Show Summary

This is episode #343, and my guest for this episode is Brett Snodgrass. Wholesaling real estate is the foundation of all real estate investing. Your ability to buy houses in a way that allows you to mark them up and still sell quickly is the key to success. Today we talk all about wholesaling…from what it is to clear up any misconceptions, benefits of wholesaling, then Brett drops some incredible knowledge on how to find deals….BTW – he did 27 wholesale deals last month alone!

Whatever you do….find a comfortable seat and listen up!

Please help me welcome Brett Snodgrass to today’s show!

Highlights of this show

  • Meet Brett Snodgrass, dominant Indianapolis wholesaler.
  • Learn what wholesaling is, and the benefits of wholesaling.
  • Learn how Brett is finding most of his deals these days.
  • Join the conversation on how to scale your business and your real estate investing team.

Resources and Links from this show:

Listen to the Audio Version of this Episode

FlipNerd Show Transcript:

Mike: This is the flipnerd.com Expert Real Estate Investing Show, the show for real estate investors, whether you’re a veteran or brand new. I’m your host, Mike Hambright and each week I bring you a new expert guest that will share their knowledge and lessons with you. If you’re excited about real estate investing, believe in personal responsibility, and taking control of your life and financial destiny, you’re in the right place.
This is Episode 343 and my guest for this episode is my pal, Brett Snodgrass. Wholesaling real estate is the foundation of all real estate investing. Your ability to buy houses or any sort of property in a way that allows you to mark them up and still quickly sell them for a profit is the key to your success.
Today we talk about wholesaling, from what it is to clear up any misconceptions, the benefits of wholesaling and then Brett drops some incredible knowledge on how to find deals. By the way, he did 27 wholesale deals last month alone. So he’s going to share some great information on specifically how he found 20 of those 27 deals and it’s something that anybody listening to this right now can do.
Now, whatever you do, find a comfortable seat, maybe get something to write on, a nice cool beverage and listen up. Please help me welcome Brett Snodgrass to today’s show. Brett, welcome to the show, my friend.
Brett: Thanks, Mike. It’s a pleasure, man. I watch your show. I listen to your podcast. I check out your site. You guys are doing some awesome stuff. FlipNerd, I always loved that title. I always think of “Revenge of the Nerds” back in my era when I think of your show.
Mike: The real estate nerds are taking over, my friend.
Brett: That’s right. Thanks for having me.
Mike: I know you’re taking over. You’re taking over Indianapolis. So I’m excited to hear about some of the stuff. Before we kind of get into talking about wholesaling today and sharing your experiences, why don’t you tell us your background, like how you got started in real estate investing and maybe a little bit about how your business has evolved without kind of stealing the thunder from the rest of the show, I guess.
Brett: Yeah, definitely. I was born and raised in Indiana, small town Indiana boy, my dad was a basketball coach. If you’ve ever seen that movie “Hoosiers,” that was like my family. My dad was a high school basketball coach. Basketball was like my life for many, many years and always had that entrepreneurial spirit and always loved to buy and sell things. I remember in junior high school I would buy and sell candy at school and that was like the thing. I would just make like a dollar here and there. It was pretty neat.
I went to college, still kind of had that entrepreneurial spirit. My parents were both teachers. I came from a teaching background. So I actually got a degree in elementary education, but I taught for about four months after college and I realized, “Man, this isn’t for me, this teaching thing.” So I quit doing that, I moved home in my mid-20s and then life kind of threw me some curveballs. I was living a crazy lifestyle, living from paycheck to paycheck, didn’t know what I was going to do that weekend. That’s what I was worried about. But I got a hold of some books I started reading.
Then I got this opportunity to work with a gentleman and he was buying and selling large land parcels. I got to work pretty much with him just off of commission. So I remember I was helping him . . . I was like a bird dog for him and I was finding him these large land parcels. I remember I was getting ready to do this land parcel and I was getting ready to make $5,000 and I never had seen that type of money before. It was awesome. It was nerve-wracking. It was like I’ve never had this much money in a bank account, $5,000 and we finally got that deal and I had that money.
Long story short, I started reading books like “Rich Dad, Poor Dad.” I started reading “The Millionaire Next Door.” I started reading “The Millionaire Real Estate Investor.” Then I found this house online. This was back in 2007, the end of 2007, I found this house for $9,000. I was like, “Who in the heck can buy a house for $9,000?” This was in Youngstown, Ohio. I had that $5,000. My dad had $5,000. I said, “Dad, let’s go buy this house for $9,000.” He’s like, “All right, let’s do it.” So I drove one way to Youngstown, Ohio. It was like six or seven hours. I got to the house and it was really like literally a $9,000 house, if you can imagine. It was in the inner city of Youngstown.
Mike: Worth every penny, huh?
Brett: Yeah. Definitely. It was trashed. But I cleaned up all the trash myself. I’m sitting here putting trash in garbage bags and cleaning up. Then I didn’t know what to do with it because we only had $10,000. So after closing costs, we were pretty much done. We actually said, “Let’s try and sell it.” So we marketed it and we sold the house for $15,000 and we made $6,000 on that house and I said, “If I can do this with one, could I do it with 100 houses?” That’s kind of where it all started.
Mike: Yeah. That’s awesome. So what year was that? That was like 2008 or so?
Brett: Yeah. This was like at the end of 2007. So the market was . . .
Mike: Starting to turn, yeah.
Brett: It was going downhill. The thing was I didn’t know any better. I didn’t know real estate from anything. People could call it I was lucky, I was blessed. I got in at the right time. It was a different time back then, but that’s what we did and that was around the timeframe it was. Everybody else was saying, “Real estate is terrible, don’t get in it.” I was like, “Man, this is awesome. I’m picking up like $9,000 houses. This is crazy.”
Mike: Yeah, the people that say that they don’t understand that people have life issues 365 days a year in all markets, right? Death, divorce, inheritance, trouble rentals. It doesn’t matter where the market is at. The thing about with wholesaling is you’re kind of a trader. You’re always arbitraging a situation . . . it’s almost a situation that you’re dealing with, right? It doesn’t matter where the market is at. The people that say that, well, yeah, it’s a bad time to buy at full price and then try to sell at full price. Well, that’s always a bad time. That’s always a bad way to do it, right?
Brett: Right. Yeah. Definitely.
Mike: Talk about wholesaling a little bit. Again, this is Episode 343, we’ve done hundreds of episodes. What I’ve really kind of realized lately is we don’t talk about the basics enough. I know there are so many people looking to get started or have recently started but they’re trying to grow.
So I’ve really kind of had this epiphany lately that sometimes we’re at too high of a level for folks. You did 25 deals last week, but a lot of people listening to the show have never done a deal and they want to do a deal. Let’s clear up some misconceptions of what wholesaling is. How would you describe it?
Brett: Yeah. Definitely. It’s funny because I just did a meetup. I had that let’s get back to the basics. This was our very first meetup and it was for a lot of new wholesalers. That’s what the topic was, getting back to the basics and we just talked about this.
Mike: Yeah.
Brett: To me, a lot of people talk about wholesaling. There are a few different ways to do it. Number one is you go out, you find a great deal, whether it’s wherever, you find a good deal on the table. You get it under contract and then instead of buying and selling the house, you actually sell the contract. You’re not selling the house, you’re selling the piece of paper you have signed for $5,000. So if you get a house under contract for $50,000, you sell this purchase agreement for $5,000 to another investor. And they buy it for $50,000, but they give you $5,000 for the paper. That’s the typical way of assigning contracts.
Mike: That’s what we call an assignment, right?
Brett: Yeah. That’s an assignment. You can also do it where you do the same thing. You get a property under contract and then you actually do what they call a double closing where you go in, you close on the property and then 15 minutes later, the other person closes on the property like simultaneously you’re closing on that particular property.
So you actually take title and then you sell the property, but maybe you might use the end buyer’s funds. So that gets a little complicated. But that’s kind of the same thing as assignment, but you actually buy and sell the property, but it’s all at the same time. That’s called a double closing.
Mike: Yeah.
Brett: But then there’s the other way, which most industries do it this way, where you actually buy a product and then you sell the product. So I always relate it to if you go to the grocery store and they have a fruit stand there, that grocery store probably bought that fruit from a wholesale fruit company.
Now, they actually bought it and then they laid it out and then they sold it. That’s what we typically do here at Simple Wholesaling, our company. We take down the properties, we purchase the properties and then we market them and then we sell them to an end buyer, an end investor. People ask me, “Why do you do it that way?”
I believe it’s cleaner and if you have the resources to do it, a lot of people can’t do that because they don’t have the money or the resources, but if you do, I think it’s a little bit cleaner and you don’t have as many hiccups along the way and as much confusion that can happen, especially when you’re doing 20 deals a month and you’re assigning everything, you’re going to have a lot of hiccups, a lot of confusion. If you do it this way, it’s just cleaner. You buy it, you sell it, no confusion, no assignment fees, nobody knows what you’re making, just a little bit cleaner. That’s what we do.
Mike: Yeah. I love your analogy because honestly I don’t know if you know this, but before I got into real estate investing almost ten years ago, most of my background prior to that was in retail, like for large retailers and so I always use retail. But a lot of times people, I think when you share an analogy like you did, people kind of understand hey, everything that you own was wholesaled somewhere along the way.
It’s a distributor or like you said, whatever your grocery store, grocery stores are different all over the country, but Kroeger or whatever your grocery store is, it’s not like they own a banana plantation. They bought that from somebody else and they marked it up. They added value. Of course the distributor or the wholesaler has to sell it at a price to where that person can make money on it because they have to pay employees to put it in the store and they have to pay the people checking out and bagging it and all that stuff, so they should make money because they added value. The person that’s buying it . . .
Brett: And they value . . .
Mike: Here’s the interesting thing. I was going to say the interesting part of that is that the end consumer knows that a farmer made money on it and a distributor made money on it. They don’t think about these things. The retailer made money on it. Everybody made money along the way but it was still enough value in there for you to buy it because you don’t care if everybody made money, you just wanted a banana, right? Everybody wins in that scenario.
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Everybody wins in that scenario.
Brett: Yeah. People ask me, “Why doesn’t your end buyer go out and find the deal themselves?” That’s a nice question. I always relate it back to the grocery store. It’s like when you go to your local grocery store, why don’t you bypass the grocery store and buy it from the person they bought it from. Maybe it’s the wholesaler or the farmer. It all boils down to convenience. We’re going to talk about the strategy that we buy a lot of properties from other wholesalers.
I love when my email is getting flooded with, they’re not all good deals, but with decent deals, I didn’t have to go out and do anything. It’s convenient to just kind of have that. That’s what wholesalers provide. We provide convenience for end buyers or investors that they don’t have to go out and hunt. They can go to their local wholesaler store like us, Simple Wholesaling and they can pick out some deals like they do bananas.
Mike: Yeah. Come get a banana. Well, the cool thing is I think as people listening to this that are like, “No, I just want to rehab,” what I would tell you is if you think of a grocery store as the retailer, they’re essentially the rehabber, like we’re going to take the final step, if you will, in the supply chain of that product. So because you’re the grocery store, it doesn’t mean you have to become a fruit distributor.
So if you just want to rehab, I would say rehabbing is not an easy business, for sure. But wholesaling is not an easy business when you’re the one sourcing the deals. I’m saying basically wholesalers have earned whatever they can get paid for that deal. So if you don’t want to go sit at the kitchen table and spend a bunch of money on advertising with no guarantee of return and meet with 15 or 20 sellers to get one deal, then you don’t have to do that. You just buy from a wholesaler and say, “Hey, I know I’m paying more than that guy did, but at least I don’t have to do any of that stuff.”
Brett: Yeah, definitely. They don’t even think about the marketing cost that goes into these. Like you said, sometimes we’ve got to talk to 100 people on the phone and 10 of them cuss us out sometimes because they’re irritated by what we’re doing or something. We go through a lot of hoops and a lot of headaches to get our deals. That’s for sure.
Mike: Yeah. Well, I just gave the analogy of rehabber versus a wholesaler. But why don’t you talk about maybe from your perspective because I don’t think you do much of any rehabbing. You’re primarily wholesaling or assigning deals, from your perspective, what are the benefits of wholesaling over other exit strategies?
Brett: Well, I do rehab some. But I always tell my team the next time I rehab a home to punch me right in the face because it’s tough. I started out wholesaling, back to my story, I started out wholesaling, did that for about three or four years when the market was hot, the market was good. I could buy a lot of bank-owned properties, it was awesome.
Then the market started coming back. I was used to making a lot of money in a down market. Here’s the market coming back and I’m like heck, there aren’t as many bank-owneds, so what are we going to do? Me and my dad, we kind of said, “Let’s just start rehabbing them. They do it on TV. Let’s do that.” I actually was a full-time flipper for about three years.
I remember I had just gotten married and I was sitting in my bed and I was juggling six or seven rehabs at that time. I had a guy who had gotten injured on one of the jobs, so I was dealing with some of that stuff. I was just stressed to the max. Contractors were ripping me off. It was just like a super-stressful time in my life.
So that’s when I kind of threw my hands up and I said, “I’m going back into wholesaling. I’m going to learn how to do it right and I’m going to do it big.” That’s when we developed Simple Wholesaling and said we’re going to do this big. What are the benefits of wholesaling versus rehabbing?
I relate it to kind of like the Flintstones car. You check back. You look at the Flintstones car. They get in their car and they move their feet and their car moves. It’s very simple. There are a couple of moving parts, but not that many. You can learn to move your feet and move this Flintstones car. Now, you compare the Flintstones car with a regular car today, a modern car. Take a Corvette, for example. You’ve got a lot of moving parts. If one of those parts gets out of whack, you could spin off the road and crash.
I feel like that’s what flipping is. There are a lot of moving parts. You’re dealing with contractors. You’re dealing with inspectors. You’re dealing with home buyers that don’t know anything about real estate. You’re dealing with their lenders. You’ve got to jump through all these hoops. At the end of the day, you hope you can make money if all the moving parts work together. I chose wholesaling because it’s less moving parts.
Mike: Yeah. I think a lot of people fall in love . . . I love to rehab. But I will say that the market is where it is right now, we’re doing more . . . I typically refer to it as wholetailing, not to throw a whole monkey wrench in this discussion, but we clean the trash out and then we put it on the MLS and then wholesale it on the retail market is the way I describe it. But yeah, there’s a lot that can go wrong with rehabbing, for sure.
Brett: When you wholetail a property, my question is because the thing we run into is the end buyer, they get a loan on the property and then they jump through all those hoops. Do they get a mortgage loan on your wholetail properties?
Mike: It kind of depends on the property. We kind of make the decision at some point to . . . of course you never know who’s going to buy your property, but we tend to try to put it into one or two buckets. Is this going to be somebody that’s going to be an investor, like they’re probably going to buy it for a rental property. So let’s just say in my market, Dallas, the median price point is climbing rapidly here, but I don’t even know what it is right now, but what I’ve always said for years is maybe $180,000 is kind of the median price point, but if it’s under like $110,000 or $120,000, anywhere under that, it’s probably more of a rental grade type property.
If it’s above that, then we’re kind of aiming at . . . like from my perspective, I don’t think it’s a great rental, although I’ve seen people buy like half-million dollar rentals. I’m like, “How does that even make sense?” People do weird things. When I think it’s like an owner/occupant-type deal, then we’re more likely to fix a structural, if it has a little bit more foundation issues, we might fix that, we might make it so it’s more livable. The landlord, I’m like, “That’s their problem.”
So what we typically do is right off the bat when we sell it, because the financing is an issue, especially if you’re used to . . . historically we rehab a lot of houses and historically they were FHA loans. The market is so hot right now that we literally say on our listing no FHA loans allowed. If it needs structural work, then we just say cash or cash like. So there’s enough of a buyer pool that people just adapt.
Brett: Yeah. Now, we do a lot of that as well. I don’t know if you call it wholetailing, but I have a guy who if we buy a house that’s totally trashed, a renter was in there and they left all their junk in there, we’ve got guys that go clean it all out and then we’ll sell it just like that. Is that a wholetail/wholesale? I don’t really know. But we do some of that.
Mike: It’s kind of a gray area of what do you call it. It doesn’t matter.
Brett: Hey, just buy and sell and make some money.
Mike: I bought it and I sold it. So let’s talk a little bit about finding deals. You’ve been doing some really innovative things to find more deals. And then we’ll kind of get into scaling. When you start finding more deals, if you’re successful and you find a way to do it, then your next issue is scalability, right? You only have so many hours in a day. Let’s talk about finding deals first. Let’s talk about classically what you do to find deals and then what you’ve done over the past year to really ramp that up?
Brett: Yeah. Well, the market has changed. Ever since I got . . . when I got started, it was bank owned frenzy, MLS bank-owned. We put in 100-200 offers a month, 300 offers and we’d get some deals, bank-owned. The market shifted, markets changed. A few years ago, this guy talked about this direct mail thing. I was like, “What the heck is that?” Never heard of it, don’t even know what it is. You’re going to actually write letters and send them out and people are going to call you. That’s weird. But let’s give it a shot.
So I had this guy, he started writing yellow letters. He started writing 250 letters a week, so 1,000 letters a month and we got a deal from it. We spend $1,000 and we made $10,000. Who would actually, if you could have a machine, go put in the $1,000, you knew you would get $10,000 out of it, how many $1,000 would you put in? You put in a lot. That’s what we did. We went from 1,000 letters a month to 2,000 to 5,000. Now we’re doing probably around 20,000 letters a month.
I don’t have a guy write them anymore. We hired out a direct mail company. That system works. You’ve got to track it. You send out 100 letters. You probably get two phone calls. We call that a response rate. Then you just count how many phone calls you need to get to get a deal.
Mike: Yeah.
Brett: That has been our number one resource forever or for the last couple years at least, direct mail. Other than that, we got a lead generation website. So if people type in, “Hey, I need to sell my house fast in Indianapolis,” we pop up. Then they fill out a little form and then we get an email saying Grover from Indianapolis wants to sell his house for $50,000, we call him and we get deals that way.
So direct mail, we’re typically getting eight deals, ten deals a month, lead generation we’re getting two or three deals. We still do a lot of HUD offers. We’re getting two or three deals a month off of HUD. But lately . . . and also Facebook. Facebook is another big one we’ve been starting to get a lot of leads. We do Facebook ads and that’s been really, really good lately.
Mike: Tell me about that. I don’t know anybody that’s really cracked the code on . . . so, most people that I know that are using Facebook advertising now for seller leads are kind of retargeting, right? Somebody came to your website and they did or they didn’t fill out a form and then you’re kind of following them around, but you’re just going right after what we’ll refer to as cold traffic on Facebook. Talk about that a little bit.
Brett: I can’t even plug in my computer, so I don’t know that much about the Facebook stuff, but all I know is the same company who does our lead generation website, they have Facebook targeting ads and they come up with like five or six ads. In Facebook, you can target certain demographics. Do I know which ones they target? I really, really don’t. I know they target Indianapolis, obviously. I don’t really know what else they target.
But we got 17 leads this month off of Facebook. We do the retargeting, so maybe some of that is from that, but 17 leads in a month off of Facebook and I think we spent . . . and they’re pretty good leads. They’re just like the lead generation website. These people aren’t just getting a letter and they’re not interested. If they fill out a form, they’re interested in selling their home and that’s what Facebook is.
Mike: Yeah.
Brett: The thing about the Facebook ads is too is instead of clicking on a link and taking them to our website, they can actually just fill out the form right on Facebook. So it says, “We buy houses cash,” they say, “Hey, I’m interested,” name, email, house address and then we get an email and we call them. It’s right on Facebook. The more links people have to click, the more they get lost in the whole shuffle.
Mike: Yeah. So talk about what you’re doing. I know you’re starting to build out relationships with other wholesalers in Indy that are bringing you deals . . . by the way, if anybody’s listening to this and you’re in Indianapolis, this guy wants your deals, your wholesale deals. But talk a little bit about how that works.
Brett: Definitely. I’ve always taken down other wholesalers deals, but it’s usually been very limited. It’s been two to three a month. There are a few wholesalers that are pretty good here in Indianapolis that they actually put out pretty decent deals, but it was about five or six months ago I talked to my team and I said, “What if we got all the wholesalers here in Indianapolis and we started getting on all their buyers’ lists and we started building relationships with them so instead of them looking at us like a wholesaler, they look at us like an end buyer because we’re going to take down and buy their deals?”
Mike: Yeah.
Brett: What I found out was I call them apple trees because we always talk about low-hanging fruit. We want to pick that deal that’s easy, that’s smooth, that low-hanging fruit apple tree. If we can get more apple trees in our business, like direct mail is an apple tree we get deals from . . . lead generation website is another apple tree. Then that other wholesaler has become our top producing apple tree in our business. How do we build relationships with them?
Again, we go out, we ask title companies, we ask other people who are the wholesalers here? We build relationships with them, we talk to them. One thing is we start having a meetup. We have a meetup that’s linked with our local REIA group, which is a real estate investors association. They are promoting us. So our first meetup was last week and we had 49 people there other than us. A lot of these are new wholesalers. So they’re out and trying to do this business, but they don’t have a big buyers list.
Well, we can be that buyers list. We’re up there. We’re speaking. We become an authority and a lot of wholesalers . . . I know when I did my first deal, we made $6,000. I split $3,000 with my dad. I made $3,000, he made $3,000. That was like awesome. I’ve never seen like, “Oh my gosh, I can make $3,000? That’s crazy.” That’s how other wholesalers think, which is how I thought. So they’ll make $1,000, $2,000, but we have a great buyer’s list, so we know we can sell that deal. There are still six left on it, eight left on it.
Then the other benefit is there’s no marketing cost. So when we’re doing direct mail, we’re paying $2,000 to get that deal. Other wholesalers, it’s zero. We pick up their deal because they paid for all the marketing on that. It’s just a strategy. I’ll tell you, man, last month we did 27. Twenty of them came from other wholesalers.
Mike: That’s incredible.
Brett: When it’s getting super-competitive, it’s like everybody’s doing direct mail. Everybody’s doing the same thing. It’s like how can we benefit from this, so instead of going against other wholesalers, we partner with them.
Mike: My guess is with other wholesalers one of the benefits that you add is kind of certainty to be able to close. I know when I deal with other investors, it just depends on your situation. For those of you that are listening, if this is something you want to explore, you need to truly be able to do what I’m about to say, but I have access to cash where I can literally close on deals today.
Like if the title work was done and somebody called me right now and said, “That’s a great deal.” They say, “Can you close in two hours?” I would say, “Send me the documents and tell me where to wire the money,” and I can do it that fast. So a lot of wholesalers that are new especially, some of the challenges, they don’t have that cash machine yet coming in. If you say, “I’m a sure thing. We can close as fast as your title company can move,” that’s a big value for a newer investor, right?
Brett: Oh yeah, definitely. I mean other wholesalers, we take down their deal in literally 24 hours if the title work is all done. That’s the benefit. That’s a negotiation tactic. It’s like they say, “I’ll take x-amount of dollars if you can close in two days,” and then okay. A lot of times other wholesalers that are assigning the contracts, what happens is they’ll get a cash buyer for it, but then something will happen and that cash buyer will fall out. All of a sudden they’ve got five days left on their contract to sell this thing. That’s where we come in. They’ll take $1,000 over nothing just to get rid of it.
Mike: Yeah. That’s awesome. So when you started to do that much volume . . . maybe give some perspective. I know we’ve talked about this in the past. You did 27 deals last month, which is incredible. But talk about how that’s grown because you weren’t always at that volume. It wasn’t that long ago that you were at a much lower level. Just talk about . . . give some perspective, I guess, on how far you’ve come volume-wise and then let’s talk about scaling, like how you got there because you couldn’t do it all yourself.
Brett: Yeah, definitely. So it was just last year, we were doing great at this time last year, but we were literally doing 8 to 12 deals a month. When you talk to anybody and you say, “I’m doing 8 to 12 deals a month, that’s like awesome.” That’s where people want to get to.
Mike: Absolutely.
Brett: But we really scaled this thing and it’s been awesome. A couple things that I did in my business that I would really recommend is I hired a coach and he really helped me . . . he really helped me think about it as a business. When you really look at wholesaling, you’re building a business. You’re really not investing. It’s a business. It’s a transactional business.
So he helped me look at it as a business and he helped me scale it as a business. He gave me one book called “Scaling Up,” which I would really recommend and there’s another book called “Traction” that I would also recommend. They’re both very similar books, but the “Scaling Up” book is really in depth. If you’re kind of like an engineer-type of thinker, it’s really in the . . . I don’t know. It’s just really in depth and a lot of big words. Then there’s the “Traction” book and that’s really the street language of “Scaling Up.”
But I hired a business coach. He taught me how to do it. He said one of the biggest things is you’ve got to put the right people in the right seats. That’s really what I’ve tried to do, build systems and processes and then put the right people in the right seats. Number one is put the right people in the right seats. If you have all the systems in the world, if you don’t have the right people in the right seats, it’s not going to work anyways. So when you’re scaling, you’ve got to look and figure out who are the right people to put in the right seats. You’ve got to get an acquisitions person. I was always the person talking to the sellers. That’s a hard one to let go because that’s like the life blood of your business.
Mike: Absolutely.
Brett: If they aren’t any good, you’re not going to get any deals. So putting a good sales person in that role is one thing. We also have a transaction coordinator. This person, he’s the one going to all the closings. He’s the one doing title company documents. He’s signing all the paperwork. He does all that stuff. When you’re doing that many closings . . . if you’re buying and selling 20 a month, that’s 40 closings, buying and selling 20. So you’ve got to have somebody who’s on top of that detail sort of stuff.
Then our last hire was a dispositions guy and I was like, “Why do you need a dispositions guy?” Dispositions, they’re the ones selling to your buyers, right? I heard one guy say, “A monkey could do that job,” right? Because really it is just sending out to the buyers and that’s it. They want it or they don’t. But I realize, “Man, you know what? It is a relationship sort of thing.”
What our dispositions guy has done, he has been able to take the stuff off my plate and he’s been able to build relationships with our cash buyers. He gets to meet them. He gets to take them out to look at the properties. He gets to meet them for breakfast. He’s really honing in on building that relationship. What I’ve learned is if people like you, they want to do business with you. So that’s really helped scale our business is he’s gotten people to like him and they want to do business.
Those are the three areas, the acquisitions, the closing coordinator and the dispositions, if you can put the right people in the right seats, that’s awesome and then just put in a process so they all talk to each other through the whole process. The acquisitions gets it. He sends it to the closing coordinator who sends it to the dispositions. He does his thing. If you can build a system to all mingle, it’s pretty awesome.
Mike: Yeah. So talk about this. This is where . . . and congratulations, by the way, that’s fantastic . . . a couple things I want to say about let’s just say the HR part of the business, like your team structure is I would encourage everybody, even if you’re getting started, to lay out a team structure like that, which is pretty typical. You have acquisitions. You have some administration. You have transaction management. You have dispositions.
You could lay out this whole like team structure of let’s just assume that you are doing the kind of volume that Brett is doing, then it’s more clear, “If I was doing that kind of volume, of course I would be able to have a team.” It’s like a little bit of a chicken and egg, which is what I want to talk about in a second. But what I would say is some people don’t lay that out because they’re like, “It’s just me or me and my wife or me and my partner or my brother,” or your dad, whatever it could be.
It’s like all those things still have to happen even if you’re a one-man or one-woman band. Maybe your name is on all those boxes right now, but it won’t be eventually. Maybe you can talk for just a minute or two here as we kind of wrap up the show on how you go from a one-man band. It’s easy to see what you have now, right?
We kind of understand the one-man band because that’s how a lot of people are, but kind of the vision or the process of getting from one to the other because it’s chicken and egg. I want to hire somebody but I don’t want to lose that money. I don’t have time to train them. There are all those things. Maybe you can just give a couple of quick tips for how to make that transition from small to a bigger organization.
Brett: Yeah, definitely. I really recommend, Mike, to kind of draw it out with the bubbles, even put your name in those bubbles. Then the first thing of what I did is I was like, “What’s the one thing I hate doing in my business and I don’t even want to do it at all?” It always boiled down to talking to people on the phone. I was like, “I don’t like answering these phone calls that the direct mail people call in. I don’t like doing any of that. That’s the first thing I want to hire out.”
And because I didn’t like it, I wasn’t good at it. So what if I found somebody who actually kind of enjoyed it and liked sales and that was the first thing that I did. So I recommend drawing it out and then maybe filling in that first bubble, “What’s the one thing you don’t like.”
And then the other thing is when you’re thinking about doing this, what I had to think about is because I used to do everything. I used to clean out my own houses. I remember shoveling out trash, like that first deal. I was doing that. And then I look back like, “Why in the heck would I do that because I probably could have paid somebody $10 an hour and then they would have loved to get $10 an hour for doing that particular job.”
My time might have been worth $20 an hour or $100 an hour. Why would I spend time doing a $10 an hour job when I can pay that out and I can spend more time doing a $100 an hour job? That’s where I have gotten to. You’ve got to think about acquisitions, what could I pay somebody to take this role, somebody who’s really, really good.
Don’t always go cheap. I’ve realized that. But find what do I have to pay somebody who’s good to take over this role? Does it make sense for you to pay them? The thing is if you’re doing two deals right now a month and you hire somebody in that role and now you’re doing four. You’re doing double the money and then the money you’re paying them probably is going to be worth it to do those extra deals. That’s the type of mindset I really want your listeners to think about.
Mike: Yeah. Absolutely. Well, thanks for sharing all that today. Before we go here, how do folks . . . you’ve got a podcast as well. You’ve got a lot of stuff going on. I know you have a lot of great value on your website. If folks want to learn more about you, where do they go?
Brett: Yeah. We have a website. Our company is called Simple Wholesaling, SimpleWholesaling.com. You can find us. That’s going to give you a lot of different information about wholesaling. We put out a lot of free content as far as blogs. We do videos. We have our podcast on there, the Simple Wholesaling Podcast that we interview sometimes other wholesalers or just real estate investors just the same thing about growing their business. It’s also a faith-based show that we talk a lot about. So just check us out, SimpleWholesaling.com is the best place. Feel free to answer any questions you guys have.
Mike: We’ll add some links down below the video here for those that want to learn more. Brett, definitely appreciate your time with us today and appreciate everybody for listening in for, again, episode number 343. So for those of you that are keeping up with us . . .
Brett: Man, how long have you been doing this? That’s crazy.
Mike: A long time. When I look at the date every once in a while, I’m like, where did the time go? We’ve been doing this for about three years. For those that have been following us for a while, they know the first year and a half, we were doing three episodes a week and for the last year and a half or so we’ve been doing one episode a week. So that allowed to get a lot of volume, but it also helped me get a bunch of the gray hairs I have now.
Brett: Yeah. That’s funny.
Mike: Yeah.
Brett: That’s awesome.
Mike: Awesome. Everybody thanks for joining us. Brett, great to see you my friend.
Brett: You too, Mike, thanks so much for having me. I wish you all the success at FlipNerd and I love hearing you guys.
Mike: You too, man. Everybody have a great day. Thanks. Brett, everybody that’s listening in right now, let me make a little note . . . now that we’re doing this live I have to write down times and all that stuff . . . for those of you that are joining us live, it looks like we’ve got a few different questions coming in and I’ve got some questions myself. We’ve got a question from Todd Hutchinson. Todd’s been on the show before.
So his question is, “Do you put your website on your direct mail?” There are a lot of people that . . . I could argue it either way, right? I want them to take response from my direct mail. But you know this day and age there are people that see something in the mail . . . I was going to grab a post card. I’ve got a bunch of them on my other table here . . . that see that postcard come in, if they’re considering it, sometimes they’ll go right to Google to see, “Who is this? Can I trust this?”
So it’s a question of whether people go out of their way to tell the person here’s how you find us online or you don’t want to muddy it up with anything other than a phone number to contact me. What’s your take on that?
Brett: We mix it up. My preference right now is to kind of be the handwritten font or handwritten envelope and to be the guy down the street trying to buy your house. We don’t put our company on those particular pieces.
Mike: You don’t put your branding. You’re kind of a generic look. Yeah.
Brett: That’s what I prefer to do, but we mix it up. So sometimes we will send that letter out that’s more of a generic guy next door piece of mail, but then the next one will be more of a branding and put our website on there and things like that so people can find us.
Mike: Yeah.
Brett: I mix it up.
Mike: Cool. One thing for folks that are listening that I want to share and maybe get your thoughts on, Brett, is a lot of times people as you’re getting started in real estate, they started getting balled up when I say stuff like, “You should test different direct mail pieces.” That just sounds like, “How am I going to do that,” which now it’s easier than ever. We use CallRail. Do you use CallRail?
Brett: Yeah. We use CallRail.
Mike: So you can setup a $30 a month account and it comes with 10 phone numbers. We literally just have a different phone number and if you need more, they’re like $2 a month. We let a phone number dictate, “This is the simple postcard. This is the complex postcard,” whatever. So right when those leads come in, they all come in to the same place, but that’s how you tag it. Is that what you do to test different mail pieces?
Brett: Yeah. We don’t have a big huge system. We have a spreadsheet setup with our CallRail. But yeah, we used to use Google Voice all the time. A lot of people use Google Voice and that’s great. But what we were running into is we couldn’t test what was actually working. I tried to be super creative on some mail pieces. We tried to insult people, stuff that I wouldn’t recommend doing, just try to get a phone to ring. That’s when we were using Google Voice. But now we can really, really test it.
So send out like 5,000 letters using one postcard and then send out a yellow letter handwritten type of postcard to that same list and see how many calls you get versus one or the other. It really makes a huge difference. Sometimes your response rate will be like 0.5, less than 1%, but sometimes it will be 2. A lot of times it depends on the mail piece. I highly recommend CallRail like you said, Mike.
Mike: Yeah. I have a link for those that aren’t familiar with CallRail down below. But it’s just CallRail.com, but I’ll add a link. So any other, while we’re talking about direct mail, any other strategies you use for direct mail you want to share with people? If you’re in Indianapolis, you can’t listen to this, plug your ears, but if you’re anywhere else.
Brett: One of the biggest things we’re trying to do, since it’s getting more competitive out there, everybody’s getting into this bubble, this wholesaling, direct mail thing and it’s getting more competitive, how are you differentiating yourself versus other people? If everybody goes to the same website and gets the same list and gets you the same people, how are you being different?
So things that we’re trying to do is sometimes that delinquent tax list, which is gold, people that are delinquent on their taxes, how do you get a hold of that list? Sometimes it’s difficult to get off the website. We’ve been going straight to the counties and putting in some manual labor, which sometimes is not hard, it’s just asking the right person the right question in getting these delinquent tax lists.
Probably other people aren’t spending the time getting. They’re just getting off the websites. If you can get different lists and be creative on that I think you’ll set yourself apart. What I’m seeing is people that get our postcards on these lists, you get off websites, they get 10 other ones, but sometimes on these delinquent tax lists, we’re the only person at the door. That’s where we used to be. So if you can do that, I think that’s a great thing.
Mike: Yeah. There’s a general rule of thumb that the harder it is to get the list, the less competition you’re going to have because most investors aren’t willing to do the hard work, they just want to just buy this list, this list is on sale, which means everybody’s buying it. You’re going to get a lot more competition that way. So yeah, awesome.
Brett: I’ve heard delinquent tax lists are good. We’re even looking into arrest records, people that have gotten arrested, things like that. We’re looking into if we can get lists like that. So those are some of the ones that probably other people aren’t really spending time going and trying to get. Another thing everybody knows probably is the follow-up is the key.
Mike: Yeah.
Brett: So if you get that first phone call, you probably need to put them into either a spreadsheet or some CRM software and you have to follow up with them time and time again to get those deals. That’s where the money is at.
Mike: Absolutely. Hey, Brett, one more question for you and then we’re going to let you go. I meant to ask this earlier. You talked about you started a meetup group to build relationships with wholesalers and I’m sure you’re educating them how you can work with them. I wasn’t real clear. Did you say another REIA club is promoting you? Effectively you’re not calling this a REIA club, you’re calling it almost like a networking group that’s tangent to a REIA club. Did I get that right?
Brett: Yeah. So we have a REIA club here in Indianapolis called CIREIA, Central Indiana Real Estate Investors Association. They were looking for a subgroup.
Mike: That’s not your REIA club, right?
Brett: It’s not my REIA club, no.
Mike: Okay.
Brett: They were looking for a subgroup, somebody to teach wholesaling. We were going to have a wholesaling meetup anyways on our own. So I told them, I said if we do this, we’re going to have our own meetup page too so we can kind of help. Now, anybody that comes to ours, they have be a member in CIREIA. But what CIREIA does for us is they’ve got 512 members as they’re promoting our wholesaling group. We have free advertising just with them pushing people in the door. I think that’s how we ended up with 50 people at our first one and we’re hoping to grow that to 100 in the next 6 months.
Mike: Yeah.
Brett: It is linked to CIREIA.
Mike: That’s cool. I guess there are so many like Facebook groups and stuff like that now that if somebody heard you talk about that . . . that’s why I wanted to clarify because people are like, “Do I have to start a REIA club to do something like that?” No. You could start a Facebook group. You could talk to your REIA club and say, “Hey, can I teach something?”
In my experience, most REIA clubs, they love that stuff because the burden is on them to create content usually or meetings. So probably the one place you have a fallback is if the person that runs the REIA club has started the REIA club for that same purpose to find wholesale deals, for example. But if you find something that has . . . share your thoughts on that.
Brett: Yeah. If your REIA club doesn’t have a subgroup wholesaling or whether it’s flipping, our REIA group has a lot of subgroups. We’ve got flipping. We’ve got notes. We’ve got wholesaling. It really helps them too because they’re trying to grow their membership, right? A lot of people, since we have our own meetup page and things like that and people know us that don’t belong to REIA, they’re hoping that we’re going to help grow their membership level too because people are going to come to our meetup and I’ll say, “Also, by the way, if you want to continue coming, you need to belong to the local REIA club.” So it’s a win/win on both.
Mike: Awesome. Well, Brett, hey, thanks again for your time. Great to see you. I’ll actually see you next week and we’ll catch up a little bit more. I’m going to pick your brain and get more of these killer strategies from you.
Brett: All right. Sounds good, Mike. I appreciate it, man.
Mike: Okay, man. Have a great day.
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I'm the content manager here at FlipNerd.com and have a passion for real estate investing and have a background in writing and business. I focus on providing content that is aimed for newer real estate investors and those who have the drive to become a full-time real estate investor. With so many strategies to utilize within the real estate investing industry, I aim to break down any barriers and showcase that real estate investing is obtainable and can truly bring financial freedom.