’s dive right into it. Lucas, thank you so much. I appreciate you stopping by and spending a little bit of time with us.
What is up?
It’s pretty interesting to see the type of background that you have. You have a background in sales, but you had no idea what real estate was, what the wholesaling was, and came into it cold turkey. You started crushing it all of a sudden. You committed to the process and started following the steps laid out in the overall business model. You’ve had some amazing stuff happen, including three deals closing within the same week and whatnot.
You had this opportunity and did a great job about teeing everything up and then laying out the pins and then knocking them down while keeping a healthy pipeline for deals to come. I want to dive into all of that stuff. I want to find out a little bit about your personal background and what led you into this whole real estate journey and talk about some deals. Let’s get cracking. What’s your background? You do begin in sales. You were doing that for a long time before you hit real estate.
I spent several years of my career in the power sports industry, working and managing motorcycle four-wheeler dealerships. I came up through the sales side and moved on to the management side. For the last several years, I ran dealerships as a general manager. I have had a pretty strong, heavy sales focus for the majority of my adult life.
How does that compare? For somebody who’s got a sales background, it hardly ever translates directly to different industries. Do you feel that’s helped you a bit? Could you have done the same stuff that you’re doing right now without it?
It’s possible to come into this industry without a sales background. For sure, 100%, no doubt in my mind that having a heavy sales background helped me, knowing the overall general sales process and building rapport with clients, listening to what they’re saying, and applying that. It helps to have a sales background, but not necessary.
Put in the effort, develop an entrepreneurial mindset, and get things done.
Having some type of exposure helps, but it’s one of those things that if you have the will, the commitment, and the tenacity to go after it, the opportunity is going to be there. Take your guys’ this case, for example. You jumped into it and you weren’t very active at the beginning. It took you guys a little bit to get more comfortable with the idea of running this as an actual business. I remember, right out of the gate, you weren’t the most active. However, you guys ramped it up. What happened through that process and what led to the first closings that you guys had?
You said it and hit the nail right on the head. We did start off slow, but we wanted to be very conscious that we’re in this to build a business, build a long-term business that can scale and be a well-oiled machine. Early on, we set that foundation, making sure we had the foundation in place, everything in place was our number one priority. Make sure we had processes in place before we started generating leads and trying to produce revenue. Once we felt comfortable and had everything in place, that’s when we started to ramp it up. When we ramped it up, we went 110%. We didn’t hold back at all.
I am your witness on that. You’re a negotiation machine. We’ve been on the phone and whatnot during the live calls and everything and talked about the deals you’re currently going through and the deals you have negotiated in the past. It’s that tenacity that you have to stick to it. Everything from following up on the leads inside the CRM to generating those new calls, you’ve covered every aspect of it. You’ve told me you get anxious whenever you feel like there’s a little gap or something’s not being handled. In the beginning, you almost have to be a little bit obsessed with the future that you’re trying to build.
It puts you into that mindset of getting things done and putting the effort in. Even if you have a 9:00 to 5:00, you have to take this and then build your own dream after hours. That’s one of the key things that you’ve been able to do. You lasered in focus on how you generate the leads. “After I get this moving, I’ll qualify and then I’ll negotiate them, then push them onto almost an assembly line type of process,” but you’re very adamant about sticking to each part of it. That’s been one of the most amazing things to see happen in your guys’ scenario. During this time, you went through a couple of different job roles and now you’re mainly acquisitions. You’re doing everything else as well at this point, but individually, your core focus, it’s on the acquisitions. What did your business look like before and what does it look like now?
We started with cold callers. Right from the get-go, they were generating leads daily. We set our parameters pretty wide. We did that to give me the swings on the phone and get more comfortable on the phone. Learn those conversations. Learn what works and what doesn’t. We were generating leads. We started to get a little bit of traction with a few of those leads, people that were genuinely interested in selling. A lot of people, especially with the market nowadays, are like, “I’ll take a cash offer.” They are a tire kicker, but we started generating some leads. I was in contact with some people that had some interest in selling and towards the end of the month, we started picking up traction with that. Fast forward to now, we’ve got three deals that have closed. We’ve got one more that’ll close and I got another deal under contract with a seller.
I want to touch on that because that’s one for the books. Before we bring that one up, you pretty much teed it up and ramped that up in a matter of about 60 days. That’s when the deals started coming in. Let’s do a little bit of a deal breakdown here. You had three that came in simultaneously and they all closed within the same week. Your first payday per se was three different transactions coming in at the same time. That’s epic. It doesn’t happen often. It’s a testimony to what it takes to commitment, to tenacity, to being in it with the intention of making a real business out of it. Where did the leads come from?
Two of the leads that we closed, they were cold call leads. Another one was a PPC lead and one that’ll close is a cold call lead. The one that I put under contract was a PPC lead.
What lists were are you marketing to?
On lists, we started just like you teach in the Rhino Tribe course. It’s your target market area. Find those top twenty most active zip codes and we started with the most active, pulled the list of I forget how many zip codes it was to get to the amount of data that we needed to send to our cold callers, to keep them busy for a 30-day period and then we moved onto the next zip codes after that. We’ve continued on with that method ever since with the cold callers.
It works. It’s a volume play. It used to be that you could get a lot more targeted with niches, lists, and stuff like that. There are a few types of lists out there that work well. They’re a little harder to get because there’s more work going into it. Think about it this way. Everybody’s going to sell at some point. Hardly ever anybody buys a house and stays with it for the rest of their lives. This is an investment, but they’ll move up, downsize, upsize, or do whatever they got to do. We have to be there. We got to be front of mind or top of mind whenever the choice to sell comes up.
You’re putting the reps in. You have to have the opportunity to take those swings. A cold calling is pretty much one of the best or top lead sources that you have. You’re also incorporating PPC, which is a little different, but it’s still high-quality stuff right there. Every time we come into a seller appointment or a situation, there’s always an issue and a solution. We have to come into every single deal with the mentality that we’re going to be able to solve a problem for that seller. Give us a quick little breakdown of the three scenarios and the situation on each one of them. What were you able to solve for those sellers?
On one of them was an older gentleman. He’s retired. His wife had been in poor health for a pretty significant period of time. He was not living in the house. He had let a family member live in the house and that family member did not take care of the house at all. They pretty much trashed the home and left a bunch of stuff. It bothered him to want to go back to the house with it in that condition, especially since his wife had passed away. He wanted to get out from underneath it. He wanted to move on with his life and get it done as soon as he could. That was his thing. He’s a great guy. I talked to him. He told me he’s going to make sure he keeps my number because he’s got another property that he’s probably going to want to sell here. He thanked me twenty times. It was a cool experience.
Whenever you come in and then add value to these transactions, they will exchange convenience for equity. They will do that and it’s the way it works. You come in and then genuinely solve the problem for somebody else. You end up with a win-win situation where they want to keep coming back to you. Now you’re the real estate guy. Whenever they think about selling something, it’s going to be off-market. It’s got to be cash. It’s going to be an investor. Even if they get 50 other direct mail pieces, calls, or they get bombarded by SMS and phone calls, you’re still going to be the guy.
I call it I got the guy syndrome. When somebody is in a group of their friends and they’re talking about real estate, I want somebody in that group to go, “I got a guy. Call him.”
At the beginning of your business, you have to be a little obsessed with the future that you’re trying to build.
That’s what it takes. It’s taking the time to sit there and find out the situation behind it, not just coming in and going straight for the throat with, “How much do you want to sell it for?” There is some finessing. There’s some conversational discovery that has to happen to come about with a solution and build that connection, that trust, and that politeness that a seller has got to have towards you to do business. People do business with people who they like and trust. It’s as simple as that. What about the other two?
The other two deals, both of those were out-of-state owners. They own them as rental properties. With one gentleman, his property management company had continued gradually raising the prices. For him, it wasn’t feasible. He was out of state. He had a few properties left that were in the state that he still owned and he was slowly trying to get rid of those. He was not your stereotypical motivated seller, but he wanted the ease and the simplicity of the transaction. He wanted to be able to get the price he wanted and have somebody else handle everything and that was it. We were able to do that. We came in, took care of everything 100%, communicated with him well, and we could lock that in and move that property for him.
The third one, again, was an out of state owner and had the property as a rental. He was getting rid of all his single-family residence and he was starting to invest in commercial property. He was looking to do a 1031 exchange with this property. Prior to us getting it under contract, he had gone under contract with one of the larger corporate national companies. He had been under contract with OfferUp and they were not able to move the property within the time period that they had said. They weren’t going to purchase it themselves for some reason. He got in contact with us. I assured him that I would find a buyer for it. We would make sure the 1031 exchange and everything got done. The exact same thing happened. We had good communication and a good rapport with the guy.
He’s a super busy guy during the day, but he said, “Text me anytime.” A lot of the communication was done by texting back and forth. It was like me and you texting back and forth. He texts me, “Hey man, dah, dah, dah,” and stuff like that. It was that communication and the ability to handle every step of the process so he didn’t have to worry about it. I was giving him that reassurance that I was not going to let it go. I was going to find a buyer for it.
I want to ask you about the 1031 exchange. For those who are not familiar with 1031 exchanges, it’s a more advanced strategy to push taxes back. Not to get around taxes or anything, but to defer them until you sell the next type of property. Instead of paying your taxes right away with capital gains, you apply them to the next purchase. You’ve got to buy another piece of real estate that’s similar to whatever you’re selling and then a 1031 exchange can happen and there are all kinds of intricacies that go along with that. Let me ask you this. He said he dropped the 1031 exchange thing on your lap. What did you do about it? Did you have previous experience on doing 1031 exchanges? How did you figure that part out?
He already identified a property. He had a group of partners. They were going and they were purchasing this commercial property. He knew what it was. He was more on a time crunch because to him, he wasted time having it under contract with the previous company. With the 1031, that’s a timeline there. You’ve got to identify a property within a certain amount of time and you’ve got to close on it within a certain amount of time also.
We did a shorter closing window. He wanted to do ten days. I told him that’s not possible to do a ten-day closing. I was able to get him to do a twenty-day closing. We closed in nineteen days. 1031 was setup. I notified when I sent the paperwork over to the title company, let the title company know he’s doing a 1031 and got them the info that they needed. I got that from the seller. That way, he didn’t have to worry about doing it and got it over to the title company.
That’s resourcefulness. You hear something like that and I’ve seen it in the past where people shy away. “I do not understand what that means. This is not for me. I’m not going to go forth with that deal.” It’s either going to be you or somebody else doing it. What happens if you don’t have all the resources? A lot of the times, you have to be resourceful and figure things out as they’re coming to you. It’s real estate. You’re never going to have two transactions that are the same.
I’ve been in this business for several years, and I don’t think I’ve ever had the same deal happen twice. It’s the reality of it. You have to be resourceful and it’s cool that you caught on into that 1031 issue. Once a 1031 is set up, laid out and the ball is rolling on that, it’s a matter of time before they lose that opportunity. They got to sell as fast as possible, whatever you have on your end. It’s not a money issue. It’s a time issue.
The big thing on this one was I had never done a 1031. In talking with the seller, trying to get it under contract and going back and forth over a couple of days, I called my title guy. It was a matter of having the right people on your team to be able to rely on. I’m like, “I’ve got this potential deal. He’s wanting to do a 1031. What do I need to do on my end to make this easier on him and on you?” He walked me through it. He said, “This is what I need. If you could get that, it saves time.” I called the customer back, and that was when I was able to close it and get them under contract. I said, “I can do this. We can close in this amount of days. Hopefully, it’s sooner, but at max, twenty days, and I need this, this, this, and this from you on the 1031. I’ll send that all over the title right now. That way, they’ve got it and they know upfront.” That was what allowed me to close it right then and there.
It’s the power of the power team. It’s part of the business model that you’ve got to have in place. Build your power team. We’d go through that in the first couple of weeks, but it’s important to have those types of relationships built out before you get a wrench thrown at the engine.
That’s what we were doing when everything was slow. We were making sure we had the right people on our team and building a power team.
Your results speak for themselves. We had three properties come in and then they closed during the first week. Now you have other stuff in the pipeline. You’re still looking pretty healthy. What was the take on those three properties for that one week? That was your first paycheck.
First payday for the company and on those three deals, in wholesaling fees, it was $27,000.
Don’t be afraid of making mistakes, especially if you’re starting a specific business venture.
That’s amazing for ramping it up in a period of 60 days, putting effort, time and then the tenacity that it takes to run an actual business. It’s amazing results. When you stack on top of that, you stack the fact that you do have a bunch of other stuff on the pipeline now. I’m excited to see what you guys are going to be creating. It’s coming in fast. I love it. At this point, you have pretty much the beginnings of a bootstrap business. Now you see how the pieces are working together. You’re not treating it as a side hustle. It’s music to my ears and you’re seeing results happen. What piece of advice would you give somebody who’s getting started, who’s relatively new to real estate investments, or has only done a couple of deals?
My biggest thing would be just take action. Do something. Take the next step. I had no clue how to do a deal, how to close a deal, how to finalize a deal, and everything but I figured it out on the way. We still are not scared to make mistakes. Our saying is, “We don’t know what we don’t know.” How do we figure out what to do? You got to try some stuff, make mistakes, and go, “Let’s don’t do that again. That worked pretty well. Let’s keep doing that.”
Take massive imperfect action. For us taking it slow in the beginning, building that foundation, having the right people in place, things like that, that has helped. Instead of taking off, going for the races and then trying to scramble, find title, find this person, find that person, “My contract is not set up how it should be.” We went through and did all those things. That way, when we hit the ground, we could hit the ground running and not have to worry about the details not being set up.
Massive imperfect action is the key to anything we do, whether it’s wholesaling, school, education, or whatever. It’s taking the steps and the actions. That’s what’s going to lead you there. The saying was, “Knowledge is power.” I disagree with that. I think applied knowledge is power. Knowledge is just information until you apply it and do something with it, then it becomes powerful. That’s exactly what you’re doing. You have this audacity of coming after sellers, too. Your closing style, it’s out there. It’s pretty aggressive. You’re there to get the deal and you have that no BS conversation whenever you sit down with sellers.
Give them your true self. It’s genuine. You texted me about this one deal that you went through. I have to bring it up because 99.99999% of the people out there would have stopped going after that seller, but you stayed there and somehow managed to get it under contract. Walk me through that real quick. That’s something that has to be talked about.
A gentleman called in. He’d been on our website. I qualified the lead and everything. He set an appointment for the next day. He’s a PPC lead hunter in a little bit more of a rural area. We’re here in Texas, but it’s out a little bit more of a rural area and it’s in a neighborhood, but this neighborhood is out in the country. It’s a couple of miles outside of a small town. He told me, “Don’t come here trying to lowball me, this and that. You try to shoot me some lowball offer and I’m going to chase you off the property with a shotgun.” We laughed about it.
I showed up. The entire property’s fenced and it’s gated. He’s got the gate locks. He met me out at the gate and he let me in. I went through, walked the house, walked around the outside and checked out the property. When I went inside, initially, when I first got there, he had a .45 pistol sitting on the nightstand, which is no big deal. That’s Texas. We like our guns. I’m a gun lover. When it came down to the negotiation, I opened the negotiation with a low anchor. When I came in with the low anchor, you should set it and then shut up, like in any negotiation. Wait for them to talk first. His first reaction was to snap his head over and look at me and he grabbed that .45 and put it on his lap.
It was a little bit interesting. I do carry a gun a lot of times. With what he had said and the location, I chose to have a gun on me at the time. When he grabbed his pistol, he looked at me and I asked him, “Do I need to get my .40 Cal out from inside of my waistband?” At that time, he smiled and put the .45 back on the table and said, “No, but you’re going to have to raise that off for a little bit.” From that point on, it was great. He told me probably ten times, “I like you. We’re getting along great.” I was able to get it under contract.
That can either be scary or instant rapport. It’s not a strategy that’s recommended, but you come across some crazy stuff sometimes with sellers, and you still got that property under contract. Now, that’s in your pipeline.
We were showing each other pictures of different guns and stuff we had and after that, we had a good time. We’re best buddies now.
If that’s not tenacity or commitment to you getting the deal done, I don’t know what is. As a matter of fact, you deserve another bell. That’s a bell ringer right there. It’s amazing to see the journey you’re going through and the leaps and bounds you’re taking in your business and all this stuff that’s coming in to change the way you look at things, the way you come up. You are approaching your actual business now getting the results that you’re getting. It’s insane. If somebody wants to get ahold of you, what’s the best way to reach out? I know you have a website as well.
Thank you so much for sharing that. It’s been refreshing, scary and all things in the same conversation. I’ll talk to you soon. There you have it. If you guys are interested in finding out a little more about the Wholesaling Business Blueprint, which is happening right now, go to our website at WholesalingInc.com/WBB, and then talk to one of our guys. See if that makes sense. If it makes sense, I look forward to working with you. Until then, stay focused. You got this.
About Rafael Cortez
Born on January, 30th 1983 and raised Yuma AZ Rafael Cortez is a second generation entrepreneur. He began his first job at 14 at a local Grocery Store. From 15 to 18 years of age his work experience included everything from hard labor in construction to supervisory positions in retail and customer service while attending the Fire Science Program at Arizona Western College. At the age of 19 he became one of the youngest Firefighters in Yuma County, where he spent the next 5 years of his professional career.