Real Estate Training Mentor Program- 50 Deals So Far for Student
Dave: Hi, I’m Dave Dinkel. Today, I’m here with Aisha. Aisha is one of our mentor students from a number of years ago. She completed about 50 deals.
Dave: What was your largest deal?
Aisha: On a rehab, the largest spread was about 64.
Dave: OK, $64,000.
Dave: And on your largest wholesale deal?
Aisha: About 24.
Dave: OK. You got a 44 in there somewhere. Was that another rehab?
Aisha: A rehab, yes.
Dave: OK good. Now, you actually work with your dad. And your dad helps with the rehabs?
Aisha: Yes, he does. We work together.
Dave: OK. So one of the reasons I asked Aisha to come by and say hi was about three months or so ago, I did a meeting. And I talked about kind of a new niche with our mentor students called wholesaling the wholesalers.
Dave: And the concept was – and it came about, let me tell you how it came about in the first place. Somebody said to me, “If you drop me in a city by parachute and I don’t know anyone or anything else, how can I start doing deals?”
And typically when people ask me that I would say to them, “The fastest way is just to door knock.” However, what I decided after thinking about it for a while is you know it might be a lot easier if you didn’t have to go outside at all and you could use your computer.
And basically, the premise is find the wholesalers which are easy to find. They’re paying for you to come from pay for clicks. Get signed up and of course start your own new website. Did you start a new email address? I said website, but email address.
Aisha: Well, we have an on-going email that we use.
Dave: Use for wholesaling and stuff?
Aisha: That we use for wholesaling.
Dave: Yeah, because you’re going to be inundated with properties.
Aisha: Oh yes.
Dave: And then – sort of get into it. Start looking at the properties. Now, the key here is your buyers’ list. You already had a buyers’ list.
Aisha: Yes, we do.
Dave: But you’re also reselling to other wholesalers.
Aisha: Yes, we are.
Dave: OK. That’s has worked out very well.
Aisha: Yes, it’s working out.
Dave: So in the three months, you’ve done about 10 deals, which is kind of freebies for you because you weren’t looking at doing that before.
Aisha: Yes. You encouraged me to rewholesale the last time we met. And I said, “You know, let me give it shot consistently.” And it’s working out.
Dave: Yeah. Now, if there’s a problem, I’m going to say to you, “To me, the problem is the spreads.”
Aisha: Yes. The spreads are typically smaller.
Dave: Yeah. And you said to me that let’s say $3,500 on average. Is that fair?
Aisha: Yes, that’s fair.
Dave: OK. Now, you’re used to much larger spreads.
Aisha: Yes, we are.
Dave: And the reason we’re used to larger spreads is because the work with deals very hard. That’s how we make our money. That’s not getting a property under contract. That’s the beginning of a ritual. We got through a game we play.
Dave: Yeah. So that’s why when people look at us and say, “How can you make $20,000 on a wholesale deal?” That’s our goal. Now, what you’re doing now on the wholesaling the wholesalers is you’re making what some of them will think as a great spread. It’s an average – less than average spread for us.
Aisha: Extra money.
Dave: Now, I want you to tell your story about one of the first times you called me up and you said you’re going to closing and you sold a wholesale or two deals and you’re going to closing and you’re having a little problem with them. So obviously, you’re not going to mention their name. But the reason I’d like you to tell the story is I want people who are listening to be aware of what can go wrong and how some wholesalers can take advantage of newbies. Fair to say, right?
Aisha: Yeah. It actually happened several years ago, earlier in our wholesaling career. And it was a well known company. And I was told to be aware of them but you know I let my guards down.
Dave: They changed their names three times. Seriously. And you asked me about them and I said to you, “Be careful because they steal deals.”
Dave: And that’s not uncommon unfortunately in some circles. So I won’t interrupt anymore.
Aisha: And they were supposed to close on two properties. We had some issues with both the deals and they said, “You know what? Maybe if we speak with the person together…”
Dave: You’llll sell it.
Aisha: “We’ll sell it together. Then we can get through this.” We’re also working with their own title company. So little did I know that while they were doing that, they were doing things on their end as well to close the deal and they ended up going behind me because it was an assignment so obviously they knew what timeframe I had to close on the deal. And that was $13,000 lost.
Dave: Now, they made you an offer just before closing it. You can have $600, didn’t they?
Aisha: Yes, $600 each deal. And I laughed and said no.
Dave: OK. Now, but bottom line is you laughed and said no to them but how much did you make?
Aisha: I ended up making nothing on it.
Dave: Nothing. They stole the deal.
Aisha: It’s a learning experience.
Dave: Yeah. The clue here was when you told me they wanted to talk to the seller, the obvious thing is now they know who the seller is. They know the seller’s phone number and they can say, “By the way, we’re the actual buyers. She is in it for money. And we may not close and she will not. So let’s make a deal directly.” And that’s what they did virtually.
Aisha: Yeah. They actually researched the seller’s phone number because I never gave it to them.
Aisha: But they were able to research it.
Dave: They probably because they have closing company in their grips.
Dave: All right. So it was a learning experience.
Aisha: Very much so.
Dave: So if somebody that was coming into the program, if you could say something to them, what would you say to them?
Aisha: I’ll just say be careful when you’re doing deals with other wholesalers because sometimes it’s risky. But the main thing is building good relationships with people, which sometimes take a while but after you have established, you’ve done a couple of deals and established a relationship then you and the wholesaler have an understanding and you know how far you can go with them.
Dave: We had, I’m not sure if you’re involved in it, we had a deal where our student had about $9,000 profit in it. The buyer came in, rewholesaled the deal to an end buyer and he made $41,000.
Dave: Not a bad deal for him. But now, how was he able to do that? He had a better buyers’ list than we did. He had a buyer at that time. He could have only had three people. It doesn’t matter. He had one that wanted that property or he sold it to him however it turned out. He netted $41,000 on wholesaling to an end buyer.
Aisha: Wow! That’s amazing.
Dave: So it can sort of be done. Yeah. Let me ask you again for the people listening just quickly, in the process of getting a joint venture agreement with the original wholesalers, so to speak, have you had any problems there?
Aisha: No, I haven’t had any issues with that.
Dave: OK. Do you – do they use your joint venture agreement or do they give you theirs?
Aisha: Sometimes it can go either way. It depends on the particular wholesaler. I’ve done it both.
Dave: OK. Now, it really all comes down to a matter of trust.
Dave: You really need to get to know them and so on and you may get burned.
Aisha: Yeah. I’ve had deals where I kept on persisting with the wholesaler that had it under contract to sign the JV and send it back but because they had worked with me before several times, they never did. But they know that at the end of the day, they’re going to get paid.
Dave: OK. So what you’re saying is they didn’t even sign the joint venture agreement.
Dave: They trusted you.
Dave: OK, great. OK. Thank you very much.
Aisha: Thank you, Dave.
Dave: You did very well. You were afraid.
Aisha: I know. Phew, sigh of relief.
Dave: At last it’s over. [Laughter]
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