Episode 129: Problem Solving for ProfitsSep 22, 2022
In this episode, David and Mike talk about problem solving in business. “We trade convenience to discount”
The convenience is LIQUIDITY and this is how they do it:
- Offer Cash
- Buy Asset
- Close Quickly
- MARKET TO PEOPLE WHO ARE DISTRESS
They also mentioned (2) two categories of distress people:
- They are personally distress
- Their property is distress
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David: Man, Mike's always telling me I'm talking too much. Guys we are back. Welcome to the discount property investor podcast. This is your host David Dodge, sitting here with Mike Slane.
Mike: What's going on guys?
David: But it's okay, I don't disagree, I do talk a lot but it probably makes for good content, right?
Mike: Oh yeah yeah yeah, the gift of gab though. Y'know you got the gift of gab
David: Yeah, but it can be a lot. I totally get it. We're going to go with that and we're going to make this episode 10 minutes today
Mike: I love it, let's do it. 10 minutes or less.
David: Because Mike's giving me trouble about talking a lot, but that's okay.
Mike: I don't know if you can do that Dave.
David: I don't know if I can either
Mike: And squeeze some good content in. Let's do it.
David: I'm going to do some good content in there. That's all right.
Mike: What are we talking about?
David: This episode is going to be a good one, it's gonna be a shorter one but it's going to be about problem solving. That is all we do in this business- is solve problems. There's a couple things that I want to mention and then I want to open up the floor Mike, cuz I can tend to dominate these podcasts and you got a lot of gold nuggets in that brain of yours there.
Mike: Well, I am just more concise
David: You are more concise, I concur, I concur. So, what do we do as wholesalers? Let's recap. We trade convenience for a discount. All right, if you are a wholesaler, you are a discount property investor like it or not. You are trading a discount for convenience. Mike, what conveniences are we providing?
Mike: Well, it's basically liquid, I mean-
David: Boom. That was gonna be the next thing I was going to say.
Mike: Yeah, so the convenience is for the seller, when you have a real estate transaction is not liquid, so a piece of property is not liquid. You can't pay for groceries with a house. So again, they need cash. Cash is a really important thing and yeah, again to be able to cash out of a real estate, a piece of real estate quickly is a huge value. So we got a lot of people willing to trade some of that value of the property.
David: It is extremely difficult to sell a property quickly for retail. Extremely difficult.
Mike: Near impossible.
David: Unless, and I'm talking quick quick, like a week or two.
Mike: Yeah, it's near impossible to get the cash quickly. So, with a conventional loan on a property, you're looking at a 30 to 60 day process.
Mike: After the contract's been accepted, after everything's done, it's 30-45 days-ish. [inaudible] will say: oh, we do it faster but it's not that quick.
David: Yeah, they say that
Mike: It's usually pretty slow and there's a lot of back-and-forth. So again, cash adds value, it adds liquidity to an eloquent asset which is very important.
David: So how do we do that? We offer what?
David: Cash. What else? We buy
Mike: As is
David: And we close
David: That's it. I mean that is it
Mike: Wrap it up
David: Wrap it up, episodes over so
Mike: No no no no. So, it is important to solve people's problems. So, what problems do they have and how do you solve them? I guess would be the question that I would ask Dave. So, what's the most frequent problem people have with a property?
David: Typically, it is- I'd categorize it into two categories: either they are distressed or their property is distressed.
David: And that's really, that is the highest level of looking at it. Now, when you come across one that has the- what do they call the little charts that overlap?
Mike: Yeah, those are cool Venn diagrams, I think
David: Venn diagram, so when you get the guy that's in the middle, where he's distressed and the house is falling apart. Those are the best deals because, not just because you can get them at the biggest discount. Obviously, in business as a real estate investor those are great, but we are there to solve problems for those people and we can create win-win scenarios. So, man Venn diagram.
Mike: That is what it's called, I think
David: It's exactly what that's called. Good looking out man.
Mike: Yeah, a lot of those are real funny nowadays. Y'know people make funny ones or whatever.
David: Oh, yeah
Mike: Is it "meme" or "meym"?
David: I think it's memes, I'm not exactly sure
Mike: Yeah. Funny memes or something
David: So let's talk about these 2 categories. We got 4 minutes to go, 5 minutes to go.
Mike: I love looking at it in two different ways.
David: You have to, absolutely. So we were driving for dollars, we have no idea if somebody just got divorced recently or if they have cancer or if they just, you know had a death in the family. These are all terrible things, but we can't determine that driving on the street. So we're driving for dollars, we are looking for distressed properties. We are looking for the properties that have lots of issues and they are in need of work. So that's one way to go about finding motivated sellers. The other way will be the distressed people and in this day and age, unless you live in Canada, they don't do this if you didn't know. They don't have any data on the public, publicly out there. In America where we live, we can actually go and buy a list of an absentee owner. We can buy a list of vacant properties. We can buy a list of probate, people that are in Probate Court. We can buy a list of- what am I missing? Distressed people.
Mike: Yeah, I think you listed them.
David: I mean, that's the majority but-
Mike: My brain was thinking about how they don't have that data in Canada, it's interesting.
David: It's interesting yeah.
Mike: Facebook does *tsk tsk*
David: Hahaha that's right, but they don't publicly put it out there. But that's what you would do, you would go about marketing to those individuals that are distressed. Now just because they're distressed, doesn't mean that they need or want to sell. Okay so what we do as wholesalers is we try to solve problems.
Mike: Let's go back to an example real quick Dave. I'd like to talk about- I don't remember the lady's name. Perfect example of where they overlapped. It was not the most profitable deal, but it was a good deal for us.
David: Our 100k deal had a overlap
Mike: It did, it did. Go back to listen to our 100k podcast
David: Yeah it was like 4/5 episodes ago
Mike: Hear all about that one. Awesome deal.
David: Go ahead
Mike: You went and actually had to physically pick her up, bring her to the property multiple times.
David: Oh man, that crazy loon.
Mike: She was a distressed seller herself
David: And the property was distressed. Yeah, that's a great point.
Mike: So again, that one was just a good deal in that there was motivation from her because both things were distressed, She just needed to get rid of it.
David: But at the end of the day, we solved the problem. We created a win-win scenario.
Mike: Exactly, and so think about this though. It's not just about solving the problem with money. The woman physically could not get to the property. Dave went and picked her up, she didn't have a car.
David: Yeah, no other wholesaler/investor in town got the deal because they weren't willing to put in a little extra effort talk to this lady on the phone and I wanted to see it, the keys were at her place and she didn't want me going there without her so I literally had to go pick her up and take her to the property.
Mike: And this is one of the things Dave is really good at in addition to the gift of gab.
David: We've been over this
Mike: He's really good at going above and beyond in helping people, like he truly is and that's- I think one of his greatest strengths as a wholesaler and as a business partner, is he really does, he just goes above and beyond. I don't even think he realizes it a lot of times, but he goes out there and he helps people and it helps him get deals. Helps him win deals all the time.
David: Absolutely, it helps. That's really what it comes down to Mike. I enjoy helping people but at the end of the day, I am in business, I do want to make a profit. I need to make a living and you know by just asking people: What is the problem? What can I do to help you with this problem? And a lot of times they say: well, I need to sell this house and I want, I want, I want, I want and that's fine. I can help you sell this house but what do you need? That's kind of how I respond with that, you know because it needs to be a win-win. If I'm overpaying for a property, this is not going to necessarily be a win-win.
Mike: So, let's talk about that example cuz I know there were a lot of things going on and I'll refresh your memory if you don't remember. I'm 90% sure- remember that it was the back taxes that was going to get redeemed so she was going to lose any equity in it
David: Yeah like 7000 in back taxes I believe.
Mike: And then there's also stuff in the house so she needed help with that. You did a lot for this lady.
David: Oh yeah, I went there like 15 times man. A lot of times.
Mike: Yeah, we ordered a dumpster for her. She wanted to go through the house herself. She did not want us to clean it out.
David: It ended up not being a home run deal for us, but we solved the problem. It was a win-win. I think we maybe made 2 grand which is a very very skinny deal in this business, but it was a deal and we made 2 grand, so it's like hey, you know.
Mike: And guys, again, we love making money, don't get us wrong
David: 2 grand is 2 grand
Mike: 2 grand is a lot of money, a lot of people are probably out there listening thinking: man I could use 2 grand
David: I could use 2 grand right now
Mike: Heck yeah
Mike: But it's also- the example is: we helped this lady. This lady was gonna lose the equity. She was able to, I don't know what she pocketed, probably about 5 or 8 who knows?
David: No, she pocketed- so this is a funny story is that she knew she had 7000 in back taxes and debts on it, but she only wanted like $1,500 to buy a new van. A new used van because, this is kind of sad but it is the truth, because the place that she was living, she wasn't really welcome anymore and so she was going to live in that van. So at the end of the day-
Mike: Okay, I did not know all of the story and this one is uhhh
David: Yeah, it was kind of crazy but dude we solved the problem for her. Who cares if she
goes and lives in the van? That's out of our control, that is completely out of our control. What we did though was we solved the problem of getting this property sold. Oh yeah, by the way, if we wouldn't have bought it, literally when we did, like 30 days later, the city was going to take it and auction it because she was three and a half, almost four years late on her taxes.
Mike: I thought it was the redemption period was going to expire.
David: Oh, that's what it is. Somebody else had already bought it and they had one year but basically, we had like a month. That definitely happened. And so yeah, we had to go over there, we got a dumpster. I mean, I didn't physically help her clean it out but I helped her in the sense of getting the dumpster and paying for it and you know calculating that into the offer amount. I believe she owed-
Mike: And got it sold for her too.
David: I believe she's owed 7, we offered 9, but after some initial costs of dumpsters and closing, she walked with about 1,500 was what she wanted and then we sold it off for like 11.5 and ended up netting about two grand so win-win but boom, you nailed it though Mike. Problem solving and that's what we did. And that's all we do as wholesalers is we solve problems.
Mike: The thing of it too is, and I don't know, this is just my personal opinion, I think Dave's too- is you can help people, but you can only help them so much. Like again, this lady she's kind of again, maybe she's living in her van now. We can only do so much for her as real estate investors and as business people.
David: Yeah, well, what she decides to do is on her.
Mike: Yeah, we're just trying to help her get the money and help her get what she wanted. That's what she wanted. She wanted to sell the house so she could get the van.
David: But honestly though Mike, if she would have told me that she needed $1,500 to go buy crack, it's not going to affect me from trying to help her. I mean at the end of the day; she's going to get that money elsewhere to do what she wants and I'm not promoting going and buying crack. Don't get me wrong. But without me or us in this scenario, she would have lost that house and had none, 0, so we got her something.
Mike: But it's also the pride though too cuz I know she was happy that she got to clean it out.
David: Oh, yeah, she found- you know how many treasure
Mike: Yeah she found a lot of her-
David: We always refer to junk in houses as treasure, it's so great. We're over ten minutes, my bad. We're getting close though. We always refer to it as treasure and oh my goodness, when I would go over there, and I had to like literally pick her up and drop her off and take her home and whatnot. And she would fill my car with like just junk and she'd be like: look at all this treasure I found. Oh my god it needs to go to a dumpster lady.
Mike: Yeah so again, it's about solving problems for people. This woman obviously had more problems than we wanna deal with. We were able to help her take care of that problem, which was the house that was going to be lost for taxes. She was able to pocket the money that she needed. We made a few thousand dollars on it as well. Again, it's a win-win situation. The end buyer was happy cuz they got a property that wouldn't [inaudible]
David: That's right. Guys we're going to wrap it up, but the moral of the story in today's podcast episode is just about providing value to people via helping them. So just be a problem solver, you don't need to like go and buy all these crazy courses on sales, or on convincing somebody that they should work with you, or even about negotiations. I'm not saying don't study those things cuz those have value, but you put me up against the guy that's really really good at sales but doesn't give a crap about solving problems. I will win every single time; I am confident of that. So just get out there be yourself and just strive to solve their problem. Figure out what that problem is, figure out a solution and you will get paid. It's how it works. That's it guys wrapping it up. Thanks for listening today, today was a shorter episode but again, we appreciate you guys. Check out freewholesalecourse if you haven't done already. See ya!
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