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REIM 107
In this episode, Alex and I are talking with a great young investor – Chris Seder.

Chris grew up around REI because his dad was in the business in Montana, but he didn’t really know the ins and outs of the industry until he decided to jump into it himself when he graduated college in 2009.

A few bumps along the way – which he says actually were great learning moments – helped him reach success, and he’s now doing rehabs in 5 markets – in Montana and through virtual deals.

In today’s episode, Chris talks to us about his marketing and direct mail postcards and what exactly they say; why he gave limited power of attorney to his acquisitions manager; and, perhaps most importantly, why you’ve just gotta pull the trigger to start investing and learn as you go.

Lots of good info, so get going…

Listen and enjoy:

What's inside:

  • 5:40 – Alex tells us about his most recent awesome deal
  • 9:35 – Chris tells us about his background in REI
  • 16:55 – How much of Chris’ deals are done virtually and the types of deals he does
  • 20:43 – How Chris got started in virtual wholesaling
  • 33:25 – Using a branded phone number for sellers to reach you
  • 39:25 – Chris’ direct mail marketing and the markets he’s in
  • 47:26 – How Chris handles the paperwork to close the deal and get paid
  • 57:58 – Chris shares some helpful numbers with us
  • 1:04:25 – Chris’ favorite lists

Mentioned in this episode:

Tweetables:

Transcription:

Download episode transcript in PDF format here…

Joe:      Welcome, this is the Real Estate Investing Mastery podcast. Hey, welcome everybody. This is the one and only Real Estate Investing Mastery Podcast. I’m glad you are here. I’m excited about this show as always. I’m always excited about these shows, but, especially this one because we are interviewing a cool cat. Is it okay to say cool cat these days, Alex?

Alex:    Well, I don’t know.

Chris:   I think you could say cool cat. That’s all right.

Joe:      Yeah. I’m just trying to be hip. Anyway…

Chris:   You caught me with the times from the ‘50s.

Joe:      Yeah. Yeah. So, this guy, Chris is actually from Montana. And, either Chris or one if his assistants reached out to me and said, “Hey, you might want to give Chris a shout out and talk to him. You might be interested in what he has to say.” And I was like, “Yeah. I get a lot of these requests from folks who want to be interviewed on the show.”

When I found out that he is from Montana, it really piqued my interest and I thought, “Oh, Montana. I love Montana. I’ll interview anybody from Montana especially guys who's doing deals.” He's not only doing deals in Montana. But, Alex, he is doing deals virtually in multiple different markets. And, I love Montana. We spent about two, three weeks in Montana this summer driving around. We camped. We went camping in Glacier National Park and I just fell in love with it. But…

Alex:    Oh, was that one of the places you stopped?

Joe:      Yeah, I’m not sure. I think you're in Billings, Chris. Is that right?

Chris:   Yup, I am in Billings.

Joe:     So. I don’t… You know what? I have to look at a map. I don’t think we drove through there. But anyway, this is something that’s just near and dear to my heart. I love the whole idea of flipping properties remotely and Alex, you’ve been doing it forever. But, I think Chris has even taken it to another level where he is not really even talking to sellers at all. And, it’s something that is exactly what I did while I was on.

Alex:    You think that is pretty cool, don’t you, Joe?

Joe:      Yes.

Alex:    Not talking to sellers at all.

Joe:      Ever.

Alex:    You remove that. You remove a lot.

Joe:      Sure. Sure. Now, there is… Well, we can talk about this in the show like when you do remove that, maybe you are losing some efficiencies. You are giving away those leads to somebody who is maybe not as good as you.

Alex:    Well, that’s my concern right there. It's losing the efficiency of you say, “How many deals do you have to sacrifice to get that done?”

Joe:      Well, we are going to talk about that because I bet you, Chris has a good answer for that and I know I do. In fact, why don’t I want to get ahead of myself? Because this is something… I’m teaching a class right now, Alex called “automated wholesaling.” And, I actually just bought the domain of automated wholesaling. Do you like it?

Alex:    Did you snag that from GoDaddy?

Joe:      No, I snagged it from somebody who had it on GoDaddy. I paid $750 bucks for it.

Alex:    Wow!

Joe:      Yeah, I know. That’s kind of steep. But, I just really love that name. And, I don’t know if you get to know a guy, a mutual friend of ours, Sam Bill?

Alex:    Yeah.

Joe:      He owned that domain actually and…

Alex:    Okay.

Joe:      So, I called him up and he said…

Alex:    And, he did an auction on it or?

Joe:      No, I just asked him, “How much?” and he said, “Well, we played this game back and forth like whoever comes up with the first number, right?” So, he said…

Alex:    You got to love that.

Joe:      Yeah. He said, “Well, what’s the most you’d pay?” And I said, “Well…

Alex:    Oh, wow! That like… That’s a blazing question. That’s like a seller asking, “Well, how much do you want to pay me?”

Joe:      So, I said back, “Well, if I can pay you all cash and pay you in seven minutes, what's the least you’d take? And so, I started it all. I just wanted this domain. So, I started at $500 bucks. He said, “At $750 and it’s yours.” And I said, “Fine.”

Alex:    Wow! And you know what? He might have let it go for $100.

Joe:      I know. He probably would have. And, he wasn't using it and I probably paid too much for it but I just started…

Alex:    Oh, well.

Joe:      I just started a few weeks ago. It started off at six. It’s probably going to be eight weeks now. It’s a six to eight week class on automated wholesaling. It’s a group coaching thing that I’m dong revealing the same stuff that I did while I was traveling the country flipping properties. I’ve been doing this for over a year and it’s something… It’s real simple. It’s nothing earth-shattering. It’s pretty simple. And, Chris and I do a lot of the same things. We are going to talk about that here. But real quick, Alex, how are you doing?

Alex:    Yeah. Yeah. Now, PPC has definitely been working for sure.

Joe:      Good. Good. Okay. Well, I want to get into this interview right away because I know Chris’ time is valuable as is yours, Alex and I have nothing else to do.

Alex:    Actually, you know what? Wait, wait, wait, there is more than that. There is actually probably… I forgot. There is some small little weeny deals is what I call them. I’m almost just like, “Forget about those,” but let’s see. Maybe, like six and then one of those was a deal we got. Well, I’ll have to get the guy that I did this deal with on here for a podcast. But, it was a wholesale deal that’s turning into a $65,000 wholesale.

Joe:      Just from Pay-Per-Click?

Alex:    Yeah.

Joe:      Six this month?

Alex:    Wouldn’t know. Probably, I would say from when I started… We’re starting at the beginning of this year from middle of January probably.

Joe:      All right. So, from the last two months, you’ve gotten almost six deals from Google Pay-Per-Click?

Alex:    Yeah.

Joe:      Nice.

Alex:    Yeah! And, to give you a preview of that one, that wholesale deal, a lady tried to quitclaim it to a relative or the guy tried to quitclaim it to a sister so he could get out of the contract.

Joe:      Maybe quitclaims would be a good list to mail to.

Alex:    Maybe, maybe. I’ve heard, I’ve heard.

Joe:      Yeah, it doesn’t work. I swear. It doesn’t work in St. Louis.

Alex:    No, not at all.

Joe:      It doesn’t work in Miami.

Alex:    But, he tried to quitclaim it so that, “Oh, I don’t own it anymore.” And but, it will work out.

Joe:      Okay. Well, cool. Everybody go to RealEstateInvestingMastery.com, RealEstateInvestingMastery.com and leave us a review in iTunes. Let us know. Do you like the show? On our website, we have this thing called the Fast Cash Survival Kit and it’s really cool. We’re giving away a lot of free stuff on our website. Alex, I’m giving away. One of the podcasts we just did recently and I forget who it was with. I should know this. I’m embarrassed. We were giving away…

Alex:    Oh, yeah. That was the one where we are giving away like a really cool… Was it?

Joe:      A course. An entire course on being a landlord.

Alex:    Oh, it’s the land lord course. But, there was something else on it like on a deal flow or something like that.

Joe:      Yeah, we are always giving way cool stuff. I just can’t remember because…

Alex:    When you’re giving away too much cool, you kind of forget.

Joe:      Maybe we need to stop giving way so much cool stuff and start charging for this stuff but…

Alex:    No, no. We keep it.

Joe:      No. We sure appreciate all of the reviews and comments. I just want to read a couple of them here if that’s okay because we want to just tell you that we appreciate you. Whether you are leaving a good review or bad review, we appreciate that because we want to know how we are doing.

This is from V. Martinez, “Busting with workable ideas. Great podcast. I’m a realtor. Five stars. I’m a realtor who enjoys learning about all aspects of real estate and I’ve really enjoyed learning about wholesaling and creative financing. Your interview with Will Velasquez is one of my favorites.” Maybe, I already ready that one.

Alex:    I think you did read that one.

Joe:      I think I did. We need more reviews guys because I’m out of new ones.

Alex:    Uh-oh.

Joe:      All right. So, yeah, leave us some reviews. But, let’s get on. Let’s get on with this. We got a great guy here from Billings, Montana. And, Chris, do you pronounce your last name Seder?

Chris:   Yup. Seder is it.

Joe:      Awesome! You know what? I bought your book on Kindle the other day.

Chris:   Okay.

Joe:      And, I read it actually. You have a book on Kindle called “Virtual Flips,” I think. Is that what it’s called?

Chris:   Yup, absolutely.

Joe:      It’s a good little book and it was great. And, I was looking through that and I said, “Man, Chris is doing a lot of the same things I’m doing.” You’ve been around a while. Talk a little bit about your story. You were rehabbing a lot of houses with your dad I believe, right?

Chris:   Yup. Yup. I have kind of, I guess, grown up around the real estate business my entire life. My dad’s been doing it. He’s been a real estate broker and also a rehabber and landlord since the early 1980s. So, I’ve kind of grown up around it my entire life.

He did it over the years in very, very small town in Montana just buying two or three rehab projects a year, buying a one or two rentals a year over the past 30 years or some years more. But, yeah. So, I have grown up around it and kind of learned the business. Growing up, I really didn’t know anything and really what he was doing. All I knew is that if I go and mow some lawns for him, he’ll pay me. That‘s about it.

Joe:      Yeah.

Chris:   So, I really got started in 2009 which was the year I graduated college. I got out of college and went kind of looking for, “What am I going to do?”

Alex:    Oh, man. Dude, you were a young guy then.

Chris:   I am. I’m not even 30 yet.

Alex:    Oh, my goodness.

Joe:      That sucks.

Alex:    Congrats.

Chris:   Thank you. Yeah. So, I guess…

Alex:    What did you go to school for?

Chris:   It was Business Management.

Alex:    All right.

Chris:   With a minor in golf and drinking I would say.

Alex:    Oh, wow.

Joe:      Yeah, all right. So, how much has that helped you?

Chris:   Probably not a ton, I would say.

Joe:      It’s good to put on your resume if you ever need it.

Chris:   Yeah, if I ever need it one day. Definitely, it would be good.

Joe:      I am embarrassed to admit that I am actually finishing up my MBA right now. Back in ‘05, which has been ten years ago, I started working on my MBA part-time because I was all about climbing that corporate ladder wanting to get ahead. I thought I had to have a degree. And, I got all the way to having like one or two classes left and I quit and that was about five years ago. And, it’s just been haunting me hanging over my head for the last five years.

I got to get this MBA finished. Well, it’s not going to do me a hell of beings to get it or put a couple of letters to put at the end of my name or to have a degree. I’m not going to hang it in my wall, but it’s good to have I think, right? It’s good to have a college education. There is nothing bad about that. Anyway, I digress. You are talking about getting an MBA and working… I mean, getting a degree in college and playing a lot and having a good time, right?

Chris:   Yup, absolutely.

Alex:    Yeah, that’s your master’s, right?

Joe:      For me, yeah. Yeah, I’ll have my Master’s in Business Administration.

Chris:   Yeah, that is pretty cool. I actually want to or my wife… I should say, my wife wants me to go back here down the road whenever and get a master’s degree.

Joe:      Okay.

Chris:   It’s not going to do me any good or anything but like you said, it would be kind of fun to have one.

Joe:      Sure.

Chris:   I want to get one from like the University of Florida or somewhere, somewhere fun.

Joe:      University of Hawaii.

Chris:   Yeah.

Joe:      San Diego State, I hear you. How about La Jolla? Isn’t there a school in La Jolla? I want to go there. But, it’s important. I mean, getting a degree I think is good to kind of help you to get a well-rounded education, to network. I mean, I meet a lot of people in the business world at my MBA school, right? So, not everybody does real estate.

Not everybody does this Internet stuff. And usually, those are the only people that I associate with. So, it’s kind of neat to get out there and network with other folks that are doing some different things. But, you are from Montana. I mean, what’s it like being in Montana? It’s a beautiful state. I love driving through it. But, a lot of people think that “Is there anything to do in Montana except look at the beautiful mountains and the big blue sky?” You know what I’m saying?

Chris:   Yeah, yeah. I mean, there are… There is definitely not as much to do as, say a big city. But, there are tons of different options where skiing, hiking, snowboarding, lots of things to do outdoor. Some of the best fishing I would say in the U.S. There is just a lot of stuff to do. And, I live in the biggest city in Montana where 110,000 people. So, we do have most things, I would say, that a big city would have but on a smaller scale. So…

Joe:      You are right. Do you have a Target?

Chris:   We do have a Target.

Joe:      There you go, right? That’s pretty much the standard by which everybody judges the city. Do you have a Walmart or Target or do you have both?

Chris:   Yup. We have two Walmarts and two Targets so we are good to go there.

Alex:    That’s pretty good.

Joe:      Yeah, yeah. So, here is the really cool thing about Montana. It’s one of the most incredible, beautiful states in the United States. And, when we were there, we fell in love with huckleberries. And huckleberries, I’m sure they grow all over that part of the country but why are they so big in Montana?

Chris:   You know what? Honestly, I’m not sure why they are so big just because I would say in Eastern or not Eastern. In Western Montana, there is a ton of them and that’s kind of, I guess, what they are known for there.

Joe:      Oh, man. We had huckleberry ice cream. We had huckleberry pies. We brought home a bunch of huckleberry jam. Some of the best ice cream I’ve ever had was at Glacier National Park, huckleberry ice cream. Anyway, I digress again. I think God blessed that part of the world, that part of the country with just incredible scenery. And, my dream would be to live somewhere in the mountains like in Montana or maybe Wyoming, Colorado and just live out there and have fast internet, right? So, if I can live in the mountains and have really fast high-speed internet, I’m in heaven. I could run my business and do it from anywhere.

Chris:   Yeah, yeah. And, we are just actually buying a duplex in a little mountain town kind of outside of us. It’s called Red Lodge in Montana. It’s just a little Podunk ski town. And I just hear, I think it was on Friday. I got an offer accepted on a nice little fix on our duplex in that town that they were going to keep the top unit for us to vacation in whenever we want to go skiing or whatnot, and then rent out the bottom unit and it’s going to be a great little property.

Joe:      So, you are doing deals in Montana itself.

Chris:   Yup.

Joe:      And, you are doing deals virtually elsewhere. What percent of your business right now is in Montana would you say?

Chris:   I’d say the bulk of our business is still in Montana. All of our rehab projects are currently in Montana. So that, I would say right now that’s the bulk of our profits. But, at the same time, I’ve really been aggressively, I guess, investing a lot of those profits into mailing campaigns in five different places right now. So, it’s hard to say exactly what the percentage is. But, yeah, right now still, the bulk of our money is rehab projects and we are still shifting and doing quite a few wholesale deals all over right now too.

Joe:      You are reinvesting some of your profits into marketing. I love that. It’s really important.

Chris:   Yeah, definitely. And then, it’s one of those things that we found and gets one of the best returns on your investment. It’s reinvesting back into your marketing because there is… You’ll spend a couple of $1,000 bucks and turn that into $10,000 or more.

Joe:      Right. And then, you are also taking some of your profits and reinvesting them into your retirement, right?

Chris:   Yeah.

Joe:      So, you can retire when you are at the right old age of 35 or 40 if you wanted to. And, that’s one of the cool things about Montana too. The cost of living is not that high. So, you could be making a New York income and living in Montana like a king.

Chris:   Yeah, absolutely.

Joe:      So cool. All right. Now, what got you into wholesaling? You’re doing a bunch of work with your dad and kind of rehabbing houses. Do you get tired of swinging the hammer?

Chris:   No, I would say wholesaling was always kind of like just one other avenue we used even in our own local market to generate income. We’d buy anything that we could that was or we still do anything that we can that is a deal in our area that is in a good location that we like. And, any leads that we had coming in that we’re saying in some of the more rental areas in our city or just kind of… There is no real war zone or anything but just lower income areas. We'd wholesale all of those off.

Joe:      Okay.

Chris:   So, that’s kind of where I started learning how to wholesale and sell these houses. And from there, I… Yeah, I just decided. We got to a point in our rehabbing business where we're just buying so many houses, wholesaling everything we can in our own market that I wanted to do more deals but we'd really hit a peak.

So, I decided that I wanted to learn everything that I could about virtual wholesaling, wholesaling in different markets. When you have a couple of hundred thousand in the bank, what do you do with it? You want to either invest it somewhere and I figured I'd spend some of it on marketing. So, that’s kind of where I decided to start learning about it. And, I think I really started learning or tried to learn about it in 2012.

Joe:      Okay.

Chris:   That was my first real attempt at the virtual wholesaling that at the time didn’t work out too well. But, from there, I learned and kind of ironed out the kinks.

Joe:      Talk about what…? How did you get started in virtual wholesaling? Did you buy a course? Were you…? What were you trying to do when you first started?

Chris:   When I first started in virtual wholesaling… Because back, I think it was 2012, there was just a ton of them everywhere. So, I was like, “This is going to be easy. I can go in any market, cherry-pick some HUD houses and easily flip them to some other investors.”

Joe:      Okay.

Chris:   So, I found… I think the first market I picked, for whatever reason, was Dayton, Ohio. I don’t even know why I exactly picked that market. I think doing a little research, I found that lots of deals in there for cheap prices. So, I just went in and started making offers. Right away, I got two offers accepted at what I thought were rock-bottom prices and I couldn’t move them. I tried calling everybody, all the buyers, contacting all the local REIAs and just nobody wanted them. They were just marginal deals.

Joe:      Yeah.

Chris:   So, I ended up losing… I think it was $1,000 earnest money deposit on each one of those.

Joe:      Okay.

Chris:   So, I lost that. And from there, I kind of decided to take a little break from trying the virtual wholesaling and just focus on our rehabbing in our own market. But, I continued over the next six months or what-not really learning about the virtual wholesaling process and what I needed to do.

And, on those particular deals, what I found that I really did wrong was I didn’t have a good reliable person on the ground that could… I had the Realtor that was there that could take pictures and does all that work. But, I didn't have a good solid person that was more so real estate investing inclined, knew the business of wholesaling, had buyers, knew what they were doing and could get those properties moved for me.

Joe:      Yeah, that’s the key.

Chris:   Yeah. And, that was what I think it was almost an aha moment. Looking back on that, I was, “Okay, I need that type of person in a new market that I go into.” So, from there… I don’t know how long it was. I started… I think I went through Cris Chico's… No, I don’t think I got his full course but I read his book, learned all of those things, watched a ton of different videos, and bought some other books on virtual wholesaling. And from there, I decided, “Okay, I'm going to try it again. But, this time, I'm going to in with a little more of a plan.”

So, I found another real estate market. I did some better market research and ended up finding the exact areas in that real estate market where the most cash sales were where the most people were buying and where were not ghetto price points but decent price points. I then went out and found a good solid wholesaler. He’s somebody that I'd actually met in Alex's wholesaling houses full-time group.

Joe:      Yeah.

Chris:   So, I found him and I knew that from being in that group, he was a good guy and a legit wholesaler who was doing business. I contacted him and we kind of talked a little bit and figured out how to structure everything. And, I started where I sent out the marketing. All of those phone calls came into me at that time. And, I still use PAT Live to prescreen all my calls.

So, all the calls came into PAT Live. Then, from those calls I just sat there and forwarded all the emails, all the lead sheets filled out to him. And, he went off and he did his whole thing, followed up with all the sellers and looked at all the properties, put the good ones under contract. And, I believe we ended up getting two deals out of that first campaign. That was around I want to say 1,900 postcards.

Joe:      Yeah.

Chris:   I think one of them was a $6,000 deal that we ended up splitting. So, I got 3,000, he got 3,000. I think the other one was like $5,100 or something like that. So, I got $2,600, he got $2,600. So, it worked out great and we just continued to expand on that. It consists only of doing marketing and in that market. It slowly grown into doing it in five other markets right now.

Joe:      That’s fantastic! And, I know Alex, I heard you wanted to chime in when he mentioning house full-time because that’s your baby.

Alex:    What's that?

Joe:      I heard you get all excited when he mentioned wholesaling houses full-time because that’s your baby.

Alex:    Hey! Yeah, a lot of people have connected from that.

Joe:      One of these days I'm going to build my own Facebook group called, “Wholesaling Houses Part-time.”

Alex:    Nice.

Joe:      Or “no time.” But Chris, my story is kind of similar. I think Alex has… I mean, Alex has been doing this himself the same kind of way for a while too. But, for me, I wanted to do a lot of deals and I didn’t do all the work. So, I thought when I was first doing this, I thought, “I'll hire an acquisitions manager,” because that’s what all my friends were doing.

So, I hired an acquisitions manager and I trained him. I trained him to do everything: find the sellers and find the buyers and put them all together. And so, guess what happened after six or seven months? This guy is still a friend of mine but we're not working together. He said, “Joe, I don’t really need you anymore. I'm doing all the work literally…”

Alex:    Geez! Thanks. I appreciate that.

Joe:      And, I'm just going to do all these on my own now and that’s fine. There was some other extenuating circumstances that I won't go into but it was kind of it was time to part ways. Like I said again, we're still friends today and we still wholesale deals to each other. He's got a lot of good buyers and I sometimes have a deal…

Alex:    I wonder where he got those from.

Joe:      I gave him a hard time. I’d say. “I taught you everything you know but I didn’t teach you everything I know.” But anyway, I thought it worked out pretty well, but I still found I was more involved than I cared to be and he probably would disagree with that. But, I was still involved. I was still kind of setting up the marketing. I was still putting out fires, answering questions and going to the title company and kind of training him as he went along.

There was a time at the beginning when he was kind of getting discouraged. “Joe, nobody in their right mind would ever accept an offer at $0.50 on the dollar. You're crazy. You're out of your mind. And, no one will ever take these offers that low.” Well, I said, “You got to be persistent with it. You got to be consistent. Don’t quit or give up.” And then, sure enough, we started doing a bunch of them and we started doing really well actually.

But, I found and I was still spending a lot of time that I didn’t want to spend on the business. So, I started thinking about that. “I still have to go to the title company. I still have to worry about inspections.” And, there's always something that comes up at each closing of the last minute, some emergency or crisis comes up where maybe something needs to be paid and the seller says, “I'm not paying for that,” and the buyer says, “Well, I'm not paying for that.”

And then, you got to eat it out of your wholesale fee or whatever. And, I just thought, “I don’t want to worry about that.” So then, I said to myself, “How can I…? I listed everything that needs to be done. And I said, “How can I get somebody else to do all of this for me, all of it 100%?” With the previous model I was just talking about, you look at the numbers at the end of the day and you're still only walking away with 45 or 50% of the gross profit because you're paying your acquisitions manager, you're paying for all the marketing and all the time that you're putting into it, etc., and the overhead that you have and stuff.

So, I thought, “How can I do this where I could literally travel in an RV for three months and do deals?” And, it just became something out of the necessity that I just had to figure out. And, it wasn’t that hard actually to figure out. I looked at this list of everything that had to be done and I said, “Well, the VA can do this and I can get a wholesaler that can do that.” And, here's a beautiful thing about what Chris just said. It’s because he's working with this wholesalers now. These are guys… And, correct me anywhere where I'm wrong here, Chris. But, these are guys who know that market inside and out, right?

Chris:   Yup.

Joe:      And, they're good at what they do. They just need more leads. So, you need to find those guys. That’s the guy who gets a lot of leads and referrals from agents just from word of mouth. He's known as the guy who can buy these homes. He's connected, but he doesn’t like being at a computer filtering through 100 leads following up with all these people. So, maybe he knows how to do direct mail but he doesn’t or he hates doing it or maybe he already does some but he wants to do more.

He's the kind of guy who's good at getting in the car and looking at houses, making offers and building rapport with sellers. He'll drop everything in a minutes' notice to go meet a hot motivated seller and he has the mentality that “I'm not leaning this house until I get a contract.” All right. You find that guy. And, even though you're splitting the profits now 50/50, you're probably still going to make more than you would if you we're doing it on your own.

Why? Because this guy is probably a better negotiator than you are. He can get it at lower than what you can. And, because he already has a good buyer’s list with active buyers that will pay more for the property, he can probably sell it for more than you can. And, he's also going to waste any time that you would have wasted on dead deals. So, he's more efficient, right?

Chris:   Absolutely.

Joe:      And so, I started partnering with these wholesalers and sure enough, I'm making the same amount if not more, partnering with other wholesalers on these deals and I'm literally doing nothing. It's just an amazing system. Now, obviously, yeah, maybe you can make more if you do it yourself and you were the one to go and actually meet with the seller and you kept 100% of the profits. But, man, when you live in a really ugly place like Montana, you don’t want to do all of that.

You want to enjoy life more and not be glued to your computer all the time or stuck at in your car going to look at houses and spending two hours with a unmotivated seller at their house. So, anyway, I love it Chris.

Chris:   Yeah. I know. That is spot on. That’s exactly why I've decided that experienced wholesalers were the best people to work with. You're going to find a few of them of that say, “No, I don’t need you. I do all my own marketing. I don’t need that.”

But, yeah, like you said, you're looking for those ones that maybe they don’t do a ton of marketing. Maybe they're making a lot of MLS offers and now, it's starting to dry up and they really just need more leads and that’s what you can provide and the time-savings.

Alex:    Maybe, they need a different kind of lead like a branded lead from… Oh, I don’t know. It’s certainly a branded vanity phone number.

Joe:      Sell now? 800-SellNow?

Alex:    Oh, no. No.

Joe:      Or 800-CashOffer?

Alex:    Oh, no, no, no, no. I think they'd like an offer that everybody wants. So, that’s 1-800…

Joe:      You're talking about 1-800-FAIR-OFFER?

Alex:    Yeah, I said they want an offer. Everybody wants a fair offer, right? So, you just call 1-800-FAIR-OFFER.

Joe:      Yeah. Now, Alex is absolutely right. And Alex, where can they go to get more information about that?

Alex:    Oh, 1-800-FAIR-OFFER?

Joe:      Yeah, yeah.

Alex:    You know what? We can put a link in the show notes.

Joe:      Okay. Or, I can just give them your cell phone number?

Alex:    I'll put a link in the show notes.

Joe:      Right. So, we'll try to put a link in the show notes. But, you just had a webinar recently.

Chris:   Yeah, that’s what I was going to say because I'm partners with Sean Terry for 1-800-FAIR-OFFER so I'll see if we can put the replay link for the webinar we just did. We're just getting started with a new training for the new licensees that just came on.

Joe:      Yeah.

Chris:   So, we will see.

Joe:      But, that’s a good point because… And, this is actually really important. I'm glad you brought it up. Because a lot of times, when you send out marketing, certain sellers will respond to the local phone number, the small mom-and-pop investor. And, some investors or some homeowners will respond better to the branded professional big company, right?

And so, you may send out a thousand postcards to the local phone numbers and a thousand postcards to a branded one. And, you may get more calls with the local ones but you're going to get calls that you wouldn’t haven’t have gotten otherwise with the branded one if that makes any sense.

So, it's something that I recommend you put into your arsenal, right? So, you've got a wholesaler now that’s doing a bunch of postcards with a local phone number. And then, maybe you can start sending some with the branded to reach the sellers that they didn’t reach and you can get leads that way. Also, it works really, really well with if you're doing some Google Pay-Per-Click. Does that make sense?

Alex:    Well, the really cool thing about… And, that’s if you understand Pay-Per-Click. I mean, what we do with our licensees is let’s says somebody's county is taken or a licensee’s county is taken. We’ll say, “Well, pick one of our other counties. You can go find a wholesaler in that market, flip this on with a flick of a switch with Pay-Per-Click and start sending them leads and start doing deals right away.

So, it's very powerful. You go to any market and you’ll just go and you've got a full… You got a website, the brand, the image, the phone number and all that stuff with the flip of a switch and literally, you can go into a market overnight if you wanted to.

Joe:      You can. That’s really cool because with Google Pay-Per-Click, you can start getting ads displayed in that market overnight almost.

Alex:    Right, if you wanted to. Let's say you wanted to it in another way. Let's say, “Well, I didn’t want to go the branded approach.” Well, now you got to build a website that’s local to the area. Now, you’re using up a different list. You’re using AWeber and all that kind of thing and coming up with a whole different set-up for every county that you want to go into. Or, you can use a branded approach that has a national feel…

Joe:      Yeah.

Alex:    …And switch and there you are.

Joe:      Yeah, that’s good. Chris, do you do any Google Pay-Per-Click yourself?

Chris:   I don’t. I'm actually… I think I'm banned from Pay-Per-Click from like four years ago or something.

Joe:      Oh, really?

Chris:   Yeah, they still won't come off my account or anything…

Alex:    Dude, just open up another Gmail account and you'll be set.

Chris:   I don’t know why. They told me…

Alex:    Set up another Gmail account.

Chris:   Yeah, I actually called them up and they told me, “No, don’t even think about setting up another Gmail account and trying it. We'll ban that one too.” And, I don’t even know why. It's…

Joe:      You probably… There…

Alex:    Have your mom set up a Gmail account.

Chris:   Maybe I will.

Joe:      You'll need to get a new credit card probably. But, here's the crazy thing. I was listening to a guy talk about this. He's been banned from Facebook and Google a lot of times. So, yeah, I guess take it from somebody who's bending all of the rules. Anyway, why was I listening to him? I don’t know. But, he's always pushing the limits on his ads that he's putting on Google and Facebook.

But, what he's done is he'll get a… If he gets shut down, he'll request a new card from his bank. And, he'll get a new… You can change your VPN or your IP address through VPN, right? And you can get a new IP address and create a new account. And, what he was saying was interesting. When you sign up for a new account, you have to get a new credit card number and just you can kind of…

Alex:    We're talking about some black cat stuff here, Joe.

Joe:      No, no, no, not really. I don’t think. If I am, I'm sorry in advance. But anyway, what he does is… You can always change… You can always spell your name different ways, right? Like, Chris, maybe you could say Christopher. And maybe, your last name could be Seder, The First or something like that, right? And then, when it comes to the billing address, he was saying that it has to be a valid address but when you are putting your billing address into your account with Google or with Facebook, all they care about is you get the zip code correct, all right? So, what he does is he actually finds us some random address in his zip code and he uses that address with a different variation of his name with the same zip code and his credit card will be approved and he will be able to create a new account.

So, having said all of that, if you think that’s black cat, then just ignore everything I said. Or, if you if feel like Google unjustly shut you down and you can’t do anymore ads, there are ways to get back reinstated. And, if you don’t know what I just said and if it was over your head, well, I am sorry. But, all they care about when you are putting in your billing information is having the correct zip code, which I thought was interesting.

Chris:   Yeah, that’s interesting.

Joe:      Okay. So, this is really cool. Now, you are doing this in about four or five different markets. I am assuming the bulk of your marketing is just direct mail, right?

Chris:   Yeah. Right now, the bulk is just postcards. We are just using Click2Mail to send out a little yellow postcard and that’s 99% of it right now.

Joe:      Good. And then, are they obnoxious postcards that say, “Urgent, call me right away. I’ve been trying to reach you. I have a message about your house”? Or, is it, “I am an investor and I want to buy your house. Call me for a fair offer,” or something like that?

Chris:   It's probably a combination of both of those. Like, the copy just says something. I grabbed a postcard here that I have. It just says, “Hey! My name is Christopher Seder and I am going to buy a house in your neighborhood and was wondering if you were looking to sell. I was driving around the other day and saw your property. It caught my eye that it might be a vacant property or a rental. I’ll give you a fair cash offer…”

Alex:    Oh, I don’t like that one.

Chris:   “Plus pay all your closing costs and buy it as is so you don’t have to fix up the…”

Alex:    I don’t like travelling around and I saw your property. I don’t know.

Chris:   Yeah, that’s one of them. That is what I send to like the find motivated sellers now, their vacant list.

Joe:      Yeah.

Chris:   That’s one of them on… When I send to like absentee owners, I take that line out. But yeah, it's been working so we’ve stuck with it.

Joe:      Well, they are just…

Chris:   And then, there is a little more wording.

Joe:      They are just simple yellow postcards, right?

Chris:   Exactly, yup.

Joe:      Alex, are you still doing white postcards?

Alex:    I have been doing the white postcards.

Joe:      Is there a reason why white and not yellow?

Alex:    I don’t know if there is really that much of a difference. I really haven’t done the A to B test. I guess I should but…

Chris:   Yeah.

Joe:      Okay. Well let’s talk numbers then. Chris, well what kind of markets are you in? You don’t have to give us the exact markets but generally what areas of the country do you like?

Chris:   Mainly right now, they’re I guess…. I’m trying to think. Midwest and East Coast, Southern East Coast. So, those are generally the markets we are in. We are in two markets in Montana right now, my own market and then also another market that’s six hours away that has been an amazing market for us wholesaling-wise. We found one big-time buyer up there that will just buy anything. Pretty much, that’s a deal. So, it's been like the easiest market…

Alex:    Once you’ve got that guy… I mean, your maid in the shade, you can almost use him as an acquisitions guy.

Joe:      Yeah.

Chris:   That’s exactly on our lap. We just closed one in that market in January where… And, I have a full time acquisitions manager in our local market and he also does…         I guess he works to our… He started too over the past few months and worked all of our virtual leads too. But, yeah, he… My acquisitions manager just called that guy up, “Hey, we have a property that we are thinking about buying. What do you think you’d pay for it?”

Alex:    Yeah.

Chris:   And then he said, “Yeah, I’d pay $35.” We ended up calling the seller and negotiating. We got it for $26.

Joe:      Nice.

Chris:   So, we signed a contract right there. The buyer went and looked at it the next day and said, “Okay, I’ll take it.”

Alex:    That’s a great, awesome, easy thing but with this whole thing that’s been going on, like marketing a property you don’t own and all that stuff, we can edit this out as this gets old too. Weird but…

Joe:      Well, I’m on not editing it out. Come on. Bring it on. What were you going to say?

Alex:    What do you think?

Chris:   And, I should say too. We didn’t give him the address or anything of the property. We just said, “Hey, what would you pay for a two bedroom, one bath in this area?” So, we didn’t give him… Yeah, we stayed away from definitely marketing a property that you don’t own or telling people about it because… Yeah, I would stay away from that.

Alex:    Well, on one end, it can be stupid because somebody can just go right around you and cut you out of the deal. And yeah, you’ll be done with them pretty soon. But, on the other hand, legally, you cannot market a property you don’t own.

Joe:      That’s right.

Alex:    Or, have an interest in it, I should say, which is a contract or an option.

Joe:      Right, unless you want to get your license, which I actually recommend. I think, Chris, you are licensed yourself, aren’t you?

Chris:   Yep, I am.

Joe:      And, Alex is not.

Alex:    He’s good. He’s all set.

Joe:      Yeah. But, you just got to be careful. What we are trying to say for the uninitiated. Well, that’s spending too much time on it. It’s that you could only market and sell your contract, right?

Alex:    Right. Not the property, the contract.

Joe:      You can market and sell the contract. That contract is assignable. You can sell that contract. And, the reason why you can sell that contract is because you have an equitable interest in the contract.

Alex:    Well, they would have to know that your contract secures an acquisition price of X for this property. That’s the way you sell it and not, “This is the property. What would you pay for it?” I guess. Well, you got to be careful there too.

Joe:      So, bottom line…

Chris:   Yeah, that was a little bad on my part.

Joe:      Right…

Chris:   But, yeah, you got to be careful with that.

Joe:      We smell what you are stepping in.

Alex:    What?

Joe:      I said, “We can smell what you are stepping in.”

Alex:    Oh, okay. All right.

Joe:      But it's… Yeah, I know, golly. You just got to be careful about it and you’re going to ask a hundred different attorneys and you’ll get a hundred different opinions. And, unfortunately, if you are standing before a Real Estate Commission… That by the way is made up of realtors. You know where they are going to land on the issue.

Alex:    Now, that would be called a kangaroo court, I believe.

Joe:      I think that’s what it is.

Chris:   And, one thing that I ended up doing too here not too long ago was and so that my acquisitions manager can pretty much do everything for us, I gave him power of attorney or a limited power of attorney over all real estate transactions for my wholesaling companies specifically.

Joe:      All right, nice.

Chris:   So that way, he can sign all the documents and everything, and then we are covered with that one. If he goes and tries to market a property that our company has under contract, if he didn't have that, he could get in trouble from marketing the property that he doesn’t have an interest in. But, since he has power of attorney, he signed the contract. He is free to…

Alex:    He’s acting on your behalf as the Realtor.

Chris:   Yeah.

Joe:      Well, that’s pretty fancy. But, at the same time we are not trying to complicate this thing.

Chris:   No.

Alex:    No, it's simple. It's easy.

Joe:      And, how you get paid like if you’ve got your wholesaler that is flipping the property, the question becomes then, “Well, how does the wholesaler pay you?” And, I’m not going to try to answer that question because I don’t know the answer to that. I just got a check from the title company on these deals. My wholesaler says, “Pay Joe a marketing fee of whatever.” And, that’s really kind of what I’m doing. I’m just doing the marketing, right? I’m providing a marketing service. You could call me a marketing consultant.

If you wanted to be more technical and legal about it, I guess you could do a joint venture agreement or just get the property under some of kind of contract and then assign it to your wholesaler. I don’t know. Chris, how do you handle the paperwork side of things when you actually close the deal? How do you get paid?

Chris:   Yeah. We prefer to get paid from the title company. That’s definitely the preferred thing. And, any person that we go into kind of a partnership with, we do sign a joint venture agreement for all of our… I guess marketing course. And, we do have just… I think it’s exactly similar to you. For each particular property, we have, I guess, a marketing fee agreement you would call it. I believe this is what we call it.

Joe:      But, people do this all the time. They all pay Zillow which realtors hate Zillow. But, they’ll pay them thousands of dollars every month anyway to do their marketing for them, right?

Chris:   Yeah.

Joe:      And, Zillow itself isn’t licensed, I don’t think. But, it's a marketing fee. There are companies out there that will do your direct mail. They’ll buy your list. They’ll do your direct mail for you and you can pay them to do that stuff. So, you are just getting paid after the deal closes instead of at the beginning.

Chris:   Yeah.

Joe:      I think it's important not to complicate it and don’t stress out and freak out about it. And, when it comes to getting your license, I actually recommend the people to get their license. It's not that hard. It's easy to do. And, the other cool thing that I’m starting to do now, Chris, is I am actually starting to do marketing for agents as well now. Because I am licensed, I can get referral commissions.

And, what I’m doing now and I am still kind of testing this and playing with it is I am doing marketing for sellers and for buyers on the traditional realtor side of things. And, if my team takes the call and sets the appointment, I am getting 50% of the commissions. If it's just a lead that I am sending to the realtor, I am getting 35% of the commissions. And, I’m only getting paid again if that seller becomes a listing and gets sold or that buyer buys a house. Does that make sense?

Chris:   Yeah, absolutely.

Joe:      So, you could do the same thing that we are talking about. For wholesalers, you could do the same thing for top-producing agents in whatever market that you are in and hopefully a higher and more expensive market because the commissions are bigger. And, you can do the same thing and start doing marketing for high expensive properties to top-producing agents who already have the systems and the processes in place. They already know how to negotiate and sell. They have a killer follow-up system and you can’t get those referral commissions if you are not licensed.

Alex:    Actually, there is a way to do that.

Joe:      To do what?

Alex:    To get commissions without being licensed.

Joe:      Well, how is that?

Alex:    You would have to set up an LLC and the LLC would have to have also an owner who is a broker or who owns part of the LLC. It’s basically just a Realtor that you can get to hang your license over at your LLC. And, because they are the LLC, the money revenue comes into the LLC and now you can legally take part.

Joe:      That’s interesting because you can own a company that has Realtors working for you underneath the company and you don’t have to be licensed.

Alex:    Right.

Joe:      Yes. So, talk to an attorney about that.

Alex:    Yes, please.

Joe:      We are not giving legal advice here on this show.

Chris:   Yeah. I’ve one of my friends in Chicago that actually does that exact same thing.

Joe:      Oh, yeah.

Chris:   Yeah.

Alex:    There you go.

Joe:      I know we interviewed a guy, Josh Cantwell, who does that. He has a big company, a big operation. And, he’s got a broker that works for him, underneath him. This guy is the broker and he just acts… Josh just acts as the buyer. He is the investor. He owns the corporation, the LLC and he is the guy buying the properties. So, when he needs to wear his investor hat, he wears it and when he needs to wear his Realtor hat, he gets his broker involved who negotiates those deals and stuff like that.

Chris:   Yeah. It's funny that you bring that up. We are actually doing a wholesaling or marketing campaign with Josh right now.

Joe:      Oh, yeah.

Alex:    Wow!

Joe:      In Ohio?

Chris:   Yeah. Right now, we are trying to… I got a nice, little, cheap rental property in Cleveland under contract and we are…

Joe:      Cool.

Chris:   Yeah. And, we are partnering with him on some mailing campaigns and working with his acquisitions manager to find them some deals and also wholesale houses there.

Joe:      I just saw Josh the other day in San Diego at a conference. It was good to talk him and in fact, I got him lined up I think to do a podcast interview with us soon here.

Alex:    Part two.

Joe:      Part two, yeah. That’s right. That’s another good way to find those wholesalers too or those buyers. It’s to go see who the buyers are. If you were to go into his market, you’d probably see him near the top there for properties that his LLC is buying and you can contact those buyers and say, “Hey, listen do you have an acquisitions team?” or “Who are the wholesalers that are bringing you the deals?”

Alex:    Or, you could find the buyer via public records who’s paying the most per square foot and say, “Hey, listen. We could make this a little better for you.”

Chris:   Yeah. That’s a great idea.

Joe:      Yeah, it is. You just got to follow the money. That’s what this is all about, right?

Alex:    And, the public records provide a perfect road map for that.

Joe:      You can never go broke making money.

Alex:    Okay.

Joe:      Write that one down.

Alex:    I will write that… Yeah, I think you should get that trademarked.

Joe:      We should maybe title the show that. I don’t know. You can never go broke making money. So, follow the money. Follow who those big buyers are and who are the active investors there. And, I won’t mention who or which city this is in but I might be working with this company. They buy a ton of homes, ton of properties and they just said, “Listen, this is our criteria. We want them in these zip codes and we’ll pay you $5000 for every house you bring to us that meets those criteria.”

And then, I told them… I said, “Well, okay. That’s cool. But, do you want to…? How does it work when…? Do you need somebody to go and inspect the property and look at it?” He said, “Yeah, that’s no problem. Just once you get the property, when you get a solid lead, then send it our acquisitions team. Our acquisitions team will go and look at the house and get it under contract and pay you a marketing fee of $5 grand for every deal you give to us.”

Alex:    No, if it's $50,000… Now, are they wholesaling it?

Joe:      No, they are buying and holding it.

Alex:    Oh, okay. All right. So, it's not like they are going to turn around and wholesale it for $40,000 more and you still only get $5 grand.

Joe:      Right. They are a company that will buy and hold and fix them up and rent them out or sell them as turnkey. So, they’ll just figure it in their cost. But, bottom line is whoever you are working with, you need to find somebody that you can trust that who is reputable. But, Chris, I am going to ask you a question I get asked all the time. What if the wholesaler goes around behind your back on a deal? What's going to stop them from taking this lead that you are sending them and just getting it under contract and selling it themselves without telling you about it?

Chris:   That definitely can happen and I don’t know really. There is… I would say there is…

Alex:    There is nothing you can do.

Chris:   Nothing. No, you are not going to sue them and spend $5 grand or more to try to get a little wholesale fee. I don’t think there is anything you can do.

Alex:    But, they’ll miss out on a ton.

Joe:      Well, for sure. And here is the thing. Maybe I’m speaking or putting words in your words, Chris. I’m sorry. I’ll let you talk after I say this. These guys they got where they are… Most wholesalers out there have a pretty good reputation and it's a small knit community, right? Words spread out fast if there are screwing people out of deals.

Chris:   Absolutely.

Joe:      But, these guys got to where they are because they have some integrity most of the time usually, right? But, you got to remember too, Chris, you are the goose laying the golden egg. You are the rainmaker and if they go around your back on a deal and you find out about it, well, guess what? You are not going to give leads to them anymore when they want your leads. They want you to win because the more you win, the more they’ll win.

Chris:   Yeah. That’s absolutely right. And, that’s when we really do try to find a partner in a new market, we really do our due diligence on them and get references from them and find out everything we can about them. If I’m going work with them, I for one, I have a pretty good I would say “BS meter.” And, if I just feel like something is off, I’m just not going to work with them. I’ll move on to somebody else. But yeah, just get references, really do your research and google them. I would even say that you can go as far as even get a cheap background check on them just to see what comes up and really be careful. Always be very slow to hire or partner with somebody and quick to let him go.

Joe:      Personally, for me, I only work with people I already know. And, because of the podcast, I’m fortunate to know a lot of people. And so, I know a lot of people all over the country that are doing deals. Or, if I don’t know somebody, I know somebody that I can call that would know about them. But, you can find people on BiggerPockets, right?

Alex:    You know somebody that knows somebody that…

Joe:      Right.

Alex:    …Robbed somebody.

Joe:      Whatever. Right. So, Chris, I want to ask you about numbers. You're doing some deals. Let’s say in Cincinnati, Ohio. And, do you have general roundabout numbers that you feel comfortable sharing? Like, if you’re to send 1,000 postcards, how many calls would you get? How many deals would you get? Something like that.

Chris:   Yeah. Typically, I would say that I usually base the market on about 2,000 postcards.

Joe:      Okay.

Chris:   And, if we send out 2,000 postcards, we’re averaging about 1 up to 2 deals. That’s kind of what our average is. One marketing campaign that we recently sent out and it may produce more down the road. We sent out, I think it was seven, a little over 1,600 postcards and we ended up with that marketing campaign, I believe we have two houses under contract currently. Our response rate on that so far was… I just ran the numbers. I was like a 2.87% response rate.

Joe:      Now, those are people who called or left a message?

Chris:   Those are people that called into our PATLive call center.

Joe:      Okay.

Chris:   And, that was just the total calls. Those are people that called and said, “You suck.” And, people that called and said, “Yeah, give us all the information.” So, from there, right now, we have two houses under contract. And that’s, I would say, typically average is we would get about one to two. Maybe, we’ll get three under contract and we’ll only close two of them.

Joe:      Okay.

Chris:   Does that answer your question or not?

Joe:      Yeah, yeah. You have an acquisitions manager in-house. So, how are you doing it now? Is your acquisitions manager calling those sellers back and trying to get it under contract and then sending it to the wholesaler? Or, are you just sending the leads right after PATLive to the wholesaler?

Chris:   It depends on the market right now. In the markets that I have built a relationship with the wholesaler, I really trust them. He really knows what he’s doing. I just send him the leads. In the newer markets that we’re just starting out, before we’ve… Since we haven’t really… Some of the people we really don’t know very well, my acquisitions manager is taking all those PATLive leads, calling them back and kind of getting more information. And then, what we do is we set up a Google Drive spreadsheet between me, my acquisitions manager and the wholesaler has access to. Then, the leads get put in there updated and my acquisition manager and that wholesaler are kind of coordinating to set up showings and all that kind of stuff.

So, we’re kind of controlling the leads a little more. We’re putting them under contract until we build, I guess, trust between us and the wholesaler.

Joe:      Are you getting a bigger share of the profit when you do that?

Chris:   Yeah. We’re structuring it where it’s more like 60-40 instead of 50-50. We’re getting 10% more so it’s not a bigger share. It still makes it real worthwhile for the wholesaler to do his thing. But, I guess that will help to cover some of the extras cost that we might have and cover our marketing.

Joe:      Yeah. Don’t you think though if you're doing 2,000 postcards, you would get more properties under contract if you actually had someone to go look at the house and can negotiate with that seller than you could just trying to do all of them on the phone?

Chris:   Probably, yeah. I would think that we might be able to. But, at the same time, we don’t want to work too hard.

Joe:      Yeah, I get it.

Chris:   But…

Joe:      I get it.

Chris:   We’re just kind of… It’s the system. But, yeah we… I guess I’m kind of on the fence about that because, yeah, we do have somebody that does go and look at the properties, our wholesaler. And, we just, over the phone, do an initial negotiating. Some of the deals we don’t make an offer right there on the phone. Some of them, our wholesaler will present the offer in person when he looks at the property because there is a lot of sellers that don’t want to negotiate over the phone.

They would rather meet face to face, sit down, have a cup of coffee with you and do it that way. So, yeah, I’d say that I don’t think we’re not missing out on a ton of good leads there. We’re definitely trying to optimize every good lead that comes in. We’re trying to do something with it and get somebody to go and look at the property.

Joe:      Okay, nice. I was thinking about this. The cool thing about working with wholesalers is that they can tell you where the best zip codes are, right? They can say like…

Chris:   Yeah, absolutely.

Joe:      …If it’s a property in this zip code, make your offer based on this calculation. Like in Saint Louis, there are some areas where… It’s real simple. Find out what the rent is on Zillow or Rentometer and just multiply it by 25 and that’s the most that we’ll pay for that property. There are other zip codes where maybe it’s 30. And so, a lot these guys, that’s what they do. They just need to look at maybe a per square foot price or multiple of the rent and that’s how of you make your offers, quick and dirty. But, you don’t know that unless you're working with somebody who’s familiar with the market and knows their buyers. And, you could either spend…

Chris:   Yeah.

Joe:      …A lot of time trying to get familiar with the buyers yourself or you can just work with the wholesaler who already knows the answers to those questions.

Chris:   Yeah. And, working with somebody is going to make your life easier. We always do our own initial market research by pulling all the cash sales and finding the zip code. But, I always, with every wholesaler, “Hey, we’re looking at these five or six zip codes. What do you think about them? What are some of the other areas that you really think are hot or that you're focusing on that people are buying in?” And yeah, I completely trust our wholesalers that are working the ground and really go off and okay, they say, “Really, the market is moving towards this area. Let’s focus on it also.” I trust them and we go for it.

Joe:      Right. Good, good. Oh, well. I’m looking at my list of questions. I have one more for you. And, you don’t have to answer this if you don’t want. But, I’d like to know. What are some of your favorite lists that to like to mail to right now?

Chris:   Yeah. Definitely, one of my favorite list is I’ve been using the fine motivated sellers now for a while. And, just the high equity, out of state, vacant houses, that seems to have produced quite a few deals for us over the past year. We’ve probably done 15 or more wholesale deal just from that single list. Other than that, I really like high equity absentee owners. That’s one that’s has always seem to produce results for us. Same with… In our local market, I love even just regular vacant houses, just driving around, writing down address, looking up who the property owner is and sending them a letter or giving them a call.

In our local market, that I would say is my favorite. But, in other markets, pulling those mailing lists is by far the easiest and best thing to do.

Joe:      Have you ever tried anything fancy to mail people like those zip letters or maybe instead of postcards, you do yellow letters or anything like that?

Chris:   I used to when I first got started. In my own market, I did a ton of yellow letters. Me and now my wife, then girlfriend, Saturday night, we’d be handwriting yellow letters…

Alex:    Oh, that’s miserable. I can’t believe she married you.

Chris:   I know. Yeah, but back then, we used to do a lot of that. And, yellow letters still, I got the best response rate out of anything from. But, once we started doing it on more of a large scale, I would say, doing 2,000 at a time, we just started focusing on postcards.

Joe:      Yeah, we know. I’m always on the fence on that issue. Whether you should do yellow letters or postcards, you’ll get more calls with yellow letters but you’ll also get more tire kickers.

Chris:   Yup.

Joe:      So, at the end of the day, your percentage is… You might get the same number of motivated sellers or potential deals if you do postcards or yellow letters.

Alex:    You just have to sort through some more of a junk.

Joe:      Right.

Alex:    Yeah.

Joe:      Alex, have you ever tried those zip letters where it has a perforated edges and they look like a bill or something?

Alex:    No, no.

Joe:      I’ve been playing with the idea of doing them. They’re like $0.60.

Alex:    Well, like car dealerships and mortgage companies do those all the time.

Joe:      Yeah. I mean, I get those things and it looks like a bill. I open them up.

Alex:    Yeah.

Chris:   Yeah, I just got two that they look like an actual check where it’s kind of pay to the order of…

Alex:    Yeah…

Chris:   I got two of those in the mail and I was thinking, “Man, that’s really…” I was like, “Oh, good. Somebody is sending me a check,” but it was just advertisement that got me to open it. So, I was actually thinking about playing around with that idea…

Alex:    Yeah, I thought about the check idea but I don’t know what you would put for a check. If you are going to like sending a check for less than half of their property value and they’re going to call on you that. I mean that's… They are right there. If somebody calls you back, that’s pretty motivating.

Joe:      Well, yeah. You can put on there… Maybe, it doesn’t have to be a dollar amount. Maybe, you can just put on there “fair price.” I don't know.

Chris:   That’s what I was thinking. Just doing even like two question marks and then a bunch of a few zeros in the price column or something. So, it’s not an actual price and then putting “fair offer.”

Joe:      But, the idea is to get them to open it up, right? So, cool. Well, Chris do you have anything else you want to say? How can people get a hold of you?

Chris:   They can find me on… I do have a website kind of that lays out a lot of our virtual wholesaling process and what we do at VirtualFlips.com. So, you can check us out there. I would say one of the big things and I know you're a big component of this just listening to… I think I’ve listened to about half the Real Estate Mastery podcast episodes.

Joe:      Sweet.

Chris:   I’ve been listening to them every time I go to the gym. So, slowly catching up…

Alex:    Nice.

Chris:   But, I would say…

Alex:    You’re actually on the way to the gym or while you’re pumping iron, you’re listening to…

Chris:   While I’m pumping iron, I’m listening to you guys.

Alex:    Wow!

Joe:      Sorry to hear that.

Chris:   Yeah.

Joe:      Cool.

Chris:   Yeah, I would say just this. You don’t have to have everything perfect to get started. You don’t have to know everything and develop that ready, fire, aim mentality because I think that’s what’s helped me more than anything is. I’ve made a lot of mistakes along the way with some of the… Even my first attempt at virtual wholesaling, I made mistakes, but I really think I learned more from that one mistake looking back at it than I would if I would have had success. And, I think that if I would had have success wholesaling those ones, I would have continued to probably do it where I’m doing the bulk of the work. I’m doing most of it and really spending too much time or more time than I needed to.

And, one big thing too is with those failures, I don’t think that you’re going to learn from them immediately. But, once you kind of get through that you're pissed at yourself for what-not and you can actually reflect back on it and look at it, I think that’s when you're really going to learn from it and develop a better system that’s going to work for you and that's going to be the best fit for you. But, just get started. Just start sending out mailers and making a mess and cleaning it up as you go.

Joe:      Even if you don’t have your Podio or your FreedomSoft or RealFlow set up, you can keep track of these leads on a yellow pad of paper. Whenever you get a good lead, just take a picture of it with your phone and e-mail it to your wholesaler, right?

Chris:   Yeah.

Joe:      Maybe keep track of the leads on a Google spreadsheet or in Evernote. In fact, I’m going to be…

Alex:    Whatever.

Joe:      …Interviewing the guy real soon here. His CRM is Evernote. He just uses Evernote to keep track of his leads and his contracts.

Chris:   Interesting.

Joe:      Yeah, kind of is. Now, I’m a big fan of Podio. I think that it’s the best thing out there since sliced bread because it’s so simple and easy to modify and it’s lightning fast. And, it’s…

Alex:    And, accessible from your phone. Absolutely.

Joe:      It’s very mobile friendly. I love it. What do you use Chris, by the way?

Chris:   I used to use and still have a subscription to it, but I still have FreedomSoft.

Joe:      Okay.

Chris:   I just recently started switching over to RealFlow. And, I’ve actually really, really liked RealFlow so I’m maybe sticking with that. But…

Joe:      Good. Anything is better than nothing. Zoho is really good. I’ve heard a lot of people say good things about Zoho. And, I think you got to use something. It’s really important that you keep track of all these leads and nothing falls through the cracks and every lead gets followed up with. And, if RealFlow will do that for you or if FreedomSoft will do that for you, then you need to use something. And by the way, FreedomSoft… I won’t go into all the details but it’s a lot faster now than it used to be.

Alex:    Yeah, Justin over there messaged me. He’s like, “Dude, we’ve figured it out. We flipped the switch or figured one little thing out and now it’s lightning fast.” I was like, “Oh, yeah.”

Joe:      It’s a lot faster now and I think there might be some new ownership soon and that’s why it sped up. But…

Alex:    What?

Joe:      That’s all I’ll say about that.

Alex:    All right. All right.

Joe:      I’m kind of in the know because I’m cool.

Alex:    You're cool.

Joe:      Chris, it’s been good talking to you.

Chris:   Yeah, it’s been a lot of fun. I really appreciate and thank you guys for having me on. It was a lot of fun and I really do enjoy you guys. I think this podcast is one of the best ones out there.

Joe:      One of them?

Alex:    Awesome.

Joe:      That’s cool. Guys, you can get more information about Chris at VirtualFlips.com. And, he has a book in Amazon. I think it’s called Virtual Flips as well.

Chris:   Yup. You can get the Kindle version of that or you can just get the actual physical version on there. So, you can actually buy the book too.

Joe:      Cool.

Alex:    Nice.

Joe:      It’s a good little book. And, I sure appreciate it, Chris. Thank you, Alex.

Alex:    Awesome. Thanks, Joe. Thanks, Chris.

Chris:   Yeah. Thank you, guys.

Joe:      All right. Take care everybody. See you.

Alex:    See you.

Chris:   See you.

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  1. Very interesting especially what Chris did when things didn't work. I would like more from Alex. I am interested in virtual wholesaling and this helped.

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