Most real estate investors start our wholesaling, as it’s generally less risky, doesn’t take a lot of money to get started, and can be done without a team. However, contrary to common belief, it’s not easy! Deals are generally few and far between, and when starting, it’s very easy to get frustrated and give up before you even get your first deal. Nasar El-Arabi joins us on today’s FlipNerd.com Expert Interview show to talk about how to get started with wholesaling real estate, and share his story.
Mike: Hey, it’s Mike Hambright at FlipNerd.com. Welcome back for another exciting Expert Interview, where I interview successful real estate investing experts and entrepreneurs in our industry to help you learn and grow.
Today, I’m joined by Nasar El-arabi. Nasar has been a full time real estate investor since 2007 and focuses primarily on wholesaling in the Charlotte market, getting in to some rehabs as well. And today we’re going to talk about getting started with wholesaling. A lot of real estate investors get started as wholesalers, which is a natural fit, but it can be a tough road to get going, and keep your head in the game, and question a lot whether it’s going to work. Until you get that first deal, and then things start to change. But it’s hard to get started. It’s really hard to stay mentally focused and today, that’s what we’re going to talk about.
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Hey Nasar, welcome to the show.
Nasar: Hey man, thanks for having me on, man. Really appreciate it.
Mike: Yeah. So, we, you and I were, I think the first time that we met, or at least talked to each other, was on Joe Fairless’ podcast. He had a series on being successful in real estate investing with a few of us. It was a four part series and that was the first time that I had really heard you talk about your background and stuff. And so, we’re happy to have you on my show now.
Nasar: Oh yeah. Thank you. It’s a pleasure.
Mike: Yeah. Yeah. It’s funny. I didn’t say that you were also a podcaster now because I know you guys just started a podcast. It’s funny that I think everybody, I think literally that’s a requirement now. If you’re a real estate investor, you have to start a podcast.
Nasar: Yeah, I think you’re right because in, I swear, back in 2010, when I first learned about creative real estate back in 2010, it was less than five real estate podcasts.
Mike: Yeah. It’s gotten easier to do and I think when you see more people doing them, you pick up on ideas on how you could do it differently.
Mike: It is what it is. I haven’t really told this to very many people yet, so I’m telling it to the world right now, but we actually are in the process of starting two more shows. So, I’m having actually two more podcasts coming out here over the next few weeks. Kind of different formats. So, anyway, I guess there’s something in the water right now with podcasts.
Nasar: Guess so, man.
Mike: Yeah. Yeah. Awesome. Well, hey, before we get started talking about this topic, and I think it’ll hit home with a lot of people. Whether they’re brand new and they’re trying to get started, or they’ve been doing it for awhile and maybe frustrated that they can’t grow fast enough, or whatever the situation might be, in terms of getting started with wholesaling. Tell us a little bit about your background and how you got started in real estate investing.
Nasar: All right. So, I don’t know if you . . . Well, a lot in your audience probably remember some television shows called Flip That House. Okay. So, watching Flip That House, me and my friend, we realized, “Man, we could do this. This can’t be that hard. So, all we got to do is buy an ugly house, yell at some contractors, and make a bunch of money.” So, I pursued it and of course the people I went to talk to did not do real estate, and did not know anything about real estate. And I was young at the time and ended up buying my first house at 24 to flip. And we bought at a bad time, but it went from bad to worse. And we ended up losing about $7,000 a piece in that deal. So, I . . .
Mike: You said you lost about $7,000 a piece on that deal?
Nasar: That is correct, yes.
Nasar: So, lost about, we did everything wrong in the book. This podcast is not that long to go through everything, but we did everything wrong in the book. So, we lost $7,000 a piece and I finished out my bachelor’s degree. I finished out my bachelor’s degree first and I wanted to move to Charlotte. It’s just that I had to sell the house. And we sold the house and I relocated to Charlotte. And I actually . . . In the introduction . . . I’ve been investing in real estate since ’07, but I went full time September, 2012, when I got fired from my job.
Nasar: And Charlotte is like the number two biggest city in banking behind New York City.
Mike: Yeah. Yeah.
Nasar: So, yeah, we have a big banking industry here, which is a major employer here. So, 2008, went in to banking in 2008, stayed there for two years. Discovered a book called Rich Dad, Poor Dad.
Nasar: Learned about creative real estate, and that’s when I learned about wholesaling and I’m like, “Man, this can be so neat if I can only get this thing to work for me.
Nasar: So, I was working second shift at the time, and in order to . . . When you’re trying to pursue something, it’s always good to hop in with two feet.
Nasar: And, when I say that, Mike, I don’t say that meaning just go cold turkey and quit your job. I’m saying, for example, if you want to train for the Olympics, it’s good to not only get out there and run, but put yourself around other people that’s training for the Olympics as well.
Mike: Absolutely, yeah.
Nasar: So, what I did was, I discovered REI and back then, I was working second shift. I used to have to use my vacation time to go to the meetings because I was working in a call center. You ever worked in a call center?
Mike: I have managed parts of a call center, but I’ve never been a caller, if you will.
Nasar: Oh, okay. Well, you’re lucky. You’re very fortunate.
Nasar: So, it sucks. So, yeah. I was working in a call center and what I . . . I had Tuesdays and weekends off because I worked 10 hours. And Tuesday I would go to real estate meetings and I would use my vacation time to go to the REI meetings as well. And I put myself around that and just really studied it. And the whole 2010 I just took out to just study this new method of real estate. In 2011, I got my first deal.
Now, with me getting my first deal in 2011, it wasn’t life changing. I did have a mentor and I would get up every Saturday morning for eight months straight. Just get out there and farm neighborhoods. So, I would farm neighborhoods on a Saturday, and cross referenced them on Sunday, and mail out a little hand-written post card, “I would like to buy your house, at, please call, my phone number, sincerely.” I would mail that out and I would get phone calls during the week.
So, I would field those phone calls during the course of the week and I did that until it took a deal. It wasn’t easy. Definitely tough and I tell people, “I had the option to quit the second, the third, the fourth, the fifth month without getting a deal.” It took me eight months. You have to stay focused on your goal. If you really want something, you have to go after it. No one . . .
Mike: It’s easy to, It’s easy to . . . Most people can’t go months without . . . It’s like if you go fishing, you know, after a couple hours of not catching anything, you’re like, “Man, I’m out of here.” But talk a little bit about the role in keeping you motivated that a mentor had, because a lot of times, in my experience, when you have somebody like that, they can pull you down from the ledge and say, “Look, this works. Let me show you some deals we’ve done.” I mean, talk about the role that had in your being able to stick with it for such a long period of time.
Nasar: Okay. My mentor, he was great and everything, but I’m not going to say he had a big role in me not quitting. What it was, I was putting myself around real estate investors who were actually . . .
Mike: Yeah. Yeah. I see.
Nasar: And the thought of me working for a job for 40 years just kept me going.
Mike: Yeah. Yeah.
Nasar: So, it was one of those things, Mike, where I was just like, “Man, it’s got to work. It has to. I don’t have a choice. There’s nothing else I can do.”
Nasar: So, yeah.
Mike: Yeah. I think everybody, I mean every successful real estate investor I know, went through that same thing. They committed to it and they had to just stick with it. They made failure, it’s not that it wasn’t an option, but it wasn’t an option they were willing to accept and they just kept churning and grinding until it worked.
Nasar: Yeah, I mean, and that’s basically it. What I did, I just went through the whole self development transition. I’m somebody who started reading at 26 which was probably six years ago. And I started reading at 26, man, and that’s . . . I first got in self development and I just, literally, what the book said to do, I did. So, instead of listening to music, put in audio books, cut off cable, reading a lot of self development books, I would go to sleep with a book by my bed.
Start to listen to audio books and things like that, man, just put that in your mind and because when things are not going your way, where you’ve got to walk in to a job that you hate, and you’re walking in to the job that you hate, once you walk in the door, it feels like a refrigerator fell on your back. You don’t want to be there. You’re stressed out and also, you’re trying this real estate thing, if it’s not going how you want, you have to put yourself around positivity.
Mike: Yeah. Yeah.
Nasar: You know? And that’s what those, the audio books, and podcasts, and books did for me.
Mike: Yeah. And talk about, so we’re a big supporter of REIA clubs at FlipNerd. We have a REIA club directory. For those that don’t know, you can find REIA clubs that, in fact, by the time this show airs, we’ll have a national directory of events that REIA clubs are having going on all over the country. So, huge fans of REIA clubs. So, talk about that component of being part of a REIA club and surrounding yourself with people and talk a little bit about . . .
There’s always great people there. There’s always a lot of new people that are in the same situation as you, that haven’t done a deal either. So, talk about how to find those people that are actually doing deals that can provide some support to you versus a bunch of people that were like you, that maybe haven’t done deals. Like a lot of newbies, potentially.
Nasar: Yeah, so, that’s a great question. Now, the REIA here in Charlotte, called Metrolina REIA, metrolinareia.org. I joined in 2010. And with the REIA group here, I came in at a perfect time. I’m quite sure you remember in 2010, you turned on the news and TV was, “Oh my gosh. Stay away from real estate. Stay away from real estate.” So, at that time, the guys who would teach the little sub groups, you knew they were doing deals because they were up in the front of the room talking about the deals.
Nasar: So, what I would do is just put myself around that. Build a relationship with those guys. Now this is the main thing that I did and I encourage people to do. I volunteered for my REIA for two years straight.
Mike: That’s great.
Nasar: And I became someone that they became familiar with. That’s how I met my first mentor. He approached me because he kept seeing me come around to the meetings. So, with me volunteering, I was also able to network. So I was also able to find out who was actually doing the deals.
Nasar: I know the REIAs get a lot of slack because the majority of the people are not doing deals, and are tire kickers, and just want to politic. However, you do have some guys who are doing deals.
Nasar: I want to say last year, based off the relationships of just my REIA, and I’m talking about three or four people, I made six figures. Between four people. Just last year. So . . .
Mike: Are you saying of deals you did amongst each other?
Nasar: That’s correct.
Nasar: Yeah. So, those relationships are viable so, notice I said four people. I didn’t say 50. I just said four people.
Nasar: So, if it’s 60 people, in your REIA, you only need to maybe know the six guys who are out there doing it. And those six guys can make you six figures. So, it’s more of build a relationship and network game. A lot of people that come to the REIA, and now I’m one of those guys. Whereas, they approach me, I meet them one time, they want me to mentor and coach them after the first time. You know, want me to make a decision there. Want me to, they basically just want to take, take, take, take, take. Instead of just building a relationship over time, and learning, “Hey, look, man, I see that you’re out here wholesaling, you’re rehabbing. What kind of deals are you looking for? If I find a deal will you help me?” Absolutely, because with those, what I do with those people, I either will wholesale them out or I’ll buy the deal from them.
Nasar: So, you’ve got to look to add value for people. If people think that you’re just going to waste their time, and steal their time, they’re more than likely not going to deal with you.
Mike: Yeah. We’ve, this has come up a few times before talking about REIA clubs. I think for folks that hear this and you’re knew and you’re going through a REIA club meeting like that, somebody else told me a similar story where they went at it and said they found some of the people who were the most successful in the room and tried to align themselves and say, “What can I do for you?” Didn’t ask for anything in return just, “I want to help you because I want to learn this but you don’t have to pay me anything. I just want to learn.” And I think that people are receptive to that.
The people that . . . Sometimes at events like that, you have people that are experienced. Everybody knows it. And they get trapped in a corner somewhere and everybody’s just trying to take from them. You’re right. But I think if you come in from a different angle and you try to give, it goes a lot further.
Nasar: Yes, I agree.
Mike: Yeah. Yeah. Well, talk about, specifically, some of the challenges of getting started because I know a lot of people, are . . . One of the challenges, I guess, people have is that a lot of people view them as their competitors and they don’t necessarily want to tell them their best experience, or their best knowledge because they’re afraid that I’m going to create a competitor, or I’m going to lose the deal to this guy somehow, or whatever. It sounds like your experience is different but talk about that part a little bit.
Nasar: I mean, it all depends on the mindset of the person. Yes, investors like that do exist. However, just because that one person doesn’t want to share information with you or doesn’t want to help you out, doesn’t mean you should just give up.
Nasar: I think that you should find the people who are willing to share information and that’s what I did. I found the people who were willing to share information. I didn’t go and stalk the guy who’s not willing to share information, but the people who were willing to share information. And basically just listen to the advice that they give. Because even sometimes when I do share information with some people, they never take action.
Nasar: So, what I’ve noticed is, successful people like to see other people succeed. Especially, when they’re actually doing the work. And when I was actually doing the work, a lot of people will help me. They still help me along the way because when . . . It’s very satisfying to see that you helped somebody out and they’re doing well now.
Nasar: And a lot of successful people are great people. You do have a few bad apples who, they don’t want to share anything. They don’t want to help anybody but that’s not the majority. So, if you do run across that individual, that person’s just not for you.
Nasar: Because it’s been many of times, whereas, I asked some people for help and they didn’t help me. Or they said they were going to help me and they never got back to me and things like that. So, it happens. You’ve just got to keep going.
Mike: Yeah. Yeah, and I’d say . . . What a lot of people . . . Another thing, another myth is some people don’t want to approach some people because they feel like, “Oh, that guy’s got a ton of experience. He doesn’t want to talk to me.” But you probably agree with this based off what you’ve said so far. Real estate investing can be a really lonely place, and the thing is, that’s one of the great things about REIA clubs and I don’t think a lot of people realize this. They say, “Well, the most experienced people stay away.”
But the most experienced people are, they’re on an island sometimes. They’re out there making it happen and coming to something like a REIA club meeting, or some sort of even like that, is an outlet for them to socialize with people that are like-minded. And so, I think sometimes just finding those people and trying to get them talking, you get a lot more out of them than you would expect because its like they’ve been in solitary confinement for a month and now they’re ready to come out. You know?
Nasar: Yeah. That’s correct. Yeah.
Mike: Yeah. Yeah. More so I’d say, than trying to pin somebody down and say, “Hey, can I buy you lunch and extract everything you know in an hour for $10?” Once you’ve been doing that for awhile, it’s like, “No, my time’s worth a lot more than $10.” But if you can find somebody at a meeting like that, where they’re coming, planning to share their knowledge, then it’s a great opportunity.
Nasar: Yeah. Yeah. Absolutely.
Mike: Yeah. Well, let’s talk about some of the other challenges of new people getting started as lead generation. So, without getting in to a lot of detail about . . . We could have entire shows on lead generation, but a lot of people that are getting started, often don’t have a lot of money. They can get really inconsistent with their advertising, their lead generation stuff. I mean, talk about the importance of that. In terms of getting started as a wholesaler.
Nasar: I mean, as wholesaler staying in business, you have to stay marketing. I mean, simple as that. It’s, you’re literally marketing all the time. If you’re not marketing, you’re not working on deals. If you’re not working on deals, you’re not making any money. So, as far as lead generation, whenever you’re getting started out, you have to approach your finances with a realistic point of view. Meaning that, how much can I afford to go out each month? And, what I see sometimes, if somebody says, “Well, I can send out 1,000 postcards.” A thousand postcards is going to run about $450.
What I tell them, I say, “All right. Can you do this every month or just one time?” If they say, “One time.” I say, “No, all right, let’s just break up that $450 then, so that it lasts longer than one month because you can’t send out 1,000 postcards expecting to get in a deal and then, from that, making money and all this. It doesn’t work like that.” You know, it just doesn’t work like that. You have to be consistent. You can’t do it one time and expect to get this big payday that’s going to change your life. It doesn’t work like that.
So, you have to be consistent with your marketing. So, if you’re limited on funds, I tell people, but a lot of people don’t want to do it because it’s hard work, drive for dollars. Drive for dollars every Saturday morning like I did, and mail out . . . I used to get pre-stamped postcards from the post office and back in 2011, 100 was $32. So, and, I would write out about 20, 25 a week and I just kept doing it, kept doing it, kept doing it.
Mike: Yeah. So, you’d see an address, write a little message, drop it in the mail around the corner, and send it to that house. Yeah.
Nasar: That’s correct. Yeah.
Nasar: You have to always be working the leads if you want to stay in business as a real estate investor, so I just kept doing it.
Mike: Yeah. Yeah, if you don’t have leads, you don’t have a business, period.
Mike: Right. Yeah. The other thing, in terms of the getting started game, is what some people don’t realize is you might mail something out today or generate a lead today that turns into a deal way down the road. I’ll tell you this. We closed on a house this past Friday, that we purchased and we made an offer on that house 52 months ago and we just kept following up. Fifty-two months.
We just kept following up, following up, following up. We have a very aggressive follow up system that just never stops until somebody sells the house or tells us to stop calling. But we just followed up every month for 52 months and then, lo and behold, we got it. In fact, we got it for less than what we offered 52 months ago. And so, a lot of people that are new don’t really, you know, until you’ve been doing this for 6 or 12 months, you don’t really see a lot of that stuff come back around because the cycle time just hasn’t happened yet. You know?
Nasar: Yeah. I agree. I’m working a deal now, man, and I’ve been talking to the seller for over a year, following up, going back and forth with a contract for six months. However, on a wholesale deal, with the way the numbers are, I can probably make $50,000 in a wholesale deal, $40,000 conservatively on a wholesale deal. A hundred on a rehab. So, this is what we consider a homerun. However, some title issues came up, so I’m working on getting the title issues resolved. But that deal didn’t come easy. You know?
Nasar: This is a year worth of follow up and six months going back and forth with the contract. Fixing this here. “Oh, I’m going to get it signed. I’m going to get this signed.” And finally got him pinned down and you’ve just got to stay on top of people.
Mike: Yeah. Yeah. Well, a lot of people . . . the types of people that sell houses at deep discounts like the type that we buy, they’ve probably been delaying that decision for years or decades sometimes. So a couple more years or a few more months really isn’t a big deal to them because they’ve been needing to do this for many years at that point. So, if you think about, for us, a week seems like forever but for somebody that’s been dragging their feet on that for years and years, they’re not thinking about your time frame.
Nasar: Correct. Correct. Yeah. They can care less.
Mike: Yeah. Maybe you can share a little bit of your insights on talking to sellers as a new wholesaler. I mean, unless somebody’s trained you, it’s a steep learning curve to figure out how to talk to sellers and build that relationship and stuff. Talk about some things that are important there.
Nasar: I mean, as far as just talking to sellers, it’s all about just getting them to like you and building that rapport, asking a lot of open-ended questions, so you can build that conversation. And as a newbie, you have to realize that we don’t buy houses. We pretty much, don’t focus on the house, focus on the situation. You’ve got to focus on the situation. And if somebody . . . and the situation for somebody that sells fast, doesn’t necessarily mean money, that they’re in need of money.
Nasar: They might not need any money and you’ll come across people who will say, “Man, I don’t want money because of the tax implication, but I wouldn’t mind selling.”
Nasar: So, you have to get creative to make those type of deals happen and make those type of deals work. I’ve had situations where sellers were upside down and they were more than happy to bring money to the closing table because it wasn’t about the house. It was more for the peace of mind because he divorced his wife in the house, he’s no longer with her, he relocated, and this is the only thing from giving him a stress free mind.
Mike: Right. Right.
Nasar: So, he came to closing, wrote a check, so that I could buy his house and he was more than happy because he sat on the market the traditional way for over two years.
Mike: Oh, wow.
Nasar: So, he figured out that wasn’t going to work. And we were there to solve that problem, but as a newbie, you have to realize that you’re looking for the problem.
Nasar: You’re looking for things, “Oh, me and Harry did this house, we have a whole house. We can’t afford to maintenance this house.” “Oh, I’m tired of tenants. Man, these tenants just tore this place up.” But you’re talking to them, building that relationship to get to that point where they’ll open up to you and once they’ll open up to you, they’ll focus on solving that particular problem.
Mike: Right. Right.
Nasar: And it’s something that you’ll get better at with time.
Mike: Yep. Yep. Well, Nasar, we’re coming to the end of the show here. Any final thoughts on advice you’d give to new wholesalers to stick with it and get out of the gate?
Nasar: Yes, definitely, I would say, “Turn off the TV and turn on your life.” So, get in to a lot of self-development. It will come in handy. Listen to the FlipNerd podcasts. Listen to my podcasts. Just go out there and fill your head with positivity, or knowledge of what you’re trying to do and implement it and that will help you get through the learning curve easier because you don’t want to give up. This business has done a lot for me that I would have never been able to do, had I been at a job.
Mike: Right. Right. Yep. Awesome, man. You’ve got to stick with it. Anything that’s worthwhile. And I think a lot of people, like you said, watching Flip This House and stuff like that, leads you to believe that it’s easy but it’s not like that.
Nasar: Not at all.
Mike: I’ve never put makeup on before I’ve gone to check out a house and I’ve rehabbed, I’ve bought hundreds of houses and never done donuts in the front yard, never thrown a hammer through anything or at anybody. I’ve wanted to throw a hammer at someone before probably but it’s a little different in the real world, right?
Nasar: Right. Yeah.
Mike: Yeah. Yeah. Awesome, man. Well, tell us about, if folks want to learn more about some of the stuff you’re working on and your new podcast, tell us a couple places where they can go.
Nasar: Yes. Go on iTunes. Look for the Flipping Empire podcasts. The Flipping Empire podcasts. You can go to flippingempire.com, flippingempire.com. If you want to learn more about me, you go to my YouTube channel. YouTube channel Real Estate Doru. I’m not your guru, I’m your doru because I actually do this business. D-O-R-U and you can find me on realestatedoru.com.
Mike: Awesome. Awesome. Well, hey my friend, thanks for joining us on the show and hope you continue to have a great year and I’m sure we’ll talk again sometime soon, okay?
Nasar: All right. No problem, man.
Mike: All right. We’ll see you.
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