Today, David and Mike share some helpful tips about wholesaling to all newbies in Real Estate and how Wholesale works. In this episode, it is going to be a case study on a property that they just purchased recently. David and Mike shares with you some of their wholesale deals. Know how they got this lead! Check this out!
David: Alright guys, welcome back to the Discount Property Investor podcast. I am your host David Dodge. Today I have special guest Dedrick and Crystal Polite. Welcome, how are you guys?
Dedrick: We're great, thanks for having us, David.
David: Absolutely, I want to just jump right in, right? Everybody listens to the podcast, they hear the intro, they hear the outro, we don't need to go over that again, right? Let's jump right in. So I have been following you guys on social media for quite some time. I met you both at Max's event about a year and a half ago. I was inspired by you guys, because you have not been in the game for twenty years. You have been in the game for two in the real estate side of things, but you're doing big things, and I love that. So I figured, hell, bring them on the show. I am sure they are going to have tons of gold nuggets for the listeners and the viewers, to learn about the speed in which you guys were able to get into the real estate business and be successful. Also some of the other things you're doing as well. So I am going to yield the floor to you guys. Tell us a little bit about how long you've been investing in real estate and what you're investing on.
Dedrick: So we are Dedrick and Krystal Polite. We are [00:01:50.10 - inaudible] entrepreneurs, also real estate investors. I bought my first investor property in 2007. It was a tri-plex in Boston. That's not where I'm from originally, I'm from North Carolina. I didn't buy another property for a good twelve years. I think I looked at one of your posts on Instagram and it showed you had one house for like ten years straight, then you started scaling a few years ago. So I sat on the sideline for a while, then I met this woman. She is a visionary and pushed me like, hey, you always talked about this real estate investment wholesaling stuff, why don't we just do it? So 2017 we [00:02:27.02 - inaudible] hard, started getting educated, started taking action. We have been able to grow our portfolio in a very short amount of time. We were both able to leave jobs at corperate America making over six figures so-- this has been an incredible business for us.
David: Absolutely, and that was one of the things that inspired me when I saw you guys speak, was the fact you were both able to leave those six figure jobs to be able to get into real estate and some of your other ventures. That's the thing I think stuck out the most. The reason is for most people, guys, I think you all agree; most people get into real estate for freedom. They find that they have very little freedom because they're hustling and grinding so hard to make it in real estate. The thing about real estate is that it is so incredibly simple. But it is not easy. Those are two totally different things. Business of buying and flipping properties with little to no money, or using creative finance to acquire-- even the BRRRR strategy is so simple, but people make it complicated. So it's amazing. You guys got into real estate to find the freedom and you have it which is awesome. So let's talk a little bit about what kind of real estate you guys are focusing on right now. You started out a couple of years ago doing wholesaling. Now you have a portfolio, let's talk about that.
Krystal: So we originally got into it from the very beginning it was always to build a rental portfolio. Build a massive rental portfolio to pass down to our sons. So that is literally always been our why from day one. It was never just to get into real estate, it was for freedom like you said. Be able to change the trajectory of our family tree. So from day one we got into it, it was, okay we are going to wholesale, but how can we wholesale to buy and hold? That was the strategy that we dove into the most. Wholesale to buy and hold, that is all we have done. Starting off we literally wanted to buy everything.
David: So you guys have had the mindset from the get go of that rent, I want that passive income, I want that cash flow, I love it. I do a lot of wholesale coaching, this podcast is really primary focused on wholesale and real estate of course. But, wholesaling is a job. If you are going to replace one job with another, it needs to have one of two things. It either has to make more or work less or ideally both, right? It is a job, the fact you guys are wholesaling for a means to an end, to then go acquire rentals aligns very close with me and my company and what we do. We have the same approach. We are five year wholesalers at this point full time. We have built a portfolio of about 65 units. We wholesale anywhere from six to ten deals a month, depending on the month sometimes more. But, all the money that we are making from these wholesales isn't ever really kept, it's deposited, hey let's go put it on another rental property, right? We align very similar on that. So that's awesome guys. You have been wholesaling for a couple of years, and let's talk about the portfolio. Only a couple of years to have a portfolio is amazing. Most people-- like for me, when I started, the first couple of years it was one or two a year. You guys are hitting the ground just sprinting. I love it.
Dedrick: Yeah, we built a portfolio, 23 units. It was really like inside 18 months, and our goals-- have over a hundred units by the end of 2020. That was our goal. Really looking into multifamily now. So our next big goal is to take down a 50 unit multifamily apartment building, and just keep growing and scaling from there.
David: I love it. So you guys are in the Boston market?
David: That's an expensive market.
Dedrick: Yeah we spent our whole lifes in Boston and moved to North Carolina in 2012, we also invest virtually in other markets around the country with different investors. Wherever the deal is, we're there. We will close a deal anywhere, especially wholesaling.
David: I love it. That's the cool thing about today's technology, is that virtual technology has really taken off, people have started doing it more and more. Do you live in Boston? Or do you live in North Carolina?
Dedrick: We live in North Carolina. Our third deal was actually a third wholesale deal. We made $103'000 closing a virtual wholesale deal in Boston. Instantly made us cash buyers at that point.
David: At that point, right, isn't that amazing how it just-- you are one or two deals away from changing the whole way the business can work? I love that. That's amazing.
Krystal: We didn't see that 103'000, we put it right back--.
David: You see, that is my mindset too! I love it. We align so similar, because I want the passive income, right? I want streams of money, I don't want the big chunks, I want streams, because it is more steady and it allows you the time freedom, which most people don't realize. That is what gets you time freedom. Stop making these big chunks, because guess what happens. You said it Dedrick, you buy the watch and the car, then you're broke again, but you got this nice shit, right? I don't want to have to keep doing this. Let's keep putting it into rentals. I think that's amazing. Are you guys using the BRRRR strategy at all? How are you going about acquiring?
Dedrick: Absolutely. We have used the BRRRR strategy before, we have used private money financing, hard money.
Krystal: A lot of private financing.
Dedrick: Whatever suits the deal. Again, we prescribe to the philosophy of having multiple tools in your tool belt.
David: You have to. You have to have multiple tools in your tool belt. You have to give sellers multiple options on how you can purchase their home. You have to be able to be super flexible and pivot and be open minded. That is what separates people that get in the business and do one or two deals and stop, or maybe do one or two deals a quarter, right? Versus those like me and you that are doing multiple deals, and we're doing multiple things at the same time via wholesaling, rehabbing. It's because we have the open mind of okay, whatever the problem is, we are going to tackle it.
David: Totally I love that. You guys align perfectly. Let's talk about some of the other ventures that you guys are in as well. It's not just real estate.
Dedrick: Before real estate we both had corporate jobs and owned a franchise that we had purchased before we got into real estate. We were always into building a business. How do we get freedom from corporate America? How do we get financial independence? So we sold that business in 2017 and took a lot of those funds and invested that into getting educated, and learning real estate and learning business. You wanna talk about some of the other businesses we are in now?
David: Before we do, let's talk about the franchise. I've owned a franchise too. We align on a lot of things, right? I want to learn a little bit about your franchise just quickly, and why you sold it. I think that we are similar on that as well.
Krystal: Yeah so-- it was [00:09:54.28 - inaudible] visionary, I was coming to my husband and saying, we need-- corporate is great, but we need to start-- we have both been entrepreneurs our entire life. So I said, hey listen we just started looking at different franchises. I was-- I sent this one particular one to him, and it was on [00:10:12.25 - inaudible], ever seen-- go to the mall and see those scooters that move like little furry animals that people can ride around the mall?
David: Yeah, yeah.
Krystal: That was the idea and I said-- he said, no--.
Dedrick: That's not a real business.
Krystal: So I say, okay, and go back to the drawing board, and I found the financials on one. It just so happened the one I found the financials on-- you know, I tell people, on Google you can find anything. I contacted the guy who owned the business. It just so happened he was an absentee--.
Dedrick: He was an absentee owner and was motivated to sell.
David: You are not even trying to locate motivated seller. Hold on, you are trying to contact a franchise or--.
Dedrick: I saw the financials and I was like, wow this place actually makes money and is profitable. So I got into negotiations [00:11:09.00 - inaudible] partnership and I started talking to him. Initially he wanted $80'000 to sell these two locations in North Carolina. He lived in Mississippi. Negotiated down to 43'000 cash. So I didn't have the 43'000, so what I did was borrow the money from my 401-k. [00:11:29.01 - inaudible] borrowed the money and bought the franchise. We are both still working corporate jobs when we bought this franchise. We hired someone [00:11:34.14 - inaudible], they worked the kiosk. We made a good 5-10'000 a month passive income from that business. I think we got it to three locations in two different States, about $300'000 in [00:11:46.02 - inaudible] revenues. But then my wife being a visionary, this train is going to start on a downward trend, so we need to sell. So after a year and a half we sold for double what we payed for it. We took that money and go into real estate from there.
David: Wow, that is awesome. So you guys-- when you-- did you buy the business from the franchise? Or did you sign a franchise agreement?
Dedrick: It wasn't traditional, we bought two of his locations. So we bought the location in North Carolina--.
David: Okay so he was a franchise-ee then?
David: Okay so you guys bought over his rights essentially then?
David: What was the franchise fee per week or per month? How did that work?
Krystal: Well, my husband negotiated so that when we bought it, there was no franchise fee or anything. We literally took it completely over from him. No royalties, he didn't want anything.
David: What? That's awesome.
Krystal: He created the brand, the logo. We took it over and then we kind of scaled it, because-- the mall was ready, the malls were ready to kick them out because they were having to many problems with his employees, kiosk not being open. I tell people a lot of times it's really different working in a mall than it would be working at a store front. You do have a lot of rules and regulations and there is a lot of back dooring when it comes to working in a mall. You have to know what you're doing. We found out really quick. Me and my husband were not new to business. So a lot of that shit didn't get over on us.
Krystal: But of course we met other individuals and it was like oh my God wait, I pay $20'000 deposit, and we're like, what? Just to the mall. A lot of it was due to his really great negotiating upfront with him. The mall was kind of glad we took over at that point. When I said, listen, let's get out, let's sell. We were at a point where we probably had twenty malls asking us if we would come into there.
David: No way! That's awesome. So the whole reason I ask though about the franchise was that I payed a franchise fee like a royalty, right? Every-- and it was-- I was a sandwich shop in Lincoln Nebraska. I don't live in Nebraska, I live in Missouri, right? So at the time, this is so crazy, I don't want to go down this rabbit hole too far. But at the time, me and some buddy's got together and said, let's do this, let's get twenty of these, right? We got to tart with one. So we got one and we were sold on this market. So we opened up this-- it was a restaurant called [00:14:30.20 - inaudible], which is very similar to Pot Bellies. Have you guys got Pot Bellies? It's basically the same restaurant, right? The guy that created it basically took Pot Bellies and just re-branded it. Same food till you can't even tell the difference. So we bought one of these things though. We were paying 6% gross to the franchise, which is really quite competitive in the franchise-- I think Jimmy John's is 9. But anyway, the whole deal with this was-- the 6% gross ends up being about 40-50% net. So like-- look at it this way; you bring in a dollar, six cents goes away right away to him of that entire dollar. But then you have the rent, the overhead, the insurance, the labor, the cost of the food. At the end of the day, the business maybe makes $150'000, but you only get to keep like-- 80 or 90 of it. You are paying 50 of 60 grand. That's why I was curious if you guys had the franchise fees or not. You didn't, so you negotiated that in from the get go.
Dedrick: It wasn't as profitable. Once we looked at our net, we could be doing something else and getting a lot bigger profit, and we always wanted to do real estate.
David: Net net is what matters. I just interviewed Khang the other day. That was a great episode, do you guys know Khang?
David: Man, he was just like bigger isn't better, better is better. Same scenario. It's all about the net profit. He's like, people that are doing 15-20 deals a month, that's great, I will do one or two and make just as much on those deals. He's like, I will work 15-20 times less hard. I love that philosophy.
Dedrick: What are your net margins? People are like, I sell on Amazon, I make a hundred grand a month--.
David: But if you only make 2000 bucks, right? That's a lot of work. I love it. So hey guys, sorry to take it down the side track there with the franchise, but I just love talking about that type of stuff. Let's get back to the other businesses you guys are in other than real estate now. That was something in the past, you sold, I love it, you saw the trend, the malls themselves kind of depleting in social value. So you moved on and-- what are you up to now?
Krystal: Right now-- we are still doing our real estate business. So we kind of created multiple streams of revenue within that business. We still have our own property management company that we run. We also have a property preservation company that we run which is also a great source of leads for us. We have our-- education company.
Dedrick: Short term rentals-- we have like eight different entities, just looking at the list yesterday.
Krystal: Also strategically buy single families as well as multi families. Strategically though, so we put them in areas where they are great as rentals but they are better at short term rentals.
David: How many-- you guys have AirBnB's and what not?
David: Nice. I got one, I have 65 rental properties-- so 64 long term leases right now, then I have one AirBnB and I am debating on doing more of them or not. How many do you all have?
Krystal: Yeah, so we have two. We have three that we are converting now. So we were waiting for--.
David: You will be to five soon.
Krystal: Right, so we have three that are waiting for the tenants leases to be up. For us to start the work on there. Start the whole remodel process and then literally in the middle of a huge college campus of three major universities, they are all withing minutes of the downtown area, so they are like, perfect. That's the only reason we wanted them so bad. I knew they would be great for short term rentals. We are in the process of converting them now. Anything else? We are looking for our next multi family-- looking for a 50-100 unit-- doesn't matter where it is, so if anyone has any that are a good deal, don't send us anything on the market because it will be deleted.
David: So you don't care about the city?
David: Anywhere in the continental US?
Krystal: Let me rephrase that, because I don't want somebody to send me something in Mississippi.
Krystal: We want it to be out-- if not in a major city on the outskirts of one.
David: Got it.
Krystal: We are in the process of looking-- well I am looking for our next franchise as well. So that's what I am in the midst of doing.
David: You guys are busy, and you got two kids.
David: You are busy. I love it, though. I like that you guys are just down to take massive action. That's what separates those that have success in anything. It doesn't even have to be real estate necessarily. Just always be-- trying to educate yourself and just take the next step towards the goal by having a good solid plan. We align very close on those topics right there. So what's next? What's next?
Krystal: What's next? Development is next. We bought a ton of land and now we are actually-- I am speaking with zoning and things of that nature, getting-- a lot of our land is zoned for multi family, so-- I am in the process of starting that whole thing. Getting permits and all that crap that comes along with it. But, development we want to start right after Corona virus is over. We want to start with a multi family in the back of one of our-- another property that we own, we are going to start there before we start with the bigger land that we have. I think that's next for us.
Dedrick: Yeah, of course real estate was the foundation, a foundation that we will never stop doing real estate, but again, it gives you the capital and that net worth base to go and branch out and do other things as well.
David: I love it. Guys, I love their social media, their Instagram. Go check them out. BePoliteProperties.
Krystal: Be Polite.
David: I always screw shit up. Hey, what's the website that you guys have? You have--.
Dedrick: SuperSocial on Instagram, it has all of our resources and links to all of our stuff going on. Our YouTube page, our private Facebook group, our Driving for dollars program. All of that is on SuperSocial.
David: Let's talk about Driving for dollars program. What's all that about?
Dedrick: Driving for dollars, man, how it came about is-- the foundation of most of our deals is found through Driving for dollars, right? Driving around, finding these distressed properties, sending them a postcard and get the deal that way. People kept asking us as we were sharing our journey on social media; how are doing this? How are you finding these houses with 50 cents on the dollar? How are you doing it? We are like, man, we don't have time to mentor or personally help everyone one on one. So around this time last year we were like, we need to create course, because we just don't have the time to answer all these questions every single day which is what we were doing. We created the course, we launched it last year. Basically showing people how to create-- close five to ten deals a month, Driving for dollars and building a team of deal finders around the country. It has done incredibly well, we have over 150 students now, we have created a community among that. So it has been great.
David: Man, that is awesome. That is amazing, guys, keep it up, you're crushing it! I love it. So what's the main website?
David: DrivingForDollarsCourse.com. Check it out if you want more information.
Dedrick: We will send you links to put in the show notes, on YouTube--.
David: Yeah, send them over. All your details and all that good stuff, we will stick it in there, guys. If you're listening or you're watching this episode, check out the show notes. By the time this publishes we will have that in there.
So we talked about what's next-- let's talk a little bit about the real estate business. So you guys understand that wholesaling is a job, it's a means to an end, you are doing it for the passive income. You are looking for the 50-100 unit building. Are you still going to be focused as well on single families and some smaller multis too?
Dedrick: Absolutely. Single family and multi, that is the bread and butter.
David: Bread and butter, totally agree. Obviously you have a couple more AirBnB's coming along. I want to ask a question real quick about that topic. Has the current situation with Covid-19 affected any decision making processes for future AirBnB's?
Dedrick: It has. One of the things we don't do is speculate and we don't do the rental arbitrage thing which is getting-- renting a property that is already--.
David: I don't either, totally agree, totally get that. Some people have a lot of success with that, and I think it depends on the market that you're in, it really does. In certain markets you make have a three to five X return on that arbitrage. In other markets is maybe be one to one, one and a half to one, and it's like, that's a lot of work and risk--. Totally agree.
Dedrick: Every one of our properties has to work as a stand along standard rental. 12 month lease, it has to cash flow. We are not going off-- oh well AirBnB will make two to three X, no, that is speculating and that will get you crushed. Once it works as a regular rental, we look at the market. We're in North Carolina, so there is not as much competition in the town that we're in. Our AirBnB in the [00:24:54.15 - inaudible] is crushing it because there is not a lot of competition. So that's kind of how we look at it. We look at the market, we under write it conservatively, then we go from there.
David: What are the metrics for the rentals? Let's say we are talking about a single family, or small multi. Whenever you guys are looking to acquire, what minimum metrics? Mine personally is 20'000 equity, 275 dollars a month cash flow, and zero dollars of my own money. That is typically where I like to be in a deal. Now if it is not in that and it is close we will make it work, but we BRRRR everything that we do. We have a private lender that lends us purchase plus rehab, multiple, about eight of them actually. We go purchase, we rehab, we rent. Standard BRRRR strategy, then we refinance it with a loan based on the appraisal and not our cost, at 75-80%, pay them back and-- I have done about-- 45 of them in the last 18 months. So that's kind of my strategy. But, I was just kind of curious on how would the metrics look for you guys when you're acquiring rentals and-- you mentioned hard money, private money. Let's hear your guys approach, just curious.
Dedrick: Yeah, it's pretty much the same, right? Because you can scale indefinitely. You are not using your own cash, right? If you have 200 grand and you buy two houses for a hundred grand each, you're tapped out. When you got that private money resource and you are buying it at 60 cents on the dollar, you're putting in 10, 15, 20'000 on renovations and then you're renting then refinancing it. You can just continue to scale. That's how you have been able to scale so quickly and same with us.
David: Very cool. So you guys-- we're doing the same thing.
David: Do you guys have similar metrics? 20k, 275, 300 a month in cash flow? How do you look at the property and say, hey this will make a good property for us?
Krystal: So [00:26:56.16 - inaudible] typically don't want to come out of our pocket, zero out of pocket. Depending if we are doing it here, or in the [00:27:05.17 - inaudible] town we live in, or Greensboro, the numbers will change on how much rent we want.
David: Sure, you guys go off at 1% of 2% type of rule? Or--.
Dedrick: Yeah, 1% is too thin for us. We got for 1.5, 2%--.
David: I'm with ya.
Dedrick: Because 1%, one thing goes wrong and you're paying out--.
David: 1% is-- the way I look at is, minimum, if it doesn't meet the 1% rule, I don't even want it. I basically make offers based on the 1% rule more often than the MAO formula. I literally just-- you got to use them together of course, right? But I will literally be like, hey this is bringing in how much? Cool. Here is where I need to be at; this number X 70% minus 10 or 15 grand minimum, right? Just very simple. Our portfolio is probably averaging about 1.3 to 1.4. I think that's kind of where we're at. So very similar. But, you guys have-- I guess the 1% or whatever the percent rule would vary though if you are in multiple markets. I am just in St Louis, right? Christina is right down the street from me, I sell her deals all the time. I know you guys are friends with Christina here.
David: Yep, but basically we are doing it very close, whereas you guys are doing it in multiple markets, right?
Dedrick: Yeah remote. So we are in North Carolina, but we close deals in Durham which is three minutes away, Greensboro, Charlotte. Again, the power of data, the power of computers. I am a big data guy, I believe in God we trust, [00:28:42.06 - inaudible] information on the comps and everything. I can under write or close a deal anywhere in the US.
David: Man, I think that's amazing. Prop Steam helps with that too, because it's national.
Dedrick: Prop Stream, very powerful, we use that.
David: Love it. So let's talk a little bit before we wrap up here, guys, about marketing. We have gone almost 40 minutes and we haven't even mentioned-- which is crazy, because that's the business that we're in.
Krystal: It is.
David: That's the business that we're in. I tell all my students whenever they come on board. I say, alright, this is going to be the hardest part of this entire program, right? It's going to take you thirty seconds, but you have to understand that you are not a real estate investor. You are going to become and expert marketer, right? Once you get really good at marketing, you can be any kind of investor you want. But none of it matters if you can't find a seller that's motivated. Nothing, right? So you mentioned Deal Machine, are you doing anything else?
Krystal: So we--. I do the marketing for our businesses. We do of course Driving for dollars using Deal Machine. We also do ringless voicemail through REI Rail. We do some light text messaging as well, we do cold calling really heavy, so we kind of have a conveyor belt of how our leads go through it, and how our-- how we approach our marketing starting off with--.
David: Do you do any mail?
David: Cool, so you guys are doing it all. All the things.
Dedrick: What we realized, David, is that individual sellers are going to respond to different forms--.
Dedrick: A 70 year old woman is less likely to text you back, but she will check her mail, She probably still reads her mail.
David: She might even mail you back before she calls you, right?
Dedrick: Hit them with different forms of marketing to increase your chances of a response.
David: We do the exact same thing. I don't have a-- there's no magic bullet, that's another thing I tell the students. There is no magic bullet, right? Here's the thing about marketing. All of it works if you do enough of it. If you go hand 30 bandit signs and you don't get a deal, well, you know, sorry. Go ahead and put up 300 of them, you're gonna get one, right? It's the same thing with all these other things, so I think it's awesome. So direct mail, cold calling, cold texting, RVM's, of course Deal Machine which is awesome, just to locate those leads. Social media, yeah again, you guys have been in the business a couple of years now. The percentage of your referrals is going up and up and up. When I first started, zero, there was no referrals. But now that I have been full time in the business for five to six years, I would say maybe 20-30% of the deals are referrals. Give me five more years and it's going to be half. That's how awesome the power of networking is.
Krystal: I tell people, even after the very first deal was found on Facebook market place-- for sale by owner. So I tell people, you know-- when it comes to us and marketing, I tell my husband, if we're driving in one of our areas here, and a sign goes up from a realtor, a house for sale, I get upset. How did we miss that? That's just me and how I'm wired.
Dedrick: If a house is sold in our town we're upset. Why didn't we get that deal?
Krystal: I market to the entire county.
David: Are you guys doing most of it virtually? Are you doing it hands on? I guess-- that's a tough question to ask because you are all over. I guess-- let me rephrase. Are you or somebody on your team running appointments?
David: Okay, me too. I like running appointments and I am also only marketing in my neighborhood, right? Like you know, twenty or thirty minute drive, right? But I like going on the appointments, or sending somebody on my team. That's like my favorite part. I don't like answering the phone.
Dedrick: Same here.
David: I don't like following up, but I have a team of people that do all those things all day long, right? My favorite thing about the business is literally like-- going out, meeting people, walking through. Cool houses, crazy houses, nice houses, gross houses. Just doing that, right? It's just fun.
Dedrick: I love it.
Krystal: -- acquisitions manager, no, no I wanna go.
Dedrick: I like being belly to belly--.
David: Me too. I'm not even-- here's the thing, I'm not even the main acqusitions guy, I have a guy for that. I'm just like, hey if you have a double booking, let me go on that other appointment.
David: I just wanna go look at some houses, right? It's awesome, we are so similar. So the reason I ask, is because some people are-- to me, that's what you have to remove to go like virtual and be successful at it. You have to remove the appointment, right?
David: You have to rely 100% on photos and videos from the seller, but even more than that the repairs from the buyers. That's a mindset thing. Alright, I am going to go out and start marketing this, knowing I don't know, then get feed back and tweak as I go. That's something I really admire about those who do a lot of virtual. I don't do much virtual. I mean-- a little bit here and there, it's really like, hey are you motivated? Do you live within 20 minutes of where I live? I will come see your house. Otherwise probably not even interested, you know?
Krystal: Even for our virtual, how we do it-- because where we are doing it is North Carolina, where I actively market. So meaning I have people-- I am either sending mailers or we are cold calling, or hitting them with a ringless voicemail. It's two markets; Boston or Suffolk County is Massachusetts, and North Carolina. That's from Charlotte all the way through to Raleigh. Those are the places we actively market to. How we do it with our virtual and even Charlotte. Charlotte is two hours away from us. But, we have an acquisitions guy in the Charlotte market, we have--.
David: Right, so you have boots on the ground there. Which means you're there, you have an office essentially. Cool.
Krystal: What I've learned to do-- because we were literally paying acquisitions $10'000 checks just because they went and looked at the property, not inside the property, but went to the house--.
David: Oh wow yeah. I am glad they were talking about this. You guys are filled with gold nuggets, this is great. Did you move to more-- or even hourly.
Krystal: Absolutely. How we do it now is-- Dedrick blocks everything up on the phone. If it's virtual. If he can't drive to it, all negotiations is done through him on the phone. If we need someone to go take pictures, then we are paying you for that. If we need you to go and put a contract or listing or something on the property and go to the court house, we will pay you--.
Dedrick: A hundred bucks.
David: Yeah, that's the way to do it guys. Set the fixed fee or even go hourly. I learned that the hard way too. I am sure you guys did. 10, 30, even sometimes 50% of a deal you did nothing on--. Naw I would rather just spend the hundred or two hundred dollars, five or even ten times on deals I don't close, because it is going to be a lower amount than that one I did for 30 grand and I have to pay you ten.
Dedrick: Here is kind of a sample virtual deal I did recently. I met with a seller probably about three weeks ago. He was motivated, it was a probate type of situation. I spent and hour at the house with him, got the property under contract, got a lock box on it that same day. Blasted it out to my cash buyers. Within three days I had like five cash buyers who wanted to see it.
David: Are you REIBlackbook?
Dedrick: Yeah we use that.
David: Your website looks similar to mine. I love REIBlackbook. I have been with them since 2014.
Krystal: Oh wow.
Dedrick: I got a lock box on it, had a bunch of buyers interested. Should I go and show these guys? It was vacant. Should I go? Why waste my time going on meetings with buyers? If you're interested there is the lock box code, go let yourself in. Five guys went and looked it, three made me offers, within a few days I accepted an offer for nine grand, and that was it. I spent like three hours on that whole deal and only saw the property once. I'm like-- if every deal went like this.
David: Simple, not easy.
Dedrick: Right, it wasn't easy, but it was simple.
David: That one was easy because we are just talking about one, but the big picture is you looked at 15.
David: That's why it's not easy. It's so simple though, you just have to find that motivated one. That's it. That's the coaching program. Learn how to market, get in front of that motivated one.
Krystal: -- do a lot of wholetailing as well. We tell people a lot of times when we are doing wholetale deals which is one of the niches we love to do, of course you need capital, whether it's your money or private--.
David: I'm glad we're talking about this, I want to talk about wholetailing and creative financing. I don't mean to interrupt. Just real quick while it's on top of my mind. On your markets, because you are in multiple, can you list owner by contract?
Dedrick: People tell us that all the time, but we haven't done it.
David: The reason I ask is because you said you have to have capital and I wanted to-- not disagree but bring that to light, because we list owner by contract all the time. We don't even own it, we just get an option agreement on it. Not a listing agreement, an option. In the option it says we have the right to list it, and we will throw it up on the market. If we don't sell it, we don't buy it, if we do, we just exercise the option.
Krystal: Right, so we've had individuals tell us yes, no. We went and checked with the State and of course they're saying no. We have quite a few brokers that are friends of ours who-- some of them are saying, no you can't sell it-- it's a way to do it.
David: That's why I ask, there is an option in our MLS, there is a box that you check, for sale, for lease, owner by contract. You can check that box. It's basically-- they want you to list that way.
Dedrick: Doesn't the owner ever get upset?
David: No, because we will never list the house. Again, this is where the motivation comes in. We will never list the house-- of one that we will tell them we're buying it. We are very transparent, right? We are here to solve a problem, not to buy a house. What's the underlying issue? Okay well the house can help get to that issue, right? We are going to buy it, or we are going to go find a partner to buy it. When we go find a partner to buy it, that's in the contract and it is bold. We are going to go find a partner via any means necessary. In parenthesis, listed on the MLS, e-mailing out to our list. Last year we bought 90-- eight houses the year before we bought 92. I didn't need any of them. I didn't need any, zero, right? But I want to buy those houses if I can get a great deal. I tell that to the sellers, I am super transparent. I also say, how can one individual buy 98 houses? Because he has a lot of partners. 98, right? So give me some time to find a partner and I can solve your problem. The house isn't the problem. The problem is the relocation, the death, the divorce, the disease.
Krystal: There ya go.
David: That's the problem. Absolutely. Guys, thank you so much for coming on today. I am so grateful for your time.
Krystal: You're welcome.
David: You're filled with gold nuggets. We are going to have to bring you back on the show here in a couple of months to get an update. How many rentals are you at now?
Dedrick: 23 rentals now.
David: 23, you're looking for 50-100 units. You guys have got the hustle, the drive, and more importantly than any of that, the mindset. Simple, not easy, I love it. Any parting words for the viewers and the listeners today?
Dedrick: We appreciate you having us. My parting words is just-- don't be afraid to fail, fail forward. We mess up everyday. This business isn't easy, it's simple. Make sure you learn from your mistakes and keep moving forward.
David: Simple, not easy. Before we wrap up, how do we get in touch with you guys?
Dedrick: BePolite on Instagram, Facebook, YouTube.
David: I love it. Guys, go check them out. All things Polite on all platforms. These guys are rocking it, you need to know who they are. I love it.
Dedrick: Thanks, Dave.
David: Thanks, guys. Signing off. Until next time, see you then