Posted on: October 29, 2021
WI 808 | Power Of Consistency

 

If you have been in the real estate business for a while, you’ve probably realized that nothing works without consistency. A consistent process with successful outcomes is the only way to be successful. Like any skill, you must practice and develop consistency in your real estate wholesaling business. If you always do the same thing every time, you begin to build patterns of success.

When it comes to successful real estate investing, there are lots of opinions out there. But what matters most is what works for you. Today, Justin Pendleton joins the conversation with your Wholesaling Inc. host, Rafael Cortez, to give you a quick background on what consistency is from his own experience and how it played a powerful role in his wholesaling business.

The Power of Consistency – From Working 12 Hour Shifts in the Military to Closing a $47k Wholesaling Deal

Episode Transcription

We are sitting down with Justin Pendleton. He is an active MP out of Buffalo, New York. He has been doing real estate hosting for a couple of years and has closed a few deals here and there and had massive results. There are a couple of things that have happened throughout his journey that I want to tap into. Some of those are about perseverance sustain on it right before you are about to quit. I want to break into that.

Justin, welcome to the show. I’m glad to have you.

I’m glad to be here always.

You have been wholesaling for a couple of years now. You have closed a couple of deals already. You have structured some of the ones that fell through, a few partnerships that went south, and things like that here and there. However, you have been able to put some solid stuff together that has given you massive results. I want to talk about that but give us a little bit of background on you.

I have been doing this for a couple of years now. In the first year, I’ve got into a partnership and closed a couple of deals with him. A couple more that didn’t come my way. We separated then I had to move on. I found your group, dove into that, and learned into action. I have my VA last September 2021. She is my cold caller. She has been cold calling and reaching out to a lot of people. That is how I have been getting my leads. They come in a call, set up appointments, and get it done if it works out. I had some that fell through but I’ve got something coming in now.

It is a volume game. The craziest thing about it, and I mentioned it, is that we were looking for a very small percentage of the people who want to sell. Out of those people, a very small percentage is going to be a natural fit for what we were trying to do as far as coming in and then solving the problem for them. You are in a particular situation.

You are active military, have a full-time job, which you go into every single day, the schedule shifts, and have been able to work around that by plugging in the VA, and then setting up the lead flow, the prequalification process. Now, you are dealing with a certain amount of pre-qualified leads per se as opposed to having to dig through all that data you do when you are cold calling.

It is a way of working around some of those challenges that come at us. One thing that pops up is you made a very important comment. The last coaching call that we had, you said, “I was on the verge of calling it because of your schedule, everything that is going on, life getting in the way, and the lack of consistency to some point as far as having the leads in the pipeline on a healthy state. I was about to call it, and then this one deal hit.” You started talking about this deal that we are going to break down here but what’s your thought process as you are going through that? What’s going through your head?

Don’t let an opportunity go out the window.

You said full-time military. I work twelve-hour shifts that are exhausting from 6:00 PM to 6:00 AM. My VA cold calls 12:00 AM to 8:00 PM. While she’s cold calling, I’m at work. When she brings in the leads, I call them at work. When you work twelve-hour shifts in the military, sometimes, you don’t have enough time to be focused on it. It was rough at first because it hit a point where nothing like guys would want $2 million for a $50,000 house, and you would go through so many. Nothing is coming my way. One month past is nothing. Two-month past is nothing. Three months past, I’m like, “My gosh.”

I almost called it quits. Luckily, I have got a couple where I reached out and set up. It looked like something would work out. I was focused on those two things. I was like, “If this doesn’t work out, this may not be for me.” I have gotten a couple under contract, where I had to terminate the contract because it was too high and nobody was getting it. I was like, “If this doesn’t work, this may be a sign that it is not for me.”

The crazy thing about it, and I see it time and time again. One of the biggest reasons why people stop right in the middle of the pursuit is because there is no consistency and systematic approach to it. When we walk around throwing spaghetti on the wall, it is hard to stay constant on something like that. Especially if you have some type of overhead going out the window, the payroll of VA, you are putting money, time, and effort into something. It’s not a systematic approach. It can be daunting. Don’t you know how long it is going to take for your results to come in until you start tracking what the KPIs are? What is the number of calls that we were doing here?

What’s the conversion rate? How many of those leads we were getting turned into prospects? How many of those prospects are getting offers? You have this pipeline, this way of putting the whole business model together and in steps 1, 2, 3-type of fashion. One thing that I see happening is often when people quit because there is no infrastructure or set the foundation on something they can build that helps for consistency but you have done that well. You went AWOL there for a little bit during the coaching calls and everything. You came back and were like, “I was working so hard in this and trying to make things happen.”

You were going through the middle of this one deal that was closed. It is a challenging thing to have a full-time job, especially you are active military. Thank you for your service, by the way. It is not easy dealing with life, friendships, family, and still having the audacity to come in and then do something else. It’s going to build up your dreams, especially when the faith starts to drop and our mindset starts to be doubtful.

We get into that space where like, “This may not be for me,” and then you get hit with some hope. It lit you up again. During our conversations, I can definitely see it. It is a real thing and now it is paying off. Sometimes we will do work for weeks, and then we will prospect, follow up, do this, and that. What’s happening is that there’s a stacking effect, and it may feel like there are not a lot of results going on but everything is stacking and it pops.

The deal comes where this is a game-changer. It’s not just because of the monetary benefits and the spreads that you are going to make out of it but because of the mindset shift that happens. Tell me about this deal. How did you come across it? How did you generate the lead? What type of list was it? It happened in Buffalo, New York, right?

Yes. I’m in Buffalo, New York. I came across it and used an Absentee High Equity List. I had my VA cold call it so she ran through it. It was another one of the, “There’s a guy. He is looking to sell.” I was like, “What is he looking to sell it for?” She said, “It is $50,000 to $55,000.” I was like, “That’s the most reasonable price I have heard in a very long time.” I jumped on that. I looked at her notes that said, “Duplex, both occupied.” I’m like, “For duplex, so let’s check it out because it may be complete garbage because I have dealt with people trying to sell a pile of trash for $50,000.”

WI 808 | Power Of Consistency

Power Of Consistency: It doesn’t matter where you start off. The first number is never the number.

 

I called him and he said, “My dad used to own it.” I called this guy’s dad but his dad passed away. He popped up in one of my past notes and was not trying to sell them. He popped up again in this list, so I talked to the son and said, “Yes, my dad passed away and I don’t know what I’m doing with this.” He went to his mother but his mother had no idea what to do with a rental property so I said, “I can gladly take it off your hands and help you out.” He said, “Come on down and check it out.” I didn’t want this opportunity to go out the window.

I hit up one of the areas like the top real estate agents/wholesaling people to help me out with this because I did not want them to fall through. Her name was Delisa Robinson. She helped me out with a couple of stuff. We both went there and checked it out. It is in good condition and not falling apart. Everything else around it is falling apart but this place is pretty okay. I’m like, “Let’s talk to the guy.”

We walked through it and met the downstairs tenant but we didn’t see the upstairs because the guy upstairs wasn’t paying any rent. That is another pressure point that is making him want to sell it. It had a vacant unit in the back that was garbage. He didn’t want to deal with that. I will talk to him and say, “With the tenant not paying rent upstairs, we weren’t able to see it. Downstair was fine. You’ve got that one back there that we were going to have to repair. We are looking at around $40,000.” He said, “Can you do $45,000?” I was like, “Yes, I could do it for $50,000 or $55,000.”

A couple of things are happening right there, and you are dropping a lower anchor than the price point you want to offer. We always know that there is always pushback. It doesn’t matter where you start. The first number is never the number. If you want it to end up somewhere in the mid-$40,000, $50,000 or $55,000, even at the price point that they had asked for originally, you always go a little lower because you know there is going to be some type of pushback.

I have talked with my partner first and she said, “You can give $45,000. That’s perfectly fine.” I have talked to the guy, “Can you do $43,000?” He was like, “Yes, $43,000 sounds perfect.” Here is where it became an uphill battle. He didn’t want to sign right then and there because it was in his mom’s name. His mom had to sign it. It took weeks to get her to sign the agreement. We had to mail it to her attorney, and then her attorney had to mail it to her, and then she had to mail it back. It had to be a whole mailing of paperwork that took weeks and weeks. That’s why I’m like, “No, I’m not going to let this fall through.” When I talked to my partner, she was like, “I can sell this for $90,000.”

What was the AOB on it?

I’m going to be honest with you. It was nowhere near that. I don’t know how she did it but I guess she took the inflation of everything that is going on now. It was me selling it. I would have sold it for $65,000. How did she get $90,000 out of it? I have no idea.

That’s the thing about leveling up. When you JV partner up with somebody who has the resources that perhaps we don’t have at the time. It’s not about having the resources. It’s about being resourceful. You take the step right out of the gate, and then bring her into the deal. If you were going to sell it for $60,000, she is going to go for $90,000. That is a huge bump in revenue. It has been split by the two of you but now, you have a professional working with you in the area and you are tapping into their network. Is she an agent?

Closing deals in the real estate industry is a long and uphill battle.

She does it all.

She is super happy if it brings something else. Trust me. She is going to be more than willing to work with you. Let me backtrack here. I want to go back into the details. You said she sold it for $90,000?

Yes. We’ve got it sold for $90,000.

You locked it up at $43,000 so that’s a $47,000 profit. Did you keep half of that?

Yes.

That is insane. Tell me the rest of it. What happened afterward?

After that long uphill battle, getting everything signed and all the paperwork, then came the buyer. The buyer was the guy who paid us. It was an uphill battle with him. I had to sell on a property at least four times. Each time he brought seven different guys. I had to talk to the seller and be like, “My contract guys come and check it out.” You contracted guys bringing an entire crew to check out the property. I had to get at least two guys in to check it out. On the day right before closing, he wanted to see it again. In my head, I’m like, “If this doesn’t work out, that’s it. I’m done with my losses because this is not for me if it doesn’t work out.”

I showed it to him. I talked to my partner and said, “I showed the guy the property. Is he going to close on it? What’s going on?” She said, “Let me call you back.” I’m at the mall because I want to get my mind off it. I’m taking my girl to the mall. She calls and she’s like, “Do you want your assignment fee in cash?” I’m like, “Yes. Isn’t it going to be a check? He writes a check down and follows him.” “No, it is cash. He can give us the cash.”

WI 808 | Power Of Consistency

Power Of Consistency: Profit first means that you pay yourself, and then you put the rest of the stuff that comes into it into the actual business.

 

I’m like, “What do you mean? Is it under a bridge behind the alley somewhere? What do you mean cash?” “He’s got $47,000 in bills that he can give to me, and then I will come to you and we will split it up.” I couldn’t say no to that. In my head, I’m thinking is this going to happen? It’s probably not going to happen. We were going to go to closing. I get home around 7:00 and she calls me, “I’m outside.” I went outside, got in the car, a shady little deal, and she pulled out the bag.

Do you have that with you?

Yes. It is real.

That is the power of consistency, the power of staying on it and being resourceful. You have a limited time on your hands. You bring in a VA and somehow, you can work around that obstacle. You go through all this time of prospecting and talking to leads on your off time. You also mentioned a few times that you weren’t even calling people during your breaks. If you had five minutes while at work, you jump on a phone call. That is a tenacity that is needed to have this type of result.

I’m telling you, it is something different to get paid in cash for closing. You had an assignment, did the assignment, did everything, and eventually, you ended up getting cash instead of a cashier check. I always push, when it is a check or something like that, to go get, collect, and then hold it in your hands. If you can hold it in your hands, a bag of money, it is going to go a lot further in that belief. Congratulations on that.

It was a crazy feeling and it didn’t hit until I came in the house and dumped all the money on the bed. I was like, “This is it.”

After that, the question of, “What do I do with the cash?” It is a very valid question. You get hit with a lump sum of money. For the most part, we were used to getting bi-weekly checks when we were working. When we get hit, the pressure builds up, “What do I do? I want to apply this the smart way and not squander it.” A lot of people put the whole thing back into marketing, take it, and then drop it under the pillow and whatnot.

I have been reading a book and it’s called Profit First. Because of the question you asked me, and I know we talked about it a little bit, it is a good strategy book on financials and how to structure the cashflow of your business. Profit first means that you pay yourself and put the rest of the stuff that comes into it into the actual business. You allocate some for taxes. In that way, you don’t get big surprises at the end of the year. It’s a good book that I can recommend people to take a look at.

The power of consistency is the power of staying on it and being resourceful. You have a limited time on your hands. Make sure you’re using it wisely.

The book is Profit First and written by Mike Michalowicz. It is a good book and strategy. Take a look at strategies. Whenever you get a good lump sum of cash in your bank account or a grocery bag, use that to build the stepping stones for the future. That is one of the biggest things. That is what we build a business. We don’t have to reset and start all over again after we go out there, and then spend the cash. It is a very interesting story. How long did it take for the deal to close?

It felt like years if I’m being honest. I will say talking with the lead to closing, maybe two and a half months, from getting this sign, it only took a month. It took like half a month to get them to sign the agreement. That is where I was sweating and like, “This is $47,000,” but that was a dream in my head. I was like, “I want to get it this time.” The dream became a reality after that.

It is on the tenacity, the follow-up. You stayed on it, followed it, and you did what you had to. It’s sending the contracts, which isn’t a pain sometimes via regular mail, making sure that they made it over or you answered any questions. You obviously came in and solved the seller’s problem. They didn’t know what to do with the property but sometimes, we do come across these things like the deals are out there.

The one that you went through is not the only one. There is more stuff out there. People don’t take the time to go through the process of filtering all that information and having conversations with people at a level where they can dissect what the real problem is. You did that, got paid, and somebody else also got paid a good chunk of cash. You have a very good person in your power team for whenever anything else pops up.

You could be mad if they do $20,000.

The buyer has a duplex. It’s a good investment property and everything. Everybody is happy. Win-wins all across. That’s what it’s about. There is enough stuff out there. There are enough deals. We have to stay on them. If we don’t give things enough time to work, how do we know we fail? What is the difference between failing and quitting? If you stay on top of something, you give it enough time to work and have an actual process, a progression to how to do things. Things are going to be a lot more predictable.

The doubt that creeps in whenever you are in the middle of something, that’s difficult. If you have a pathway to follow, there is always a degree of support there for you. That’s going to help get you through the darker times because of what’s coming. These are the next steps, the numbers that we are following, the KPIs or the stats. This is what the average VA does in terms of leads. Another thing I wanted to ask you is how many leads is your VA calling a day?

She can get through an entire list in a day. I don’t know if it’s great compared to yours but 400 or 500 leads a day, full-fledged conversations, maybe like ten and then actual like, “I’m interested,” warm lead, hot leads, depending on 1 or 2.

Your time is limited. You are going through the actual process of breaking down the interest. Your VA takes all the time in the world to call those people. You don’t have to worry about it. Instead of reaching out to 500 people, you only have to reach out to the ten that are interested. That’s how you are maximizing your return on time and making that investment. Sometimes, we think of VAs as having an expense. It’s pressure. It makes me nervous about having somebody else on my payroll but how much is your time worth? It may not be the ideal thing we are starting. We have a way of doing it.

WI 808 | Power Of Consistency

Power Of Consistency: Do some cold calling. If you don’t have the time, hire someone.

 

We have a job that’s paying you bi-weekly, and you have some discretionary income there that you can apply as an investment for your time. It will help and give you that big push that we need to have some time to get through the rubble of the data to get to the actual leads. Bringing in a VA after you know the process, you have done the cold calling by yourself, and understand what it takes. After you have done that stuff, you are somewhat proficient at it. You can come in and plug somebody else in to take that time off of your plate. They handle those responsibilities and send you over the leads.

I 100% recommend it. If you are struggling with cold calling, I obviously do some cold calling and stuff because that is all I did. I’ve got to like that path, so I hired someone. It’s going to be costly. Make sure that you can afford it because it is as a person that is relying on you to pay them to feed their families. I’m close. Her name is Jess. I know everything about her family. I know she’s opening a restaurant. I know she’s at school, her son is at school and she takes care of her mom. These are real people.

That is why I said all the time, “Good job. I couldn’t do it without you. You are the MVP.” Make sure that you can want to fly them. Two, you are taking care of them, teaching them, and telling them what to do. It’s 100% worth it. If someone was to ask me, “Should I get one?” Yes, it has got to be iffy at first because you don’t know what you are doing but it pays dividends in the end.

Justin, that’s amazing. It is great to see everything that you are going through. The way that you are overcoming the obstacles that come at you, especially having the big responsibility of being an active military in the Air Force and still managing to create this other line of wealth that’s going to set you apart from the day-to-day at some point. Congratulations.

I don’t know if there are a lot of people out there that get bags of cash regularly but it is something that can definitely go into, your done and checked the list. With that being said, if somebody wants to get ahold of you and JV partner up in the Buffalo, New York area or any nearby vicinity, where is the best place to reach you at?

I’m on Facebook. I’m trying to be much anywhere else on Instagram but Facebook, @JustinAPendleton. You will see me, I’m the cute guy sitting down on the grass. That’s how you notice me. You can find me on Instagram, @Justin_Penpen.

Justin, it’s great having you. I look forward to seeing you in the coaching calls and breaking up the outcome deals you have. I know you have a healthy pipeline now, and that consistency is paying off. Now, you are stacking the results and the leads. You have deals coming in and some other stuff that’s getting ready to get processed and go to the closing table.

There you have it, Tribe. If you are interested in finding out how to get to your first deal or build up the foundations that you need to run a business, check out the wholesaling business blueprint at WholesalingInc.com/WBB. Click on the Schedule A Call Button, have a conversation, and see if it matches. If we were a fit for both you and us, I look forward to working with you guys. Until then, stay focused.

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About Rafael Cortez

Rafael is an Organizational Psychologist and real estate professional holding ownership in multiple companies in various verticals. He has profitably invested in wholesale real estate over the last decade, runs an active business doing an average of 15 deals per month and is now passionate about using his investment knowledge, entrepreneurial experience and training as an organizational psychologist to help others learn about real estate investing through the Wholesaling Business Blueprint Coaching program with Wholesaling Inc.

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