Posted on: July 07, 2021
WI 726 | Wholesaling Business Blueprint

 

In this episode, Rafael Cortez is joined by his Wholesaling Business Blueprint (WBB) students, Shelly and Shannon. Shannon has been doing real estate since 2007 but only saw success after taking Brent Daniels’ and Rafael’s courses and working with Shelly as a team. Now, they do real estate full-time and have a couple of contracts in the works!

Shelly breaks down the $23,000 deal that they just recently closed. They also talk about the importance of building a good relationship with sellers and how that led them to more deals, offering advice for people who are nervous about reaching out to potential clients.

The Secret Behind This Couples Success in One of the Most Competitive Markets in the Country

Episode Transcription

I’m pleased to say that I’m sitting down with two of our students. They have been crushing it and this is Shannon and Shelly. They’re out of Central Valley in California. They’re an absolute example of commitment, tenacity and getting into it can deliver for you in terms of results. I’ve seen them grow from deal here and there to a solid streamflow of pipeline stuff. The whole experience of watching them and their business grow has been amazing to me. What’s up, guys? Thank you for taking the time and being here.

Rafael, what’s up?

We started back in the Wholesaling Business Blueprint. You guys have been closing deals. You guys have been steady and intentionally growing and learning the whole process of building a business. Give us a little bit of background on how you got started and why you decided to jump into wholesaling and real estate investments. How’d you get across those fears and stuff?

It’s a long story, but long story short, when I got out of the military, wanting to get into real estate investing, I read a bunch of books on it and I thought I knew what I was doing. Back then, I was doing it the hard way. I was driving for dollars, but with a pen and paper and going down to the courthouse with my brother or my friends, doing it the hard way. I ran across a couple of deals and I got screwed on a couple of deals doing it that way. After that, I would get the names and addresses back to skip trace. It was like $1 or something to skip trace, which was expensive. It wasn’t a business I could do at the time. I would do it every once in a while to make a little bit of money if I could, but I never made it a business.

In 2019 or so, I had a buddy come up to me and he was like, “Have you heard of this guy called Brent Daniels and Wholesaling Inc.?” “No, I don’t know anything about it.” He started showing me some YouTube videos of Brent Daniels and it blew my mind. I was amazed at all the technology of all the resources that we now have. I was thinking at that time, “I got to find this guy who reached out to Brent.” I reached out to Wholesaling Inc. I got started with Brent probably about the end of 2019 and then COVID happened. I was still working full-time through Brett’s program. I was able to at least still do five deals. During COVID, still working full-time, doing everything else. It felt like a hustle.

After that, I was like, “I need to make this a business. I know I can make it a business.” I reached out to Wholesaling Inc. again and they’re like, “If you want to make it automated systems and everything, Rafael’s the guy to talk to.” We were like, “We’re on.” We gave you a call and after the first call, we’re like, “This guy is brilliant. We got to work with him.” That’s where we’re at and how we’d been there.

It’s been an awesome journey to spend time with you guys and watch your development as you pivot from the hustle and mainly your thought process, going from the hustling to the business development side of things. I remember you started hitting me with questions on creative financing right out of the gate and that sort of thing. You jumped into that. You were ready for that stuff to come along and then tap into that whole new area of doing business. There are different ways of locking deals and you guys were good about going to town on that right out of the gate. I love that. You have been going through the process. When did you get out of the military?

It was a long time ago, in 2007, but I’ve been trying to do real estate since then, off and on.

It’s a process of cutting the learning curve and doing all that stuff, but now you’re actively doing deals and hyper-focused in the Central Valley in California. You have a couple of stuff in the pipeline, which is pretty exciting, but you closed a few deals. I want you to pick one and then tell me about it. How did you get the lead? How did you have that conversation? Break it down.

We closed a deal for $23,000. That’s the biggest one so far. My average deal before, I think out of all of them, it was like $7,000. That’s all I was used to. I was like, “If I can make $10,000, that’s great.” Once I started working with you, it was like, “No, we can make way more than that.” There’s a calculator and the way you explain how to present the offers to the buyer. Our spreads have shot out the roof. We have a deal under contract in escrow. It should be closing and that was for $21,000 and then we have a deal we got that should be $24,000.

You have another $45,000 set to close and you just closed $23,000? This is one thing that happens. I think we lose a lot of people in the initial phase of it because you start stacking the lead follow-ups, the conversations with the sellers. It hardly ever happens where you start closing a bunch of deals right out of the gate within the first few weeks. What does happen is you start having a lot of conversations real quick and start setting up your follow-ups, and then, “I’m going to push this guy out in two weeks. I’m going to push this guy out in three weeks.” The next thing you know, you have a bunch of people that you’ve already talked to during your follow-up and now you’re building that relationship, which at the end of the day, that’s what gets you through the door.

Continue growing and learning the whole process of building a business.

There are 1,000 other people making offers and trying to figure out how to work the wholesale side of things, but if you’re able to build a relationship with that person, you start stacking the deck. I love that effect because usually, when people get started, you stick with it for long enough you’re going to have enough things and then the deals start popping. Why? It’s not that they happened last week. It’s you’ve been working on those for the last few months, but now you have the momentum.

You have that stuff that you were working on and then you have the stuff that you’re working on now, which is going to close in the next 30 days and whatnot. That’s a beautiful thing about getting into it and getting into that groove where you start stacking the deal. You have a couple of deals in the pipeline. Tell me about that $23,000 deal that you closed and how’d you get that lead?

This is Shelly’s deal with her first deal closing. I’ll let her talk about it.

Shannon always did it on his own and then I took an interest in it a little bit here and there.

He’s contaminating your brain with wholesaling stuff. Is that what that means?

It was intriguing to me once I took an interest in it. I was like, “I’m going to go along the process with Rafael with you.” We decided it would be in our best interest that I focus full-time on it. That’s what I did. I started driving for dollars. Where this deal came from was driving for dollars. We’re committed to it. We enjoy doing it together. We go have breakfast. We make a whole thing of it. Driving for dollars and cold calling, I was doing all of our cold calling and this deal came from a lady. I called her and she texted me back because she was in her office at work. All of the details came through text messages. We set up a call that evening. It was for my first deal. It was straightforward and I know it doesn’t always go like that, but there were many things before that with other deals where you think something’s going to happen. It doesn’t and you want to give up.

I knew everything. Shannon told me, “Keep going.” It was a numbers game. This one did come through and it was straightforward. We had a call that evening. The next day I made her an offer. I ran the comps and made her an offer for, I believe, $139,000. She counted at $150,000 and then within a week. We settled at $142,000. Shannon worked a long time on developing a buyers list. When we sent this out to the buyers, in twenty minutes, we had an offer for $165,000. It was a smoking deal. The seller had inherited the property. It was rundown. She didn’t want to deal with tenants. She didn’t even want to talk and have a conversation with tenants. The key, and something that I’ve been good at and it goes to my background, is I love dealing with sellers and Shannon’s great at dealing with buyers. Together, we’ve been able to marry those things. It’s worked out well.

We had clear communication with the seller. Everything went seamlessly. We had a little hiccup with the escrow company and we transitioned to another escrow company that we got through a great referral. They’ve been amazing and now we’re sending everything to them. Knowing and having a good relationship with your escrow company as well is important, but it was a lot of falling down. A lot of guesses that fell through and people were ghosting me. Everything’s compounded these months of cold calls and follow-up, and now things are starting to pop off and stack up. It’s exciting. Hang in there and don’t give up. A lot of noes, but you were finding yourself and you get better. I used to get so nervous in those conversations, and I would probably spend half a day rehearsing what I was going to say to somebody.

They would ask you something totally different and you’re like, “I wasn’t ready for that.” There goes half a day. It’s $23,000 out of driving for dollars. Driving by a property, looking at some distress on it, and then taking the action of reaching out to them. In this case, you did it by text messaging.

It was standard text. It wasn’t like a mass text or anything.

I had cold-called her and sent the text. It’s strange and everything transitioned through there. Personalization and making them feel comfortable is important.

WI 726 | Wholesaling Business Blueprint

Wholesaling Business Blueprint: Have follow-up attempts so you could establish a conversation with the sellers.

 

What we do when we do our cold calling, these are hand-picked lists. If we don’t get in contact with them after we leave a message, we usually send a text from our personal number to their personal number, but it’s only to a hand-picked list.

When we’re driving for dollars, a lot of them go into the automated system and to a lot of them, we’re like, “We need to look that one up and we need to call that one personally.”

Build out that relationship. That’s what it comes down to. It keeps saying the same thing. It’s almost redundant, but you have to connect with people on a one-to-one basis. It’s the old adage that people who will sell and do business with you like and trust you. You can’t build trust if you don’t have a connection in place first and sometimes moving too fast will break that trust. Moving too slow will break that trust. You have to know how to navigate the whole seller relationship.

This is sensitive stuff. They’re not selling shoes. It’s a property. When they make it over to being a prospect, we have that one-to-one connection. If we can’t get ahold of them, we’ll send a text. If we have an email, we’ll follow up with an email. We hit them three times on that same follow-up attempt. It works great. By that point, you already have an established conversation with them. You can text back and forth and then do your thing.

One of the questions that I get quite often is, “When is it okay to follow up? When is it okay not to follow up? When do I stop?” You only stop if they say they sold the property or get me off your list. Other than that, you’re just going to taper the amount of follow-up based on your relationship with them. If they say follow up in two weeks, we usually call them back in one week and whatnot. We always ask for permission for that next follow-up call. That’s huge. What you’re doing is perfect.

Something I’ve learned that might be helpful to other people beginning is you said not to make the offer too quick and that was a learning curve because I was always like, “They’re in. They want it.” Shannon would be like, “Slow down.” Just because they gave you the number they want and you know you can be there, you still got to travel lightly because it will scare people off. I did that.

I have the same conversation. They’re on the phone and they gave her a number. I’m like, “Slow down a little bit. Let it marinate a little bit.”

What you get is sellers’ remorse right away. You’re thinking, “I could have gotten more,” then they start getting hesitant. You don’t have a signed contract yet. You always do a little bit of pushback. It’s negotiation 101. I remember early on, Shannon was having an issue with the offers. You were talking about the offers and then you would drop the offer. One of the things that we always say is to drop the offer and then stay quiet. It’s one of the standing rules and then wait for a response because that’s your anchoring, especially if you’re anchoring low. Sometimes that can be super awkward. That moment feels like it’s lasting 100 years, but it’s important. It’s imperative because if you drop the offer and then backpedal by yourself before they even say anything, you shot yourself in the foot. “Shannon, stop talking after you drop the offer.”

I’m so proud of you, guys. You guys have been crushing it. I bring it back to the commitment, the tenacity to stay in it, especially if you’re doing it as a team. Sometimes that can be somewhat difficult. Your guys’ approach is complete transparency in everything that we’re doing in wholesaling and then within the business. That’s working great. How did you negotiate the property with the seller on this $23,000 deal?

She was an absent landlord. She had inherited the property and they were long-term renters for over a decade. She didn’t want any confrontation with them. She didn’t want to speak to them and she had zero interest in it. She didn’t want to work on the property. She didn’t want to deal with the tenants. We solved that problem for her. She had an issue and we solved it. She didn’t want the property. She didn’t want to raise the rent. She didn’t want to have conversations. She’s like, “Can you guys do all of that?” We’re like, “Yes.” For $23,000, we will do that for her.

We reached out to the tenants because of what she was saying that they would be a problem, but when we talked, they’re like, “Come on in or set it up for a day.” It took a little bit of scheduling, but they were okay with everything.

In the real estate business, don’t make the offer too quick. You still have to take it lightly because it will scare people off.

From there, it’s always funny because I watched Shannon closed deals in the past and people are always like, “Thank you so much for taking my money.” She’s like, “Thank you so much.” We’re like, “You’re welcome.”

It’s almost hard to believe, but trust me, those $23,000 that you guys got in your end, that value is there for that seller. There’s something that equates to that amount on their side, not dealing with distress. Maybe she’s retired and has a steady check coming in. She couldn’t care less for another $20,000. I’ll speak for myself because this was my mindset, too, at the beginning when I first got started. I was thinking the money was the thing. The money matters, the offer, the amount that they want, that’s their biggest problem. I was almost biased to the number that I was going to offer and thinking, “They’re never going to take that. I’m never going to be able to make this much.” The problem is different for every seller. That’s the reality of things.

Breaking away from that mindset where the money and the amount of the offer is the main thing, it’s very important because that allows you to see below the blank and see what the real issues are. Granted, for a lot of people, that’s going to be their thing. “The most I can get, that’s why I sell to.” Some other people are going to be better off selling to somebody because they’re going to deal with the conversation. They’re going to kick their niece out of the house and they don’t want to have that awkward moment or break up in the family. They don’t know how to deal with the probate process or how to get guidance. They don’t want to deal with attorneys and stuff like that. You can come in and play that role for them and then get checks of $23,000 from the pipe.

Almost every situation you said is something we’re dealing with and other transactions we have going on. It’s about figuring out why because you get, “If the offer’s right,” a million times. Those rarely are going to work out, but when you can talk to people and figure out their issue, the money isn’t the issue.

Most of the deals that we’ve closed, most of the issue was that they didn’t want to talk to the tenants.

People hate having tough conversations.

We are going to talk to their tenants for them. We’re like, “We’ll have that conversation. No problem.”

Think about it this way. If they feel comfortable having a conversation with you and it’s somebody that they care about inside that property, they’ll want to have that same quality conversation with them, but they don’t want to do it. They will gravitate to you having that conversation because they liked the way that they had the conversation with you. It’s how it works. Treat your sellers nicely, do what’s right, and be completely transparent like you guys are doing. Doors and opportunities are going to open up. There are going to be more people making offers, but that’s not the X factor. Your X factor is coming in there and then focusing on that solution that you can provide for them and create something great for them and you guys at the same time. It’s a win-win.

Countless times, we’ve had people say, “I have a stack of postcards this big.” They like the way that we treat them and that all goes back to being transparent and honest with them and making them feel comfortable through the process.

The deal that we have in escrow, we had the seller come to our house. He brought some pictures of his property. He had dinner with us. He stayed for almost four hours. He even brought the stack of actual other cards. He’s like, “I’ve been having people call me for years, but there’s something about you, Shannon and Shelly. You guys are nice.” He’s a real nice guy. It’s about solving a problem and being personal. It’s not about the amount of money. I personally think it doesn’t matter where we start out with the seller for a number. It doesn’t matter if we started with the seller or buyer for numbers. It’s about the relationship and making it all work together. That’s how I look at it.

When you approach it that way, the money is a by-product of the business and of the actions that you’d already taken. It’s focusing on solving that problem for the seller and coming in and being there then genuinely making that connection with them. The money is going to be a by-product. You said the word assume and it brought me back to this book that I read a long time ago by Don Miguel Ruiz, The Four Agreements, and one was don’t be biased. Never assume that you’re coming into whatever’s coming up ahead, but it’s a great book. The biggest takeaway that I got from it was assumption. I would always assume that the problem was this.

WI 726 | Wholesaling Business Blueprint

Wholesaling Business Blueprint: Focus on solving a problem and being personal. It’s not about the amount of money. What matters is building the relationship and making it all work together.

 

I would always assume that they were not going to sell it, that they wanted this or they wanted that. After having a quick conversation, something different popped up. That relationship, comfort, or trust has to be there for them to open up and have a conversation. This is one thing that happens and I know we’ve talked about it in the coaching calls. People get into the space where they feel like they have rapport. This is very important.

Readers, take some notes on this. The goal of the rapport is not to drop the offer as soon as you get rapport. The goal of building rapport, building connection, and being genuine with somebody, it’s to open up the conversation so you can find the problem. When you have rapport, people will open up more to you and then you can dig into the actual issue and see if you can solve it for them.

What happens is that people feel like, “I feel like have a great connection with this person. I’m going to drop my low-ball offer.” It’s not the case. It’s like using a hammer for a screwdriver. It comes down to that stuff and assumption will kill your deals. I wanted to highlight that because it’s important that you guys know. You became aware of this early on and now it’s helping you do all the stuff that you’re doing.

You have this deal of $23,000, you have another $45,000 in the pipeline and now you have a machine, the whole process. You talked about the title companies and building the power team that way. I know you had a fine-tuning along the way, but the infrastructure of your whole business is set in place. If you look back to 2007, 2010, 2011, 2012, would you have thought that you could have built something like this and have the type of life that you’re in the process of building now?

No, not at all. That’s why I quit many times. Pick it up, put it down, pick it up, put it down. The Driving For Dollars app, all the technology that we have now, Wholesaling Inc. and all the support, I didn’t have all that, so I didn’t imagine that. I feel like my mindset is being expanded every other week. It has a lot to do with Shelly being very supportive and being around supportive people. The business is still going. We have VAs calling. We have our buyers. We’re at the beach and the business is still going. We have a deal that’s going and we have an employee calling all the buyers and making sure that it’s getting sold. Automating everything is a tribute to you. These are things that you have taught us to do. That’s what we’re trying to do and it’s working.

It’s like a one-man show doing everything for a long time and now, things are automated and they’re moving along. Almost every weekend, we’re out of town. We’re at the beach. Every time we go to town, things like that start to happen. It’s a lot of the mindset, the reading, the faith, that consistent work, and never stopping.

I can testify to that. I can attest to you guys’ consistency and commitment to the whole process. It’s a blueprint. It’s science. Before we start signing off, what will be your best advice for somebody who’s getting started? This can be anything from strategies, from mindset or whatever. What is your best advice to somebody who’s getting started as a wholesaler?

No matter what your budget is, if you’re a one-man show or a team, be consistent and keep going no matter what it is. If you’re a one-man show and you’re driving for dollars by yourself and you’re making all the calls, that’s fine. Keep doing it. You got to block out the time to do it. Surround yourself with the right people. For a long time, I was doing it by myself. A lot of times, I felt like I was telling friends and family about what I’m doing and it sometimes would crush my whole aspiration. Being around Shelly and surrounding myself with people like you, Brent, and the Wholesaling Inc. industry, everybody’s being very supportive, which helps a lot as well. Keep going forward.

The Four Spiritual Laws Of Prosperity, the book that you recommended that we read. If you’re taking a leap of faith like she says, profess your aspirations and dreams and everything to God or whoever your higher power is and boldly ask for what you want. Be careful who you share it with in life because there are so many naysayers. We’ve been careful to do that and only let in the people that are going to support us. That’s been helpful because when you want to give up, you have all those people that are going to encourage you to get back.

You’re completely right with all that and especially on the naysayers. A lot of people don’t understand the potentiality of things of the process that can bring in the different types of life that people are dreaming of. That’s one thing. Anytime people don’t understand something, they reject it. There’s a natural barrier up in place. That has a lot to do with it. First, they’ll say, “No, you’re crazy. You’re nuts. This is stupid. You’re wasting your time and money,” and then they will ask you, “How’d you do it?” Trust me, that that’s how it’s going to work. I’ve seen it time and time again. It’s beautiful.

I’m very proud of you, guys. I’m honored to be part of your guys’ journey and let’s keep crushing it. You guys are doing outstanding. Every time we have conversations, it’s something new. The energy, the vibe, the overall personality that you guys bring to this whole thing makes it work. With that being said, Tribe, these are two Rhinos who are totally crushing it in Central Valley, California. If somebody wants to get ahold of you, reach out, if they have JV deals or whatnot in the area, what’s the best way to get ahold of you, guys?

WI 726 | Wholesaling Business Blueprint

Wholesaling Business Blueprint: Keep going forward, surround yourself with the right people, but you also have to be careful. Only let in the people that are going to support you.

 

The best way to get ahold of us is probably through email. It’s Sequioa003@Gmail.com. If you’re in the California area, I’ll shoot you my personal number if you hit me up by email. If you got a JV on something, that’s cool. If you got a question, I have no problem sharing information. I share with everybody, the cat, the dog if they want to listen. I feel nice sharing it. If someone has any question about anything, I’m not an expert, but I know who the experts are and I know I can reach out to them if I don’t know the answer. For JV deals or anything, you can reach out to us.

I’m excited to see the next two chapters of your journey. I know it’s going to be amazing. There you have it. If you are interested, if this resonates, if this feels like it’s something that you want to tap into, go to the Wholesaling Inc. website and that’s WholesalingInc.com/WBB. Ask for the Wholesaling Business Blueprint. Have a sit-down and a conversation if it matches. I look forward to working with you guys like we are with Shannon and Shelly in The Shannon and Shelly Show.

All the business stuff that you’ve taught us has been awesome. The mindset stuff, I can’t even mention enough about what you’ve done for our business. I am so grateful for you and for all the advice. You’re always available for us for questions in the middle of the night and everything. You’re always available, on weekends and everything. I don’t know if that’s just for us, but you’ve been nothing but awesome.

Thank you so much. I love you and I’ll talk to you guys on the next coaching call. Tribe, WholesalingInc.com/WBB. I look forward to working with you guys and, until then, stay focused. You got this.

Important links

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.

He saw opportunity and began working on his first entrepreneurial project, a Non- Emergency Medical Transportation business at age 21 while providing EMS and Fire services in Yuma AZ. Rafael launched Netcor Transports LLC, his first company opening day May 1st, 2007 at the age 23. Maintaining constant logistical and economic growth since its foundation Netcor was sold in the summer of 2014.

Rafael is currently an Organizational Psychologist and real estate professional holding ownership in multiple companies in various verticals. Base of operations is in Phoenix AZ.

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