8 Units, 10 Wholesale Deals, and $0 Spent on Marketing w/ @Liliinvests

Ashley:
This is Real Estate Rookie, episode 91.

Lili:
Yeah, for the most part, I don’t pay for any marketing, I reach out anytime I see a distressed property come up on market, I’m reaching out to that listing agent about that property, and I’ve been able to generate enough leads by doing that.

Ashley:
My name is Ashley Kehr, and I’m here with my co-host, Tony Robinson. Tony, how are you today?

Tony:
I’m doing fantastic, Ashley. It’s a beautiful day in Socal, I can’t complain. The Lakers just won a basketball game a couple of nights ago, so all things are good in the world of Tony Robinson.

Ashley:
Yeah. Always have to throw the weather in my face. We he had like two nice days where I got to ride my motorcycle, and now it’s back to, it was like 55 degrees this morning, and I think it creeped up to 61 maybe.

Tony:
Yeah. I love the videos you post of you on your Harley. And I think you got tagged in someone else’s story of you riding up on them on your motorcycle, and it was the coolest thing I’ve ever seen on your page.

Ashley:
Oh yeah, when I went to my cousin’s house, they were ready for me, waiting. Yeah, I’m really enjoying it. I feel like I worked the past eight years and have had no hobbies, and any hobby I did have like archery or kayaking, anything like that, I stopped doing. So motorcycle riding, I can physically not work while I’m doing it. I can’t check emails, I can’t get distracted by real estate as much as I love it. So it’s been really great to force me just to have that time by myself and really enjoy. But I am looking for biker friends in the area if anyone does want to ride together.

Tony:
So if you are a Harley rider in Buffalo-

Ashley:
It doesn’t even have to be Harley, I would just let her ride with me.

Tony:
So I can get on my son’s electric scooter and I can meet up with you and we’ll cruise?

Ashley:
We’ll probably go the same speed. Tony’s always pitching his property for sale in Louisiana, so now I’m constantly pitching like, “Hey, I need biker friends.”

Tony:
Yeah. We’ll see who rides first. Is my property going to sell first or are you going to get some biker club going on in Buffalo.

Ashley:
Okay. So today, we are talking about wholesaling and a little bit about house hacking. We have Lili on, and she actually has shared her journey of becoming a wholesaler on YouTube. You guys, she is putting no money into marketing and she’s done 10 deals in less than a year.

Tony:
It was crazy. Her story, she’s relatively young, she’s fresh out of college, and she’s just been super tenacious in taking the steps that are necessary. But I think what was the biggest game changer for her was that she’s been documenting this process on her YouTube channel. So look her up on YouTube, it’s Lili Invest, it’s L-I-L-I Invest. And she said that that process of being super vocal about not knowing what the heck she was doing, but trying to figure it out anyway, and sharing that with other people has been invaluable in the growth of her business.

Ashley:
Yeah. So today, she breaks down her journey, how she got started and how she actually had a career in basketball and then got injured and turned to real estate. So you guys, listen through this whole episode, it is great.

Tony:
Before we bring her on, let’s make sure that we give one last plug for the Real Estate Rookie YouTube channel. If you guys haven’t subscribed yet, please do. Ashley and I and some of our guest contributors are putting in a lot of work to make it a great resource for you all.

Ashley:
Lili, welcome to the show. Thank you so much for joining us. Can you start off telling everyone a little bit about yourself and then we’ll jump into real estate?

Lili:
Yeah. You guys for having me. So yeah, my name is Lili. I’m still have a new real estate investor, but my entire life, I was a basketball player. I don’t really remember a time I wasn’t playing basketball. I was on my first team when I was three and my dad was the coach, and I played my entire life, got to play at Stanford University for undergrad, got to go to Notre Dame for one year of grad school. I ended up tearing my ACL that year, even though we won the national championship. And so, my whole life, I was like, “I’m going to go to the WBA.” And now, I’m done with college and I have a busted knee, and I’m like, “What next?” I had always known about real estate because you’re around a lot of successful people and they talk about real estate, so I was always interested in it, but I didn’t know what was next.
And I got the chance to join the Harlem Globetrotters, which was really, really cool. So I got to travel with them, do some media, do some trick shots and stuff while rehabbing my knee. And one of my teammates who I was traveling with was also really interested in real estate and we started talking about it, and that’s where I started to make some moves with house hacking and then wholesaling and now BRRRR investing. And I’ve just been documenting that whole thing on my YouTube channel. So it’s been a whirlwind since graduating college to now.

Ashley:
What a boring story, I’m sure you have nothing exciting to answer. That is so awesome. Stanford, going to Notre Dame, then going to play for the Globetrotters, very cool. And as much as I wish we could dive into that whole experience there, because I bet that’s a whole podcast episode in itself, I want to talk about that conversation with your friend about real estate. So how long did you guys actually talk about it before either one of you took action?

Lili:
Yes. We were on the media team and so we would wake up and do morning news interviews and morning radio, then we’d go to schools and do trick shots, and then we’d do drive home radio, and then we would go to NBA games and do the NBA games at night. So we were like 6:00 AM to 11:00 PM in the car in between all of those things, we were talking about real estate. He was thinking about becoming a real estate agent. His name is Julian, I got to give him a shout out. He ended up becoming a real estate agent in Columbus, and I was like, “I want to house hack because I just graduated college, I don’t want to go rent somewhere.” I knew I wanted to get into real estate, so I had been saving up a little.
And we probably talked about it for about three or four months as we were working our jobs as Globetrotters. And then, it was February 14th when I closed on my house hack, it was Valentine’s Day of 2020, so you guys know what happened just a few months later with COVID and everything. And of course the Globetrotters got shut down, we couldn’t travel. And that was the start of everything of like, “Okay, basketball is definitely on pause right now, it might be on stop for good, let’s go for this real estate thing.”

Ashley:
How scary was that, that you basically lost your job right after you had purchased your first house?

Lili:
Yeah, it was really scary, especially because I had tenants set to move in March 15th and they were coming from out of state. And so, not only was I not going to be out with the Globetrotters, I wasn’t going to have tenants in this duplex that I’m house hacking. Luckily, I had some reserves set aside. I was able to use a down payment assistance program, so I actually didn’t have to use my savings for my down payment, so that immediately became reserves, so I felt confident there. And then I was able to get on a forbearance plan because of all the situations with COVID. I had tried to cover my bases upfront, and then that was a big help as well.

Tony:
You picked a great time to become a real estate investor, right? What’s so funny is that we’ve had other people on the show that also started investing right around the same time as you. And I think that there’s like a silver lining when you start investing in such a tumultuous time, because I think it thickens your skin from the beginning because you’ve already dealt with a little bit of adversity. So now the next time that you deal with some problem in your real estate business, you’re like, “Well, I made it through the pandemic, I’m sure I can make it through this.” So it gives you a different frame of thought. Now, I want to give the listener, Lili, just an overview of your business, where it stands today.
Since you got that first house hack, do you have any other deals you completed or properties that you’ve purchased? Just give us like an overview of your business transaction so far.

Lili:
Yeah. So while I was searching for that house hack, I’m looking for a multifamily. I actually found an owner who had a bad eviction situation, so he had a distressed property, and I wasn’t going to be able to get the FHA loan on it. So me and my dad ended up doing what I would now call like an owner finance deal. I didn’t know that term then, but we were like, “Oh yeah, we can fix this up. We can lay some floors and patch some paint, whatever.” So I actually got a rental before I found this duplex to house hack. And then I did about 10 or so wholesaling deals for the last few months to build up capital and learn the ropes and make relationships. And now, I am doing some BRRRR deals. So all in all, I have eight units, that’s three duplexes and two single families.

Tony:
And you’ve done all this and like a little over a year?

Lili:
Yeah. It’s been completely insane. Most of those units of those eight have come in the last month or two, because I was wholesaling and then I found an owner who had multiple properties. He wanted to get rid of, and I was like, “Okay, I have the funding for these through some connections with some local hard money lenders.” And I was like, “Should I wholesale them or should I try this? What do I do?” And they were such good deals. It was like, “Okay, we’re going to try it.”

Tony:
Man, I love your story already, and we’re like five minutes in. This is something you said all the time too, Ashley, so I’m surprised you didn’t like jump out of your seat. But when you talk to an investor or to a potential seller, the one question that Ashley always encourages everybody to ask is what? What’s the question, Ashley?

Ashley:
Well, there’s two. So will you do seller financing and do you have other properties for sale? Which I think you did both of those.

Lili:
I know. And I’ve heard you say it much listening to other episodes, and it worked. And I was like, “Oh, you have a lot of other properties?” And his situation was actually, he had a contractor who he gave money for materials and the contractor disappeared, and so the properties are like halfway renovated already. Some of the work’s not so great, but they’re halfway renovated and there’s a lot of materials on site. And he was just done with it, so he was willing to get rid of them pretty cheap. And I was like, “Okay, that question worked. What now?”

Tony:
I want to go back, Lili, to the house hack. I think that’s a great way for a lot of new investors to get started. So I guess for the listeners that aren’t familiar with what house hacking is, break it down for us. And then I guess if you can walk us through why you chose that as the first option for yourself and how you made that deal work.

Lili:
Yeah. I always say that house hacking is buying a property with a owner occupant loan so that you can have a low down payment and just renting out whatever extra space you have. It could be a multifamily, and I know a lot of people like to go for that two, three or four units, but it could also just be a three or four bedroom house, and you live in one bedroom and rent out the other space. Maybe you have a basement, maybe you have a garage apartment. So whatever space you can or are willing to rent out, depending on if you have kids or a family, that’s house hacking in my book. And so for me, I did really want to find a multifamily, and so I was able to find a duplex where I live upstairs and I rent out the downstairs.
And house hacking was a good place for me to start because I was graduating from college, and so I was like, “I’m getting kicked out of my college apartment, so I need somewhere to live.” And I was on the road with the Globetrotters so much, so while I was on the road with the Globetrotters, I was looking for properties. When I came home, I just stayed with my parents instead of going out and signing a lease, and I was like, “Okay, this is the perfect time to buy something.” And also, I think this is a tip for folks that may be coming out of college as well. When you’re coming right out of school, I feel like the lenders are a little bit easier on you because I can’t have two years of job history, I’m just graduating. And so I kind of got over on that.

Tony:
I think that’s a really interesting point to make, because I think most investors that are younger coming out of college, I think they’re afraid to have those conversations because they’re afraid of getting shot down. But what you’re saying is that, it almost works in your favor because they’re a little bit more lenient and willing to help you.

Lili:
Absolutely. And I also think like your age, even if I see a kid who needs something, I’m so willing to help them, and I’m still considering myself a kid. So when the lender sees you, like, “Hey, I’ve been saving up for this down payment. I really want to get a property where I can live in one unit, rent out the other. I don’t have two years of job history because I’m coming right out of school.” They’re going to be a little nicer to you. And that’s what I found in my situation than maybe if I was two or three years out of school, they wouldn’t have that same perspective.

Tony:
Are you self-managing his house hack yourself or did you bring in a property manager? And if you are self-managing, I guess just talk us through what that experience has been like for you.

Lili:
Yeah, I am self-managing it. And I had listened to so many podcasts episodes of whether or not I should tell my tenant that I’m the owner or not. And I did end up telling my tenant that I’m the owner, but it’s been really great. It’s a young couple about my age who lives downstairs. Yeah, things have been really great. Like we garden in the backyard and it’s been all good. I know that I will have tenant problems at some point in my real estate investing career, but I think I got lucky just screening on Zillow, requiring the application, looking at the background check, that type of thing.

Ashley:
What about your other properties? Are you self-managing those also? And what does that look like? Are you using any software? And what’s the process for that?

Lili:
I am self-managing those as well, and things have been going well, but as I’ve picked up these properties in the last few weeks, I will be using a software. I’m going to go with Rent Ready. I’ve heard them as a podcast sponsor and everything like that and I’ve gotten to connect with them even about my YouTube channel. So I’m going to be going with them and documenting the process of how it’s going, collecting rent, screening tenants, all of that on my YouTube channel too.

Ashley:
That’s awesome. And your YouTube channel, I want to talk about this because Tony and I recently launched the Real Estate Rookie YouTube channel and Tony has his YouTube too, with his wife, The Real Estate Robinsons. How does this help an investor? Have you seen any benefit from doing a YouTube? For me, I have my Instagram account and I’ve made so many connections and networked with so many people through it. Let’s talk about your YouTube channel a little bit as to how that has benefited you as an investor.

Lili:
I think it has in multiple ways, like you said, making connections. People DM me all the time. I was able to actually add to my own wholesale deals with people who had found properties, got them under contract at a really good price, but maybe weren’t sure about the rest of the system, so I was able to find JV partners and get some capital up for my flips in that way. Funders actually, when I was talking to a few lenders about doing some hard money loans and also some BRRRR focused commercial loans, they actually looked at my YouTube channel and were like, “This is pretty cool. I see that you’re dedicated and you know what you’re talking about.” So it gave me a little bit of credibility there.
But also, just researching for my videos has helped me learn so much about real estate. If I’m going to talk about this for a 15 or 20 minute video, I did so much reading and listening and learning, I’m almost getting better myself helping other people learn as well.

Tony:
One of the things that Ash and I always encourage rookie real estate investors to do is to be vocal about what it is they’re working on in the world of real estate investing. And you took that idea and you ran with it like Forrest Gump or something. You just kept going and going and going, but it shows that it pays dividends because when you first started, you got your first deal in February of 2020. When did your YouTube channel start?

Lili:
I got consistent in June of 2020.

Tony:
So we’re talking just a few months thereafterwards. So you weren’t this guru, you weren’t this super experienced real estate investor with decades of deals behind them. You were like four months in, four or five months in. And the fact that you’ve been able to document your journey is what’s drawing people to you. So for all of our rookies out there that are afraid to be vocal because maybe they don’t feel that they have enough experience or enough knowledge, just the fact of sharing your journey with someone else is valuable enough to people that they might want to connect with you, and I’m glad that it’s paying dividends for you and your business.

Lili:
I really appreciate that because it’s so true. And I say, at the beginning of every YouTube video, I’m like, “I’m documenting my journey and bringing you guys with me.” I’m like, “I’m not a guru, I am not going to do everything correctly.” And I even make some deals, like, “Guys, I lost a deal. I messed up, I ran my numbers wrong,” whatever goes wrong, but it’s just showing what’s happening. And there are good things and there are bad things, but we can learn from all of them. And even as a beginner, somebody knows one thing less than you and you can help that person if you’re sharing what you’re learning.

Ashley:
I think that is such a huge benefit to someone, because it’s almost like they’re getting the experience with you rather than being told what to do, I think. People learn different ways and that’s so much more beneficial to a lot of people, is learning from your experiences and watching you do it, watching you be hands on, and like you said, being on your journey instead of you saying, “Okay, this is what you need to do, this is what you should do. This is what you should do. This is what you should do.” So I think that’s awesome. And what is the name of your YouTube channel?

Lili:
You can just search for my name, Lili Thompson, or if anybody wants to find me on YouTube or Instagram, it’s the same thing, Lili Invest. So it’s like Lili Invest in real estate.

Tony:
I want to move, if you’re okay with it, Ash. You got anything else in the hole on this? I want to move to wholesaling a little bit.

Ashley:
No, yeah, go ahead. It’s your show, Tony, take it away.

Tony:
I want to talk about the wholesaling piece, because I love that you’re experimenting with different avenues inside of real estate investing. And obviously, that’s what what makes real estate investing so cool, is that there’s so many different ways that you can break into this space. You did the house hack, you got that under your belt, you had this other long-term rental. And then you said, “Okay, let me give wholesaling a shot.” So how did you go about educating yourself to get that first deal done? So from the time that Lili said, “I want to become a wholesaler,” until that actual first deal closed, what were the steps in between that you took?

Lili:
It’s so funny because even before I was like, “I want to be a wholesaler,” that same Globetrotter teammate, Julian McClurkin that I was doing, all of my Globetrotter things with, we’re in the car between interviews or trick shots or something like that, and he’s like, “You should look into wholesaling.” And this is before I even had my house hack. And I’m like, “What is wholesaling?” And he tells me, you get a property under contract, it is assigned to an investor. And I’m like, “That sounds illegal.” I had no idea what it was, and I was like, it doesn’t seem like you can do that.” And he’s like, “Look it up.” And that’s something I told people, “Google, YouTube, books, podcasts, those are your best friends.”
A lot of times you can get them even books for free from your library. Like my local library has audio books that I can grab just from my app on my phone, and so I just started diving in and like, “Okay, wait, this actually makes sense. I can do this.” And my first step from there was to go driving for dollars, and I did this series on YouTube that was like, Getting My First Wholesale Deal, Episode One, Driving for Dollars. And my mom went with me and we’re driving through and we’re like, “Ooh, look at that house, look at that house.” And you get out of the mindset of looking for the prettiest houses, and instead look for the ones that have the overgrown grass or leaky roof or something like that.
And that was focusing on off market. And I eventually, after watching some YouTube videos and hearing about other people’s experiences, I decided to try wholesaling on market, and that’s where most of my deals have come from.

Tony:
Got it. So I want to go a little bit deeper into the driving for dollars. Now, for the listeners that aren’t familiar with that approach, what is it and what’s the benefit of doing that and how does it relate to your wholesaling business?

Lili:
Yeah. Driving for dollars is getting in your car basically and driving around and looking for properties that might be distressed. I know there’s a lot of different signs of that, it could be overgrown grass or just a property that doesn’t look very well taken care of or a mailbox that stuffed full. And you want to find those properties so that you can make a list in your notebook or log them into an app, and then contact those homeowners and see if for whatever reason, because this property is in distressed condition, if they’re willing to sell it. And then that’s your first step of getting a property under contract so that you could move forward in and assign it or sell it to an investor.

Ashley:
When you’re doing the driving for dollars, are you using any kind of apps or anything like that to keep track of the houses or CRM, anything like that?

Lili:
Yeah, so I use PropStream. They have a desktop app that’s really good for pulling lists and doing other types of marketing, but they also have a driving for dollars app that as you’re driving, you can just hit the property, add it to a list. I think you can even send a postcard to the owner right from the app, or you can go home and skip trace the list that you have to find those property owners contact information. You can do all of that, right from PropStream, get the phone numbers and start cold calling if that’s what you want to do.

Ashley:
Tony and I both use PropStream too and I feel like it’s becoming so common. It’s really becoming a useful tool for investors. We’ll have to get them to somehow sponsor the show so we can all get a discount.

Lili:
Yeah, absolutely.

Tony:
I’ve got one more follow-up on the driving for dollars, Lili, because I’m curious. I’ve never done it myself, so I’ve always been curious at this point. When you say, “Okay, I’m going to go drive for dollars,” do you have like a map of, “Okay, I’m going to go hit this part of town today,” and then when you finish that part of town, do you then move to the next? Are you moving on a really methodical fashion through the town until you hit every single block or are you just like, “I’m on my way home from the grocery store. Oh, here’s a block I’ve never been down before, let me do that.” What’s your approach to, I guess, driving for dollars and knowing where to go?

Lili:
Yeah. The first time and the one that I showed on YouTube, I did it completely wrong, in my opinion. I was just like, “Let’s just go drive somewhere.” So I pick up my mom and I just hit a random neighborhood. Now, how I do it is a little bit more focused. I don’t drive for dollars often, but when I do, I’m looking at the areas where I’ve seen a lot of properties being remodeled or have recently sold, recently flipped. And then that way I know, “Hey, the cash buyers in my market are looking for distressed properties in these areas.” So if I can go find a distressed property, get under contract and then call up a cash buyer and say, “Hey, I know you just flipped the property on main street, I’ve actually got one four houses down for you that needs some work. Are you interested?” Then that puts my efforts a little bit more focused on the areas where, if I get a distressed property, I know that there will be a buyer for it.

Tony:
Let’s keep pulling on this thread. How do you figure out where there’s been a lot of flipping activity? Like if I’m a new wholesaler, I’ve never done this before. How do I figure out where homes have been flipped in and what part of the city?

Lili:
I like Redfin. Redfin or zillow.com are both like free databases where you can see, not only homes that are actively for sale, but homes that have already sold. And so I go look at those homes that have sold, and I look at either the price per square foot. Usually, if it’s a recent flip, it’s going to be a higher price per square foot than other properties, or just looking through pictures and getting good at seeing, “Oh, that’s a fresh paint job.” Or like, “Oh, that’s nice new hardwood flooring,” or something like that. And a lot of times, the listings will say, “Freshly remodeled or newly updated.”
And then I’m saying, “Okay, that neighborhood has one or two. That neighborhood has five. That neighborhood has none.” And then I’m getting an idea of, “Okay, it would be really good to get a distress contract in that neighborhood over there with the five flips.”

Tony:
I think PropStream also has a filter now where if you type in a city, one of their pre-made filters is flippers, and it pulls up all the properties that have been listed twice within like a short time period. I’m not sure what time period they use, but say the property was purchased in January for $200,000 and it was listed again in April for $300,000, it’ll show up on there as a property that’s been flipped. So something I’ve noticed as I’ve been playing around with PropStream also.

Lili:
I actually use that flippers filter to find cash buyers too. So once you get that property, you need to find an investor to flip it to, you can skip trace the people that come up as flippers and give them a call, and they’re usually cash buyers looking for more deals.

Ashley:
That is such a great tip because I think part of wholesaling, finding a deal, you can go out and do that, but actually finding the buyers and making those connections can actually be pretty difficult. So that’s awesome. And how do you handle those phone calls? What does a phone call look like when you actually call one of those potential buyers?

Lili:
I found that the phone calls with the buyers are actually easier than the phone calls with the homeowners, because if you’re cold calling a homeowner, they’re like, “Who is this random person calling me asking about my house?” Usually, “How did you get my number?” That type of thing. With the cash buyers, when I got my first deal under contract, admittedly, it was not a very good deal. I did not know how to run my numbers, I didn’t know what numbers to look for or anything, but when I called up people that I knew were flippers because of PropStream or looking at my local Facebook investing group…
I recommend everyone join, any market you’re interested in, join those local Facebook groups, because then I would message or call those investors, and I would say something like, “Hi, my name is Lili, I’m a new wholesaler. I have a distressed property under contract, and I would love to tell you about it. If you’re looking for more deals.” And then they will ask you a couple of questions. And some of them are like, “Nope, not a good deal. Bye.” But some of them were like, “Hey, this still doesn’t work for me because of A, B, C, but if you go out and find one that meets these criteria, give me a call.” And then that was how I got better and better just getting my cash buyers to teach me for free, how to get them a good deal, and then now I know what a good deal looks like.

Ashley:
That’s like when I get a text message from somebody who wants to buy my house, I send the response like, “Hey, I don’t want to sell it, but can you put me on your buyers list? This is what I’m looking for,” every time we get one of those texts. You told us how your interaction goes with the buyers, but what about the sellers? You said that it is more difficult for you, those conversations, so what does that look like?

Lili:
This is like a crazy story. One of those properties that me and my mom saw, we were driving for dollars. I put it on my list and I go home and I cold call. This is episode two of that wholesaling series, this is literally like, “Okay, now it’s time to cold call.” And I cold call, he is a gentleman and he has some non-gentlemanly words for me. Obviously his house was in distressed condition, so other wholesalers had been calling him and he’s like, “You people keep calling me and I don’t know why you think I want to sell.” And just going in and going in, and going in. And I’m like, “Okay, I’m sorry, I’m sorry. I won’t call you again.” But then I got a tip from someone, I don’t know if it was YouTube or someone I was talking to. And they said that you can look at expired listings on PropStream.
And so that’s like if a property has been listed for sale on the MLS like on Zillow or something, and it didn’t sell, then you can see that on PropStream. And sometimes those properties won’t have sold for other reasons, but a lot of times it’s because they are in distressed condition or they were priced too high. And so what I did was I pulled a list of expired listings and I just called the real estate agent who had listed those properties and said, “Hey, I see that you have an expired listing on Main Street, could you reach out to the seller and see if they’re interested in a cash offer,” which they might be more motivated because it didn’t sell the last time they tried. And I did that.
And one of the agents was like, “Yeah, I’ll give him a call. I’ll call you back in a few minutes.” She calls me back in like five minutes and she’s like, “Yeah, he’s actually willing to sell. Here’s the price that he wants.” I’m like, “Okay, I’m sorry. I’ve been calling a lot of agents, what was the phone number or what was the address on that one?” And she tells me the address, and then I look at my other lists and then I look back and I’m like, “That’s the dude who cussed me out this morning.” It was this insane owner. It was the same owner. And he was so unwilling to even have a conversation about it when I called him directly, but when his agent called him, he’s like, “Yeah, let’s go for that.”
And that’s when I was like, “I want to work with agents and not homeowners.” And that’s when I started focusing more on the on-market listings or agents pocket listings instead of going directly to the homeowners, because my mind was just blown.

Tony:
Can I play a really quick voicemail? I think I’ve mentioned on the show before that we’re solely starting to build out a wholesaling arm of our business also. Let me see if it’ll play through here.

Speaker 4:
Hi Sarah. My name is… I live in… Road in Joshua Tree. I called both… you weren’t randomly driving around here with cash. I get one to two calls a day for the last two months. I’m an individual who enjoys privacy, but I’ve been getting one to two calls a day for the last two months of people who think they want to buy my freaking property and make money off of it. I’m also a real estate investor, but I’m not stupid. So don’t call me again.

Ashley:
Beep.

Tony:
[inaudible 00:28:45], but those are the people that you deal with when you’re reaching out to sellers. For some reason, some people have just a lot of animosity towards people that want to buy their homes. So you got to be thick-skinned a little bit to deal with that stuff.

Ashley:
And Sarah is the sweetest person ever. So for someone to say that to Sarah too.

Lili:
I’m not thick skinned enough for it. I’ll admit it, it ruins my day. And so I was like, “I have to find another way.”

Tony:
But that’s a really important lesson. I think Lili, is that you can still get to the same end result, but there’s different strategies you can employ to get there. And you said, “Hey, I’m realizing that I’m having better success having the agents as the middleman as opposed to trying to deal with these very agitated homeowners.” And if it’s working for you, then it’s working for you. So is that going to work in every market? Maybe not, but it’s like, I think the underlying message is find a way to still get to the same end result while using the strategy that makes you feel confident or comfortable.

Ashley:
I think a lot of people don’t even think of that as an option for wholesalers is going with the agent, going with the broker, because usually it is the opposite way you want to go directly to the seller. I prefer negotiating directly with a seller because I like to know the reasonings why they’re selling. So do you ever find that as a hurdle like that, having that intermediary, that middle person that it’s maybe not as easy to communicate why that person is really selling and what you have to offer?

Lili:
Yeah. I definitely think there’s downsides and there’s upsides. The downsides is like you said, I don’t ever really get to speak directly to the seller. And so I don’t get to depend on my rapport building skills, I don’t get to hear directly from them what their motivation is, there’s someone else in between. And I might tell the agent an offer and the way that they present that offer could mean a yes or a no. The things that they also say, their tone of voice, their energy, that can all influence things. So that is part of the downside. But one thing that I do is go directly to the listing agent, so if that property is on market, I’m not calling up a buyer’s agent to then call the listing agent for me, I’m calling that listing agent and letting them also represent me, so they get double commission if the deal goes through.
So that does build some rapport with them as well. But I also think that one of the benefits of dealing within agent instead of a homeowner is that anytime that agent for the rest of their career gets a distress property, now, they’re going to call me. So I’ve done repeat business with agents that it’s like, they just keep getting distressed listings, they call me even before they put it on the MLS. And usually a homeowner, they might have one or two or three or four other properties, but once you’re done with them, you’re done with them. Whereas the agents, I’ve got a dozen agents around town who anytime they see distress properties, they know, “Oh, I can get double commission if I send this to Lili.”

Ashley:
That is such a great tip. And that really is so true that you are an advantage to them because they’d get the double commission. And then that it’s a benefit to you because they’re reaching out to you, but then they don’t even have to go through the whole listing process of the property, that if you’re going to be able to get the homeowner what they want, and it’s an easy done deal.

Lili:
I had one person, an agent called me, we had talked about a previous listing, and it didn’t work out, I got outbid, my offer’s coming in low, so I was trying to get a good deal, but I got outbid, but then he called me a few weeks later. He’s like, “Hey, I have a seller who has COVID, obviously people can’t be walking through the house, but they want to sell. So if we get you like a FaceTime walkthrough video, really good pictures, do you think we could get a deal done?” And I was like, “Yeah, let’s do it.” And I was able to do the whole deal, even assign the property to a cash buyer without ever having to get into the house. And that was like a win-win situation for everyone, rather than that person having to try to list on the MLS and have showings and all that.

Ashley:
That’s a really unique story right there.

Tony:
What marketer are you in, Lili? I don’t know if we touched on this yet.

Lili:
Yes, I’m in Tulsa, Oklahoma.

Tony:
Got it. Okay.

Ashley:
How have you been able to scale so quickly? It’s just a little over a year, you bought your first property, and how have you been able to wholesale so many deals and to get your rental properties?

Lili:
I think the biggest thing was I’m a big researcher studier, and so it’s been a quick year, but before that, basically the latter years of college, I was reading and learning and saving money. And so I felt like, “Okay, I can hit the ground running.” And it just so happened that I was like, “Okay, I’m just going to keep wholesaling, keep wholesaling.” And I sent out the deal to one of my buyers and he’s like, “Hey, I’m too busy for this, but it’s a good deal. Do you want me to connect you with my hard money lender and you just keep it yourself?” And I’m like, “I hadn’t thought about that, but sure.” So then I have the conversation with the hard money lender and they tell me how much of the deal they’re willing to fund.
And I’m like, “Wait, I have that capital from wholesaling, so maybe it is time that I could move in.” I was thinking I’m going to need so much money to buy my first property, and then I run the numbers with the hard money lender, and I’m like, “Wait a minute, this is achievable after doing these wholesale deals.”

Tony:
I love that it was really your relationships with people that triggered a lot of these, I guess, really a lot of these points in your life. It was your relationship with your coworker, your teammate on the Globetrotters that really got you into real estate investing to begin with, it’s relationship with this buyer that you knew got you into holding your own properties. And I think that’s a super important point to call out because, and I say this all the time, but real estate investing is a relationship business. And the more meaningful relationship you can have, the more successful people tend to be. I’m not advocating that people go out there to just try and suck other people dry, but it’s like, how can you provide value to other people because eventually, they’ll want to return that to you?
You provide a value to that in-buyer, because you were giving them good deals. So the natural response to that person is like, “How can I give Lili some value back?” And I love that it’s really been about the relationships and then the hard work also. Let’s not undercut all of the hard work that you put into building your business as well. I want to talk a little bit about what’s next for you, are you continuing to wholesale or are you now just strictly focusing on building your own buy and hold portfolio? Where’s your mind going next?

Lili:
My end goal has always been passive income so that I can just live how I want to live and spend time with my family and do the things I want. And like you said, wholesaling is not easy, it is very, very active income, which is really good, I think, especially for beginners to build up capital. But for me, I know that my end goal is long-term passive income. So I get some deals and it’s appealing to be like, “Oh, let me wholesale this for 10 or $15,000.” Then I’m like, “Wait a minute, maybe I should go to the hard money loan route and keep it because then I’ll have some cashflow and passive income.” So that’s my goal, trying to stay focused on building that cashflow.

Tony:
One more follow up on the wholesaling piece, with your leads… I guess first, are you still just doing driving for dollars or are you leveraging other marketing platforms and sources as well?

Lili:
Yes. For the most part, I don’t pay for any marketing. I reach out any time I see a distressed property come up on market, I’m reaching out to that listing agent about that property, but also to see if they have any other distress properties or if they’ll send me their pocket listings before they get on market. And I’ve been able to generate enough leads by doing that, especially because the market’s so hot, things are popping up on the market every day. That’s my main way of getting deals, and it’s been working out so far.

Tony:
That’s awesome. So you’re not spending anything on marketing right now then, that is fantastic.

Lili:
That was my goal, was like, “Can I find enough leads basically for free? It’s going take me a lot of time, but can I find them basically for free, and then most of my wholesale assignment fee is just profit?

Tony:
Wow. That’s amazing. I don’t think I’ve met another person who’s wholesaling consistently, someone that’s done 10 deals that is essentially spent $0 on marketing. So that’s amazing.

Lili:
Thank you. It’s almost like you got a team of agents.

Ashley:
And that’s like proof for anybody who doesn’t have the money for marketing too, they can’t use that for an excuse to not get started in real estate because I think you’re proving it, that you’re putting your time into it instead of spending money. So that’s great. Tony, do you want to move to our, do a Deal Deep Dive? I would love to do one on a wholesale deal.

Lili:
Okay. Let’s do it.

Ashley:
Okay. If you want to just run through how you found the deal, what the purchase price was, what you got at for, and run through all that for us.

Lili:
Okay, great. This wholesale deal was my first successful wholesale deal, but it was probably my third property that I’d gotten under contract. And so previously, I didn’t do things correctly, I had to cancel the contract, but I tried to learn from my cash buyers what I did wrong. So this wasn’t on-market deal, that was cash only as is sale, so I knew an investor would be interested, and it was listed on the MLS for $89,000.

Ashley:
And then did you have to do any negotiating or you got it at listed price?

Lili:
My goal with on-market listings is to always get them beneath the listing price so that when I send it out to a cash buyer, I’m giving them a discount based on what they can see on Zillow. So it was listed for 89, and I believe I offered somewhere around 72 or 73, but I ended up getting it under contract for 76,000.

Ashley:
And then how did you find a buyer for this?

Lili:
I posted in the local Facebook investing group, The Crossroads Of The Property, the school district, and just like some basic numbers, and people started commenting their email addresses and they were asking me to send them information, and I did. And I got I think, three or four offers for it. I ended up accepting an offer for $82,000. So that was my first wholesale deal with a $6,000 profit.

Tony:
I want to talk about the negotiation piece. How did you get them down to the price point that you agreed to?

Lili:
I’m glad you asked, I actually forgot because this was the first deal. I asked the real estate agent, “Here’s my offer, this price earnest money, this many days of due diligence period.” But I said, “Is there anything else that they need or want that I might be able to help them with?” And she came back and she said, “Yeah, the seller said that she needs a longer closing because she’s going to be trying to find another house to buy. So she wants to make sure she has time to find another house. And she’s a single lady, she has a bunch of stuff that she wants to get rid of. She doesn’t have a truck. So if she could just leave anything she doesn’t want on the property, then that would really help.”
And I was like, “Oh yeah, we could definitely do those two things because I knew my buyers were going to be going in there and ripping out carpet and cabinets and stuff, so they’d already have a dumpster. So I figured it wouldn’t be too much of a hassle for the buyers, but it made a huge difference to her. And so she was willing to come down a little bit on the offer price in exchange for those two things.

Tony:
And I think that really goes back to being able to solve problems for people. To the seller, those were two major problems. Even though it was very insignificant to you, to the seller, those were two major problems, major enough that she was willing to give you an almost $10,000 discount or more, because you said it was listed for 89.

Lili:
I got $13,000 discount.

Tony:
That’s a $13,000 problem for her that you were able to solve. I think that for a lot of the rookies that are listening, that’s the approach you have to take is like, what’s the biggest problem that I can solve for the seller so that we both walk away feeling happy?

Ashley:
Tony, didn’t we just talk to somebody too who was trying to buy a house and the lady wanted to sell, and they finally figured out that the reason she won’t sell was because she didn’t know how to move. And then they like civil, “We can help you. We can do that for you.” And they moved all of her stuff.” Actually, I know who it was, I think it was Jay Scott, maybe, actually, who was saying that they’ve been trying to get this house and finally the lady said, “I just don’t know how to move. I’ve lived here my whole life.” And so they like, “We can do that. We’ve got movers, got the truck, and here, tell them where we need to go.” And so they got the deal because of that.
And that was the only thing that that lady was holding back from selling, is because she didn’t know how to move. And obviously, that was an easy thing for them to do to help her.

Tony:
Lili, how much time would you say you put into this deal, from the day that you founded, that you reached out until it closed? So you got your assignment for how much time it passed in between?

Lili:
I get these automatic alerts from Redfin or Zillow, anytime a property that says like, as it is or cash only comes on the market. So I got the alert on my phone. I immediately called the listing agent and she was like, “Whoa, you’re quick.” That’s how she answered the phone. And I told her, she kept double the commission. We made the offer within an hour after I’d run my numbers. The seller got off work, told the agent, “I need these things.” I said, “Yes.” It went into contract around maybe 6:00 or 7:00 PM. So that was just one day. I put it in the Facebook group the next morning, a day later, I let the buyers come see it.
And then that evening, I accepted an assignment contract. So that whole thing was like three days. And then the deal closed 45 days later because we gave her some extra time to find another property. But all in all, it was about three days of work on my end.

Tony:
Not even three days of work, but it took it last over three days.

Ashley:
A few phone calls.

Tony:
We’re talking a few phone calls. What was the net profit? So you got under contract for 76, what was your end buyer’s purchase price

Lili:
They purchased it for 82 and they were really happy because they got a $7,000 discount off the asking price, especially what they could see on Zillow, especially because right now a lot of things are even going for over asking price. So they were like, Oh yeah, I’ll definitely take that for 82.” I made six, the seller got what they needed and that person became a repeat buyer for me.

Ashley:
I love this whole wholesaling topic thing because Tony’s just getting into it. I did one accidental wholesale deal once, but this is really great. But I want to take us now to our Mindsets Segment. I just want to know, once you actually got started into real estate, how was the mindset shift? Were there things that you believed before you even got started that actually weren’t true, and you decided maybe those things were harder or those things were better? How did you make that mindset shift?

Lili:
Yeah. I thought that it would take a lot more time to move from strategy to strategy. So I was like, “Okay, I’m going to house hack, and it’s going to take me a few months, a few years to figure out how to wholesale. And then from there, it’ll take me a few months or a few years to figure out how to do BRRRR investing.” But I realized that the fundamentals of real estate, if you learn those, then you can apply it in different situations. And that’s why even though I didn’t know I was doing owner financing, I was able to figure that out and piece that together just because I’ve studied the fundamentals. And another example is with wholesaling, I was running the numbers for my buyers, ARV, rehab, all of that, and I was just tacking on wholesale fee for myself.
And then now that I’m doing BRRRR investing, I run the numbers the exact same way, I just don’t tack on a wholesale fee because I found the deal myself, and I’m like, “Oh, okay, it’s actually not that different, you can learn the fundamentals and apply them in different ways.” And that was very different from what I thought up front.

Tony:
What a great approach. We love the Mindset Segment because so many new investors get held back because of these misconceptions they have about how scary it actually is to get started, but it’s like you just put one foot in front of the other and eventually you figure things out and you’re like, “That wasn’t as bad as I thought it was going to be.” So I love that you were able to illustrate that for us. I want to take us to our next segment, Lili, which is our Rookie Request Line. So for the listeners, if you guys want to get your question featured on the Real Estate Rookie Podcast, just give us a call at 8885-ROOKIE, and maybe we’ll get your question on the show, but Lilly, are you ready for today’s question.

Chris:
Hi guys. This is Chris out of the Virginia. When evaluating new markets or subsections within that market, you want to look for information like crime rates, income, future developments. My question is, what are some good three or low cost resources that a new real estate investor could leverage to try and start finding out that information about given markets around the country? Thanks in advance for any help. Bye-Bye.

Lili:
Really great question. I think that PropStream is a great resource for that, although I know PropStream is not free, but there is a seven-day free trial on PropStream. So if you know that you want to dive into a particular market, you could get a free trial, use PropStream and go from there. I also know that there’s a website, I believe it’s city-data.com. And that can show you different maps with just all types of different filters that you could put in. I know that Chris mentioned crime rates, or school districts, or things like that, but even easier, I think, especially if you’re just getting started, just do the Redfin or Zillow thing, look for where most of the investor activity is.
And then you don’t necessarily step one, needs to know why all of the activity is in that area. You can trust that, all of the investors in Columbus, Ohio are choosing this area to flip or buy houses in, that’s probably a good area, and then you can go from there. Just steal what all the research they’ve already done to decide to invest there. And then that might be a good starting place.

Tony:
Love that advice, Lili. And I just want to add on one thing to that. Back in April of 2020, I posted in the Real Estate Rookie Facebook group as I was doing research, trying to find it another market for us to move into. I put things down like population growth, job growth, they can see rates, median home value, how many renters are in the market. There was a lot of data, and literally I just put it in the Rookie group. So I’ll link to that in the show notes for today’s episode, but if any of the listeners are stuck on what market to look into or like where to grab the data, I’m pretty sure I put all the links in there of where I pulled that data from as well. So we’ll link in the show notes for today’s episode. Ashley, where can we go to get the show notes for today’s episode?

Ashley:
You can go to biggerpockets.com/rookie91.

Tony:
There you go.

Ashley:
Also, you guys can check out on BP Insights too if you want to find market information too. Dave Myers, he does a ton of research to bring you guys market reports too. So you can check that out if you’re a Pro member. Let’s move to our random questions. I’ll take the first question this week, and I want to know what is some advice or something that you want our audience to take away today?

Lili:
This is actually something that my basketball coach would say a lot, and it was, there’s nothing new under the sun, so steal like an artist. And he was talking about different moves or different methods that like LeBron James or Candace Parker used to become a better basketball player. But that’s what I did as a new investor. When I had no buyers list, whenever somebody would post a deal in the Facebook group, buyers would comment beneath, I would go DM or email all of those buyers like, “Hey, I see you commenting on somebody else’s deal, but what are you looking for? How can I help you?”
So just steal what other people are doing, there’s nothing new under the sun, you don’t have to reinvent it. Success leaves trail, so just follow that.

Tony:
I want to ask a question about the very first phone call you made to a seller. Were you scared? And if you were, what were you afraid of and how were you still able to push through that fear and make that phone call?

Lili:
I was very scared. My hands were sweating, I was very scared. And I had a script in front of me, which I think was a mistake because everyone has a script and everyone’s getting these, like the voicemail you played for us, everyone’s getting these calls. And I was like, “Hi, my name’s Lili. I’m a local investor. I was driving by your house, I saw, whatever.” But I think what I was scared of was irrational because worst case scenario, they say a few mean words and hang up on me. That’s probably your worst thing that’s going to happen. And so just realizing, it’s almost like playing that game where it’s like, “What’s the worst that could happen?”
And then you say it out loud and it’s like, “Okay. That’s actually not that bad.” And it helps you get past it.

Ashley:
Well, before we end today’s show, I just want to give a shout out to this week’s Rookie Rockstar. So this week our Rockstar is Zach Al. So Zach is excited to announce that he has his first rental property. His goal was initially to invest next year, wait until then, but he got his finances in order and made it happen early. So that is awesome, Zach. Congrats on reaching your goal a year earlier than you planned. It is in Concord, North Carolina. It is a single family home. He purchased it for 125,000, expenses are 800 per month. And that’s great. That’s awesome for you, Zach. Thanks so much for sharing it.
And if you guys would like to be featured as a Rookie Rockstar, send Tony or I a DM on Instagram or Facebook, and we’d love to feature you, or you can post it in the Real Estate Rookie Facebook group. Well, Lili, thank you so much for being on the show today. Can you tell everyone a little bit about where they could reach out to you or find some more information about you?

Lili:
Absolutely. You can find me at Lili Thompson on YouTube, Instagram, or I’ve now been convinced to get on TikTok, and the actual @ name is liliinvests.

Ashley:
Great. Awesome. Thank you so much for joining us. We really loved having you on the show today.

Lili:
Yeah. This was so much fun. I listen to you guys all the time when I’m driving or doing different things. So it’s really nice to meet you and I’m glad to be here. Thank you.

Ashley:
And even though this is going to be released a month or two later, we do want to wish you a happy birthday too, because we heard that it’s your birthday today we’re recording. So thank you so much for recording with us on your birthday. We feel very special.

Tony:
Yeah. We feel honored that you celebrated your birthday with us.

Lili:
No, I appreciate it. This was a great birthday present for me.

Ashley:
We knew. We knew it was your birthday day when we scheduled this. A good day for that. Well, thank you guys for listening today. I hope you enjoyed the show. I’m Ashley @wealthfromrentals, and he’s Tony @tonyjrobinson on Instagram. We’ll be back on Saturday with our Rookie Reply. I’ll see you guys then.