Posted on: July 20, 2017

William J. Rafter has been Wholesaling since the 70s and he’s done everything you can think of when it comes to real estate. Over the past 10 years, he’s focused on Wholesaling and he has a wealth of knowledge to share with you today.



  • Why referrals are so powerful for a Wholesaling business
  • How to secure referrals
  • How to remove liens for cents on the dollar and add equity to a hard-to-sell property


Free Marketing

Referrals are always great because they’re free marketing. If you can get people who will refer you deals, you’re expenses are 0 and it’s all profit.

Bill is a master at getting people, especially real estate agents, to refer him deal after deal after deal. He is in this position because he is helping these individuals do something they don’t know how to do, so he’s giving a lot of value back.


Cultivating Good Referral Relationships

Bill’s networking strategy harkens back to a pre-smartphone era, when the only way to keep in touch with your local realtors was to go to their office and say hello. To this day, he has a “farm” of real estate offices that he goes to, in person, to develop a trusting relationship.

These offices refer Bill their hard-to-sell properties, and he helps them get paid.

The key is to always make sure the real estate agent is paid their commission. If you do that, and maintain a good relationship, they will continue referring to you.






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Episode Transcription

Cody Hofhine: Welcome to another podcast episode here on Wholesaling Inc powered by Investor Grit. My name’s Cody Hofhine, and I’ll be hosting in the show today and today we have a Rhino Rockstar that is going to be deep diving the power of referrals. Today we have Bill Rafter, he’s from Lexington, Kentucky. Now this guy is going to be one that you’re going to want to pull over if you’re driving, or if you’re sitting there listening to this, you’re going to want a pad of paper and a big old pen with 20 refill ink jars in there and everything else because you’re going to go through a lot of notes on this one. He’s been wholesaling since the 70s and done everything you can think of when it comes to real estate. And over the last 10 years, wholesale has been his main focus. So he’s gone through the highs, the lows, all the different markets and he’s going to share some wealthy, wealthy knowledge here.
This is going to be just amazing content. It’s going to be gold nugget after gold nugget. So get ready because we’re going to get Bill Rafter on right now to kind of give a background a little bit about who he is, a little history about him. And then from there we’re just going to deep dive with some gold nuggets on how you can take advantage of any market with the art of wholesaling. For those that are new on this podcast, remember, wholesaling is just simply finding deeply discounted properties and then turning them for a profit. There’s multiple ways you can do that. And so we’re going to be talking about majority of those ways right here with Bill. So get ready for a Rockstar Rhino, Bill, my man, how the heck are you?

Bill Rafter: Hey there Cody. Man, I’m doing great. I’m excited to be on the call with you today on the podcast.

Cody Hofhine: Likewise.

Bill Rafter: Looking forward to going and addressing all the issues that we discussed.

Cody Hofhine: I love it. I love it. So tell us this to kind of give us a little background. You’ve been doing this since the 70s. You’ve kind of whole sold ever since the 70s. Tell us kind of a background of what you’ve done, and then also how has wholesaling been? Because I didn’t start but more than a couple of years ago. So I would be interested, myself, in just hearing has there been changes or has wholesaling been awesome in every market? Kindly give us a little history and background.

Bill Rafter: Sure. First just a little brief summary about myself. I got started in the real estate business in the late ’70s, 1978 to be specific. Started in the game as a realtor with a major franchisor at the time. After a year or two of being in residential real estate and learning everything about there is, to know about selling houses, I decided that just really wasn’t for me anymore, and I really wanted to get into the investment part of the game. So I found this investment company that specialized in buying and selling houses on a wholesale basis and they hired me in as an acquisition manager. So for about 10 years I was an acquisition manager buying for kind of the hedge fund of the day. We went out and did nothing but negotiate deals with sellers and buyers, buy properties, close them, and resell them to our cash buyer pool, and they would keep them as rentals or fix them up and resell them for profits.
And so that’s kind of what I did for many, many years. And then I got married and relocated to the south. I just got into the commercial field. We started buying and selling big properties, and for several years I managed the large property buildings. When I first got Lexington, Kentucky, where I live now, I managed the largest building in central Kentucky. It’s 31 stories. And so I’ve been in the commercial field, also, for many years and I have experience in both commercial properties and apartments.
Probably about 13 years ago now, I decided to start my own company here in Lexington, and we specialize in buying and selling properties on a wholesale basis. That’s pretty much what I’ve done for the last 13 years.

Cody Hofhine: I love this. So, Bill, I’ve always considered you someone that I, A. look up to B. Well, a great friend and then C. Is someone that I come to, because you have a lot of knowledge in just real estate in general. You’ve done things that I’ve never even heard of with real estate. And I always appreciate the fact that I can pick up the phone, call my man, Bill Rafter, talk to him about anything in real estate, and you’ve had some kind of hand involved into it to teach me a little bit more about it. In turn, you’ve also been one of my mentors is probably a fair statement to throw out there, which I absolutely love. Kind of tell us a little bit… The last 10 years you’ve been focused on just wholesaling. How has that been? Because that means that you went through the recession of ’08. How was it for the last 10 years going from, let’s say, ’06 to current with wholesaling?

Bill Rafter: Well, I had the benefit of being able to see real estate over a 30 plus year basis. So, I saw that coming because when you have a situation where residential buyers of single family homes can no longer afford to buy one of those houses, you know that you’re going to have an adjustment in the marketplace. And I saw that coming. I knew we were going to have a downturn in ’06 and ’07 because I’ve seen that in my career. Back in the ’70s, we had a hot real estate market like it is now. And then in 1980 what happened? The interest rates went up to 20% and the whole market collapsed essentially. Once that happened we had to learn how to wholesale, and how to get properties moved without using traditional financing. And so we use things like owner financing, and sellers were willing to discount their properties substantially for cash, and things like that.
I’ve seen the cycles, and we’re about ready to have another cycle right now that’s going to get started probably by the end of this calendar year, and what I mean by that… And I already see it coming. So as an investor get ready because the benefits and the properties are going to be out there available for pickup. Because anytime you have a sellers market that’s hot and you have a shortage of inventory in a lot of the markets, the next thing that’s going to happen is the interest rates are going to start to go up. It’s going to go up from 4.5 to 5%, and then 5.5 to 6%, and it’ll probably level out somewhere around 6%.
The reference point is, the interest rates… When I first got into real estate, we’re 9.5%, fixed rate, 30 year for a residential loan on a house. Now today, if that happened, the whole market would collapse, but then that was a good rate. So people are used to 3 and 4% interest on houses, and when it goes up to 5.5% and 6% it’s going to shock the market. And there’s going to be all kinds of deals out there available for wholesaling and all kinds of other investments. So be ready because it’s coming.
But in the meantime, even when the market’s on fire, you can get a great wholesale deal and pay 80, 85, sometimes close to 90% in the hot markets and still turn around and wholesale that property for 100 or 110% because the market’s so hot. So you adjust in the marketplace and you keep an eye on what’s happening and you adjust your techniques and procedures according to what’s going on in the markets that you are involved in.

Cody Hofhine: I love that. So I’m listening to this, and I’m listening to also one key point that you touched on was, even in the hot market or slow market, wholesaling is still a very good option to do. We just had one kind of the… Which I thought was interesting. You’re familiar with the word wholetailing. That’s just putting the word wholesale and retail together and get the wholetail. With that being said, Oh this is probably a month back. We put one under contract and to look at the numbers we put under contract for $92,000 and we are looking at wholesaling it and our buyers were kind of just like, “We can give you $95,000 or we can give you $100,000 and it just looked like there was more value there.
And so what we ended up doing is we ended up doing the light light, light, light, light rehab. When I say light light, I hate rehabs. I just don’t do that. It’s just not my thing. But we did carpet and paint and then some baseboard, just very simple, simple stuff. And so we did that and then we put it back on the market. Now this was just last Thursday that we ended up putting this on the market. And what’s interesting, what took place over the weekend, and this sounds almost like a joke, but this lets you know what kind of market we’re in. We had well over a hundred phone calls of people that wanted to go in and see the property, but we had 15 offers over this weekend and all of them were over the asking price of what we were asking for the property.
And it was just absolutely flooring. It just floored me of how incredible his market is right now. And we didn’t know if we would test the market with a number we were already thrown out there, but we got plenty of offers in and every one of them are over what we were asking. So it’s a great market to wholesale right now and a phenomenal market, a hoteling obviously.

Bill Rafter: Obviously, and that’s exactly what I’m talking about. When you’re in a seller’s market and retail properties are being snapped up like crazy, then that’s an ideal market for doing the hotel type technique. When you find a property that’s in reasonably good condition and you’re looking at paint and carpet or just clean up. Whereas, for instance, I had one in the last couple of years and what it was is, we went ahead and actually bought the property, got a great deal. We even got remove some liens from the properties and stuff like that. And our deal with the seller was, the seller wanted to stay in the house after we close for about 60 days. So we had a little rental agreement and we held back some money in escrow to make sure everybody did what they promised they were going to do and then the seller was able to then relocate and then we went ahead and put the property back on the market on a wholesale basis.
And Cody, all we did is I sent a janitorial company in there and they cleaned it up for two days. Probably it cost me about 500 or $600 just to get it cleaned. We had the carpets professionally cleaned and we made it put smell goods throughout the house, put it back on the market and in less than 90 days time we made about a $20,000 profit on that deal. And sold it to a new FHA buyer that moved into the property as their own home. And the deal was… As I knew to do that, we have owned the property for about 91 days because that’s an FHA requirement. I knew that going in so, but the rental back to the original seller worked perfect, because we got some revenue during that time period. And then by the time they moved out we got it all cleaned up. The 91 days had passed and we were able to sell it to an FHA buyer and close it in about 45 more days. So it was a great deal. And all I had into that deal was about $600.

Cody Hofhine: Wow. So absolutely love this. Let’s deep dive. I’m going to kind of set this up with, every time when we talk and we talk together frequently, I’ll get on the phone with you. And I’m always just puzzled on how well you do with the referral market. Referrals are always great and the reason why they’re great… For all of Rhino Nation listening right now, the reason why they’re so great is because they’re free. You don’t have to pay for the marketing. So if you get people that are going to refer you deals, your expenses are zero and it’s all profit. So it ends up being a huge win for you if you can get people to refer you business.
Now Bill is one of the masters at getting a ton of people and especially real estate agents refer him deal after deal after deal after deal. And so the power of referrals is huge. And let’s kind of deep dive one of your most recent referrals where a realtor came to you and asked you for help because he quite frankly didn’t know how to take care of the deal because there was liens and judgments and all that stuff. Kind of help them understand that it’s not just the power of referral, but it’s because you also are helping these individuals through something that they themselves don’t even know how to do. And so you’re giving a lot of value back.

Bill Rafter: Yeah, exactly. And Cody, here’s where this technique came from. Back when I first got started in the real estate game, as an acquisition manager. In those days we didn’t have smartphones and the internet. So the only way that you could interact with realtors is by going out to their offices and getting to know all the movers and shakers in those various offices and develop a relationship with them. So I had like 10 real estate offices and they were kind of my real estate firm. And so I got to know all those folks in there and got to build a relationship where they liked and trusted me and I let them know exactly what I was looking for. And I said, “Hey, if you guys have properties that you simply can’t list because they’re in too bad of disrepair or you have all kinds of title problems with the properties, that is just not worth your time to try to solve, give us a call and we’ll take all of those properties that you can refer to us.”
And so that’s what I’ve done here in Lexington is I build up relationships with the realtors and all the various offices in town. And because I was a realtor for a couple of years, I was a real estate broker in two markets in California and Louisiana. And I practiced for years. I understand how real estate agents work and I understand how they think. And they’re interested in number one, getting paid their real estate commission and not doing business with somebody that simply wastes their time and doesn’t do what they promised that they were going to do.
So the key is, always make sure that the real estate person gets paid their commission and do what you promise you’re going to do. And you’ll have more referrals from real estate folks than you can possibly handle. So what I tell the folks is say, “Hey again, if you have any properties that simply are not selling or you know anybody in your office has a listing that’s not selling, give us a call and we’ll figure out a way to make sure you guys get paid. And then if you have any judgment, liens and things like that, we know how to deal with those kinds of properties.”
So just a about a week ago, I had one of my realtor friends Tony, he referred a property to me and it was actually in another County called Scott County. And it had judgment liens against it and he just doesn’t have the time or the inclination to deal with those kinds of properties. So we’re able to get in contact with the seller and get an authorization to talk to the lien holders on their behalf. And we were able to negotiate those liens down to nothing. One was $10,000 on the pay off. We got negotiated down to $2,000 and another one was $5,000 and we got that down to $1,000 and so we were able to literally, create equity in the property, Cody by doing that.
And so we were able to then turn around and wholesale the property out, make a nice profit. I think my profit on that little old deal was about $5,000. And just as referral now, it didn’t cost me a dime in marketing to get that deal. It was a phone call and all I had to do is just negotiate those liens. And we already had a buyer for the property lined up subject to those liens being removed from the title. And the realtor actually had the buyer. So the realtor found the buyer, the realtor found the property, referred it over to me and I negotiated the liens, put it on their contract with the seller and we resold the property to the cash buyer and closed a few weeks back.

Cody Hofhine: So tell me this… Because here’s something I think a lot of people are listening right now and they think, “Oh, but Bill knows what he’s doing and this is tough and it’s too hard for me to wrap my head around this. There’s no way I could learn this.” Now to a degree, yes. Bill is good at what he does. But was it always just easy peasy Bill? When we’re talking, looking at these deals, talking to the judgment liens, all the lien holders and all that stuff, is it easy right when you first learned this like, “Hey, I’m just going to pick up the phone. It’s going to be easy peasy lemon squeezy. It’s done.” Has it always been just easy?

Bill Rafter: Of course not. You got-

Cody Hofhine: Okay. And that’s the big thing I want them to understand. It’s not easy, but you do not shy away from things that are tough because at the same time, if your specialty is helping out with removing those liens and judgment, negotiating the liens and judgments down to a minimum. There’s not many people out there that can do that or willing to do that and so Bill is securing himself… This is the best part about it. He is securing himself as one of the only individuals realtors will ever even bring in on the deal because he’s one of the very few that got uncomfortable and learned how to do this. To negotiate with lien holders and with all the judgments and getting them down from $10,000 to $2,000 and from $5,000 to $1,000. That is a lot of money saved on those negotiations and Bill has been able to learn that.
Now let’s fast forward to where we are today. How much time was involved when you say, “You know what, I picked up the phone and I called these lien holders.” How long are we talking when it comes to that? On this particular deal I should say, how many hours were involved?

Bill Rafter: Well, typically maybe about three or four hours at the most and it’s really pretty simple Cody, here’s the process. You get a one page, piece of paper signed by the seller giving you approval to talk to that lien holder.

Cody Hofhine: In their behalf. Right?

Bill Rafter: Right. So that takes you just a few minutes or if the seller has an email they can in a way to scan it, get it back to you. You don’t even have to leave the house. So otherwise you go meet with them for a few minutes or meet them at a Starbucks or whatever and they sign that and the realtor has already told them it’s okay. So, the realtor’s cleared things out so it’s not going to be any pushback from the seller. It’s just simply says, “I authorize Bill Rafter to talk to ABC, judgment company regarding this lien.” And so I fax that into the lien holder company and usually an attorney or a collection company.
And then we talk about it. We say, “Look, this property essentially has no equity. It’s probably going to end up going into foreclosure, anyway and you guys aren’t going to get a dime out of the property unless we can do something here. So the most we can afford to pay you is $2,000 if that’s something that you’d consider.” And then we go back and forth on that until we finally get a number and it either works or it doesn’t. And especially if the lien is older, if it’s like two years or older than two years, two to five years, let’s say, then they know they’re not going to get any money. They already know they’re probably not going to get it done. So anything that they get beyond a dime is a bonus. And they only probably pay 10 cents on the dollar if it’s a collection company for the lien anyway, if the lien has been sold off to a collection company.
So knowing all that, I know what they’re probably going to take. So my offer is less than that initially. And then usually I can get them somewhere between 10 and 30 cents on the dollar depending on how old they are and how big the lien is. So that’s what we do. It’s not that difficult, it’s just a matter of just doing it a few times and learn in the process. Anybody that’s ever negotiated a deal to buy a car or negotiated a deal to buy some furniture, can get these judgment liens cleaned off the property.

Cody Hofhine: Love it. So Bill, the main thing I love that Rhino Nation can take from this is the fact that anyone can do this. There is a little bit of a process to it, but at the end of the day, when you’re good at doing that… Because, I would say a good majority, but you’ll come across homes all of the time that have these judgments and liens where that judgment lien, may make it difficult or almost impossible to wholesale or even sell traditionally. So, with that being said, this makes it a unique situation where you can now make it a wholesale deal or a retail deal because you’re lowering those liens for these sellers, which is huge. A huge win for the seller. And then on top of it, the best thing about this is where, if you listen to it, Bill said he’s into this three to four hours of work. He has no marketing expense on this one and he was able to make $5,000. So again, we’re talking over $1,000 an hour that bill is paying himself on this one particular deal. And he does this multiple times during the month.

Bill Rafter: Yeah, exactly Cody. And here’s the million dollar tip, is a lot of the liens that you’re going to find on a property are mechanic type liens. Guy installed windows did a poor job so the seller wouldn’t pay him or whatever kind of plumbing work, whatever kind of lien it is. And so, the vendor, the plumber or the window company will file a lien against the title of that property. But maybe it’ll be three or four or five years later that that mechanics lien is still there in a lot of States. And again, you need to check with your title company or attorney on this, but in a lot of States there’s a time period for those mechanics liens. And if they’re not renewed by the lien holder after a certain period of time, even though they’re still actually on the title of the property, your title company or attorney can illegally remove those without having to pay a dime. And so make sure you check that out and make sure the liens are still viable and they haven’t expired because if they have, then your title company can get them off of there.

Cody Hofhine: I love it. So bill, if you were to look back to the beginning of wholesaling, if you were to look back and just say, “Hey, if I was at the very beginning stages…” Because a lot of time a lot of our listeners are people either just getting into wholesaling and there’s people that are listening that are barely learning right now, what the concept is of wholesaling. So if you could take yourself back to their shoes, either haven’t started but want to start or just starting, what would be your gold nugget that you would make sure? Like, “If I start it over again I’d make sure I did this.” What is that?

Bill Rafter: Well I would want to make sure that if I’m going to invest my hard earned dollars in some sort of real estate learning system, wholesale system, I want to make sure that I invest my dollars, in a system where people are actually doing it. In other words, here’s what I look for Cody, is the person or persons that are selling the system, actually doing it themselves and are they accessible for follow up and support. Because if you just buy a course off the internet and there’s no support, there’s nowhere that you can go to have your questions answered. Or when you actually get a deal and you have a challenge that pops up, is there somebody that you can email or call or get on your weekly call and get your questions answered with a real live deal that you’re involved in?
Because the best training in the world man, is to learn how to solve a problem on a deal that you actually have your nose in. Man, there’s no better learning than that because you figure out, you were helped on how to figure out that particular problem and you were able to get that deal closed and pick up a check. Man, you’re going to remember that lesson forever. So make sure you’re involved in a system that has good support. It has people that actually are doing it that they didn’t do what they’re trying to teach 10 years ago and they’re not doing it now. You want people that are actually doing it in the real world today? And that’s who the folks that you want to invest in and learn from.

Cody Hofhine: Fantastic. I love it. So now looking at… I know you are a reader and you’ve read some amazing books. In fact we’ve read quite a few books, the same books. If you were to suggest a book that would help them on maybe mindset or taking action, whatever it may be, what would be that book that you’d throw out as, “Hey, this is one worth reading?”

Bill Rafter: Well, I would do probably a couple of books right off the top, the Four Spiritual Laws of Prosperity, by Edwene Gaines. It was a fantastic book.

Cody Hofhine: Couldn’t agree more. Love it.

Bill Rafter: Yeah. And Scott Alexander’s book, Rhinoceros. In fact I-

Cody Hofhine: Rhinoceros Success.

Bill Rafter: Yeah. Rhinoceros Success. I just picked up a copy of that book just the other day and it just got in. I just got it from Amazon. And there’s some others that The Compound Effect and several others that-

Cody Hofhine: By Darren Hardy.

Bill Rafter: Yeah,

Cody Hofhine: That one. That’s the favorite. Okay, so Bill, one thing that’s interesting that you bring up with Rhinoceros Success that maybe a lot of people don’t know that’s listening to this podcast. That book right there is the whole reason why we call ourselves The Rhinos, The Tribe, right? Is because of that book right there a Scott Alexander. In fact, something unique and absolutely going to be awesome is he is actually going to be speaking at our live event, The Summit, our wholesaling summit in April 27th through the 29th. He is our concluding speaker and this guy can move and shake and inspire people all over the place. And I absolutely love the mindset of Scott Alexander. And that book is a powerful, powerful book, hence so powerful why we call ourselves The Rhinos, because of that book right there.
So I’m so glad that you brought that book up because I don’t think anyone realized, “Why is it that they call themselves to rhinos? Why do they call it The Tribe, The Rhinos?” Like “Why are they The Rhinos?” It’s because of Scott Alexander. That book right there is why we call ourselves The Rhinos and it’s a powerful book. I almost want to say it’s almost like a silly story with the most powerful mindset and concept for you to acquire.

Bill Rafter: Exactly, man. It’s a great book and of course I love to say this, we call both the gentlemen and the ladies that are in The Tribe, rhinos and I always joke around and say it’s the only time that you can call a fine lady or rhino and not get slapped.

Cody Hofhine: Yes, when you’re part of The Tribe, if you use outside of The Tribe. You might get a black eye. I love it. I love it. I love it. Well, bill, thank you so much for joining us on today’s podcast. I know there’s a lot of gold nuggets here that have been shared and our Rhino Nation listeners today, we’ll be able to implement that into their business today. I know there’s a lot of people thinking about, “Oh man, we came across that deal where there was a judgment lien and had we known about how to take care of this, we could’ve got that deal.”
And so there was a lot of gold nuggets shared where if they will just implement these things, you’ll see your business take off in ways that you never ever imagined. And that’s what I absolutely love about this podcast is it speaks to so many people. Everyone has a unique message when they come on and share their story or deep dive a deal. And it just helps every listener out there like, “Yeah, I’ve come across that before. And yeah, it was a dead deal. And had I done that, it could have been a deal.” So thank you so much for sharing with us today.

Bill Rafter: Well, you’re welcome, Cody. It was a pleasure being on and sharing some ideas on the podcast with you today. Thanks.

Cody Hofhine: Awesome stuff. Thanks Bill. Now Rhino Nation, in concluding this podcast, you’ve heard Bill Rafter from Lexington, Kentucky, share some of the golden nuggets about wholesaling and how wholesaling has been good in every market that he’s been in and he’s been doing this since the late 70s to currently still doing it and does a really good job at it. Makes great money and he helps out a lot of individuals in the process. So we’re grateful for that. And guys, this is something that if you connect and you’re finding out these gold nuggets are really helping you go back and re-listen to these podcasts, they’re there for you so that you can continue to pull gold nuggets out, implement them into your wholesaling business and just take massive, massive imperfect action.
And one of those things you can do also is if you want to learn more and you’re not currently on our email listing, you can go to that’s and if you’re not subscribed to our email, we send out free gold nuggets all the time through email. Go in there and sign up for that email and you’ll get a lot of gold nuggets from us for free. Also, you can go around and play around on the testimonials page and see how many people are doing this nationwide, which will inspire you and motivate you to take massive action that you can do it. If these people can do it, you can do it. Until next time, take care Rhino Nation.

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