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  • 1328 » Realtor Secrets Revealed: How to Make 20% Commissions Flipping Deals with David Ounanian

You don’t need a real estate license to do deals, but it certainly does help. Things are a lot easier when you’re a realtor yourself, especially when it comes to connecting with other realtors. It helps get your foot in the door and helps boost your credibility. My friend David joins me here to talk about this whole topic. David’s an investor and a realtor in the St. Louis market and we’ve known each other for a long time. He shares all the details on how to do deals and make money.

Right now, there are a lot of rules and laws being passed to prevent folks from doing wholesale deals without a license. Luckily, there are a couple of ways around that. Number one, just go ahead and get your license, no big deal. Number two, just buy the property and work with realtors who can then help you buy and sell your deals. I love working with realtors, and I think it's a great way to get started in the business.

Listen and learn:

What’s inside:

  • How David got started in real estate and investing
  • How David does deals as both an investor and a realtor
  • What you can and can’t do using this strategy

Mentioned in this episode:

Download episode transcript in PDF format here…

Joe:   Welcome to the Real Estate Investing Mastery show. I'm Joe McCall. Hope you're doing awesome today. It's a beautiful day. I'm sure wherever you are today we're going to be talking about real estate licensing. Okay. Now, do you need a real estate license to do deals? No, but it certainly does help. All right. I had a real estate license for years and years. Just about a year ago. I let mine expire. Why? I don't have a good reason. We'll talk to David, my guest, about that today. I just got lazy, and I hated taking those continuing education classes. Okay, that's why I basically stopped mine. But it's nice to have. And I was just talking to a client yesterday about she's wanting to. She really likes the idea of finding deals from other realtors. And I was telling her, I said, man, you're a realtor yourself. That makes it awesome because it's just a lot easier when you can talk to realtors who are already realtors if you're a realtor, right? It helps get your foot in the door. It helps sometimes with credibility. You may not think so, but it helps many, many times with your credibility. Whether you're talking to sellers or buyers or other realtors, and you're Ty and you're trying to look for deals. So we're going to talk with a friend of mine today, David or Nanny, and I think I got that right. But we'll find out in just a second David. Oh we'll just call him David. Oh, he is an investor, a realtor and a friend here in the Saint Louis market. And we've known each other for a long, long time. And so we were at a workshop the other day and I said, hey, David, would you like to be on my show? Let's talk about this. How can realtors make money doing investing? How do you how can realtors do deals? And how can investors work with realtors? And should investors get their license or not? You know, there's a lot of rules going on and laws that are being passed where you can't wholesale deals anymore unless you have a license. So there's different ways around that. Number one, just go ahead and get your license is not a big deal. Number two, just buy the property and work with realtors who can then help you buy and sell your deals. So there's for some reason that for many years there's been this animosity between realtors and investors and a lot of misunderstanding and all that. But I love working with realtors, and I think it's a great way to get started in the business. It's a great way to make a lot of money, either by becoming a realtor or working with realtors, because you should seriously consider both. All right. We're going to talk about that on today's podcast. But first is broadcast is brought to you by Joe mccall.com/Saturday. Now what are you talking about. Every Saturday I do a class as of right now as I'm recording this, where we go live into a brand new market and sometimes it's live, sometimes it's recorded because I can't do it live. But we'll go into a brand new market and we will pull a list of vacant land. We'll pick a market, and a lot of times I'll let you pick the markets. We'll pull a list of vacant landowners, we'll skip trace the list will cold call the list will send up a direct mail campaign to that list. I'll set up everything inside of Freedom Soft so you can see me do the stuff. You can watch me go in and set up a new market. People ask me all the time, Joe, do you still do deals today? And the answer is yes. In fact, we just got a deal under contract yesterday. As I'm recording this. Well, we have the potential, seriously potential of making 100 grand net profit on this deal, which is awesome. I'm excited about it. Do I have my real estate license? No, but we are working with realtors on this deal. All right. So yeah, not bad. Better than a poke in the eye with a stick. So I'm going to show you how we do all of that in this $7 workshop I do on Saturdays. Joe mccall.com/Saturday. It's just seven bucks. If you don't like it, watch it. Anyway. I'll refund your money, but check that out Joe mccall.com/Saturday. Cool. All right. Let's bring David on. David how are you my man?

David:   I'm doing great, Joe. How are you doing? Thanks for having me on.

Joe:   Awesome. I'm glad you're here. And we've known each other for years and years. I think I first met you probably at one of the local real estate clubs in Saint Louis, I'm guessing. Yeah. What were some of the real estate clubs, or REIAs, as I call them, that you would use to?

David:   Oh my gosh, I went to all of them when I just started out. So I came from just like a background you had. I was an engineer in the 9 to 5 corporate job for 12 years, and one of my very, very first mentors gave me a really good piece of advice. He said, go to all of the local REIAs, go to all of the meetup events, and, try to meet a thousand people that first year that you're in real estate. And, I don't think I met a thousand, but I probably got to 500. And that really propelled my career to get on again on a good starting path.

Joe:   So when was that? When did you start going to the local REIAs?

David:   That was 2017, 2018. It's about seven, eight years ago.

Joe:   Nice. All right. And you're also a really good golfer. Do you still golf a lot? Do you get to swing sticks?

David:   But not a really good job. I have a 20 handicap, so inside. Oh. Who? You're.

Joe:   Oh, you were okay. Well, you were way better than I was.

David:   I was having a good day when you had me out at the club. I know that, but so recently I built a putting green in my backyard, so I kind of scratched the itch here and in play a couple times a year. For real. But.

Joe:   Well, we should play again sometime soon.

David:   Let's do it.

Joe:   Yeah. All right, so you're in Saint Louis. How long have you been a realtor?

David:   So I got license 11 years ago. And so the whole background of why I got licenses is when I went to buy my first house, my realtor sucked like, a lot of realtors out there. A lot of them are just carrying this piece of paper around, and they have no idea what they're doing. So I was really frustrated with the process, and I didn't want any of my family or friends to have that same experience, so I just got license on the side. I was selling like 2 or 3 houses to friends and family every year on the side of my corporate job. Never in a million years thought I was going to be a full time real estate agent or full time investor. That kind of came later when I got burned out on my corporate job. Started going like, how do I get out of here? How do I retire? And real estate just kept coming up and up and up and over again. And, like so many of us read Rich dad, Poor Dad. And then, you know, that kind of lit the fire to start investing. And then it kind of came full circle with having my license and how valuable that has been, for my career since then.

Joe:   Awesome. And you got your license first before you kind of got into the investor world of things. That's right. Yep. Who did you hang your license with when you first got started?

David:   It was a small, like, family owned place. I think it's called Schneider Real Estate in Saint Charles. Great people there. They kind of taught me the contracts in the way of the land when I first got started. I've kind of bounced around since then. I went to the flat feet places where I could keep 100% of my commission. I went to the big guys like Keller Williams, and now we're at EXP Realty, and we've been very happy there for the last 3 or 4 years.

Joe:   Yeah. People who are at EXP love EXP. I don't know if I've ever heard anybody complain or say anything bad about EXP.

David:   Yeah, it's a good place to work for sure.

Joe:   Awesome. All right, so what got you interested in the whole real estate investing side of the business?

David:   Well, I was just trying to get financial freedom, trying to get out of the 9 to 5 life that I was live in where, you know, I was living basically paycheck to paycheck when I had a good paying job. But I had went out and bought all these nicer things, like a bigger house and new vehicles and a lake house and a boat. And so I was making six figures in my corporate job. But the second that paycheck came in, it was the very next day. It's made all these. Yeah, it was spent making all these payments on stuff that I had financed. And, it just, I kept I never saw an end to it. And I was like, I do not want to be in this job for another 30, 40 years and retiring, like some of my coworkers were, who were absolutely miserable. And I think you had that story about the cupcakes or something with the Upside Down. I forgot about that. Yeah. I so related with that because that's what was happening at at my job is people with 30, 40 years of service where we're just retiring, you know, after their entire life, it kind of passed and by. And, I didn't want to be one of those guys, man.

Joe:   I used to show that picture all the time in my webinars. It was my last day of work at my corporate job in 2009, and the secretary admin assistant lady at the job site made, a dozen cupcakes and, all of the cupcakes except one had frowny sad faces, frowning sad faces. Except one cupcake had a smiley face and guess which one was me. But yeah, man, I cut. I burnt the chips and cut the sale and it was an amazing, crazy ride. 2009 all right, so, you were interested, but, like, you'd been doing real estate, real turf stuff. Why did you think, then that doing investor stuff might give you more chance for freedom? You know what I mean?

David:   Yeah. So that was a it's all about the passive income opportunity with investing. Right. So I knew as a realtor I had to work to make a commission. And I had all these bills to pay. So if I wasn't getting paid every two weeks, I was going to be in trouble. And so the idea of owning a rental property where the rent's coming in every month, I'm making money every month, for the foreseeable future. That's what attracted me to this idea that, you know, I could build up a rental portfolio, get out of my job, pay off debt, and survive on passive income.

Joe:   So did you do that? Were you able to figure that out?

David:   Yeah. So I didn't have a ton of money getting started. So I was really attracted to this thing called the BRRRR method where you buy your rehab, your rent, you refinance and repeat. If you're basically refinancing all of your rehab money and your down payment out of the rental and taking it, going to a new rental. And so, yeah, after two years of building up my portfolio to about ten units, I left my corporate job to do investing full time. And then another two years after that, we got up to 20 rentals, and my wife left her corporate job, and she's in the business with me now of investing.

Joe:   So you were able to make enough cash flow from just ten rental to make enough income to replace your old job.

David:   Not replace the old job. So we mix some flips in there to pay off big debt to lower our monthly expenses and then the rentals, what they do. Is, you know, if I don't make any money this month, my rentals are going to make my mortgage payment and put food on the table so I can survive knowing I don't have to go out and do a deal this month to survive. The rules kind of give us that security.

Joe:   So the cash flow you get, the net cash flow that you get from your rental properties that you have now paid just the bare essentials, which is awesome, right? The most important essentials the mortgage payment and food. Yep. Right. Not bad. Not bad at all.

David:   Yeah, it's not bad.

Joe:   And so then the extra money that you make could be from flips. Do you? Wholesale deals too?

David:   Not many. So we'll talk about here in a little bit. Kind of our model that we're using on the agent side, that is kind of like wholesaling. But it's just it's just getting paid a bigger commission.

Joe:   Okay.

David:   So we can dive into that a little bit later, too.

Joe:   Let's talk about the first. This idea of living off the cash flow from your rental properties. I'm interested by this. I at one time I owned 13, 14, 15 properties that I was either bought with bank financing or seller financing or subject tos where I bought took over the mortgages and I was cash flowing a couple hundred bucks a month, but that always had a way to just disappear. Right. With vacancies and repairs and maintenance and, I don't want to go into all of that, but it was discouraging. It was hard. It was like I was so discouraged because I read, I believed, you know, the key to getting out of the rat race is to just buy assets and produce cashflow. And, I thought the numbers were I was doing it the way I supposed to be doing it. The problem was I wasn't getting enough cash flow, and I wasn't saving enough money for those future expenses that were coming up. So are you saying, just so I'm clear, that you're getting enough real net passive income cash flow from your rental properties after property management, vacancies, maintenance, repairs, taxes, insurance, all of that stuff? Is that makes sense?

David:   Yeah, that makes sense. And it wasn't some easy path, right? I had to learn a lot of what you what you just mentioned along this road. So I remember like, a couple of years into doing this, you know, I didn't have my accounting down. I didn't have QuickBooks set up the way it was supposed to set up in the end of the year came, and all of a sudden, I've got $20,000 worth of real estate taxes that are due, and I don't have $20,000 in my account. And it was a really frightening experience. It's like, oh my gosh, we got to figure this out. So we put in a system where that rent comes in and then it go. If you've ever read the book Profit First. That money's going in a bunch of different directions to your maintenance, your CapEx, your real estate taxes. Before I see any type of profit on it. And so you would think, you know, rental property is going to have a ton of cash flow is the idea when you buy these things. And the reality is it's pretty small. So we generally we'll see about 100 to $300 profit per door. So on the 20 units, probably at about $5,000 or so, a month. And so that kind of takes care of some of our bare necessities. It's not a huge profit margin, but it gets the job done. And it's a nice, safe, secure asset that's appreciating. And we've got equity in there. And, and we started paying some off with, with the property.

Joe:   Well that's awesome because it's not much now but it's growing right. And if you look at all the unseen benefits of it like depreciation and tax write offs and appreciation. Yeah. And you're going to have these properties free and clear probably in 15, 20 years. Right. That's when it really starts growing. And you can use that equity leverage it and buy other properties bigger properties. Yep. So yeah it's a longer game. It's a long play for sure. Absolutely. Okay. Cool. So for the extra money, you're doing some fix and flip maybe rehabbing.

David:   Yeah, we do 1 or 2 fixing flips a year, which is easy for me because my wife just fixes them up and I just buy them and sell them. And then majority of my active income today comes from real estate commissions, from helping other investors invest in real estate. Awesome. So the last year we've had, we sold 113 investment properties where I was the agent and earn a commission on those deals. Many of those are people doing fixing flips or rentals, or short term rentals or mid term rentals, any number of those.

Joe:   Okay. So let's talk about that. I love this strategy. I have interviewed people before who do it. It's a great way to kind of do the wholesaling thing. But as a realtor, which in a lot of ways it's easier. And it's I don't want to say wholesaling is illegal, but in some ways doing it this way is more legal. It's more safe. You're more within the comforts in the confines that the real estate commission and that one wants you to be in. Don't get me started with that. Right? Because whatever. Sometimes I complain about the Real Estate Commission and the National Association of Realtors, it's. It acts more like a cartel and a monopoly. But whatever. Okay. It is what it is. You could argue and fight that and you'll never win. So sometimes you just gotta learn to accept it and take it as it is. And that's why I did have my license for so long. And the only reason I let it expire was because I just got lazy and I got to. Don't you get tired of those classes as well, David? I mean, be honest.

David:   I don't know how much I can say on a recording, but, I do have online classes, and I may not be looking at the screen while they're going on.

Joe:   But, yeah, they test you, and they quiz you to make sure you know what. But, yeah. I mean, how many times have you taken the ethics class?

David:   A lot of times.

Joe:   Yeah. And it's important. Obviously, I'm not saying it's not important. Okay, so. So what is this, then? What are you doing now for pass for more active income at working as a realtor? Kind of doing the wholesaling. Yeah, part of the business as a realtor. What does that how does that work?

David:   Absolutely. Yeah. So we call ourselves Cash Flow Nation. We're basically real estate investment advisor. So the way we market ourselves to people is kind of think of your financial advisor, you know, your traditional financial advisors helping you build wealth and prepare for retirement, and marry that with a realtor who knows how to transact real estate. And so we're kind of the hybrid of those two professions. And we help people, as are Asian, buy and profitable real estate deals and investments to increase their net worth and their wealth and their cash flow.

Joe:   Nice. I love that I love that term. Real estate advisor, real estate investment advice.

David:   Real estate investment advisor.

Joe:   Yeah. Yeah, I love that. You don't have to have any fancy certification or licensing to do that except just a real estate license.

David:   Just have to have a real estate license. Yep.

Joe:   Awesome. Yes. Okay, so now how do you make your money? What does that mean?

David:   Sure. Yeah. So as far as, like, how we do deals is we help people do, like, just what I said. Fixing flips, rentals, the BRRRR method, anything they want. So.

Joe:   So you go and find them deals.

David:   Yeah. So a lot of our buyers will buy them right off the MLS. And we're blessed to be in a market where investors buy stuff off the MLS all the time. So probably you know 80% of our deals are just MLS deals okay. Where it gets exciting is the off market stuff. So about 20% of our deals come from off market sources. And so what I like about those is we have an opportunity to make a much higher commission on those. Because on the MLS, it's simply stated this is how much you're getting paid. It's usually 3%, 2.7 for that two or whatever it says on there. And that could be changing with the new rules, of course, that are coming out, this summer. But historically, there's not a huge opportunity to make a wholesale fee type like commission on an MLS deal versus off market. We can mark those up as much as the margin would allow us to, and it's still be a good deal for a client. So a lot of times we'll work with other wholesalers, other agents, and, especially it works well when you have a wholesaler, let's say, Joe, you're a wholesaler and you have a deal. For what? And I'm not giving actual numbers from a deal that we just did. Let's say you've got a deal, and you said, hey, I want $40,000 for this house. Well, I the first question I'm going to ask you is, hey, can I put my commission on top of that price? And you're going to say, yes, I would love you to put the commission on top price, because I don't want to give you a cut of what I'm making on my 40. And I'll say, great. And so I'll go back and I'll look at the numbers, for this $40,000 house and I'll see. Hey, how much room is there in there for? Still to be a good deal for my buyer client. But for me to make a decent commission on this deal. And so for this exact example, it might be $10,000. I might be able to make a 20% commission on the sale. So I send you an agreement, Joe, that says, hey, I'm going to sell your house for 50 and you're going to pay me a $10,000 commission to do that, and you're happily just happy to sign that because you're getting your 40 that you wanted. And then you're like, he's going to figure out a way to sell it for 50. And so then I go back to my clients and I advertise the property as a $50,000 deal. Here are the numbers on it. Here's the rehab estimate. Here's the rent estimate. This is what the ARV looks like on this particular deal. It was like 120 RV with a 30 grand rehab. So they're still getting a decent margin at 50. It's still a deal for them. It's a great deal for me as the agent. It's a great deal for you as a wholesaler. And we get the deal done and we make, 10,000 our commission or 20% commission, which is way, way higher than any normal real estate agent's making on an MLS deal. And because we're investors, because we're licensed, we know how to orchestrate all the paperwork and analysis to get this done.

Joe:   I love that. And so that wholesaler might have got. In that property under contract for 30,000.

David:   Right. Yep.

Joe:   So they got it under contract for 30. They contact you and say, hey, I want to sell this thing for 40. Yep. And, you know, that's still a really good deal you find in, you know, at 50, it'll be a still a good deal for your end buyer. Right. And by the way, these buyers that are buying these things to fix them up and flip them, they know what's going on, right? They know there's middlemen involved a wholesaler, a realtor. But they don't care because they're getting a deal on the minimum and the numbers that they want. Right. So that wholesaler just simple round numbers here will make ten grand. You'll make ten grand commissions, and then the seller will make a lot of money after they rehab it and fix it up and rent it out or whatever, they're going to hold it for ten, 20, 30 years. They're going to fix it and flip it and make 30 grand net. So it's like everybody wins. And the seller also wins because they found somebody to buy their property. That needed a lot of work. Nobody else was interested in buying it. Only an investor would buy that property and the community wins because now this trash property is taken off the market. Somebody is going to get in there, fix it up, clean it up, fix the landscaping, bring the values of all the houses up around it. Right. Everybody wins. Yep.

David:   Yeah, it's win all the way around. And that's what I love about that scenario where you kind of alluded to this earlier when you are just a wholesaler, not all the time. Do all of those interests align. Right. And I give people the example of the first investment deal that I did. So I was dumb enough to think I knew enough because I had my real estate license and I was doing my first investment deal, and I did. I didn't need another agent to help me. So I did my first deal, and I bought a property from a wholesaler. Well, little did I know that the wholesaler had wholesale or had been wholesale that property from another wholesaler. And when I got into it, after I closed all of these problems, I lost all this money on my first deal, and I was really upset, and I felt like the wholesaler screwed me over. And, you know, that's kind of the bad rap that sometimes wholesalers can get because they're really only interested in making that that sale and that wholesale fee versus us as the agent. You know, if I'm going to sell that for $50,000, I got to do my due diligence, make sure it's still a good deal for them because I'm representing them as an agent and it's my butt on the line. I'm do I should be doing all my due diligence, make sure that it's all good. Yeah. If it's not a good deal at 50, I need to. I need to figure out how to get them a better price on that property. And that might include, that might include me lowering my commission. So we've gone into these before where inspection reveals. Hey, the roof's bad. There's another big expense that nobody was expecting to have on something. And I will lower the commission, and I'll ask the wholesaler to lower their wholesale fee to get the deal done and still make it a good deal for everybody.

Joe:   Man, I love this. It's a win. And we'll talk about due diligence in a second. Here I want to know what the things you look at. So my question also then is like other realtors listening to this are going to say that's not and that's not fair. I make 6% commissions and you're making 20% commissions. Is there some kind of law that says there's a limit on certain amount of commissions you can make as a realtor? Are there rules against this?

David:   No, I mean, that's what this lawsuit was all about, is realtors were saying that, while the court was saying that realtors were saying that commissions weren't negotiable. Commissions have always and always will be negotiable. So if I can negotiate a 20% commission, that's props to me. Right? The seller's willing to pay me that. I didn't force him to pay me a 20% commission. I didn't say you have to. Do you have to pay me a 20% commission? That's the only way you're going to sell your house, right? This is a negotiable thing. And so a lot of people are getting negotiated in the other direction, where their commissions are getting slash and beat up, and they're competing with flat fee brokers and stuff like that, which is where we found this niche of being licensed and working with investors, where we're we are not like some, readily available commodity. Like we're actually pretty rare to find agents that are focused on. And I'm working with investors that are confident in investing. And so we can negotiate our commissions the other way to be higher than most other realtors.

Joe:   Yeah. And one of the cool things too, I know guys who do this where they will negotiate with the end buyers up front, and we'll say, my commissions are minimum of this. And if you want me to help you, you know, you'll I'm going to make at least a, you know, a thousand $2,000 on representing you and whatever commission I can get from any from the any of the other deals. Right. So you can negotiate. Yeah. A commission from the person bringing you the deal, and you can negotiate an extra commission from the buyer that you're representing. Is that right?

David:   You sure can. Yeah. We've been plenty of times made commissions on both sides of the deal, which is awesome. Yeah. So you can you can market yourself to the buyer. Said, hey, anything that I help you buy this is this is a commission that you're going to have to pay. And then you can do it the other way. Like, I prefer to have the seller try to pay for all of my commission, because then the buyer can very easily finance that into the purchase of the house. Right? So when the house is 50 and there's 10,000 hours of commission. They're getting a loan on the 50. Versus if the buyer had to bring commission to the table, like, what say they were buying it for 40, but paying us a 10,000 commission? The lender may not loan against that 10,000 commission. That's a lot of extra cash that they would have to bring. So that's why I prefer to get it from the seller and bake it into the price. But you can definitely get fees from the buyer as well.

Joe:   All right. Cool. How do you find these buyers?

David:   They are there online watching this video right now. They're all over the place looking for. So they're Facebook. Instagram, YouTube. Biggerpockets is a huge source, for us, of just people looking for investment deals and investment knowledge and trying to get in front of an agent that can help them navigate the market and stuff like that, as well as the in-person stuff. So we mentioned, you know, meetups, go to meetup.com, look for different, Rias real estate investors associations to go to. And, and just hand out your business cards.

Joe:   I remember I was probably ten years ago there was an investor. This was 2014. Maybe there was an investor who had these meetups in about five different cities in California from Saint Louis. So every month he'd go travel to five different meetups in LA, San Francisco, San Diego, etc. and teaching how to invest in turnkey real estate out of state. And it was just educational. He would teach how to do this, what to look for, what to watch out for, common mistakes because you can't buy cashflow in California. If you're an investor and you want to buy rental real estate, you can't buy anything that cashflow. So this guy would teach how to do it, how to pick the markets, how to pick the realtors, how to pick the properties, how to pick the property management and blah blah, blah, blah blah. And then at the end, by the way, if you're interested in it, we can do all of this for you. Saint Louis is a great market. We've got a lot of properties here, and they would just pass out brochures and every month they would get business. They would get in business from investors in California like, oh my gosh, this is amazing. I don't know, you could do this and you can help me. And they would sell properties to these people right off the MLS.

David:   Yeah that's awesome. Yeah, it's a great strategy.

Joe:   There's a lot of opportunity there. And, as a realtor, you're just educating the market. Sounds like. And you're telling them, hey, this is what you need to watch out for. This is what you need to be aware of. And. And Saint Louis is a good market. We can help you find these deals.

David:   Yeah. And we focus on long term relationships with our buyers. So that's one of the things that differentiates us from wholesalers. If you, if, if you're not going to make money as a client of mine on this deal, I don't want I don't want you to do it because I want to I want to be involved with, you know, on 20 deals with you over the next ten years versus doing this one deal where you got burned and now you never want to do it again. Right? So I'm interested in the repeat business of this. And so we have a ton of clients that they do ten, 15, 20 deals a year with us. And those are the type of relationships I love to build up to.

Joe:   Nice. And are these out of state, you investors, usually.

David:   There's a lot of out-of-state investors. Yeah. So our primary, kind of avatar is an out-of-state investor or, somebody local that's kind of newer and needs some hand-holding on how to invest and how to get going.

Joe:   Okay. Question I have is, sometimes are you concerned with liability when it comes to, you know, if you're estimating the value of a property, the rents, what it could rent for, the amount of the rehab you're recommending, contractors or property managers, there's got to be times when, you know, the amount of rehab was underestimated. Or you recommended some property managers that didn't work out that were bad. You might have said, hey, the rents were 800 to 900. And they thought, oh, great, I can rent it for 900. But then they couldn't. And so they only could rent for 800. And that kind of screws up all of their ratios, financial ratios and stuff like that. Right. So like how do you cover your butt when it comes to like that kind of stuff?

David:   Yeah, that's a great question. So the easy one with the rents is just pulling comps. And so we use the MLS to pull Rec comps. And thankfully there's still enough out there to accurately assess. But I give him three comps and I say, hey, I think it's low rent for 900 bucks. Here are the three comps, you know, and they see the data and I here's one for 950. Here's one for 50. Here's one for 875. That's why I said 900. So I try to use that as much as possible. And then when it comes to recommendations, I always try to give him multiple recommendations. Very rarely I'm going to say, use Joe. Joe is your guy that you have to use for this, for the contracting and the property management. Because, Joe, if you let me down, you're going to make me look really bad. But if I say, hey, there's Joe, Tom and Bill, these guys are great property managers now. Now you go interview them and you pick which one you think is best. It's that all kind of, cover my butt as if somebody lets them down. They were involved in the process of picking, we gave them some good options to choose from, though.

Joe:   What do you do about rehabs and estimating what work needs to be done, how much it's going to cost and all that?

David:   Yeah, that's been a tricky one. So I've got what I call a rehab estimate, where we tell people this is a ballpark, estimate of what you can expect to pay, for certain things that go on in a house. It's a spreadsheet of, like, 200 different line items of everything you can fix inside and outside the house, and a generally a ballpark of what it would cost to do that. So we help them kind of analyze that. That's kind of the first step to figuring out what a rehab estimate would look like. Then from there, we encourage them to get multiple bids. And then we compare those bids from actual contractors to the one that we had to see. Okay, this one kind of lines up with what we're expecting. Let's go for it. But there's always surprises. So even in the bid that we give them, we automatically have a 10% contingency on that. And sometimes we want to increase that if they're if this is a fire damage or distraught or even more distressed property. We may put 15, 20% contingency on there because there's going to be things that come up that we that we can't see or estimate right now.

Joe:   Let's talk about certain areas of town. You're not allowed to redline, which means you can't steer buyers away from certain areas.

David:   Yeah.

Joe:   But okay, let's be honest though, there are areas where you do not want to be in. Yeah, right. Like you're just asking for trouble if you. It's going to be number one. Hard to find a contractor that will even do any rehabs. Yeah. They're right. Number two, the rents, the numbers may look good on spreadsheets. And this is what bothers me sometimes, especially in Saint Louis. We all know people back from, you know, the early 2000s that bought these properties for $60,000, that are still not even worth today, $30,000. Yeah. Like there's neighborhoods where there's a ton of vacancies, there's a ton of boarded up properties. And you look at the numbers and you might think, oh, man, this is a great deal. The numbers work out, but it's just not a good neighborhood, right? You're not going to find good tennis there. Nobody wants to live there. The schools are bad and it's just whatever. Okay. Yeah. But like, okay, as a realtor with your ethics and you're not allowed to steer people from what you know, but we're talking this is you're dealing with investors. And this is maybe different than retail owner occupant buyers. But how do you do that what you're interested in.

David:   Oh, yeah, that's a fantastic question. You know how to ask all the good questions here. So this is something I've dealt with for years, right? Every investor that comes to me wants to know where's the good place to invest. Where do I want to stay away from? You know, and to the point where, like, they had gotten videos from other realtors in other markets that said, oh, this, they circled something on a map and they said, this is the place to invest and this is where you do it. And I was like, wait a minute, I don't think you can do that. And so I went to my broker and I said, hey, what do you think if I put together this video that talks about different areas? He said, absolutely not. You cannot do that. That is steering, that is redlining. Like we cannot classify different areas and steer people into different areas. So I found a very clever way to get around all of that and still get the same exact result. And so what we focus on is the price point. Okay. And so I can go in at any market today and I can tell you what class a neighborhood, a certain house is in based on the price points in that, in that metropolitan area. So let's take a look at Saint Louis, for example, the median price point in Saint Louis, I think last time I checked is like, let's say $220,000 for a single family home. I what I do is I say anything above that median price point is in a class area. That's a class real estate. You're going to have the lowest amount of cash flow, and you're going to have, you know, the highest amount of appreciation per se, because this is this is a class. This is, where, you know, the price of the home has gone up, but the rents don't necessarily go up that fast. And so you've got lower cash flow. Then I break down the, the zero to the median into thirds. So two thirds of the median up to the median price point. I don't have my calculator on me right now, but let's say let me figure out 220 divided by three about $70,000. So let's just say 150,000 to 220 is going to be what I call B-class real estate. So this is where you're going to be in still a pretty good area. But you're gonna have better cash flow than your A-Class real estate. And then they are the third below that from 150 down to 75 is. Generally your C-Class real estate. This is going to be a little bit worse of an area, worse of a neighborhood, a little bit more questionable tenants. This is where I like to say, hey, you may want to start thinking about section eight to where you can get some more guaranteed rent insurance, stuff like that. But you're going to have higher cash flow in that price point and then, you know, that bottom and more risk. Yeah. The bottom third under 75,000. This is this is D class pretty close to a war zone. You know no fly area. So when you're talking about people buying a house for 60 I instantly go to my my price points. And I say this is this is a highly, questionable area that's going to be very rough. There's, you know, we tell people the pull up spot crime, I think it's spot crime.com and put in that address. And in a price point like that, you're going to see a ton of like gunshot markers. And you said you're going to be scared out of that area when you look at the crime and stuff. And so that's generally how we get around telling people what area to look in. And we just classify just based on the price and looking at crime reports and stuff like that too.

Joe:   I think a good way to look at it too, would be just in numbers, because if if you were to buy a property there, it's going to it. Just looking at the numbers, honestly, you're going to have rehabs costs going to be way higher than you realize, and then your vacancies are going to be much higher than you realize. So you if you factor all these in and your rents are going to be a lot lower than you think, it's going to take you a lot longer to find tenants. So if you look at the numbers, they just don't make sense. Forget about your biases or what you feel comfortable with, quote unquote. If you just look at the numbers, it won't work. And when you try to resell that property, you can't give it away. You can't even give it away. I remember one time I, I was doing some marketing and a seller called me, and, I, he said, I want to sell this deal. And I think just looking at the numbers real quickly, we said we could offer him ten grand or something like that. And then I said, after I looked at, I said, this, and this isn't going to work. I'm not interested. You'd have to pay me to buy your house. How much would you pay me to buy your house? And he said, I'll pay you a thousand bucks to buy this property. And I thought, oh, shoot, what did I just say? And so I said, well, let me look into it, okay. And so I actually sent him an option. I forget how I did this, I don't remember, but I just started getting on the phone and calling every landlord I could find in that area. And I just said, hey, for $1,000, I will give you this property, okay? And nobody said they wanted it. Nobody even wanted the property.

David:   Holy cow.

Joe:   For a thousand bucks. So anyway, that's just something you gotta navigate gingerly. Yeah. And it's just be careful because, yeah, we don't want to discriminate.

David:   Yeah, there's definitely those areas though. And especially our city is where the amount of rehab it's going to cost to fix up that house, the house will never be worth the money that you have to put into it. And so that's where a lot of these neighborhoods that are distressed are just they can house after vacant house because it needs 50 grand and repairs in the ARV is 25. Right. And so it just it doesn't make sense for anybody to do anything with. Yeah.

Joe:   Okay. Cool. Let's talk about the you estimate your repairs. People get tripped up on this a lot. And sometimes in some of these neighborhoods there really is no ARV is there like after repair value because these are properties that are they're not selling to retail buyers. Only landlords are buying these properties in some of these areas. Right.

David:   So like in the cheap. So again yeah in the in the lower class areas. Yeah.

Joe:   Right. The neighborhoods maybe.

David:   Generally people start getting a mortgage for a house when it's about 100,000 or higher. A lot of the lenders these days, they, they say, hey, the price has to be 100 or more that to get a mortgage on it.

Joe:   Yeah. Okay. So then how do you evaluate these deals. How do you look at the numbers. Is a cash flow. Is it net operating income cash on cash return ROI rent yields things like that. Well how do you look at those.

David:   Yeah I mean we look at all of them. We take all them into account. Probably cash flow is the number one reason why somebody wants to buy a rental. So that's got to be positive. And depending on the class of area that they're in it, you know, it requires more cash flow. If you're in like a C class versus in a class property. Right. And so I want to see a couple hundred dollars on my C class rental, in cash flow, versus a class.

Joe:   So, oh, so how do you for the, for the repairs. You do you, you have your own repair sheet, but you get contractors to bid it as well.

David:   Yeah, yeah, we've actually we partnered with one of our property managers. They have construction teams, inside of their company. And so one of the cool things that they do is instead of us hiring a third party home inspector, we just have their construction manager inspect the property, and they give us a bid at the same time they do the inspection. And so they're happy because now they're getting paid to go out and do these bids versus before they were coming in after the inspector and expected to give the client a free bid. Well, now. We kind of just contact them that, inspect it and bid it all on once. And so it's one trip to the property. The client has oh, these are the repairs that are needed. This is what we're going to need to fix up to get to your occupancy and get it ready. And here's the bid for it. And so that's kind of part of it.

Joe:   Yeah, this is so good. Because this reminds me of, there's some pretty dramatic, horrible stories that have come from other markets. Indianapolis is one of them specifically. Maybe you're familiar with this, but if you've been on Biggerpockets at all, just do a search for Indianapolis and I won't mention names, but, do you know what I'm talking about? David?

David:   I don't know where you're going yet.

Joe:   All right, well, this was a couple of years ago. It's probably quieted down since then, but there were literally hundreds and hundreds of investors that lost millions of dollars buying turnkey rental properties from a certain famous guy.

David:   Okay.

Joe:   And, he was selling everything through a property management company. That was complete fraud. It was like they were sending rehab estimates and rent rolls of and pictures of properties that weren't even being fixed up yet, weren't even rented yet, and showing positive it was a Ponzi scheme is what this thing was. Wow. And it just really, really got bad where a lot of investors lost a ton of money. And unfortunately, this happens in some markets where I don't know how it starts. It could just be that these property management companies get completely overwhelmed, and they're dealing with the trashiest worst neighborhoods, and they're like, and then they get into a hole and they're trying to dig themselves out by getting new investor money to pay off old investor money. And immediately all of a sudden, before they know it, they have a Ponzi scheme that this happens a lot, unfortunately. So yeah, one of the great things about what you're doing is you're now the boots on the ground person for the investor who wants to get into Saint Louis, and you have a foot fishery responsibility to be honest and tell the truth, and give the best advice that you can. But like, what was going on here is that, again, these buyers from California were buying these rental properties in Indianapolis. And they were they were being promised that these properties were worth this. The rehab was worth this. Yep. And they would rent for this. And so they would send all their money to this guy who would buy the property, fix it up apparently, and get it rented. And then like they would starting to get rents, they were getting reports every month, you know, everything's going great and they show up. They finally fly to Indianapolis. Yeah. And the house is completely boarded up and trashed. It's never been rehab, never been rented.

David:   And it's like a scam.

Joe:   Isn't that crazy?

David:   That is nuts. I can see how that can happen, though. And I think that's the problem with the turnkey model is you're put like, basically you're placing all of your trust into one person or one company to be your agent, your property manager, your contractor. And it's like this person's wearing all these hats, and those are all very different jobs that require a lot of attention and skill to do each one individually. And so that's where our value proposition comes in there. Instead of doing turnkey, hire us, be your agent. We're going to we're going to give you the best property management options. We're going to give you the best contractor options, through our referral network. And we're just going to be the best agent that we can possibly be for you. And so that's how we compete against some of these other people that are like the all in one service. You're going to get mediocre across the board at best. In that scenario, and especially if they get overwhelmed or too busy, I can definitely see how their money gets behind. And then all of a sudden you got a boarded up property when it was supposed to be rehabbed and rented out months ago.

Joe:   If you I know you do some podcasting and some content marketing yourself, you should do a little research on this because you can talk for months about wow, what happened here, you know?

David:   Okay. Yeah.

Joe:   It reminds me too, of, back in 2012, I had been doing lease options and started doing more traditional house wholesaling with cash deals. And I hired an acquisitions guy, and we were doing a lot of deals, doing well. But I talked to a guy who was like, Joe, you should you should find the buyers first. And it's always easier to sell buyers what they want rather than what you have. And that is some of the best advice I've ever gotten. And I'll tell you who it was. It was Kent Clothier. Kent Clothier has been teaching and doing this for a long, long time. He says, Joe, it's always easier to sell buyers what they want rather than what you have. So go find what the buyers want and bring it to them. Yeah, that's the tricky part with that. Is that brokering you need a license to do that. If you go find a property for somebody else, you need to get a license to do it. Okay, fine. Go get a license. But what happened was I thought, that's really smart. And so we were doing a ton of seller marketing, trying to find these off market deals, and we were doing 1 or 2 deals a month, maybe three, and we changed it where we just started marketing for buyers, and we started simple. We found buyers who were out of state by. Buying in other hot markets, like for rentals like Memphis, Indianapolis. Cleveland, Ohio. Lafayette, Louisiana. Mobile, Alabama, like all of these other markets, Oklahoma City. So we would go in and pull list of who are the out-of-state investors that were buying in those states. And we started sending them letters, real simple letters that said, hey, we're the and I copied all of this from Ken Clothier. He here's a book called Reverse Wholesaling. You should go get it. We said, hey, we are the premier real estate investing company in Saint Louis. We see that you've been buying properties in Oklahoma City. And if you're interested in buying some properties at Cash Flow in Saint Louis, give us a call. We'd like to talk to you and tell you and show you what we have. That was it. And that phone number would go to Rick's cell phone number and he would answer the calls. And so pretty soon, within a few months, we had 10 or 20 buyers that were like, oh my gosh, I can't believe you guys answer your phones. Number one, because we answered the phones. You know how. And that's just.

David:   Nice. Yeah.

Joe:   Sales 101, right? That's one of the biggest frustrations and complaints most people have with realtors is they just don't answer their stinkin phone. Yep. So if you want to triple your business, just answer the phones. All right. But anyway, so these buyers are like, I can't believe you guys answer your phones and tell me what you've got. I'm looking for somebody. And so we stopped all of our seller marketing, and we started networking at all the local real estate clubs and different Facebook groups, meetups and, just word of mouth. And we started collecting. This is what else can't told us to do. Start collecting the names and phone numbers and emails of everybody that does business in Saint Louis property managers, realtors, investors, wholesalers, everybody. We could and we started emailing everybody once a week, and we pretended to be the new hedge fund in town that had $1 million burning a hole in our pocket. And we started sending out marketing to everybody. Instead of looking for sellers, we started looking for deals. Yeah. And we started saying, hey, we've got $1 million, we need some properties, we need properties because we've got these buyers that we're looking for. We listed the zip codes it has to rent for. At least this has to be at least a 2 to 3 bedroom. Has to be whatever. Whatever. Send us what you've got. We are looking for deals. We want your deals. And we started getting people out of the woodwork, bringing us deals, incredible deals. And we started getting realtors that would bring us deals and say, hey, I don't even care about the commission. I just want to help my clients sell their property right now. Guess you get wholesalers that say, I only got a week left on my 30 days or whatever. I don't care if I just make a thousand bucks. Just please. I don't want to back out of this contract. And we started getting more deals than we could handle. And then we realize after doing a bunch of these deals like, oh, this is great. And then our buyers were all tapped out. They're like, oh man, I, you know, I don't have any more money or this is great. But so then we started realizing we need to continually be marketing for buyers. And so we just started every month sending out marketing to get more buyers. And it was awesome. We were doing way more deals by just finding the buyer. I should have started this podcast with that story because Rick and I only work together. You might know Rick too, by the way. Yeah. He's super good guy, and we only work together for about a year, and, he was doing all the work, and, we were splitting the profits 5050. And he's like, Joe, you know, I could do this on my own. I don't need you anymore. Thank you very much. We're still friends these days, to this day. But. So we parted as friends. I was like, I get it, Rick. And, he's still. This has been ten years, over ten years, and he's still actively doing this. And that's all he does. He got his license and he just finds buyers. Now he presents himself as the guy with all the money and everybody starts bringing him deals. It's an amazing, simple business, isn't it?

David:   Yeah, yeah. It's amazing when you can leverage those referral sources and have other people bringing you the deals. It's awesome. Very powerful.

Joe:   Well, yeah, you should if you want. Later, I'll show you that letter we sent out and how we got those lists of buyers. Like, it's so simple.

David:   Yeah, it'd be awesome.

Joe:   Just got to make sure you have a phone number on there that somebody answers. Yeah. I hope you guys, you're listening to this. Picked up a gold nugget there. Whether you're Jay, you're an investor, you're a realtor, your landlord. Whatever you do, if you just answer the phones and start talking to people and then follow up with people, we kept on sending emails saying, hey, we're looking for deals. Do you have anything? Every week an email, a text, a phone call. We're looking for deals. Send us what you've got. And all of a sudden we became known as the guy who, because word of mouth spreads so fast, you know, David, he's got buyers. Send your deal to him and he'll just add your his commission on top of whatever price you want. I know there's people listening to this podcast right now, David, are thinking, I've got a deal in Saint Louis. I'm going to call David. How can people get ahold of you?

David:   Let's do it. Yeah. So, I'm on Instagram or Facebook at Agent David O, send me a message. Is probably the quickest way, and we'll connect and send you my email address and my phone. And, yeah, I'd love to do deals together. We started this podcast with, you know, what are the advantages of getting. Licensed as an investor. I got about six of them. I just wanted to run through real quick. Joe and you. You tell me what you think here. What's the number one? This is probably the most obvious one to me. And, maybe the you two is access to the MLS. What do you think?

Joe:   I love it because now you can also get access to the county records behind the MLS as well. Just see who the buyers are, what they bought them for, and you get the contact information of the realtors, the buyer's agents and the seller's agents. Right? Yeah.

David:   Yeah. It's a powerful tool. So that's what the appraisers are going to use to value the property. So you have the history?

Joe:   Yes, the history, which is you can't get that anywhere else of see, like when how many times has this property sold and who bought it when and all of that.

David:   Yeah. And I notice MLSs today are very strict about who has access and who can log in. So we've been slapped on our hands many a times because a login showed up from a different IP address. And, you know, you got to go through this whole thing. So no longer can you get it from your agent anymore, like, you literally need to be licensed to have access. Anyways. That's really important. Number two, obvious one I think is, is you're going to save money on commissions, right? You're not going to if you're doing your own deals, you can list them and not pay yourself a commission or buy them off the MLS or not pay a commission. Number three, this is something that I've definitely experienced myself, is you're going to close more opportunities with sellers. So when I'm going on a seller appointment and I want to buy the house, first of all, I do want to buy the house, as an investor. But that's going to come at a discounted price, right? A lot of times we go into these appointments and the seller wants more than you can offer. Well, as a licensed agent, I can put all of the options on the table for them. Oh, you want that price? We can help you get that price. But here's what it's going to include. We're going to have to list it. You're going to have to we're going to have to show it. We're going to have an open house. Where have people going through here? We're going to get contracts that are contingent on financing. We're going to get contracts contingent on inspections. You're going to have to get an inspect. So like I can put all the cards on the table. So that way I'm not sitting there, beat them up over the price. And as though my only lever I can pull, I can be the agent deal. And so get a commission and bring in some income on a property that may not be a fit for them to sell to a wholesaler. Number four, this is a big one that I've experienced is I'm leveraging the experience from the investors I'm working with. I'm helping an investor do the deal, and I'm not risking any of my own time or money doing that investor video. But I'm there for the ride. Right. And so we're I or I've picked up, some new strategies cuz, like, I never saw myself as being an Airbnb owner or this new craze of mid term rentals where you're furnishing a rental and you're renting it by the month. I just saw so many of my clients doing that and making 2 or 3 times the money I was making on a similar property. Then I was like, I need to do that. I could do that really easily. I've seen how they did it and now I can do it. And so I'm leveraging the experience of my clients and then now putting it in play, my own business and having a lot more confidence of being able to do that. So that was number four. Number five higher commissions. We talked about that at the beginning, how they made 20% on a on a commission deal. And number six, is real estate professional status. So, Joe, you know that if we're real estate professionals, according to, the IRS, we can get a lot more savings on our taxes and depreciation and write offs and stuff like that. And so being license helps, just validate that you are a professional in this, in the space, and you could put more hours towards that those credentials.

Joe:   Yeah. And it gives you credibility with the sellers. Yeah a lot of times the trust with them for the most part for the one of my funniest realtor jokes though, was when we were in, Jackson, Wyoming, on the 4th of July parade. This was probably ten years ago, and, Jackson, Wyoming. And there's a realtor in the parade, and she's throwing out candy to everybody, and there's an announcer on the microphone. He says, oh, hey, there's Realtor Cathy. That's the most I've ever seen her work. You hear these? You hear these groans going through the. There's thousands of people there. This guy's like, I can't believe he just said that. That's the most I've ever seen. Or. Oh, that's the hardest I've ever seen her work or something like that. Oh my gosh, I was, I was I felt so bad for her.

David:   Oh no.

Joe:   It's kind of true. Maybe I'm just kidding. I'm just kidding. I got a couple questions. I just realized I wanted to ask you one of the biggest things that when you're selling a deal to an investor is the cash flow. The cash flow projections. Real quick talk about the formula you're doing to show them that cash flow. What are you accounting for? Because this is one of the things I get frustrated with a lot when I'm seeing people advertise deals is they're like really underestimating the vacancies in the management and the repairs and all that stuff. How do you do it?

David:   Absolutely. Yeah. So obviously you got purchase price. You got. Closing costs. You've got any type of rehab or repairs that you're putting into it. You've got property management fees, you've got any tab seller paid utilities, which shouldn't be much on a single family. You've got your cash, CapEx expenses. So these are like your roof, your water heater, things that are lasting 20 years but eventually are going to need to be replaced. And they're a big expense. Then you've got monthly maintenance. So this is think like the ceiling fan broke or something like that. And you got to go fix, smaller items on a monthly basis. And then you've got vacancy rate. And so that is when the property gets turned over, it's, it's going to be a month or two without getting any rent collected. So we have to kind of calculate for that in, in advance what we're going, what the cash flow on a property is.

Joe:   So like what are some numbers you use for that like 5% 10%.

David:   So the you know, the books will tell you to put 10% for each. So 10% for vacancy, 10% for CapEx, 10% for repairs. You'll never do a deal as those are your numbers. It just it wipes out everything. So we adjusted them down to five, and that's what we're that's what we run with on all of our calculations.

Joe:   Here's one more thing that I see a lot of people forget. And it sounds like a little thing, but it's sometimes not. The property management companies charge a fee when they find a new tenant.

David:   Yeah, it's the first month's rent.

Joe:   A month's rent as a fee.

David:   Yeah. All right. We actually do account for that in our calculator. We assume that the length of a tenant stay is going to be two, two and a half years. So we'll, we'll take a fraction of that one month rent as a fee that we're putting in to that.

Joe:   Well that's good because I get annoyed when I see they're taking out a certain percentage because they're saying, oh, you're going to have one vacancy. So let's figure one month's of rent for vacancy. But it's more than one month's of lost rent. You also have another month that you have topay to the property management for the fees. Yeah, but it's like this is I'll we'll wrap it up with this. I think when you are advertising a deal and this is applicable to realtors, to investors, property managers, everybody. It's always best practice to under-promise and overdeliver. Yep. Okay. That's going to keep you out of so much more trouble. When you think the rehab might be 30 to 40 grand, then go with the 40 grand number. Right. If you think the rents are going to be 7 to 800 when you're figure in your calculations, figure 700 for the rent. If you think whatever like vacancies always under-promise overdeliver. Because then when you're when you're saying when you're showing this guy the rehab might be the higher number, let's say $40,000, whatever it was, they're going to see that and say, oh, you know what, my contract I can get it done for less than that. This must be a really good deal. I appreciate you, but if you if it's opposite, if you tell them the rehab is going to be 20 there, you'll instantly lose credibility when they look at that and say, oh, this guy's an idiot. Who does he think? Does he think I'm an idiot too like? So it's so important, you know what I'm saying?

David:   Yeah. That's great advice. Yeah. So yeah, like, if you, if you, if you under-promise like, they're going to be so excited when they find out that it's less than that or they're making more cash flow, allow them more profit than that. Versus the opposite way around for sure.

Joe:   All right. Good.

David:   I'll give you an example like we've had somebody had a great deal. They made 30,000 on rehab. Right. But we told them they were going to make 50. And so now they're disappointed. Yeah. And it's like, no, this is a this was a great this $100,000 house is a 30% margin on this thing.

Joe:   Yeah. Sometimes it's better. It's better just not to say anything right.

David:   Yeah.

Joe:   Let them figure it out on their own. Yeah. Okay. Real quick. Is there a software that you like to use to help evaluate these deals, to create the reports and give them those kinds of things? Or is it just.

David:   We use Excel spreadsheets so we keep it in our Google Sheets actually. So you don't have to have any software and easy to share and stuff like that.

Joe:   There is a software I like a lot called Deal Check. Have you ever used it?

David:   I've never heard of it.

Joe:   I love deal check okay. Because it gives you it does all these calculations for you. You can set up all the parameters any way you want and it gives you the PDF reports. It gives you a link that you can share with your logo, your information on it.

David:   Nice.

Joe:   With the maps, with the comps, the sold comps and the rental comps, it's really amazing. It's just 10 or 12 bucks a month too.

David:   And I bet you have a referral link for us.

Joe:   I do, but I don't even remember though. But it's a really cool. And even if I did get commissions, it's like a couple bucks. But just Google it. Deal Check. Okay, I think deal check that I. Oh, nice. I had the guy on my podcast before I when I've taught this subject before, of finding the buyers first and then finding a property for them as an agent. I've recommended this to people, many, many times. Go check out deal? Check. Because it just makes it all look so much more professional and you get some really good cash flow performance. Also financial ratios. You can want a lot of these investors, these buyers, they're very analytical and they like the numbers. And when you can give them numbers and. Stuff like that. They geek out about it and they get excited and they can see, you know, the depreciation over time, the appreciation over time, the loan pay down over time, the equity build up. It figures in tax deductions and depreciation.

David:   Our spreadsheet has that. It just it probably looks a lot better on deal checks. You got graphs and visuals. Yeah I'll have to check that out. That'd be very valuable for us for sure.

Joe:   All right. Well good. I'm glad I contributed something to this podcast. Hey, David, thanks so much for your time again. People can get reach you at Instagram or Facebook.

David:   Yeah. Right at Agent David O on any of the platforms. Reach out, send me a message. Would love to do some deals with you.

Joe:   At agent David O, the letter O.

David:   The letter O.

Joe:   Cool. And they can reach out to you to get more information about EXP and working with you on the realtor side of things.

David:   Absolutely. Yeah. Cool. Awesome. Thanks, Joe.

Joe:   We'll see you guys later. Thank you, David. Bye bye everybody.

David:   Later.

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