Braden is a real estate wholesaler based in Florida.
Way back in the early days of REtipster, Braden was the first person I ever interviewed on the blog.
Back in those days, I had a lot of questions about how real estate wholesaling worked. Like a lot of people, I was fascinated by the idea of making money from real estate deals as the “middleman” without using much or any of my own cash.
I discovered Braden in the BiggerPockets forums, as he was giving really solid feedback about wholesaling that actually made sense. Of all the voices I had seen talking about this wholesaling strategy, Braden was the first person who explained it in a way where everything made sense.
After trying to learn from a lot of conflicting voices on the internet, Braden’s input FINALLY helped me see things clearly. It didn’t take long for me to realize this guy was worth listening to because he was down-to-earth and honest about how the business really worked.
If you’re interested in real estate wholesaling on ANY level (whether you’re working with houses, land, multi-family properties, or otherwise), I’m positive you’ll get some value out of our conversation today.
Links and Resources
- ASAP Letters
- What is Single Source Funding?
- How a Double Closing Works
- How an Assignment of Contract Works
- What is a Real Estate Broker?
- 10 Real Estate Investing Experts Answer: What’s the One Thing I Wish I Knew Before Investing?
- Wholesaling Made Simple! A Comprehensive Guide to Assigning Contracts
- How Much Should You Offer For That Property?
- REtipster Forum: I had a lady call the cops on me the other day…
- What is “Driving for Dollars” and How Does It Work?
- What is “Flash Cash”?
- Transactional Funding Explained
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Thanks again for joining me this week. Until next time!
Episode 85 Transcription
Seth: Hey everybody, what’s up? This is Seth and Jaren with the REtipster podcast and today we’re talking with my friend Braden. Braden is a real estate wholesaler based in Florida. He and I actually go back a few years, way back in the early days of retipster.com back before anybody knew who I was or what the website was.
Braden was literally the first person that I ever interviewed for the blog. And actually, it wasn’t a normal thing for me to interview people, but I was so interested in what he had to say that I just had to get him on a call.
The reason I wanted to interview him was because I had a lot of questions about how real estate wholesaling worked. And like a lot of people, I thought it was fascinating. This idea of being able to make money from real estate deals as the middleman, without using much or any of my own cash.
And I remember spending a lot of hours in the Bigger Pockets forum asking questions and reading up on how this process was supposed to work. And I actually found it really frustrating because when I was trying to understand the specifics of what is the contract supposed to say and the timing and logistics of when and how the wholesaler gets paid and how to sell the contract with an assignment and how to handle a double closing and all this stuff.
I was getting so many mixed messages and conflicting advice from the people in the Bigger Pockets forum. I was just getting all mixed up and turned around and then that’s when I found Braden. And Braden was giving really solid feedback on the questions I had. The stuff actually made sense with what he was saying.
And of all the voices I had been hearing out there talking about wholesaling, Braden was the first person who really explained it in a way where everything checked out. And so, I started sending him emails, a lot more questions, and he replied every time with these super-rich explanations that finally helped me see things clearly. And it didn’t take long for me to realize, this guy was worth listening to. And he was down-to-earth and honest about how the business really worked.
Really, ever since I started the REtipster podcast I’ve always had in the back of my mind, I got to get Braden on here. We got to talk to him because I know he gave me a lot of valuable feedback back in the early years.
And if anybody out there is listening to this, if they’re interested in wholesaling on any level, whether it’s for houses or land or multifamily properties, and whether you’re looking to do assignments or double closings, or there’s some other closing maneuver, I’m positive you’re going to get some value from our conversation today.
So, with that introduction out of the way, Braden, what’s up? Welcome to the show.
Braden: Hey, how are you guys doing?
Jaren: We are doing great, man. I’m excited to have you on the show.
Braden: Yeah. I’m excited to be here. Thanks for that nice introduction.
Seth: You bet. I spent a lot of time on that. For anybody out there who might be listening to this, maybe they’re not familiar with wholesaling or what your definition of it is. Because I know wholesaling kind of takes a different approach depending on who you’re talking to. But what is your just 30-second definition of what is wholesaling to Braden?
Braden: Yeah, to me, it’s finding a property that 9 times out of 10 is going to be distressed in some way or another. Getting it at the best price you can, that would make sense for the seller or the current owner, and then bring that deal to an end buyer. So, we try and connect, basically kind of like a middleman. It’s very similar to just brokering real estate, but you’re looking for specific types of properties and you’re working with specific types of buyers in the end.
Seth: Gotcha. And do you actually have to be a licensed agent to do this? I know this actually kind of varies from state to state. Different states have different opinions on this, but are you licensed and do you have to be licensed to play this game?
Braden: Good question. I am licensed. I have a broker’s license in the state of Florida. So, it is definitely a gray area. In some states it is very clear that you have to have a license. In Florida I think it is pretty clear that you do have to have a license. It’s something that I’ve never seen enforced, but I don’t want to be the guy who they make an example out of. And I don’t think anyone else probably does either.
And it’s just for me getting the license was just kind of like another profit center within my business. And so, it made sense to have it. I can make a good amount of extra money every year. Just kind of doing listings or acting as a buyer’s agent for friends. And then I don’t have to look over my shoulder worried, “Hey, is today the day the hammer might come down on me for not having a license?”
So, it’s certainly a gray area, but I always recommend people to get it. I mean, it doesn’t hurt to have it. A lot of people are worried, “Well, if I have a license, I have to be held to a higher set of standards.” And I’m kind of like, well, you should already have those high standards anyways for your business. You need to be dealing honestly and fairly with everybody. So, for me, it’s definitely a benefit to have it.
Jaren: Yeah, I really agree with that. I used to work for a large wholesale operation based in Indianapolis and we had a monthly meetup where we actually taught beginner wholesalers how to wholesale well because it was actually a way for us to get deals. People would trust us and bring us their deals that they didn’t have the capital to take down. Or if they just wanted some hand-holding, we would JV a lot of stuff.
But for whatever reason, people always seem to give pushback on getting their license. And I get it from an expense standpoint. Like if you’re not planning on doing any listings. It’s a couple of thousand dollars a year roughly, give or take, for maintaining your realtor association membership and all of the licensing and stuff.
But I think it just gives you peace of mind and it’s not costing you anything outside of the actual cost to get your license and to maintain access to the MLS. But to have more information and more resources available, it just makes you a better professional, I feel like. So, I couldn’t agree more with your assessment on that.
Braden: Yeah, definitely. Even having the analysts access, that alone is worth the $2,000 or whatever it is a year because there’s private stuff on MLS, private remarks and stuff like that the realtors can make that you’re not going to see on Zillow or PropStream or any of these other websites that people use. So that little bit of information that I can see on certain listings that I know are going to help me when I’m doing comps or when I’m looking at properties, it’s well worth it.
Jaren: Yeah. I agree. A hundred percent. Well, tell us a little bit about your story. How long have you been a wholesaler like this and how did you get into it in the first place?
Braden: I have been doing it now for 10 years and I shouldn’t say I don’t only wholesale. I do some flips. I’ll do a couple a year. Up until recently I had a small number of rentals, but wholesaling just really fits my personality. So that’s why it makes up the majority of my business, but I’ve been doing it now for 10 years.
My wife is actually a school teacher. One of her coworkers owned, or he still owns a wholesaling operation that they’re based out of a few different locations in Florida, but he had an office in Bradenton and I had just recently sold a business and I didn’t know if I wanted to go work in an office or starting another business or what I wanted to do. And my wife’s coworker just kind of in passing mentioned that he was looking to hire somebody and she knew a little bit about the backstory because they were friendly at work and she knew a little bit about what he did.
So, she mentioned it to me and the wheels started going and I started working with them and stayed with that company for about two years. It was a really good learning experience. I can remember when I first got started, I was very skeptical because I had never heard of wholesaling. I didn’t quite understand what they were doing.
But my first month there I made $4,300. I was like, “Oh, okay, well, it’s the first month. That’s pretty good.” The next month I think I did like $4,900. And then the month after that I did like $15,000. So, I did pretty well. Most people who start in real estate, that’s a pretty quick start. And so, I was pretty well hooked after that with it.
So, it was a smaller office. It was myself and three other agents and then the manager of the office. But we did a good number of deals. That was back when most of the wholesales were REO properties, bank-owned foreclosures. We would do anywhere between like 10 to 15 deals a month. And like I said, I stayed with them a couple of years.
Towards the end of that couple years, things weren’t going the way they had been in the past. A lot of changes were happening within the company and stuff that I wasn’t really kind of ethically on the same level with. So, I decided to go out on my own at that point. So, for the past eight years, I’ve had my own company.
Jaren: Something I really want to highlight for the listeners in your story is the fact that your “mentor” was somebody who you went and worked for. And that has also been a running theme in my real estate journey, for lack of a better term. I have a lot of people through the REtipster community and kind of just through the grapevine who asked me, “How do I find a mentor? How do I find a mentor?”
And I think one of the best ways to find a real estate mentor is to just go find somebody who’s doing what you want to do, whether it’s wholesaling or flipping land or houses or whatever. And go and figure out a way to work for them or work with them and do deals together.
Because that way the mentor is motivated to teach you everything they know, because the better that you succeed, the more they’re going to succeed and the more money they’re ultimately going to make.
So, it kind of aligns interests. Whereas a lot of people they get this weird concept about mentorship. I remember having people sit down with me and Brett Snodgrass over at Simple Wholesaling back when I used to work in Indianapolis and they’d be like, “I want you to be my mentor.” They’re talking to Brett. “Will you teach me everything that you know?” Et cetera, et cetera.
And it was kind of weird because it was like, “Well, why would we take our time to teach you stuff? I mean, you’re not paying us like a coaching fee or anything like that. We’re not doing deals together and I have a business to run. It’s kind of a weird approach.
So, I like the fact that the way you got started was you happened to fall into working with somebody who was already doing the business and you were able to add value to their team. So, I just encourage all of the listeners out there. If you’re really looking to get started in real estate and you want a mentor, go and find somebody that you can bring value to in some capacity. Whether it’s literally working for them or it’s doing deals with them.
Braden: For sure.
Seth: Yeah. Now, Braden, I knew this is a conversation I’ve heard a lot from different wholesalers and different opinions on it. But wholesaling in general, just the basic concept involves a couple of big components. There’s knowing where and how to find these great deals at deeply discounted prices. And then also having cash buyers lined up, waiting to buy them. This isn’t the kind of thing you’re selling to a conventional home buyer or somebody who needs a mortgage. Somebody who’s got the cash and they’re ready to buy now.
So, it’s kind of like this chicken-and-egg scenario. Which one do you think you should work on first if you’re just breaking into this? Should you focus on finding the deals first or focus on finding the cash buyers first? What’s your opinion on that?
Braden: Yeah. So, I am a big proponent of finding deals first. I think too many people get hung up on looking for buyers and then only looking for properties that fit their buyer’s criteria. So, let’s pretend I’m a buyer. I say, yeah, I only want a three-bedroom, two-bathroom house in this neighborhood. And then I go out and try to find that specific house.
And real wholesale deals like true wholesale deals are hard to find. And so, you really need to look at everything. And if you’re only looking for one specific type of property, you’re missing out on other deals. If it’s a true wholesale deal, if it’s a good wholesale deal, you will find a buyer. It’s not hard to find buyers. I have people that call me weekly. “Please add me to your buyer’s list. Please put me on there.”
They come to you. Once you can add value to them, once they see that you have good deals, they’ll find you. You start building a reputation for, “Hey, this guy knows what he’s doing and he’s got good deals,” and they’ll find you.
But it’s simple. If you have a good deal, you can throw it up on Craigslist and it’ll sell. People are always on there, scanning. You can JV with another wholesaler if you don’t have any buyers and it doesn’t mean you necessarily have to split it with them. You can just say, “Hey, I’ve got this property. I’ve already tacked on my fee. If you can bring me a buyer, you can mark it up and we’ll split whatever you mark it up or you can mark it up and you can keep it.” Whatever the case might be. So, I definitely think if you start looking for what a buyer is telling you to go out and find, you’re going to miss out on a lot of deals.
Seth: Yeah. Along those lines of finding deals, I know at the time of this recording, it’s kind of mid to late 2020, and it’s a pretty fiercely competitive market in most of the U.S. Good deals are not as easy to find as they were 5 or 10 years ago. And I’m just wondering, in today’s environment, how are you finding them? What’s the most advantageous way to go about looking for motivated sellers?
Braden: Yeah, that’s a great question. We have always been big on letters. In fact, I started a letter company. We just have like a small letter shop because we were sending so many letters. And again, I’m all about having different profit centers within your business.
So, we have a direct mail company, but our most consistent and number one source to find deals is still letters. That has always worked out well for us. But now we’re just turning over a lot more rocks to find those deals because we really only mess with really good wholesale deals or we know what we’re going to make our spread. We know our buyers are going to make their money when they go to resell it. So, it is about turning over a lot of rocks. And then of course if it’s competitive, you’ve got to give yourself that competitive advantage.
So, you have to be on top of your game, answering the phone every time you get a letter call coming in, no matter what time of day it is, you got to answer. You need to be professional, courteous, listen, understand the needs and the issues that the potential sellers are going to have. And then coming up with a way to solve it.
I talked to people all the time. They’ll say I’ve got a stack of letters, six inches high here, and I’m just going to go through and call them. And the next time I talked to them, they say, well I called 20, half of them, their phone was disconnected. The other five never call me back. A couple of them didn’t show up for the appointment. So, it’s just about being professional. If you can be the most professional you can be, you give yourself that advantage over your competition.
But you’re right. It’s extremely competitive right now to find deals because everybody wants to be a real estate investor, right? Every Uber driver I talked to asked me what I do. Well, I’m in real estate. “Oh, I’m going to be a real estate investor too.” And all the time you get it. It’s kind of died down a little bit, probably because of COVID and everything that’s going on. But I swear back probably three or four years ago, everybody I talked to was like, “Yep, I’m going to be a real estate investor. I’m going to be a real estate investor.” And that’s presented its whole set of challenges, but also opportunities. It’s competitive but yeah, you just got to stand out.
Seth: You’re saying that there’s other wholesalers who are sending out mail and their line is disconnected. Like they’re not even answering their phone?
Braden: Yeah, it’s crazy.
Seth: So, they’re literally just flushing money down the toilet.
Braden: Well, they probably sent the letters out, maybe did one batch of letters, sent out 500 letters out. They were going to make all this money because some guru taught them that that’s how it worked. And then it didn’t work. And they’d probably just got a burner line or a Google voice line or something to begin with. And they just eventually disconnected it because they didn’t make the millions of dollars they thought they were going to make.
Seth: Wow, that’s crazy.
Braden: It’s a business. You’ve got to treat it like a business. You gotta start from the beginning, set it up, structure it the way you should so you can have success. And I see it all the time, especially with the letter businesses, people will call and say, “I just mailed 250 letters last week. And I figured my phone will be ringing off the hook.” And that’s just not how it works. But give it time, stay consistent, and you’ll have success.
Jaren: Hey, Braden, I wanted to go back and address something that you said a couple of times. You said that you’re all about having multiple profit centers in your business. And I want him to explore that a little bit because playing devil’s advocate, some people might say, “Well, no, you should really have one focus and double down on that one core focus and not have multiple streams of income. And not being an agent ,and have a letter printing business, and being a wholesaler.” Or other investors I know who will flip houses, be an agent and wholesale depending on the deal or hold it depending on the deal.
And I’m just curious since you seem to be on the side of having multiple streams of income and it’s worked out for you, what do you say to those people that are like, “No, no, no, you, you can only do one thing and do it well?”
Braden: I think if you started all these things at one time, that would be the issue. We didn’t start the printing business until many years of wholesaling. And wholesaling for me now is pretty simple. It’s easy. We are on our routine and we keep it going.
Once you get really good at something and the systems are in place and the processes are in place, I can then take away some of my attention from one area of the business because I really don’t need to be there anymore. You know what I mean? Like with the printing business, I kind of just handle overseeing some of the customer service stuff, but I’m not the one who’s running the machines. We’ve hired somebody to do that. If they need help, if something breaks, I can help them, but it doesn’t take up too much of my time.
So, I’m thinking like having my broker’s license, if I have agents that work under me, I’m just taking a cut of what they’re working. It’s not more than an hour or two a week of my time, but I would have never gotten my broker’s license and tried to hire agents, right as I was starting a wholesale business or vice versa the printing business or the other stuff that we do.
I think once you become good at something and you’re comfortable, you can kind of step back a little bit and try and start something new, but also keeping your eye on things and making sure that you stepping back isn’t going to really hurt the business.
Seth: Yeah, that’s actually an interesting thing. I was part of a video roundup. I’ve never done this before, but I was one of, I think like 8 or 10 other people that contributed to one video, my friend Jay Helms who runs The W2 Capitalist YouTube channel. But basically, the point of the video was what’s like a piece of advice you’d give to a real estate investor.
And it’s a common thing I’ve seen a lot in the world where if you eventually decide to specialize and not just one thing, but two things that actually give you like a huge competitive advantage. I know like Elon Musk and Tesla is one really commonly cited example of this because he sort of became a master and obsessed about not only energy storage, but also cars. And when you put those two things together, you get Tesla and there’s nobody else really who competes with Tesla on that level.
And if you were to just spend all this time on cars, well guess what? There are tons of competitors in that world and same thing in the battery market, but there’s not many people doing both of those unique things that are mashed up together.
And I look at you Braden and it’s kind of a similar thing where it’s like, I don’t know how many wholesale is out they have their own letter printing shop where they can probably have a competitive advantage in that way, whether it’s better costs or lower costs or some other tricks of the trade that maybe not everybody knows, but you do because you’re into that kind of thing.
So, I like what you said though, about how not doing it all at the same time, that’s kind of key. You sort of have to get one plate spinning and then you can kind of play around with the second one, but you don’t just make it all happen overnight.
Braden: Right, exactly. And that they complement each other. It’s not like I have a wholesaling business and an ice cream shop. Everything we’re doing is just within the business to make the overall business make more money. So, yeah, they just complement each other.
Seth: It’s like, will you take a lower offer if I gave you this ice cream cone?
Jaren: Seth, to your point, how do you know what are the two things to focus on? Because it worked out for Elon Musk, but to Braden’s point there, they don’t necessarily seem to be that related when we talk about battery storage or energy storage stuff and high-end sports cars are luxury cars. So how do you know which two interests to double down on and master essentially? It’s a million-dollar question, I know.
Seth: Actually, I don’t think it’s that hard to answer. One part of it is like, what do you have a natural inclination to do? Like, what do you enjoy? What do you think you would excel at without having to try too hard because you just have a natural interest in it? But also, like what fits this one thing like a glove? Like what would really complement it? Ice cream shop versus wholesaling totally have nothing to do with each other, but just think like in the normal course of your real estate business, Jaren, like what are things you use every day? You need a data service, you need direct mail, maybe a phone system, maybe due diligence tools, this and that. There are all kinds of stuff that you need anyway, and if there’s anything there that you have, like the competence to make it easier for other people and scale and replicate, any of those things could be a fair game.
Somebody who, for example, is a real estate investor and they also have a YouTube channel or a podcast or something like that. I mean, holy cow, the opportunities that open up are so much bigger. There are people like throwing money at you. They are like begging to work with you and you can kind of take your pick if you even want to do that. And that’s just like one example.
As long as there’s synergy and it makes sense, which I don’t think it’s that hard to figure out what those things would be. But I think in the case of Elon Musk, I’m sure he probably thought about it for a little bit before he decided to make it all happen. It wasn’t like he just flipped a coin and decided to do another thing. It really made sense.
Jaren: I think it’s also important to be pretty eclectic at first. I mean, I guess that’s the whole premise of a liberal arts education instead of specializing and just doubling down on one focus. Being exposed at the beginning to multiple different disciplines and fields of study helps you really figure out what you gravitate toward and what you excel at. And then you can cross-pollinate different disciplines from there. It’s really interesting. Getting back to Braden though, and wholesaling.
Seth: 20 minutes later.
Jaren: I wanted to talk about some of your tips for direct mail because obviously as a wholesaler that’s successful, who has been doing it as long as you have and owning a letter printing company. I’m sure you have some really solid insights there as to how to distinguish your direct mail from other people’s direct mail. So, do you have any three top tips for direct mail marketing for the listening investors?
Braden: Yeah. Sure. So obviously direct mail’s pretty competitive right now. One of the things that helps us stand out, or I guess two of the things, is we use a unique envelope. That’s like custom. We had to go to like an envelope plant to have them like custom-made, but they really stand out in your mailbox. So, it’s not just like a white number 10. It’s like, we’ve got a blue one and a green one and a yellow one. So, it pops when people see it. We do use the handwriting font. We like that. It’s always worked well, but we have a proprietary font that doesn’t look like a font. If you have two “L”s within a word, one “L” will look different. So, it really does look handwritten. And then the message inside the letters is crucial, right? It has to resonate with the recipient if they have any inclination to sell at the time. Like it sends that message of, “Hey, if you’re thinking about it, you got to call me.”
A really well-written professional letter, we’ve found over time, really outperforms either a really poorly written letter or even yellow letters. We offer yellow letters, but I always kind of push people to go for more of that professional one, because the leads are going to be higher quality. You’re going to have less calls, but they’re going to be more quality leads. If you can get that message through, “Hey, we can close quickly. We’re professional. We have a great reputation. We’re local.” Whatever the messages you want to get across.
But those three things, really. The unique envelope, the ability to get it opened, right? Once someone has taken the time, I don’t know if it’s just a psychological thing, but once they’ve taken the time to open the envelope to unfold it, they’re going to read the letter. That’s why I’m so big on letters. We are going to start doing postcards soon because so many people want to do them. But I always just push letters just because postcards are easy to toss. Letters, it’s just something in their mind that once they’ve opened it, they’re going to read the letter. They’re going to see what it’s all about. And we have such a really well-written letter that if they were even considering selling, we’re going to get a call.
Jaren: Do you provide ad copy for customers that use your letter printing services?
Braden: Yeah, it’s on our website. And then we’ll customize it if they want to put their logo on it or they can switch it up if they want. Different people have different letters, so they prefer their letter to ours, which is totally fine if it works great. But ours is just kind of tried and true. The one we’ve been sending for years. We have a couple different variations that we’ll send out, like with COVID we sent a COVID letter out, which had some success just kind of letting people know, “Hey, we’re still buying. We’re still going to pay what stuff is comping out at right now. We’re not going to, all of a sudden, take a huge plunge in our offers and that we will do it in a safe way as far as wearing masks and gloves and that kind of thing.”
So, we do change it up from time to time. But yeah, we do provide whatever are our customer needs, as far as help guiding them to starting their campaign. Because a lot of the people we work with, they’re just starting out with direct mail. So, we kind of wanted them obviously to be as successful as possible because that means they’re going to keep sending mail through us.
Seth: Yeah. What is your website, by the way? The letter printing company.
Braden: Sure. It’s asapletters.com.
Seth: I’ll go check that out as soon as possible. When you were saying Braden, you were talking about yellow letters and the quality of leads is apparently lower with yellow letters. I’m just curious why would that be? What does that have to do with the quality of the leads?
Braden: Yeah, so I say professional letter, which is a professional business type of a letter. With yellow letters, it’s typically “Dear Seth, I am interested in purchasing your house at one, two, three, four main street. I can pay cash close, quick, biases, call me.” And then a phone number and a name. A lot of people think, “Well, gee, maybe they’re buying it the whole neighborhood. Maybe it’s a developer.” They don’t know.
In a professional letter I can say, “Hey, look, we’re an investment company and our goal is to make profit, but we need this to be a win-win situation for both of us.” So, they know right from the beginning, we’re not going to come in and overpay. And if they have this mentality of “Well, I’ll sell for a million bucks if you give it to me” my letter’s going to let him know I’m not going to give you a million bucks. Don’t waste your time calling me.
I think the yellow letters are a lot of curiosity calls, whereas I can send the same professional letter and answer all the questions I’d have to field by taking a call. And I’m just saving myself some time instead of answering a hundred calls and maybe only answering 50, but those 50 are actually interested in selling instead of the other 50 people that would have called that don’t have any interest in selling, but just were curious about the yellow letter. And that’s been tested. We’ve obviously done yellow letters ourselves versus professional letters. And so, I know for a fact you get more calls with yellow, but the call quality was a lot less.
Jaren: How many letters are you seeing in your business right now for Florida that you have to send out on, let’s say, maybe not even on a monthly basis? But to get one deal, like on average, how many letters do you think an investor needs to send out?
Braden: It’s kind of tough to answer just because we have years and years and years of letters that are out there. And they’ve been sitting in people’s drawers because our letter says, “Hey, if you’re not interested in selling at this time, please save my letter and call me when you are ready.” There are times where that happens, where, “Hey, I got your letter a year ago or five years ago or whatever the case may be.”
But I would say probably on average, like 4,000 to 5,000 in my market is probably about what we’re seeing deal ratio on letters. I went back and kind of looked over our deals this year. I keep track of obviously where they all came from the lead source and stuff. So, if I average it out based on the number of letters we typically send and how many deals we’ve gotten, it’s probably about 4,000 to 5,000. It could be a lot less, but we really only take down good deals. We don’t do ones that are only going to be really, really thin or tough to sell. We very rarely will cancel a contract.
Seth: How do you qualify a good deal? Like how much profit are you making? And in terms of one that will sell or one that’s, I don’t know if it’s nice or not, but how do you define that? A good deal.
Braden: Really based on the numbers. Again, we’ve been in this market for so long that we know, “Okay, in this neighborhood, we can pay this and, in that neighborhood, we can pay that for this type of property.” So, we really know our numbers really well, and we know we can then resell it for.
So, if we’re not confident or we have really low confidence that we’d be able to sell something, we just pass on it because we don’t want to have to go back to a seller and say, “Hey, look, sorry, it didn’t work out. We’re canceling the contract and walking away from it.” And there’s been plenty of times where we just couldn’t get a buyer in time, whatever might’ve happened. And we’ll just take it down ourselves and then list it on the MLS. So that it happens.
So again, we just really try to never cancel contracts unless we miss something in the initial walkthrough or the seller tried to hide something, which has happened unfortunately more than a few times. So, they’re intentionally trying to hide something and then it’s uncovered and the value drops drastically. Then we’ll just say, “Hey, look, we didn’t see this when we initially looked at the property and ran our numbers. So unfortunately, we’re going to have to back out of the deal.”
Jaren: That’s also a sign of a good wholesaler. I know that a lot of the wholesalers in Indianapolis that were kind of worth their salt and they had a good reputation, whether it was with buyers or with sellers, if they gave their word that they would close on a deal, the good ones always did everything they could to close on it. And if they told a seller, just like Braden saying that, “Hey, we’re going to do this” even if they didn’t have a buyer in place and their primary business model was wholesaling through assignments, they would take it down themselves. So, I think that’s a sign of integrity and how you should do the business, man. So good on you.
Braden: Thanks. One of the really unfortunate things that we’ve been seeing for like, the past, probably about the past year is wholesalers, in a lot of times they don’t even live in the state, they’re from out of the area, but they lock up a property and then they overpay. Like they clearly overpaid by a lot. And so, the seller will call us back and they’ll say, “This person offered me $40,000 more than you did. Can you match it?” And we were just kind of like, blown away. How are these guys making any money?
But what they’re doing is waiting until like a couple of days before closing and then going back and saying, “Hey, look unfortunately the numbers don’t work, but we can still close, but we need it for $40,000 less.” And by then, the sellers, whether they’ve moved their tenants out or they’ve packed up or they’re counting on that money, they just cave in. And it’s just such a dirty thing to do in my opinion.
But we see it a lot. So now it’s gotten to the point where I say to the sod, it’s like, look, I don’t know who you’re talking to. You don’t have to tell me, but I know my numbers really, really well. I’ve been doing this a long time. I’ve got a great reputation in town. And a lot of times, if they’re willing to overpay by that much, they’re going to under-deliver. And just so you know this is probably what’s going to happen.
And it’s worked out by saying that because a lot of them have then come back to me and say, “Hey, look, it happened exactly the way you said it was going to happen. They wanted to force me to close. And I just said, no, the deal is off. So, I could go back with you because it seemed like you were honest with me from the get-go.” Because I wish them luck. I mean, if they can get $40,000 more, that’s awesome.
Jaren: Yeah. Go for it.
Braden: Good for you. Go for it. Unfortunately, that’s just an unpleasant side of the business that we’re kind of seeing recently.
Jaren: Yeah. I don’t know how people can live with themselves, man, but recently I’ve been dealing with some ethical issues with some people that painted a picture like they were my friend and that they had my best interests at heart, but ultimately just kind of took advantage of me and my family. And I don’t understand why there are people out there like that. Like I can’t sleep well at night if I did that. If that was like my primary acquisition strategy to like over-commit $40,000 and then the day of closing, well, I have them hooked on a fishing line, as it were, to just like force them to buy low. I just kind of do it.
Jaren: I guess people out there can.
Seth: Yeah. It’s kind of sick. I think what it boils down to is like, it’s effective. Like it works. People fall for it. And I wish it didn’t work, but that’s just the truth and it’s a dirty thing to do, but some people don’t have a moral compass. It’s just, “I want results. I don’t care what I have to do wrong to get there. It’s just kind of what I’m going to do.”
Seth: It’s hard to play that game when you do have a moral compass and you are trying to do it right. It’s just, it’s not fair.
Braden: And that is I think rightfully so, where like on Bigger Pockets, a lot of wholesalers get knocked a lot, but it’s like that in any aspects of real estate, right? Like there’s slum lords, there’s flippers that do shoddy work that just put lipstick on a pig and cover up major issues and hope that they don’t find it during inspection. Like there’s bad people in all aspects of any profession, like any industry you’re going to have bad people in it. So, it’s just kind of, unfortunately, par for the course.
Seth: Have you ever had it where somebody had a better offer on the table in terms of like somebody who would offer them more, but they went with you anyway? If so, do you know why? What motivated them to work with you instead of going with your competitor?
Braden: Yeah. If it’s over a few thousand bucks, definitely that’s happened. They might be a few thousand dollars more than us, but we connected well with a seller, whether that’s just a personality thing, maybe that’s just taking the extra time to really listen and hear what the problem is because you’re not buying at a wholesale price if there’s not a problem. There’s always going to be some kind of issue, whether it’s a structural or a repair problem, whether it’s a title issue, whatever. There’s always going to be an issue.
So, you really have to listen and understand the seller’s problems and then be compassionate and try and solve it for them. So, people appreciate that. People like it. They appreciate the fact that you’re going to take the time to really listen to them.
So, if you can connect with a seller and make them feel more comfortable, they’re probably going to choose you, even if it’s over a few thousand bucks, because they have more confidence in you. We really push the being local thing. I don’t know how well it works, but I know we got a deal earlier this year and the lady said, “Yeah, I went with you guys because you’re local, you know the area, you are part of the community.” So that was good.
If it’s more than a few thousand dollars, it’s pretty rare. I can’t remember off the top of my head at a time that it has happened, but certainly it’s happened numerous times over $5,000, $6,000, $7,000. And most companies that know what they’re doing, we are always all within a few thousand dollars to each other with our offers.
Seth: It’s interesting how the offer price is important. Like, it doesn’t matter, but it’s not everything. It’s not like, the deal can’t happen or there’s not a way to mitigate the situation or somehow build trust that can win a person over.
Braden: For sure.
Seth: How much money do you typically make from one of these deals where you’re assigning a contract? Like what’s a normal payday considered for that?
Braden: Probably average right around $15,000 is probably our average.
Seth: It’s pretty good.
Seth: How many hours of actual work would you say go into that to make all that happen? Finding the deal, talking with the person, putting all the pieces together.
Braden: That’s a great question. I mean, if you took out the marketing side of it, we can get a deal done over the phone in the first conversation. A normal scenario is a call comes in, we talk to the person and we always give like a ballpark of where we could be before we even go look at the house. So, we’re on the phone, we’re running our comps, asking questions about what repairs it needs, what kind of condition it’s in, has it been updated? Does it need any work? That type of thing.
And then we’ll give a ballpark. And we do a pretty big range on our ballpark to give us room and kind of get our foot in the door. So, we’ll do like a super low range and just say, “Look, if the property is in really, really poor condition, like almost we’d have to tear it down, we’d be at this number. If it’s in really good condition where we really don’t have to do anything, we do this number.
And if that fits within what the seller finds acceptable, we’ll then set up an appointment to go look at the house, walk through it and we’ll make an offer on the spot. We’ll have a contract with us. And if they want to go ahead and sign, we’ll sign it right there. If they want to have an attorney look it over or someone look it over, we’ll just say, “Okay, well here’s a copy. Just let us know once someone’s had a chance to review it for you.”
Seth: Okay, cool. Just because it’s kind of interesting, what’s the most you’ve ever made from one of these wholesale deals? What’s like the high end that somebody could ever expect to make in the best-case scenario, if all the stars are aligned?
Braden: You want a single deal or a deal that turned into another deal, that would have been the highest?
Seth: Yeah, let’s hear them both.
Braden: Okay. So, the single deal we made $82,000 on one.
Seth: Wow, man. That’s insane.
Braden: Yeah. We are usually good for, not that much, but usually one of those a year, one or two of those per year is pretty typical.
Seth: Was this an assignment or a double closing?
Braden: That was an assignment.
Seth: Seriously? $82,000 with an assignment? That’s crazy. Holy cow.
Braden: It’s a crazy story too. We found the property on like a driving for dollars and approached the owner of it. It was abandoned. It had been abandoned for a long time. And they said, no, I owe the bank money on it. And we said, “Well, if we could work something out with the bank, would you just take a flat fee for it?” And he was like, “Yeah, sure. I don’t want it. I don’t want the house.” So, we said, “Okay, we’ll give you whatever.” I can’t remember what, $20,000 or something. And we were able to negotiate with the bank and get the mortgage almost eliminated. It took a lot of work. It was difficult, but it wasn’t an easy payday; it took several months, but it was a nice one.
Seth: Yeah, that’s cool.
Braden: And then the other one, which was really cool, was off a letter call. A guy called and said there was a fire. It was down to the studs. And he said, I’ve already got my money from the insurance company. I’m not doing anything with the property. I don’t want it anymore. Like, it’s a hassle. I dealt with contractors. He’s dealt with like those restoration companies that come in and rip everything out. Like he was just over it. He’d lived in another state. He said, “Just give me what the land is worth. That’s all I want.” And we go, “Okay, well what do you think the land is worth?” He goes, “The assessed value is I think it was like $30,000. Give me $30,000 grand for it, I’m done with it.” And I’m like, “Oh, okay, sure.”
So, when we went over there, the house next door was also abandoned and it had like a tree that had fallen through the roof. So, the roof was just wide open. We tracked down the owner of that house and not the same situation as far as insurance, but she’s like, “I don’t want anything to do with it. It was mine and my ex-husband’s, I have tons of terrible memories there.”
And as we did more research on the property, we found out that the county had pulled a demolition permit to basically bulldoze the house because there was a tree in and there was a hole in the roof. I think it was scheduled for like a week after the first time we made contact with her. So, it was coming up quick and we’re like we don’t know if we can get it stopped. We will try. She goes, “I don’t care. You can give me what the land is worth.” And we’re like, okay, what do you want? And she goes, just whatever it’s assessed for $30,000. They’re literally right next door to each other. So, we were able to stop the demolition and we sold both of them to different buyers for $90,000. So, we made $60,000 on each, back-to-back, same-week closing, found the deals the same day. Like it was pretty cool. So those are rare, several years ago, but that was a cool one.
Seth: That’s amazing. That’s really cool, man. It makes for a great story, right?
Seth: So, I know we’ve sort of talked a little bit about how assigning contracts is sort of like your main bread and butter. Why do you gravitate toward that? And do you ever do double closings or traditional closing?
Braden: So, I don’t really do double closings anymore. We used to, especially when you were buying from the banks, because you had to. They wouldn’t let you assign contracts. So, you’d have to do a double close. And when you do a double close there’s two sets of closing costs. So, if you double close something, you’re basically losing profit on the deal.
So, if an average closing costs you a thousand bucks, if I do a double close, I just lost a thousand dollars. And if you’re averaging, let’s say $10,000, you just lost 10% of your profit for the entire year by doing a double close. And there’s really no reason to do it. It doesn’t make any sense, in my mind, I haven’t heard a really good reason.
So, assignments are just easier. They’re cleaner. We still walk through the whole closing process with the seller and with the buyer. And we’re kind of like the hand holders, if you will, of getting the deal done. We don’t just assign up and walk away and take our money. But assignments may just seem a lot cleaner.
Seth: Yeah. My understanding anyway is that. By the way, if you guys check out the show notes for this episode, retipster.com/85. We’ve got a number of different videos and resources that very clearly explain how assignments work, how double closings work and traditional closings in case you’re at all confused about what we’re talking about when we say double closing.
I think my understanding with double closings is that the only major reason why you would do that is if you don’t want the end buyer to see how much money you’re making in between. Am I accurate on that or am I missing something or am I misguided there?
Braden: The part about you don’t want them to know how much you’re making. I don’t want to deal with a buyer like that. And I won’t, and I don’t have to. So, I go to a buyer and say, “Hey, this is the price. If it makes sense for you, great. If it doesn’t make sense for you, no big deal. I’ll move it on to somebody else.”
And if they then find out how much I’m making I just go, “Well, wait a second. You were very happy before you found out I was making $25,000. What’s changed? Did the numbers not work for you anymore?” And then from that point on, I just won’t work with them if they try and back out, or if they try and renegotiate, we have a core group of like a handful of buyers that we work with. They know what our expectations are. We know what theirs are and we just work well together. So, we don’t have like a massive buyers list where we send out a property and get a ton of phone calls on it. We just work with the same guys.
Seth: So, this $82,000 summit deal. So, they didn’t balk at all at that. They’re just like, “Yeah, that’s cool. Whatever.”
Seth: Okay. Yeah. But I’m not wrong, I guess, is what I’m saying is that if somebody did have that concern, like if they were worried that somebody was going to steal it behind their back, this would be an effective way of hiding that from them. But to your point, you just don’t want to deal with that. So, you don’t have to.
Braden: Right. You can word it however you want when you’re talking to somebody. But if they don’t want you to make $20,000, let’s see, they think you should only make $2,000 is ruining a good relationship. If you find a good wholesaler that knows what they’re doing, it can provide value to you and bring you deals.
I shouldn’t say this, but it wouldn’t be wise to ruin a relationship, right? Like it wouldn’t make sense to sour somebody over really at the end of the day, if they can consistently bring you deals, that’s a drop in the bucket, the fee you’re going to pay them.
Last year, we had a guy who we sold a deal to and then afterwards, he knew the seller had multiple properties and was like, “Hey, I want to buy this. You don’t go through them, go through me.” And we’re like, “Okay, well, you just lost out on a lot of opportunities because we’re never going to deal with you again. You’re on a blacklist and you’re done.”
Seth: Yeah, I think in your situation in Florida, the fact that you are a licensed agent, but when you are advertising these properties to your buyers list or wherever you advertise them, since you don’t actually own the property, you just have some kind of assignable purchase agreements between them, I presume. Do you have to disclaim that somewhere to the people that you’re selling this? You’re like, “Hey, I don’t own this property. I have it under contract and I’m assigning it.” Like, do you have to specify that? Or is that not necessary?
Braden: Sure. We just use the state contract, like the Florida FAR/BAR as-is contract. And that’s what we signed between the sellers and ourselves. And that contract is assignable. So, then we have an assignment agreement that we sign with our end buyer. So, we show them the contract and we show them the assignment agreement. We have it under contract for $90,000 and we’re selling it to them for $100,000. We’ve got a $10,000 assignment fee on that assignment agreement. So, they know. They’ve seen the original contract. They’ve seen the assignment agreement. Everyone’s aware of what’s going on.
Seth: Going back to earlier in this, when I was introducing you to talking about just the conflicting information and advice, I had heard from different wholesalers about how to properly assign contracts, this was one thing that really confused me. Because I had heard some people saying that, “Yeah, when you sign a contract, you just fill out the assignment agreement and get your money and they’re on their own.”
They got to close it. They got to now jump in and somehow talk to the seller, basically no hand-holding at all, which I was just like, really? Like, that sounds crazy. And like a horrible thing to do to your seller, to not explain this stuff and stick with them through the closing process. Obviously, the way that you do it is you don’t really get paid until the thing closes. So, you stick with the deal until it goes through title, right?
Braden: Oh, yeah. A hundred percent. I could never imagine being a buyer and paying someone a fee for something that may or may not close. I mean there are times where deals blow up. There are title issues that we just cannot work through or a seller, I don’t know if this has ever happened to me, but I know it’s happened to people I know. Just like all of a sudden start ghosting them. They want to back out of the deal, whatever the case may be.
So, we stay, I stay really in good communication with the sellers and the buyers through the whole process. I let them know once the title searches are back, once the municipal lien searches are back, when we’re planning on closing. So, communication is super important. So, I make sure that’s a priority within our business.
Seth: And when you do get a deal on a contract and you’re now in selling mode, trying to find somebody from your buyers list. I mean, it sounds like today you just have a handful of people and that’s all you need. Like you did maybe send that email to him and the thing is sold. Was there ever a point or is there ever a time now where you’re listed on Craigslist or something or somewhere else just for the general public to see, or do you never have to do that anymore?
Braden: No. We’ve talked about really trying to build up the buyers list and then offering properties as a basically, “Hey, we’re going to take offers, highest and best, by this date and this time.” But I think one of the reasons why we have, I guess, some leverage with our buyers is we treat them really good and people don’t like that. They don’t want to have to go bid on a property and wonder what this guy’s bidding and miss out on it. So, they treat us good. We treat them good. I mean, hardly ever. I think we sent out an email for a property maybe once this year.
One of my handful of guys called me and he’s like, “Hey man, what the heck? Why didn’t you call me on this? I want it.” And I said, “I sent you a text on it last week and you told me you didn’t want it.” It was just a miscommunication, but he ended up taking it. But yeah, I mean, it’s really rare that we market properties out to either our buyers list or like a Craigslist or anything.
But that’s something, if you’re new, if you’re just getting started, you probably are going to have to advertise that you are going to have to go out and find those buyers. But once you’ve got a good buyer, treat them right, make sure they’re treating you right and kind of work with them closely. And most smart, real estate investors, if something can make them money, they’re going to buy it. It doesn’t necessarily have to be a duplex or a house or a piece of land. If they know they can buy it right and sell it and make money, they’re going to buy it.
Seth: Yeah. The people that you’re selling to, who are these people? Are they house flippers or are they going to then resell it again? Who are they exactly? And also, more importantly, how do you find them? And how could a person find these people in any market that they’re in? Who should they be targeting and trying to reach out to?
Braden: Yeah. So, they’re mostly right now, flippers. We do get some rentals, but the prices are just crazy high right now in our area for rentals. We don’t see a lot of multifamily or if it is rental, it’s kind of a rougher area. And even those prices are high. So, we are dealing with a lot of flippers right now.
As far as “how did we find them?” A lot of just networking. A lot of just kind of you meet one person, they go, “Oh I’ve got a friend, he also buys. Can you add him to your buyer’s list?” And then just kind of developing those relationships over time. So, if I was starting, I’d go to like a REIA meeting. You can put out on ads on Craigslist and just say, “Hey, I have wholesale deals. Shoot me your email address, your phone number. I’ll add you on my list.”
I mean, there’s a lot of ways you can find buyers. I always tell people that are just getting started. It’s like, don’t worry about the buyers. The buyers are easy. You worry about good deals, learning your numbers, finding those good deals, and you’ll be fine with buyers.
Seth: Do you think that has changed over time? Like I know 10 years ago, it seems like finding the buyers might’ve been harder and the deals was probably easy.
Braden: Yeah. It’s definitely cyclical. So right now, it’s obviously a sellers’ market. The market’s super, super hot. So, we don’t have a hard time at all with buyers, maintaining buyers. They don’t jerk us around or anything. Back, like you said, 10 years ago, 8, 9, 10 years ago, it was tough. I mean, you really had to hustle to sell a deal and it was definitely not easy. So, it’ll change I’m sure. Next time we go through a crash or whatever it’s going to change, but you can always get good deals.
When I first started, one of the common things I would hear from like, family and friends are like, “Oh, well, this should be good for a couple of years.” But once the economy rebounds and housing prices rebound, what are you going to do then? Because you’re not going to be able to find good deals anymore.” And I used to be worried about it. And then as everything improved and prices were going up and up and up, I was like, “Well, I can still find deals. So, this is no problem. I can always do this. I just have to find deals. And it doesn’t matter if the house is worth $300,000 today and $30,000 tomorrow, if I can buy it at the right price or get it under contract at the right price, I can sell it.
Seth: Yes. I mean, it seems like no matter where things go, there’s always the opportunity you just have to, because there’s always going to be that segment of people who are in that situation where they’re motivated for whatever reason, like that doesn’t change with the economy. It’s just maybe the numbers in the margins a little bit.
Seth: So, when you look at a signing contract specifically, does anything strike you as particularly difficult about that? What are the drawbacks or the challenges with this particular type of wholesaling?
Braden: I think it’s easier than doing a double close. A double close is going to take either using your own money, using like, flash funding or I don’t know the exact word, what they call it.
Seth: Flash cash or transactional funding.
Braden: Yeah. Some transactional funding, something like that. Or you find a title company like mine that will let you do a single source funded, double closing where basically you’re using your end buyers. It’s an ABC transaction. A to B is seller to me, B to C is me to my end buyer. And we’re going to use C’s cash to give to A. But again, you’re now paying two sets of closing costs so it’s taking profit out of the deal and that’s hard to find a title company that will do those types of deals.
So, if you use your own cash, well here again, you are paying two sets of closing costs or you’re losing some money. And if you’re using the transactional funding, you’re paying a fee for that. So, I think assigning is the cleanest, easiest, and most profitable way to do it.
Seth: Yeah. I know when I think of that and I’m sure you have a solution to this, but if Jaren were here, by the way, Jaren is a power cutout. He’s no longer going to be with us for the rest of the call. But I know if Jaren were here, something he would probably mention when he was working with Simple Wholesaling, the only way they ever did closings for the most part was just buying the thing outright.
So, they owned it and then they would turn around and try to sell it within the next week or two or four. And the nice thing with that is when you own the property, you can get into it and you can inspect it and you don’t have to mess around with this assignment stuff. It’s sort of cleaner, I guess. However, it is effectively a double closing because you’re paying your closing costs twice and that kind of thing.
But I know in my mind that would be something that seems like it’d be harder with an assignment is because I may or may not be able to get into that property or get all the pictures I want or inspect it and understand what the problems are, which seems like it would also lead to the appropriate offer price. And how do you deal with that? Are there times when you can’t get into a property or inspect it very well? And if so, how do you make a good offer on that?
Braden: Yeah. I mean, it does happen. We’ve contracted stuff that we’ve never even been inside of it before. So, we just assume it’s torn apart. We’re just assuming that we’re going to go in there and have to do everything or our end buyer’s going to have to go in there and do everything. And that’s the offer we give them. And we say, “Hey, if we can get in, the offer might go up.”
But there’s some people, they don’t want to bother their tenants. They don’t want to, whatever the case may be. There’s always some kind of story. We base the offer on, “Hey, this place is going to be needed to be taken down to the studs. That’s what we’re going to offer you.” And then as far as like, getting back into the property, we say from the get-go, “Hey, we’re going to need to come back through two or three times during this process and walk through it again. We’re probably not going to do like a formal, formal inspection, but we’ll want to walk through it again. And so, you just have to be aware of that.” And most of the time people are perfectly fine with it.
And then kind of going back to what Jaren did, once you close on the property and now you own it, that’s nice, but you’re now paying for insurance. If you are using any kind of private money or hard money, or whatever the case may be, now you’ve got those costs. If something does come up that you didn’t know about, as far as like a structural issue or a major issue, you own the property. Now you know now you have to disclose it. And it’s not that necessarily, we want to try and hide anything, but I don’t want to have to run into the surprises that are going to come up if something is missed because it happens.
Seth: Yeah. Those are great points, man. I never thought about any of that. That makes a really compelling case for assigning over anything else. Well, I’m sold. In terms of offer prices, though, you sort of shed some light on how you come up with the best offer price, but is there like a formula you use? Like based on the MLS data you have access to you kind of figure out, “Okay, what’s the approximate market value?” and then take it down by a certain percentage. And then also assume you have to replace everything. Walk us through how you would formulate an offer.
Braden: The kind of general rule of thumb is 70% of the ARV, the after-repair value, that people go off of. I don’t do that. I do sometimes, but not every time. We really look at the data of like in a certain neighborhood how long are these houses staying on the market for. If they’re selling quick, like really quick, we know we can pay a little bit more because it’s a desirable neighborhood and our end buyer, or if we close on it ourselves are going to be able to sell it very quickly.
And vice versa, if something is sitting in, it’s taking 60-90 days to get contracts on and all the houses are like that, that means this neighborhood isn’t as hot. So, we need to pay a little bit less because we always want to be the lower end of the pricing. So, the stuff sells quickly, right?
So, that’s something we take into consideration. Obviously, we’re going to look and see, “Okay, are these buyers typically FHA buyers? Are they cash buyers? Who’s buying in this area?” And so, those are all things we use when we’re determining what we can pay for a property.
And then we’re really going off of what our eyes have seen. Okay, it needs a roof. We know that’s going to cost $8,000 to $12,000 depending on the size. It needs a kitchen that’s going to cost this, it needs a bathroom, whatever. Oh, we can save money here. We’re just kind of adding the numbers up in our head and saying, “Okay, this is how much the repairs are going to cost. This is how much we think we can sell it for in the end. Here’s what we could sell to a flipper.” And then that’s how we make our offer.
And then obviously the most ideal situation is getting a number out of the seller first. Hey, what are you looking to get for it? What do you want to walk away from the property for? And that’s tough to do. We barely rarely get the first number out of the seller.
Seth: Yeah, I got you. That makes sense. Kind of just a practical question. If you remember back to the days when you were starting out on your own, it sounds like you sort of have a different situation now with people helping you on your team. But if somebody is getting started trying to do this, are the hours kind of crazy? Like, are you working a lot of nights and weekends and always have to pick up the phone every time it rings? Like how intense is this?
Braden: Yeah. So, when I started and I think I told you, by the third month, I was the “top producer” in the office three months into it and there were a couple of people that had been there for years. I would be at a restaurant at dinner with my family and like, “Oh, my phone is ringing. Excuse me. I got to go to take this call.” It doesn’t say like that. I don’t want people to hear that. Like, “Oh gosh, I don’t want that life. I don’t work weekends now, 05:00 o’clock I’m home.”
And again, that’s kind of why I do wholesaling is because it really fits kind of the stage of life, I’m at right now and having little ones at home and stuff. But you need to put in some work or some hours and some time when you’re getting started and getting up and getting going, there’s no doubt about it. But once you get good enough and then you can hire somebody to then be the acquisitions guy or a girl, and then hire another person.
So, there’s ways to kind of alleviate that grind if you will. But I’m a big guy on like, when I had rentals, I didn’t want to hire a property management company because I wanted to learn, okay when I do go to hire a property management company, what are my expectations? What should they be? Because I know how to do it. So, it’s the same thing. Like, okay, here’s my expectations for an acquisition’s person because I’ve walked the walk, I’ve done it. If you want to be successful, this is what you need to do. If you don’t, if you want to be mediocre, I don’t really want you anyways. But it is a bit of a grind at first, but it certainly will pay off if you’re willing to put in the time.
Seth: Yeah. When you talk about how you were one of the top producers within the first few months, why is that? What attributes did you have or what were you willing to do that the other people weren’t? How could a person replicate your success?
Braden: I did a lot of reflection on how I was interacting with people. I always help people with like letter calls. I would take like 30 seconds after every single call and just replay it in my head and pick a point where I either kind of lost it, lost the person or like it clicked for them like, “Oh, I like this guy.” And then just trying to build off of that.
And a lot of it is you talk with a lot of different personalities, especially in Florida because we have so many transplants, but you talk with people that are from the deep South, you talk from people from New York, all over the country. So, you kind of have to adapt to personalities and learn how to make them feel more comfortable. So, I’m not going to talk to the hard, tough guy from New York the same as I’m going to talk to the sweet Southern lady from Georgia.
I spent a lot of time just kind of reflecting on what I was doing well, what I was not doing well. And then, like I said, just really working, just outworking everybody. I was the first one in the office. I was the last one to leave. I was the one who was also kind of like innovating, coming up with new ideas. “Hey, have we ever tried this before? Have you guys ever thought about this before? Oh, that’s a great idea. Let’s do that.” Stuff like that, that kind of just, I guess, put me over the edge of where I needed to be.
Seth: That’s actually really fascinating and that’s really insightful and it makes sense that that would work out to your advantage so much. Just that, when you’re talking about like, replaying conversations in your head after you have them and just thinking about stuff, I feel like so many people don’t do that. They just kind of like, life happens to them and they don’t really reflect on it. They just stumble from one thing to the next.
Man, if somebody is willing to just go slow and really analyze what just happened there and how could I do that better and how can I know my audience? That makes sense that that would work well for you.
So, I know back when I was trying to find title companies who could handle assignments and/or double closings for me, I had a lot of trouble with that. Like it was surprisingly hard. They didn’t want to touch one of these deals with a hundred-foot pole. It’s like, they told me it was illegal or it couldn’t be done or something like that. And really what it boiled down to was financing couldn’t really be involved. They had to be a cash buyer and they just hadn’t really done it before. That wasn’t the normal thing they did, but I just find it really frustrating.
And I don’t know if you’ve ever dealt with that, Braden, or if you hear from people who deal with that, but as somebody who is shopping around for an investor-friendly title company, does anything come to mind? Like what questions should you be asking them? Or what should you be looking for? Or maybe it’s just about getting referrals from other investors to find out where they’re going. Maybe it’s just as simple as that.
Braden: That’s what I would recommend. If you’re just getting started, go on Craigslist, find an ad with that. Clearly, it’s a wholesaler trying to sell it. You’re going to see it. It must be a cash buyer or there’s certain ways that’s phrased within the ad, you know, wholesale price or whatever. And just call up and say, “Hey what title company would this be closing at?” And there you go. You just found an investor-friendly title company.
Seth: It’s that simple.
Braden: It’s that simple. And there you go, you’re done. You’ve found your title company, go to them and say, “Hey, look, this is what I’m doing. I’m getting started. Do you do assignable contracts? Can you do double closings?” And I would guarantee if another wholesaler’s using that title company, the answer will be yes. And if it’s not, find another wholesaler, see who they’re using. So, it should be pretty simple to find an investor-friendly title company.
A good title company is so important. These deals are often… there’s something going on. Like I said, there’s always going to be some type of problem. So, we run into title issues a lot and having a good title company that can work through those issues is super, super important. So, we’ve definitely gone through a fair share of title companies because it’s a big part of the business.
Seth: Is it any more expensive to close an assignment deal than just a normal one? Just because an assignment’s involved or that has no effect on closing cost?
Braden: Nope. It doesn’t affect closing costs at all.
Seth: Kind of just a really broad question here. In your opinion, what is the biggest misconception that beginners have about wholesaling? What do they think they’re going to get versus reality?
Braden: Rich really, really quick. Yeah, probably that. It’s not as easy as it looks, finding real deals. I mean, anybody can go out and put a property under contract and then try to sell it. It doesn’t mean it’s a real wholesale deal. So, finding true deals is tough and it takes time and it takes effort.
And just like with anything else, if it was easy, everybody would do it. If you want to have success, I know there’s courses and stuff out there that’s like $10,000 at 30 days and it’s just not realistic. It could happen. Don’t get me wrong, but I would set your expectations quite a bit lower and realize like a long-term plan, it can be really profitable. But don’t expect to get rich quick. Don’t expect it just to happen overnight. If you’re someone who’s willing to work and willing to put in the time, you can have a lot of success, but it’s certainly not something that’s just easy.
Seth: Yeah. I’m curious for somebody like you who’s been doing this for so long and you’ve been through so many deals and you sort of know the ins and the outs of it and the highs and the lows. What do you still find to be just a really difficult part about this business? What just drives you crazy or keeps you up at night if anything? Does anything still stick out as like, “Man, I just hate this part of the business?”
Braden: I think the part I liked the least is the angry, angry phone calls from people who get letters. Other than that, there’s really not much that bugs me. That I don’t understand it with people who get so upset that they get a letter in the mail. It’s like, did you get any kind of other advertisement in the mail today? Did a car company or a credit card company or something like that? Did someone advertise to you at all? But it still doesn’t make you feel good when people call and start screaming and yelling at you.
So that to me is the kind of the worst part of the business. But other than that, I haven’t run into anything lately that I haven’t seen like multiple times. So, whether it’s like liens on properties or title issues, or having to deal with multiple family members who all own the property and you’ve got that one brother that’s just being difficult and holding up the sale. Stuff like that, it just kind of becomes so very common that I’m used to it.
Seth: That is funny, the whole, to try to understand what is going on when people are so angry, they’re so mad at you. It’s like why?
Seth: Especially, because I know like in the land business in a way there’s one train of thought that thinks the best way to do direct mail is to send blind offers where you literally just come up with a number and send it to him. That’s the first thing they receive. I can’t understand the anger that just because like they see the number and they may not like it. So, okay just be mad about it.
But when you send just a yellow letter or a postcard, you’re not even giving them an offer, you’re just saying, “Hey, call me back if you want to sell your property” and people are angry at that. It doesn’t even make sense. At the REtipster forum just today actually somebody posted that they had a lady call the cops on me the other day because of a letter I sent to them.
Braden: Yeah, I’ve had that.
Seth: Personally, I’ve had people say like, “I’m going to call my congressman and I’m going to call the local media and make a fool out of you!” And it’s like, “Holy cow, man, settle down.” And not surprisingly, I’d never heard anything from a congressman or the media. So, either they didn’t do it or the media and the congressmen didn’t care. One or the other.
Braden: Right, right.
Seth: You almost just kind of have to sit back and be entertained by it. Because it’s kind of funny, but it’s still troubling in a way too.
Braden: Yeah. It still kind of gets under my skin a little bit. I mean, it is funny, but it’s still like, ugh. So, I was going to say the other thing within the business that bugs me is when title companies wait until the very last minute to send out closing docs. You’re having your buyer, your seller blowing your phone up saying, “Where are the docs? This has to close tomorrow.” Which is happening right now as we’re talking.
Seth: They used to be my job back when I had a job, I would close commercial real estate loans. And it’s insane the pressure you get sometimes. I mean you would think the world is literally going to end. It’s crazy.
So, Braden, first of all, just thanks a lot. It’s been very informative. I’ve learned a lot of new stuff. For people who aren’t as familiar with wholesaling, I’m sure you can agree there’s a lot of really valuable things we’ve covered here.
So, at the end of our show, usually Jaren and I, today it’s just going to be me. We ask our guests three final closing questions just to get more insight into who they are and how they think and how they work. So, the first of these three questions for you, Braden, is what is your biggest fear?
Braden: It is a good question. And I know this sounds cliche or weird, but I really don’t have fears.
Seth: That must be nice.
Braden: With this whole COVID thing, I’ve learned that living in fear is just such a drain on you physically, emotionally. So, it’s just one of those things that I’m okay. I have faith that if it’s my time, it’s my time. If my business goes under, I’ll be okay. Like I’ll be provided for, something will come along.
And I think if you worry whether it’s financially or relationships or health or whatever, if you just have faith that everything’s going to work out okay, very rarely just things not work out okay. And I find, kind of like, the joy in things and the good in things.
At least for me, it just makes life a lot happier. And I think especially right now in our country, we’re seeing what fear does to people, whether it’s civil unrest or health or whatever. And it’s a scary way to live. I think there’s things that worry me, but I don’t really fear much. I’m worried for my kids if something were to happen to them, that worries me. But if it happens, it happened for a reason and I’m okay with that.
Seth: Man, that’s really fascinating because I really envy you. I would love to be able to have that mindset, but I have fears about all kinds of stuff. Most of which I know logically is totally irrational. Like it makes no sense and you’re right. It’s a horrible way to live life. Like it’s totally draining. It’s just pointless suffering really in your mind. But there’s times I don’t know what to do. Like I don’t know how to stop that. It feels like I’m lying to myself when I say “Don’t worry about it. It’s fine.” Because a bigger part of me is like, “No, no, it’s not fine.” But then at the same coin, I can’t change the situation or fix it. So, what good does it do to worry about it? I’d love to dissect your brain someday and figure it out like how was Braden doing this? Just letting go and trusting that somehow, it’s going to be okay.
Braden: Yeah. Yeah. Just surrendering and everything happens for a reason, everything good or bad. And if you can find the good in bad situations, that’s a much happier way to live in my opinion.
Seth: I think that word “surrender” is actually a really appropriate word because when you just let it go and just say like, “I’m okay, I accept whatever happens.” That’s really freeing in a lot of ways. Cool. So, second question here. What are you most proud of?
Braden: Professionally or personally?
Braden: So personally, definitely my family. That’s everything to me. My wife and I, we have four kids, so we are always busy.
Seth: Yeah, I’m sure.
Braden: They’re just awesome kids and I have an awesome wife. So that, personally, is my family. Professionally, being able to do the same business for as long as I have and doing it in a way that I feel good about. I don’t go to bed having a regret or feeling like I’ve taken advantage of somebody or taken advantage of a situation or whatever the case may be. And in hundreds of transactions, I’ve never had a seller upset at a closing table, but I’ve had dozens “Thank you” and tears, “You have no idea what this means to me. You have no idea how much this helps,” whatever the case may be. So being able to be in business and do it in a way that I feel proud about and doing it in a respectable way is something that makes me feel good.
Seth: Yeah. That’s huge. There are so many people out there who just feel trapped in a work that they hate or doing things that they know that they don’t want to do, but they just don’t know what else to do. And I don’t know, in the world we live in, work is just hard. Even things that seem like they should be simple, they never are. There’s always something that just like comes out of left field and makes it harder than you think it should be. And I know that’s a big accomplishment where you can do what you just said for that long and have a long track record of helping lots of people who were happy and you enjoyed the work. Like that’s a big victory.
Braden: Yeah, for sure.
Seth: Alrighty. The last question here. What is the most important lesson you have ever learned?
Braden: Probably failure. There is nothing wrong with failing. People say that a lot, but within business, you’re going to try things within real estate or whatever your business is. You’re going to try things a lot and a lot of them are going to fail and that’s okay. There’s nothing wrong with that at all. And it’s a good way to learn.
And we’ve tried things that we’ve lost a lot of money on that failed, but I’m like, “Oh, okay, that’s fine. Let’s figure out what will be successful.” We hired a company to do Google AdWords. And I think we lost like $25,000. After $25,000 we were like, “All right, pull the plug. This is not working. It’s just not working. We’re just bleeding money right now.” And $25,000 was gone. I think about a month, it might’ve been two, but it was like, quick. And we’re like, “Okay, we’re never going to see that money again, but let’s stop the bleeding while we still can.”
I think people, it’s like they max out their credit cards. Like it’s all or nothing. I can’t give up. I have to keep going. It’s like, “No, you can give up.” If it’s not working, pivot, do something different. The business, the overall business might work. My business model works, things within my business model don’t work, but we still have to try it. So, failing is okay.
Seth: Yeah. It’s actually funny you say that because for a lot of people we’ve interviewed their answer to question one what is your biggest fear? A lot of people have said failure is my biggest fear. So, it’s funny that you say failure is okay. And I agree with that.
The older we all get in life it seems like there’s this increasing pressure to not look like a fool. You need to look like you’ve got it figured out. You have it all put together. You’re not somebody who doesn’t know what you’re doing. Especially in the professional real estate world. I feel like there’s a lot of pressure there too. If you make a mistake, then you’re just going to have egg on your face and everybody’s thinking you’re an idiot.
It’s good to have that perspective and realize, not only is it okay to fail, but it’s arguably good. Because if you’re not, then you’re not trying new things and you’re probably missing out in some other way.
Braden: For sure.
Seth: Awesome. Well, Braden, if people want to learn more about you or check out your letter company or discover more about what Braden does or what he has to offer the world, is there a website they should go to?
Braden: Yeah, you can go to asapletters.com. I do a lot of the customer service. And if I do not get the email, if someone wants to email me, it will be forwarded to me and I will respond. I love helping people out, whether it’s answering questions about wholesaling or marketing or whatever I’m always happy to do it. It just kind of became part of my business.
And I do spend a decent amount of time working with people, especially as they’re setting up their letter campaigns, answering questions. And most of our customers have my cell phone and we text often. And so, I’m happy to help people, give them as much advice and help as I can. So that’s where you can find me.
Seth: I know even in the land business where it’s relatively easy to find deals for the most part, it’s not nearly as hard as household sounding, but even then, it’s not at all uncommon for a person to mess up their first few mailing campaigns. Either they’re saying the wrong thing or they filtered the list wrong or something is off. There’s just so many variables that can be screwed up.
And also, when you’re getting started, that’s a huge kick in the gut. When you spend even a few hundred bucks and nothing happens, it’s just like, “Oh.” That’s hard to get over that. So, I can see a lot of value in working with somebody who not only has a proven copy for their letter, but also understands how to filter the list and what kind of mail to send out. There’s a huge advantage to that.
Braden: Yeah. And I would say to people just keep pushing. It works. Just pivot. If you did screw up, whether it’s the criteria of your list or something, just fix it, move on, fix it and move on. And that’s the biggest thing right now. I always tell people when your competition zigs, you got to zag. Do something different. Stand out more.
Seth: Yeah, for sure. I think every time I do anything that bombs, it’s actually a huge lesson. And what it’s telling me is like, don’t do exactly what you just did again. It’s like, just make sure you’re changing one or several things until you find your path.
Braden: Yeah, for sure.
Seth: It’s never a total waste. Well, Braden, thanks again for talking with us. I’ve learned a lot. It’s been great to have you on. I know this has been a longer conversation than we normally have, but there’s a lot we had to unpack here.
Braden: Yeah, we could keep going for hours, trust me.
Seth: Yeah. I’m sure.
Braden: We’re just scratching the surface. I’m sorry Jaren went off. I didn’t mean to get him to run away like that. I appreciate you guys having me on it. I had fun. It was good to catch up and talk.
Seth: Absolutely. And again, if guys want to check out the show notes for this episode, I’m going to include a lot of relevant links and information to Braden’s website and other similar articles and videos and stuff that explain more about what we’re talking about here. Go to retipster.com/85 because this is episode 85 and you can find a lot of that there. Thanks again for listening. And we’ll talk to you guys in the next episode.