Transcription
If you're working on your first wholesale deal, I want you to scrap everything you've been doing up until now and tune into this video. I'm not only going to show you the fastest way to your first wholesale deal, but I'm going to show you how to do it for free. Coming up [Music]
This video is brought to you by Fast Track, a partner program where Jerry Norton will fund your deals and mentor you. Learn more at fasttrackwithjerry.com.
If you're new here to this channel, I'm Jerry Norton with flippingmastery.com, and this channel is all about ways to help you make money wholesaling and flipping real estate so you can live your dream life. Be sure to subscribe and turn on the bell notifications so you don't miss new videos.
Recently, I've been training a new acquisitions manager in one of my remote markets, and I'm going to give you the exact five-step process that I'm having him do to get his first deal as fast as humanly possible. You see, I want him to see success quickly so he's motivated to keep working, he gains confidence, see some money quickly, and most importantly, catches the vision for how this can be a six-figure income.
Now, on this video, I'm going to go fast, and I'm assuming that you already have a foundation on what wholesaling is and the basic mechanics on how to wholesale a property. If at any point I talk about something you are unfamiliar with, I encourage you to watch other videos I've created about the topic. I have over 525 videos on my channel ranging from everything imaginable about wholesaling and flipping. I promise you, if you have a question, I have a video about it. Be sure to go to the playlist section where I've organized all of my videos by topic.
One more thing before we get started: there are a lot of ways to get a wholesale deal, especially your first wholesale deal. What I'm going to share with you is by no means the only way or necessarily the best way for you. What I'm going to show you to do is unlike anything anyone else would tell you to do, but I don't care because it works. The reason why it works is because it has the least amount of steps and the least amount of moving parts; the leads are readily available; and what I'm going to show you does not require spending a dime on marketing cost. And what's so cool is you can continue doing this strategy to do multiple deals a month. And once you get this dialed in, you can certainly do other techniques or other methods. But again, the point of this video is to show you what I believe is the fastest way to your first deal. If you follow the five steps that I'm gonna outline, I believe you can get your first deal in 30 days or less. Okay, are you ready? Let's get started.
Step number one is to only target on-market properties. On-market means the property is listed for sale with a real estate agent. For now, I want you to stop driving for dollars, stop sending direct mail, stop getting lists and skip tracing and cold calling and text blasting and ringless voicemail and going on appointments to meet sellers at the kitchen table. For now, I want you to stop doing all of that. You can do that later, but right now, right now, I want you to hyper-focus on only going after listed properties for sale. Now I'm going to show you how, so keep watching.
But most people are shocked when I talk about wholesaling on-market properties. Most people think that you can't wholesale listed properties, or they have no idea how, and no one teaches how to do it that I know of, except me, and that's sad because it's one of the most effective methods to get good wholesale and fix-and-flip houses. And yes, it's true, there are some challenges with on-market. On-market properties are competitive because they're public on Zillow, Redfin, and Realtor.com, so more people know about them, and in many cases, you're competing with homeowners. Yes, there are agents in the equation that you have to deal with, and those agents often require a substantial earnest money deposit, typically $500 to $1,000, and they also typically require a proof of funds letter to accompany your cash offer. But once you learn how to overcome some of those obstacles, on-market is a gold mine for wholesale deals.
Here's what is also true about on-market properties: many distressed, motivated sellers list their properties for sale on-market with an agent, and there are always more and new leads coming available every day. What's also true is these properties can be acquired at wholesale prices. And what's also true is you don't have to spend a dime in marketing to find these leads. And what's also true is you, the buyer, don't pay a dime in commissions; the seller pays the commissions. And what's also true is agents can be a source of continual, ongoing leads. I've now done hundreds of on-market wholesale deals and dozens of repeat deals with the same agents who continually feed me deals. Bottom line is this: learn the agent game, and you will never go hungry again.
Step two to get your first deal is to create a property search in your target market so that you can start finding distressed properties for sale. Now you have to get set up with searches to start farming for leads. There are several ways to do this. You could have a licensed real estate agent set up an automatic MLS search for you that notifies you by email every time new properties come out for sale. Now, if you do that, do not commit to let that agent be your buyer's agent; you'll see why later. You could also create a search using the Redfin fixer-upper feature if you have Redfin in your market; these are properties identified as fixer-uppers. Now, I did a video that shows how to do this; I'll put the link to that video in the description below so you can learn how to set up these searches. And to really make this process fast and simple, I developed a software tool that instantly finds all of the on-market properties currently for sale in any given zip code that are below the average sold price per square foot. This saves a ton of time finding leads. For a free version of this tool, just go to mydatacruncher.com. Once you enter your email, you'll get a login email to you, and you can start using the software. But if you're a member of my deal management system, Flipster, then you can save searches instantly, add leads to the property workflow, comp and analyze deals, and so much more. And if you've never heard of Flipster, it's a cloud-based, all-inclusive wholesaling and house-flipping management system to help you streamline, organize, and automate all of the steps to wholesaling and flipping houses. To learn more and see it in action, just go to getflipster.com.
Once you've got your searches set up, it's time for step three, which is to analyze the leads you're finding to determine your wholesale offer price. Now, this process has to be fast; if you over-analyze, it will take too long, and you won't get your first deal very fast. This is a skill you have to become proficient at. I've done dozens of videos on how to comp properties and analyze deals. To really cut the learning curve, if you have Flipster, it automatically analyzes the leads for you based on some simple assumptions, and it tracks and saves everything for you so you stay really organized. But if you're not a member of Flipster and you'd like just my comp tool with analyzer without any of the other features, go to compmydeal.com to get this tool for free.
Once you've determined your ideal wholesale buy price, it's time for step four, which is to make an offer. Now, this is extremely important; if you do this step wrong, the whole strategy will fail miserably. Up until this point, all I've asked you to do is go after on-market leads, create searches so that you can find distressed properties, and analyze the leads to get to your wholesale offer price. But now, this is where things get real, and you have to understand how real estate agency works to really grasp this step. Let me explain. When a seller decides to go on-market and hire a real estate agent, they are agreeing to pay real estate commissions; let's say it's the standard six percent. The listing agent representing the seller will get three percent for doing the listing and representing the seller; a buyer's agent who represents a buyer gets the other three percent. So the listing agent gets three percent for representing the seller, and the buyer's agent gets three percent for representing the buyer, for a total of six percent. But even though the buyer's agent represents the buyer, the seller is the one who pays the buyer's agent's three percent commission. All said and done, usually there are two different agents, and the seller pays a total of six percent; that is normal, standard real estate agency. But what if the listing agent also has a buyer, and their state or broker allows the agent to represent both parties? Then that agent would get six percent—three percent for the listing side and three percent for the buyer side—and as far as the total commissions paid, there is no difference to the seller. Why? Because the seller is paying six percent regardless of how the commissions are split when the same agent represents the seller and the buyer. This is technically called dual agency.
Now, to avoid a conflict of interest, some brokers decide not to let their agents participate in dual agency, and in some states, it's illegal. I think currently, as of this recording, there are eight states—Alaska, Colorado, Florida, Kansas, Maryland, Oklahoma, Texas, and Vermont—that do not allow dual agency. However, most of those states do allow what's called designated agency. Now, this is where two agents in the same brokerage, where one represents the seller and the other represents the buyer.
Now that you understand dual agency and where permissible, at the time of making the offer, you are going to strategically create a dual agency situation. I call this the double-dip technique. Here's how it works: rather than working with a buyer's agent with each lead you find, look up who the listing agent is representing the seller; it's right there on Zillow or Redfin or Realtor.com. And then go directly to that listing agent. Tell them you are a cash buyer and you want to make an offer on their listing, and that you're unrepresented, meaning you're not working with a buyer's agent. And tell them you would let them represent you as your buyer's agent on their listing as well as any future listings they get. Now they're motivated to work with you. To really help you get comfortable with this conversation and even how to overcome any objections when using the double-dip technique, I created word-for-word scripts. If you'd like those for free, leave a comment and say, "Jerry, you are a flipping genius; give me those double-dip scripts," and I'll give you the free download link. And by using this technique, listing agents will be motivated to work with you, and they will tell you about other listings they have, and they will call you about their deals in the future.
Let me illustrate an example of the power of the double-dip technique with a conversation that just happened to me while I was preparing this video. An agent just called me who I've double-dipped with on several deals over the years, and she said, "Jerry, I have a listing on a distressed property right now at $149,900 that is pending, and the buyer is backing out, and the seller just told me to drop the price significantly and get it sold ASAP." She said, "I'm calling you, Jerry, before I do the price drop to see if you're interested." So I took a look at the deal, and I told her I need to be at $100,000 on my offer, and she said, "I think they might take that." So she's making the offer for me as my buyer's agent, and if I get it, she'll earn six percent commission. And even better, she'll call me in the future when she gets other good deals.
Step five is to make a lot of offers, regardless of asking price. I don't care if the list price is $199,000 and you need to offer $125,000; still make the offer. There are two reasons why you should always make the offer. Reason number one: you never know when a seller will take your low offer. I recently had Alfred Cuevas, a YouTube subscriber who learned the double-dip technique from me, share with me how, following my double-dip technique, he made an offer for $70,000 on a property listed for sale for $135,000 in Virginia, and the seller accepted his offer. Then, during inspections, he renegotiated and got the price down even further to $62,500. That's more than half the asking price. Way to go, Alfred; you are a flipping genius. Now, does that happen every day? No, but it will happen, so just make the offer. The second reason to always make the offer, no matter the asking price, is because it's more important to establish a double-dip relationship than it is to get the deal you're calling about. For example, my new acquisitions manager called and made a ridiculously low offer on a property, which was immediately rejected. But then, after establishing the double-dip relationship while talking on the phone, he asked the agent if he had any other distressed properties that we could take a look at and make offers on, and he gave us five other properties we could look at, and two of them aren't even listed yet. Never forget: the double-dip relationship is more important than the property because the agents will bring you repeat deals for years to come.
Now, if you really want to get your first deal fast, like in the next 30 days, here's what you need to do: make it a goal to make at least five double-dip offers a day, five days a week for four weeks; that will be 100 offers. Now, if you're willing to make 100 offers, I'm certain you will get a deal.
I've got six really important tips to make sure you succeed at this. Tip number one is to use my agent offer sheet, which covers everything you need to make sure the agent includes in your offer. Remember, the agent is going to write the offer using their state-approved forms, but you need to make sure they include everything you need to be able to wholesale that contract. I did a video where I break down 10 critical things to make sure are included in your offer, including a 10-day inspection contingency so you have time to verify and validate that you actually have a good deal. Now, make sure you watch that video; link in the description.
Tip number two: earnest money and proof of funds are going to be required to get your first deal. You're going to need $500 to $1,000 to put down as earnest money. If you can't figure that out, you aren't going to be able to do this. As far as proof of funds letters, if you're a Pro or Prime level subscriber to Flipster, you get unlimited proof of funds letters for as many offers as you want; just another reason why you need Flipster. Go to getflipster.com to learn more.
Tip number three: a verbal offer is still an offer. In fact, if your offer is really low, the agent isn't going to want to spend the time to put it in writing. When that happens, ask them to call the seller and give a verbal cash offer. Again, my agent scripts show you how to handle that.
Tip number four: speed is the secret ingredient. I teach my acquisitions managers that they have to get the double-dip offer in within minutes of new listings coming available. Let me tell you two things that just happened: a brand-new listing came out on a distressed property; we made a low verbal offer, and the agent replied that the seller verbally accepted our offer, but then the agent drug her feet on getting us the paperwork, and within a few hours, they received a full-price offer from a buyer's agent, and they decided to take that, so we lost the deal; that was the agent's fault for dragging her feet. Story number two that just happened: brand-new listing comes out; we make a double-dip offer, and the agent had the offer to us within minutes to sign digitally. She said, "Please hurry; I'm getting a lot of calls." Within an hour of this property coming off for sale, we had a fully executed contract signed by the seller. With low inventory, if you're not lightning fast, you're going to miss out on deals. By the way, I do not look at the properties until after I get the executed contract and during my 10-day inspection contingency.
Tip number five is to focus on bigger rehab deals. Currently, as of this recording, in most markets, there is very low inventory, and if a house is livable but you know, old and dated, you will be competing with homeowners, and they will always pay more than you. Focus on properties that homeowners can't buy because the issues are too significant: needs a new roof, holes in the wall, missing a furnace, etc.
Okay, tip number six: make sure the contract doesn't have a no-assignment clause. If it's a bank property, such as an REO, it will most definitely have a no-assignment clause. But don't worry; I developed a workaround using an LLC. I did a video where I break it down for you; link in the description. And if you're in Texas or Florida or one of the other eight states that don't do dual agency, you can still follow this technique; still go directly to the listing agent and ask if they have an agent in their office that they could work with to get your offer submitted; this would be designated agency. The listing agent may have an assistant that they work with; they're going to look good bringing leads to their colleagues in the same office, and sometimes they'll receive a one-and-a-half percent referral fee from the buyer's agent, so it still benefits them. Get creative and look for ways to build relationships with listing agents.
Finally, when it comes to assigning an on-market contract, once the agent helps you get a fully executed contract, their role is done; what you do with that contract is your business. The double-dip listing agent isn't involved in the process of finding a cash buyer or assigning the contract; you have to handle that. Take your contract and assign it to a cash buyer, same as you would with an off-market property.
So how well does this work? Let me tell you: one of my elite mentoring students, TC in Pennsylvania, does three to five deals consistently every single month; they're all on-market following the double-dip strategy, and they're a combination of wholesales and fix-and-flips, and he earns a seven-figure income annually. So if you want to not just do your first deal but learn how to take this technique and turn it into a business, be sure to check out my mentor and partner program; just go to fasttrackwithjerry.com for a free training with all of the details.
And finally, I want you to see this process in action. I recently released a video where I show you how I did all five of these steps and secured a deal in less than 20 minutes; even get to hear me on the phone during the double-dip technique conversation with the agent. This will really help you see the vision of how this works. Watch that now! And if you haven't yet, be sure to subscribe to my channel; this is the number one channel on YouTube for all things wholesaling and flipping, and I'll see you on the next video.