All Forum Posts by: Cornelius Garland

Quote from @Liam Singh:

Hello everyone,

I'm looking for insight into your experience with a few funnels. A partner and I are focusing on realtors, a probate list (cold emailing) updated once a month, D4D, and Craigslist. The Craigslist effort will mostly be just for this month to test the numbers, as I am moving into this full time from my current job in tech and do not have the time necessary for D4D.

If you have done these, do you have experience you can share with how you made it work? If you've done something different, why did you choose to focus on that different funnel? From my first few weeks getting up to speed, it's definitely become daunting trying to source solid deals in Denver. 

Any perspective you are willing to share would be appreciated!

I worked a full time job my first year in real estate, and I drove for dollars for the first 6 months but didn't get any results. It takes significant volume to get a deal under contract regardless of the marketing strategy. If you have more time than money then you can spend your days D4D and manually doing lead generation. However, when working a full-time job, you'll get better results by putting together a marketing campaign. Specifically, pulling a list of motivated sellers, and then reaching out to it via cold calling or text.

There's a tendency to take a targeted and sniper approach when you first start and have limited time. For cold marketing, we need to take a broader approach since we're stacking the funnel of quality leads. Even though a list may appear highly motivated, like probates, you still need to touch a high number of sellers to generate enough leads to get a property under contract. Additionally, others are targeting the same lists, so finding an exclusive, highly motivated list is difficult. This is why I create my own criteria to ensure nobody else has the same combination of 10k+ sellers on their list.

Cold email is not a great strategy as the emails do not have a high response rate. Yes, your messages will hit their inbox if you're using cold email software, which I'm assuming you're doing since you're in IT. However, you're going to need to send hundreds of thousands of emails to get a deal. Most people in the industry experimented with this already, but aren't having success because email addresses are not highly accurate when you skip trace the lists - especially if you're using a cheaper datasource.

Atop of this, you're in Denver, which is an affluent market. The median sales prices are $550k, which is $100k over the national average. The higher the median sales price is over the national average, the more affluent an area is; ultimately, resulting in the majority of the sellers not fitting our ideal "motivated seller" demographic. 

So let's break this down and point out the flaws in your strategy: You're in an affluent market where your ideal seller is not located while using cold email and manual marketing strategies, which yield a low number of sellers being touched daily. This is a recipe for your business to never get off the ground. It's sad to see so many investors get excited about starting their journey but then lose steam because they get stuck in the marketing phase - never giving themselves an opportunity to actually get a seller on the phone and do the fun part of investing - locking up contracts! This will not happen to you if you make tactical adjustments that I'll state below.

Here's what I suggest: Focus on one scalable strategy. If you want to do more hands-on marketing, bandit signs are a good alternative to D4D as you can put your signs up over the weekend and get a lot of eyeballs on them instead of manually driving an area and taking a sniper approach. I tend to adopt the same marketing philosophies of Fortune 500 companies: Does McDonalds or Lowe's have reps going door-to-door to market their products? No, even in the early stages they did not. They focused on getting in front of the most targeted demographic using their available budget at the time.

Here's what I'm doing that's working: I'm cold texting to get all my deals this year. I used to have a lot of cold callers on staff, and this year I have slowly transitioned to texting after primarily cold calling to get deals between 2019 - 2024. Since the texting 10 DLC / A2P regulations went into effect in October 2023, it reset the marketing channel and now very few investors are texting in bulk due to all the hurdles you need to jump through to get your account approved for texting.

For me, keeping my cost per deal low is very important. It was worth it figuring out how to get texting up and running because my cold calling leads kept taking longer and longer to convert into deals (over 120 days even for hot ones). And I can only get 1 - 3 leads, on average, a day with cold calling, so it made sense to change. I can get 20 - 50 leads a day cold texting by using one virtual assistant verses needing 30 cold callers on staff to generate the same volume. It became very unsustainable, and I wasn't getting the same ROI with cold calling.

A lot of the information you hear on social media is either dated or too ambiguous. Most influencers in this industry are extroverted and great at sales; however, they have blind spots in the technical areas and many live in echo chambers. So you'll hear them parrot the same talking points even if the information is not the most accurate and current. There are very few original thought leaders and true pioneers in the marketing side of real estate. Marketing is just an afterthought to most gurus, yet it's the primary reason why most investors never get their companies off the ground. Feel free to ask me any other questions so we can get you rolling in the right direction. 

Quote from @Carlos Velazquez:

I am new to real estate investing an ventures an need some guidance on attempting to complete a wholesale for my first time. I have a property in mind I have a few variations of contracts to send to the listing agent and I have a mental script ready to call the agent an attempt to get the property under contract. The issue I am having is finding investors in general I have No Idea where to look guidance an advice would be greatly appreciated. 

I don't want to sound like a broken record, but I'll echo the previous replies: You should not attempt to wholesale on-market properties. We just don't want you wasting time going down a dead end road. Look at it from the agent's perspective: Why should they work with you when they have access to hundreds of qualified buyers via the MLS? All the buyers you will bring to the table likely saw the deal already and decided to pass on it. Now, you could reach out to these agents and see if they have anything distressed in their pipeline that's not listed. Some agents may not feel comfortable listing junker properties as they may be a blight on their brokerage, or they're priced too low where the effort to list it doesn't make sense.

My suggestion is to stick with off-market deals for now and focus on building your own seller pipeline by pulling a list and cold calling or texting it yourself.

Quote from @Richard Kamienska:

I’m trying to creat a letter to send some mailings in this same scenario. Would you mind sharing a template?

I'll share a yellow letter I used to get me countless contracts. I highly suggest doing yellow letters if you're targeting below 5k sellers as the response rate will be higher. Direct mail is a volume game, and you need a lot of volume (at least 15k+ pieces) to have a fighting chance to get a deal using postcards. However, you can get a deal with lower volume if your mail piece is of higher quality (i.e., yellow letters).

Here's the Yellow Letter Mailpiece:

Yellow Letters HQ is my go-to place for purchasing and delivering direct mail pieces. Also, they have lots of templates on there you can use as inspiration. We used one of their postcards for years and sent out tens of thousands of mail pieces using their standard one. I'll place it below.

The Postcard Mailpiece:

Again, nothing too fancy here. The purpose is just to get the seller to call back so you can present an offer to them. We also, mailed out postcards using different colors like yellow and pink. Unless it's a probate situation or the property is going to the tax / foreclosure auction within 30 days, I would advise you not mention the sellers' situation in the mailpiece. This can appear intrusive and typically has the opposite effect than one desires.

Quote from @Dominic Joseph Jean:

Quote from @Cornelius Garland:

I wouldn't argue one strategy is better than another. When you've been around for a while, you develop an exit strategy "tool belt" of sorts. I wholesale some properties, and others make sense to take down as rentals. Also, novations are nothing new. This is a catchphrase that people started using a few years back.

I was essentially doing "novations" way before it ever became a thing, with a limited durable power of attorney, back in 2016. One of the first deals I did was take down a 26-parcel deal in a highly distressed neighborhood and listed it on the MLS. The POA gave us the ability to list it. I'm not a fan of novations where you don't get the purchase agreement notarized and filed at the courthouse. It's too flimsy otherwise. If you're going to go that route with listing it, do it the right way or else you may find yourself in legal trouble, or a buyer may snake the deal from you.

Again, novations aren't anything new, and most experienced investors are shying away from them these days because they're operating in a legal "grey area". I never want to place a Realtor in a compromising situation, so I always get a notarized POA and file it at the courthouse. This helps the process move much quicker on my virtual deals. In Cleveland, I'm taking down duplexes as rentals and Cuyahoga county requires us to communicate with 3 - 5 departments just to get payoffs. If I had to wait on the seller to do this, it would drag out my closings for months, potentially. There are multiple benefits of using a POA to list the property rather than getting a purchase agreement e-signed with a "listing clause" in it.

 Hello Mr. Garland, 

Thank you for sharing this great advice. I had a question for you, what would be the right way to do a Novation without getting in legal trouble or sketchy grey areas?

Thanks,

Dominic Jean

You're welcome, Dominic. The best way to stay legally compliant is to be upfront with the seller and tell them what you plan on doing. This is where a lot of investors get stuck because they have difficulty conveying the benefits of working with an investor opposed to going directly to an agent. 

If a property fits our novations criteria, we'll mention on the first call that we think the property will be a good fit for our "Novations Protection Program". Then my closer goes onto explain how we'll actively market the property through our preferred Realtor network, and if they use a conventional Realtor then they'll just put it on the MLS. We position it like we're a partner in the process. Really, that's the most difficult part: Convincing the seller why they should list the property with you opposed to them going to an agent directly.

You can then use a standard purchase agreement to get a firm commitment from the seller. Your agent that you partner with will then get the seller to sign a listing agreement, which makes you, the investor, appear very credible.

Quote from @Francisco Milan:

Hows it going guys what is the best place to get a land list ? I have found that on the MLS (mymonsoon) for a list of land in a specific city I am looking to target there is only 600 records and on titlepro24 is close to a 10k list ? Not sure why or which one is more accurate.

Wanted to see if anyone can recommend me to a place to get a list 

Hey Francisco, yes, I'll point you in the right direction. With land, Propstream can get the job done, although I would recommend using a better skip tracing company to get phone numbers once you pull your list.

A couple of recommendations when list pulling: Ensure you're only targeting individuals and not LLCs. Also, determine if you're interested in infill lots, rural land, or both. If you're targeting infill lots then you want to put a lot square footage filter on your list to focus on lots smaller than a half an acre (21780 sqft or less) to eliminate rural lots. Also, having interested buyers lined up is really important with land. You can move lots once you contract them just like houses, but the buyer pool is much smaller. My 3 years of wholesaling, I moved 100 parcels to one developer, so I ran campaigns just for him.

Getting clear on your criteria is important because you can find yourself throwing a way a lot of land leads you're not interested in, which will unnecessarily increase your marketing costs. Best of luck, and I hope this helps you out.

Quote from @Brandi Hoilett:

I’ve been building systems and networking... but I’m curious how long it actually took others to get their first real check.

Was it a few weeks? Months? A year? And what finally clicked for you?

Trying to keep expectations realistic and stay consistent.... even on the slow days.

Great question and there are stories circulating on social media where you hear about people who closed their first deal in a month, which can make new wholesalers feel like they're behind if it takes them longer. Very few people get this lucky starting out, and honestly, there's tremendous value in terms of education and experience you gain when it takes you longer to close your first deal. There are parts of the business you can only learn by experiencing them first-hand, and every wholesaler goes through them. This includes sellers ghosting you after the contract is signed, contracting properties too high and not finding a buyer, and buyers snaking deals from you. While you could learn these things from a course or social media, these lessons don't really resonate with you until you experience the consequences of them. This is what I call "earning your stripes", and it is for the better that you learn these lessons early on in your career as they make you a more shrewd investor.

Here's my background: It took me 8 months after initially learning about wholesaling to close my first deal. I closed my second deal a month later and my 3rd deal 2 months later, which turned out to be a 26-lot and house deal from one seller. It all started when I attended a Fortune Builders weekend event in January 2015. The next month, I incorporated my LLC and began driving for dollars on the weekends in Charleston, SC. I was working a fulltime intelligence contracting job in Fayetteville and spent 40 hours weekly in my 9-5 and another 30 hours weekly on my wholesaling business. I learned most everything I needed to close my first deal right here on BiggerPockets. I had a "mentor", if you can call him that. I didn't pay him or anything. He was a guy who ran the REIA in Fayetteville and took a liking to me because of my determination. He told me a few years back that I was the only person he can think of that actually was able to pursue real estate full time during his 10 years of running the REI. There were hundreds of people I met at the REIA during my year there, and I think this proves how difficult it can be to succeed in real estate. Personally, I think it comes down to how badly you want it because if your situation is even a little bit comfortable, then it can be tough to discomfort yourself to be in this industry, as it's a grind when you first start out.

During my first year, I was obsessed with the industry and stayed in sponge mode. I attended every event the REIA had and drove to Charleston on the weekends to apply the information I learned on BP and at Meet Ups during the week. I would've closed my first deal sooner if I put a marketing campaign together early on. I was collecting about 10 addresses each weekend that I drove for dollars, and I wrote yellow letters to each of them. I didn't receive one call back for the 6 months I did this because my volume was too low. For direct mail at the time, you needed to send at least 3000 mail pieces in order to get a deal.

After not getting any leads for months, I realized that I needed to do a direct mail campaign. I gathered information from the forums to put together a motivated seller list on List Source, and I ordered yellow letters in August of 2015. The list was comprised of 3000 absentee owners in very distressed parts of Charleston. I contracted a home from a gentleman who lived out of state in Massachusetts. I made $3k on the deal. And while it was not a lot, I was floating and felt like I was on "cloud 9". The fact that I made my entire monthly salary in one deal by myself was paradigm shifting. It also felt good to finally prove to myself that wholesaling was real. I never questioned if it was legit, but it certainly felt like my goal was elusive after seeing others' success while I kept on having no luck.

So what kept me going? My first year was all about learning and building a foundation of knowledge. I felt like an imposter and it took me a couple of years to feel comfortable referring to myself as a real estate investor. The more I learned, the more confident I became on the phone with sellers. Also, small wins like setting up my website, purchasing business cards, networking with buyers, learning a marketing hack, and finding boarded up houses while driving for dollars felt like I was always moving in the right direction. I highly suggest finding a local Meet Up group or REIA in your area, even if you're investing virtually. Just being around the energy from high performers can keep you motivated.

My suggestion is to focus on your marketing. You can have the best script, CRM, boots on the ground person, etc, but it is all in vain if there aren't any leads in your pipeline. We're in the sales and marketing business as wholesalers, and it's important to keep this top of mind even though we're are technically in the real estate niche. Hope this helps! Keep pushing along. 

Quote from @Tammy Fleming:

Hello Everyone

I have an opportunity to purchase a home through a wholesaler. I have never done it before and i would be happy with any guidance. There is no utilities but she wants a $5000 non refundable earnest money and a 3 day option. I ran the numbers and it looks like a good deal but i wouldnt have an opportunity to check things out. Help 

Greetings Tammy! My advice, coming from someone who primarily wholesales and purchases land from wholesalers, I would ask them for a longer due diligence period; 14 days is the standard. The earnest money should be due after your inspection. This wholesaler sounds like a novice. Usually, I only collect $2k - $3k for earnest money unless my assignment fee is above average or the house's ARV is $500k+

Sounds like they're trying to pressure you into signing and purchasing the property quickly, which I take as a red flag. I'd also ask them if they are the actual contract owner - meaning, are they direct to seller? They should not be "daisy chaining" the deal and pushing someone else's deal unless they disclosed this to you. I would Google the property to see if it comes up in a Facebook marketplace or group post just to ensure you're talking to the actual contract holder.

There are a lot of novice wholesalers out there, some with malicious intent but many are cutting corners looking for a quick buck.

Quote from @Nick C.:

Because wholesalers are not real estate investors. You can't run accurate numbers if you're not an investor yourself.

I disagree strongly with this and I'm going to assume you haven't wholesaled, correct? I've been part of many 7-figure wholesaling operations working as a partner and marketing director, and while there are not a lot of them, there are several companies operating at a high level. One operation I worked with invested $40k monthly in their marketing and I was responsible for allocating these funds efficiently. Additionally, wholesaling is merely one exit strategy. Honestly, the majority of flippers I work with wholesale plenty. They cannot flip every deal or pass them to an agent because the margins are too thin on a 3% commision.

This type of rhetoric really discourages individuals who may not have the starting capital from a trust fund to jumpstart their rehab or rental investing operation.

In short, a very lazy answer Nick.

Yes, I closed several virtual deals in the Tampa MSA. However, I would say that recently haven't targeted the area just because the median sales prices are so high. Much of the distressed inventory with equity was turned over from 2018 - 2022 and then prices started increasing. This is causing several investors to compete for a small cohort of properties.

Quote from @Andrew Rivera:

Awesome model!  What type of lists do you text and where do you get them? 

Thanks, Andrew. I target a combination of distressed owner occupants and absentee records. I have targeted filters on them and try to stick to homes that were purchased for less than $100,000 and with over 10 years of ownership. I also eliminate homes sitting on over a half an acre lot since these are usually in the rural part of town or affluent properties on a golf course, lake, etc.

I use IDI data primarily and have a contract with them. I've been rocking with them since 2019 and it's the best data on the market, in my opinion. Feel free to ask me any other questions on here. I love talking about data and marketing!