Real Estate Podcast

Episode 184: Derrick Towns - 10K Case Study - First Wholesale DEAL!

brrrr method david dodge discount property investor michael slane podcast real estate 101 real estate coaching real estate investing real estate investor real estate tips wholesaling wholesaling real estate Sep 22, 2022

Show Notes

This episode is all about a case study of David Dodge's student First Wholesale DEAL. Today, David with his student Derrick Towns talks about his first-ever wholesale deal, how he found this deal, and what services he used. Check this out! there's a lot of tips in this episode!

Things that will cover in this episode:

  • Who is Derrick Towns?
  • Talks about Derrick's First Wholesale Deal!
  • How did he found the deal?
  • What kind of list he used
  • What services he used
  • How he got this deal
  • Tips on how to get a deal
  • What Derrick do to sale this property

Service mentioned in this episode:

Episode Transcripts

Welcome back to the Discount Property Investor podcast. Our mission is to share what we have learned from our experience and the experience of others to help you make more money investing like a pro. We want to teach you how to create wealth by investing in real estate, the discount property investor way. To jumpstart your real estate investing career, visit freewholesalecourse.com, the most complete free course on wholesaling real estate ever. Thanks for tuning in.

David: Alright guys, we are back. Thank you for listening to the discount property investor podcast. I am your host David Dodge, today I am joined by one of my students locally Derrick Towns.

Derrick: Yes sir.

David: Derrick, how the hell are you buddy?

Derrick: Pretty good, pretty good.

David: Man, I'm happy to have you. Thank you for coming into the studio, hopefully you like our little space. Derrick's been a student of ours for I don't know, maybe two months, three months maybe?

Derrick: Yeah, about three months.

David: Probably going on three months and Derek is a local student, which is awesome. I love it when we have local students because I know the market, so it's easier for me to help them. Now, the cool thing about Derek is when he joined our coaching program, he knew a little bit about real estate. Derrick's already doing some deals with fix and flips and some other stuff, so again, I'm just happy to have Derrick on the show. Thanks for coming in, grateful for you and your time.

Derrick: Thank you, thank you.

David: Tell us a little bit about what you were doing with real estate prior to working with me and Mike. I want to get a little bit about your background.

Derrick: Alright. Prior, I started in 2018, bought my first rental property in May of 2018 and 2019, I started on two flips, my first two flips.

David: So, you got a rental now? Two?

Derrick: Yes, I still have the same rental that I purchased in 2018.

David: Okay one, perfect. Cool.

Derrick: And last year in 2019, I purchased 2 flips, one of them is completed. It's on the market right now. The second one should be done about two months.

David: But you never had done a wholesale?

Derrick: Never did a wholesale.

David: So, a rental, some flips- one's on the market, one's being worked on.

Derrick: So, I knew about wholesaling, but I didn't think it would be for me. So, fast forward to this year, I just realized it's the foundation of real estate and getting deals so I just went in and dove in and found you guys.

David: How'd you find us? if you don't mind me asking, just curious.

Derrick: I believe it was YouTube.

David: Okay, cool.

Derrick: Yeah, I'm always on YouTube, always trying to learn.

David: Make yourself comfortable.

Derrick: Alright, and I found you guys and then I was like these guys are in my backyard.

David: That's right, we're right here.

Derrick: So, I was excited, and I was sold ever since.

David: Perfect. Okay so Derrick is sitting in front of me right now guys with closing docs. He just closed his first wholesale deal. How much was the transaction for Derrick?

Derrick: 10k net.

David: 10k! What's the exact number?

Derrick: It was $9,753, I believe.

David: $9,953, I'm looking at the closing statements right now. Boom love it. So, this was your first wholesale deal.

Derrick: Yes.

David: Tell us about the deal. How did you- let's start here, how did you find the deal first and foremost?

Derrick: Okay, I found the deal when I used your link- Propstream.

David: Propstream.

Derrick: Signed up for Propstream, I searched the area that's actually the same area as one of my flips.

David: Okay, so you're basically- and I tell people this too all the time Derrick, hey market where you're wanting to invest or where you're wanting to wholesale, right? Doesn't make sense to do it three counties over if you're not wanting to drive there, so you already are doing you know, some real estate deals in a particular area. You went on Propstream, you pull the list. What kind of list?

Derrick: This list was a high equity list.

David: Okay, we love those high equities.

Derrick: Absentee owner.

David: Boom. So, you're- you're adding some components here, you're stacking.

Derrick: Yeah, yup.

David: So not only was this a high equity, it was absentee, okay.

Derrick: And I believe I had the owner owning for about five years or so or longer.

David: Good criteria. Where'd you learn all that stuff?

Derrick: Just playing around with it and watching a couple videos.

David: My man. That's right, but it's good though to have multiple criteria cuz it's going to dial in your list. So, high equity- very important if you want to be- if you want to wholesale, unless the seller's bringing money to the table.

Derrick: Right.

David: So, that's- that's great. You said absentee.

Derrick: Yes.

David: Another great reason why somebody would be presumed to be motivated. Love it and the last one you added was 5+ years of ownership. I like that one as well, I always add that in, reason is: typically, if somebody bought a property in the last five years, the odds of them being motivated or wanting to sell it at a significant discount, we're talking 20, 30, 40% discount, it's going to be a lot lower. So, the criteria you had in there was perfect, it got you a deal so you're going to keep doing that, but I love it.

Derrick: Absolutely.

David: So, you got a list off of Propstream, how big was that list of that? Do you remember roughly?

Derrick: Roughly, it was probably about I wanna say six or seven hundred.

David: Okay, so decent size.

Derrick: And I also made sure it was a minimum of two bedrooms.

David: Okay.

Derrick: So, I x-ed out the one-bedroom.

David: I like doing those too. Some people in some markets may like one bedrooms, it depends on where you live. Here in St. Louis in our market, two bedrooms are going to be better for flips and rentals so that was great too. Again, by adding the extra criteria, you're going to narrow that list down which is going to save you money. You know, it's got its pros and cons by doing that, but I love it. So, you went and you got the list Propstream, what'd you do next Derrick?

Derrick: After I got the list, I exported it and I sent it straight to Batch.

David: Batch, BatchLeads, love it. It stacks them, it skip traces them and it texts them. So, the reason- one of the reasons that I wanted to interview you today because of- is your approach to how you did this. A) I want to congratulate you for doing your first deal man, you rocked it.

Derrick: Thanks.

David: You had a $10,000 wholesale fee, right?

Derrick: Yes, absolutely.

David: So, one of Derek's goals, we were just talking about this before the episode was to you know, get into this full-time, right? You're working part-time elsewhere, doesn't really matter but boom I mean, this is real- this is real money right here, ten thousand. Okay, so this is about you, I've talked a lot-

Derrick: I've showed and told everybody as well. I wouldn't care if it was a $500 profit, I just want to prove to myself that I can do it.

David: You wanted to prove to yourself, the fact that it was 10, even better. So Derrick, you got the list off Propstream, you took it over to Batch, what'd you do next?

Derrick: Okay, I skip traced my list. That's the first thing I did and then I sent out text blasts.

David: And for those that aren't familiar, skip tracing is basically just getting phone numbers and emails. You know it does email too.

Derrick: I didn't know that.

David: I believe so, don't quote me on that.

Derrick: Okay.

David: I don't really use it that much, but I know a lot of people that will do email marketing. Again, another approach to hit these people or even a follow-up tactic too. Regardless, you skip traced it, guys what that means is it's getting the owner's phone number. When you pull this off Propstream, it's going to tell you the address assuming it meets the criteria you set in the name, right?

Derrick: Yeah.

David: But doesn't get you very far unless you plan on just going and knocking on the door, right? or I guess you could mail with that information too but to call or text, you need a phone number and batch helps do that. So, you skip traced it, batch also does the texting. You pushed it to a campaign, you started texting, what do your messages look like Derrick?

Derrick: Well, I got all kind of messages. Some people didn't respond, some people said no, few people cussed me out.

David: How many?

Derrick: I don't know.

David: A couple?

Derrick: Yeah.

David: It's part of the game man, you gotta have thick skin.

Derrick: You gotta have thick skin, got to have it.

David: Love it, okay.

Derrick: But all it takes is one.

David: It's all it takes. So, you started cold texting these people.

Derrick: Yes, yes.

David: And you're using batch, so tell me a little bit about that process. You send out a couple messages at a time-

Derrick: Yeah, I try to- I probably try to send out about 30 at a time cuz I don't want to have too many conversations going at the same time.

David: And you don't want the delay. You don't want a three-hour delay between the response. Right, so less is more with texting you know, you definitely want to be doing it, but you don't want to try to send out 5000 texts, it's so- that's such a bad idea. 30-40 at a time, give it a half hour, hour. Make sure that your convert- you're conversating with these people, setting appointments or just answering questions, but being very responsive is the point I'm trying to make. Anyway, you're texting, how did you come across this lead here man? over on Clements Avenue?

Derrick: Somebody texted me back. I probably had a few leads.

David: And your texting sellers?

Derrick: Yeah, texting sellers. I had a few leads out of that list, but on this particular deal someone texted me back. I went through the whole motion of asking would they be interested in selling their property? Come to find out the guy actually has several other properties that he's working on.

David: And you're gonna go buy those too right?

Derrick: Yeah, I'm going to follow-up.

David: Hell yeah.

Derrick: He just didn't have time to get to this project and it was just sitting, probably costing them taxes every year.

David: Tell me a little bit about the house, did you go look at it?

Derrick: Yes, yes I did. It's a single-family home. It's actually a 2 beds, 1 bath, all brick and it was vacant.

David: So, what was his motive? So, we know, or I know at this point, this guy has owned it for five years. The equity was a presumably 30% or higher unless you adjusted it off that, and absentee which could- which is not necessarily means vacant, but it can, but in this case, it was also vacant, so you have four motivations right here, but I'm curious what was his motivation. Obviously, those things are going to be piling up on his back but whenever you were texting him and he said hey Derrick, you know, thanks for reaching out, I am interested. Did you- like whenever you met him or talked to him, what was the reason that he wanted or needed to sell?

Derrick: I believe it was just sitting there and it was just costing him money, taxes.

David: So, just inconvenience.

Derrick: Yes.

David: Taxes cost expensive.

Derrick: And when I did go see the property, the grass was high, he did inform me that he was getting notices from the city. It was just an inconvenience for him, and he don't have the time to work on it.

David: So, you solved the problem.

Derrick: Yes.

David: That's it, that's all you did.

Derrick: Absolutely.

David: And I'm not trying to undermine it but I'm just trying to show everyone how simple this business is. Derrick, 10 grand, this is awesome dude. So, you met him at the property, you got some pictures of the property.

Derrick: Got some pictures.

David: How did that go? Like, did you- was his asking price a deal or did you have to negotiate with him? Tell me a little bit about how that went if you don't mind.

Derrick: He pretty much wanted to be around a 35k range, so I went in at 25 and he said he wasn't trying to go that low, so I just told him look, hey we're kind of in that same range of number.

David: We're not far, yeah.

Derrick: Yes, so if I come up and meet you at 28, can we make a deal? He thought about it, he said let's do it.

David: Alright guys, lessons, lessons. Okay, what was the MAO? Do you remember? It's not- it doesn't really matter but do you remember roughly?

Derrick: I knew that I could sell it for about-

David: What he's asking?

Derrick: 35k.

David: Okay, so that's what matters, that was your- okay, so your MAO was less than that because you had to basically build in a profit. This is one of my favorite tactics Derrick, I love this, okay. You got to have wiggle room, never make the offer the highest offer you can make first because nobody wants to deal with a dick, pardon my language. They want you to have some flexibility, whenever you're like my offer's firm or the next offers lower, nobody wants to work with that guy. You got to have some wiggle room but what I'm getting at though is the fact that he was at 35, you were at 25 and you met in the middle according to me, not him probably or most people but you came up a little, right? You came up 3 grand and he came down- what is that 7?

Derrick: 7.

David: He came down seven so boom, right then and there you got value in this deal. Got you-you send him a contract or had a handwritten one? How'd that go?

Derrick: I sent it via email.

David: Okay, did he sign it right away?

Derrick: He's actually a realtor so he wanted to draft up his own real estate contract.

David: That didn't stop you.

Derrick: So, I said go ahead and we did.

David: Was it special sales, probably the 6- or 7-page rule?

Derrick: Yes.

David: Okay, perfect.

Derrick: Yep.

David: So, that didn't stop you guys.

Derrick: And what's actually funny is that he wanted to put this contract is not assignable.

David: He did wanna- I remember that. Yes, and how'd you get around that? What'd you tell him?

Derrick: I said fine, I'm just going to plan on double closing it.

David: Double closing it, right and that's boom.

Derrick: And that's exactly what I did.

David: So, what we are doing guys is we're solving problems, along the way. Dude, this is so great. Okay, so you met him at the property, he showed it to you, you made him an offer, you got pictures I'm assuming.

Derrick: Yes.

David: While you were there, later on you sent him an email with an offer in it.

Derrick: Yes.

David: And did you guys verbally agree prior?

Derrick: Yes.

David: Okay, cool. So, he signed it, sent it back. He's an agent guys. You can wholesale deals from people that own them that are agents like he could have easily listed this property and probably got what you sold it for right? But he didn't because you were basically offering him convenience and you demanded a discount in exchange, right?

Derrick: Absolutely.

David: So, you got this property at 28.

Derrick: 28 thousand.

David: And it's under contract, what kind of contingencies? because if you use our contract, there's some built-in but whenever he sends you one, did you make sure that you had something in there?

Derrick: I mean, sure. I had him give me a 10-day inspection.

David: Perfect, so you had an out?

Derrick: Yes.

David: Perfect. Okay, so this is where I'm excited about this.

Derrick: But he did stress, and he made me close within 25 days.

David: Cool.

Derrick: He wouldn't want to go [inaudible]

David: Which is understandable, the main thing is to get it sold in the first 10. Did you throw in the word business?

Derrick: I don't believe I did.

David: Pro tip. Here's why, check this out, this is so cool.

Derrick: The weekends.

David: The weekends man. So, 5 days is 5 days, 5 business days is typically 7 so when you go- and it multiplies, right? So, when you do 10, that's 14. 15 is I'm not good at math, 19 or something like that, right? But you basically get like 40% more days, so next time use businesses. Pro-tip, but anyway, you got it done in ten, doesn't matter. So, what did you do to sell this? So, you found the list on Propstream, you got the criteria, you pulled it down, you put in into Batch, you skip traced it, and then texted it. From there, you communicated with him and set the appointment, went out, made a friend, this isn't hard, you made a friend, you said man let me try to help you, let me buy this, you got it under contract, what'd you do next?

Derrick: Well, I did the same exact thing to find my buyer.

David: Whaaat?

Derrick: Right in Propstream.

David: Right in Propstream, so this is why I was so- when you told this the other on our call, I was like holy cow, like yes Propstream has the ability to pull buyers. I just don't feel like it's utilized that often and boom you utilized it. So, you went back to Propstream.

Derrick: Back.

David: Back, and you pulled buyers so how does that work? Tell me the process of that.

Derrick: I actually drew around-

David: Perfect.

Derrick: The neighborhood.

David: And that's one of the features, you can draw on the map. So, you basically just drew an object that was close to where that was at.

Derrick: Close to the circle around that area, probably about half a mile away and all the surrounding areas and then I found all the cash buyers.

David: And how many do you think- roughly? I mean, it's probably not that many.

Derrick: It was probably about 250.

David: 250, that's more than I would have guessed, but that's a lot of people.

Derrick: Right.

David: And then you pulled out-

Derrick: Pulled that list the same way I pulled the seller's list.  I imported it straight into Batch-

David: How long did that take you to pull the buyers list?

Derrick: Two minutes.

David: How long did it take you to pull the sellers list?

Derrick: Two minutes

David: Isn't this crazy dude?

Derrick: Crazy.

David: This is fucking awesome, pardon my language but I'm excited.

Derrick: Yeah, didn't take any time at all.

David: 10 grand dude, 10 grand. Okay, so you pulled the buyers list, and you did the same thing, you went back to Batch.

Derrick: Yup.

David: What?

Derrick: Back to Batch, skip traced that list, came up with a-

David: And you did the same cold text too, right?

Derrick: Yup, same cold text, I put a little information in those text messages.

David: So, this one looks different though.

Derrick: Yes.

David: The first one was probably along the lines, and you said you had a lot of different- a message template, right?

Derrick: Yes, yes.

David: But basically, it's simple guys. If you were listening or watching this, it's you know, hey John, I think you're the owner at you know, 2222 Clements Avenue. Do you have interest in selling it? Or any variation of that which could be a hundred things, but when you did the buyer, how did that look? I'm curious.

Derrick: It was pretty much the reverse. Hey, I've seen you purchased homes in this area for cash, would you be interested in another one?

David: That is so incredibly simple, it's almost it's almost hard to believe but that's it, that's all there is to it. So, you did the exact same thing, 250 people that you had sent. How did the responses come in and look?

Derrick: Ooh, there was actually a lot of responses.

David: I would imagine- you probably, imagine you had at least 10 people that are like, yeah send me more info, right?

Derrick: Yeah, it's always a lot of more responses when you're reaching the buyers as opposed to sellers.

David: Right.

Derrick: So, I had a few people interested, but I had one main guy who pretty much, as soon as I texted him, he said I want to go see it. He went to go see it, it was already on lockbox, made sure it was on lockbox.

David: So, you brought that with you when you went to the appointment?

Derrick: I had to go back and put it on there.

David: Okay, but you knew and now you know.

Derrick: It was on there before I texted the buyers.

David: Hell yeah.

Derrick: So, he went to go see it and he said hey man, you don't have to go any further.

David: You didn't even have to meet him, did you? or did you?

Derrick: No, I didn't.

David: You didn't.

Derrick: Not at first, no.

David: Next time you're not going to meet the seller either.

Both laugh. 

Derrick: I can't wait.

David: Okay, cool so, he went- he said you don't have to go any farther.

Derrick: He said don't go any further, I'm your buyer.

David: What were you asking? So, you had it under contract at 28 and what were you asking?

Derrick: I knew I could get 34, 35 so I put it out there at 38,500.

David: Okay and then what was his offer to you?

Derrick: He said he wanted to give about 35 so I kind of negotiated with him and he said that he didn't want to lose this house cuz I told him there was another person interested, and he said let's do it for the 38,500.

David: So, full asking price?

Derrick: Yes.

David: Damn, holy cow. Okay, guys 2 software's and a little bit of hustle and you earned $10,000. Found the list on Propstream, added it to Batch, text some sellers, set some appointments, did the exact same thing once you had a deal, Propstream for buyers this time, went to Batch to skip and cold text. Hey, I got this deal, was he the first guy that went in it? Probably sent a couple people over.

Derrick: He was, it was probably about 4 people. He was the first.

David: Okay, but regardless, you had only given the information to a couple of people, right?

Derrick: Right.

David: And then he said, okay, I like it, full ask. Did you send him a contract, did he send you one?

Derrick: Well, actually he's a little bit older gentleman so I just drove to meet him.

David: Perfect and I love that though because that solidified it, shake a hand. Hell yeah. Okay, and then you brought a contract with you?

Derrick: Yes.

David: And then you take it to the title company?

Derrick: Yes.

David: Closed it up? Double closed?

Derrick: Yup.

David: The cool thing about where we live- where'd you close this at? Investors?

Derrick: Investors.

David: Perfect. The cool thing about where we live at here in St. Louis, Missouri is we can do double closes without any money. Some areas, some states, some counties, you know, they may not allow the dry double closes, you may require a transactional lender to do these, but we don't.

Derrick: Right.

David: So, you didn't have $1 invested-

Derrick: I didn't have to bring one penny.

David: In the deal. Now, -

Derrick: Actually, I did have to bring the earnest money, that’s all I had to do.

David: Okay, how much was that?

Derrick: 500.

David: 500, so you did invest that, but you got it back.

Derrick: Yes.

David: Right, okay so 95 is really the profit though but 10 g's is what came in the account, that's cool. Okay, so you took it to the title company to double close. You didn't have a nickel out of your pocket for buying and/or selling and made about 10. However, and this is what I really want to emphasize on just for a second Derrick, flipping houses with little to no money, you just proved it's possible with basically no money to buy and or sell however you are paying for Propstream, you are paying for Batch, you're in a coaching program, you have some costs but at this point you've made three, four, five, x on those costs, right? So, it's all, it's all good. It's worth it, right?

Derrick: Absolutely.

David: So, what I'm getting at though is doing deals with little to no money is so possible. It's simple in fact, however, the caveat is sometimes you have to invest in marketing, most times, right?

Derrick: Correct.

David: Once you start doing more and more of these, you’ll start getting referrals and you'll have no cost for the lead. So, that's what I want to just you know, put out there is there is cost in the marketing. How much do you think excluding working with me, on just your Propstream, your skip tracing and you’re texting which is again 2 software's and you're only 3 months in, what do you think the total amount of money that you've spent on this?

Derrick: I would say about 600 a month.

David: Okay, so three months, you're about 1,800. So you are, you know, again not including the coaching, you're looking at almost 4x, 3 and 1/2 x give or take on that deal. Now, you also have a ton of leads I'm assuming from those efforts. Derrick, my average deal takes four to six months because it's the follow-up.

Derrick: The follow up.

David: So, we're doing you know, 6, 8, 10 just kind of varies, right? One or two of those that come in a month will be quick, easy. The rest of those require follow-up and they take four to six months of following up to either get the agreement between us and them to work or to wait out their motivation, right?

Derrick: I'm learning that now. Probably working on about 10 to 15 leads that I'm following up, just this one happened to be-

David: Quicker, boom so this is awesome, and this is how it happens, some of them go quick, some of them take longer but the cool thing is you have 1800 in cost, you made 10 grand, but you also have leads that you're working that you can continue to follow up with that you've already spent that money on. So, you know, over time you can drive your cost down because you can build that big ass funnel of follow-ups. Man.

Derrick: Right.

David: So, you know looking back on this, how much time did you, not on all of your marketing but on this particular deal.

Derrick: On this particular deal just downloading the list, sending text blasts, driving to the property-

David: Getting pictures, going to meet the seller or the buyer.

Derrick: No more than 2 hours.

David: Wow, let's say 3, right? Let's go higher, 3 hours. That's breaking that down to 10 grand, 10 grand for 3 hours. You know, you're looking at like 4- 35 hundred dollars an hour. So, it's pretty simple, this process is simple.

Derrick: Absolutely.

David: And hopefully, you've proved to yourself that this can happen, and this can work.

Derrick: Yes.

David: Cool man. I'm excited for you, $10,000 wholesale fee, first deal, 3 months. We have liked to have gotten you there in 1 to 2 but doesn't matter, you did it, you proved it to yourself. You got a couple more leads that are in the pipeline, you said about 10 right now.

Derrick: Yeah. about 10-15. What's funny is that I actually got a property I would say one weekend I started wholesaling.

David: Boom.

Derrick: But I priced it wrong, it was a learning lesson for myself as far as the rehab is concerned and that one didn't close. So, it was a learning lesson when I went to this one.

David: Probably offered to pay more, couldn't sell it for that. You know what? Lessons are learned that way all the time but regardless, you got to do that sometimes. You got to because so here's why, sometimes you'll think that you're in too high and you'll find a buyer eat anyway, right? Other times, if you don't at least try, I tell this to a lot of the students that are new and they're not making offers Derrick, if they're not trying to get properties under contract, it's impossible to sell something that you don't have, right? If Walmart didn't have any inventory on their shelves, how can they turn a profit? You got to have inventory so the fact that you made the offer, sent it over in writing, had it under contract and had to back out is okay. You gave it your best efforts and you didn't have any malice intention anyway, right?

Derrick: No, not at all.

David: It was all let's try to get this done. So, talking about the deal that you did though, triple-win. You helped the seller who's an agent, he could have done it himself, get rid of a problem property to reduce his liabilities. Boom, win, you found a buyer in the area, which I'm impressed by you, by the way, because the tactic in which you did it is just simple and you did it just simply, you just put the pieces together. So, you found this guy and what was his plan? Did you ask him? Is he gonna rent it?

Derrick: I think his plan was to give it to a family member, rehab it and his brother's going to stay there.

David: Perfect, so he's going to rent that property out. Triple win, you won 10 g's.

Derrick: 10k.

David: What was like the biggest lesson from this? Just that it's possible? like, opening up your mind?

Derrick: Yeah, just going through the process. I just wanted to prove to myself, of course I knew it was real, but I can do it.

David: It's hard like truly understand it though until you see it, and you get that deposit in your bank account and you're like, holy cow. So, this was a more inexpensive house, but you can do this with million-dollar houses too. You don't necessarily need money to buy and sell because at the end of the day guys, we're selling paperwork. That's really what we're selling, we're not selling houses. So, you can make it work to where you're flipping the paperwork, the cost, or another way to word it would be the investment that you have to make as an end to the marketing. Derrick, I've said this a lot of times and I would think you would agree with me at this point, wholesaling is the marketing business, wouldn't you agree?

Derrick: Yes, absolutely.

David: It's not a real estate investing business, kind of cuz you're kind of doing that. The way I look at it is you become an investor when you start taking risk. You are doing that, you got some- you got a rental, you have got two flips in the work. You are- that's risk. When you're doing wholesales, the risk is so limited because of the CYA clauses, the inspection period, you know based on the partners approval or subject to successful acquisition or whatever those contingencies might be. Boom. Derrick, thank you for coming in, thanks for coming in on the show.

Derrick: No problem, thank you.

David: What else can you tell us that you've learned about this deal? I mean, this is- me and you sitting here right now, it's simple but before, 3 months ago, you're like man, there's so many different pieces, there's really not.

Derrick: Right.

David: Wholesaling is actually really simple, you just got to-

Derrick: It just takes grime and persistence.

David: You said it, persistence.

Derrick: That's it.

David: Persistence. There's 3 things that I would want to highlight on that topic that you need to have persistence in. One is your marketing, you agree with me on that?

Derrick: Absolutely, yes yes.

David: You gotta. Number two, consistently sending offers. What good is marketing if you're not sending offers and I just mentioned if you don't-

Derrick: Right, I know you told me that I always try to send offer even if it's not in writing, I'll text it or I'll call, give them the offer.

David: You gotta have inventory. You can't sell what you don't have in inventory, love that. So, number one marketing, number two is consistently sending offers and then finally is follow-up because you paid for those leads, they're in your system, either your offer isn't high enough for them or more importantly the motivation on their side isn't high enough for you and I always want to emphasize this and if you can leave here Derrick with one gold nugget, other than the business which I gave you earlier is you now know that what you do, this service provides a shit ton of convenience to your sellers, so now this hopefully this will help speed up the next deal for you, right? But now know you're- what you're worth. You can provide a crazy level of convenience so when a seller is asking retail or close to it, pull back.

Derrick: Okay.

David: Pull back. Why should I go out of my way to give you all this convenience if you aren't going to give me a discount? I'm not saying be rude, that's not what I'm saying, what I'm saying is pullback. Well, maybe this deal isn't for me. I'm looking for something that I can get at a discount, right? But in exchange I'm going to provide a crazy level of convenience. What's that look like? close quick, pay cash, little to no inspections, as is. You don't have to repair it, clean it, fix it I mean, that is a lot of convenience. So, the reason I say this is because I had- after about a year-and-a-half in this business, I had a mindset shift of man, I'm undervaluing this convenience and what happened is I stopped chasing bad deals. You've heard of the 80-20 principle, 20% of the deals are going to be 80% of your profits, so I quit chasing these bad deals because I started realizing hey, this level of convenience that I'm offering is extremely valuable and if somebody isn't willing to offer me a discount, it doesn't have to be half, that's not what I'm asking for but a discount, we'll then I'm probably not going to be interested in closing quick, paying cash or buying it as is. I'll pull back on one of those three things just to level the playing field but if they do decide to give you that discount, give them all that convenience. So, know the value of the convenience is a lesson that I just wanted to throw out there because boom, 10 grand. You helped two other people in the process, and it'll help you from chasing those skinny deals. Again, I'm not saying don't follow up, what I'm saying is don't go out of your way to chase them if they're not-

Derrick: The convenience is there-

David: 80-20 man, you know, you're going to spend 80% of your time. This is true. We just closed a deal yesterday for 1900 bucks dude. We worked on this deal, we closed three this week, today is Thursday. The other two we didn't do that much on, the one that we- and we made like 6, 7 grand each. The one that we got for 1900 dollars, we spent three months working on, two different title companies had to clear a judgement, had to pay agents, we spent you said earlier 2 hours up to 3?

Derrick: Yeah.

David: On this deal that we did, we probably spent 15 and made 19- so, what I'm saying is don't chase them, let them come to you. Let them know that you have that level of convenience but in return, you demand a discount. Again, it doesn't have to be crazy big, but it's got to be something in there.

Derrick: Right.

David: So, Derek again, thank you for coming on today. You've been one of my favorite people to coach because you are a hard worker, and you got that grind. Again, you said the thing to take away from this was persistence. Guys, if you are listening to this if you are watching this, just be persistent. Derrick doesn't even have a CRM yet.

Derrick: I don't.

David: Which is okay, we're going to have to get you into the CRM stage.

Derrick: Immediately.

David: Immediately, cool. But the cool thing about Batch is they have the ability to mark a lead warm, cold, hot, whatever to where you can kind of compile those and go back. It's not a CRM but it does allow you to basically filter or put them into folders which was sufficient for the first deal but now that you've made it, you've proven to yourself and you have money to reinvest in that marketing which I'm assuming is going to look very similar to what you've already done, just duplicate this man, go find some more lists or other types of marketing, you know, bandit signs, direct mail, so on so forth.

Derrick: Just time to do what I did but on steroids.

David: Exactly but honestly, I wouldn't change it too much.

Derrick: Okay.

David: Just get really good at this and then eventually you can outsource this to a virtual assistant and then you don't have to do that anymore, you just gonna start running appointments. That's what I do cuz I enjoy it, you see what I'm saying? Either way though, thanks for coming in.

Derrick: No problem.

David: Happy $10,000 first closing. Congratulations my man.

Derrick: Thanks.

David: Derrick, I'm grateful for you, any last words for the audience today?

Derrick: I just keep the grind, stay persistent.

David: That's it guys, it is that simple. Keep the grind, until next time you heard from Derrick Towns here in St. Louis, first deal $10,000.

Derrick: 10k.

David: Boom, thanks Derrick.

Thanks for listening to the discount property investor podcast. If you enjoyed this episode, please like, share, and subscribe to help us reach a wider audience to jump-start your real estate investing career, visit freewholesalecourse.com- the most complete free course on wholesaling real estate ever. We would also appreciate it if you left us a review on iTunes or Stitcher. Thank you in advance for your support and remember you make your money when you buy, you get paid when you sell. Now let's go build some wealth.



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