Posted on: December 16, 2021
WI 842 | Wholesale Fees

 

Finding discounted properties is one of the most proven paths to financial freedom. All the more does wholesale creates bigger revenues through fees. It doesn’t discriminate where one may be making those cold calls. Making connections this way will create promising opportunities to earn and even serve the community. This growing business takes the kind of talent that’s accessible to anyone who shows the right motivation. It’s a matter of consistency, patience, and eliminating the notion of instant gratification.

Joining us in this episode is 25-year-old real estate investor and networker Alec Schaal. He walks us through his journey towards closing wholesale fees and consignments worth $273,000. Alec isn’t missing out on answering the how’s and why’s to pursuing real estate investment amidst the ongoing aftermath of a pandemic outbreak. He takes us back to how he started unemployed and kick-starting his investment career in his mom’s laundry room.

From a Career in the Sports World to Getting Fired to Generating $273,000 in Wholesale Fees

We all know that March 2020 was when COVID started making an impact in all of our lives. The guest that I have on the show has an interesting story. I’m excited to share this story with you, not only the story but the inspiration that you get from the story, and some tactics that you can start using to implement into your business so you can be successful as this young 25-year-old out of Fort Lauderdale. 

He loses his job in April 2020. He’s applying for jobs, figuring out what’s going on, and decides to get into wholesaling real estate in October 2020. In about ten months, he has closed $273,000 in wholesale fees and assignments. This is incredible. You’ve got to read his story about how he did it because it took 90 days to get his first deal. To share this, break this wide open, and explain this experience and how he did it, it is my pleasure to introduce Alec Schaal to the show. Welcome, Alec.

Thank you. I appreciate it.

I’m excited. What a story. You’re a young man and you lost your job. What was the job that you had prior to April 2020?

It was a sales job. I was working in corporate sports. I originally thought sports was a safe market and then COVID happens. We all know what happened to sports. It was crazy.

How long have you been doing that?

I graduated from college in 2019. I did it from June to July 2019 until March 2020.

You were fresh. You were starting at the bottom.

It’s the inside sales, cold calling, selling season tickets and luxury seating, and everything like that, the groundwork.

You are rare in this world because you found wholesaling from your dad. There are not a lot of people that are finding this from their parents. Wholesaling has just caught on, but when most people are real estate investing, they are thinking about buying rentals, fix and flips or development. Wholesaling came in and people realized that this is the foundation of their real estate entrepreneurial efforts. It’s being able to source discounted properties. Your dad brought you into that. How did that go?

I’m blessed that he got exposed to real estate. He read Rich Dad Poor Dad back in 2010. I’ve been exposed to real estate for 10, 11 years. I grew up with him doing it. He never wholesaled. He bought from wholesalers. He was more on the buy and hold side while he was doing his W-2. He’s like, “Do wholesaling. You like sales, do this.” That’s how he got me exposed to it.

In April 2020, did you get a severance package from your job? Did they give you a nice nest egg to live off of for a while so you could get on your feet and decide what you want to do or find another opportunity? What do you do? What’s going on with Alec? What are you doing?

Follow up. Follow up. Follow up.

It was going well. January and February 2020 were great. I was working in Major League Baseball. The opening day was around the corner in March, then COVID canceled everything and they gave us a month of pay in April. It was like, “Do your own thing.” They had to let go of the new sales department guys. Slowly they were trimming it off and I was one of the first people to go. I had some savings from working. I had $5,000 saved up so I had enough for rent for a few months.

Did you live by yourself? Did you have a roommate?

I was living by myself. I was living in Miami at the time. I still had my lease and everything. I was fostering a dog at that time and doing all this stuff. My lease ended in August and my mom was like, “You can’t afford rent anymore. Come back and move in with me.” I turned 24 at the time. I moved in with my mom and she has a small condo. I’m living with my mom at 24 unemployed. A year prior, I had a good job. It was not a high-paying job but it was a job that I enjoyed.

You’re back with mom.

Luckily, I have my own apartment now in Fort Lauderdale. In August of 2020, I’m living with my mom. It was a blessing. It was cool that she allowed me to do that. I was living with my mom at 24, unemployed, and trying to figure out what I’m doing amidst COVID and everything.

You then started and decided you want to get into real estate. You decided you want to do wholesaling. You joined TTP in October 2020.

I joined TTP probably in my 2nd or 3rd week of starting. I’m like, “Let’s get this toned in, Alec. Let’s try to figure out what we’re doing here.”

People think that you need an office or a good space to make calls from. Explain to people where you were calling. For anybody, if this is your first time and you want to find discounted properties and incredible opportunities, you have to have consistent quality conversations with distressed property owners. We show you how to find those lists of distressed properties, how to get their phone number and what to say. Alec has the list now. He has the phone numbers and he knows what to say. Where are you when you’re making your calls?

My mom is a teacher and I’m back at her condo. She’s teaching from home because of COVID. She’s taking up the whole living room and dining room area teaching. I’m like, “Where am I going to cold call?” I can’t cold call in the guest room, which is where I was staying behind my boxes because I just moved in. I moved all my stuff with me so there’s no room in there. I can’t cold call in the dining room area where she is. I could maybe after 4:00 when she’s done, but then she wants to relax. She doesn’t want to hear me on the phone. I’m like, “What do I do?”

Luckily, she has a small little laundry room in her condo. It has limited AC and it’s a small little room. We brought a white fold-out table that you bring at a family barbecue, and we put a cheap office chair in there. I put my computer in there. Wires were going out the door and that’s where I got started. I was pounding out calls in there.

Talk to me about what your schedule looked like.

I did the same thing every day when I first got started. I lived and breathed real estate. I didn’t do anything. I woke up early in the morning, went to the gym, got a cold shower, got fired out and pumped up, and I would just cold call.

WI 842 | Wholesale Fees

Wholesale Fees: The best absentees are out-of-state absentees.

 

By the time you’re done with the gym, the shower and all that, what time is it when you start calling?

I start at 9:00 or 10:00 and I would go on until 6:00 or 7:00 every day. I’m crazy. I don’t mind cold calling. I enjoy it at the same time. I’m one of those guys. It was like, “Whatever.” I like talking to people on the phone. I did it before. I didn’t mind so I would go all day pounding it in this little laundry room with no AC.

As you’re making those calls, do you remember what your favorite lists were that you were calling when you were first starting out?

At first, I was trying to do niche lists like pre-foreclosures and everything. I do like the driving for dollars lists. I’ve closed a few deals doing those lists. Those are always the best leads. Honestly, now I like absentee. I feel like absentee is a good way to get warmed up when you’re cold calling too because you’re getting yelled at. Being yelled at is a good thing. It warms you up a little bit. Absentee is the bread and butter of my business and I’m assuming most wholesale businesses.

Explain what absentee is for anybody that isn’t familiar with that term.

An absentee is somebody that lives in a different house and owns that house. With absentee, we’re shooting for a tired landlord. The best absentees are out-of-state absentees. You could throw a lockbox on the vacant house of the out-of-state absentee. Absentee is when somebody owns a house but doesn’t live there. Tired landlords are the best thing.

When we’re pulling lists, we’re looking for people who are non-owner occupied. This isn’t their primary residence. We’re looking for people who own these properties for at least seven years. We know that on average, people hold properties for seven years. We want to let appreciation do its thing. We want to make sure that there’s a good amount of equity in these properties. The cherry on top is you look for properties that are older, built in 1990 or before. Now, you got the perfect storm.

You have older properties, where people don’t live in them so there’s not that strong emotional connection. They’ve got enough equity in there and they’ve owned it long enough to where they’re not suited to be a landlord or they’re ready to finally unload these properties. It’s the perfect storm. That’s where you find a lot of opportunities. Eighty percent of the deals that we do are non-owner-occupied or tired landlords. Whether they would be on our driving for dollars list, probates or preforeclosures, they all blend in there. For the most part, 80% don’t live in those properties. That’s typically what we run across. Is that similar for you?

For sure. You stack the driving for dollars and the absentee. Those are my favorite leads. I love those ones. Absentees are the best. You can’t go wrong with tired landlords.

You said another interesting word, stacked. What does that mean?

I’m spitting out words. We stack our list now. We have a lead stacker that we use, BatchLeads. A stack to lead would be somebody that’s on multiple lists. If there’s a contact that’s also on absentee and driving for dollars, it’s a stacked lead. We target those ones a lot. Those are usually the better leads. We go with everything but we hone in on those ones.

We use that as well. You’re getting multiple layers of distress. You might have somebody that’s behind on taxes and it’s vacant, and they’re on two lists. That is somebody that shows outward signs of distress, and that’s what we’re targeting. When you’re going after good opportunities, you have to solve a problem. You’ve got to find a problem that you can solve. I’m not telling you this, Alec. I’m telling the audience. You’ve got to find a problem that you can solve and that’s what we get paid for. That’s why we make such good amounts on our deals. What’s your average deal size right now?

While the oil is hot, make the move.

It’s probably around $33,000. It’s looking good.

There’s a lot of pride in that because you know that you’re providing an incredible value, whether it’s somebody who’s going through pre-foreclosure, vacant property or they’re not paying property taxes. All of a sudden, you get new owners into these properties. Property taxes are getting paid, which goes to the schools, the streets, the security and everything. This business is wildly rewarding. We’re going to do a deal breakdown and get real nitty-gritty because that’s everybody’s favorite part of the show. It’s the actual case studies.

Before we get there, Alec, what’s your dream? What’s the goal? When you’re looking at this thing and you see that wholesaling is the foundation of your real estate business, there are five main things that you can do to take the next step, 1) Fix and flip 2) A rental portfolio 3) Development 4) Make enough income to be the bank and to be able to lend 5) Coaching and mentoring type of business. Where do you see yourself? What excites you?

Financial freedom excites me. My dad owns a bunch of rentals. Rentals are the end game. I love the idea of passive income. That’s where I’m at. I’m growing the wholesaling business phase. I’m looking to bring on an acquisition manager soon and bring on some more cold callers. I have two cold callers. They’re absolute killers. I love them. I’m looking to bring on more. One of my goals is to do a deal that I’m not involved in. That’s a goal of mine. I want to own at least two rentals. It’s to build this business and get rentals.

Rental rentals lead to passive income and that cashflow. What’s the number that popped into your mind?

$3,000 a month in passive income within a year.

What about a big goal?

Get as many rentals as I can and get this thing automated.

Is it $30,000, $40,000 or $100,000 a month?

That would be amazing. I haven’t thought that far ahead, to be honest. I’m at $3,000 right now.

You’re in the mix, you’re in the ring, and you’re in the whirlwind. Let’s talk about a deal that you want to break down. What have you got for us?

I’ve got a good one. I started cold calling in the first week of October 2020. That’s when I made my first calls. The weeks prior to that, I was driving for dollars, building up a list, and got 1,000 leads. I was going to call it. I didn’t know what a dialer was. I had previous sales jobs and we never use dialers. We didn’t know what that technology was. I was hand dialing for my first week and that’s when we got in contact. You’re like, “Get a dialer.” I was working on Excel and it was my 97th cold call. I remember because it was the first person that didn’t yell at me. I caught this lady by 5:00 PM, 6:00 PM. She was just leaving work. She was waiting at the bus stop so she had time to talk to me.

WI 842 | Wholesale Fees

Wholesale Fees: The go-to advice is just get started.

 

She bought this house ten years ago with her boyfriend and they broke up. Now they’re looking to sell it. I’m like, “Cool. We would be interested.” We’re talking and I’m like, “What are you looking to get for it?” She’s like, “We owe $130,000 on the mortgage. We would probably sell it for that.” I’m looking at Zillow and I’m not good at pulling up comps at this point but Zillow was $200,000 to $210,000. I’m like, “Maybe I could wholesale it for $140,000 to $150,000.” I am trying to figure it out. I haven’t done a deal at this point. We’re talking and she’s like, “I’ll talk to my ex-boyfriend about it. Call back in a few days.” I called her back in a few days and she’s like, “He’s not looking to sell it. We got back together so we’re not selling it anymore.”

I followed up in a few weeks, even though she told me that. I’m like, “Has anything changed?” It’s just to see. You never know. She’s like, “We ended up breaking up again and we do want to sell.” I was like, “What are you guys thinking?” She’s like, “Let me talk to him about it and see where we’re at.” I literally would follow up in one week. She’ll be like, “We’re still thinking about it.” The next week I followed up and she’s like, “We’re still thinking about it.” The next week, “We got back together. We’re not selling.” The next week, “We broke up again. We’re selling.” I’m like, “What is going on?”

I had them in a constant follow-up route. We were talking and that weekly follow-up probably went on until mid-November. One thing that I like to do with follow-up is to lead with a negative. I’m like, “It’s Alec. I know you hate hearing from me. I know you’re so tired of hearing from me but I’m wanting to see what was happening.” She’s like, “No. Don’t worry about it.” It’s like, “It’s Alec. I’m sorry to keep bothering you. I know that you hate hearing my voice.” It’s stuff like that and they get defensive.

I would do that every single time. She was in my follow-up every week for three months. One day in late December, I woke up to a text message. I look at my phone and it’s like, “Call me at 12:00.” It’s an unknown number. I’m like, “What?” I walk over to my Mojo. I’m using Mojo at the time. We don’t use Mojo anymore but we’re using Mojo as a CRM too. We’re using the calendar feature. I typed it in the Mojo and it’s her number. I’m like, “I’m surprised I didn’t save her number.” I saved her number after that and I called her at 12:00.

She said, “We’re selling now. Are you still interested?” I was like, “Of course. When can I come by?” She’s like, “Whenever.” I’m like, “Can I come today?” While the oil is hot, make the move. She’s like, “Sure. Come at 4:00.” That same day I went to the house and I finally met her in person. We finally met in person after weekly phone calls for three months. It’s crazy. She was sweet. We were talking and she said, “Do you want to see the house?” I’m like, “Of course.” I walk in the house and it’s like if you go on Google images and you type in “Wholesaling real estate before and after fix and flip” or something, and you look at the worst before, that’s what the house looked like.

I walked in and I’m like, “This is wholesaling. This is it. This is what it looks like.” I walked into the house and there was broken furniture. None of the appliances worked and there were dog feces in the house. It was bad. I’m like, “Nobody should live there.” I walked into the house and we left the house. We were talking about the price and she’s like, “We owe $130,000 on the mortgage but we want to walk away with $10,000 each so we’re thinking $150,000.”

That’s what I thought I was going to wholesale it out. Originally, I’d get it for $130,000 and wholesale it for $150,000. I’m like, “Maybe it’s not a good deal anymore.” I was like, “I’ll run the numbers and see if I can make that work.” Even if I bought a contract that day, I wouldn’t have been able to lock it up because the boyfriend was also on the lease and he wasn’t there. I looked at the comps when I got home and the comps were in $250,000. I’m like, “What was going on?” The prices are rising quickly in that three-month span. I called her back the next day and I’m like, “We can make $150,000 work. When would you want to do this?” She’s like, “Let me talk to him.” I’m like, “No way.”

Here we go again. They’re going to get back together again.

That was late December 2020, and another 2 or 3 weeks I called her and she’s like, “We’re ready. Do you want to come? We have to do $160,000 now.” $160,000 is still a good price so I came over with the purchase agreement. The house still looks the same and I was like, “Let’s do it.” He’s not there, of course. He has to sign it. Every time I came over, he books it. It’s like he sees my car and he’s out.

I followed up the next day and he was not there. Out of the blue, he went MIA. He disappeared off the face of the earth for two weeks after I dropped off the purchase agreement. He’s not at work or anything. I don’t know where he went. He just disappeared. This was mid-January 2021. It’s 4 or 5 months of follow-up. It’s crazy. I’m still calling her every week. I’m like, “This isn’t over yet. We’re at the finish line.” I called her and it was already February. She’s like, “He came back but you have to talk to my dad about it.” I talked to her dad and he was like, “We want $170,000 now.” I’m like, “Are you going to keep raising it on me?” I’m like, “If we did $170,000, could we get it done?” He’s like, “Yeah. The ex-boyfriend will sign it if we get $170,000.” They want to walk away with $20,000 each. I’m like, “With $170,000, maybe I’ll wholesale it out for $180,000. It’s tight now.”

I went to the house the next day with another purchase agreement for $170,000. The old one is still sitting on the table. They said they couldn’t find it but it’s in the same spot where I left it. I drop it off and he’s not there. She’s like, “He’s going to come back soon.” I’m lingering around the neighborhood. He never came back. He disappeared for another week. I’m like, “This is crazy.” This guy doesn’t even go to work. I don’t know where he goes. I’m following up every week. If I had kept track of the touches at this point, it was at least 50 touches. It’s a crazy amount. Sometimes we talk multiple times a week. It’s constant. People make a big deal about follow-up. How long does a follow-up call take?

The interesting thing is with 50 calls, people are like, “It’s exhausting.” A lot of that is calling, no answer, text message. That’s 80% of it. For the other 20%, you’re probably talking to this person more. It’s not taking you all day.

It’s a journey. There’s no magic, it’s just inputs and outputs. You just have to keep doing it.

Even when you talk on the phone, it’s a two-minute conversation, tops. You say, “Anything new?” “Nothing.” “Okay.” It’s not that big of a deal. It’s mid-February and he disappeared again. I don’t know where this guy went. He’s not even going to work but he does his job. It’s a weekly follow-up. Early March, I get a call completely out of the blue from her. She’s like, “He came back and signed it.” I’m like, “Let’s go.” That same day, I drive over, pick it up, scan it, send it to the title company, and it’s locked up at $170,000. I’m like, “I got this locked up at $170,000. What should I do?”

To this point, I’ve done two more deals. I then built up a buyer’s list. Now I have more grounding. It worked out that this lasted so long because the values went up too. It’s $170,000 and I’m looking at the comps. The comps are now pushing to $270,000. The comps are going up. It’s a hot area of South Florida where I got this house. It’s in a good rental area. I’m like, “I’m going to send it out at $200,000 and see what happens.” I’ll send it out at $200,000. Why not? That same day, there were two full-price offers at $200,000. I didn’t accept any yet.

The next day, I got an offer at $205,000, unseen. I had a Dropbox link with the pictures. The guy didn’t even see the Dropbox link. It’s $205,000, unseen. I’m like, “Done.” Maybe I sent it out too low but it’s alright, just get this done. I sent over the assignment. It was a $35,000 assignment. It’s risky. He seemed like a good buyer when I was pre-qualifying him. He signed it and we got it done. There are a couple more parts after we got it done.

That’s not the end of that story. There’s a lot more for the boyfriend to sign before this thing gets done. You’ve got to get all of the title documents, the statements, and everything that the title company needs. I bet he wasn’t Johnny-on-the-spot.

He was a hard guy to reach.

Let’s celebrate. Over $35,000, 50 calls at least. Congrats.

Thank you.

Do you have to go find him and drag him to the title company?

It’s funny because as soon as we signed it, he was answering my phone calls now. He was my best friend after we signed it. We did a couple of things. I had his money. He wanted his closing money. Because they’re going to rent a place, they didn’t have any money. They wanted me to lend them $3,000, that’s $1,500 each.

We signed a document that I would lend them the $3,000 before closing, and then they would sign the closing docs then so they couldn’t just run away. That’s what we did. They then could afford to pay first for their new place. Two separate places. They weren’t moving to the same place. What we also did that somebody told me about that saved this deal was we did a seller hold back. At the closing table, we did a 30-day close. They didn’t find a place in time for the closing. What we did was a seller hold back, which is a fancy term of saying, “We hold the money.” The title company held $10,000. They have fourteen days. If they stayed past the fourteen, we would keep the $10,000. If they moved in that fourteen days, they would get $10,000. It finally closed. They got out and found a place.

You look at the 50 calls that you made and all the other stuff and divide by 35,000, it’s worth your time. Touching on something there. What Alec is talking about that is common if the property is occupied either with the tenant or with the owner is something called a post-possession agreement. The title company is going to hold back a certain amount of funds. Typically, we put in $10,000 of hold back to get out on a certain time. If they don’t, that starts getting reduced by $100 a day until they’re out of there. It’s common if somebody is living in there. It’s a post-possession agreement. You can google and check it out. Get familiar with it because you will be using it if you’re talking to enough people in building your business.

It’s good to have in the back pocket.

WI 842 | Wholesale Fees

Wholesale Fees: Consistency and patience are super important. This isn’t a business of instant gratification.

 

You can get that from a closing attorney, escrow and title company. You can ask them for those as well. It’s incredible. You get $35,000 off of that. You’ve done $273,000 total. You’re off and running. You’re showing out. This is beautiful and true. If you talk to enough people, you’re going to get the opportunities. That’s it. You weren’t afraid of the phone. You were already in a job where you were using a phone. It’s such an advantage. For everybody out there, if you’re scared to make calls or you have a fear of the phone or the phone feels like 500 pounds, look at the flip side of this. Look at what you can do. Look at what the service that you can provide.

You’re going to have to find these people that are in these distressed situations but you get the opportunity to solve their problem. They’re not solving that problem by themselves. They’re not solving that problem without you hand-holding them, walking them through, and getting the deal done. Other investors are not going to spend 50 calls. They’re not going to go and reach out to somebody, organize and then care about it. It shows your heart, Alec. It shows that you are out there to serve the community and you get paid handsomely for it.

It was a rewarding deal. I’m still in touch with her. We talk every once in a while.

Alec, if people want to reach out to you, they want to squat up with you, network with you in Fort Lauderdale or Miami or just say congratulations, what’s the best way to do that?

The best way is Instagram, it’s @Alec_Schaal. I’m in Miami, Broward County, West Palm Beach in Port St. Lucie Markets, and a little bit of Tallahassee too. We’re in those markets. If you’re in those markets, reach out. Otherwise, we’d love to connect.

Give advice to people just getting started out.

The go-to advice that everyone hears is to get started. That’s super important. Getting started is the best advice you could take. There are a lot of other things that are needed in this business. Consistency and patience are super important. This isn’t a business of instant gratification. A lot of people think, “I’ll call this person and they’ll sell it. I’ll make $10,000.” You hear that all the time. On the tenth cold call, they sold their house and they made $10,000. Even then, it still takes 30 days to close. It’s not even instant then.

It’s not a business of instant gratification. You got to win the day. You’ve got to win every day. The results will come. I had a deal that completely messed up in my second month of wholesaling. The other guy made $40,000. I had to cancel the contract and he made that much money. I thought about quitting so many times but I was like, “Keep going.” It’s a journey. There’s no magic. It’s inputs and outputs. You’ve got to keep doing it.

Alec, thank you so much for jumping on.

I appreciate it. It was awesome.

For anybody out there that is interested in joining the most proactive group in real estate investing, it is the TTP family, it is the TTP program, go to WholesalingInc.com/TTP. Check it out. Check out the reviews, the testimonials, the success. If it feels good in your gut, sign up for a call. We look forward to talking to you. I look forward to working with you personally. That’s it. Until next time, I encourage everybody out there to go talk to people. See you. Love you.

 

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