Many people want to start investing in real estate but don’t know where to start. Wholesaling is by far the best way to get started. It requires no training, knowledge, cash, credit, or experience. It is okay to make mistakes in wholesaling, but it is also crucial to be aware of those stumble downs. You don’t need to be an expert, but you need to pay attention, follow through, and execute the steps below. Depending on how much time and effort you can put into wholesaling, you could quite possibly leave your current job and become a full-time wholesaler if you choose to. Of course, the more experience you gain, the easier it will be for you, the more streamlined the process will become for you, and the more deals you will close!
In this episode, we are joined by our guest Alan Whitworth as he shares his journey towards closing $3,000,000 in assignment fees and how he did it as a first-time wholesaler with no experience. The wholesaling tips and tricks continue in this discussion.
3 Million in Wholesaling Assignment Fees in Two Years with NO Previous Experience
We are sitting down with Alan Whitworth. You started wholesaling in 2019 and have done over $3 million in sales. Assignment fees revenue to you and your business, that is an incredible number. You were a Field Operations Manager and then you jumped into the world of investments in wholesaling. I remember meeting you back then and then having a few conversations here and there but you have exploded this thing. You are still doing traditional wholesale if there is such a thing as traditional wholesale. You are doing buy and hold to doing more advanced strategies like innovation. Thank you for stopping and being on the show. I’m glad to have you. Give me a little bit of background on you.
In 2018, I asked my wife what business she would be interested in getting into. From the start, I was not even thinking about real estate. She was like, “Real estate sounds interesting.” In January 2019, I bought a course for $30,000. It was ridiculous. It was not even that informative but it started me. What I was figuring was like, “I could buy a car for $30,000 or invest this money in myself and then that thing pays off eventually,” something that gives me a return. It wound up being a terrible platform and course. Everything about it was terrible. On top of that, getting around other people that were doing deals and that were in real estate was the main factor.
You have to filter through what everybody’s intentions are too, because some people want to do deals with you and make money helping you get through the deal, buy your deal from you and then other people want to sell a product. That was their persuasion on it. I had to start deciphering through that. What I did initially was I started with text blasting. I was taking $3,000 out of my bank account every single month and gambling on text blasting every single day. I was using RooR, which is a very primitive platform.
I would skiptrace my stuff the previous day and then I would get up and set up my campaign at 3:00 AM. I started work at 5:00 AM. I set up my campaign, run it by 4:00 AM, get ready and then go to work. It would not start blasting until 2:00, when I was off work. It was weird because it’s a big kick in the mouth. It’s so much negativity. I was even running ringless voicemails as well. People are calling you back, telling you that they hope you die, all kinds of terrible negative things. My wife and I were getting into arguments all the time about the fact that I was pulling $3,000 out of our bank account every single month. She was like, “What are you doing with it?” I had nothing to say to her.
I started all my campaigning in January 2019. I did not close my first deal until June of 2019. That was that persistence level that you have to have to succeed. Through that whole timeframe, I was like, “Can I even do this? Is this even possible? Are all these people full of it?” They are saying that they are doing this, getting deals and stuff like that. It’s strange because once you get proof of concept and you know that if this is something that works, then things start. Put it in perspective too. June of 2019, I closed my first deal, which is $56,000 off the first deal.
All that work that I was doing on top of that is what you got to figure out. I was building a pipeline, stacking in conversation to follow-up and then after that, I closed the next one. I did about $100,000 my 1st year in 2019, which allowed me to resign from a career that I had for 25 years as a field operations manager for an electrical company and walk away and go straight full-time into real estate. I’m not the best, by any means. You are going to make mistakes.
Anybody that says that they are flawless and says, “I was going to pace more but he got his 1st deal after 1 week in wholesale,” I do not necessarily agree with that. No pace on that but his wife was already in real estate this entire time. Everybody has different factors. I came in point-blank, starting from scratch. You had no clue. I did not even know how to spell real estate.
There is a lot that happened right there. You spent around $18,000 in 6 months to catch their first deal. That is a lot of faith going into a space that you feel can make a difference. The strategy that you began with RVMs, which are Ringless Voicemail and then SMS, which is text messaging, it’s one of those things that lasted for eight months before you started breaking and falling apart. I remember doing that as well. I used it as a strategy for a few months but then restrictions started kicking in, red flags, fines and lawsuits.
It got real crazy real quick. You have this strategy and started blasting and reaching out for sellers, trying to find deals out there and it starts getting tighter. What happened first? Walk me through the process. Did the marketing get tighter? Did you switch gears on the type of marketing that you were doing? How did it carry you through those six months?
I was doing ringless voicemail and text messaging the entire time. I did not change. I kept doing the same thing over and over again. I would change my approach in my text messages, how I would be talking to people. I was hitting a lot of foreclosures and stuff like that, which is a list that everybody hits. I do not even touch them anymore because I have a different marketing strategy, but when you are doing direct marketing, everybody’s hitting the foreclosures. As far as marketing goes, I do all PPC, instead of me or my team begging for a deal anymore, which is exactly what text messaging, cold calling and ringless voicemail do.
It’s the difference between marketing and prospecting. In marketing, you are putting yourself and your brand out there, what you can do and people see that. It’s like fishing people. People come to you. When you are prospecting, you are going after people. You are sending a text message and cold calling people out. It can be a lower cost but it’s going to be a lot tougher because we are reaching out as opposed to them reaching in.
It is not always lower costs though too. In 2020, I started doing cold callers. I had ten VAs and still have people hitting me up asking me if I need any VAs. I laugh about it a little bit. Even the leads that they are bringing into you are not necessarily solid. You still have to close those leads. The difference is when you are doing something like PPC, you could be spending the same amount of money. If I would have had $18,000 in PPC, I probably would have done a lot better and a more positive experience with every single one of these people I talked to because it shakes you up.
I have a question in that regard. I advocate for cold calling. PVC is a better strategy to get people in. It was more expensive. It’s not necessarily the most cost-effective thing as you are coming into the business. The thing about cold calling is it preps you. It builds that fake skin because people are throwing rejection at you and you are having conversations and then building that skillset as you are going through it.
One thing I have seen people do is they come in and have a budget of $10,000 to $15,000. They drop it into PPC or something more expensive or higher out right away and the second that they get an actual deal, they have no idea what to do. There are some theoretical approaches to things but the confidence and the personality that you need to have as a closer to go close a deal is not there, the actual walking through the process of the thing so many different times before you get something real preps you.
It’s not a necessary evil. Even with my team, as it sits, everybody’s going to get into slumps. If you think that you are going to jump into real estate and all of a sudden you are going to kill it, you are wrong. You might get lucky. If you get your first deal after a week of trying, I don’t know that is a benefit. It might be to some people but you might get spoiled and then you get lazy.
90% of real estate deals come from follow-up.
I tell my people on my team, “Make the most difficult calls first. When you show up, make the ones that you do not want to make first.” We have evolved to the point where none of it even matters anymore. When you are coming in new, you always want to prioritize the most difficult phone call. When we start talking about that deal, I’ll even put perspective on that as well. It was a ringless voicemail lead that came in and I’m sitting there in my truck like, “What do I do?”
I want to make a little side note on combining different marketing strategies. RVMs and then you have SMS. I was doing the same thing. When I was doing text messaging alone, I was getting a 9% response rate. For the longest time, I started sending out to 1,000. I would hit 1,000 records. That was my base number. I would set up different campaigns with more than 7,000 or 8,000 but I always had a control campaign of 1,000 to see response rates and have a good grip on the percent. This is what I can expect. When I was doing one of them, it was SMS first. The response rate was about 9% or something like that.
Out of 1,000, we would get about 90 text messages back. It was responses, not necessarily leads. It’s people sometimes being mean to us. We would drop an RVM, a Ringless Voicemail and then shoot them a text message, “I called you a little while ago.” This message would hit maybe 5 or 3 minutes after it was timed. The response rates went up to about 27%. We would get 250 responses. There was a lot of stuff to plow through as far as qualifying. Combining a couple of different avenues of marketing is a very effective way.
That is out the window because of all the red flags. RVMs and fines are dangerous to do even if you do it right. There are still different ways of coming across people. PPC is one of them and social media is another one but if they keep seeing your name and then you start building that relationship somehow and some way to a degree with the sellers, they will come back and give you a call when you are sitting in your car.
Ninety percent of the deals come from follow-up. What you are talking about is omnichannel marketing. You are hitting them from multiple areas. Even when you are doing text messaging, if this is what you are choosing to do, your initial text message has to go out with no content like, “I called you the other day. What is going on?” That one will get through the veil that won’t be blocked by the carrier.
The second one that comes through is, “I was interested in talking to you about your property at XYZ.” That was one thing that we learned because your deliverability goes down if you try to put content in the first one. It gets flagged and pulled out. We went through all this stuff. All my acquisition agents, I had 4 or 5 of them at the time, were required to put out 2,000 text messages in 1 day.
That was not even included what the conversation was. It was strange because in the office, it’s demoralizing for everybody. We would have people in the office would show these text messages that were like, “Let us see who could outdo who with the worst one.” They made a game about it. I always went by how much it costs me to get a contract for that channel. In text messaging, we’re about $1,400 to $2,000 per actual contract. I do not care about leads, I care about contracts. Everybody has a different metric and thinks about this differently but all I care about is bottom-line stuff. “Is this making me money?” Whether our follow-up is fantastic or junk. With the ringless voicemail, I hear the phone ringing all day long. People will be like, “Arizona next level, how can I help you?” I hear him go, “Sorry about that.”
It’s interesting because when you shift over to PPC, every single person that is calling you is wants to sell their house. You have to qualify whether that house has any value. We look at 10,000 plus population because we already know we can sell on a 10,000 population. I know other people doing PPC that will not touch anything below 50,000. We have multiple campaigns running a PPC and cross-matching to see which ones are performing. We created one that has a 50% conversion rate, which is insane. I hear other people, Corey Geary excited about a 12% conversion rate. I’m like, “This one is at 50%?”
I threw a whole bunch more money at that one. You have to be very selective because you can go broke fast if you make some bad decisions. I used to have twelve people in my office, including myself and my partner. Altogether, there are seven of us. We are doing better and more effectively. You learn so much. You learn where you can trim and add. I want to get to the point where we are clear $300,000 a month always.
You are talking big numbers. This is usually what you get from somebody who started years ago but you have been in it for a couple of years and move so fast.
It’s a matter of being around the right people. If everybody that I’m hanging out with is brand new to wholesaling, I’m going to be happy with 1 or 2 deals a year. I would never be content with that. When I was starting, everybody like, “I do fifteen deals a month.” What does that mean in numbers? Fifteen deals a month could be $1,500 deals. You are clearing in $20,000 a month. No disrespect to anybody or even realtors because realtors are always talking volume. The total value of the property. “I did $12 million.” “What did you make? What was your cut out of that?” They could cut themselves short at 1% to get the deal.
You are not necessarily grabbing 100% across the board, so it’s all dicey all the way through. Be careful when you hear those types of numbers from people. On top of that, when you are dealing with people that have been in wholesale for a while, “I do ten deals a month,” what does that mean? I started asking that question after a while because I was like, “Maybe I’m getting 1 deal every 2 months.” I’m clearing $20,000, $30,000, $40,000 to $50,000 on the deal. When I started talking like, “What does that mean,” stop talking to me about how many deals you do because it’s irrelevant. How much money are you making off those?
Getting them deep as is the real key thing. We have learned a lot of tricks. Everybody in my office on the acquisition side is super comfortable with having those harder conversations. When you first start, it’s so hard to have those conversations because, in your mind, you are like, “I would not go for this. I would not accept this.” If somebody wants to drop me $20,000. I’ll be like, “Go F yourself,” whereas now it’s like second nature. Sometimes we will even lock up a buyer and then go back to the seller and drop anyway.
There were a lot of people that would suggest that it’s unethical to get a house under contract for $100,000 and then come back 1 month or so later and then try to drop the $10,000, $20,000 or $30,000. If you put it in perspective on the realtor side, this happens all the time, especially when you get to the BINSR and appraisal aspect of it. Price drops happen all the time. It’s part of the business. We will try to hit both sides of it. Get the number up on the buy-side.
People love to talk about themselves. Build rapport in a massive way by getting other people to open up about who they are and what they do.
It never hurts to ask the question and then you are deeper. Your efforts have become more fruitful. That is key. People have a lot of mental blocks with this where they are afraid to ask the question or any question. Have those difficult conversations even pushing the send button on your phone, and over time you get a thicker skin and a better understanding of how to navigate these conversations.
Your background is closing. What are the top three things somebody needs to focus on to become a good closer?
I had a bunch of foremen working for me. If I came onto a job site and go, “You need to fix that and this. Get it done. I’ll be back,” people would be like, “Screw that guy.” I’ll do what I want because these are all rough-neck dudes with their big level careers in anything. I’m overseeing them. What I learned fast was if I walk up, care and get rapport with that person. This was before real estate. They want to perform and do stuff for me. If you take that into negotiations on the real estate side, you build rapport with people. I will throw little statements into the conversation to see whether they are left or right-wing so I know I can have this conversation.
One of them, I’m not going to have a conversation with them, the other one I might. I feel them out on what their common interests are. I try to get a bond with that person initially. That gives you so much because you give somebody value in a conversation, like listening to them. If I call you up, I ask you a question, I pause and I don’t say a word for five seconds, you are going to respond because it’s going to get uncomfortable, regardless.
You start with, “How are you doing?” Whatever they are going to tell you, it does not even matter. “Why are you looking to sell?” “I need to get out of this house.” Whatever their response is, you do a why on top of that one. “Why are you looking to sell?” You do not say anything for five seconds. You do not want to take too much further past that. You can engage with them however you want.
As far as strategies go, that is a good strategy, especially when you are dropping an offer. When you drop a number, it’s almost like a game of who can stay quiet the longest. “Our offer on this property is going to be $180,000.” You stay quiet. The room gets heavy. The air gets thick and it’s uncomfortable. Whoever speaks first loses. It’s how we work it on the negotiation stage. During a negotiation, if you give somebody an easy out, they are going to take that easy out.
You’re forcing them into answering. “Why are you looking to move?” “I want to be with my kids or something like that because I’m retiring.” “How long ago? What are you retiring from?” Any one of those things. You can pick up one thing and what they said, you repeat something that they said with the additional question.
Keep doing that over and over again. You do not want to let it drag out to the point where the conversation falls flat but they know that you are interested in them, which people value the most. The thing that people love to do is they love to talk about themselves 100%. If you can get somebody to talk about themselves, you are building rapport massively at that point in time.
Tell me about this $56,000 deal that you got 6 months into it. If you put your neck out there for 6 months, you spent close to $20,000 in marketing. Fighting and arguments are in the middle of that because you had this vision and idea of what you could get to.
That was on a ringless voicemail. I got a voicemail message from this guy, Paul. He was like, “It’s time for me to sell.” I had no idea what he was even talking about. No clue. I did not have a Podio or CRM. All I would do is I would put dates for follow-ups in my Outlook calendar on my phone. “Call this guy this day.” That was my CRM. I’m sitting there like, “This guy called me. I have no idea what he is talking about. I got to figure this out.” I pulled over my truck and sat there for a little bit. I finally got myself to push send on my phone.
He said he was going to sell another house in Peoria because he was going through a divorce. I was his friend after that. I talked to him about his divorce going back and forth. Two weeks later, he was like, “I got this other thing that you might be able to do something with. This guy is telling me he cannot pay.” I did not realize this guy was holding notes. I did not know that he was a mortgage lender.
In this business, you never know who you are talking to. You could be talking to somebody about some shack and freaking Maryville that has 50 properties across the country. You have no idea who you are talking to, so be careful how you approach everybody because everybody could have multiple deals that they are not even telling you about.
He said, “This guy is paying $600 a month. He called me and told me he cannot pay for it anymore. In the past, I would foreclose but I’m getting too old. I do not even want to mess with that. Do you want to see what you can do?” This is a Roche property. I sold it to Pace Morby and then ultimately found out that he sold it to Chris Ironman.
You get curious about the process. It does not matter. If you make money on it, that is all that matters. Paul was the note holder and he had his guy that had the house whose name was Paul also. Everybody hates them. They are dealing heroin and meth out of the house. Nobody has even been in the house for years. His brother Paul had been paying the mortgage on it the entire time. All that was owed on this thing was $32,000.
That is a sign of distress.
This is such a low-dollar property too. Amazingly, I was able to pull out that much money. I even gave more money back to the seller at the same time. I started talking to Paul, the guy that had the property and then I went and signed a contract with him for the $32,000 that he owed Paul, the note holder.
Always do the most difficult things first. Trick yourself into performing without doubts. It gets lighter the more you are willing to take on challenges head-on.
What was the ARV on that property?
The guy did not care about the property. He wanted to get rid of the headache. He got it for $32,000.
I wind up giving him an additional $19,000.
How much is this worth?
If that is not worth the six months of trust, belief and effort, I don’t know what is.
There was another aspect to it though too, because there was an IRS lien tied to the property for $125,000.
On your first deal, you are dealing with somebody who does notes and has experience in it. They do have some pain in there and you have liens on top of this thing?
My whole theory was if I don’t know how to do it, I’m going to figure it out. On the CEO podcast, you and I were talking do not be afraid to ask. Ask people and get information. They wanted to have an appraisal on the property and I do not think there is no way an appraisal is going to happen. This guy is going to shoot people if we try to try to walk through the property. We created a construction budget for it that took all the equity out of the house. There was no money to be made on the sale of this property, no matter what. We turned that into the IRS and they lifted the lien. I did that all through the title company. Empire West was that one.
You went in, estimated the rehab, amounts of costs and everything and then created a budget after that.
Construction budget that took all the equity out completely. There was no money to be made on the seller of the property.
Whoever bought it, came in and did the rehab. That is an advanced level type of strategy to put together.
There are a lot of things that you can do in real estate and it gets broader. Maybe I’m a 1 or 2 on a scale of 10 in the real estate game. There is always another way to go about it. We brainstorm all the time. There is this property we have in Washington. We were going to make $80,000 on it. The wife comes to sign because it was gifted to the man. We even paid for his attorney for him to get divorced. We paid $7,000 to this guy and put a lien on the property. We gave him $5,000 initially to pay for his attorney. We even found his attorney for him.
He had been trying to divorce this woman since 2014. He never could come up with the money. We already had this thing under contract with him, so we are already in the game with him. He was like, “I cannot sell this property because of this divorce.” I’m like, “There is another problem we got to deal with.” We pay him $5,000, got his attorney and then that attorney bellied up and was getting disbarred so we had to hire another attorney. With that $5,000, we put a lien against the property. With the $2,000 that we gave him later, we said, “We will give you $2,000 but we are going to do a buy option on your property.”
Meaning, he cannot sell this to anybody else but us, no matter what. His soon-to-be ex-wife, which has no stake and rights to the property, refuses to sign. The title company is saying that she needs to sign. She doesn’t because we have this court order from the judge saying it’s not necessary but the title company wants to protect themselves. We went back and forth and then what wound up happening, I had my acquisition agent call her on the phone. I was like, “Offer a $5,000 to come and sign. When can you come sign?” We have been trying to get this lady to sign.
You are thinking outside the box. You are coming into it from a different perspective, solving the seller’s problem. The seller has a big issue. Maybe a personal issue not related to the property, at the end of the day it is. That is where a lot of people stop. What are the issues? What is the distress with the property? They do not go that extra level to find out is there something else that might be stopping this from happening from creating a solution for this seller, which at the end of the day, is what we are trying to do. We get paid for speed and convenience.
At the same time, you want to do everything you can to protect your investment too. I got a lot of time, money and energy into this thing. I want my $75,000. I do not even know what it’s going to come out to be. I’ll let you bring up what we can do for people too when we get to that point but you have to protect your investment. You cannot be afraid of anything. The most difficult phone call that you have to make, you need to make that phone call first. The most difficult thing each day that you have to do, you need to do the most difficult thing first and then everything else is down the hill.
You wait until the end of the day to make that difficult phone call. You are going to sit there, agonize over it the whole day and then finally get them to go, “This was not a big deal.” If you knock that out first, you have momentum through the day. It’s a mind trick. You have to trick yourself into performing without having doubts because we are all going to fight through doubts no matter what we do. It gets lighter the more you are willing to take on the more difficult things first.
There is a book called Eat That Frog! that touches on that. It sets you up to knock some of those heavier things out of the way first and then everything is going to be easier. There are always two takes to that stuff but I agree though. Whenever I get rid of whatever is heaviest, I’m coasting through the rest. Thank you so much. It’s insane years and the amount of progress that you have made is big. It’s spectacular to see your progress and coming in that fast over a matter of a couple of years.
It’s consistency and showing them what it comes down to.
Thank you so much. It’s a pleasure having you on the show. There you have it. If you have any questions and you want to find out how to build an actual business, instead of remaining on that hustle and trying to figure things out every step of the way, go to the Wholesaling Inc. website at WholesalingInc.com/WBB. Set up a consult call and see if it pans out. If it pans out, we look forward to working with you on a one-to-one basis. Stay focused. You got this. Let’s go.
- Alan Whitworth
- Empire West
- Eat That Frog!
- Be sure to join the Wholesaling Inc Facebook group
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.