In this episode, Cody Hofhine puts Tom Krol in the hot seat to dissect the EXACT STEPS he took to generate almost $90k in ONE WEEK, Wholesaling houses!
The BEST part is…Tom never even saw one of the houses!
Come be a fly on the wall and learn how to identify TRUE seller motivation so you can CRUSH your Real Estate investing business. Tom reveals his “Rule of 7” and talks about why it’s SUPER important to NEVER make your offer to the seller first.
The takeaways in this episode are plentiful so be sure to take good notes…but take MASSIVE action too:-)
See you next time!
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Cody Hofhine: Welcome to another episode of Wholesaling Inc by Investor Grit. This is Cody Hofhine and today we are going to be dissecting, not one, not two, not even three, but five deals made last week by our head rhino, Tom Krol. And so I have Tom with me today. My man Tom Krol from sunshine state Florida and he is going to deep dive some of the most recent deals that he did. Tom just recently did five deals last week that made him close to $90,000. Tom, ring your victory bell for yourself real quick. Let’s say the tribe here, a victory bell for this.
Tom Krol: Victory bell for the five deals last week. I love it. All right, so let’s get right to it.
Cody Hofhine: Break it down for us, Tom. I’m putting you in the hot seat right now and I want our listeners to understand like exactly what is it that you want us to learn from this and how we do this.
Tom Krol: Okay guys. So here’s the deal. I’m going to put myself in the hot seat and we are going to just not hold anything back. I’m going to get right to the meat and potatoes so I don’t waste anybody’s time. So let’s get right down to it.
Tom Krol: The number one thing that I want to talk about with these five deals that we just did is, number one, I want to tell you I didn’t see any of these houses and that’s very important. What we do in wholesaling has very little to do with real estate. It’s more of a pawn shop. I know that makes all the gurus out there and the so called experts, it makes them so angry when we say that. They just are like, I can’t believe he said that. But that’s the truth of the matter.
Tom Krol: We want to stop learning about how to do this and just start doing it and start making deals. So what I want to talk about today is I want to talk to take you through each deal that we did. I’ll tell you exactly how much we made and what we did.
Tom Krol: Now keep in mind just to keep everything on level, I pay my acquisition manager 20%. So if you have a pen and paper, start writing this stuff down because if you want to know exactly what we’re doing and how we’re doing it, these are the details. I pay my acquisition manager 20% of these deals. So as I’m telling you these numbers, just consider that 20% of this deal went to somebody else. It went to my acquisition manager.
Tom Krol: What I want to talk about today is what I will tell you is one of the number one killers of new wholesalers. One of the number one killers of new wholesalers and that is assumption. Assumption.
Tom Krol: Now here is the deal. If you assume things about the seller, about people, who would ever sell their house at a discount? They could just call a real estate agent and get full price right away. Why would anybody ever sell? This is why we’re in a pawn shop business and not in real estate, because it would be the same question is, nobody would ever sell their their Superbowl ring for $300. Oh really? Double check that. Right?
Tom Krol: So here’s the deal. There are good deals all over the place all the time. You just have to know how to get them. And one of the biggest mistakes that people make is they assume that they know what the seller is going to ask for a property or they assume that there are no good deals. Or they assume that, oh, that was back in 2008 when there was no demand and high supply in this. Those deals don’t really exist anymore.
Tom Krol: That is total BS. The deals are out there right now in your backyard.
Cody Hofhine: Couldn’t agree more, Tom.
Tom Krol: Absolutely. There’s no question about that, guys. So assumption is the killer. Don’t assume anything. Don’t assume anything. Now, here’s what I want to talk about specifically about that. Each deal, whenever we have a seller, we always want to find out what exactly is going on. We want to build rapport and we want to have our services as cash buyers. And if you’re worried about being a cash buyer, cause you don’t have the money… If you feel like you don’t have the money or if you feel like you have bad credit-
Cody Hofhine: So what about credit, right?
Tom Krol: Credit, that’s the word I was looking for, yeah. If you’re worried about that, don’t even worry about it. We’ll talk about all of that later.
Tom Krol: So here is the deal. Check number one was for $12,936.72. Now when we first talked to the seller, the seller was… And by the way, I wrote down the reasons for all these. One or two of these checks might be mixed up with the wrong address, but they’re all, just might have in wrong… Categorized incorrectly, but these are all what I call the surface level reasons. And then the real reason for why they sold.
Tom Krol: So the first reason that they sold when they first called our company from our marketing. So we send out marketing and the sellers call us back and what the reason was is they said, well, their whole family had moved to another state and this seller was left behind having to have to sell the house in order to rejoin the family in another state.
Tom Krol: So we kind of hung back on real quick.
Cody Hofhine: Tom, real quick, what type of marketing? When you say marketing, just to break it down real granular to our listeners, what type of marketing did you send out that this guy called on?
Tom Krol: So the bread and butter of our company in Florida is direct mail.
Cody Hofhine: Awesome.
Tom Krol: Yeah, now some of these checks did come from what’s called PPC. That’s important too.
Cody Hofhine: Pay per click.
Tom Krol: Pay per click, yeah. Which means it came from people who… And we use Dan Barrett over, I don’t know the name of his company-
Cody Hofhine: Isn’t it Adwords Nerds or something?
Tom Krol: Adwords Nerds, yeah. You guys use him, right?
Cody Hofhine: Yeah, absolutely. He’s a rock star.
Tom Krol: Dan Barrett is a rock star. And then we have a Facebook guy who is also available. We use him for our tribe members and he also helps kind of boost up our… I don’t know whatever it means, SEO or… I don’t know what all that stuff means.
Tom Krol: But that’s how we get exposure.
Cody Hofhine: But that’s why we hired out cause we don’t understand it, Tom.
Tom Krol: That’s the key. I don’t want to learn anything. I want to be in Fiji with my feet in the sand. I don’t care about real estate. I don’t care about SEO or PPC or any of that stuff.
Tom Krol: So here’s the deal. So to be clear on these, the majority of our deals come from direct mail. But last week we closed five deals for almost $90,000 in total profit and three of those five deals came from PPC and two came from direct mail. So just be aware of that.
Tom Krol: All right, so first reason was they said well they wanted to move back to rejoin their family. But what we really found out, and this is important because when you build a rapport with the seller and you understand your services, what we really found out was that this person, the condition of the home was a total mess.
Tom Krol: And what we found out was this person, really the underlying reason for wanting to sell quick for cash as is, was they didn’t want to do an open house with all of their neighbors walking through the home and seeing the state of the condition of the home. Now this sounds like, well, what difference would that make? Right? Well, that might be true for some people, but in this particular case, because we built report, or I should say my acquisition manager built rapport, we found out that the real, that was really the undercurrent.
Tom Krol: See, that’s the difference between being like a telemarketer or being like an actual person who understand your services. So it’s so important. So I really want you to know that the only way you get to that second reason is by building rapport, creating a bond with the seller.
Tom Krol: So surface level was this whole out-of-state story. When you really got to know the person it was another story, which was they were embarrassed of the condition of their home. So that’s check number one.
Tom Krol: Check number two $9,115.4 cents, surface reason for selling was they wanted to be in a better school district. Not really the real reason. The real reason was that they were both busy. It was a guy and a girl, married couple, I believe. It was a really super busy couple.
Tom Krol: They had a bad investment and they didn’t want to put more money and time and resources into a bad investment. So they wanted to sell quick for cash. They were done. They had lost money on the deal. They were moving on emotionally. They already moved on for the home. They already actually moved in. So even though they had said that they wanted to move into a new district, we found out they were already in that new school district.
Tom Krol: So it wasn’t even at all the real reason of why they told us. Always remember sellers are like in constant negotiation mode, right? So when they’re saying stuff, when they know you only on a surface level, they kind of say you know, standard answers. But when you hold their feet to the fire, when you hold their feet to the fire and you make them be truth tellers, they will give you the real reason when you build a rapport and a bond with them.
Tom Krol: Okay, check number three was for $5,665.72. Surface reason, well this one was very similar so the homeowners were separating and they were living in different areas of the house. That was really kind of the real reason too, because what they were really most worried about, about selling on the open market was that they didn’t want to have to work with, with putting the home on MLS and then having to show the house and basically seeing that the house was almost divided literally in two.
Tom Krol: And they were worried. And most of all, most importantly they were worried about a buyer who needed a loan. So when you sell your host house, traditionally you might have a buyer who needs a loan and then that you have to wait for approval. I don’t really understand a lot about that stuff, but basically the homeowner was scared that it was going to take too long to sell the home.
Tom Krol: So that was really the underlying reason is they really were not big fans of each other. They wanted out of the house ASAP. And that was why as a fast cash buyer, we can do that deal very, very, very quickly.
Tom Krol: Okay. Check number four-
Cody Hofhine: All these deals real quick, are all these deals like right there around you? Or are we talking like counties away? Or no, these are like in my backyard. I’m mining for gold right here?
Tom Krol: Yeah. See this is the thing is that all these deals are local. They’re all right in my backyard. They’re all like in Port Saint Lucie, Fort Pierce. I think one of them might maybe was in Martin County but that’s just like 30 minutes South. So they’re all right in my… All of these houses are within a 30 minute drive.
Tom Krol: And yeah and here’s the thing, it’s like people are like, well, you know those deals don’t exist, right? You’ve talked to people, you’ve talked to whoever, an agent and they’ll say ,no such thing. Those deals don’t exist. They don’t exist, right?
Tom Krol: We’re doing these deals every single month. We’re doing deals like this every single month. The deals are out there. Don’t be one of the 98%. Be one of the 2% that if you look on MLS every single day, the same exact type of three bedroom, two bathroom homes in the same subdivisions, a hundred of them sell. 98 of them sell for like, $200,000 but one sells for 50 and one sells for 300.
Tom Krol: Why is that? There’s no rhyme or reason to the same home. Same basic condition. Why is it? It doesn’t matter why. It doesn’t matter. Why. Just know that some people will spring a Rolex watch to a pawn shop. Well, why wouldn’t they just put on an eBay and get highest and best price for a two week auction? I don’t know, but do I really care? I don’t. Right?
Cody Hofhine: That’s a perfect point, man.
Tom Krol: It’s so true. It’s like, but you can’t assume that the deals… As soon as you assume that deals aren’t out there, your belief system changes and there’s nothing that anybody can do to change that. So just at least be open to the idea that there are people who want to sell quick for cash for a variety of reasons, and you’ll find out those reasons as you build a rapport.
Cody Hofhine: Love it. Go to deal four. Sorry man, I had to just make sure these are all in your backyard. So I love it, love it, love it. Tell me about deal number four.
Tom Krol: Deal number four $41,781.72.
Cody Hofhine: Hold on, hold on. We’re going to have fun with this one. You said 41,000 what?
Tom Krol: 781 and 72 cents. I love it. I love it.
Cody Hofhine: Now, tell us about the surface and the real reasons.
Tom Krol: Okay, so surface reason, tired of dealing with out of town rental. So these were landlords who said that they were tired of dealing with an out of town rental. And this is actually the one where I might’ve confused to scenario between one of these and the other scenario. But either way, they’re all basically… These scenarios are all attached to these checks.
Tom Krol: What we really found out was that the real problem was that this particular home was in a bad area and the homeowners did not… They had two major real problems. They were embarrassed to say it, but they didn’t want to drive through the bad neighborhood. They were scared. They just didn’t want to ever have to go there. They were nervous about going there. They didn’t like it.
Tom Krol: And the other thing that had happened was the tenant had just moved out and they were extraordinarily worried about vandalism in a vacant home. They thought the home was going to get broken into and it was legitimately not a good neighborhood. So that was really the problem. Now again, if you take this on the surface level you’re never going to get the homeowners to give you that low number.
Tom Krol: And by the way, as a side note, guys, remember this. Always, always, always, always have the seller give you the number first. And then reject that first number and negotiate from there. But never give out the number first. If there’s one piece of advice that for sure I can, you can take away from this episode is when you are looking for a good deal, never, never give the homeowner the price first. Always let the homeowner give you the price first.
Tom Krol: One thing we use in my office as the rule of seven. We will not give a seller an offer until we’ve asked them seven different times for their price first. So always have them give you the offer first. And then what we typically do is we always reject the first offer.
Tom Krol: So no matter what they say-
Cody Hofhine: This is so true. Like car sales, it doesn’t matter if you’re dealing with car salesman or not. I mean, you don’t want to be the first person to make the offer.
Tom Krol: Brother, I mean this is so true, right? Because here’s the thing, what people don’t understand is this was why when I say this has nothing to do with real estate. People don’t understand that. They’re like, why? I don’t understand. What do you mean it has nothing to do with real estate?
Tom Krol: You can wholesale anything. We just happened to choose real estate because that’s the biggest margins. But you could wholesale treadmills or diabetic strips or fences. I mean sod, lawn care, trees, victory bells, it doesn’t matter. It’s all about buying cheap. That’s what really wholesaling is. It’s the art of finding discounted items and then reselling them for a big, huge profit. Right. This is why it has very little to do with real estate. So it’s really important to say that.
Tom Krol: Anyway, bottom line is they really had two big problems and we allowed them to give us their price. And then we went from there, $41,781.72. Awesome.
Tom Krol: Next one, last one that we did last week was $18,500. Actually I think that that checked $18,500 was the reason number four. I think reason number five was actually attached to the 41 or maybe it was… I don’t remember now because I just kind of drew a line so I’m not sure.
Tom Krol: All right, last one. Here’s the deal. They had said that they were retired and downstairs sizing. So in the first initial notes, the homeowners were retired and they were downsizing because they were just older and they didn’t want a big house to take care of.
Tom Krol: What we found out on this one was very interesting. We found out that the homeowner actually was a very, very private person and did not like dealing with people and did not want a whole bunch of people traipsing through the house. It was just a private person. Now there are people like this. They want to deal with one person. So my account manager went in there, built a rapport with them, and purchase the home at a steep, steep discount without having to do all that stuff that annoyed the homeowner.
Tom Krol: They didn’t want to have to deal with people. So some people are just really shy. They don’t like to deal with a lot of people. They want to deal directly with the buyer and that’s exactly what they did. So I just really want…
Tom Krol: The point of this episode is I really want to encourage everybody that you have to operate at a different level. You have to change your belief system. If you want to find phenomenal deals again, and again, and again the trick is very simple. Number one is this, remember it’s a numbers game. 99.5% of the people you speak to do not want to sell their home and they certainly don’t want to sell it for a low price. So that’s just part of the game. Don’t allow all those people rejecting you to change your belief system. That’s number one.
Tom Krol: Number two, in order to find these good deals, always allow the seller to give you the number first. And number three is always remember that you got to get these good numbers. You’ve got to build rapport and you’ve got to get down to the situation. As wholesalers, we will always lose on price. If you make it about price, we will lose. You’re never going to be the highest and best.
Tom Krol: You’ve got to hold the sellers feet to the fire, find out the truth, make them be truth tellers. Find out really what is going on in the situation. And then see if you can provide a service where buying as is or being a cash buyer, paying all the fees, if that is going to help them in their situation. It’s all about the situation.
Tom Krol: Whenever a student or anybody brings me a deal and they tell me about the deal and they have questions, and they start telling you the house is a three bedroom, two bath, three car garage with a pool. I don’t care about the house. It’s always about the situation. That the house does not matter. It is totally inconsequential. It is all about the situation. Why is the seller selling?
Tom Krol: So that’s the key. If you want to stop wasting time, you just want to start doing deals, build a rapport, create a bond, and then find out the real reason. Go below the surface, find out the real reason and see if it’s a motivating situation. And know that most times it’s not and that’s okay because you’ve got to get 100 nos to get the one yes. It’s no big deal.
Tom Krol: So that’s awesome. And I am so excited. Let me just say this, I’m so excited about this podcast. We are going to provide you guys with absolute… I’m telling you, this is like the real, no fluff, no BS. We are going to give you exactly what you need. We’re going to talk about the art of progress, not perfection. We’re going to talk about massive imperfect action. We’re going to talk about failing forward. We’re going to talk about the absolute exact instruction you need. I’m going to talk about the tactics, the script, how to do this, where to find the deals, exactly what direct mail pieces to send out. Exactly how to… We’re not holding anything back.
Cody Hofhine: Tom, the best part about this… I love listening to your passion, your excitement and it’s the same thing I feel like within myself. But the the best thing I can tell our listeners about you is, because of your passion you truly are there to help people and you put people first.
Cody Hofhine: Profit is the byproduct of just putting people first. You’re going out there and I think you forget about the four letter word, sale, and you replace that four letter word with the word, help. We’re not out there selling anything. We’re out there helping individuals. We’re trying to be solutions to their problems. And when you help individuals or you put people first, the profits are just the byproduct because you’re establishing that relationship of trust. They want to do business with you because you’re building this great rapport and you’re putting them first.
Tom Krol: Well I think that the whole key is one of the core fundamentals to wholesaling, which is the art of finding these discounted properties, is that one thing we always do is we bring it to the analogy a dog. And what you do is you say, look, if you chase a dog, it’s going to run away. And if you run away from a dog, it’s going to chase you. So the best way to catch a dog is to run away from it.
Tom Krol: So here’s the deal. You’re never going to convince anybody to sell their home at a discount. You’re never going to convince anybody to sell their home at a discount. So what you want to do is you want to be a deal finder, not a deal creator. And how do you do that? By knowing your services so that you can help people because if you make it about the price, you’re never going to do a deal.
Tom Krol: So if you understand your services as a wholesaler and why it’s important that you close fast, why it’s important that you buy as is, why it’s important that you pay all the closing costs. If you understand that, then you’re able to help people and actually get real solutions. And people will be trying to convince you to give them your money rather than you trying to convince people to for them to give you their house.
Tom Krol: And that’s the difference is, is you don’t have to keep chasing deals. They’re just going to come to you. When you have the right conversations it’s going to be super quick. So I love this business. This business is such a blessing in my life. I mean, it’s such an honor to be able to share it with other people and we’re going to crush it guys.
Tom Krol: So just bring your pen and paper every single week. Cody and I are going to go through these step-by-step. We’re going to put all of our guests in the hot seat. We’re going to pick their brain. We’re not going to let them get away with anything. We’re going to ask them specifically about what they did to get every single deal and how they did it so that you can replicate their success.
Tom Krol: And that’s going to be what’s going to get you out of your comfort zone and stop learning. If you’re listening to this podcast during the middle of your day, put it down and get on the phone. Get on the phone if you want a deal, get on the phone. That’s the key. And listen to this stuff as a reward. Listen to this stuff for instruction as a reward later on. So awesome, man.
Cody Hofhine: I love it. It’s all about doing. Tom, thank you for deep diving and helping the Rhino Nation, our listeners, understand that anyone can do this. Rhino Nation, I want you to understand this. Like this is simple. This is easy. It’s just taking this instruction and just going and doing. Tom is successful at what he does because he just goes out there and he fails his way forward. Was he perfect right from the get go? Absolutely not. Tom, were you? Were you perfect?
Tom Krol: The whole reason I was successful at this is because I was not perfect. That’s the secret actually is, and here’s the other thing about being a perfectionist. It’s one of the number one ways to fail at this business. Anything that you hear online, anything that you see on YouTube, or listen to in a podcast, find a real estate attorney in the state where you’re going to be performing real estate transactions. Run it by them, make sure you get a green light from them, but after that, go out and fail forward.
Tom Krol: Here’s the biggest secret. If you are a perfectionist, you’re still going to experience failure. So you might as well just get the failure over with. Stop being a perfectionist. Just go out and look like an idiot in front of the sellers because you don’t know what the heck you’re talking about. That’s the secret. If you really want to know the secret sauce to wholesaling and just making a fortune in a short amount of time, it’s progress, not perfection.
Tom Krol: Make a huge sign, put it above your desk. Progress, not perfection. That is the secret. I promise you, that’s all you need to know. And that’s really it because believe me, if your motivation is right, and your why is right…
Tom Krol: And we’ll have a show about the why and because I didn’t understand. When I first heard this whole thing about a why, I didn’t really understand what it was. But if your why is right, you are going to crush it in this business. And it’s not going to be because you’re using a specific contractor, you’re just going to go and find a deal and that’s the bottom line. We’re going to get into all of that, exactly how to do that step-by-step.
Cody Hofhine: Tom, my man, thanks again. This has been awesome. Rhino Nation, if you want to learn more about wholesaling, get over to investorgrit.com that’s investor G-R-I-T .com. Get on our email list. We send out content for free that will just help you absolutely explode your wholesaling business. And if you need a little extra boost, a little extra kick, and you want us to help you crush it and wholesaling, click on our coaching tab. Book a free strategy call with our team and if we like what you have to tell us, we might just invite you to be part of the tribe. Until next time, take care Rhino Nation.