Building a “Multi-Purpose” Flipping Operation in 4 years- PART ONE

Interview with Tennessee and South Carolina wholesaler whose incorporated many different exit strategies and assets to his business using only a few team members.

Today you’ll listen to a full time and “multi-purpose” investor Jeremy Remer. He took full dive into real estate investing 4 years ago and he’s only gone up from there. Flipping land, rehabbing and wholesaling single Family residence, and buying up cash flow properties, Jeremy and I chat about many aspects of his business including how to hire team members, where he gets his deals, and buying on terms. Listen in on part one here.

In the interview, you’ll discover: 

  • How much he pays his acquisition manager (it’s higher than most and he explains why)
  • His business structure (when he wholesales, what he keeps, and buying on terms)
  • How many follow-ups it takes to reach a contract
  • His sources of leads and how to utilize them
  • How long it takes to train team members and put them in place
  • How to evaluate the strengths of team members
  • How Jeremy got his start
  • How Jeremy builds his buyers list
  • How to fund deals
  • Jeremy’s biggest challenges in the beginning
  • Jeremy’s struggles and turning point
  • Jeremy’s advice for – The key to his success (it’s not reading bigger pockets forums) 

To contact Jeremy visit: https://www.tncashoffer.com/

Or email him at: [email protected]

Phone him at: (615) 670-8153

Quotes From the Show

“Sometimes it takes us eight times, ten times, to actually get a deal.”

“I try to match the strengths of the individual to the position that we’re looking to fill.”

“We go in with at least two offers, every single time.”

Transcript of Interview:

Jeremy:

And there were months where I was flipping houses, didn’t have many wholesale deals at all, and I didn’t know where the money was going to come from.

Paul do Campo:

Tell me about your main bread and butter with REI.

Jeremy:

Yeah. Right now, we’ve got a real strong wholesaling business in South Carolina, so my home market is actually Nashville, and that’s where I used to focus all my time and effort. As far as wholesaling and flipping, I just found myself too much involved in the business, trying to go and oversee these projects, work with contractors, chase down leads. I realized I just couldn’t do it anymore, and so for me to get out of the business, I needed to force myself out. I started looking at another market and chose one in South Carolina, and found boots on the ground, and we’ve just done really, really well. I still do a little bit here in Nashville, but it’s far less than I was doing let’s say, I don’t know, 18 months ago. It’s been really good for me because I don’t have to be involved in the flips, I don’t have to go see the houses, none of it. I’m working with my team, I’m focusing more on the business now than I’ve ever done.

Paul do Campo:

Is your team doing this virtually too, or are they meeting with sellers?

Jeremy:

I have a guy on the ground who meets with sellers. This is one of the reasons why I love it, is he has a background in commercial and residential construction. So basically, it was a great match because he was doing a rental we picked up, it was the first house we bought in South Carolina and he ended up doing the work on it, and I just really was attracted to his personality and the way he approached things. So, we got linked up and I just told him, “Hey, listen, man, do you have any interest in getting involved and meeting with sellers?” Because I could tell he had what it takes, and just a really solid guy. And so, I taught him that aspect of the business, and so he’s just been doing fantastic ever since. It’s been really, really good match because he also runs our flips there, so his crew, if we take down a good deal and we want to cherry pick, he’ll manage them, get them going, check checkup on the job every week or whenever he needs to. And then, as far as going on appointments, I mean, we’ve got him rocking and rolling on anywhere from five to 10 appointments a week.

Paul do Campo:

Oh, that’s awesome. And so what do you pay him for acquisitions?

Jeremy:

I have a unique model because he’s doing so much of the business. Typically, acquisitions managers are paid a much smaller percentage, but I actually, believe it or not, give him 40%, but he’s also doing all of my flipping. I don’t have to ever talk to a contractor or do anything, so it actually works out in the end really, really well for everybody because at the end of the day, we’ll do anywhere from eight to 12 per year, and they’re all high margin and I don’t ever have to deal with a contractor. So we say, hey, we’re going to give a lot more on our wholesaling business, but we’re also not having to do any of the work as far as the flipping goes, so that balances itself out for us.

Paul do Campo:

Yeah. So he’s doing the job of two people, 40% seems fair.

Jeremy:

Yeah. And he’s also doing dispositions, and I mean, he’s just a high capacity guy, so I would not recommend this for just someone who you’re trying to bring on as an acquisitions guy. I don’t think the numbers would work at all, but in this case, we have it structured where we’ve got a team who we do some of the backend stuff as far as dispositions goes, the emails, the text blasts, things like that. And then, he actually will go out to the property because he’s got the construction background, because he knows what’s going on there, when flippers come in or buyers come in, he’s able to have that conversation and say, “Hey, here’s exactly what we see, here’s what we estimate.” He’s very knowledgeable, so it’s almost like he’s doing the work of three people, so he absolutely earns his keep, and we’re happy with the arrangement we have.

Paul do Campo:

Awesome. What do you mean by disposition? I mean, I hear acquisition all the time, but not dispositions.

Jeremy:

The sales aspect of whatever properties you have under contract, who’s going to be talking with buyers, who’s going to be showing the houses. There’s all sorts of followup that needs to be done. Our team does the administrative stuff from here in Nashville, and so we’re able to do all that stuff, get everything out to the buyers, and then all of the followup from that point on goes to him. So, he’s going to have the phone calls with those people, setting up the showings, hey, I can’t be here at this time, can I come then? All of that stuff. And then once the inspection is done, getting those offers and then following up with them and ultimately, which direction we’re going to go, can I talk together, but he’s done all the work on that. It’s really a really good setup because he has all those relationships and because of all the marketing we’ve done, we’ve made him the local authority over there in our market, and so we’re continuing to grow that every single day and really excited about where that’s going.

Paul do Campo:

Okay. You mentioned follow up on these deals, do you have a number in mind of how many followups it takes to actually get a contract?

Jeremy:

I was referring to the disposition side of that follow up, but as far as the followup goes, when we reach a motivated seller, I mean, I would say if we get 10 leads or 10 appointments, we’re probably going to close two of them, and then everything else we close after that, I mean, it’s going to come anywhere from touch two, all the way to … sometimes it takes us eight times, 10 times to actually get a deal. We’ve got a followup system that we use. We have a CRM and we’re constantly texting people, we’re emailing them, we’re doing everything we can to follow up. The funny thing is you don’t know which way people are going to respond, and so integrating several different tactics has allowed us to be really, really successful. That’s where we get the majority of our business. It’s not that first appointment, hey, close the deal, it just doesn’t happen that way for us. Our followup system is key, and that’s how we get the deals.

Paul do Campo:

Yeah. I don’t think it happens for most either. I mean, I think it’s like 80 to 90% of deals, sales in general come from following up. Do you have all these leads coming from an abundance of different sources, or do you have a main three that they’re coming from?

Jeremy:

Yeah. We’ve got … of course, we do direct mail, we do PPC, SEO, Facebook, we have some other lead channels we’re exploring right now. We don’t know how effective they are, but we’re also starting texting right now and then we’re going to add cold calling. We’ve kept a few things back to really focus on the channels that are working for us, and as they’re working and as we have them really dialed in, we’re adding more channels. That’s what we’re in the process of right now, because we have a lot of leads coming in, we’re getting a lot of phone calls, we’re having a lot of success with the online and now we’re just trying to say, hey, how can we do more and add more deal flow and more volume.

Paul do Campo:

Was it a long learning curve for you, for the paid ads for PPC and Facebook ads?

Jeremy:

For Facebook? No. Well, actually for both, it wasn’t a long learning curve. When we started PPC, we did that back in 2018, we weren’t really sure what the success or the results were going to be, but we had a ton of success and that was here in Nashville, pretty competitive market. My business partner actually learned how to manage PPC, and he went through one of those boot camps with another real estate investor or another real estate … a firm that focuses on PPC, and he learned it, and we realized that we could be just as effective as they are and save on that management fee. He’s been managing that ever since, so we’re able to be really effective with that. Facebook, we just started having success right out of the Gates.

Paul do Campo:

Are you managing any of that, or are your partners managing all of the paid ads and lead generation then, right?

Jeremy:

No. Interestingly enough, my partner only manages the PPC, but as far as SEO, we have a firm that takes care of that for us. And then Facebook, we have a different company that manages that. And then for direct mail, we do all that internally, so we’ve got a process that we follow and work with mail house and all that, and we make sure that that’s on autopilot. I have an admin/transaction coordinator, and she stays on top of our transactions and our lead gen, it’s just like clockwork. Every week, I tell her this has to be done, and we can’t miss it. When I was managing that, it was a mess because I would just take care of whatever I felt like was most important. And with all the things going on in the business, it got lost. So, she manages that now and it goes out every single week religiously.

Paul do Campo:

I know from my experience, building a team was just … it was a headache trying to come up with a system. How long did it take you to put a one team member in place and to assist them? Do you have any tips about putting a team member in place? I know it took me probably two months, maybe more to actually get people trained or a system in place.

Jeremy:

We’ve also, in addition to wholesaling and flipping, we got involved in land business too. That was really our first hire, and so we weren’t sure how we were going to work with this VA, so she’s based in Connecticut. We never have actually met other than over Skype or phone or whatever. We got her involved in a little bit of the house business and a little bit of a land business, but as our land business took off, we actually just said, “Hey, listen, we really need you to focus on the land stuff.” And so, she was doing probably 90% of the work in the land business, which was great. And then my partner, he took on the other 10%, the mailings, and we do blind offers, so he would make sure that those were priced accordingly, make sure all those were out, he would focus on what areas we wanted to hit, and then she would do the rest, all the followup, taking calls when contracts came in.

Jeremy:

She ended up being a really great add to our team, and then at that point we said, okay, we’ve got that under control, how do we really move the wholesaling business forward and bring someone else in, who can take care of some of the admin stuff that would allow me to really focus on growing the business. Last, I guess July maybe, I think it was last July, we brought in another person and she works here with me in Nashville, and she’s focused on initially the admin stuff. She had no real estate background at all, so I just said, “Hey listen, I want to explain to you what our business looks like, the tasks that I want you to do.” She’s just a really good fit. I needed someone who can execute on the tasks, on the admin, on the followup, all of these things that for me personally, I didn’t love to do, I wanted them outsourced, I needed them outsourced. I started just giving her things and training her. I spent a lot of time investing in her, and now she’s gotten to the point where she is our lead gen, she manages all of our Podio, she’s doing followups with attorneys and title companies, getting contracts out.

Jeremy:

I guess I don’t know how many months that is, maybe eight months or so, she’s gone from no experience to now, she’s a really valuable asset to our team. And so for us, it was just making sure that it was the right fit. I was looking for someone that their strength was in admin, their strength was in followup, I needed someone who could do that. And so, I tried to match the strengths of the individual to the position that we were looking to fill. That’s how we’ve done that, and so far, it’s been good.

Paul do Campo:

How do you find that out, when you’re just looking for somebody, how do you figure, okay, this person is going to be good for admin? Is just from experience that they’ve had?

Jeremy:

Well, interestingly enough, I spent about five and a half years working for a nonprofit and we were international, so we were in about 18 countries. I had to work with people on the ground in places like Haiti, Iraq, Cambodia, all over the place. Some of those folks spoke English, some of them didn’t, and so when you’re working cross-culturally and you have language barriers, among other things, cultural barriers and whatnot, you really realize how important it is to have the right people. You have to trust them. And then, you also have to figure out how do we communicate. And so, one of the things that I loved was figuring out what someone’s strengths were. And so, before we ever hired someone, we would actually have them go through strengths finder, the StrengthsFinder 2.0, to find out what their strengths were. In addition to that, we wanted to find their four letters, are you ENFP, what are you?

Jeremy:

What we did is, I went through and just learned the basics of that. I figured out number one, what my strengths were, and then everyone around me that was on my team or that we were bringing in, we were trying to match, what are your strengths, what’s your personality type, and then do those fit with the position that we’re looking to hire for? And so, that’s been my experience, and we built out a team of … I don’t know, I think I had about 30 people working with me cross-culturally, so I just applied those techniques to this business, and what are we looking for, does their personality match up? And like I said, we’ve had a lot of success so far, but there’s always going to be challenges because it’s never going to be a perfect science, but it’s been working for us and it’s allowed us to really grow our business and focus on running the business rather than me being involved in all the day to day stuff and putting out fires.

Paul do Campo:

What’s your Myers Briggs or Briggs Myers, whatever it is, the four letters, if you don’t mind.

Jeremy:

I’m an ENFP, so I’m a weird ENFP because they say all those folks are very entrepreneurial and they’re very scatterbrained and they’re not organized. I am an ENFP, but I have a background in accounting and finance, and in a weird way, I’m an organized one. So, I like to build systems, but what happens is, because I like to read, I’m a learner, I try to involved in everything, I want to understand everything, and I just don’t have time to do everything. And so, what typically tends to happen is I’ll start things and I will I’ll try to get an Excel spreadsheet up to where it has all the different things that need to be done, and then it’s great, I need to hand it off to somebody at that point. That’s really been key because for the admin that we hired in July, I was able to start things, I was able to set her up, but now I said, “Hey, listen, this is what we’re looking for, now, you manage it, you make it better.”

Jeremy:

And so, the entrepreneurial, very artsy fartsy pie in the sky, thinking about the big picture stuff, I have that, but I’m also down to the details, I just can’t manage them longterm because eventually I’m not going to do that well. And so, finding someone who can then take that and make it better or expound upon that and manage it well, that’s been critical for us.

Paul do Campo:

Okay, going back to your deals, I want to ask about … You mentioned you’re doing eight to 10 deals a year right now. With all those avenues that you’re bringing in leads, how many leads per month is that? Let me just clarify.

Jeremy:

In our South Carolina market, this year, we’ll do anywhere from 48 to 60 wholesale deals. That’s 48 to 60, and then we’ll do probably eight to 10 high margin flips where we just cherry pick the best deals. And then as far as in Tennessee, I’m not really focusing here, but we have some existing marketing that we have going. And so, I anticipate we’ll probably do anywhere from 10 to 20 wholesale deals in three markets in Tennessee, in and around Nashville, Nashville, Chattanooga, and then the markets around there. There’s that side, and then we’re also trying to grow our terms business as well, and then we’re trying to also grow our multifamily. We’ve got a ton of stuff in the hopper right now, which is really exciting, but it’s a lot of stuff going on.

Paul do Campo:

And your one acquisitions guy cycles through all those markets?

Jeremy:

The acquisitions guy only focuses on South Carolina. He’ll take down, like I said, probably the 48 to 60 deals, and then he’ll manage those flips.

Paul do Campo:

Are these competitive marketplaces?

Jeremy:

Well, I mean Nashville is competitive, but like I said, we’re not focusing as much there. The market in South Carolina is actually Myrtle Beach, South Carolina. I mean, honestly, it’s a market that I see really dominated by realtors. There are some wholesalers there, but it’s a unique market because a lot of people up from New York, Pennsylvania, Michigan, from up North, they’ll come down and they’ll go golfing or go to the beach in the summer, so it’s really popular as a tourist destination. My parents live down there, they retired down there several years ago, and I haven’t gone down since I was a kid. That’s how I got introduced to it, and then it just so happened I met the right guy and just said, hey, you know what, might as well take this market by storm and see what we can do. And so, we’ve had a ton of success. We’re only going in … let’s see, we’re coming up on a year, we’re 11 months in right now, and I’m really excited about where we’re going.

Paul do Campo:

Why did you choose South Carolina?

Jeremy:

Mainly because like I said, my parents are down there. It was intended to be a secondary market, we wanted to try virtual wholesaling and see if we could have some success here. We were looking at potentially doing some Airbnbs and rentals. It took a while, we actually tried once, and over probably four to six months, we didn’t have a lot of success, but we didn’t have the right boots on the ground, and then once we found that, all of a sudden everything changed. We just ramped up our marketing efforts and it’s been really, really good.

Paul do Campo:

Okay. So, it wasn’t any specific research data points that you saw or something like that, there was just basically the circumstances of, you knew it already and found boots on the ground?

Jeremy:

Exactly.

Paul do Campo:

Did you start with all these different exit strategies? We never really got into how you started.

Jeremy:

No, not at all. I started back in 2016, in the summer of ’16. I am not even four years into this. I thought I was going to do some wholesaling, so I got involved in Tom Krol’s Wholesaling Inc, awesome, awesome coaching program. But what happened was I actually found it hard, I made some bad decisions as far as the business went. I chose a really expensive SEO firm that cost me lot of money. I should have went PPC, but I didn’t know the difference, and so I only had money for one. Was trying to do it on my own and I was also working a full time gig, and was traveling a lot for work, and there’s just a lot of things going on. I ended up finding it easier to start out flipping. I was flipping houses in Nashville, my father in law is a contractor. I mean, I didn’t know what I didn’t know, and he bailed me out several times on some properties that I got into, but we made money and it got me going. Eventually, I figured out the wholesaling side of it, and then we started to transition more into wholesaling and having a lot of success there.

Jeremy:

A lot of things were going on in our business. My partner actually lives overseas, and so he and I had talked about eventually wanting to do rentals and eventually wanting to do some land acquisitions and land flipping and then also multifamily. It’s just weird because everyone has a different journey, every investor goes about it a different way, and some things you’re successful with and some things you’re not, and we just found that flipping at first was successful for us, but then we really wanted to be out of that. To me, it was adult daycare, having to have contractors every single day, oh, sorry, my truck broke down, they don’t answer their phone. So, I just said, “You know what, enough with this, I want to really do more wholesaling.” We got that up and running, we got our land business going. We probably should have been better about really focusing on one thing, but we just found that for us, different opportunities presented themselves in different niches, and we’re like, hey, listen, if there’s an opportunity here, my personality is such, hey, I’m going to go figure it out.

Jeremy:

We did that, and it’s taken us down several different rabbit trails, if you will, but what we’ve learned is we’ve been able to figure this out, and now we’re refocusing our business into the areas where we’re finding the most success, where we can really operate a business instead of a one off.

Paul do Campo:

Hey, let me interrupt you to tell you about the free video you can get called 40 Ways To Find a Deal. It’s a presentation done by local expert out here in Southern California. His name is Steven, he’s a flipper, he was a hard money lender, he’s now building tiny homes for landlords. He’s been immersed in the real estate business and he gave a presentation a couple of years ago on 40 Plus Ways To Find Deals Out Here, especially in Southern California, which is a competitive market. It’s things he’s done, things that his acquisitions team has done, and you can get that for free at realestate.audios.com/flipping. Depending on when you’re listening to this, you also get some free bonus PDFs that I give away, and you’ll be subscribed to my daily email newsletter where I talk about some principles of marketing, business, real estate, mindset, everything in between. Head on over to realestateaudios.com/flipping to get those.

Paul do Campo:

For people who want to start wholesaling, do you ever recommend them to start rehabbing just to get an idea about what that looks like?

Jeremy:

I wouldn’t know. My thing is find a coach, find someone that’s doing what you want to do that’s already successful doing it at a high level. Go and meet with them, figure out how you can add value to them and their business, bring them a deal, or if they have a paid program … Like I said, I paid for Wholesaling Inc, Tom Krol’s program. It was phenomenal because he wasn’t focusing on knowing every little detail, he said, “You’re not going to know every detail, we’re going to give you the basics, you’re going to go out and you’re going to meet with sellers, you’re going to understand how the business works. We’re going to give you an overview, you’re going to go take action, and through that action, you’re going to learn what works and what doesn’t work, and we’re going to provide some coaching along the way.”

Jeremy:

And so, I didn’t know what I didn’t know. I made so many mistakes, but I had that opportunity to learn and figure out, okay, this isn’t working for me, then I ask the tribe, the wholesaling tribe and ask a lot of questions. Other people were dealing with some of the same stuff, and just through all the people in the group, I was able to figure out, hey, here’s what I’m doing wrong, and I really need to tweak it this way. Or Tom himself, he’s always available for questions, so we were able to really hone in on what we wanted to do. I just recommend go in that direction. Now, once you understand wholesaling, if you want to do a couple flips here and there, or if flipping is ultimately where you want to go, that’s great. If you can find the deals, I mean, if you’re a flipper, you have a couple of different options; you could have a business where you just have every wholesaler in the town, and you’re on their list, and you’re going and looking at deals and making offers. That’s one way, it’s a cheaper way.

Jeremy:

However, you’re going to be giving up a lot of spread, because the wholesalers are getting some of that spread. And then, if you’re already a wholesaler and you’re already finding deals, this is what I love about it, is we now have access to houses at great prices where there’s enough spread where if the deal works for us, we’re going to cherry pick that deal and we’re going to have our guys do it. So instead of trying to do two low margin houses … I mean, I know some investors where they may make like 10 or 15,000 and they’re buying that deal. I would never touch that deal, I’m looking for spreads of 50K plus, and we’re finding them. And so, at that point we’re saying, maybe we don’t want to wholesale that one, we just want to buy it ourself. Let our crew keep them busy, have a high margin deal, and then we take it down ourselves, and do the work, and then we sell it.

Jeremy:

But we do fewer of them with our own team, and I love that strategy, because to me, that means we’re not sucked away from wholesaling into flipping, we are now focused on our wholesaling business 100%, but when the right deal comes along, we do already have a crew, again, because my guy in South Carolina who has that, where he can take those on, he manages all that work and his guys are very competent, so it’s not taken away from the wholesaling business. It’s adding to, which is a big difference.

Paul do Campo:

Yeah, I understood that wrong. Is that your minimum assigning fee, 50K, or is that for the rehabbing?

Jeremy:

No, I’m just saying it for the high margin stuff. I mean, will we take something where it’s a 40K rehab? Yeah, sure. If we can get in quickly, and we’re in and out of there in a couple of weeks, for sure. But our core business right now is wholesaling deals. We’re happy to give those deals away. I mean, we bought a house … This is a great example. We got one under contract for 15,000 and it was a four-three, and we put it out there thinking this is a smoking deal, the investors are going to eat this thing up, and people are going to love this, there’s at least 50K profit here. And so, we like to put out really good deals. We’re not putting out junk, we’re not trying to put out really, really tight margin stuff and keep all the margin herself, we’re trying to really put out great value for the rehabbers in our market. Nobody wanted it, and we thought, maybe it’s because we’re putting it out too cheap. I don’t know what the reason was, maybe our buyer’s list wasn’t big enough. I’m not really sure. We haven’t had this problem with any other house.

Jeremy:

We ended up keeping the property ourselves, we’re like, okay, we’re just going to close on it, we’ll do the work. We ended up working with a local bank because just … We paid the 15K cash and then we had the bank … They said, we’ll give you the 50K to do the work, and so they came out and did an appraisal. Their appraisal was, we think that when this thing’s all said and done, you’re going to be able to sell this thing anywhere from like 140 up to like 180. Well, what’s crazy is now we’d brought a realtor out because we had a couple of questions, we said, “Hey, how would you position this house based on the way it’s laid out? Would you reduce a bedroom and provide more space, whatever.” We got his opinion, he said, “No, this is what I would do”, and it was actually the direction we were leaning toward. And he said, “You don’t understand, this is going to be a great deal for you. We can probably sell this thing 190 to 199,000.”

Jeremy:

And so here we are, looking at a great deal that nobody else wanted, we pay 15K for it, we’re going to put 50, 55 maybe, so we’ll be all in for … I don’t know, call it 75,000, and we’re going to sell this thing … I don’t know, maybe 175, maybe 180, maybe 190. Those are the type of deals where it’s like, hey, this is a smoking deal and if we’re going to put all our effort into a couple of houses, I don’t want to do four low margin houses, I want to do one or two high margin that it really makes sense that we can put forth our best effort and our guys are really focused. And we’re not driving all around town trying to manage too many projects at once, if that makes sense.

Paul do Campo:

Yeah, complete sense. You mentioned bringing that realtor in for some consulting on that deal. Do you work a lot with realtors?

Jeremy:

Yeah, all the time. I mean, when we flip a house, we always list it on the MLS. We don’t buy anything on the MLS, I don’t think I’ve ever bought any house that’s been listed on the MLS. I’m not opposed to it, we’ve made offers, it hasn’t really been our strategy. It doesn’t really work for us. But when we do all the work, we want as many eyes on that property as possible, so we have a realtor that, in every market that we work with that, that does our listings for us.

Paul do Campo:

Are you putting any contracts? If you’re planning on assigning the deal, do you put it up on MLS too?

Jeremy:

We don’t. In fact, I don’t know if you’re allowed to do that in either of the states in Tennessee or South Carolina, because I think that’s a state by state thing. Some States allow that and some don’t. I’ve just never had a need for that because I’ve always had … Once we started doing wholesaling well in Tennessee, we had a strong buyer’s list, so we were always able to move our properties. And then with South Carolina, aside from this one that I just gave you an example of that we’re flipping ourselves, we’ve been able to move our property, so we have not explored that avenue at all.

Paul do Campo:

How did you build your buyers list?

Jeremy:

Oh, great question. What are the main things we did? Craigslist postings. What we would do is … Craigslist is still great for that. We’ll put out a link to our Podio page essentially. We just copy and paste a link from Podio that takes them to that Podio form, we drop that into our Craigslist. That’s been really, really effective for us. We do paid ads on Google. We will try to get buyers that way, we’ll put out a couple of properties. Not that we’re wholesaling, but properties either that we’ve flipped on our own, or properties that we’ve already sold, or something else, maybe we closed on it, and now we’re listing it for sale or whatever. We’ll put some of those out there, we’ll do a little slideshow, and we’ll do some PPC, and we’ll do some Facebook ads. We probably get anywhere from … I don’t know, I would say 10 to 20 buyer leads per week, so we’ve done that.

Jeremy:

And then, you could always switch buyer lists with other wholesalers in your market. We haven’t had a lot of success doing that in South Carolina, in our market in Myrtle Beach. I mean, we don’t know a lot of wholesalers, so we’ve had to build that basically from scratch. That’s been a really big focus for us. We’re trying to start a meetup group or [inaudible 00:40:41] group in Myrtle Beach, and we expect that that’s going to help a lot and try to bring together what we think is a fragmented market; contractors, realtors, investors, wholesalers, everybody, and say, how can we all help each other and add value? We don’t need to all be competing or in our little silos. I think that’s another opportunity that I think will allow us to build our buyers list as well. But those are some of the main channels for us.

Paul do Campo:

Do you go by a rule of thumb for giving offers, formulas, or how do you go about that?

Jeremy:

We’ve tended to be really, really conservative, so our thought process is if we’re putting a property under contract, I mean, a lot of wholesalers get this wrong, and whether they know it or not, there’s potential legal ramifications, you have to have intense. You can’t just put properties in a contract and then say, “Oh well, I’m not going to close on this”, or, “Hey, I couldn’t find a buyer and then you just back out.” I mean, I know people that that’s their strategy, and if you do it too much or if you get reported, you can get in big trouble. So, the way we look at it is you have to have intent to purchase and the ability to purchase. So for us, if we put something under contract, you better believe we’re going to close on it. Now, if we decide to go the route of assigning the contract, then certainly, we’ll do that. If we can’t find a buyer, or it’s just one of those properties that doesn’t work for other investors, we’ll just take it down herself and do what we initially planned.

Jeremy:

Now, are there times where we’ve had to back out of a contract? I think I’ve had two instances where we backed out, and it was because of either a really, really weird situation where during the inspection, the house just had major structural stuff where it didn’t make sense anymore, and we weren’t going to be able to do anything at that price, so we just said, “Hey, it’s not going to work for us”, or, “Hey, if you’re willing to come down”, and the buyers or the sellers rather, they weren’t. But for us, we don’t want to be known as the guys that put properties under contract and don’t close, we want a reputation of, hey, if we say we’re going to do something, we’re going to go ahead and follow through on that. Our contract to close ratio is very high. Like I said, we just don’t put properties in our contracts and not close on them, one way or another.

Paul do Campo:

I think that’s the right way to do it too. Too many guys are running around with the opposite mindset, and I think it hurts the whole industry. I mean, you have states now coming down that we can’t assign anymore without a license. I guess that’s coming down the pipeline or it’s already happened in a couple states. So how quickly are you selling off these contracts when you’re assigning them?

Jeremy:

We’ll know within a matter of days. For us, what we do is, we’ll put under contract … Let’s see. In the last two weeks, we’ve put four properties under contract and we closed on one. One of them was a terms deal, so we’re now in the process of putting it out there and we’re going to look for a tenant buyer. The other four that we put under contract, we are going to assign them, and we’ve got inspection time set up this week. So, we’ve got one tomorrow, we’ve got one on Wednesday and we’ve got two on Friday. We’ll know within … Usually seven days of putting a property under contract, we’ll get in there, and we will bring our guys in there, I mean, my guy on the ground will look, and he’ll bring his guys for a second set of eyes and second opinion if he needs them, but then we’ll also bring folks in. We just have a short walkthrough period where people can come in and those buyers, if they’re interested, then they make their offer.

Jeremy:

We’ll know pretty quickly, and if we don’t get anybody that wants to buy the property, then at that point we say, “Hey, listen, we’re closing with cash or we’re using hard money”, or whatever our strategy is, we’ll go ahead and we’ll execute on that, but we tend to know anywhere from seven to usually 10 days at the latest.

Paul do Campo:

Going back to the cash offers, is there a formula used, rule of thumb, on these cash offers you’re giving out?

Jeremy:

Yeah. No, great question. I think every market’s a little different and every investor is a little bit different. We might start at a number of like 70% of ARV less repairs, and then there’s other times where we might go as high as 75 or 80. It depends on the area. In each of these markets, there’s going to be really, really hot areas where we know investors are willing to pay up to 80%. Maybe there’s more spread. I mean, in a market like yours in California, you’ve got houses that are $1 million plus, at 80%, there might be plenty of spread, whereas in, let’s say in Myrtle Beach, we might buy a property for $50,000. Well, 80% isn’t going to work, there’s just not enough margin there. We are really looking at different areas within our market to figure out, okay, if this is a high end area and it’s a house that’s five, $600,000 that we’re putting under contract and ARV is 800 or whatever, that’s a different story, so we might be willing to go up to 80%. But typically as a rule, we tend to be somewhere between 70 and 75 less repairs.

Paul do Campo:

On funding these, do you find it hard to come up with some capital?

Jeremy:

No, because we’ve got hard money lenders who are nationwide where we’re able to close within … I mean, if we had to, we could probably close in 24 hours. But realistically, most of them, they say, “Hey, give us five to seven days, but if you’re in a pinch, then just let us know and we’ll get it done.” We’ve worked with some lenders that offer us good terms. In a situation where there’s no rush, maybe we’ve got 30 to 60 days, we work with a local bank and we just go through their process, which is a little bit longer, but you get better terms. We’ve done everything from paying cash, to bank financing, to hard money, and we’ve even brought investors in on certain deals as well, so it’s still specific. We look at everything, what makes the most sense on this particular deal and then we go from there and just execute.

Paul do Campo:

Was funding ever an issue when you first started?

Jeremy:

Yes, it was definitely. I mean, it was a big deal because when we first started, again, we didn’t really have those relationships with hard money lenders. Again, you don’t know what you don’t know. I got into this and was like, well, how is this supposed to work? What does it look like for transactional funding for a double close? Do I need the double close? What’s the seller going to say when they see how much I make and then what’s the buyer going … So dealing with all those issues. What I found is, I’ve never actually ended up having to use transactional funding, believe it or not. We have either used a hard money lender, a local bank, or we’ve used our own cash where we brought in some investors who are willing to put in some cash for us. I put those double close fears aside and just say, “Hey, you know what, we’ve never had any issues with assigning a contract.” If we have a good relationship with our buyer, they shouldn’t care what we make on the deal? I mean, as long as the numbers work for them in theory, those are the people we want to work with. That’s been our approach.

Jeremy:

But if there’s a lot of margin in a deal, we tend to just say we’re just going to flip this ourselves because we’ve got the manpower to do it and it just makes sense for us. But we did run into those challenges and especially starting out, I was really, really nervous, how is this going to work and how am I going to close on this? And then, it’s just one step at a time. You find a solution and then you move on to the next one, and you’re just like, okay, I found some money here and we found a hard money lender here and we found … We’ve just made it work, but maybe it hasn’t been quite the traditional path. But like I said, we started in flipping. I was fortunate to be able to have to go and find some hard money lenders out of the get-go, and so if we got ourselves into some sort of a GM as far as wholesale and property, and if we couldn’t find a buyer, we had to close on it, we’d have the ability to do that.

Jeremy:

Fortunately, we’ve never really got ourselves into a major jam where we couldn’t fund a deal and we had to back on him. So, I’m happy to say that. Hopefully, that never happens.