BiggerPockets Podcast 065 with Wendell De Guzman Transcript

Link to show: BP Podcast 065: Creative Investing, Mistakes, and Bulletproof Vests with Wendell De Guzman

Josh: This is the BiggerPockets podcast, show 65.

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Josh: Hey, what’s going everybody, this is Josh Dorkin, host of the BiggerPockets podcast. Here with my fabulous cohost, Mr. Brandon Turner.

Brandon: Yo, what is going on, Brandon? Well, not much. Just you know, keeping it real out here in Washington. How are you doing?

Josh: Yes, yes, I’m doing alright man. Doing alright. Having a.

Brandon: Got a new office I hear?

Josh: Yes, yes, I’ve got a new office. It’s nice. It’s nice. I’ve enjoyed working out of—out of Dorkin Headquarters for many years, but it is good to get out and work in a real office with the window.

Brandon: Nice. Nice.

Josh: As opposed to the bat cave.

Brandon: Very cool. Very cool. Well, you know, welcome everyone to the BiggerPockets podcast show 65. Today, we have Wendel DeGuzman, as our guest today and he is.

Josh: Is that—was that a question?

Brandon: I wanted to make sure.

Josh: We’ve got Wendell DeGuzman, yes.

Brandon: Yes, lowers the first inflection.

Josh: He’s awesome.

Brandon: He is awesome.

Josh: Yes, yes.

Brandon: Yes, we’re having him on the show, he’s been through pretty much every field of real estate investing you could imagine and he’s had a lot of mistakes and successes. He is very honest.

Josh: Forthcoming. Yes, he’s really forthcoming about what he’s been through if you want to hear what can happen as an investor, I think the ups and the downs, especially.

Brandon: Yes.

Josh: You definitely want to pay attention, there’s a lot of really good tips in the show so.

Brandon: Yes.

Josh: I definitely encourage everyone to pay attention. Speaking of tips, why don’t we look at today’s Quick Tip.

Brandon: Quick Tip.

Josh: Alright, guys so today’s Quick Tip is actually from one of our user’s, Ming Lim. Ming’s suggestion is that you go and use your library as a great resource for free real estate books. What he said, he’s surprised how many people buy books that are actually free to read. Have many times have you gone and bought a crappy book and thought wow, that was a waste of $20, well you don’t have to do that anymore. Put your tax dollars to good use and visit the library so.

Josh: That’s actually how I got st—I mean, I read probably a hundred books the first year of being a real estate investor, all from the library so.

Josh: Yes, yes, I think it’s a great tip so. Glad to share it and of course, if you have a good Quick Tip that you want to share, please send us a message on Twitter, Tweet us at using @BiggerPockets and let us know what your Quick Tip is and maybe we’ll use it in a future show. With that, maybe it’s a good time to move on to the interview with Wendell, but really really quickly, for those of you guys who are listening to the show and enjoying our podcasts, please just want to send a reminder. Jump on iTunes, definitely leave us a review.

Let us know what you think of the show. Let everybody know what you think of the show and be sure to leave us a rating as well. Hopefully, it’s an honest rating so do be sure to do that and last but not least. This is show 65 of the BiggerPockets podcast and if you check out our show notes at BiggerPockets.com/Show65, you can leave Wendell questions, comments, anything you want, you can interact with him so be sure to do that. With that, why don’t we move on to the interview. What is going on Wendell? Welcome to the show man, good to have you here.

Wendell: It’s great to be here.

Brandon: Good, good, finally, this is. Yes, this is what, our fourth try at this, I think or third or fourth.

Wendell: Yes.

Brandon: Yes.

Wendell: Yes. Yes.

Brandon: Last time, your internet, like they were working on the internet outside of your house or something, yes. Bad luck we’ve had so, anyway. Yes, glad to have you officially on the show today. We are going to jump right into this thing and yes, why don’t we start with the first question we always ask. The crowd all says together: How did you get started in real estate?

Josh: How did you get started in real estate investing?

Wendell: Alright, how did I get started, well, one night, I couldn’t sleep right and you know I was thinking about well, about our finances as a family and so I was—I couldn’t sleep and I was watching late night TV one time and I saw this guy talking on TV saying that your house is not an asset. I was like, really, your house is not an asset? I was intrigued by that. This was back in December 2002 and his name is Robert Kiyosaki so that intrigued me and the following year, January 2003, I became a real estate investor so.

Brandon: Cool.

Josh: Nice.

Brandon: You’re a Rich Dad, Poor Dad kind of disciple as well huh?

Wendell: Yes.

Brandon: Nice, nice.

Josh: That’s great, that’s great. What were you doing prior to that and how did you launch your this real estate investing path of yours?

Wendell: Okay, well I’m an engineer working for a Fortune 500 company.

Josh: Got you.

Wendell: I was doing okay, but after awhile, I got bored and when, especially when I read that book Rich Dad, Poor Dad, it opened my mind to you know—to financial literacy and so investing in real estate became like, “Okay, I really need to do this for my family so.”

Josh: Yes, yes and I think you know, I think the vast majority of our listeners, probably are in the same position, “Hey, I need to do something better.” You know, life is short and lets prepare for the future so, that’s great. You’re watched the Kiyosaki, you got excited, and you decide, I’m going to get going. How did you do that?

Wendell: Okay, so after I watched the show, I think it was on BBS and then I searched for good books to read so immediately, I bought Rich Dad, Poor Dad. Read it, you know, from cover to cover in one sitting. Couldn't put it down.

Josh: Yes.

Wendell: Then, I bought other books, yes so that opened my mind to the possibility of buying houses with no money down and no credit. Well, I didn't have money at that time to invest in real estate so I thought, "Well, this should be a good thing to have. Is to know how to buy houses with no money down." I was able to buy my first deal.

Josh: Okay so this first deal that you got into was a no money down deal. What did it look like and how did it all come together?

Wendell: Okay, well, it's a no money down deal so I was able to get financing because of my great credit and at that time, banks offer no money down so I was able to get the deal with no money down and then I turned around and the--what I did, I sold the house on a rent to own.

Josh: Got you.

Brandon: Okay.

Wendell: I found an end buyer, gave me $7,000 and you know, gave me $2,000 a month rent. I was making not alot of cash flow, only like $200 a month, but it was a good start so.

Josh: This--you kind of cheated. This wasn't really a no money down. I mean it was.

Wendell: Yes.

Josh: It wasn't creative financing.

Wendell: Right, right.

Josh: You used the bank's, you know, greed, back in the days when they were throwing cash at everybody.

Wendell: Yes.

Josh: To get a good deal, which is awesome.

Brandon: You know what, one thing I--you mentioned you heard this strategy in a book and then you went and did your first deal and it wasn't exactly like the book and I just want to point out to anyone listening that I think that's really really really smart and alot of people think you have to follow some formula that, you know, maybe some guy wrote a book on how to do something exactly or I read a blog post on how to buy a multifamily and then people go look for that exact like multifamily and the point of reading books and the point of reading blogs has nothing to do with trying to copy the formula. It's all about just trying to expand your mind to be able to do these kind of deals and so I think that's cool that you kind of represent exactly what I'm saying there so nice job.

Wendell: Yes.

Brandon: Cool, what happened next then you got into a lease option deal. Did that work out? That--actually, why don't we take a step back for those people who don't know what a lease option deal is. Can you kind of just--what exactly was that? What did that mean when you put a tenant buyer in there?

Wendell: Okay, so a lease option or rent to own is basically you sell the house, when I say sell the house, you're basically selling the house in the future.

Brandon: Okay.

Wendell: You know, so the tenant buyer will give you a down payment, legally it's called a non-refundable option consideration and you know, it's great. It's non-refundable so you get to keep it all, right. Then he will give you a monthly rent and you decide based on the numbers whether to give the tenant buyer some portion of the rent against that down payment so it becomes a forced savings plan for the tenant buyer so they like that because they don't want you know, in a peer rental situation, right. The landlord gets to keep everything.

Josh: Right.

Wendell: The tenant doesn't get anything at the end.

Josh: Yes.

Wendell: The--in a rental situation, the tenant buyer gets to save up their down payment so in 12-24-36 months they get to qualify for a bank mortgage or bank financing so that at the end of that period, they cash you out and you get a big check at the back end.

Josh: Okay so Wendell, can you give us an example of a hypothetical lease option deal say you know work with some easy numbers and who before we do that, who’s a typical lease option buyer? Presumable they’re not the same buyer as somebody who’s going to go and get traditional finance on a property. Is that right?

Wendell: Yes, yes. I mean typical list to own buyer or at least the good tenant buyer in my opinion is someone who has a good job okay, but probably because of what happened in the economy in the past several years, maybe they got foreclosed on in their home so they are ex-home owners I would say, right. They have a good job, but they lost their home, you know maybe because they lost their job a few years ago, but now they are back on their feet so they can pay the monthly payment and at the same time they have saved up some down You non-refundable option consideration so that is a good tenant buyer.

Josh: Okay, so we got the good tenant buyer. They’ve got the five or 10K and what happens? You know, you’ve got this property, you list it as a lease option and they come in, they say yes, I’m interested, they give you the payment consideration and what is that give them a right to? What are the contracts? What are the terms of these kinds of things look like?

Wendell: Well, when they give you the non-refundable option consideration, you give them an option to buy the property at let’s say you know, in fact let me give you, well related to your question, let me give you an actual example of an actual deal did that I did, okay?

Josh: Perfect.

Wendell: I have his house that two real estate agents couldn’t sell, for like almost one year, right so the seller you know, I—she was referred to me by another seller that I dealt with and so I told her, look, you know, I cannot pay you the $170,000 that you’re asking for, but I can pay you $160, which happened to be the loan balance that she has at that time. You know, most investors will not touch that deal because I’m basically buying it for 93% of market value, right.

Josh: Right.

Wendell: The financing is so good because her interest rate is so low that I decided, you know, this is great because I can buy a house, you know, worth $170 for $160, yes, not much equity, but her monthly payment, PITI is only $1,000 a month. What I did is, I sold the house on a rent to on basis, you know, I price it to $189,900. Now, I’ll explain later why I price it so high, okay, way above the market value and then you know, I was able to collect $7,000, actually, no, that’s another deal so that’s $6,000 down payment from a tenant buyer and I was able to collect $1,200 a month cash, I mean, $1,200 a month rent. That made the cash flow about $200 a month right?

Josh: Yes.

Wendell: Then what happened was, on their 11th month, they’re paying me like clock work right. They’re paying me ahead of time, which is great.

Josh: Yes.

Wendell: The nice thing about rent to own is that generally, the tenant buyers that you get, they take care of the property because they know it’s theirs, right.

Josh: Yes.

Wendell: Whereas you know a tenant, you know, doesn’t care so much about the property because it is not theirs. You know, a rent to own buyer, generally, again there are exceptions to this rule, generally they take of the property better because they know that they’ll own in the future. Alright, then what happened was, on the 11th they called me saying that, “Okay, we lost both of our jobs.” The husband and wife, just like oh no, you know, now what will I do.

Well, because the area is a great area, people love to go to that area and live in that area, I was able to get another tenant buyer who gave me $3,000 down, a lot less down payment, but I charged them a higher monthly payment. I charged them $1,400 a month so that put you know, $4000 a month in my pocket and then after 15 months, they were able to get a loan, okay, for $180, they negotiated a little bit on the price, right. At the end of that 26 moths, I got $20,000, the difference between the $180 and the $160 that I bought it for.

Josh: Yes.

Wendell: You know well there is some loan pay down or principal pay down because it’s over two years, but that’s minimal. That basically paid for the closing cost, right. At the end of it all, by the time I tabulated all the you know, the $6,000 non-refundable option consideration I got from the first tenant buyer, the $200 a month cash flow for 11 months. The $400 a month cash flow for 15 months and the $3,000 down payment from the second tenant buyer, I basically netted about $37,000 on a house that most investors will not touch because it is 93% of market value.

Brandon: Yes.

Wendell: That deal is a great example of a true no money down deal because I was able to get that deal subject to, the existing financing. I was able to convince the seller. It’s in her best interest that I take care of the monthly payment because at this time, you know, I mean she was paying for two house payments for one year, right.

Josh: Yes.

Wendell: One on a house that she lives in and one on a house that, you know, she no longer lives in. I came in there with a solution to her debt problem, right and then I turn around, I was able to give a home to a tenant buyer who would otherwise not be able to buy the home, you know, but I gave them like 15 months to qualify for a bank loan so that turned out, you know, pretty well and I made money on a deal that you know most investors—most of my competitors won’t even you know, imagine.

Josh: Yes, so tell me, you go in this property is for sale, it’s $170, she—you know, you suggest to her $160,000 and you do this deal subject to, again, just to kind of take it back for those people who might be confused, how does that work? You know, are you actually buying the property, is it like a typical sales contract or is it something that else that you’re doing and is she the owner? How does all of that work?

Wendell: In a subject to, the way it works is basically, she would deed me the house right. Now, basically when that happens, I get the deed, meaning I’m the new owner, okay. The loan remains in her name.

Josh: Okay.

Wendell: I own the home, she owns the loan.

Josh: Got you.

Wendell: That’s how it worked out.

Josh: How do banks feel about these arrangements?

Wendell: Now, technically, they can call the loan due. There’s such a thing called a due on sale clause.

Josh: Yes.

Wendell: However, one of the ways I was able to get around that is when I deed the house to a land trust, okay. Part of the due on sale clause is that you know, they cannot call that loan due if it is deeded to a land trust, okay or to a trust basically, because a trust is for you know, for planning purposes, right.

Josh: Yes.

Wendell: You can’t—I mean they cannot call the loan due technically so that’s how I was able to get around that, but technically, they can still call the loan due, but a lot of these banks that don’t want another foreclosure on their books on a performing note. It doesn’t make sense to them so technically, they can’t call the loan due, but practically, they haven’t done that to me.

Josh: It’s not in their interest.

Wendell: Yes, yes, exactly.

Brandon: Now, I think this is a part of confusion for a lot of people when we talk about subject to and that is—is subject to illegal? Is this illegal or is it just against the bank rules.

Wendell: Well, it is not illegal, okay.

Brandon: Yes.

Wendell: Generally, banks frown upon it especially if, you know, if the financing works against the, meaning that the subject to buyer is getting great financing and now the interest rate, let’s say is higher, right. Let’s say the interest rate I was able to get is five percent, but all of a sudden, let’s say two years from now, the interest rate is seven percent so the banks, they—of course they want to make more money.

Brandon: Yes.

Wendell: They look down up subject to and you know, but so far, I mean, you know, I haven’t gotten any banks called the loan due.

Brandon: Yes.

Josh: Now.

Wendell: I’m not saying it will not happen. It can happen, but you know it’s—I just said, it’s not really in their best interest to do that.

Brandon: I usually recommend if people are going to do subject to, is to have some kind of a back up plan in case something goes wrong, in case the bank for whatever reason does come in and say, no I want that back. Back on episode two I think it was with Karen Rittenhouse, that was way back in the day. She does almost primarily subject to. That was she talked about is in all of her 100 plus deals she’s done, she only had a bank I think once or twice every even like bring up the issue and both times she was able to talk with them and you know, resolve the issue.

If you have a like back up plan of some kind like you could always wholesale, you could always sell it or you could always you know whatever, that often times helps or if you can come up with the cash.

Josh: Yes.

Wendell: Yes, right.

Josh: Well, so my question, and I think this would probably be another question for folks is you know, is this something where you’re just primarily negotiating with the seller or do you actually end up having conversations with the bank when you’re doing this. You know, hey seller, I, you know, I’m going to you know purchase this property, you’re going to hold on to the mortgage, I’m assuming most sellers who are not savvy are probably going to be a little bit confused by the whole process right, so how do you walk somebody through it and then, you know what do you do with the banks? Do you talk to them or do you just kind of you know cross your fingers?

Wendell: Okay, well first of all, this strategy of subject to and not the work for all types of seller right?

Josh: Right.

Wendell: It takes a certain level of motivation, you know, in the actual example that I talk about, I mean, if you’ve been paying one year for a house you no longer live in, you’re really, really motivated right?

Josh: Yes.

Brandon: Yes.

Wendell: If you have someone coming in and saying I’ll take over your mortgage payment, what will you say? No, right?

Josh: Sounds good, yes.

Wendell: Right, exactly so it doesn’t work for all types of sellers, but it does work for specific types of sellers and then I really don’t talk to the bank. What I do is I just send them a fax signed by the seller saying that you know, that the insurance information, I have to be added, or my company has to be added as an additional insured you know that—I have an authorization to talk to the bank just to verify how much really is the loan balance. You know, but I really don’t like you know, it’s like poking a tiger and so when you do that, it doesn’t make sense so I just inform them that hey, I want to know how much the loan balance and my company will be managing the property and I’m one of the you know, co-insured so if something happens, if something breaks down, you can contact me, you know and that’s as far as calling the bank or getting in touch with the bank is concerned with subject to.

Brandon: Well let’s talk about that then, when something goes wrong, what happens if you’re doing, for example, on the deal you talked about. The original, it was, you were paying a thousand a month to the seller and then you were getting $1,200 a month in rent. What happens when the furnace goes out and it’s eight grand. Who covers the cost of the furnace or if you know something drastic happened?

Josh: Good question.

Brandon: Thanks.

Wendell: Yes, well, that’s why it’s good to always get insurance so if something big like that happens, you know, if you can claim the insurance, you know if you can get that from the insurance then do that, right. Yes, but at the end of the day though, one of the down sides of subject to is since you own the house, then you’re responsible.

Brandon: Yes.

Josh: Yes.

Wendell: Right so if something big like that happens then you’re responsible. You know, one of the deals that I got you know, the—there was like a big water leak underground in one of the underground pipes and I was like, you know that’s a $4,000 bill that I did not expect so all the cash flow for like two years are gone, you know.

Josh: Yes, yes,

Wendell: That’s the down side so.

Brandon: There is some investors I’ve heard and I’ve never done this, but that have gotten home, they get a home warranty on it or they require their you know, tenant, buyer or whatever to get a home warranty and they’re like $500 bucks and they cover a lot of problems like hot water heaters.

Wendell: Right.

Brandon: Furnaces and stuff.

Wendell: Yes.

Brandon: I’ve heard that’s kind of a way to mitigate some of that problems too.

Wendell: Yes.

Brandon: Yes, very cool. Well, I love that story because that’s like the true perfect creative finance and like I said a couple of podcasts episodes ago, we have a book on creative finance coming out soon with the title that I’m not sure on yet, but that’s one of the things—that’s a huge part of that book is there’s a chapter actually on subject to and one on lease options and then a whole chapter just on how does—how do you put different things together like that, exactly like you did, you buy it subject to, sell it lease option or you, you know, I don’t know there’s so many different creative combinations and I love that you kind of spelled that out for us today so.

Josh: Yes.

Brandon: Thank you very much for that.

Josh: You know, what I think is the coolest part is you know that’s one of his earlier deals too right so.

Wendell: Right, right.

Josh: That’s really fantastic, well, so.

Brandon: Yes, I was wondering how many deals have you done then and since then? Like how many—how active are you?

Wendell: Very. Yes, I’ve done over a hundred deals.

Josh: Okay.

Brandon: Wow.

Wendell: To be honest, I haven’t kept track.

Brandon: Yes, wow.

Josh: Oh man, I’ve done so many deals, I can’t keep track, yes. Here’s a thousand dollars to blow your nose with.

Wendell: No, no, I mean.

Josh: Come on Wendell, keep track baby.

Wendell: Some investors would say they’ve done 1,200 deals like whoa, okay, really, let’s just say over a hundred.

Josh: I got you, that’s good. Alright, so you’ve done over a hundred deals. What types of deals so we’ve got the lease option, sub to, you know, do you have buy and holds, do you flip, do you wholesale, what else do you do?

Wendell: Yes, yes, I’ve done wholesaling, I’ve done fix and flips, I’ve done lease options, straight rentals like you know single-family homes and multifamily homes. I’ve done—I’ve even bought and sold land, you know but that’s just one deal. Other than that, I have not done, you know I haven’t bought like trailer park or you know, the true commercial properties like office buildings.

Josh: Yes.

Wendell: You know, retail space, warehouses, you know, self storage, those I haven’t done yet, but as far as residential real estate is concerned, I’ve pretty much did everything that you can think of so.

Josh: Okay and what are you focusing on right now?

Wendell: Right, now I’m focusing on wholesaling, well, actually, we have two focus areas, I would say right. One is we buy and sell houses here in Chicago because the market is getting hot here. It’s good to wholesale to fix and flippers. You know, people who would fix and flip houses right.

We also do some fix and flips, but majority of our deals we just, wholesale. Then, in Florida, because it’s a destination state, population there is growing, that’s our buy and hold so we have rental properties there and as a matter of fact, we just acquired a three bedroom, two bath home there. My business partner sent me a text today so yes, so those are properties that we tend to keep for the long term so we have a good balance of you know wholesaling for quick cash and buy and hold for long term wealth and appreciation so.

Josh: Diversified.

Brandon: Very cool, very cool.

Josh: Nice.

Josh: Well how are you finding your deals then? I’m assuming you’re doing some kind of marketing for them.

Wendell: Alright, okay for those of you listening and if you’re from Chicago, this is time to turn.

Brandon: Turn it off.

Wendell: Turn off your computer, okay. I don’t want to give away my secrets, but anyway, a lot of the deals that we’re getting. We’re getting it from HUD, you know, we have a good system in place, we’re making offers everyday. We’re getting a lot of deals from HUD.

We’re also getting a lot of pre-foreclosure leads so we do some direct mail campaign for Florida we have—I mean some of the deals that we get are also from other wholesalers. You know, so I posted a few days ago like you know, like an update, like a weekly update on what’s happening on my real estate business and one of the terms that I put there is you know, coop-petition, you cooperate with your competition. You know so a lot of beginning wholesalers, they don’t realize how powerful that is and they’re wondering, I don’t have a deal, I don’t have buyers, how do I go about this right?

One of my suggestions is you coop-pete, you know, so meaning you call all the wholesalers that you know of that are in your town. You know, you can Google them, you know, when your driving, watch for those “we buy houses” signs. You know, network at your local REA. You know, and talk to the wholesaler, tell them look, I’m willing to help you and I’m going to wholesale your deals for you so now you have properties to sell so now all you have to do is market the heck out of these properties and then now you have buyers in your database right?

Brandon: Yes.

Wendell: You can do that without risking any of your money without even spending a ton of money on direct mail campaign, right. All you have to spend money is on marketing to sell these houses and even in the worst case that you haven’t sold the house or you know, like a single wholesale deal from that wholesaler it’s okay because by doing your marketing, you’re able to build your buyers database so now all you have to do then is really find out who among your buyers are the real cash buyers and then you focus on finding the deals for those you know, hot cash buyers.

Josh: Are you just saying then that the wholesaler would go find other wholesalers and say, “Hey, wholesaler, you’ve got this deal, you haven’t flipped it yet, let me help you out. In return you’ll give me some kind of compensation and I’m going to go and I’m going to market in addition to you marketing.

Wendell: Right

Josh: You sign some kind of contracts with them, some kind of agreement, saying you’re going to get X, Y, or Z in return for closing, you know, bringing in an actual buyer and then by getting out there, you know you’re building your own brand, people are starting to get to you know, and that’s how things get kicked off, is that right?

Wendell: Yes. Yes, exactly, you got it.

Josh: Now, now, is there any danger to that strategy for somebody who’s doing this wholesaling for other wholesalers, you know, getting bypassed or you know, the wholesaler in his own right isn’t on the agreement. You’re now marketing a property that you have zero financial interest in.

Wendell: Yes. I mean, actually the risk would be—I mean if you don’t do your due diligence, meaning you’re just wholesaling another wholesaler’s deal without even looking at the property, without verifying the value, without verifying the repair, you know the repairs that the property needs, the danger number one is if you don’t do your homework, you will lose credibility, right, because you end up wholesaling houses that you know, are over priced and you know, it’s already over priced and you’re over pricing on top of that you know so. That will make you look like a fool in front of your potential buyers so that’s how you lose credibility in a hurry, okay. Before you, you know, before you wholesale another wholesaler’s deal, it has to be a really good deal, right.

Brandon: Yes.

Wendell: Then either, you can put a profit on top your—on top of what they are selling it for, or what I typically do because I open my wholesale deals to other wholesalers. You know, I tell them look, I’m asking, in fact, I have a deal that you know, that you know, I found a buyer just last Sunday. Actually, it’s not me who found the buyer it’s another wholesaler who found a buyer. You know and I told him, the name is Bailey. I told Bailey, look I’m selling this for $149, right. If you can sell it for $149, you know, I’ll give you $5,000 right.

That means I’m only going to net $110, you know, that’s okay because I have a really good deal. I have enough margin in there and so when we market it together. You know, the house is only for sale for $149, for $115, right, it’s not going to be like another wholesaler selling for $120, another wholesaler selling it for $125, you know, me and other wholesalers are selling the same thing for the same price. That gives them credibility right, that they’re not over pricing my deals so there’s no you know, and of course, I only do this with—I have to talk to the wholesaler first.

You know, get to know him personally so far, the only time that you know, that I did this and the wholesaler said that there’s a buyer on the other line and then the buyer fell apart at the last minute. That only happened once in ten years of me doing this so it’s like, it can happen, you know that the whole deal can fall apart if you’re not careful. Of course, you have to put it in writing, right. That everything is agreed upon up front and there’s no problems down the road.

Josh: Yes.

Wendell: Yes, coop-petition or cooperating with your competition can be a good way because I can only market my deals so much right.

Josh: Yes.

Wendell: By working with others wholesalers, I basically leverage on their buyer’s databases, right. Maybe I have a hundred buyers in my database, but if each of those other wholesalers have let’s say 50 buyers in their databases and I work with ten of them, right? All of a sudden, I expanded my buyer’s database to 600, right.

Brandon: Yes, so it’s almost like you’re just giving a referral fee to the other wholesaler, right. You’re selling the property, but you’re—if somebody brings you a buyer, you’re giving them a referral fee right? I mean kind of.

Wendell: Well, what I sign with them is like a non-exclusive option to purchase.

Brandon: Okay.

Wendell: While in that case, option to sell the property. They a sign a non-exclusive option to purchase from me.

Brandon: Okay yes.

Wendell: For a price lower than you know, what they’re going to sell it out in the market so that the difference will be their profit.

Brandon: Yes, and that keeps it my mind a lot more. I mean we’re not obviously lawyers and I’m not going to say what’s legal and what’s not, but a lot of areas I know, like referral fees may be frowned upon, but options are generally from what I know, legal across the board.

Wendell: Right.

Brandon: Again, check with your lawyer and all that.

Josh: Yes.

Brandon: Technical jargon, but that’s the way to—I mean, that’s how I would envision doing it as well is you set up a non-exclusive option with that wholesaler and then they can go out and try to sell it just like a lease. I mean it’s basically, it’s like a lease option, just yes, this is advanced stuff. I like it. This is cool, well cool. Here’s a question, basic question and now that we’re on the topic of wholesaling, should new people start with wholesaling I mean after all, you’ve been doing this for ten years and you’re doing wholesaling and it sounds a little bit more complicated than I think what people hear on the you know, TV shows or whatever. What do you think? Should new people start with wholesaling? Why? Or why not?

Wendell: Okay, well it depends. It depends on them, right because not everybody have the same circumstances, right. Some of them might be—might have a fulltime job and they’re working 12 hour days or what not, right. They might be way too busy to do wholesaling or they might be in the market where it’s better if you—if you fix and flip properties, right? Or it could be in a market where it’s better to buy rental properties.

It just depends on your situation, but generally, yes, I mean, wholesaling is not easy right, there are many moving parts to it, but the good thing about it is that there’s low risk, you know, if you structure it the right way, there’s really no risk because if you’re not able to sell a property, if you structure your contract correctly, you can get your earnest money back if you put an earnest money in the first place and you focus on finding a great deal, a wholesale deal and to me that’s the nice thing about wholesaling is when you develop that skill of being able to find a great deal then you can make money from that deal in whatever way that makes the best sense. It’s like the highs and best use right?

Brandon: Yes

Wendell: If you’re good at finding great deals, then depending on your market, you can make money on it by just wholesaling to other investors by you know, fixing it up and reselling it at a higher price or fixing it up then renting it out, right. That’s a good thing about it is it helps you develop that capability.

Brandon: Yes.

Wendell: Of finding great deals because if you don’t know how to find great deals then everything falls apart right.

Brandon: Yes.

Wendell: Because we make our money when you buy and you realize it when we sell so.

Josh: Yes, yes, so and I was going to harp on that. I mean the question here is should new investors start with wholesaling and in order to wholesale, you need to find great deals.

Wendell: Yes.

Josh: Typically, the new investors don’t necessarily know what a great deal is or how to find those great deals right.

Brandon: It’s almost like instead of learning—newbies starting with wholesaling, newbies should start learning how to find good deals right.

Josh: Right.

Brandon: What does that look like?

Wendell: Yes.

Josh: That would be my thought process, you know, hey I need to learn the process of finding these good and at that point, I’m okay going wholesale because I think a lot of people come out and say, “Oh, well you know I’m going to be a wholesaler.” I’m go and start building this buyer’s list, which ultimately is, I don’t know. I don’t think it’s worth the while of newbies to waste their time because in the end at least it’s my opinion that you know, if you’ve got deals, people are going to find the buyers.

Wendell: Yes, yes.

Brandon: Yes, definitely more important I think to focus. I mean you can’t focus on everything at once I suppose in a way, but if you focus on finding good deals I think that’s probably the most important thing. That’s the most important skill of any real estate investor could have probably.

Josh: Oh, yes.

Brandon: Find the good deals.

Wendell: Right, right. Yes.

Josh: Well, yes, I mean think about it, you’re a buy and hold guy, you got to find good deals, right. You know, of the long term, your expenses are going to be X, Y, and Z. If you buy bad, you’re in trouble.

Brandon: Yes.

Josh: If you flip houses and you buy a bad deal so that’s—you know, I mean thinking about it really is the probably the single most fundamentally important aspect of real estate investing for any kind of investor, any kind of strategy.

Wendell: Yes, that’s right.

Brandon: Yes and that’s kind of why, you know, back in our show with Jerry Puckett, back on I think show what was it 21 maybe, anyway, we called it, and his kind of catch phrase is “market like a wholesaler” because if you can learn how to market, no matter what you are, whether or not you’re a flipper, buy and hold, commercial, whatever. If you can market like a wholesaler should market, you’re going to do great so.

Wendell: Yes.

Brandon: Very cool. I guess I might as well throw this in here. If people want to learn how to analyze deals a little better, go check out the BiggerPockets calculators, which are at BiggerPockets.com/Calc. We have a flipping one, a buy and hold one, a 50% rule one, and a wholesaling calculator that’s coming out some time soon.

Josh: Some time soon.

Brandon: Yes, we’re working on it so.

Josh: We don’t know when. Yes.

Brandon: I’m pretty excited about that one so anyway, go check them out.

Wendell: Okay.

Josh: Really quick, while we’re plugging here. This show 65 with the BiggerPockets podcast, if you’ve got questions for Wendell, definitely be sure to jump on the show notes at BiggerPockets.com/Show65.

Brandon: Cool.

Josh: Alright so Wendell, why don’t you tell us about your biggest deal. What was it? You know, what kind of impact did it have on you?

Wendell: Okay so my biggest deal is a hundred plus unit apartment complex.

Josh: Whoa.

Wendell: Yes, I was able to get it. This is in Loveland, Ohio. I was able to find that deal through one gal whom I trained on how to find apartment complexes because that’s really what I was looking for. We got it. It’s off the MLS—I mean it’s not on the MLS, right.

It’s a private seller, you know, who just wants to get out of the apartment of you know, building game because their—if I remember correctly, they were trying to buy another business, right. They just want to get out of the apartment complex. Learning from my—I guess biggest mistake, which was also an apartment building, a section of apartment building. You know, so I learned from that mistake and I was able to get a good deal.

I mean it’s not a great deal in terms of big discount to market value. In fact I probably paid like close to market value for the property. The good thing about that deal is it you know, it brought a lot of passive income and what I realized was that ironically, the bigger the deal, the less management headaches I have.

Brandon: Interesting.

Wendell: Yes, yes, that’s one of the biggest learning there is—I mean think about this right. If you have a ten unit versus a hundred unit, the ten unit apartment building will only produce so much income that it really cannot pay for a fulltime property manager or an on site property manager and maybe a maintenance person.

Brandon: Yes.

Wendell: The hundred unit building can pay for a fulltime property who can live onsite and fulltime maintenance person.

Josh: Yes.

Wendell: Guess what, you have less management headaches and you have bigger cash flow with a bigger unit with less vacancy risk.

Josh: Wendell, this is a hundred-unit building you actually bought to buy and hold correct?

Wendell: Yes, that’s right.

Josh: Okay so you know maybe we can you know dig in a little bit on this thing. A hundred units about how much did that thing cost?

Wendell: Six million dollars.

Josh: Six million and how did you finance it?

Wendell: I was able to assume the existing financing of five million dollars and I was able to raise one million dollars form private investors.

Josh: Wow, okay.

Brandon: You did most of this deal with no money down pretty much.

Wendell: Yes, I have like $5,000 into the deal.

Josh: You put $5,000

Brandon: Not bad.

Josh: Into a six million dollar apartment complex that you invest you know.

Wendell: Right, right.

Josh: That’s awesome. Good for you. I’m real happy for you Wendell.

Wendell: Yes.

Josh: Where’s my hundred-unit building? That’s great man, no seriously. I’m giving you grief, but that’s fantastic so you put—you know, you get these investors together, you assume the existing financing and what did the building look like when you picked it up? Was it in trouble? What was the vacancy rate? What did you do to turn it?

Wendell: Well, actually, it was in good shape.

Josh: Okay.

Wendell: If I remember correctly, it was 93% occupied when we got it. You know, we were able to increase to 97% occupancy, but I mean, little increase in occupancy there. We really just acquired it for the cash flow.

Josh: Yes.

Wendell: It was in a great area. It was in good shape so, yes.

Josh: Okay, so tell me. You know, I’m now thinking about the numbers and I’m thinking, hey, okay, this guy puts $5,000 to buy a six million dollar property, what kind of revenues is this thing bringing in?

Wendell: It ranges over you know like the several years that we owned it.

Josh: Yes.

Wendell: It’s producing nine to 12% you know, cash and cash return.

Josh: Okay.

Wendell: You know, from the million dollars that they put down, you know so, yes. I mean it’s not spectacular, but it’s a good deal in my book, you know.

Brandon: I’m wondering how did you make, like personally, how did you make money off it. Did you get with.

Josh: Well, that’s what I was going to ask.

Brandon: Yes, one share unit? Because you only had $5,000 into this thing.

Josh: What do you own? What’s your piece of the actual of the property? That’s where I was going, Brandon. Great minds.

Wendell: What I contributed to the deal and by the way I got the $5,000 back so. I really have no money in it to be honest so because me and my partner put the deal together, you know, in the—it’s still crucial what we did together because we were able to qualify for a five million dollar loan that we assumed, right. My ownership on the deal, I mean on hindsight, I could have gotten probably a bigger piece of the pie, but given that I want to establish that relationship with that particular group of investors.

Brandon: Yes.

Wendell: Me and my partner, we got like 20% of the deal and then our cash investors, you know, they got the 80% of the deal.

Josh: Got you.

Brandon: I think that’s.

Wendell: It’s not a whole lot of money, but you know, it’s a good way to start. I mean, it’s.

Brandon: Yes.

Wendell: The nice thing about that is by creatively putting a deal together, right. You can acquire this big properties that you would never thought you can acquire right.

Josh: Yes.

Brandon: Yes.

Wendell: You know, if puts passive income into your pockets so, yes.

Brandon: Yes, that’s cool. Hey can we go back to—we kind of glossed over it real quickly, but you mentioned the girl you trained to go find apartment buildings. This is something that I know, I’ve talked to a number of people, including like, you know, my friend, Ben Leybovich. Me and him have had a lot of conversations on how do you find apartment buildings for sale. I mean, like, how do you find larger apartments for sale right now? Do you have any tips on finding ones like that?

Wendell: Well.

Josh: Any that you want to share at least.

Wendell: Okay, when I started, you know, actively looking for apartment buildings, what I did was, I went to LookNet.com and I actually, well, first of all, LookNet, when you look at LookNet, generally, you really can’t find good deals there, okay. The good thing about looking at it is it allows you to find the real estate brokers who focus on apartment buildings.

Josh: Yes.

Wendell: What I did is, I contacted 50 commercial brokers of apartment buildings and I was able to establish some relationships in there and I was able to you know, I told them look, the deal that you have, it doesn’t quite work for what I’m looking for, but this is what I’m looking for. The cap rate, you know. If the loan is assumable, that’s even better, etcetera, etcetera. I gave him the criteria, you know. Out of the 50 that I contacted. Like several of them came back you know and I was able to find my first deal doing it that way.

Josh: Yes.

Brandon: Yes, that’s smart.

Josh: Yes.

Brandon: That’s very smart.

Josh: That’s a really good idea, the part about asking if the loans are assumable. I think that’s something that probably most newer investors wouldn’t even think to do and I think it’s certainly brilliant.

Wendell: Yes.

Josh: Yes, no that’s great. You mentioned a little bit ago, you biggest mistake was also in apartment building, why don’t we—buildings—why don’t we talk about that a little bit.

Wendell: Okay, how much time do you have.

Josh: Make or break. Come on. We don’t need to hear about every mistake. Just talk about the big whoppers.

Wendell: Alright, the big, okay, well. It’s 36-unit apartment building in a bad place in Cincinnati, Ohio. When I first looked at the deal, it’s like whoa. The numbers look good right. The property the owner right now bought the property for a million bucks, you know.

After negotiating on it for six months, I was able to lower. I mean, their first asking price was $950,000 and then after a few months, they lowered it down to $825,000. Then after a few months, they lowered to you know like $700,000 and I offered the $600,000 at that time or I think I offered them when they were asking for $950,000, I offered them $700, you know and then eventually, they refused my higher offer. Then after a few months, they told me hey, the building is for sale for $565,000.

Brandon: Wow.

Wendell: Okay, wow, you know so we were able to get it. It was you know.

Josh: Would you buy like four or five 65?

Wendell: Yes, $565,000, which is the loan balance is—it’s not that great area, you know. It’s in a place where I was kidding Brandon like several weeks ago. It’s a place where you only have two options right. You either get shot or you get stabbed.

Josh: Nice.

Wendell: Alright.

Josh: What happened to you? Did you get both, I mean?

Wendell: Well, when my partner and I go there, we wear a bulletproof vest, okay so don’t buy in areas where you have to have—where you have to wear a bullet proof vest.

Josh: Yes, I don’t know about that, Wendell, man.

Brandon: That’s a tweetable topic right there. Don’t buy in areas where you have to wear a bulletproof vest.

Wendell: Right, right so anyway, to make the long story short, we were able to get the building. We acquired it with the, you know, one dollar down. It’s a land contract. We just assumed, well not assumed, but we took over the mortgage payment and then we were able to fill it up, you know. We list it up and then we were able to refinance the seller out of it, but what happened was, you know, this was back in the day where you know, I was younger and I guess more arrogant.

Josh: Like Brandon, yes.

Brandon: Like me.

Josh: Alright.

Wendell: You know, my partner and I said, well, we have $200,000 to burn, you know lets get all of these units fixed up right. Let’s lease it out, you know, but what happened was in a bad area, right. That’s not a very wise thing to do because when we leased up the place, well, first of all, we hired the wrong property manager.

Brandon: Wow.

Wendell: You know, who happened to basically steal from us.

Josh: Oh nice. I’ve been there.

Wendell: Yes, did not tell us the truth about what’s really going on in the building right. Mistake number two is we put so much money into this building thinking that it will be maintained that way, but in a bad area where you get not so good tenants. Well, they tend to destroy the property.

Josh: Yes.

Wendell: You know, it’s like, I don’t know why they do that, but they do. There are people like that. Believe it or not, okay.

Josh: That’s really though.

Wendell: What happened from 80—well when we first took over the building, it was like 50% occupied and really the actual economic occupancy is really lower than that because not all of the 50% of the people living in there are really paying right. We were able to increase it I believe up to 80%. We were able to refinance and you know, get the seller out, but you know we used the money. We put it in the building, but then after a few months, when we found out that the, you know, previous property manager did not tell us as to what’s going on in the building so we have to you know, we had to fire him, get another property manager, but by the time we got the building back you know, it was like 60% occupied, right.

Brandon: Ouch.

Wendell: We are out $200,000 and then now, after the units are already messed up again, but now, we don’t have the money to pay for it.

Josh: Yes.

Wendell: You know, so yes, so, I’m embarrassed to say, but you know, we basically lost that building to foreclosure so.

Brandon: Ouch, ouch.

Josh: Wow. Wow. Well, you know, you live, you learn right?

Wendell: Yes.

Brandon: What are the lessons you learned that you could share?

Josh: Yes.

Brandon: What can you share from that tragic experience? That’s pretty rough, that’s worse than what I’ve been through.

Josh: Yes, that’s pretty bad man.

Wendell: Yes. Yes, that’s.

Brandon: What can you share?

Josh: Well, but it, you know, listen man, at least you didn’t get shot. You wore his bulletproof vest and his helmet when he went down there.

Wendell: I was like, well, I’m never buying in an area where you only have two options, right? Getting shot or getting stabbed.

Josh: I’m sorry. It’s not funny, but you’re.

Brandon: You know what, as tragic, as sad as that is, out of the 30 whatever plus thousand people that will listen to this episode, I guarantee you, you just saved somebody’s career. Like, if nothing else, like that lesson that you learned about how hard it was. Just saved, I mean multiple people’s future careers cause.

Josh: Oh yes.

Brandon: Yes, it’s all good.

Wendell: Yes and the second lesson there is you know real estate is not all about the numbers right.

Brandon: Yes.

Wendell: My background was engineering so I’m you know, I’m this math guy, you know, spreadsheets and everything right.

Josh: Yes.

Wendell: To me, when I started. It was all about the numbers. If the numbers was good, it must be a good deal, right.

Josh: Yes.

Wendell: Well, it’s not necessarily true, okay.

Josh: It’s an art, not just a science, yes.

Wendell: Exactly, exactly so you know, you have to know the area, what’s really going on and the third most critical thing is property management is really crucial.

Josh: Yes.

Wendell: You know, especially in a not so good area, right. If you are willing to risk it and buy a property in a bad area, you have to either get a property manager, you know, whom you trust, whom you know already and who live in that area. Okay, who knows the ins and outs of that area.

Brandon: Yes.

Wendell: You know, because it’s not.

Josh: Doesn’t that guy also carry a gun and a knife and having that guy on staff might be a little worrisome you know?

Wendell: Well, yes, that’s true.

Brandon: Well, first rule is don’t buy in that area.

Wendell: Yes, that’s right.

Josh: If you end up buying, yes.

Wendell: If you end up buying, you better get the property manager who knows the area.

Josh: Yes.

Wendell: Live in that area, you know and or you have to live in that area, you know, so.

Josh: Yes.

Wendell: I mean you really have to be a hands on manager if you want to buy in a bad area so.

Josh: You brought up the thing about on it’s not about all about the numbers and Brandon, I think he wrote a post, what was it, last week or the week before about there was a survey that came out about the best areas to invest in real estate.

Brandon: Yes.

Josh: Number one of course, was Detroit, I believe.

Brandon: Yes, Detroit.

Josh: There were other cities in there where you know, the numbers were fantastic, absolutely astonishing numbers and if you’re a numbers guy and you don’t look at the other stuff, you’re like, “Wow, these are great places!” You know, again, you have to look at the other factors because if you invest solely on the numbers, particularly, I would say if you’re a new investor, you know.

Wendell: That’s right.

Josh: I think it’s easy to say, “Hey, I’m new, I’m going to be a little cautious. I’m just going to focus on numbers.” That could still get you in trouble. You know, you can find great deals in terrible areas and find yourself in a lot of trouble and you know, again to re-iterate my own story, that’s pretty much what I did and you know I ended up in trouble as well so you know. I definitely appreciate that you harped upon that so.

Brandon: In fact I have swung both ways right, like I’ve bought properties where I like I’ve bought properties like where I didn’t do any numbers at all.

Josh: Nice.

Brandon: Then I did properties where like I over analyzed everything and then I bought bad stuff because you know, it was all about the numbers so and I.

Josh: Nice.

Brandon: I think that’s kind of the benefit right at BiggerPockets is you can kind of have other people point out your stupidity and say, “Look, here’s another opinion on what this property is so.”

Josh: Yes. You know, that was a pretty notable mistake. What did that do for you, you know, did you think about quitting? Did you think about giving up or did it motivate you to kind of dig deeper and just change strategies and smarten up a little bit.

Wendell: Yes, well, the temptation to give up is so high you know at that time because there’s so many bad things happening, you know with that building, but what I did is you know, I told myself, well, if I quit then that’s really when I have failed right. You know, reading a lot of books about real estate, you know, for example, I read the Art of the Deal by.

Josh: Trump.

Wendell: Donald Trump, right and knowing that he too lost a building to foreclosure, right.

Josh: Yes.

Wendell: He was actually in a worse situation than me you know.

Brandon: Yes.

Josh: He was like—he was pretty deep upside down according to many in the press. I’m not going to state any facts. I’m just going to you know. Repeat what’s been.

Wendell: Right, right so I was you know basically $750,000 you know in debt on a building that is not performing, but you know the Donald is $900 million dollars in debt you know so it was like okay, so if he can turn it around.

Josh: Supposedly by the way.

Wendell: Make money from it. Yes supposedly, okay. You know why can’t, right.

Josh: Yes.

Wendell: That’s when you know, I decided to buy a bigger building with bigger cash flow and every mistake that I did with my first building I did the exact opposite. You know, my first building, I bought it in a bad area, my—the second building that I bought the 100 plus unit apartment complex. I bought it in a great area. I paid you know, like dirt cheap price for a bad building. Well, I paid fair price for a good building, you know. The building that I bought in the beginning was 50% or less occupied. The building that I bought is 93% occupied so.

Brandon: Yes.

Wendell: Every mistake that I did, I did the exact opposite so my advice is if you have the misfortune of losing a property to foreclosure don’t let that stop you. You know, if fact, had I sort of delayed by a few months, you know, the time that I bought the second building, I probably would not have been able to qualify to assume a five million dollar loan.

Josh: Yes.

Wendell: You know, because when my building was in trouble. You know, when I was not yet in foreclosure, I immediately bought another building. You know, learning from the mistakes from the you know, with my first building, right so. At time, I think what I did was still good so.

Josh: Yes.

Wendell: I was still able to qualify and assume a five million dollar loan with a business partner. You know, had I delayed it a few months, I would never have bought my second building so there is definitely married and not quitting and learning from your mistakes.

Josh: Yes, no that’s great.

Brandon: Yes.

Josh: That’s great so you’ve continued on, you’ve been you know, very successful, done lots and lots of deals. What is the future of you real estate business look like now?

Wendell: Okay, well, the good thing is, you know the momentum with our wholesaling business is really building up, right. We are you know, basically, buying one house a week and we should be on track to meet our goal of ten to 15 houses a month.

Brandon: Wow.

Wendell: You know, on top of that, you know, well I guess in a parallel to that, we are building an inventory in Florida of houses that we are going to buy and hold for the long term.

Josh: Got you. No that’s great. That’s great.

Brandon: Yes, wow.

Josh: Alright, well, fantastic stuff and some unfortunate of course, but certainly insightful. I know that I’m appreciative and I’m sure the listeners are as well at your willingness to be so forthright about everything that’s happened.

Yes.

Josh: Why don’t we move on to the next section.

Announcer: It’s time for the Fire Round.

Brandon: Alright, the Fire Round, these are questions that—ripped from the headlines of the BiggerPockets forums. Question number one, if you had to pick either a single family or multifamily for a first time investor. What would you choose?

Wendell: Single family.

Brandon: Okay, do you want to—why? Well expand on that.

Wendell: Why okay.

Brandon: I know this is the Fire Round, but you know, I’m just curious.

Wendell: Alright, well, there’s less risk because you can sell a single family either to an end buyer or to an investor.

Brandon: Yes.

Wendell: Multifamily, you’re stuck selling that for an investor so getting out of it, if you made the mistake, similar to the mistake that I made.

Brandon: Yes.

Wendell: Is a lot harder for a multifamily, but for a single family, you make a mistake you can sell it even if you have to bring cash to the table. First of all the cash is just that you need to bring will be less if you make a mistake so you cover your down side with single family.

Josh: That’s a fair point. Definitely an interesting take on the question, what about tips for or advice for wholesaling out of state?

Wendell: Well, don’t do it if you’re a beginner. If you haven’t wholesaled a house yet, don’t wholesale out of state. At least in the beginning.

Brandon: Yes.

Wendell: You need to know the area in order to be able to wholesale, you know, effectively.

Josh: Yes, yes, what if I live on the border, right so if I’m in the border of New York and New Jersey, can I wholesale on New Jersey? I’m just being a smart ass.

Wendell: Yes, sure.

Brandon: Alright, question number three for the Fire Round is in direct mail marketing, where do you get lists?

Wendell: Where do I get lists?

Brandon: Yes, who do you send to?

Wendell: ListSource.com is a good one.

Josh: Okay.

Wendell: You can get lists of people who own houses in they’re out of state, you know and the house is vacant. Yes, I mean, that will be a good list to get because the you know, the out of state lender is probably motivated to get rid of vacant property.

Brandon: Yes.

Wendell: Another list that I do is expired listings so if you want subject to deals or lease options deals, expired listings is a good source of leads for direct mail.

Josh: Yes.

Brandon: Okay.

Josh: Yes. No that’s great, that’s great. What about cash buyers? Where does one find cash buyers?

Wendell: Where does one find cash buyers? One of the most effective way is by networking at the local REA, another one is networking online here in BiggerPockets.

Josh: That’s a good place, I’ve heard of it.

Wendell: Yes.

Brandon: That’s cool. Very cool.

Josh: Right on.

Brandon: Alright, why don’t we wrap this up with our

Announcer: Famous Four.

Brandon: Alright, the Famous Four. These are the questions we ask everyone, every week so everyone knows what they are, but you know we still like them. Number one, what is your favorite real estate book?

Wendell: What’s my favorite real estate book? Quick Turn Real Estate by Ron LeGrand.

Josh: Got you. Alright. What about favorite business book?

Wendell: Most people don’t consider Rich Dad, Poor Dad as a business book, but to me it is a business book because it opened my eyes to you know, like the whole financial literacy and how the game of money is played.

Brandon: Yes.

Wendell: Now let me add to that you know and this may not be politically correct for some people, but the Bible to me is a good book. It’s not necessarily a business book, but if you follow its principles, you will not get into trouble so.

Brandon: Good tip. Good tip. I like it.

Josh: Oh, what about hobbies, what do you do for fun? Anything outside of real estate?

Wendell: I’m a good bowler. Bowling.

Josh: Really?

Wendell: Yes, yes.

Josh: What’s your highest score Wendell?

Wendell: 256.

Brandon: Whoa. You are a good bowler.

Josh: That’s a pretty good game. That’s a pretty good game. I saw a video, it’s really funny, I saw a video on Youtube the other day of a guy who bowls backwards.

Brandon: What?

Josh: He bowls backwards because he’s got a bad knees and this guy literally like will face the opposite direction of the lane and has this funky backwards motion, spins the ball and his best game was 260 and he’s gunning for a 300 game.

Brandon: Oh, he’s beating you, Wendell.

Wendell: Wow.

Josh: This guy not only is bowling backwards without looking and he’s still beating you. Maybe you should pick something else up.

Wendell: Yes, I should have probably just focused on real estate.

Brandon: I’m going to find that video and put it on the show notes page also.

Josh: Yes, it’s amazing.

Brandon: That’s cool.

Wendell: Oh yes. I bet I’ll look at that one. Yes.

Brandon: Alright, final question for me is what do you believe sets apart successful investors from those who give up and fail?

Wendell: Well, there are many but, one of the things that sets successful real estate investors apart is that they’re will to take massive action. You know like—they’re not afraid to fail and they don’t over analyze things. They just try things out. You know and they learn as they go along versus I have this you know plan that I thought you know like for months and months and then now I’ll start implementing it. Well, it doesn’t happen that way for successful investors that I know and definitely, it did not happen that way for me. I developed a simple, one pager plan and then I immediately implemented it. You know, like I read the book and I immediately implemented and I got my first deal because of that. Most people would attend seminars after seminars or they will you know, go to BiggerPockets everyday for like one year and you know they have nothing to show for it.

Josh: Yes.

Wendell: Because they don’t get off their butt and just take some action you know.

Josh: Yes.

Brandon: Yes.

Wendell: Like yes.

Brandon: One of my favorite books is called The Lien Startup and it’s all about that. In a company—just get out there and do something, make something happen, and then tweak and go. Like learn as you go and your company has a much better chance of success no matter what it, real estate or otherwise so.

Wendell: Yes.

Josh: Yes. No that’s great.

Brandon: Very cool. Very cool.

Josh: Well, Wendell, it’s been a—it’s been interesting man, I appreciate everything you’ve been through and I think you’ve shared a lot of really really cool insight. I think we could probably have run this show for several hours and still not have run out of material, but definitely, appreciate you taking time to be here with us after several tries. Where can people find out more about you?

Wendell: Yes, they can check my blog at The DiligentWholesaler.com.

Josh: The DiligentWholesaler.com.

Wendell: Yes.

Josh: Also, presumably, they can find you on BiggerPockets.com.

Wendell: BiggerPockets.

Brandon: Wendell is very active in the forums so we appreciate that Wendell.

Josh: We do, we do.

Brandon: Cool.

Josh: Well, listen, thank you so much again for everything and we will again encourage everybody to jump on the show notes at BiggerPockets.com/Show65. Otherwise, if you’ve got any questions, you know, certainly you can post them on the forums at BiggerPockets.com/Forums.

Lastly, as we do with every show, be sure to follow us on Facebook at Facebook.com/BiggerPockets, on G+, on Twitter, on LinkedIn. We’re all over the place. Get involved, get active, participate, be a part of BiggerPockets and as Wendell said earlier, take massive action. I do agree with him that’s a great a way to make things happen so with that we appreciate your time, your listenership. Be sure to leave us a rating in review on iTunes and Brandon, why don’t you take it out of here.

Brandon: Alright, this is Brandon signing off.

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