Transcription
Should be live in the Chicago wholesale deals Facebook group. Today we're going be going over our um kind of like we talked about last week, our six offer system. So, we're going to be going over our six offer system, how we uh are cash flowing properties at the same time we are wholesaling flipping properties. Uh so, we're going to go over that and all the strategies. We're actually going to go over seven different offers, but all the strategies require no money, no debt, no cash, of course.
Um, so, we're going to go over that and uh anal maybe even analyze a deal step by step and show you how that we're we're doing that. So that's the key is I believe that yes do you know transactional deals where you get paid once but at the same time you should be picking up cash flowing properties that pay you over and over again right cuz you know you don't have to work anymore if you get enough cash flow coming in right so my goal is to help uh help you we do these trainings to help you close deals in the future hopefully we can partner on deals in the future um so hopefully these trainings help you have a free um updated ated real estate wholesaling course for free if you're interested in that. We show you everything that uh we do in our business that to close deals every single every single month and uh our Facebook group is best Chicago wholesale deals live. So the recordings after 30 days uh Facebook takes it down now. Uh so we put them on YouTube. So in my YouTube channel, YouTube.com Russelljw Walker, right?
If you're looking for deal Chicago area, go to best Chicago wholesale.com/ buyers. Um if you're in a different market, uh we're currently got some deals in Florida, the Carolas. We got some deals in Indiana, Indiana, Wisconsin, St. Louis area. So if you if you're in other market, just let me know. We can add you on your buyers list in that market. If you need a buyer for your deal, you can submit your deal here. If you maybe own the property or you have a deal under contract, we can see what we can do. Maybe it doesn't work for investor. It may work for a creative deal like a creative financing owner financing or rent to own so we can check take a look at it. Uh if you have a deal, just send us the deal uh to my email russleb wholesale.com.
If you're looking for one-on-one mentorship, um, where we basically handhold you from everything from A to Z, we can even set up marketing campaigns for you, do a, you know, create a marketing plan, marketing strategies so that you're consistently closing deals every month. Um, you can check out how our uh mentorship program works here, kingdomacademy.info page.
So, we're going to get into training. Uh, so how how to flip and cash flow houses without cash or credit. Going over our six offer system, how it works. Um, and we'll go over a bonus one, a seventh one, and we've done a lot of that, too. So, so we currently have uh every lead that comes in, we we determine, you know, does it work for any of these different strategies, right? Uh, so a cash offer. So, um, that's where we would buy it ourselves. So we have uh partnered with hedge funds, thirdparty contracting companies that we can actually do a fix and flip without, you know, without me putting my own cash in. So uh we can get the offer a cash offer at if we can get a deal at 65% of ARV minus rehab cost, we can bring in a hedge fund that actually close on it. And typically what we're doing is we're just we're just uh wholesaling it, meaning that we're not going to actually rehab it. we just clean it out and put it back on the market for retail at the retail price, right? So, um and and uh the next offer is a wholesale offer, we can offer a little more. It depends on the area. Some areas, you know, you can do it you're stuck at se 70% of ARV minus rehab. It just depends on the area as far as percentages. But to come up with all the different offers, you just basically need two things. You just need to get the after rehab value and the rehab cost. So, if you have after rehab value and rehab costs, you can easily come up with all the different offers.
Um, and then we have a uh sandwich rental. So, the wholesale offer, basically what you're doing is you're just getting the property under contract and you have, you know, 30 days to close on it or whatever you negotiated and then your goal is just to find another buyer at a higher price that you you assign the contract to or you can do a double closing with. And then the sandwich rental and offer same thing I would say very similar to like owner financing subject to is where you would stay in the middle of the deal. And the reason you stay in the middle of the deal cuz it cash flows or there's equity, right? Like you let's say that the the ARV is 200,000 and you got it at 150, right? And then maybe there's 500 a month in cash flow. That's a good deal to stay in the middle of where you would hold want to hold on to us for as long as possible, right? Uh we did we did uh a few sandwich rent to owns where we rent to owned it. We uh basically furnished it and then turned it into an Airbnb for the next two, three, four years and then eventually sold it. So when you do a sandwich rent to own, it's similar to ownership where you you you can you can resell it right away. You can rent to own it to someone else. You can Airbnb it. You can actually uh just sell it outright if you got a really good deal. I remember we had a really good deal. It was uh we we negotiated a sandwich rent to own and we stayed in the middle of it, but we just decided to sell it right away. So, we we just basically got it for two uh 200 and put it on the market for 250 because we had a big spread in it right away. So, we just put it right on the MLS. Right. So these are controlling properties with an option agreement. So sandwich rent to own, you control the property with an option to buy, right? So you can actually, you know, get an option to purchase it for 200,000 and then resell that next week for or you know or however long it takes you to find a buyer for 250 or more.
Then the wholesale rental is when there is no equity, there is really no cash flow. We're just assigning it for a down payment. So, the only pro profit we make is in the down payment, right? So, what I'm going to do is just kind of go over the formulas. Um, last week I I gave you guys like a AI, the formula, the template, and everything like that. Um, uh, so you can use that for free. You can just reach out to me. Uh, we have, uh, we have offer template. You just plug into the AI and it comes up with all the offers for you and it has all the formulas in it and everything. I'm trying to find my my notepad. I was going to pull up the offer formula. So, if you guys didn't get that from last week, uh, you know, just reach out to us. We'll send it to you. So, basically, you know, we we plug this in the chat TPT and we just tell it, hey, we're investors looking to buy properties, and can you use these formulas? Can you use this uh letter of intent as well? Wait, I didn't have the So, and then we train it as well. Like here's how we come up with rehab costs. I know some areas are going to be different rehab costs. So, you probably want to adjust it based upon what you know. Um, and then we have we we we teach chat GPT the formula on how get how to get after rehab value and then we train it, right? So, if it gets something wrong, you got to retrain it and then keep retraining it. And then here's kind of the formula. So, if we're going to buy it ourselves, what we do is we're at 65% of ARV after rehab value minus rehab cost. And that's going to give us our offer that we can bring it to a hedge fund and they can buy buy it with us. And we basically partner on the deal with a hedge fund. Uh the wholesale offer, the max is 75% of ARV times ARV minus rehab costs. and the wholesale offer, you know, you want to double check like if you're going to make an offer at, let's say, 95 here. Um, so I we run the formula. We're at 75% ARV minus rehab cost minus our wholesale fee. We're at 95. You just want to double check everything. Go look at on the market in the same area within maybe a mile radius. And search for everything active that an investor can buy on the market today. And then you want to you you know if you see a bunch of properties that are in the same condition as yours or same type of property and they're all selling for 85 and you're trying to get it for 95 and then you're trying to wholesale it for 105. You're not going to sell it off market because an investor can just go in there and buy properties the same condition at 85, right? So you want to this 75% is always going to change based upon what's active on the market, what an investor can go buy right now, right?
And then we have uh rent to own. Um I was going to pull up uh notepad to do it, but it's not it's not coming up for some reason. So rent uh the listing offer if we're going to do like a noation where we get it at a certain price and add our fee and put it on the MLS. We're at 90% of ARV minus rehab costs minus our $10,000 fee. So, and the same thing there, you want to look at everything on the market active and then you kind of want to make a common sense decision. If you see if if you're going to put it on the market like do an ovation and you see I got to sell this thing for you know 116 to make a profit but then you see a bunch of properties in the same condition been on the market for like two months and they're all selling for like 90k. Uh of course you want to lower that. You want to get it, you want to be, you want to use common sense. Check everything on the market and see if it's going to sell, right?
Then a rent to own or this could also be like uh owner finance offer, subject to offer. You want some equity in the deal. So, if you're going to stay in the middle of a deal, I would say the bare minimum would be like 15% of ARV. So, we're at 85% ARV minus rehab cost minus um $10,000 if we're going to assign it like a wholesale fee. So, and then with the market rent, if you're going to stay in the middle of a deal, I would say 25% take 25% off of the market rent. So, market rent is, you know, a,000 bucks a month, you want to be at 750. That's barely like that's the the lowest I would go, right? So if you can get it at th those, you know, that kind of a spread, I would stay in the middle of it, right? So rent to own, you can uh uh negotiate these things for for um many years. We we had a deal rent to own for I think uh close to eight years, right? So we it was a short sale. Actually, when we first got it, it was a short sale. Like it was upside down. So he was upside down like 50 grand. But eight years later, we still had it. were still uh rented it out. Um, it ended up being like it was we had 100,000 plus in equity. So this owner who was underwater couldn't pay his mortgage anymore. We ended up doing a uh rent to own for eight years and it was upside down 50,000 but eight years later it was positive 100,000. So deals that you think, you know, you can't, you know, make any money cuz they're upside down, um, you know, you got to think long term, right? So we looked at the deal. It was like a three unit and we looked at the mortgage. We looked at, you know, the cash flow. So, so we got this fully occupied and rented, you know, we're going to make maybe 500 bucks a month. So it's not a lot of money, but we looked at it like, hey, if he he's willing to give this for eight years, what happens in eight years? the rent increases, right? The price the you can increase your rent. You should be increasing your rent like 3% a year or more or more, right? So, every year the rent should go higher. Um, so we ended up, you know, uh, helping the owner get out of a short sale or foreclosure and we just did a rent to own for eight years and we ended up with probably 100,000, you know, in profit the back end. You're making just 500 bucks a month. I think it ended up making like,000 plus a month after uh we raised the rents. Uh but we probably ended up making like 130 $140,000 off a deal that was upside down, right?
So rental assignment, your only profit is the down payment. So usually there's really no um there's really no equity in the deal. So the seller is at like 200,000 and it's worth 200,000. and the seller wants 2,000 a month in rent and it's the market rents 2,000 a month. So the only profit there is a down payment, right? So you're you can do this same exact strategy with um with uh subject to owner finance deals um where you just assign the down the uh assign assign the contract for a fee, right? So, uh, you and you know, you negotiate with the owner and the owner wants 5,000 down and then, uh, you know, you're trying to get them as low as possible and then you're trying to get the buyer to per down as much as possible. So, you're trying to get the buyer to put down 10,000 20,000, right?
So, um, and then we do short we do property management where we we don't do regular property management, but we do Airbnb management as well. So, we manage Airbnbs. Uh, we did get a couple of them the last few weeks. And just those two deals alone, I think we should be making like 1,500 a month off just two deals, right? So, and we're just managing the property for the owner. Um, and we're not we have no expenses out of the pocket. Could you do regular property management? Yes. But, you know, you're getting like 10% or 10% or less. We're where We're Airbnb. We're getting like 20% of the revenue. And then we have everything pretty much automated where we're not uh you know we're we're basically doing a few hours of work a week on Airbnb where we have VAS and AI technology that's doing pretty much everything in the back end. Right.
So all these offers require little to no cash, no credit. Um, and the seventh one which you know we we've done quite a few is equity partnerships with owners. What does that mean? Um, so for example, we had a deal, uh, there's tons of equity in. The guy had no mortgage. Um, the tax auction was coming up in like two weeks and he owed like 40 grand, right, in taxes. So, we told him, "Hey, we'll we'll partner with you on the deal. We'll put up the 40 grand." Like, if you don't have the 40 grand, like if there's a deal that this property had was literally worth 200 grand as is, right? So if you don't have the 40 grand, if you present the deal to investors, they're going to you're going to find the money, right? So no matter what. So uh we had a deal, for example, we we put up the 40 grand, avoided the tax auction, uh before before the few weeks hit, and then we just ended up telling the own the owner didn't want to sell for the cash offer, wholesale offer. He didn't want any of the offers. He he wanted to to um he was just really stubborn. He wanted like, "Oh, I want, you know, 100,000 120 100,000 on top of the 40, right?" So, we ended up just negotiating with him to say, "How how about we just become partners? We uh, you know, we put up the 40 grand in back taxes that you owe. You're going to lose the property." And then we just uh clean it out and put it back put it on the market, right? because the the owner was actually um he had a he had the tenants there and they just left the property and and uh so we just had to clean it out and put it back on the market. So we just ended up partnering with the owner and putting up the money and um printing it back on the market right away. And there was literally like 100 after commissions and closing costs. I think there was likeund like 30,000 in profit that we split with the owner. So equity partnerships is a great way like you can also do we done some deals too where we partner with the owner the owner put the property up and then we just basically uh got the funds to rehab it. So, the owner puts the property up, you get the property for free, and then uh you become owners, part owner with the with the owner on that property. And uh this this works good especially with properties that have a lot of equity or they're free and clear. And then you can just uh refinance and get like a hard money loan for the rehab costs. So the the lender puts up the money for the rehab and the owner basically gives you the property for free and then you can work out with the owner if you're going to split the the holding cost the you know with with the owner while you're rehabbing it. Right? So equity partnerships too you can you can uh assign them as well. I you know you can you know form equity partnership with the owner you can assign them as well. Um, but there the these are probably like lastditch efforts. So if someone just is unreasonable like usually like you know there's a foreclosure coming or auction coming and you know they're just not reasonable on their price. Um, hey, you're going to lose a property anyway. You got two weeks left. How about we do this? Right? So that that's probably like last case scenario. Right?
So, um, if you go to our uh Kingdom Academy info homepage right here, mentorship, go to um, put your information in and the next page is like a video on on uh a recent video I made a few like a month ago on just all the deposits that come in every month. You'll see like all the Airbnb deposits every almost every other day coming in and you'll see like the wholesale deals. So, in my opinion, you should be doing the transactional deals where you're flipping properties, maybe you're rehabbing them or wholesaling them or or wholesaling or doing no. Uh, you should do that where you get paid once and that's it. Then you should also at the same time be picking up uh owner finance deals, subject to deals, rent to own deals, Airbnb, maybe you start managing properties. Um, or maybe you you get a rent to own or owner financing and turn it into Airbnb. Um, that way you're getting paid over and over again, right? So one week, you know, you don't close any transactional deals, but you clo you but maybe you picked up a bunch of uh, you know, cash flow deals where you're getting paid every every week, right? I had a student go from like zero Airbnbs to I think it was like 19 or 20 in in one year and went from zero cash flow to ended up making like 15,000 16,000 a month and just did it in one year from what we teach here, right? And that's that's um uh that's the end goal is like I don't want to be worried about, oh, I have to close a wholesale deal or else I can't pay my bills, right? or I have to close a listing or I have to close a flip or I can't uh, you know, I don't want to be stressed, right? I rather have hey, I don't have to I don't have to work this month at all because I have enough cash flowing rental properties that are coming in whether you know, of course you can buy them and own them yourself or or subject to them or owner finance them or do a sandwich rental and hold them and get paid, you know, every every uh every month or you turn them into a vacation rental get paid every week right so all these offers require little to no cash credit.
Um, and we we uh we've been teaching this same system for I don't know, maybe eight years, nine years now. Um, just doing, of course, we're always going to be doing wholesales. We're always going to be uh flipping properties, but at the same time, we're we're always going to be looking for the next deal that we can cash flow, right? So, if you do that with every lead instead of if you're just focused on wholesale and that's all you do, um, you may have you may have missed some deals across the table and that could have ended up being like, you know, 500 bucks a month, 1,000 bucks a month. You do that 10 times, you got 10 grand a month coming in, right?
So, if you guys have any questions, uh, reach out is my number, phone, email, and, um, this, uh, offer formula with the letter of intent if you're interested in that that you can just plug in the chat GPT and in the future, you just, uh, plug an address in. You can plug an address in and then it will come up with all the different offers for you. can kind of show you. I think we did a bunch of them today already. So, right here, we just plugged in the address here. You can you can have it come up with the ARV yourself. Um, I would say it's a work in progress. It's about 85%. It used to be like 70% accurate where you put the you you put the address in and ask it to come with come up with the ARV itself. Um, and it now as you give it like, you know, all these directions here and then also at the same time you should be continually training it like, hey, how'd you come up with, you know, this ARV right? Looks like you're pretty far off. Um, and then you retrain it and tell it, you know, hey, these are the comps, right? So, if you continually do that, it just gets better and better. So, in my opinion, right now, it's about like 90% accurate um getting ARV. And what I would do, for example, if you haven't trained yours yet, I would plug in, so for example, this one here, we made an offer in Orlando. Um, what I would do is give it all the information that you have on it, right? It's a 42, 176 square ft. It's uh four bed, two bath and then you can ask if they get the after rehab value for you. And this property, I think they just said it was like a cosmetic rehab. It's in good pretty good shape. So, we did about 20 bucks a square foot. So, I'm just going to put in cosmetic rehab complete complete LOI. So, I got ARV at 380. I think I got 390. So, it's just a little bit off. Yeah, I got 390. And then boom, it gives you the cash offer, your wholesale offer, sandwich rental offer, and it even came up with the market rent. And I would check that too on Zillow. But I like to double check it before I send it cuz I want to be pretty I want it to be pretty accurate. So I would go to Red Fin nearby homes for sale and then just look at the sold in the last six months. And I would zoom out to try to be within like a half a mile. And then this property is uh 1,700 square ft. So we're going to look at like around 1,900 and under. There's only one com at 550. So if you got like one combo way out there and then all the rest 390 365. So and then one thing you should do before you send the offer, like if I'm about to make this offer, I want to go to for sale. I want to see everything active on the market. And then I want to price I want to see everything at the lowest price. And I take the square footage off just in case I see uh something bigger, something cheaper. And I zoom out to try to be within a mile and a half. So what I'm doing is like if I'm an investor in this market, you know, can I find something cheaper than my deal? So, if I if I'm about to make this offer, let's say uh he's going to accept this wholesale offer 287 and I have to wholesale it for 297. Um, so if an investor goes in this market, can you find a better deal than mine? Right. So, right here, this is a 21. So, my property is 42700 square ft. This one's a 32500. So, this is pretty close. So, I I need a beat. And it looks like it's yeah pretty it's in between like cosmetic. Yeah, I would say it's a cosmetic. So this one I have to beat, right? So if I get this under contract at 287, try to sell for 297. Yeah, I'm the cheapest deal in the whole in this market within a mile mile and a half radius. If you want to be safe, you want to zoom out more, you can. But um I'm trying to make sure that if an investor goes into this neighborhood, he can't find a better deal than mine. Right? So when the whole, you know, the whole 70% 75% formula, then the whole thing changes, right? If let's say the cheapest deal, let's say this is sim similar size. So this isn't this is very small. So, let's say this 275 is the same size as my property and I'm about to make this offer at 287 and try to sell for 297. Guess what? My offer has to go down. I'm going to go down to if they're this if they were similar, same size. My offer I would want to try to sell this for just below this, maybe two 274, right? So, my offer then would change from 287 to 264. So that's a $20,000 difference, right? So it's a big difference, right?
So, if you guys have any uh questions, reach out to me. Call, text, email. If you want to get our free real estate wholesaling course, just reach out to me. Or if you want the offer template where it comes up with all the different offers. Um, and we try kind of train it to get the ARV. We train it to get the uh rehab costs for us. And if you're if you're uh, you know, any of these this information is different in your market, you can just change it and uh retrain chat GPT for your specific market because every market is different, right? Like if you're in Florida, you know, you got to make sure the pools, right? Like if a property has a pool and your property doesn't, it's like, you know, you're going to take 30% off the ARV if all the comps have pools, right? Or you're trying to find comps that don't have pools. So, you have to train the you have to train the chat GPT specific to your market, right? So, if you guys have any questions, reach out. Call, text, email. Uh, if you want the template uh with all the different offers, just reach out to us and we can send it to you.
So, we're going to end here. So, God bless. So, see you guys uh next.