Transcription
People take years sometimes to learn how to comp. But when you become really good at comping, you become super valuable because being good at knowing what an ARV is helps you understand where you need to be in order to make money on a deal.
What's cracking, YouTube? This is another installment in my bird dogging series. And in this video, we're going to talk about how to nurture relationships with wholesalers. Thanks again for joining me here, guys. This video is going to be chock full of ways to deepen and nurture a relationship with wholesalers.
Now, again, remember when you're bird dogging, relationships with wholesalers are the most important relationships you can have in that dynamic because that's where the deals are coming from. Now, of course, wholesalers are not going to chase you down to send you deals in the beginning. When you become really good at selling deals for them and they start relying on you, things will change. But in the early days, it's more of you pursuing them. And so, like any relationship where there's someone pursuing the other, there needs to be something of value. There needs to be a reason that y'all are in an engagement with each other. And so the first thing that you can do is offer value.
Now what I do is supply a buy number. One of the biggest disappointments that a wholesaler can face is cancelling a deal. And usually the reason why a deal is canceled is because they locked up the deal too high. How many times have you had a wholesale deal sent to you and then you look at it and it's just way overpriced. And when you talk to the wholesaler about it and seeing if there's any negotiation or if there's any room or even what they were thinking, you find out that they locked up the deal way too high. And so it's not a deal. It's just an address. Right? That happens way more than you may imagine. In fact, I would say that that's probably 90% of the action that wholesalers take. Miscalculating ARV, miscalculating buy numbers, locking up things too high, and then ultimately cancelling it and then adding to the hard reputation that we have as wholesalers in this country.
So, the way that a wholesaler can avoid that entire thing is by working close with a disposition partner who knows their buyer list and knows what their buyers will pay for certain types of properties in certain areas. If you are that good at what you can do as a disposition rep, as somebody who sells deals, you should be able to know where the range is of where specific types of properties in certain areas will trade. And that should give you good insights into helping a wholesaler with a buy number.
So, the relationships that I have with wholesalers are pretty unique in that I'm actually given addresses from wholesalers before they even have the contract locked up. Pretty damn cool. In fact, you all may know my bestie, Pace Morby. We did our first hundred deals together where he would send me an address while he was driving to his appointment and I would give him the buy number. That would be the number that if he was able to get the property at in that price or less that I would guarantee him to make at least $10,000 or buy the property. So, Pace was always very safe. He knew if he went in, he could be very intentional. He could be very forthright with his seller and pretty well guaranteed that the deal would happen if we could get to this number. And the first hundred deals that we did together were exactly that. He'd send me the address. I'd send him the number. He would lock up the deal. I would sell it. And then we would split the money. Sometimes we'd split it 50/50. Sometimes he would take a bigger cut if he got a better deal. Sometimes I would make more. It really just depended on the dynamic or the certain or the situation. But we always made money and we always did really well. So it worked and it worked until he built his own disposition system. And even to this day, Pace will still text me an address and say, "Hey, bro. What do I need to buy this at because he trusts my numbers." And that's the kind of person you want to be for a wholesaler. You want to be a resource. You want to be someone that they can trust. Someone that they believe that if they ask you a question and you supply them an answer, that that answer is going to be correct.
So, one of the fastest and best ways to nurture a relationship with a wholesaler is to provide them value. And if you're really good, give them a buy number or help them with their ARVs.
Number two, one of the hardest activities that we have in real estate investing and that you may have as a wholesaler is understanding value. Comping houses. How do I know that this is a thing? Well, the most viewed video on my channel ever are my comping videos. And I make really good videos. I make good videos about mindset, breath work, bird dogging, but y'all just keep watching my comping videos. Well, why is that? Because it's really difficult. People take years sometimes to learn how to comp. But when you become really good at comping, you become super valuable because being good at knowing what an ARV is helps you understand where you need to be in order to make money on a deal. So, you need to know what something is going to be worth in order to know where you're going to buy it at, right? So, helping wholesalers with ARVs, helping them learn the skill of comping, giving them techniques, giving them tips, even sharing my appraisal rules with wholesalers so that they learn more or sharing videos with them is a great way to nurture relationship because you're sharing resources and you're helping them get better. Iron sharpens iron. And so if you can be that for a person who's learning this business, they will always want to work with you.
Again, case in point, even to this day, Pace will send me houses and say, "Jaml, what's the ARV of this thing?" Not because he doesn't know what he's doing, not because he's lazy, because he trusts me. And whether or not we do the deal or not do a deal, or whether or not I'm involved in the deal, I'm happy to help. Pace and I have made millions of dollars in our pasts and we make millions of dollars together in our nows and our futures. That relationship is very valuable to me. The friendship is very valuable to me. And to think that one of the first pieces of value that I was able to give to this person for his business was comping. Pretty cool, right?
All right. Number three, assisting in a renegotiation. So, I want to teach you guys a little bit about how you can increase value when you're wholesaling. Now, I want to preface this by saying the ethics of how you approach this next step is really important. We don't renegotiate just to make more money. You renegotiate because the property warrants it.
Now, even if you have sold a property, even if you've sold your contract and you have a wholesale deal that's complete, you got your buyer in, their EMD is in, let's just say that a seller or an agent misrepresented the condition of a property, and the offer that you gave them was based off of the representations that they made. Now, during your inspection period, you find that the property is in much different condition than what they had originally told you. And so, the price that you had originally offered them isn't really valid. Now, just because you were able to successfully wholesale the contract doesn't mean that you got a fair buy number. And so, one of the ways that I've assisted hundreds of wholesalers is by helping them with renegotiations.
Now, the value that I bring to the table when I'm working with a wholesaler and doing this is I'll actually pay for the inspection. So, wholesalers who already are in contract, who have a deal done already, but aren't interested in spending money and writing a big report and going after and and skillfully renegotiating would use me as a service. So, what I would do is I would hire the inspector. The inspector would go out. I would look at what the original contract was and I would look at the original conversations that were happening between the buyer and the agent or the seller and I would see what representations were made and then I would see where on the inspection report things were different and then I would go and I would tally and calculate what those differences were and then I would ask for a retrade or a price reconsideration. Now I wasn't always successful in this. Sometimes they told me to pound sand, but seven out of 10 times they were willing to negotiate.
Now, what was really cool about this is my inspections, yes, they cost money, but they were worth it because so I spent $500 on a home inspection. Sometimes we were able to renegotiate 15, 20, 30, $40,000 off a price. And what I would do is I would say to a wholesaler, "Hey, how about I handle this part? I'll pay for the inspection. I will help with the renegotiation terminology and I'll give you the bid. You just have to present it to the agent and anything that we're able to get off the price, we split. Pretty cool. I make the initial investment. I help them with the renegotiation and the restructuring of the deal and boom, I make 10 grand, 5 grand, 7 grand, 20 grand. It didn't matter. The thing that mattered was that it worked and it was a service that I was able to help wholesalers with so that they could understand how to better a communicate when something needed to be renegotiated, but b how things worked, how much things cost, what does it cost when this goes wrong, what does it cost for a new panel, what does it cost for a new roof, what does it cost for any of these little things that pop up on inspection reports? And so these assistances that I was giving to these wholesalers became extremely valuable not only to them but of course also to me. And the best thing about this is the more home inspections you do, the better pricing you get from your home inspector. So my first inspection started costing me around $700. It's now around $200. And so I can get an inspector to go out to a property and pay him 200 bucks and he gives me a full report and I can leverage that full report to make 5, 10, 15, $20,000. Pretty dang cool, isn't it?
Number four, presence. Yes, data. Things that you can get for free from your title company. Now, I've did a whole video before on working with title companies and how to maximize the relationship that you have with title companies. And one of those things that I talked about was maintaining or creating a relationship with the marketing VP at a title company. Now, that individual controls a lot of resources at that title company. Resources like data. They've got access to the best lists and they're already skip traced. Now, if you've ever gone direct to seller and paid for a list before, you'll know these can cost thousands and thousands and thousands of dollars. In fact, it's one of the most expensive tools that a wholesaler uses when they're going direct to seller. Well, what if you were able to give that for free to a wholesaler and the only thing that you want is to have an opportunity to do business with them when they lock something up? I'd say it's a pretty fair exchange. You develop the relationship with the title company, you go and get the skip trace data, you deliver it to a wholesaler who then calls the homeowner, and when that deal gets put under contract, you guys JV on it. Pretty dang cool. Now, I've had this relationship and have this relationship with many agents and wholesalers in the state of Arizona. And you could have the exact same thing as well. You just got to know how and who to talk to and what will move the needle for a wholesaler in your market. Is it data? Is it tools? Is it access? Is it the network? All of these things can be used as bargaining chips to deepen your relationship and to deliver more presence to your wholesale partners.
Number five, the olive branch profit bump. Now, say that 10 times with uh water in your mouth. Now, what I mean by the olive branch profit bump is when I'm in a JV deal with a wholesaler and I come to find out that I'm making more money than the acquisition wholesaler is making cuz I was able to sell it for more. I will typically call the JV wholesaler that I'm working with and I'll tell on myself. I'll tell him, "Hey, bro. I noticed you're making 10 grand on this deal and I'm making 20." I don't feel good about that. I feel like we each equally did something really good here. You brought the deal to the table. I brought the buyer to the table. I don't like that you're making 10 grand and I'm making 20. What if I gave you five of what I'm getting? That way we're both making 15 grand each.
Now, you might say, Jamal, you're just buying your relationship. So, so maybe I am. But here's what happens when you do that. You display high integrity. You share with the wholesaler that your frame of mind is win-win. That I don't want things to be uneven. I don't want to win more than you. I don't want to take a bigger bite than you. I value the work that you bring to the table. And I don't want things to feel or be uneven, even if you made it that way. You see, lots of times wholesalers don't want to tell you what they have a property under contract for. They just say, "Go sell it for what you can sell it for. I just want this this number. And that's when this works the best. When they locked themselves and painted themselves into that corner and then you go and knock it out of the park. Now you have an opportunity and a leverage point to bring them along with you. So that olive branch, yes, it cost you maybe an extra five grand in one deal. It's going to deliver you dozens and dozens and dozens of deals in the future with that person because they trust you. They believe that you're the best resource for them to work with and they know that even if they're not watching their own back, you're watching it for them.
Number six, dead deal resurrection. All right, guys. So, this is a ninja tactic that I've used with wholesalers and it is one of my favorite ways to make money. Now, we all know that not all deals end well, right? Some end in a cancellation. Well, what happens when a deal cancels? Well, it's very rare that if you're the individual who cancelled the deal that you can go and recontract that deal with the same seller or the same agent because the relationship probably got strained, right? They don't believe in your ability to close the deal anymore. Maybe you waited until the end of the inspection or you asked for a big price drop or whatever it was. Things didn't end well. But that seller is still wanting to sell that property and that agent is still representing that seller. So what if you brought somebody else into the picture to contact that agent or contact that seller, get the deal under contract at the price it should have been in and then JVing the deal after the fact. So I've helped wholesalers resurrect hundreds of deals this way. We find out what they've canceled and then we go in and negotiate and try to revive the deal. And when I cancel, they go in and they negotiate and they try to revive the deal. And then we track those deals. And when when those deals close because we were given that lead by that wholesaler, we share our profits with that wholesaler and vice versa. So the dead deal resurrection is so cool because you have nothing to lose. You already lost that opportunity. Now you're just handing it to somebody else to see if they can make something of your missed opportunity, which typically they can. So dead deal resurrection. One of the best ways to nurture and develop and deepen a relationship with a wholesaler.
Number seven, now this one I call bad cop, rad cop. Okay, when you are negotiating with an agent or you're negotiating with a seller, sometimes your wholesaler needs a bad cop so that they can be the rad cop, right? And the bad cop is typically going to be the one who says, "We can't go above this number. I'm sorry. We're stuck at 100 grand or whatever it is, right? And they need that person to be available." In fact, nothing is better than being in the presence of the agent or the seller and calling somebody on the phone and saying, "Hey, Steve, you know that house on Roosevelt? So, can we do 110?" And then Steve says, "I'm sorry, man. We got to stay at 100. We're overpaying at 100. It's the best we can do." And so now you've got that person who's helping you in the negotiation. So you can either be bad cop or you can be rad cop. I would say it's always best to be rad cop. So let the other person be bad cop. But it gives you someone to play with, someone to have a negotiation with. It adds another party to the conversation which adds texture which makes the conversation deeper, better, and typically more convincing.
Number eight, be an EMD sugar daddy. Now here's what I mean when I say EMD sugar daddy. A lot of wholesalers that are brand new or that are in their first year of work don't have a ton of money to put out in earnest deposits. In fact, typically that's one of the biggest things that keep people from doing deals. Now, an entire business model, Gator loans, was created for this specific need. That's how necessary wholesalers need EMD loans. Well, what if you were the person who brought the EMD to the table? That's exactly what I did for dozens of wholesalers that were on the come up earlier on in their careers. I would always say, "Hey, bring me into your deal. Use me for the buy number. I'll put up the EMD so you don't have to come up out of pocket." How cool was it for them? Cuz now they don't have to come up with any money and they can go out and put out as many offers as they want because I'm the one writing the check for the EMD. So, I would track where my EMD was. I would make sure that I had contractual rights to be able to get that money back, but I would gladly and happily put out EMD checks for people because I knew every time I put out a check, there was a chance that that would come back double or triple, right? So, why wouldn't I want to float out around $50,000 in earnest money out there if that's going to bring me back a h 100red grand? It makes a lot of sense, right? So, being an EMD sugar daddy is really a great way for you to get yourself into the conversation, into the deal, add value to a wholesaler, and really help their cash flow and their business model, and make money just because you're the sugar daddy.
Number nine, be an asset for rehabs. Now, here's the thing. A lot of times, wholesalers aren't really in the business of fixing and flipping. I, however, am a wholesaler who does both of it. I fix and flip. I buy for rent. I also wholesale houses. So, I have every exit strategy under the sun in my repertoire. When you're first getting started in this business, a lot of wholesalers are not fixing and flipping. They just don't have the resources to get there quite yet. So, they're essentially wholesaling everything, but they still need to be able to understand the numbers as if they were fixing and flipping. And that's where I come in, cuz I can help them wrap their head around what rehab budgets are. I can even create a bid for them. Now, when they're negotiating with homeowners or they're negotiating with an agent, having access to me who has real life access to numbers, who can provide a bid, who can help them in a negotiation, that becomes valuable. Now, if I scratch their back with a renovation bid, they scratch my back by letting me JV or sell the house. Make sense? So, if you're a contractor or if you have knowledge about what these kinds of things cost, offer that to people. Anything to get yourself into the conversation and being useful. If you're useful, you'll be used.
And number 10, be the connection section. Yes, be the guy who opens doors. I'll tell you, my relationship with Pace was essentially defined by this. You know, one thing that I can say that Pace Morby has better than anyone I know is an abundant mindset. He doesn't believe in scarcity. He'll give you everything because he knows that he'll get everything in return. And it doesn't have to come from me. The universe provides it to him some way, shape, or form. It's a beautiful way to live. Now, one of the things that he did for me, although I was doing stuff for him in the beginning, one of the ways that he really brought value to my life outside of doing, you know, 100 plus deals with me is he would open up doors for me. Like, I wanted to meet and do business with more home investor franchises in Phoenix, Arizona. So, what does Pace do? He goes and becomes a home investor and then introduces me to all of them. In fact, not only did he introduce me to all of them, he said, "You should use him to sell your deals because he sells the hell out of all of mine, too, and we make lots of money together." So, he essentially opened up all these extra doors that I made hundreds of thousands of dollars with. Like, no joke.
Now, Pace could have inserted himself into those relationships. He could have said, "Hey, send me your deals and then I'll send them to J." He could have very well done that. And he could have made maybe an extra five grand every time I did a deal. But he didn't see it that way. He didn't have that type of mind. He thought, you know what? Let me just bless Jamal. Let me just bless this franchise. Let me just get these guys in contact with each other and not think that I need to have my hands in all of it. I'll make money here someway. And if I don't, I'm just happy I help the homies. That opening of those doors, I mean, look at the relationship pacing I have now, right? It's one of the greatest collaborations that I've seen in real estate to this date. We sell out big events. We travel the country together. Like, we are as close as it can get. And we trust each other. We care about each other. I want him to win. That is a beautiful relationship. And I can tell you that one of the first things that made me want to get that close and let me feel like I could let my guard down was all of the connections that he was so freely willing to give to me. Just a beautiful way to be. So, be a connection section for somebody. Be a person who opens doors. Make introductions. Help people out. Be that person so that when someone's in need, they know that they can turn to you for help.
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