Virtual real estate wholesaling is a lucrative way to make money. And being a master of virtual real estate wholesaling is not some magical gift given to a select few individuals. It’s truly something anyone can learn with the right mindset, desire, and action!
Brent Daniels and Lauren Hardy are dynamic entrepreneurs and passionate real estate investors. Join their insightful conversation as Lauren shares her humble beginnings and gives us a peek at simple steps on how she mastered the art of virtual wholesaling that made her real estate career extremely profitable.
The information she provides is actionable and easy to implement!
Three Simple Steps to Mastering Virtual Wholesaling
When did you start wholesaling? When did you get into it and why virtual?
I started as a house flipper. I was 25 years old. I started because I did not want to have a full-time job anymore. My daughter Reese was about one-year-old. After having a kid, it’s funny how your perspective changes. Before you have a kid, you’re like, “I’m going to be a CEO of a company one day and work twelve hours a day. It’s all career.” You have a kid and realize that having a job and having a child in corporate life is very hard, especially when both parents have it. There’s not someone that is a stay-at-home. As soon as Reese was born, I’m like, “I got to figure out how to work from home and find something that I could do.” I couldn’t not work.
My ex-husband but husband at the time wasn’t bringing in enough money to support all of us, so I had to find something that I could do and I would have done anything. It just so happened my brother started flipping houses first. He had three projects ahead of me at that time. He said, “Why don’t you start doing what I do? You could do this and work around Reese. You could do it from home and still have Reese home.”
We came up with an equation. How much money would I have to bring in? I always love these numbers. It makes me so happy. We factored in what I was getting paid on my salary, which was $55,000 a year at the time. I was living in Southern California. I was broke. I graduated college, but I graduated during the recession. We were post-recession at this moment, so $55,000 of stable income was good. I had friends still working as restaurant servers and doing part-time work. At least I had a steady job with benefits. We took how much I made minus the childcare. Childcare is insanely expensive, as some of you might know.
We minus childcare and I factored in, “I will get health insurance with my husband’s plan.” We minus all the costs and we realized that childcare got doubled when I found out I was pregnant again. All I needed to bring in to be exactly even with having that full-time job was $36,000 a year. That was it. My brother goes, “That’s one house that you flipped in California. You could easily do that. You could do one flip a year and cover that. Do two to be safe.” I said, “Sign me up. Let’s go.”
How did you start flipping? You’ve got $55,000, you’ve got college, you’re pregnant, you’ve got a baby and you don’t have a tremendous amount of savings.
There was nothing. There was no money.
How did you go into flipping houses?
I had no money and nothing in savings. My brother Dustin gave me some coaching programs. He had two coaching programs and back then, they used to come in CDs. It was like a binder with CDs. I listened to the CDs on my way to work and back. That’s all I had. I would listen to some stuff at night like BiggerPockets Podcast. I would listen to it a lot. In about a week, I finished my first course. That course was so well done that I had all the tools. It was Mike Cantu. I interviewed him on the show. He is local in my territory.
If you ever buy education, do what the coach says.
It was great because it was very local and relevant for flipping houses in Southern California. I listened for one week and figured out from that course, “I’m going to do direct-to-seller marketing. I’m not going to look on the MLS.” What that looks like is direct mail. Direct mail costs money. I didn’t have that, so I had to think, “Where am I going to get that money?” I called up Capital One and got my credit card limit increased as much as I could, which at the time, $11,000 was my max. I put it on credit cards and I was like, “I got my marketing budget. Here we go.”
Are you sending mail in Southern California?
Yes. This was years ago. People weren’t doing mail or not a lot. My first marketing campaign looked like exactly what Mike Cantu did. I did everything he did. If you are ever buying education, do what the coach says. I copied his letter word for word. I even used the same font and envelope style. Everything was the same. I found someone on Craigslist to handwrite the addresses, so they looked personal because before all those machines were out, they would do it for you. I found someone on Craigslist to do it. It was $0.50 a letter or something like that. She would handwrite it and I would get it back from her. She would even put stamps.
Was this somebody local?
I found someone on Craigslist and got the Forever Stamps of the Disney and Pixar ones. It looked very personal. I started mailing letters.
I got a list of absentee owners. That was it.
That’s non-owner occupied.
These are rental homes. To talk about limiting beliefs, I was so scared to flip a single-family house. For some reason, a condo was in my comfort zone because condos in California were cheaper at the time. I could get one under $200,000 if it was distressed. This is at that time, but not anymore. Whereas for a single-family home, I was going to pay $300,000 and that scared me. I’m admitting I had limiting beliefs and fears. I marketed to condos because that’s my comfort level and started sending to the absentee owners of these condos. I would pick cities. I didn’t have a ZIP code strategy or anything like that. It took me from the day I started mailing to the day I got my first contract signed four months.
That’s the average. It’s a different market, but typically, you got to go about 90 days of consistency for sure in anything that you do. All of a sudden, you start seeing day 91. These things start going. It was day 120 to 150 for you.
I’ll tell you some of the reasons why it took me so long. I didn’t understand offer pricing. Something that I stress is understanding offer pricing in your area. It was deal or no deal. I was making offer prices based on this very generic take your ARV times 70% minus repairs. That was it. It was an out-of-the-box calculation and I would offer it to the seller. If the seller said no, I would go, “We don’t have a deal.” That’s all I would do. I ended up having a stack, and this was before I had a CRM. I would write these on pieces of paper. I call them seller lead sheets. I would write all the details, address, seller scenario, what I offered and what they said they would take.
I eventually had this stack of seller leads sheets that were going nowhere. I didn’t know what to do with them. I was like, “They want too much money.” Finally, after four months, my brother goes, “What are you doing? Let me know who you have been talking to.” He looks through my lead sheets and goes, “What about that one?” I was like, “It doesn’t meet 70% minus repairs.” He’s like, “I don’t care. That’s a good spread right there on that. The seller said he would take that. Call him up.” I called him up and the guy still was willing to take it. I got my first flip deal. Me and my brother, Dustin, came up with the financing. He had a private money lender that he had already been working with.
You squatted up with your brother.
Yeah and we split that thing. I always say that my first deal was bought on the last day of the recession because that property went up 10% in value when I bought it. We ended up making $67,000 by the time we flipped it and we split it 50/50.
How did that feel?
It felt amazing.
You covered your year.
What was incredible about it was I was working a full-time job still. I was still working corporate and making $55,000 a year, so I got an extra $33,000 to add to my salary. In my head, I’m thinking of salary. That’s the most money I had ever made in my life. The other thing was, I said, “I will quit my full-time job when I have $55,000 in my bank account.” At this point, I am about 5 to 6 months pregnant-ish. I still got some work to do because I didn’t want to go back to work with two kids. I was hoping I quit on my maternity leave.
Luckily, as I was flipping that first deal, we were in process. It was maybe an escrow. I had gotten another contract on a very similar condo. It was almost the same number. I made another $65,000 with my brothers and split it in half. I ended up having the money, so I was able to not go back to work ever. It was the biggest day ever. In my head, I imagined the day that I would walk outside on a Tuesday at 10:00 outside of my house and know what that felt like.
Find another market to diversify yourself.
What does Tuesday in the morning look like when you have a corporate job? It looks like your office building. I remember that it was a big day to call my boss and say, “I’m not coming back.” They thought it was because I was going to stay home with my kids, but it wasn’t. I didn’t feel like telling them. That’s how I got started. That’s the deal that started everything. From then on, it was a big journey. I was local until I couldn’t be local anymore. We can talk about that.
The marketing channel didn’t work anymore because people figured it out. Doing marketing is the lowest barrier to entry. As long as you have some funds, you can send out mail and start taking some action that way. It’s not like you have to pick up the phone and call strangers or door knock. You’re sending out mail, you’re out there and you’re getting a response. You just weren’t getting the response that you were used to.
I attribute that to and if you can take this concept home with you, our business is dependent on us getting discounted property. That’s it. To get a discounted property, you need to be able to convince a property owner to sell to you at a discount. You need to be in an area where sellers are easier to convince. That’s a big concept for people to understand.
Do you think that in Southern California, they want retail plus-plus because everybody knows that property values have skyrocketed?
That’s happening all over the country in a lot of different markets that weren’t like that before. Phoenix is a perfect example. There was a lot of seller distress in Phoenix for many years. Phoenix started heating up and now sellers are very aware that people are leaving California to move to Phoenix. Property values are going up, so wholesalers have a harder time convincing sellers to take a discount. I ran into that situation. Property values were going up in Southern California.
To give you context, Southern California’s average house price is $850,000 in my territory in Orange County. You try to convince a seller to take it even with a 20% discount on that home. This is hundreds of thousands of dollars. They’re going to tell you to go pound sand. I had two choices and this happened in 2015. I realized the lake was drying up. I can either get a job and quit this thing or I have to find another market to diversify myself, so not all of my eggs are in California’s basket. I ended up doing that because getting a job was my last resort. That’s where I went virtual.
You’re virtual in what markets?
My first market was Nashville, Tennessee. The first thing I did was built houses, ground-up construction. That was my first virtual venture.
That sounds like a nightmare.
It was easy. It’s flipping that’s a nightmare. Ground-up is not that hard because you’re buying land and getting an architect to draw out plans. You have a contractor or builder to give you a quote. As long as you don’t make changes to the fixtures and finishes, your quote is going to stay the same for the most part. Whereas flipping when you’re virtual, the contractor can make some adjustments and say, “I opened up the walls and didn’t see this and that.”
There are unexpected expenses. You got into virtual, doing deals, and wholesaling. That’s what we’re talking about. What markets are you in?
I’m in four markets and the markets I’m in now can change in 2022.
You’re flexible. You can pick up and move.
One of the reasons I’m in four markets is that two of my markets are in a state that’s passing the wholesaling legislation that will make it difficult for wholesalers.
You need to get a license.
We don’t even know the language yet. We still don’t know where it’s going, so I wanted to have a backup. The benefit is you can pick up and move. I wanted to give you the whole timeline so you can understand why I ended up wholesaling because wholesaling was better. I was house flipping. If you’re in your backyard, house flipping is very fun and creative. It fulfilled me creatively, which I liked. When you can’t be local, it won’t fulfill you creatively because you can’t be there anyway. You’re not feeling it, you’re not meeting your contractor and you’re getting ripped off most of the time. There are more problems and headaches.
This has been true across the board. Unless you have your staff that moves somewhere, you establish a territory. If you get in there to do flips in other states, you’re going to have to deal with shenanigans.
If you are interested in joining the most proactive group in real estate investing, it is the TTP program. Go to WholesalingInc.com/ttp, scroll down and check out the hundreds of testimonials and what the program is about. If it feels good in your guts, then sign up for a call. I look forward to working with you personally.
About Brent Daniels
Brent Daniels is a multi-million dollar wholesaler in Phoenix, Arizona… and the creator of “Talk To People” — a simple, low cost, and incredibly effective telephone marketing program…
Also known as “TTP”… it helps wholesalers do more, bigger, and more profitable deals by replacing traditional paid advertising (postcards, yellow letters, bandit signs, and PPC) with being proactive and taking action every single day!
Brent has personally coached over 1,000 wholesalers enrolled in his “Cold Calling Mastery” training, and helped 10,000’s of others who listen to him host the Wholesaling Inc. podcast, watch his YouTube channel, and attend his live events…
A natural leader, Brent combines his passion for helping others with his high energy, “don’t-wait-around-for-business” attitude to help you CRUSH your wholesaling goals as quickly and easily as possible!
About Lauren Hardy
Lauren Hardy is a Virtual Investing expert and Real Estate influencer who owns multiple companies in the real estate industry including real estate investment, coaching, and software companies. She is also a Wholesaling Inc coach and co-host of the Wholesaling Inc Podcast.
Her experience in the last decade has been focused on real estate investing and creating products and services to serve the real estate investing community. If you are interested in investing in real estate virtually, house flipping, or virtual landlording, Lauren’s your girl.