Today, David Dodge joined by his good friend Justin Van Riper. In this episode, David and Justin talk about how he got started in Real Estate, how he got involved in this business, and the reason why he goes full-time in wholesale. Check this out if you want to learn more about Real Estate.
ey could buy five or six properties for the same amount of money that they may have to spend on one in their own market, so love that one. Huge tip, huge tip.
Justin: Yeah, and you're exactly right, so if you're actual market is in California, one thing I would maybe consider is virtual wholesaling, that's one option. I mean, there's some other hurdles that you have to get through with that and you can make some really good spreads if you are in California, working in the California market. So, you might not get as many deals but you can get some that have much larger spreads.
Justin: Definitely not saying it's impossible by any means to wholesale in California somewhere like that.
David: No, not at all, but it's going to be easier to get out-of-state people in our market so that's great. And really a lot of the markets, most of the markets, right? If you're anywhere in the Midwest, absolutely, try to find an out-of-state people. Have you had any luck pulling list of cash buyers? I know like, I use Propstream to run all my comps and to pull my list. I don't do a ton of buyer marketing at this point cuz I did it years ago and built my list and I'm to the point now where I don't really necessarily you know, need to build it cuz I got guys like you that have the buyers that I don't, right? but if you are new- you're brand new and you decide: hey, I want to do some buyer first wholesaling and this is the beginning, lists- let's talk about that. You have any inside- any pros, any cons?
Justin: So, there's a couple things with that. First off, I kinda mentioned this earlier but I think this is huge. I've done this in the past where I've you know, marketed to all the cash buyers, everyone who had purchased property in the last-
David: Buy a list off of like, I think Listsource sells them. I know Propstream does and I think the other really big one is REWW.
Justin: And so, I mean, I've definitely done that in the past and what happens is: you get a ton of buyers that call you back. I mean, cuz most people who have purchased one property, and you can even sort it by purchased multiple ones but anyways, purchased one, most of them want to purchase more, they just do. So, you will get a ton of people that will call you but what happens is most of the time you're saying: well, I want this particular zip code at this price. They're very specific.
David: Yeah, which is fine, but if you have 30, 50, 300 people calling with these different criteria- and I'm going to just take the- I'm going to cut you off here, I apologize in advance, but that creates more work and that's probably where you're going with this right? Now all of a sudden, I got 50 buyers that want different things and yeah, maybe that's good but maybe not, maybe it's not good to do that. So yeah, I just want to hear your advice on this.
Justin: Yeah. So, what I like to do instead, especially as you mentioned, St. Louis, quaint market for like a hash club so what I would do- I.ve done a couple different things in the past. I've done my ROI so I've done essentially, we can offer properties consistently and I will say this too, I will say: I'm only looking to work with people that are serious, that are going to purchase more than 10 properties this year. I can provide you with at least 10% projected ROI. You know, you'll have a contract, you'll have all this. I can give you referral's I guess for contractors, property managers, all this. But I'm very specific with the buyer that I'm looking for. So, I don't let the buyer kind of like dictate everything. I give the exact criteria that I can provide and if you're interested, then at that point, you have to sell me that you're going to be a good person to work with me.
David: All right, so he's taking the same principle guys that I just talked about with chasing the motivated sellers and he's applied it to motivated cash buyers. He's not chasing these people anymore, right? And that was what I just described, cuz that's what I had done in the beginning is: I went, and I bought a list and I sent a simple little letter just saying: hey, I'm Dave, I'm buying in the area. I'm not trying to sell you anything in this postcard or in this letter however, if you are looking to buy, here's a URL or here's a phone number, let's connect, maybe I can get you a deal. And it worked, but it created a lot of work because again I got all these people calling that say: hey, I only want the southside of 63131 and I only want the northeast side of 63024 or whatever and I don't buy two bedrooms in this zip code, only three, but in this zip code, I'll buy two. And before you know it, you got 75 different things that you're trying to keep track of and it's a pain in the ass and it creates more work and instead what he's doing is he's saying: listen, I don't really care exactly what you're looking for but this is what I can provide, does it fit your requirements? and if it does, let's work together, and now all I need is a name, a phone and an email, we don't even need to talk about all the little knick-knacks.
I'm just going to send you deals, and the ones you don't like, archive them, delete them. The ones you want, pick up the phone and call me and we'll do a deal right?
Justin: Yeah, absolutely and a lot of them like, I will work with them even if they say, yes, we have that conversation and they say you know, yeah, I'm looking to purchase at least 10. Yes, it's you know, [inaudible] or whatever, it'll be as simple as them literally saying: go out and find me something. As soon as I do, which you know, a lot of times I can literally do in an hour that day. I can go on in an hour do that, and I can be like alright, here's what I got and I'll send you know, I can send that property or properties or whatever to them. I contact- one thing I guess I do wanna say beforehand is you know, for- to be able to send it to kind of these buyers, the couple things with this are: you always want to be upfront with the other person, especially other wholesalers.
David: Yup, I like the transparency approach big-time. Tell- I like to tell everybody what I'm doing, even the seller, you know. I'm gonna wholesale it and I do plan on closing on it. I'll tell him you know, I'm gonna market this property, but I'm going to close on it regardless or I'll just tell him straight-up: hey, I can't buy it, but I maybe can help you sell it. Do you want me to market it? If they say no, then that's their problem. And I'll just circle back in 2 months, hey you still own it? You ready for me to help you? I'm only going to get paid if you get paid, oh you are? Did I not tell you that the first time around you idiot, let's do this, right? And that's how it is, you gotta be real with people, you gotta be transparent. You don't want to be rude, I was kidding there when I said it that way, but that's the mindset that you got to have right? Love it, love it.
Justin: Absolutely, and a tip with that to go along with exactly what you're saying, you can do this with the actual homeowners, you can do this with another wholesaler like when I partner with another wholesaler. You design the simple option contract with them, the option contract binds nobody. Nobody has-
David: And it's my favorite tool in my belt.
Justin: Isn't it great?
David: Literally. We just- we did three wholesales last week- closed on 3, 2 funded last week, 1 funded Monday but 2 of the 3 came from option agreements, which most wholesalers would have walked away from that, there was very little equity or they weren't willing to give us a great deal and we just said: hey, let's just try it and we made 8 grand on 1 and 9 grand on the other, that people wouldn't- you know, not home runs by any means but guys if you- who could use an extra eight or nine thousand right now? Probably everyone listening to this, you know, like literally that's a lot of money and if you're not an investor and haven't done this before, that could be months and months and months of your current salary, depending on your situation. I mean, that's a lot of money and these are deals that we converted from people that we didn't think was a deal, we used an option agreement. So, if you're not familiar with the option agreement, will you explain that to people real quick?
Justin: Yeah, so basically in the option contract that I use has specific verbage in there that states this, that we'll get to in a second. But let's say you know, you're the other wholesaler seller, this would be what I would say to you, I would say: hey, the numbers- especially if you're just a homeowner, I'll just say to you: hey, the numbers aren't going to work for us personally however, you know, I've been doing this for a long time, and I have a very large network of other investors. So, what we could do is we could sign an option contract for this price that you're wanting to get for it, and I will go ahead and I could then send it to some of these investors that are in my network. I'll tell them and there's specific verbage and I'll show it them and I'll say: if you find a buyer before I do, then this option is automatically-
David: Non-exclusive, love it.
Justin: Yeah, non-exclusive.
David: I tell them that too man. Non-exclusive meaning, I only get paid if I help you, and if you find somebody else, all I ask is that you tell me. Just keep me in the loop. I have no intentions of doing anything but helping you. I don't plan on suing you, you know, I'll even say that, like there's no reason. Basically, I only get paid if I can help you and if I don't help you, at least I tried and you don't have to pay me to try. I mean, it's a no-brainer, anybody, and everybody- if you explain an option properly, there should- there's no reason that they wouldn't want that. Unless they didn't want it on the MLS and that was part of your strategy, which again you get to be very transparent with people about. But yeah, I think it's great man. Option contracts are awesome. I don't know if you have one in your course, we have one available for free at the freewholesalecourse.com, so if you guys want an option agreement, go check it out. We have a free one that we've been giving away for five years, had over 10 thousand people take our course at this point. freewholesalecourse.com, get yourself a free option contract. Love it.
Justin: It's huge and it's so great. I mean it literally like- the only thing it does is it gives them access to all of those buyers. All those buyers that you spend a lot of time and money to get, it gives them access to it so - when I'm so you know, stuff through the option and I've been very transparent, I've had so many sellers that are like, they had multiple properties and are like: I can't even tell you how much of a lesson that you've been, like you were able to you know, sell these properties for us. And I' m like this is awesome cuz I mean-
David: Oh, you're under promising and over delivering when you close on an option every time, if you know, assuming that you explain it properly because you know, when I go, when I say: listen, there's no guarantee but if I don't try, how are you going to know? And you don't have to pay me unless I do something and typically, I'm going to make money on top. I mean, it's like a no-brainer for the seller, right? As an investor, I never want to be a motivated seller ever, right? But in the event that I become one, anybody that brings me an option that's non-exclusive, I'll sign it, I'll sign 50 of them cuz it's like why not? right? Like go out, market it and see what you can do. It is what it is. So, I love the option agreement, great tool. Very cool, very cool. Justin, tell me about what's next. So, you know today is May 13th, this episode will publish in about two weeks towards the end of May, you know, we're in the middle of this Covid thing, I guess we're kind of- hopefully coming off the back end of it at this point but as of today's episode, as of us recording this right now, if it's live, it's live, of course, but the podcast: 2 weeks trailing. Everything's still shut down, we've been shut down for 7 weeks, maybe going on even eight weeks at this week, maybe? I think it's 8 weeks and we're just getting ready to open things up but what do you foresee is going to start happening with the market and are you going to start doing more marketing for motivated sellers? Are you going to stick to where you're at with just the co-wholesaling of the wholesalers and the buyers that you got?
Justin: Yeah, as far as where it's going, honestly, it's anybody's guess on you know, what's gonna happen. I mean, everyone can make their predictions and if anyone, you know, had it exactly right, you could make a ton of money.
David: Right and I know you don't have a crystal ball, I was just curious on what your opinion of kind of where it's going. You know, I think there's going to be a flood of houses, but I don't think it's going to be right away. And again, this is just my opinion, I think that we're looking at 6 months before we see this flood because you have the deferments which could easily get extended if there's another wave right? and you know, depending on how much longer people are going to be out- some people are making more money on unemployment than they were working. And you know, it doesn't mean they're going to put that towards their mortgage, but it just goes to show you like, there's a lot of people out there that are really not looking to get back to work. They're happy with this current situation. So, I was just kinda curious on where your mind was that- with that?
Justin: Yeah, and I do agree. I mean, I think lender guidelines, that's gonna be another factor that will be, you were saying, in my opinion, it's the same thing, it's going to be delayed until we actually see the real effects from all of this.
David: Doesn't mean you can't start building that big ass funnel now though guys with your marketing and motivated sellers. You find somebody that's somewhat motivated today and in 6 months, they may be very motivated and that's kind of how this business works. Marketing, follow-up, follow-up, follow-up to a deal, that's it, it's that simple.
Justin: And I would definitely tell people: don't be scared right now to try to do deals cuz you still can. I mean, you said you guys closed-
David: We did 3 deals last week.
Justin: Yeah, 3 deals. I mean, they're still happening guys so, you know, you don't need to-
David: The retail markets been hot man.
David: Properties are selling, like rehabbed one's- nice properties. You know, that- not you know- people that I know or my team, we sold a couple in the last 4, 5 weeks. I think we've sold three in the last five weeks that are retail, all of them have sold within about a week. Some of them have had multiple offers, you know the guys over at 3 doors I mean, they're a mastermind. They've been selling a ton of them, multiple offers same-day type things. So, I mean, the retail market is doing really well but again, the lender guidelines may come into play here if somebody hasn't received a paycheck in 2 months. It may slow things down but again, who knows? We'll have to see.
Justin: That's without open houses too, you know they have all these properties-
David: That's without open houses too man.
David: I forgot about that, I saw a meme this morning, it was like talking about that. It was like: I sold 10 houses this weekend and had no open houses, you know, it's like that's kind of unheard of but wow, that's really really cool man. Well Justin, leave us with some parting words, you know, if you are new to this business, obviously go check out all things Justin at DPIpodcast.com/Justin simple domain. Again, I'm going to have a link to his course. I'm going to have his bio over there and all the places that you can find Justin online like his socials and whatnot. But if somebody is new to this, what would be your advice to them? Like where would they start? and what should they focus on?
Justin: So it's funny, I actually- when I very first started in wholesaling, I partnered with a guy who did pretty big volume- first name: Chris.
David: Chris Kay?
David: Yeah, I love Chris.
Justin: No no no no.
David: Different Chris, doesn't matter, doesn't matter. Go ahead.
Justin: Anyway, yeah so he did a lot of volume and so when I first got started in actual wholesaling, I basically was doing this from kind of the beginning. And over the years, I've tried so many different things that didn't work or whatever but that's how I even got started, is to find other wholesalers.
David: Totally agree.
Justin: Yeah, to try and help them out.
David: Hire a coach or go partner with people and do the dirty work right? Go run the appointments, go do the drive-in for dollars, hang the bandit signs, do what they don't want to do so you can get partnered in on the deal so you can see how it works because the funny thing is, once you see how simple it is, you're done. You're going to go off on your own, you're going to be able to do it by yourself but if you don't have the funds to hire a coach, just go partner with some other wholesalers or other investors in your area. Hiring a coach, I think's going to be the quickest way because you're paying not so much for education, even though that may sound contrary to what you think of coaches, you're really paying for two things: you're paying for speed and accountability. That's what my coaching program consists of as with most others is we're going to get you there in 1 or 2 months versus 6, and we're going to hold you accountable and if you fail, it's not because you didn't act with what the program says, it's because you didn't act with what needs to happen, you didn't do anything. So, love that that. Get yourself a coach or go work with other people. And again, that's how I got started, I'm sitting here talking to one of the first guys that I did a joint venture with in the beginning and I learned- you basically introduced me to an assignment agreement. I didn't know what the hell that was but now I use them weekly. Love it.
Justin: Yeah, it's crazy that someone like, you know, yourself or myself I mean, we're open to- you know, if you're willing- if you just want to ask questions, you know, constantly. You know like if you're, I don't know, I guess I'm not wording this correctly. But if you're willing to like, say: I'm going to- how can I help you? to another, you know successful investor in your area.
David: It changes the dynamic completely.
Justin: It does, and you do what you can do to help them. You're going to see how they do what they do, and they're going to be a lot more likely to, you know, kinda help you out.
David: When people say: hey, I want to pick your brain. Nope, how does that benefit me? But if somebody says: hey, I'm down to come to the office and cold call 4 hours a week, I'm like: perfect, do you want to learn the business? Let's go do some deals together. You are showing me that you're committed to doing something. You know, hey I'll go hang your bandit signs if you can bring me on some of your appointments. Great, come to the office, pick up two hundred of them, let me know when they're all out and next appointment I get you're going to be on it with me. I'm not going to say no to that. You're helping me help you. And when people just want want want, it changes the whole scope and that's where the coaching comes in. It's like, I'll do it, but I'mma have to charge you for it, otherwise, it's going to be a waste of my time to teach somebody that may not even want to do it you know? or has the action in them, the massive action to go actually do it. So, love it guys check out Justin Van Riper. He's the man, local St. Louis legend, he's been doing this for about 10 years, buyer first wholesaling is a brand-new course that he just launched. He's gonna give you guys 5 free days, go check it out. You can get all things Justin as well as the link to the course and find him on socials over at the podcast website: DPIpodcast.com/Justin. Guys, we are going to sign off on that note. Justin, thanks again for coming on the show, grateful to have you and know you as a friend. Until next time, signing off guys!