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Posted on: June 14, 2022
WI 972 | Feng Shui

 

Today, David Dodge is joined by the 17-year-old Joe Han to talk wholesaling. This kid has been getting deals done during high school hours! Joe has connected with other winners through Facebook and local connections. Relationships helped get deals done for over $11,000! In this episode, you’ll learn more about building relationships that will benefit your real estate business.

Work with David Dodge by visiting WholesalingInc.com/BrrrrMethod

17-Year Old Makes $11k Using BRRRR Method With Joe Han

Episode Transcription

I am here with one of my students, Joe Han Damert. He is 17 years old and just got his first wholesale deal. In fact, it was a few days ago that he got paid. I got him on and we can all learn a lot from Joe Han. He is crushing the game and just got his first deal. We got to ring that victory bell for Joe Han. Joe Han, welcome. Tell us about this deal and congrats. I’m so happy for you. The first deal is always the hardest.

This deal was from the marketing channel. I used BatchLeads to send messages. I normally send out 500,000 messages a day, and this property was about 20 minutes away from my house.

Where are you located?

In Fort Lauderdale, Florida.

You’re in high school. Were you sending these text messages while you were in school? Were you doing it at weekends or in the evening? When were you sending these messages out?

I send these messages on my lunch break. I would have them auto-click and then keep on sending 500,000 messages.

For anybody that’s reading that says, “I can’t find the time,” we got a high school guy here doing deals and he’s sending text messages on his lunch break. Joe Han, you are an inspiration to everyone. You’re sending text on your launch break. By the way, Joe Han has been working with me for a couple of months. We’ve been working hard to get him his first deal, and he nailed it. This is great. Who were you texting? How did you find the leads in the list? What were you doing to get that?

I used PropStream and then with PropStream, I used certain filters. I filtered out some people like distressed landlords. It was tired landlords on that list.

Did you market the multiple lists?

I marketed multiple lists. The property that I texted, she wasn’t interested in selling that, but she said, “I have another property. What would you offer for this one?” I get her on the phone and then give her an offer. She liked the offer, but then she was like, “I’m not ready to sell. The tenant is there. She has been there forever and I don’t want her to move.” The tenant was an old lady. She was paying under market rent. The market rent was about $2,000 and then she was paying $1,100.

This is a lead from a tired landlord. You sent her a message about a different property. She said, “I don’t necessarily want to sell the one that you reached out to me about, but I have this other one.” She was charging basically half of what the market rent was.

The market rent was like, “I need to work from $1,500 to $2,000 on the higher.”

When did this happen? You first made contact with her when?

Around December 2021.

Did you make her an offer in December?

Isn’t that funny how people want to sell today and then they don’t want to sell tomorrow? Isn’t that wild?

Yes, I gave her an offer. I’m pretty sure she accepted that offer. It was $110,000. I called her a month later and she said that she was still talking to the tenant and the tenant wasn’t ready to move. The tenant had a lease, so she’s not leaving until October 2022. She’s still on the property. She finally talked over with the tenant and tried to find the tenant a house to move into because the seller was a mortgage broker. I kept following up with her. One day in April, she tells me that she’s remodeling the house. I give her a call. I offer her $125,000 and then she accepts. She’s like, “Let’s do it.”

When you offered her $110,000, she verbally agreed to that number, but you hadn’t had anything signed with her at that point because she was still trying to go back to the tenant to figure things out. Is that right?

She didn’t know for sure if she was going to sell or what the situation was.

She liked that number, but she didn’t love it because she didn’t sign anything. How often were you following up with her?

She told me to call her after the holiday. I gave her a call, and then she told me that she wasn’t looking to sell it soon, so I followed up with her maybe a month or two after.

Isn’t that funny how people want to sell now and then they don’t want to sell tomorrow? Isn’t that wild how that happens like that? On the flip side, as you learned, they don’t want to sell now and then they will sell tomorrow, so it can flip. It can go both ways. How often were you following up with her on average between December 2021 and June 2nd, 2022?

I followed up with her ten times, but we made contact. I would call her back and stuff like that, maybe 30 times total.

You touched her 30 different times and that was either via a phone call or a text message.

That includes texts and phone calls. We normally text a lot because she’s a younger person.

It’s about over a five-month period. You made 30 different points of contact with her, either via phone calls or text messages. I want to highlight that because not all deals are going to happen right away. In fact, 80% of deals are going to require follow-up, probably 90%. You followed up with her for 4 to 5 months and you made 30 different points of contact. That is what it takes to do deals. I want to commend you for not stopping, not quitting, and being consistent because it led you to this deal. By the way, how much did you make on this deal?

I made $11,000 on the deal.

$11,000 and you’re 17 years old in high school doing this on your lunch break. That is phenomenal. Tell us more about the deal. You started in November or December 2021 with 30 different follow up and you contacted her via text.

I got to say a follow-up is super important. I was about to not put her into my CRM and call her in the next month. I was thinking she was not going to sell. I put it in and called her again. She was feeling pretty motivated and I hit her. When I called her that second time after she told me she wasn’t interested, she told me she rejected an offer for $118,000. I went on my computer, called her back, and said, “I can do $125,000.” She accepted it super quick. She was like, “Let’s do it.” I thought I gave her a good deal. I redid the numbers and I’m like, “This is a pretty good deal. She’s pretty motivated.”

You sent her a contract for $125,000. How long did it take her to sign it?

I sent it sometime in March 2022, but then she was getting her bathroom remodeled and that took a month. I didn’t want to sign a contract and sell it to a buyer when the bathroom was getting built because of the inspections. Anything could happen. I don’t want to mess myself up. I kept in contact with her like, “How are you doing? How’s the bathroom situation holding up? If you need any help, I could help you with any questions.” I was just being there for her, keeping in touch. If she was going to sell it to me, we were keeping in touch. Every week, she would tell me, “It’s going to be done by the end of the week.” I would call her by the end of the week then she would say, “It’s still not done.”

WI 972 | BRRRR Method

BRRRR Method: The two most important things when it comes to investing in real estate are being patient and being persistent because you need to follow up with people a lot in order to win deals.

 

Is this the bathroom on the property that you had on her contract or is this a personal bathroom at her house?

The property that I had on her contract.

I get it because you didn’t want any of the buyers or the inspectors to raise red flags with this. Again, I commend you. You were patient. A better word is you were persistent, which is awesome. $125,000, you made her that offer, she agreed, but she didn’t sign right away because of the bathroom. You didn’t go away, you stuck around, you continued to follow up, and you were persistent. It took about a month, give or take, for her to sign this agreement.

She signed the agreement on April 20th, 2022. It took maybe a month and a half to two months. With COVID, especially here in South Florida, everything takes forever. Everything is held back.

The lesson here is that you were persistent. You kept following up with 30 touches. You made her an offer. She didn’t like it. You followed up a month later. You made her another offer. She liked it. She still didn’t sign because she was working on her bathroom but you didn’t go away. That’s what led you to do this deal, getting your first one under your belt and making $11,000. It was the persistence. A month and a half goes by, she signs. What happens next?

She signs the deal. I usually hit up this guy, which is a JV, and then I sold it with him.

Who’s this guy? How did you meet him?

I met him on Facebook groups.

Is he a local investor?

He’s not super local, but he’s around the area.

You met him in a local Facebook group. It wasn’t a national group. Was it a local South Florida?

It was a Florida investor group.

That’s pretty large if it’s the whole state. You met him in a Facebook group. What happened? How did you guys connect? How did this joint venture work?

We connected back in August 2021 when I closed a small deal. It was not like a deal. He paid me a little referral fee because I hooked him up with the property. He was reliable and I trusted him so I sent him that deal. He told me he could get a buyer in there so I immediately sold with him. I probably could have got more but I trusted, and I wanted to close the deal.

Relationships go so far in this business because he helped you in the past. He gave you a little fee for a deal you teed him up with. It wasn’t a deal for you per se. It was more of a bird-dog fee, but look what happened. It came back around. That’s a great lesson for anybody reading. If you do good to other people in your market, they’re going to remember you and want to do business with you again. You reached out to this other investor that you knew and had done some business with in the past. He said, “Joe Han, I have confidence in this deal. I can help you bring a buyer in.” You contracted it for $125,000. What did he sell it for?

Do good to other people in your market. They’re going to remember you and they’re going to want to do business with you again.

He sold it for $145,000.

He ended up making $7,000 and you made $11,000. $7,000 and $11,000 is $18,000 but there was a $20,000 gross spread on here. What happened to that other $2,000?

Close to closing date, we found out that the city had to lien on the association, so we had to extend the closing date to another week or two. Anyway, the seller didn’t want to come out of pocket more than $2,500 for the lien because she already is selling the property at a discounted price. I told her that I would pay for the rest of the lien up to $10,000.

What was the total lien amount? If she paid $2,500 and you paid $2,000, it’s probably about $4,500, give or take?

Under $4,500.

When did you guys close this deal?

May 31st, 2022.

Did you get how much net proceeds?

Net straight to me was $11,000.

It’s a quadruple win in this scenario. Congrats. This is awesome. I’m excited for you to get this first deal. It’s going to help build your confidence and momentum. You now have marketing money to put in to get that next deal, hopefully, the next 2 or 3. You bought it for $125,000, win. The seller was able to get rid of the property. You guys made $20,000 gross on this deal. Your partner made $7,000 and you made $11,000. That’s a win. You even helped her pay some of the closing costs because there was a lien making it a super win for her because she had to bring less to the table and then you guys sold it to an end buyer. Do you know what the end buyer was going to do? You sold it for $145,000, win. That’s four wins.

I met with the end buyer in-person showing her the property. She liked the property. She was, “I’ll buy it. I’ll close it now.” She was happy. Everything is working fine. Rentals in that property ranged from $1,500 to $2,000. It was a pretty good deal.

What was the ARV on the property?

ARV was somewhere around $160,000 to $190,000. It depends.

There are a couple of different factors that are going to change. Long story short, you got this at a massive discount. Let’s say that the number was $175,000. You got it at $125,000. You got it at a discount, but you teed it up for this other investor and left meat on the bone for that person. That’s why everybody wins. The seller, you, and your JV partner win. You guys both got paid and you got to help people. That end buyer got the deal at $145,000, knowing that it’s going to be worth roughly $175,000, maybe even a little bit more. Everybody won. Did that buyer buy it to move into it? Did they buy it to keep it as a rental? What was her plan?

They were going to rent it out. They paid for it cash. I’m guessing they’re going to do the BRRRR Method.

WI 972 | BRRRR Method

BRRRR Method: Pick a good title company, make a relationship with them, follow up with them just because you send them a contract in an email doesn’t mean that they’re going to have it ready for you on the date that you want to close.

 

Let’s do some simple math real quick. You’re seventeen and in high school. You’re doing this on your lunch break and in the evenings when you get home from school. You’ve been at this for 5 or 6 months and followed up with this person 30 times, probably more than that. You were patient and persistent. Those are the two most important things when it comes to investing in real estate because you got to follow up with people a lot in order to win them over and these deals. That’s amazing.

You walked away with $11,000. Your partner walked away with $7,000. You helped the seller sell a deal. You helped an investor find their next rental. Everybody wins. That $11,000 is a lot of money. The average 17-year-old probably making minimum wage or just over minimum wage, let’s say, $12 an hour. If you multiply $12 an hour by a 40-hour week, that’s $480. $480 times 4, that’s $1,920. It’s basically $2,000, working at minimum wage or above for an entire month.

If you do that all summer and work for three months at that wage, you would basically make about $6,000, and that’s pre-tax. Post-tax, you’d bank about $4,000 and you did it on one deal and made double what you would’ve made all summer working at a minimum wage job. To anybody that’s reading, if Joe Han can do this, you can do this. Joe Han, what were the biggest struggles that you found in doing this deal? What would be some lessons that you could share with the audience to help them if they are trying to also get their first deal?

The first one is the title company. I had the seller pick the title company because I didn’t think much of it. The title company was so slow. It might have been the first time they worked with disclose. I had to redo the contract with my JV partner and the buyer because they weren’t accepting it. They said I had some weird terms that I had to put in. When we were waiting for the city to get the lien amount so we could close, the title company told me that they were waiting for a response from the city.

I couldn’t take it anymore, so I called the city and then they gave me a response that we disclosed. I was waiting. You have to be on top of the deal. You have to be calling, making sure everybody is doing this stuff, even the title company was taking forever. If I had called them earlier, I could have closed early. I could have let that deal slip away if I wasn’t on top of it.

That’s a big lesson. Stay on top of your title company.

Pick a good title company. Pick one that you trust and reputable with wholesalers. The last thing you want is to go through that.

Pick a good title company. Make a relationship with them. Follow up with them. Just because you send them a contract in an email doesn’t mean that they’re going to have it ready for you on the date that you want to close. You got to stay on top of them like you stay on top of your sellers and buyers. You got to coordinate it, keep everybody in the loop, and make sure they know when their closing date is. You got to make sure that they know how to get there, all of these things. I couldn’t agree more. What were some of the lessons that you took away from completing this deal that the audience can take away and add value to them so they can go get their first deal or maybe do more deals?

The second one is discipline. During the beginning, maybe December 2021 to January 2022, I was sending messages, but I wasn’t on top of following up. I’ll call this person. If they didn’t answer, I would be like, “Whatever,” and then not even call them. I made a promise to myself to every single day follow up with them. I’ll leave a voicemail. I’ll text them and call them again. You got to be on top of it. Call them and build a relationship.

If they don’t want to sell now, they maybe want to sell for a month. It’s always good to have that relationship because you never know. If they want to list their house on the market, you can refer them to an agent that you trust, and then you get a little fee or even build a relationship with their realtor. There are so many takeaways you can deal with building relationships with people on the phone.

I love that you say that because I teach this every single day. Make a friend. You don’t need any special sales tips or tricks up your sleeve to do deals. If you can simply make a friend, you’re in. You can help that person. If they want to take a low cash offer, great. If they want an agent, you can make money that way, too. You can refer them. Not only did you do your first wholesale, but you joint-ventured it, which is awesome. You piggybacked or used your joint ventures’ buyers list and his connections to help get this deal done. You made $11,000. He made $7,000 in the process. The next time you get a deal, if you bring it to him, do you think he’s going to be willing to work with you?

Absolutely.

He is. It’s the same thing with that title company. When you bring them the next contract, hopefully, this time, they start working on it right away and it requires a little less follow-up, but don’t rely on that. Continue to follow up and to stay on all of these people.

Follow-up is key.

Follow-up is everything in this business. The fact that you touched this person, I refer to it as touches. The number of times that you reached out to them, called them, text them, or maybe when they’ve responded to your text or called you back are all different touches. Here’s the thing. That is not abnormal. That’s normal.

Follow-up is everything in the wholesaling business

When we do deals, were touching people 20, 30, 40, or 50 times in some cases. 4 to 5 months is not abnormal either. If you do 10 deals, hopefully, 1 or 2 of those will be quick, but the other 8, on average, are going to take 30 touches in a couple of months of follow-up. I want to beat that in and hit that hard because those are the lessons that I’m taking away from this, Joe Han. Follow-up is everything. You got to be persistent.

In general, when you start caring about their problems and talking to them as a real person, you’re going to see a lot more results. When you care for them and want to solve a problem, they’re going to realize that and want to do business. You can feel that. You can’t fake that.

Making a friend is what it all comes down to. People can sense out when you’re in to make a $20,000. You guys made an $18,000 gross wholesale fee on this one. Even though you only got $11,000, I say only but that’s a ton of money, there was $18,000 gross that was created here. If you went into this transaction, initial call, and these follow-ups trying to make $18,000, she would have sensed that in a heartbeat. She would’ve probably not wanted to work with you. You approached her in this situation as, “Let me help you. You got this property that you’re trying to get rid of. You’re in the process of remodeling a bathroom. You’re tenant is paying you 50% of what they should be. This is a headache for you.” You made a friend and got paid $11,000.

One more thing. When you’re talking on the phone with the seller but you don’t believe in your service, you feel that you’re scamming them or trying to make a quick buck off them, you’re not going to be able to have that connection. You have to believe that you’re the right choice for the seller. You’ll be able to close and get them that money but you have to believe in your service in order to sell yourself and your service.

Let’s talk about the fact that you’re seventeen. Did the title company give you any trouble about signing a contract or doing any of that, not being eighteen?

No. Nobody knew.

Nobody knew and nobody cared. When you first came to me and said, “I’m seventeen, is it going to matter?” What did I tell you? “No one’s going to care.” That doesn’t matter. What would you tell anybody else reading this who’s not eighteen? They’re 16, 15, or 17, and they’re worried about getting into the wholesaling space because of their age. What would you tell them?

Just do it. You got nothing to lose. It’s only going to make you stronger. It’s impressive that a fifteen-year-old would be going to buy a property from somebody else.

I’m impressed with you buy-up in this deal and making $18,000 gross. This is huge.

It’s mentality. You got to have that strong mentality that you’re doing the right thing. It doesn’t matter when you’re doing the right thing.

Did you ever meet the seller, Joe Han?

I met the seller the first time. She was showing me around the property and I was taking some pictures.

Did she ask you about your age?

No.

How about when you met the buyer? How many times did you go to the property? Twice. You went there to meet the seller originally. Did you meet your JV partner or the buyer that he found for you?

WI 972 | BRRRR Method

BRRRR Method: Age doesn’t really matter when you do the right thing.

 

The buyer that he found for me.

You had to meet her at the property, too, right?

Yes.

How did it go on the second time went when you met the buyer? Did they ask you how old you were?

No.

Nobody cares. That’s the point I’m trying to make. If you are not eighteen, you can do this business.

I went to the title company twice. Once to drop off the earnest money check and then once to pick up my check for the deal. I shook his hand and everything. I talked to him and nobody cares.

You have got a great one under your belt. It was a quadruple win. Seller won, you won, JV partner won, end buyer won. You have built up even more confidence. You already had great confidence, but you got even more confidence now. That persistence and patience are the two important ingredients in this game. What do you got next? What’s the plan? Are you going to do some more marketing or you’re going to reinvest some of this money?

I’m thinking of hitting Facebook. I’m joining groups and then connecting with realtors, junk removal companies, doing something that doesn’t require a lot of capital. Eventually, I’m starting thinking of creative ways that not a lot of my competitors are doing because it is super-saturated in my market. I’m trying to think of creative ways to do marketing.

There are hundreds of ways to do marketing. There is no one magic bullet. At the end of the day, don’t keep your business a secret. You’ve heard me say this a ton. Tell everybody. I love where your head is at, going and networking with junk removal companies. You have a small business. Is it doing power washing?

Pressure washing.

You’re already meeting homeowners whenever you’re out on those. You’re going to be giving them your information. You’re going to be networking with these homeowners and letting them know that if they have any friends that have houses that they need to sell, condos, apartments, or whatever, you’re interested. You’re going to hit hard on the networking approach. That’s a great approach. When I got in this business full-time several years ago, the first 6 or 7 deals I did were from property managers and networking like you’re planning on doing. That’s an amazing, awesome approach.

Joe Han, thank you so much for coming on. Congratulations on your first wholesale deal. This is phenomenal. $11,000, you’re still in high school, 17 years old, making deals, and helping people. You’re sharing a lot of valuable information with me here on this show. I am confident this is going to give confidence to other people. Hopefully, they’re going to pick up on a couple of gold nuggets, AKA persistence and patience. Those are going to be needed in order to either get that first deal for them or hopefully do more and more deals like you’re going to be doing soon.

One more thing before we end the show. If you’re struggling to get a deal, stay disciplined and study your market. Every day what I would do was study my market one hour a day. What are my competitors doing? What’s the real estate market looking in my area? I would study that for an hour and take notes and then study the wholesale. The certain marketing channel that I’d be doing, I’d be watching and re-watching videos and taking notes. I would do my follow-up calls and do everything every single day. That’s the result and my advice.

I’m going to sum that up into a simple phrase. Consistent and persistent action equals success. You nailed it, Joe Han. You got to be consistent and persistent. One thing that I caught there that I do want to emphasize again real quick is that you said every day. Why would you recommend somebody do something every day versus trying to do it on the weekends?

If you do it every day, you’re drilling it into the back ends of your business and what’s happening in the market.

If you do it on the weekends, you got sick this weekend, have a bachelor party next weekend, got your sister’s or cousin’s baby shower the weekend after, three weeks went by and you didn’t do anything. If you get sick and you miss a day or two is no big deal. You pick back up whenever you feel better. If you do these activities daily, you are going to have a much better go at this. You’re going to have a lot better consistency. It’s not going to be as hard to be persistent with these sellers if you do these activities.

Joe Han, thank you so much for sharing. Once again, congrats. I’m so proud of you. You’re going to be knocking out tons and more deals in the future. I can tell because you are here to stay. You’re consistent. You are persistently following up. You’re not afraid to continue to call people and follow up with them. That’s what this business is all about. It’s making friends with people, letting them know you can help them, and getting paid handsomely when you do help them.

Don’t approach the situation like, “I’m going to do this to make money.” Approach it like you’re going to help them. That’s what you said. Those are your words and I could not agree more. Thanks so much for coming on. Guys, take after Joe Han. You can do this. Age doesn’t matter. You can do it. Joe Han, big congrats to you. I am excited to continue to work with you and get you doing a deal soon. Keep it up and stay persistent. Guys, take after Joe Han. Be persistent.

 

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About David Dodge

David Dodge is a real estate coach, author, and investor with over 17 years of experience. David specializes in using the BRRRR Method to acquire Rental Properties with NONE of his own money and has taught others how to generate passive income using his systems. He’s also the co-author of the book “The Brrrr Method” and currently has over 90 properties in his rental portfolio with a goal to grow to over 200 properties in the next 24-36 months.

 

 

 

 

 

 

 

 

 

 

 

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