Posted on: April 07, 2022
WI 924 | One-Of-A-Kind Strategy

 

Most people think it’s easier to make money elsewhere than invest your coins in real estate. But both are difficult if you don’t know what you’re doing. When you’re in the real estate market, you have to realize that consistency is key. Like any field, real estate success takes time; but don’t let a couple of hurdles put out that fire.

Take the story of Auston Cook, who’s had his fair share of ups and downs in the real estate business but still managed to skyrocket his way up by following this one-of-a-kind strategy. Be inspired by this determined investor, and start taking action by listening to today’s episode.

A Unique Real Estate Investing Strategy That Is Unlike Anything We’ve Seen

Episode Transcription

It is very important to remove everything that is unnecessary about being a real estate entrepreneur. Let me break down this business into three parts. It makes it very simple. The first part is lead generation, which is the engine of our business, that is going out there and finding the opportunities. The second part is converting those opportunities into signed agreements or signed commitments. That’s doing the lead follow-up, the pre-qualifying and doing an incredible offer presentation.

The third part of this business is the exit strategy. There are only three parts to that. You’re going to buy and hold property, put it into your portfolio and hold it. You’re going to flip a property. You’re going to buy it and flip it, at some point, and sell it for a profit or you’re going to assign your rights to purchase that property. That’s what’s commonly referred to as wholesaling real estate.

My guest from Plymouth, Michigan, has got an incredible strategy that I want you to pay attention to because this is different than anything else that you’ve heard on this show so far. It’s incredibly smart and thoughtful for what he’s doing. It’s incredibly creative how he’s finding opportunities where other people are passing them up. It is with great pride that I bring on to this show, Auston Cook from Plymouth, Michigan.

I’m super excited to be here.

I’m super excited about this as well because usually, I open up these show conversations, Auston and I say, “How did you get into real estate? Is your family from real estate? Do you have a bunch of success coming? Somebody that you can look at and see a bunch of success in the real estate world,” Almost every single interview says, “No, I don’t have anybody. I’m the first person in this.” You have a legacy. Your dad has been doing this for a long time. Why don’t we talk about that and talk about how you got into this business because you didn’t want to?

It’s a full-circle story. My father is an OG wholesaler and developer in Metro Detroit. Before the recession, he was the seventh-largest builder in the state of Michigan. He was all private and never went public, which was quite the feat. Essentially what happened here is I saw my dad as I was growing up working hard in real estate, making a lot of money and then the recession hits. He and all his partners lost pretty much everything. That was about the time when I was getting into high school, maybe early freshmen or sophomore year. I was like, “I’d never want to do this real estate thing.” It’s bonkers. He worked hard all this time and then he lost everything.

It scared me away. I went through high school and college. I did not want to do real estate. I didn’t know what I wanted to do. I went to the University of Michigan. I graduated with a Degree in Mathematics and Environmental Science and I still didn’t know what I wanted to do. One thing I knew is I loved climbing. I went and got my climbing certificates and I took people climbing in the mountains. I climbed for pretty much a year straight. I lived out of my car and climbed in 38 states. One day, I fell and broke my foot, so I had to come home.

As my foot recovered, I wasn’t going to be able to climb for three months. I plan to get a job for those three months and then get back in my truck and go climb. I got a job selling solar panels. I quickly rose to the ranks in the company. I became the number one salesman at that company pretty quickly after six weeks. I realized these people are asking the same question over and over again about the solar panels. They’re asking, “How is this going to affect my homeowner’s insurance?” I had no idea. I was living out of my car at this point. I was living in my dad’s basement once I got back when I broke my foot.

I told them, “I don’t know,” but I got this question over and over. I looked it up and I realized that Michigan has super high insurance rates because of their no-fault insurance on the automobile. People are bundling auto and home together. They instantly think they add a $30,000 system for their house, their insurance is going to skyrocket. I realized that people only care about the price of their insurance. What I did was I went and I got my insurance license. I got sponsored through Allstate to write homeowners insurance and when I go on an appointment to sell them solar panels, I would also have an insurance quote. If my price was lower, they would go for it.

Now, I was double-dipping in sales and I wasn’t only selling solar panels, but I was selling homeowners insurance. After a while, I realized homeowner’s insurance was easier to do, so I started selling that full-time. I started getting with some realtors and auto dealers to try to sell more policies. I realized auto dealers were flaky. The deals would fall through and I’d be wasting my time, but what I realized with the realtors is that after 30 days, it would take a little while, but the sale would always go through. I realized these realtors are getting paid $10,000 a sale and I was only getting paid $100 a sale.

Real estate requires action. Just go up there, knock on the door, pick up the phone, and give them a call.

I was like, “Something’s not right here.” This is where my dad comes back in. My dad, he’s been a real estate broker, developer and wholesaler for many years since ’77. He was like, “Do you want to get into real estate? You got to get your license. This is not going to be easy. Real estate is tough and hard work. It takes time to see results.” I’m like, “I’m up for the challenge.” I went and got my license. I’m like, “Now, what do I do?” He’s like, “What you do is you go into the legal newspaper and you look for people going into foreclosure. You walk up to their door, you knock and you ask them if you could buy their house.”

I love your dad so much. It’s old school. I know we were talking right before this and you’re like, “I was doing a lot of old school methods and my dad’s old school, but it works.” It’s still talking to people and getting in front and having a quality conversation. It’s not the most efficient in 2022, I’ll tell you that, but it’s phenomenal advice.

I went there. I had no idea what was going on. It was my first day doing real estate. I knocked on the lady’s door. She opens. I told her she was losing her house and she started crying. She pulls me into her house and is asking me all these questions. I don’t know what’s going on. I ended up telling her, “I’m going to come back tomorrow. We’re going to talk about this.” I’d come back and I asked my dad that night. He helps me write a purchase agreement. He drafts up a purchase agreement. He’s like, “Here’s what you do. You’re going to go in with this.” We went into the house and the lady didn’t want to sell at the price that I was proposing.

I was like, “I just got my real estate license. I can help you put it on the market.” We went to put it on the market and we got an offer on the first day it was on the market. This was the summer of 2019. The offers were $20,000 lower than what we thought or what we had it listed. I told her, “If you’re going to take this, I’ll match this offer in cash,” because my dad basically already said he would give me a loan on this project. It’s my first project and he was pretty happy I was getting into real estate. She’s like, “That sounds good.” I took my commission off of that. I got it for $12,000 less.

I got this big house and my plan was now to save her from foreclosure by purchasing it cash and then renovating and selling it. My dad goes, “That’s a great thought, but look at this house. Do you see anything different about this house compared to their neighbors? I was looking at it,” I was like, “No.” He goes, “How big is that lot?” I’m looking at it. I’m like, “I have no idea.”

I go up there to their township. I figured out how big this lot is. I came back to him, “It’s 100-foot,” and he goes, “Go back to their township and ask him how much you need to build a house here. How many feet of frontage do you need?” I came back and it’s 50. He’s like, “How much are new construction homes selling for in this area?” I looked it up and they’re selling for about $500,000, and we got this double lot for $168,000 with the house.

He’s like, “If you took $168, you put $10,000 into tearing it down, $2,000 for the lot split. You have $180,000 to do it. For two lots, that’s 90,000 a lot. If we put a couple hundred into building a house and we sell it for $500,000. You got yourself a nice little profit there.” I was like, “I don’t know what to do.” He’s like, “I’ll teach you.” My dad taught me how to build a house. I’m in the process now to get my builder’s license with all that. He walked me through and I built one house and he gave me a loan to build the first house.

I sold the first house on the market. I had so many people want that house that they wanted to buy the lot next door. I didn’t even have a house on that yet. He came up with a strategy where we were going to sell it ahead of time on a construction loan so that they pay off the lot, and I get the money upfront to build the house.

What I did is I took all that money that I got, so the profit from the first house and the construction loan money for the lot on the second house and I bought another double up. I started marketing this neighborhood hard. I started putting out postcards, door-knocking and cold calling this neighborhood like up the wazoo. I still door-knock in this neighborhood. Once a month, I go knock on everyone’s door and make sure they’re not going to sell to anyone else but me.

You bought a house on a good size lot for $160,000. You then started the process with the planning and zoning committee to split that in half. How long does that typically take in Plymouth?

WI 924 | One-Of-A-Kind Strategy

One-Of-A-Kind Strategy: Talk to the zoning department of your city, town, or country and make sure you understand the timeline for property construction.

 

In our township here, it takes about six weeks.

That’s incredible. It’s six months here in Phoenix. Go to California, it’s like eighteen months. It’s crazy.

Any variance takes a lot longer, but fortunately, we didn’t need a variance. We just needed a simple split.

You were finding houses that are on big lots that you’re splitting down the middle and building two houses. You built one with funds from your dad. He helped you get there. He connected you with contractors and in all the trades to build that. You’re like, “I’m taking notes, dad. I got it. I know how to communicate with them and keep them on schedule.” With the second lot, it’s still empty and just dirt and then you go and you sell plans, the whole project to somebody that’s going to get a construction loan, so they start paying you for that before you start building, is that right?

Correct.

You then take the profits from that house that you haven’t even built yet. It’s already under some process, but the one that you sold, you take the profits and you go do this again. How do you survive during this? How do you make any income or are you still living in your dad’s basement, at this time, building houses?

I’m living in a house that I’m going to tear down.

I know where you’re at now but during that time?

At that time, I was living in his basement. The funny thing is the first day on the job, I got this deal. I put this deal together. This is where the struggle came in. I got “beginner’s luck.” The very first day, I got this big deal and the whole process from start to selling that house took about a year. Throughout that year though, I was struggling. I did not have a lot of income coming in. I had my real estate license, so I was doing maybe one deal every six weeks or so, making a few thousand here and there to keep afloat, but I had to live in my dad’s basement.

I did not have any financial freedom or anything. I was struggling and I didn’t know what to do. I didn’t know how to get more sales yet because I didn’t have the money yet for the first year. That’s where I found TTP. I was getting pretty desperate and I started calling people and the foreclosure list was not working out for me. I didn’t know how to get more leads and what to do. I found TTP signed up and started going after all sorts of things like probate leads and divorce leads. I started streamlining my whole process through your training.

Don’t expect to close a real estate deal right away. It takes time.

What it did was it helped me get a lot more organized and almost multiply my business. The exact same time when I joined your program was around the time when I sold that house and I sold the lot. It was perfect timing that I found you because now I had this money and I was able to start door-knocking and cold calling the neighborhood. I started going after every double lot. I started targeting hardcore and talking and getting in front of the owners and making sure that they knew who I was. What I quickly realized is that I could buy these double lots for market value now and make a huge profit.

I want to make sure that the audience understands this. You can give people the Zillow estimate on these properties or an appraisal estimate. They can have a real estate agent say, “This is what you can sell your property for on the market.” You can get pretty close to that. You can back out some of the sales and some of the title costs if you want with the seller so that it sweetens the deal for that property owner and cash buy those.

One thing that I will say is this. If you’re going to implement this strategy, which is fantastic and I see it in every market, but if you’re getting going in this business, make sure that you talk to the zoning department of your city or town, or county or whatever it is that governs it. Make sure that you understand what is the timeline for this? It’s because in some areas, you got to have a lot of patience and your buyers have to have a lot of patience.

Your numbers have to reflect the total price that you can give to the property owner. If you’re somewhere like in Plymouth, Michigan, where you can get this done in six weeks, that’s fantastic. You can give them more. If it takes longer and there’s any debt service like private money or hard money on these properties with your cash buyer or yourself, you need to take that into account and work those into your numbers. I think it’s a phenomenal strategy. You’ve got this lot and you’re being patient with it. How long does it take to build this house?

Getting the plan sorted out, getting it split, getting everything lined up and learning what to do and doing it took about a year.

When you’re living in the basement at your dad’s house, putting together new build houses, how old are you?

I am 27.

You’re 27 years old and new to this business. You’re selling some properties. You’re doing some things. Were you 27 in your parents’ house?

Yes.

What’s going through your head? Are you like, “I need to get my life together. This needs to work out. Do I love real estate or do I want to do something else? Do I want to go back to insurance?” What’s going through your head during this time?

WI 924 | One-Of-A-Kind Strategy

One-Of-A-Kind Strategy: The nice thing about cash-out refi since it’s tax-free and you are not required to pay off a loan.

 

During that time, I was pretty down. It was a tough time. It was a lot of work building a house, especially having no prior construction knowledge. At the same time, I’m trying to stay afloat by working with buyers that I find, old friends and stuff to buy houses. I don’t have a lot of experience as an agent either. I was struggling on both ends of that. My friends always say that they never saw me for like a year and a half because I was working fifteen hours a day, but it was hard. The problem was I only had one big deal. We’re getting any more wholesale deals, no flip deals, I wanted to get more into it, but I didn’t have the resources and the knowledge.

The whole irony of it is right before I finished and sold this house, I broke down. I started crying and I prayed for the first time since maybe middle school or high school. I was like, “God, is this the right path for me? Am I meant to do real estate? This is hard. I’ve been putting so much effort in and I’m not seeing the results.” A few days later, I got a phone call from someone and he’s like, “Are you buying houses in this neighborhood? I see you tore this one down.” I’m like, “I’m buying houses in that neighborhood. Let me come right over.”

I schedule the thing. The next day I go to his house and he explains that his mom went into a nursing home and they needed to sell ASAP to pay for the mom’s care. This house is not going to be needed. I got them under contract right there. I was like, “This is my second ‘off-market deal’ and I’ve been in it for a few years.”

From there, that renewed my spirits and at about the same time, I found you and finished that first build. We had some funds. I had some coaching now and I had new encouragement. I said, “I can’t give up. I have to keep going.” Instead of working fifteen hours a day trying to get this house built, and now I’m working like fifteen hours a day to try to find more double lots, to try and find more of this guy where his mom went to a nursing home and need to sell the house. I’m glad I didn’t give up.

If you’re reading this, check this out on Brent Daniels‘ YouTube channel, you’re going to see two brand-new built houses across the street from Auston.

I finished two and I’m going to do the same thing in the house I’m living in. We had a bunch of double lots in this neighborhood. Once we get two of them sold and with my construction loans, we’re able to buy the next one. We’re doubling the business every time, which is super sweet.

It’s a wonderful plan. It’s a very simple plan. Keep rolling the money. We’ll get into how you’re taking money out to live and what you’re doing with the properties that you’re keeping is absolutely brilliant because you’re young, building wealth and a machine that’s finding and building houses. It’s incredible, especially coming from, “I’m door-knocking selling solar,” to “I’m door-knocking selling solar and insurance,” to “I’m door knocking car dealerships and realtor offices to try to sell insurance,” to becoming a realtor to now, being a real estate developer building brand new houses.

Also, you’ll be able to drive by those houses for the rest of your life with incredible pride in your eyes and in your heart that you built something like that on the street that people are living in and enjoying. There’s so much fulfillment there. It’s such a journey that you’ve been on over the last few years and I think you’re just getting warmed up.

I’m so fortunate that you joined TTP and you started expanding the different avenues to find these specific properties that you’re looking for and you’ve been able to do it. You send me pictures of these $130,000 and $128,000 checks and all of this incredible income that you get to increase your lifestyle, but also, you’re putting it back into the projects that you’re having to build your wealth. Let’s talk about that a little bit. You build these properties. What do you do once you sell them? You’re buying more of these types of deals. Are you keeping them? What’s your strategy for wealth creation?

Some of the money that we’re getting from these properties we’re putting right back in. We’re buying more double lots. On top of that, what we’re also doing is we’re buying houses that we can get at a nice value point where we can put a little bit of love into them. What we then do is we do a cashout refi. It’s the BRRRR strategy, but the nice thing about the cashout refi is that since we’re buying the property with the money that we already made, we’re not paying off a loan necessarily. What we’re doing is we’re taking that money and we’re living off the money that we get from the refi. It’s a pretty nice way to go about it.

You will never get serious results until you get consistent with your work.

How much income tax do you pay off of those refis?

It was zero tax on the refi, which is income tax, which is nice. From there, I’m working on expanding my fix and flip business because what I realized is that although these new builds are super fun and nice, I love development, but it’s time-consuming. It’s a very long process. Although I want to continue with the development, I also need to subsidize in between and get something a little bit quicker, which is where I love wholetails and flips.

It’s because the profits on a flip can be pretty nice and meaty. It’s the same on a wholetail which takes a month to do. A flip takes a max of three months. We’re seeing great profits on those. I’m expanding your teachings here and I’m going into full-time cold caller. We’re working on getting more properties and more acquisition-type stuff.

On top of that, I’ve been meeting with other big realtors and investors in the area. I’ve made it my way to meet with three a month. I’ve been doing that for about a few years and they’re bringing deals. I told them, “I’ll secure the funding. I’ll do all of the contracting work and then we’ll split the profits 50-50.” These realtors are the ones that are selling 100-plus houses a year, so they’re coming in contact with a bunch of potential clients who would benefit from a quick cash sale. That’s where I come in.

I partner with them and then all of us make out from it, especially the seller, because they don’t realize that they’ll benefit from this quick sale. We come in and help them out. It’s been a nice partnership strategy, instead of going business to customer, we’re going business to business. It’s a pretty nice model that we’re trying to implement now as well.

I love that you do them because, as a former real estate agent, if I had the opportunity to brag that I was part of a brand-new development or a brand-new house, I would be telling that at every barbecue, Meetup and company brokerage meeting and all that stuff. I’d be like, “You guys are selling houses and that’s good, but I’ve evolved. I’ve evolved into being a developer,” where you’re doing everything but they’re bringing you the deals.

There’s a huge benefit in building an incredible network of real estate agents that either get a part of the deal or they get to keep all their commission or whatever it is. Start talking to real estate agents. It’s not scary. They’re human beings. They look fancy on their Instagram, Facebook, on their business card, on bus benches and stuff like that, but they’re people that need to sell houses and they don’t get fed unless they do. Be in front of them, have that conversation, build up your courage to go and talk to real estate agents in your local market and tell them exactly what you’re looking for. Look for an incredible win-win synergistic relationship with those people.

Auston, talk to me about big plans. Are you a, “I want 10,000 doors,” type of guy? Are you a, “I want to build skyscrapers,” type of guy? Are you, “I’m going to set up a bank and be a bank,” type of guy? What type of real estate entrepreneur do you see yourself like having a lot of pride that you got to that spot?

That’s a tricky question and I often think about that because I’m so well-versed in so many exit strategies now that I can’t decide which one I want as my ultimate game plan. Ultimately, I would like to have a very diverse portfolio on short-term rentals, long-term rentals, multifamily and single-family. That’s what I’m working on now. I’m starting to diversify my portfolio. On top of that, I do want to get more into the development side.

My father, I’ve grown up seeing him. He’s built 87 subdivisions. Every time we drive by one and it says a Cook Development on the bottom and it’s cool. It’s like, “He made that several years ago.” I would like to dabble into that as well and get more into that. Times are changing and it’s a very high risk to do that, but then I wouldn’t rule that out at all.

WI 924 | One-Of-A-Kind Strategy

One-Of-A-Kind Strategy: Start talking to real estate agents. They are not scary. They are just human beings who look fancy on the outside. If they cannot sell houses, they won’t be fed.

 

That’s the path that you’re on, you’ve got the experience and all the mentors that you need in your dad in doing that, so that’s incredible. How do people reach out to you? How do they find you? If people want to squat up with you in the Metro Detroit area or if they want to say congratulations or maybe they want to send you a deal.

There are a couple of ways. One, if they want to find me on Instagram, it’s @AustonCook and then my phone number is (734) 756-0848. Shoot me a text.

Give some wisdom to anybody that’s starting out, hasn’t done a deal and is very excited about being a real estate entrepreneur. They finally got through all the filters and distractions that are out there. They found the right place to start, which is sourcing discounted properties, AKA wholesaling. They are excited to start this process. What advice would you give them?

There are a couple of pieces. The biggest one though, and first and foremost, is to take action. I know so many buddies and people that I’ve met along this journey that have still nowhere near where we want to be because they are stuck in analysis paralysis and then they’re not taking action. You’re not going to know everything. It’s scary, but go up there and knock on the door, pick up the phone, give them a call, do it and take that action.

The other thing to realize and Brett says this a lot. Don’t expect to get a deal in right away. It takes time. For me, I got lucky and I got my first deal on my first day, but after that, I had a dry spell for a few years. After that, it went bonkers. It’s been one after the other. The biggest thing is don’t give up. It’s tough when you’re putting in 12, 15-hour days, 6, 7 days a week and you’re not seeing results, but trust the process. It will come. Don’t give up and keep going at it.

The third big thing that I have is consistency. You can be the best on the phone, door-knocking or at follow-up or anything. However, you’re not going to get serious results until you get consistent with it. You can’t do it once a week and be like, “I’m done. I checked it off.” You got to be consistent with it every day. You got to call these people back right away. You have to show them that you’re a real estate professional and be consistent, don’t give up and take action.

It’s incredible how much you’ve done in the last few years and everybody should know that. Auston has been building this up and that first year was getting everything going with the development. The last several months have been impactful and that’s how it happens. You push and all of a sudden, you make it through the ceiling and you are unstoppable. You just keep going. The wind is behind your back. Auston, thank you so much for joining us on the show. Everybody reached out to him. He put his phone number. Take advantage of it. Especially if you’re in Metro Detroit, squat up and meet up with Auston. See what’s going on and do business together.

For everybody out there that is interested in joining the most proactive group in real estate investing, it is the TTP program. It is the TTP Family. Go to WholesalingInc.com/ttp. Check out what it’s all about. You’re joining incredible people like Auston Cook. That is the place to check it out. If it feels good in your gut, all the testimonials, make sure that you sign up for a call and I look forward to working with you personally. I will sign off and as always, I’m encouraging you to go out there and talk to people. Until next time. I love you guys. See you.

 

Important Links

 

About Brent Daniels

483Brent 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!

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