Transcription
Please help me welcome Mr. Jerry Norton.
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Thank you, Mike. Appreciate you.
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Thank you. No, I'm really excited for what I want to share with you today. And when I think about 2026 and what's going on in the marketplace and what the opportunities are, you know, there's a lot of things going on and I think there's some big moves that we can make next year. And I just want to share with the group here for the next little while some real tactical things that that we're doing in my business. I'm here with my business partner Mark right over here and we transact seven figures in Tulsa. Um, I do some other things, but we're really looking to, you know, grow our business there. Who, who here is really interested in scale, you know, going into 2026?
Okay. Who's happy where they're at and they're like, nah, I don't want to, I don't want to make any more money. Anybody? Yeah, we're all thinking about that. When I think about, okay, how do we scale? How do we grow our business? You know, there's two ways. There's volume and there's margin. Ideally, both. Ideally, if you could do volume and margin, then you're, you know, sort of hitting all the things. But we tend to naturally gravitate towards volume as the way to grow our business. We tell ourselves, "If only I could do more deals. If I did more deals next year, we'd make more money." And certainly, there's some truth to that. But usually, the fastest way to double revenue is not doing more deals. It's what?
Making more profit per deal is usually the fastest way to scale. Because now you're not doing more deals. You need more team, more resources, more capital, all the things. Now you're just improving your margin. And so part of what I want to share today is aligns with this idea of margin over volume. But first, let's talk a little bit about maybe the landscape going into 2026. I think in 2026, if you're clinging to the old way of doing things, the way things have been done this year or last year, I think you're going to struggle to compete. And I think next year is going to be a massive weeding out process. Natural selection is happening right now. How many of you agree with that?
Uh, Brent Daniels told me that in the wholesale industry, we went from, I think it was like 80,000 active wholesalers down to 10,000, something like that. I don't know where he got that data, but in the COVID days, in the heyday, you know, everybody flooded the market. You almost could not not make money. I mean, all you had to do is show up. You didn't have to follow any fundamentals. You just buy something, wait six months, make money. And I think the market got really screwed up during that time, right? Because people who should have lost money and gotten out of the industry stayed in the industry and continued transacting. But those days are long gone, aren't they? I mean, today, you better be following really sound fundamentals if you're going to, if you're going to survive. And I think we're seeing more of that take place. I think the game is changing. I think it's changing fast. A lot of that is technology is completely transforming the way we're doing business. I think we have no idea how much it will continue to transform how we do business. And I think if we don't adapt, if you and I don't adapt and adapt quickly, then we're going to really struggle to survive. And those that do adapt, I think we're going to have less competition. And I think we're going to be more profitable than ever before. And that's what I'm excited to move into. So, I'm looking at this more from abundance than scarcity. I'm a little worried about how it all plays out, right? Rightfully so. But I want to look at what's happening, coming down the road, and I want to be a step ahead of it. What I've noticed in business now, got in real estate over 20 years ago, the people I know that continually make more money, continually grow, improve, are the ones that adapt the quickest. The early adopters seem to get all of the market share. And so, let's think about this. What is going on in the wholesale landscape? Raise your hand if you're a wholesaler. Maybe a third of the room or so. What's going on in the wholesale industry? What's the perception in the marketplace right now outside of our industry? We think we're the greatest people on the earth. We serve everybody. We pro all this good. We bring inventory to market. We clean neighborhoods, right? We do all these things. But what does everybody else think about wholesaling?
Blood.
Yeah. We're bloodsuckers, right? We're predatory. Yeah. Yeah. We're making all the money. We're not doing anything for it. We're not earning our money, right? They have no idea. None of this is true if you understand wholesaling and you're an ethical wholesaler, obviously. But the image in the marketplace is that wholesaling is predatory. And who's bought into this idea most? Real estate agents, for sure. Yeah. Legislators, consumer protection agencies, the real estate commissions have bought in wholeheartedly to this idea that wholesaling is predatory. And what's going around right now is this idea that there's equity theft. I can't even believe this is a thing, equity theft, or a new way I've heard this described as deed stripping. What is equity theft? If wholesaling is predatory, what would equity theft be? You're stealing equity for a poor, unsuspecting homeowner that's in distress. And that's what they think. And I think what's happening here, and we're going to see more of this transpire, stressed sellers are now becoming a protected class. And they need protection from you greedy investors that are going to steal their equity. That's the narrative. Did you guys know that West Virginia, they introduced a bill this year and they called it the Abolishment of Wholesaling Act? God, it didn't pass. It didn't keep going. And this bill was to stop it altogether. It wasn't disclosure. It wasn't licensing. It wasn't any of that. It was no more. We don't want this happening at all. And the hot buttons are definitely foreclosure. If you're dealing anything with foreclosure, pre-foreclosure, know that that's a hot button. Know that the consumer protection agencies are all over that one. You better be delicate with foreclosure and elderly, which is mostly who we deal with in wholesale real estate. We deal with a lot of elderly people because the baby boomer market's so big. So, you have to be very sensitive of this. You have to be very careful about what you're doing, how you're transacting. And you better be ready for more of this regulation coming down the line. And by the way, this regulation and all these things that are happening to the wholesale industry, does that impact flippers? You better believe it. Yeah. So, if you're a flipper only, if you buy your inventory from wholesalers, should you be concerned about some of this? Yeah. It's interesting because the National Association of Private Lenders, they reached out to me because I cover this regulation on my YouTube channel. They reached out to me and they said, "Jerry, we're really interested in what you're talking about and we're very concerned about wholesale regulation." I said, "Why do you guys care?" And guess what they said? They said, "We went back and surveyed all of our private money lenders and it was something like 87% of their loans by wholesalers." They said, "If wholesalers go away, so does private money lending. So do we. So we're very concerned about this. How can we support you?" So, you know this is a real thing that all of us need to be concerned about. And what is it that's actually under attack? What's under attack is equitable interest. Now, what is equitable interest? The easiest way to describe this is making money in a transaction before you legally own the property. That's equitable interest. So that includes an assignment. That includes a double close because what's your BC contract? Your BC contract on a double close is equitable interest, isn't it? Do you own the property when you sign that BC contract? You don't own it yet. What about an novation? Same thing. That's equitable interest. You don't own the property yet. So, what they're actually coming after is equitable interest. And we're seeing these laws get more and more aggressive. And I think the day will come where the assignment, the double close, and the novation, those strategies will be a relic. They'll be a thing of the past. They'll either be illegal or they'll be so convoluted that it won't be a viable strategy. It'll just be too complicated to do it. It won't make sense anymore.
Okay, so let's talk about flipping for a minute. How many flippers in the room? Fix and flip. Okay, a lot of you guys. Okay, so you guys know I, I'll be preaching to the choir a little bit. Flipping is a very unpredictable business model. Uh, I say this all the time. Flipping is actually not a business because it's not scalable. It's not very predictable and it's very difficult to repeat. Now, why? Why is flipping from that context? Why would flipping not be a business? Think about the process. The process of flipping. Why is that a difficult business? Every single flip is its own isolated business. Because everyone's unique. Everyone has its own set of circumstances. No two flips are the same because no two houses are the same. And once you start digging into a house, you uncover all these problems that you didn't anticipate. How many of you flippers in here nail your budget every time? I've been flipping for 20 years. I don't think I've once hit the budget. You know what about your timelines? Like they sell faster than you think they'll sell, right? Yeah. And you always get your ARVs, don't you? You always hit that ARV right on. Those are some of the problems. ARV is difficult to predict right now because we have a slow market. And so in my flipping business, I'm looking right now, I don't know about you guys, I'm looking more heavily on actives than I do on sold for comping. Why? Because there's all this inventory sitting on the market and when my flip comes out and there's 10 more just like it in the same neighborhood, why is mine going to sell over all the other ones that people get to pick from? So, I want to base my number on how do I beat the actives? The sold data is good information. It gives me a baseline, but I need to know what I'm up against when my property goes active with all the other inventory out there. So, I'm looking at days on market. I'm looking at actives. So, ARVs become very difficult right now. We have high inventory. We have long days on market. And we have higher holding costs. So, flipping has its own set of challenges. I think those challenges are going to accentuate in 2026. And we're going to continue to face them. And rehabbing, by the way, I think this one's a big one today. It is becoming increasingly more difficult to get competent labor to flip houses. How many of you guys have been around flipping for a while? Why is it so challenging to find good contractors? It's more, it's harder today than ever before for some reason. Yeah, maybe all the labor's going away. I think people want the easy desk job, you know, so we have a low labor pool. Quality is low. Have materials come down since the market slowed down? Like cost of materials has that come down? Not in relation to the market. So, these are challenges that we face.
So, what is the solution? I think the solution is, I think we can find the best of both worlds. I call this the takedown method. And I'm just trying to rename it. I think it sounds cooler. But what is this really referring to? Wholetail. I think it's just kind of a dumb name. Wholetail. So, wholetail. Who's done wholetail? Okay, good. So, I want to talk about this. I want to kind of deep dive into this, show how we're doing this, why this is important, and why I think this is going to be a big move in 2026. In case you're like, what are you talking about here? This is where you're going to contract the deal off-market. You're going to actually fund and close on the deal with no predetermined buyer. So, you're not marketing for your buyer. And then you're going to clean it, trash it, relist it, and sell it on the open market. No rehabbing. Now, we used to just call this buy and sell real estate. You know, you're just going to buy it and resell it, and that's all this really is. But why is this better than wholesaling? There's pros and cons to this. What we're finding or what we're trying to create in our takedown business is, is my mic keep cutting in and out? Yeah. We want to, we want two to four times more profit than a traditional assignment of contract. That's the goal. What's really big about this is no disclosure, no licensing, no regulation. And this morning, Mark and I were talking quite a bit about our market in Oklahoma because guess what happened November 1 in Oklahoma? New laws came into effect around regulation. And Mark and I are like, how do we navigate this? We now have to have a separate document that discloses that we're wholesaling. We have to give the seller a two-day cancellation notice where they can cancel in two days. We're going to see if you sound better on this one.
Thanks. We just introduced all this complication to our wholesale business. Now, we're like, "Okay, well, how do we implement this into our processes? How do we manage sellers around this?" You know, so it just creates a lot of complication. On one hand, this sucks because it's just making our job harder. But on the other hand, if we're opportunists, how could we look at this? We're going to lower the competition. Yeah. Because the fly-by-nights are all going to, what? They're going to go away. Yeah. They're going to go find an easier market. The virtual guys that are sitting in Phoenix, Arizona, wholesaling in Oklahoma, they're going to go find an easier market. So, that's the silver lining is this regulation is actually creating a lot of opportunity. If you were to open a new market, what state would you go to if you want to kill it? South Carolina. Why? They've made it illegal to wholesale in South Carolina. Now, there's still some transacting going on the side, but it's all hush-hush, and their regulators are coming down hard, but they're trying to stop wholesaling altogether in South Carolina. What better place to transact if you're capitalized? We're going to talk about this. If I were to summarize everything I'm talking about today, the number one thing I would say is get money. Get money and get ready to close. And if you can close, you're going to own the market. Why this is better than wholesaling is because you are the actual buyer now. You're buying the property and you're going to get deeper discounts. You're going to get better deals. And I'm going to talk a little bit more about why that's so significant. The other benefit to this is you essentially eliminate your dispo department and all the urgency that comes with dispo because when we wholesale and you get that contract, everything is fast, fast, fast, right? Because now I've got to find my buyer. I've got the small window of time. If I don't, I'm going to be renegotiating or canceling my contract. With the takedown, we're just putting that baby up on the MLS and looking for the highest paying buyer. That's all we're doing. Better than flipping. Here's why this is better than flipping. You're turning it faster because you're not rehabbing. You have less capital involved. No rehabbing or contractors. Oh my gosh. I think I would rather own a daycare than run contractors, right?
It's the same thing. And it's much more predictable and scalable because now you can have several projects going on because you're not running crews. You know, a flipping business hits a wall very quickly if you want to scale because now you need more crews. And how long does it take to develop a good crew in a flipping business? Years. Yeah. Because you got to try them, try them, try them. You got to build the right team. You don't know if they're good until you're three deals in and they show up on time and all of that. Takes time to build a team in a flipping business. So, it's much more predictable, much more scalable. Now, what are the best takedown deals? The ones that are mortgageable. I don't think that's a real word, but these are clean but dated. These are move-in-ready properties. Now, you can do the takedown with any type of deal. It could be a cash-only transaction. It's just on the MLS. By the way, why is the MLS, of all the places you could exit a deal, why is that the best? Right? You have the most exposure than anything else once it's on the MLS. It's better than any cash buyer list you could ever have because once it's on the MLS, everybody and their brother sees it. Okay? So, that's how you get the highest paying buyer is the most exposure to your deal. So, you will always get the highest price if you can get your deal on the MLS. Would you agree? Yeah. You're going to extract what we call it the outlier. You're going to extract that buyer that pays way more than everybody else. Doesn't make any sense to you why they're paying that much, but they are. Okay? You find that person, they're not on the Facebook groups. They're not on InvestorLift or InvestorBase. They're not in your cash buyer database. It's the outlier that sees it on the MLS and wants it for whatever reason. That's who you attract when you can get your deals on the MLS. So, that's why we get more money doing this.
So, let's follow, let's break down our five-step process for how we do this. We can get in the weeds a little bit here. First thing we want to do is establish our adjusted ASIS value. So, ARV goes out the window now. We don't care about ARV anymore because we're going to compete with like properties. So, when I comp this thing, I want to look at what are homes selling for that are in similar condition as my deal. And then the adjusted number is when I come on market, how does my property become a no-brainer? The goal is to be under contract in less than three weeks. So, it's a fire sale price, right? That's why it's adjusted. I don't want to sit on the market. I want it to fly off the shelf when it comes available. We're going to look at sold, but we're going to look heavily at actives to establish that number. Step two is we're going to start calculating some costs. So, here's how I break this down. First, we have our holding costs. And we want to use a formula where we take 10% of that ASIS value. Whatever ASIS value we decide on, 10% of that number is going to go to holding. And holding is going to be closing fees. We're going to pay closing fees twice when we buy it and when we sell it. I like to factor about 3%. We're going to factor in 3% for our costs like trash out, cleaning, insurance, that stuff. Maybe a small punch list, but remember, we're not rehabbing. As soon as you go to paint and carpet, you're what? You're back to flipping. So, this is in and out. And then the third one is commissions. And I'll talk a little bit more about this in a minute, but we factor in 4%. I do a 1% on the list and a 3% on the buyer side. So, a total of four. So, this comes to 10% in holding costs. Third thing we need to factor is our financing. Now, we like to budget 5% of that ASIS value to our carrying cost. So, for example, if it's a $200,000 deal, if you go with a 15% interest rate for 120 days, you would pay $10,000 in financing, which would come out to about 5%. So, if you have cheaper capital, then you're just adding more to your margin. If you have more expensive capital, then you may have to adjust this. This is actually the magic ingredient is the financing to make this work. So, we'll talk a little bit more about that too in a minute. Then the fourth step is you want to calculate your profit. And I like to budget 15% of that ASIS value. There's a little bit of a buffer there for unforeseen. Now, what unforeseens can come up doing this? There's three things that happen. The buyer has an inspection and wants what? Concessions or they want repairs made. Okay? So, I'll talk a little bit about how we manage that. The other one is it doesn't sell for as much as you thought and it takes longer than you thought. So, you have more carrying costs. So, those are things that can come up. Remember, you're taking title now, so you're taking on more risk than traditional wholesaling because you own the dang thing. There is inherent risk when we do that. So, I like to have a little bit of a buffer. If you don't tap into the buffer, then you should be looking for about a 15% margin on that. And then, of course, you know, your formula is, is you just subtract your holding cost, your carry cost, your profit. That's going to get you to your MAO. Real simple. It's just 70% of the ASIS value is where you want to buy. Okay? So, if you can hit 70% of that adjusted ASIS value, that might be a great takedown deal.
What would be the ideal takedown? I mentioned this a minute ago. Move-in-ready is a big one. Now, again, it works with any type of deal, but the move-in-ready ones are the best. The best ones are where you walk in that property and it's a disaster, like it's a hoarder and it's a mess, but it's clean and livable. And then you buy it, you get all the crap out, you clean it, you take new pictures, it looks night and day from the way it did before, and you put that thing on the MLS. Those ones are the best. You want to be careful about low income. By the way, that formula I just shared, ideally that only really works if you're up over the $100,000 range. If you're down below $100,000, then you got to way adjust that formula. In fact, my old stomping grounds are Dylan's Market of Detroit. And I got a Detroit takedown deal right now where I bought it for $45,000, put it up for $79,000 and accepted an offer for $75,000. Okay? And I did nothing. I didn't even trash this one out. It needed about $10,000 in trash out, but it's Detroit, so they love that there. You know, just rerun the numbers if you're in any kind of low-income market. Just make sure that you're really building the right margins in there.
So, how do we create an unfair advantage with this? This may come across wrong. I'll try for it not to come across wrong. We have an opportunity if you're the actual buyer. Now, your conversations with sellers, your appointment with sellers, or if you're on the phone closing with sellers, you have a way unfair advantage by being the buyer because you now have the opportunity to build better trust with sellers. Because what do wholesalers do with their terms if you're wholesaling? Yeah, you got to have loosey-goosey terms, don't you? Why? Because if you can't find a buyer, what do we do? You got to renegotiate or cancel the contract because we're not buying it. Has the whole cancel contracts thing, has that come back to haunt us in the industry? Yes. I know some wholesalers that they perform on one in 10 contracts. They lock up everything. I call it throw mud at the wall or sling mud at the wall. They're mudslingers. They lock up everything and anything. They push it out to their market and if they can close one out of 10, then great. Now, that's just horrible for our industry, isn't it? That's the worst thing ever. Like that alone is ruining it for the rest of us. But the reality is if you're wholesaling, you got to have some loose terms so that you can get out of the contract. If you're the buyer though, what can you do? Can you come in with big earnest money? Can you show proof of funds? Can you remove contingencies? The terms when you're the buyer is how you beat out your competition. Like I talk about it with Mark, we go on appointment in Tulsa and when we go on appointment and we're at the kitchen table and we're eyeball to eyeball and belly to belly with the seller, that seller could have five contracts out on the table and we're walking out of there with the deal. Why? Oh man, when because we'll throw everybody else under the bus. This is what it sounds like. Mr. Seller, I'm sure you're considering other offers. I would too if I were in your shoes. That's just smart. But I do want to caution you to make sure whoever you go with, whether it's me or someone else, that you have a high level of certainty that the deal will close and fund on time as promised. More than anything, I want you to have a good experience. So, I'd be happy to share with you some pitfalls to look out for. And if you'd like, I can even review any written offers you've received and give you my expert opinion. That way, you make an informed decision that you feel really good about. No pressure. It's no problem for me. And if you decide to go with someone else, that's totally fine. Like I said, I just want to make sure you have a good experience and you're treated right. Would that be helpful to you?
Now, what do you do when you get those wholesaler contracts? You educate the seller. Say, "Well, what is this right here? This says right here that they have all the way until closing to back out of the deal. This says a $10 earnest money." Do you know what earnest money is, Mr. Seller? Do you know if this person actually has the money to buy this property? Have you asked them that? Okay. Now, what am I doing? By the way, when I teach this, all the wholesalers are so mad at me. They're like, "What are you doing? Don't tell people that." I'm like, "Well, trust me, it's happening." Like, this is the big boy game now or big girl game. If you think that you're going to compete with the Mark Gabriels in the market who are going on appointment and they're sitting down and they're talking to the sellers, you're going to become obsolete real quick if you can't step up the game. Would you agree? Then we're going to say, "Mr. Seller, as I mentioned, with me, you are dealing with the actual buyer and I stand behind my cash offer of whatever. To prove it to you, I can provide you with a proof of funds. My offer also has an earnest money deposit of blank, which further proves I'm a serious buyer that you can depend on. If you want to have contingencies, you can say, finally, I'm willing to waive all contingencies, which means my earnest money is non-refundable." So, we're teaching them what non-refundable earnest money means. Wholesalers don't teach sellers what that means, right? Or if you are closing on the phone and you haven't seen the property, you could say, you know, I only have a five-day or whatever. You know, keep your contingency tight because you want to explain to them how that works. And at some point, that earnest money becomes hard and non-refundable. I find that we spend most of our time educating sellers on how this all works. They don't know. They're not sure. And does a distressed seller, do they sell on price or certainty? Certainty. It's always certainty. It's not about price. We think it's about price and certainly price matters, but a distressed seller goes with Mark because he feels confident and certain that Mark is going to solve his problem. Okay? If you provide that, you're going to walk out of there with the contract and it's going to be way less than the other offers on the table. So, I'll say something like, "I put all this together in an agreement for you to approve. If you're looking for a fair price, peace of mind with a buyer that can and will perform and you're ready to go, I need you to approve this agreement." By the way, we say approve agreement, not sign a contract. Why sign a contract? That sounds like I need a lawyer for that. I need a lawyer to sign a contract.
Let's talk about selling the deal. Now, like I mentioned earlier, the MLS is always going to get you the highest price. By the way, our process with this is we still go through our dispo process because I'm not sure I want to take it down, especially if I can hit a number I'm happy with on a traditional assignment. But I am gearing up for the day where that goes away entirely. But as long as we can still do it, we're going to still do it because money today with an assignment where I don't have to fund it, close on it, own it for a period of time, I'll always take that over having to own something. Wouldn't you agree? But there comes a moment in time where you're like, "Well, I could double or triple or quadruple what I could make on an assignment. Maybe I should think about this." We have a deal, Mark told me this morning where we just assigned this deal. Was a $17K deal. Guess what the cash buyer did? He trashed it out and put it on the MLS. As a wholesaler, when you see that happen, you're like, "Oh, I could have done that." This happens all the time. Okay, so we had the contract for $210. We pushed this out on our dispo and our highest buyer was $225, which means we would have made a $15,000 assignment. Who would consider that a win? Yeah, that's a win. We'll take that. But we didn't. We put on the MLS at $280, sold it, and netted $33. So, a little more than doubled what we would have done on the assignment. So, what we're doing is we're going to work the field. We're going to see what we can get. And then if it's not at least double to four times more, then just take the assignment and move on. You know, as long as you can still do the assignment, it better be a win because I'm taking on more risk. I got to wait longer to turn the deal. It better be a win. Okay.
So, the question he asked was, are you looking at your time factor? The goal is never to stay in a deal four months because if you think about it, if I want to go under contract in 15 days, maybe a 30-day closing after that, my goal is 30, 60 days, maybe 90. But if I'm in 120, I screwed up somewhere. If I'm in the deal 120 days, I was off somewhere. Here's what matters. Time to turn the deal and capital. Because if I have limited resources on capital, then that also ties my hands a bit. You might say, you know what, I got limited resources on financing or I don't have very cheap financing, I think I'll just take the 15 and run. But I just want to say this, when you take the 15 and run and you leave money on the table, you're shooting yourself in the foot. It's almost like people that JV. We have people right now that bring us deals, Mark and I. We're just their JV partner and we JV their deal and we split 50/50. And every time we do it, I ask myself, they do all the work to get the deal and they give up half. Why? Why are they giving up half? It's not risk. They're smart. They know how to get into the deal. Why not build out your own dispo process and make twice as much money? It's not like it's wrong, but I'm just saying going into 2026, we have to extract every dime out of every deal to win and win big.
So, Jerry, does that mean that you're not marketing towards FHA buyers on MLS because, you know, you got the window?
Good point. FHA has a 90-day seasoning rule. If you have a high probability of your buyer being FHA, then you're going to need to factor in a much longer timeline. That has presented some problems with us. But what we typically will do with those, if I'm doing this right, this is a hot deal and there's a lot of action. So, we tell the buyer agents, look, we can't do FHA. Can your buyer do conventional? And we'll say no to FHA offers to get the conventional offer. We usually can find a conventional buyer because again, it's a hot deal. It's a good deal.
When we go to put this back up for sale, do we start high and come down or do we start low and create a frenzy? And both strategies work. In a slow market, the start low is usually going to win more because I got to get people excited about it. I need people to be scrolling through and they're like, "Whoa, that's a deal. I got to go see this." And if you start high, it just might get overlooked. So, I'd rather create a bidding war and try to get it up. We follow that on our dispo process, by the way, too. If I have the contract for 150, sometimes we'll dispo it at our suggested starting price at 150. Just because cash buyers are, you know, they're looking through their texts, their emails, and I got to get them to stop scrolling and go, "Whoa, what's this?" If I dispo at 170, they don't look at it. If I dispo at 150, they look at it, and then they pay 170. This is a suggested starting price. And by the way, you better come look at this because we're probably going to get over list price offers or over asking price offers. That's how we communicate it.
Like, don't miss this one, you know? So, we create that urgency.
Okay. So, let's talk a little bit for a second here about utilizing agents. Now, I hold a real estate license in Michigan where I'm from. I've kept it active all these years. I'm with Real Brokerage. And what I've been able to do as being an agent with Real is I can tap into the Real agents in any market. Every single time I've been able to get an agent to list my property, full service listing for 1%. If you don't have that access to something like that, you may have to talk to 20 agents to help them catch the vision as to why they should do this for you. But the way I present this to an agent is I say, "Look, I keep it really simple. I'll handle pictures. I'll handle the description. I just need you to put this on the MLS and manage showings and feedback. That's all I need you to do." And then I push repeat business. I say, "This year we plan on doing 12 or 15 deals like this. If you're my agent, you'll get all those listings and you'll get all that exposure." And some agents catch the vision of this and they're happy to do it. Okay? But we got to get that listing at 1%. I don't care about open houses. I don't care about marketing. I don't care about any of that. All I want is what I want on the MLS. The MLS will sell it. It's all they need to do. So, this is what that conversation sounds like. If you guys want to know, Mrs. Agent, we have an investment model where we buy properties directly from private sellers at a discount and then quickly resell them on the MLS. Every property is cleaned out and vacant and easy to show and priced to sell quickly. We plan on doing 15 deals this year and I'm looking for an agent who can handle listing all of our properties. Since it's such a fast and easy process and since we're doing volume, we're looking for an agent who can list our properties for a flat 1%. Is this opportunity something you'd be interested in? Okay.
Now, on the buyer side, we don't want to cut ourselves at the knees here. So, we don't ever try to offer lower commission. We want buyer's agents to be excited and motivated to show and sell our properties. So, we'll offer the 3%. One thing you have to do is you have to manage expectations well with buyer agents around inspections. We want to be preventative on an inspection repair request. So, we'll say, "We're considering your offer and I see your buyer has an inspection contingency. I want to make something clear to you. We are selling this property as is, which is why we priced it below market value. We are aware that there are probably some issues that are going to be found in an inspection and you need to make it clear to your buyer that we are not going to make repairs. If this is an issue, then let's not waste your time or my time." They say, "Yeah, yeah, yeah." And then what do they do every single time? Hit you with a repair list every time. So, it's sort of a waste of time, but you know, you're trying to set expectations. Now, what we'll do is when they come back with that is we'll typically try to negotiate a concession because again, do I want to get into rehabbing? No. So, they'll come back with their list and we'll say, "I'll tell you what. We'll give you $2,500 at closing to cover this and you take care of it." And usually that gets it done. The other thing real quick is we have in our contracts that the buyer agrees to close with seller's title of choice. Okay? Now, why? Because you just bought it, right? So, if you can go back to the same title company, it's your title company. They're going to give you a break. They're going to love working with you because you're bringing them two transactions every time. So, we just push real hard to do that. And we tell the agent, we say, "Look, we just bought this property and if we can go to our title company, it's going to make everybody's job easier." Now, agents fight you with this tooth and nail, but if it's your agent on your team doing your thing, they're on your side, but it's the buyer's agents that often want to use their title company. So, sometimes you're going to have two title companies, which is just a headache. So, we try to avoid that.
So, let's talk about funding. This is the last thing I want to talk about. Funding is the secret ingredient to all of this because if you don't have funding, this is all just a waste of time. So, how do we get funding? And so here's a hack strategy that we do. If you've got a hard money lender that you like or if you're trying to keep your fees low, here's the hack strategy. Go to the hard money lender of choice and tell them, "Look, I'm not looking for 100%. I need 90% or even 80%." Because now you can get your fees real low. You're bringing money to the table. And then what we'll do is we'll supplement that. And the flippers in here are like, "Oh yeah, there. This is exactly what we do." Because flippers do the exact same thing is then we're going to bring private money in to supplement the gap. And what we like to do is we like to overborrow. I call this financial financing. So we'll borrow not only the down payment that we're short. We'll also borrow all the closing fees, whatever the hard money is requiring upfront in fees. We'll even borrow 120 days worth of interest payments in that PML. Everybody following me? So I'm truly, truly 100% funded on the deal with no cash out on the deal. So really comes down to is your private money lender relationships because hard money lenders are accessible in every single market. They're available to you. 80 to 90% of the money is easy to get. Uh, any questions as we finish up here? You know, there's going to be friction and there's going to be some layers of complication depending on what market you're in. But again, I think that's to your advantage. Whenever there's friction, it eliminates a lot of competition. So I like the high friction things.
Going out there acquiring these opportunities. Are you purely going PPL direct to seller or are you also getting MLS offers and working brokers as well?
So, this does not work well with on-market properties because it's already exposed to the market. The only time where you can buy on-market and then resell on-market is if you create massive spreads, which we get sometimes like we'll buy stuff off the MLS for half a list price. It's just when it comes back on the market, you don't want the market going, "Oh, I just saw that property. Why would I want it now when it was just up for sale forever?" Even though the numbers might pencil with that, it's going to be tough to resell. You want inventory that nobody's seen before. I don't know what it is about cash buyers, but when they haven't seen it before, they just love it. When they've seen it before, they're like, "Didn't sell before? It must be something wrong with it. Why would I want it?" Even though it's like, "Well, run the numbers. It pencils." Like, I have that argument all the time because I do a lot of on-market. So, this is mostly an off-market to on-market strategy. Your acquisition is really no different than doing traditional wholesaling. So nothing changes there. Do all the same things you're already doing. You're just looking at a different exit and a little bit different formula on how you're getting into the deals. But it really doesn't matter. You could be any type of marketing channel.
Great.
All right, guys. Let's give it up for Jerry. Thank you, everybody.