David Dodge brings a special guest whom he met in an event in Mexico, Greg Helbeck. Marketing requires a lot of time and money. If you are a new investor and you don’t have enough money to spend on marketing look at everything you’re doing as a return on your time and effort, just like what Greg did when he first started. Check this episode to learn more about Real Estate Investing!
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: Welcome back to the discount property investor podcast. This is your host David Dodge and today I'm bringing on one of my good friends and a special guest, I just met Greg at a mastermind event recently in Mexico and we got the honor of sharing a 2-hour car ride from the event to the airport and really got to know each other and got to catch up on all things real estate. So [unintelligible] please give a good welcome to Greg Helbeck. Greg, what's up brother?
Greg: Dude, it's my honor to be here and can't you- isn't it crazy? That was a month ago man, the multipliers event. Time flies.
David: I know, isn't that crazy how time flies? That's a whole month, man.
Greg: It's scary man. It was a great time though man, it was an awesome time meeting you and it was my first year at that event and it was life changing. It was a great great great time.
David: Yeah, there's no event like it, man, there's really not. I'm really happy that you're a part of the- a part of the group now Greg, it's an amazing thing.
Greg: I'm excited.
David: Guys, Greg is very unique. For one, he's a young guy, he's 25 years old and he's crushing the game, right? Now Greg lives in San Diego, California, literally my favorite place on Earth. I love it there so incredibly much, but he does the majority of his real estate investing out of the Hudson Valley, New York area and Greg, fill me in again on where Hudson Valley is. It's how close to New York, New York like Manhattan?
Greg: Sure, so it's in the suburbs of New York, New York so we're about 45 miles north of the George Washington Bridge which is in Manhattan.
Greg: It's in an interesting area, it's actually where I'm from. I was- I moved to California like 3 years ago, almost 3 years ago now so I still go back to New York all the time you know, every, you know, month or two, I'll go back cuz I love the family and friends there but it's a unique market where you know, some counties in the Hudson Valley, you got $700,000 ARV's and some counties you got, you know, $100,000 ARV's so you can really cover a lot of ground there and it's a very unique market to where I think we're gonna get into this, like there's attorneys involved so there's a little bit more of a barrier to entry and it's a great marketplace. I really enjoy it, really enjoy working there and it's like, you know, there's no place like home as you know, you know.
David: Yeah, that's right. I still live in my hometown. I'm trying to get out of here as well buddy, but I love it. So Hudson Valley, that's basically where you grew up right? Were you born there?
Greg: Yeah. I was born there, raised there, still spend a good amount of time there when I'm not in California and it's interesting, I moved to San Diego 2018 and I was so tired of New York, I hated it oh it's cold as snow and when you move somewhere else like it's almost like you think the grass is always greener. I really like California, it's an amazing place but every time I go back to Hudson Valley, I'm like man this is- I'm from here, I got my roots here, I know everyone here so yeah, it's a beautiful area. I love the four seasons and it's just got so much to offer.
David: Yeah, that's one thing that you don't get really so much in San Diego is the four seasons so much.
Greg: One season man.
David: It's one season, just nice all year round.
Greg: It's 70 degrees out right now.
David: I love it. So Greg is a wholesaler, a fix and flipper, and he does some buy and hold real estate investing. He's doing a lot of sales in direct marketing, right? You're not buying stuff off the MLS, are you?
Greg: No, I've never- it's funny you say that. I'm in escrow right now on a rehab or a BRRRR, I'm not sure what I'm going to do with it yet and it was on the MLS but they got a mailer from me, and I made him a crazy low offer and I'm like there's no way they're taking it and they're taking it.
Greg: So if that ends up getting to the finish line, that would be my first MLS deal but it was still from my marketing efforts.
David: Isn't that crazy man? Like so you know, my partner and I, we've been buying close to a hundred houses a year for the last about, I don't know, call it four years and like two or three of those typically are listed properties. The majority of them are off market, you know, it's just going to direct to seller in our business is just the way to go, especially if your wholesaling. Can you wholesale a listed property? Absolutely, if you get it low enough, right?
David: But it's hard to get it low enough you know, typically it's hard to get it low enough just to be investable asset, right? Let alone getting it good enough to be able to then take it and sell it to somebody else and still have meat on the bone for them and you, right?
Greg: Yeah, oh yeah. That's the thing, if it's listed yeah you got to- you got to steal the house man. You got to steal that house, maybe sell it on terms or something but yeah, you got to, you know, it's possible but you really like, you got to just get it. You got to get something unique, if it's off the market.
David: You got to get it, yeah you got to get it unique man.
Greg: You gotta do something that's gonna make it stand out. But yeah, all that stuff, I used to just be a wholesaler and then I started to realize that there are opportunities where man if I close on this thing, I'd make triple the profit with not that much more effort involved, started doing that and then I realized oh my gosh, I mean, I'm paying a lot of taxes now, I got to get some rentals so I can offset that so now thanks to your book and some other people, I really got turned on to this BRRRR method and I'm in the middle of actually going to reposition a vacant mixed-use building by doing the BRRRR method.
Greg: We're gonna close that in a couple of months. I'm looking forward to that one.
David: I'm looking at it- do a mixed-use BRRRR right now myself man, that's funny that you say that. And thanks for the kind words man, the book- the book, you know, it's funny sometimes people will say: how does it stack up to the BiggerPockets book? And I say: honestly, I have no idea, I've never read that one before. I just know from my own experience doing this about a hundred times, this is how I do it, you know, so there's probably other ways of doing it and better ways maybe even for all I know, who knows, right? But that's just from my experiences and you're probably done close to 120, 130 BRRRR's and we're trying to do probably another 50, I'd say before- 50 to 80 this year, right? Still this year. We got a couple under contract as we speak. I think we have three under contract. Man the BRRRR method is one of my favorite things, it really is. It's amazing.
Greg: It makes so much sense because like I remember like I used to be like oh, I've got to put 20% down and then like save more money and like the whole BRRRR thing, I remember like someone taught me like a strategy, I was like oh, it's like- it's basically rehabbing but instead of selling, you just go to the bank and have them cash you out and I was like I have all my money back now, I can just go do this again so yeah, it's brilliant. It's a brilliant strategy.
David: I love it. Well Greg, one of the things that really like- I'm trying to think of a good way to describe it but like- I guess one of the things that I was really ignorant to in the true definition of ignorance, like I just didn't- I didn't know, I had never really been educated on was the closing attorney process. So if you don't mind, I'd like to kind of talk about that just really quick cuz I think that's going to provide a ton of value to the audience. And the reason that Greg is the guy to talk to about this because he has to deal with these closing attorneys to do his deals like, you know, New York is a state that requires closing attorneys. Do they even have title companies up in New York?
Greg: You do have them but they're just a part of the transaction, they don't control the transaction whatsoever.
David: So you basically have to do both, right?
Greg: Yeah, it's so expensive to close. Yeah, I mean it is insane to close because of all that, so yeah you have closing company- you have title companies and then you have attorneys. Really David, the title company in New York, their only job is to literally provide title and municipals which is like you know, the town record of all the-
David: They just give you the- yeah, the docs for the-, right?
Greg: Yeah, that's all they do. Yeah, they just do that and then they show up to the closing and they just provide the policy and that's it. I mean, attorneys are the ones who do the whole actual like wheeling and dealing of the transaction in our state.
David: Okay, so I just did a quick Google search for which states require a closing, an attorney, right? And it says several states have laws on the books mandating the physical presence of an attorney or other type of involvement at real estate closings including Alabama, Connecticut, Delaware, DC, Florida, Georgia, Kansas Kentucky, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North Dakota, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia and West Virginia. Holy cow, I thought there was like 3, there's like 20.
Greg: Yeah, yeah.
David: Holy cow, I did not even know this man and again, this is- I feel like I'm going to learn something new here, you know? Because it's like- so let's just talk really quickly about how it works for me in Missouri, right? And I guess basically the other, you know, 30, 35 states that don't require the closing attorney, right? So we have the option to go hire a closing attorney, but it's not required so why would we want to do that, right? So I don't- I typically tell my students you know, hey let's go find a title company and find one that's investor friendly because they're going to basically, you know, help you with this transaction. Title companies are like personal injury attorneys, they only give paid typically if they can close the deal for you, right?
Greg: Yes, yeah.
David: So they're going to go to work on your behalf for free basically hoping that they're going to close the loan and if you don't know a lot about title companies or how that process works, go walk into one, they're like on every corner and go meet the people there and basically make them your coaches because again, they get paid when you close a deal so I tell this to all my students like hey go find a title company that you want to work with, make a friend over there and basically turn that person into a coach and they're going to be able to help coach you through the closing process. Now, this is about Greg, not about David so I want to speed this up, but here in the Midwest and 30 to 35 other states where the attorneys aren't required, we just go find ourself a title company, we find a property that we want to buy, hopefully it's direct to seller, motivated seller, right? Direct to seller marketing and they're motivated and we have a really great deal on it, right? And we take that and we get a contract on it. We take that contract to a title company and we also deposit some earnest money or money into escrow, which is called the consideration in between the escrow and the contract, you have yourself a deal, right? And everything becomes valid and legal, and if you're going to buy it, then you just have the title company tell you when to come up and sign and they're going to charge you a little bit of fees to work it all up and make sure that the actual deed is transferred properly through a general warranty deed or specialty warranty deed but not, you know, basically is transferred and it's insurable, that's the main thing. Whenever you go to a title company, you get what's called you know, title insurance. Therefore, if there's an issue later when you try to sell it, you have insurance to cover all the legal costs and time and fees that it's going to make to be able to sell it. So at the end of the day, the title company helps coordinate the closing. They actually administer the closing and they also provide insurance against any errors that may have happened during that. Now, if your wholesaling, same thing. You bring in your buy contract, you bring in your sell contract, you give it to your title company and they help coordinate it, right? One more thing before we move on from there, there's typically two types of closings whenever you are wholesaling. There's the double close and there's the assignment. With a title company, it doesn't really matter. You just tell them what you want to do, you figure out what you want to do, you talk to your buyers and see if it's okay to do an assignment. If not, double close it. There's pros and cons either way, but again, you just tell the title company. You basically just inform them of what your intentions are and if you're not doing a double close or an assignment then you're just purchasing, it's literally that simple, right? And if I don't know something, you know, or there's something wrong with the title, you know, they typically will tell me but then I'll just typically turn around and say cool, what are you going to do about that? How are- you know, how can I help you help me? Basically.
Greg: Yeah, exactly.
David: What do I need to do to help you but at the end of the day, this is kinda your problem not mine and that's what we pay you for. So, guys again, listen- or thanks for listening to me ramble about that, but that's how like, I thought, 98% of the US operated literally just like that and I- and I'm learning new stuff. It sounds like there's about 20 states that actually require an attorney. Greg, what in the world is that? How does it work? Why? Fill us in.
Greg: For sure. Before I get into that, I want to tell you a quick funny story.
David: Sure, sure.
Greg: I've done probably in between like 40 and 45 houses in the Dallas area and one in Austin, and this is a couple years ago, I haven't marketed there in a while, but I remember the first year we did, I lock the deal up and there's obviously no attorneys in Texas and, you know, I sent in like a small nominal deposit and the escrow officer- the title agent was like, all right we're good, we're in fully executed contract and we assigned it two weeks later and it was like, I had the money in my account and I'm like wait a minute, that's all you do in Texas? So like-
David: So really if the deal is perfect, you can send one email. If the deal lines up and everyone shows up and you don't have to go do- one email, yeah.
Greg: So yeah, so other areas are definitely it's a lot different. So in New York, so just to kind of paint the picture and some other attorney states are similar to this, especially It's mainly the Northeast: Connecticut, Massachusetts, New York, New Jersey. Billy Alvaro is a mutual friend of ours, he also deals with this on a daily basis.
David: He's out in Jersey, isn't he?
Greg: Yeah, yeah he's in Jersey now, Jersey and Long Island. So in New York, in the Northeast in general, when you get a seller to say yes, I'll just say this for New York cuz I, you know, I do this everyday.
Greg: Got a deal you know, today actually so it's like similar process. When the seller says yes, the whole process changes. So in New York, I'll just set the stage here, seller says yes, that's great. 9 out of 10 times, you're not going to sign a piece of paper or a DocuSign at their house or on the computer. Once the seller says yes, they go get their attorney, you get your attorney, the email-
David: So- hold on, I gotta interrupt man, I'm so sorry but I just-
Greg: [inaudible] yeah.
David: I can't hold back. So how do you send an offer or make an offer? Is it always done verbally or do you actually send something-
Greg: It's verbal. Yeah it's [inaudible].
David: So you don't ever really send the contract to them and then they sign it and send it back, that's- wow.
Greg: Not [inaudible]. No.
David: Okay, so I didn't mean to interrupt but I- that to me is just like what? Holy cow, I'm sending offers all day, contracts are going out.
David: Okay, interesting.
Greg: Once in a while, you'll do that. So if it's a deal, so I'll give you an example: if there's a property owner and they're like: I don't want to buy it, I want to wholesale it. I will tell them full transparency, hey generally use an attorney. I want to put this under contract with a 10-day inspection period and I'm going to try to sell this to another investor for a profit. If I can't sell it, I'm going to cancel this contract. We don't need to get the attorneys involved now cuz it's going to cost us both time-
David: And money.
Greg: -so let's give ourselves 10 days, I'm sorry?
David: And money.
Greg: And money, yeah.
Greg: Yeah, so we'll give ourselves 10 days. If we can't- if I can't find a buyer, I'll let you know, no harm, no foul. So I'll do that 1 out of 10 times with a seller because that's like a borderline property but generally speaking, like you just said, yeah you don't send offers out, you get a yes on the phone or in person and then the next steps are the attorneys communicate via email for the most part and then the seller's attorney-
David: And are you cc'd on all this stuff or no?
Greg: Yeah, yeah, yeah I'm cc'd on these yeah so the sellers attorney prepares a contract, and this is why I love New York cuz there's a big barrier to entry there because nobody want's to do this so it's not as competitive as a San Diego or as a Dallas or something cuz it's kinda hard to get deals. So the seller sends a- the sellers attorney signs a contract, sorry, sends a contract to my attorney. My attorney sends it to me, I review it, a lot of the times there's like a lot of tough language in there like you have to put a huge deposit down anywhere from 1 to $10,000 which is very normal in my market, and then also there's- generally there's a no assignment contingency. So then what happens if you have to then send that contract back with a writer which has all the basic changes you want to make and then they have to sign off on that. So generally speaking David, when a seller says yes-
David: Now, is there a standardized contract that's used typically Greg or is it always whatever that attorney wants to write?
Greg: Yeah, it's a huge 10 to 15 pager these contracts.
David: Oh geez.
Greg: 10 to 15 pages, they're thick. So it's funny, I just got a fully executed contract today like literally the guy- I got the email before we went on this call. I got the yes on New Years Eve.
Greg: Thank you. It's a 3 unit, I might BRRRR it. I got the yes on New Year's Eve. We have a fully executed contract, today it's March 2nd.
Greg: I'm not kidding.
David: It takes that long? Just bouncing it back between attorneys. I mean, we can close a deal-
Greg: Yeah, we were haggling.
David: We can close a deal in three days.
Greg: Yeah, no. My record in New York-
David: Now that's rare, yeah typically it's two weeks on average but yeah, man you're talking January, February, it's two full months, that's 60- and that's not even to close, that's just to get the contract signed and executed.
David: So then you got another month. Holy cow.
Greg: Yeah, it's- that's a- that one- that's not normal, it can happen- Normally what happens is about 5 to 7 business days, you get a fully executed contract. So if you get a yes, five to seven business days later, you're signed in escrow so there's a big lag there, right? So that's like thing number one with the Northeast if you're dealing all with attorneys is that you got to understand just because you get a yes on the phone or in person doesn't mean you're locking that thing up today and you got to be willing and able to address all the potential objections the seller's attorney might have if they have an attorney representing them. So a lot of the times, there's a few objections. Oh well why do you need an assignment or why are you going to only put $1,000 down? Cuz a lot of these attorneys want 10 percent of the purchase price so if I'm buying a house for four hundred grand-
David: 10%? I'm buying houses for- I'm putting down ten bucks on mine sometimes.
Greg: So, it's a whole 'nother planet man. I just put- I just locked one up last week. I went hard in the paint, $10,000 non-refundable earnest money site unseen like hard- it's a good deal but like that was what they needed or else I couldn't buy the house. So, they want these bigger deposits, generally speaking I put anywhere from 1 to 2 thousand dollars down and I get away with that 9 out of 10 times.
Greg: So that's another thing, so you gotta plant the seed with the attorney hey I'm not putting 10 percent down, I'm a cash buyer, I'm offering your client all these benefits, because of that I buy 3 to 4 of these a month and if I was going to put 10% down on every property, I would be out of business, so then I get them usually to agree that because of the convenience of my sale, I don't have to put a huge deposit down. The second thing I always say is hey I might buy this property in velocity or I might buy this property in a new LLC and I just- I do this all the time. I'm going to have to create a new LLC if I want to buy another one today and I want an assignment just in case I decide to change the purchaser before closing so it doesn't stall out the sale so you can get your money faster.
David: Love it.
Greg: So you always got to frame it how it-
David: You framed it perfectly, yup, absolutely.
Greg: You always got to frame it so you gotta kind of negotiate a little bit but then anyway, after that, those are kind of the landmines, when you actually close on a property in New York because you have so many other parties involved, you have- like so for example, when I go borrow money to take a deal down, you have the lender obviously, the lender in New York has to have an attorney represent them so then you got to pay for that lenders attorney fee. I have my attorney, right? And then I have title fees, so to close on a deal in New York, like you got to really have it's anywhere from 4 to 7 thousand dollars on average to close on a property in New York because of all these excess fees, so the benefit to that is and I don't want to-
David: Man, that's crazy. I would say it's like anywhere from 12 hundred to 3 grand on average to close on one in St Louis or in the Midwest.
Greg: That's amazing.
David: Yeah, so you guys are like triple almost then, that's nuts.
Greg: It's triple. The benefit though is- and that's crazy, I wish it were that cheap. The benefit to New York is though is when you close- when you get an escrow, I call it escrow cuz I'm in California, I do deals out here too. When you get in like an agreement with a seller and you have a fully executed contract, it is impossible for someone to screw you on a deal, like it is absolutely impossible for another buyer to go behind your back. When you go in contract, you are in contract. You have attorneys representing you. So like we do some monster wholesale deals and we do some monster deals where we're going to close on them and it is- we cannot get our like feet taken out from under us when we're under contract.
David: I like that a lot, you know, it happens occasionally. It's kind of rare, you know, but it really depends on how much rapport you build with your sellers, you know, but it can happen and in your guys' case, you kind of eliminate the possibility of it because it's like their- unless they have multiple attorneys representing them, and even at that, I'm sure that there's ways to kind of figure that out, so holy cow. So where does the title company fall into the closing with the attorneys?
Greg: So the title company in New York, all they do is they just make sure that the title is insurable like you explained earlier. Like they make sure that there's you know, clean title, the deed is correct and the deed transfers are going to be correct. They provide the title pol- the insurance policy and then in New York, which is this a little bit different, I don't think this happens in St. Louis. Basically every town that, you know, obviously you have properties in either a city or a town. Every town and city in New York has their own, it's called the municipal search and what happens is they search the town and make sure there's no open permits or you know, grass abatement, weeds or whatever the case is and they basically conduct this municipal search and then they give you a clean title commitment at that point or a clean municipal commitment at that point and then they just go to the closing and they shuffle papers and switch the deed over and sell their policy, and that's all they do. They don't- you don't communicate with them at all, you don't- you know, none of that.
David: So when you actually go to the closing, you don't go to a title company then typically or do you?
Greg: No, no, it's always in a lawyer's office.
David: It's always in a lawyer's office. What? That's so strange to me.
Greg: Yeah. It's like you're getting divorced or something, you're in the attorney's office.
David: Yeah, it's like man, it's just- wow, okay.
Greg: Yeah, yeah.
David: So I can see how this and so is the title- the title company is always required then unless an attorney owns one and he just does it, right?
Greg: Yeah exactly. Generally there has to be a title company involved, yeah.
David: Go it, but you- so like where I'm at, the title company is also involved assuming you're buying it through, you know, buying it the right way, right? I mean anybody can do a quick claim but you know, you're not going to be able to sell that sometimes unless it's like done right, you know? But- wow, okay, so I guess where I'm going with this though is I can have as- me as the buyer and I can have a seller and a title company so there's three people involved here. If I need a- if I want to bring a lender in to buy it, the lender and I will work with the title company to prepare the proper documentation and mortgage and deeds and whatever may be needed, promissory notes, you name it, all that paperwork type stuff, so it doesn't really add that much complexity but essentially it's just me and my seller or me and my buyer if I'm selling and the title company and that's it, but if you guys- so you guys have to add in the component of the attorney but it's not just one attorney, right? I mean is there times where you have an attorney that will represent both the buyer and the seller or is that not even a thing?
Greg: Yeah, you can do that. We don't- I don't do that because you- I'll do that like so I did a wholesale deal and my attorney represented my buyer and me, but the seller was totally represented on their own because New York, I'm sure as you probably figured this out, it's a very- I don't know the word, litigious, whatever the hell that that term- that legal litigious state, everyone wants to sue you in New York and especially down where I am, everyone's very skeptical. They think everything's a scam so when I have a- especially a seller who's in a jam, they're willing to sell at a discount, I always get them- I refer to them an attorney if they don't have one because I want to make sure that my butt is covered if they-
David: Yeah, and that makes perfect sense.
Greg: Yeah, cuz these are big spread deals too so like, we're buying these for a lot of money sometimes so these are large transactions so I wouldn't want a seller to sell me a property and then have like my attorney representing both of us, and then all the sudden they get some- their cousins an attorney and thinks they got ripped off and then all a sudden I'm in a lawsuit. So I always want the seller represented on their end. Once in awhile, I'll have the buyer just use my attorney if they're easy to work with and they're-
David: Yeah and if you're- if everyone's open about it, like hey I'm buying for 90 and selling for 100, like what else do you need to know?
Greg: Yeah, yeah, it's-
David: Same lawyer on the buy side, I get that but when you're dealing with the other side of the transaction, the opposite of whichever side you are on, having their own attorney makes sense. Okay, so let me describe a complicated deal and you're going to laugh because then I want you to describe a complicated deal, right?
David: So I may have a deal where I have a motivated seller and I send to them a contract and they sign it and I don't need any lawyers or anything, right? And I take that contract to a title company and then I start marketing that contract. Let's say this is one that I want to wholesale.
David: And the price is irrelevant, right? And I just have this deal and I find some guys online that you know are saying hey that they have interest in this deal and I say sure here's the lockbox code and then I find out that it's not them that's buying it, it's like one of their partners that's buying it, right?
David: And this can actually happen two or three times.
Greg: Oh yeah.
David: In this whole daisy chain process, for simplicity I'm just going to say that this happens just once. So basically another guy has a buyer and he's like hey you know, if you want to do this deal, I need to get paid five grand or I may even want half of the wholesale, how much are you going to wholesale this for Dave? Well, on some cases I'm not going to tell that guy. I'm just gonna say how much do you want, right?
Greg: Yeah, yeah.
David: But if it's not a crazy deal, let's say it's only like a $10,000 spread, not a huge deal. You know, I'll be like hey I'll give you half, its five grand for bringing the buyer in but you know, even though this is somewhat complicated by me talking about it, the only difference now is that I have my seller and me, and we have a contract and we have a title company that we're going to give all that to and then now I'm just going to have a contract with their buyer and then just a joint venture agreement.
Greg: With the other guy, right.
David: Or I could buy it and then assign it through that contract, through their end buyer, either way though, it just adds like one more person and one more document.
David: And we still use the same title company, hopefully everybody's involved in the same company. Now, there is a thing where you can have a buyer represented by one title company and the seller by another, there's really no reason for that other than oh I only work with this company because I do a ton of business with them and that does happen from time to time, but the downside to having two different title companies is the fees are going to be higher.
Greg: Oh yeah.
David: Like you know, they're obviously going to cut a break to both parties if they can do this whole thing in like 20 minutes, right? Versus having to communicate with other companies and all the stuff. So for me, a complicated deal would just be to have another person that comes in or maybe even two in some cases which just adds one more document like either an assignment agreement or a joint venture agreement, right? But where you guys are at, you're bringing in attorneys for each of these people, right?
Greg: Oh yeah, yeah.
David: And the lender if a lender's involved, you're bringing in an attorney for the lender so I mean, you can have a deal that goes from just you and a seller which is two people to like eight people like that.
Greg: You wanna know something funny that you said that? It's funny you say that, yeah. You're gonna- I hope you're sitting here cuz you might fall out of your chair. So I mean obviously we wholesale to different types of buyers. Cash buyers are normally the easiest to work with for obvious reasons. I mean we've done deals- I mean I don't even- I can't even remember at this point how many we've done but where the buyer- because it's expensive in our market so the buyers get financing, they get hard money. So if you're doing a deal in New York and all is well, right? This is exactly what's going to happen at the closing, I don't go to closings any more, my attorney goes for me cuz you know, we do enough business to where we-
David: Yeah, and covid and other stuff. Sure.
Greg: Yeah, so if it's no covid and I'm hanging out in New York and I just want to go to a closing for fun, and we're doing a wholesale deal and the buyers getting financing, this is who's at the closing: the seller, the seller's attorney, me, my attorney, the buyer, the buyer's attorney, the buyer's lender, the buyers lenders attorney. They're all in the same room.
Greg: And I've actually done that. We've done that, yeah.
David: And they're all in the same room.
Greg: All in the same room.
David: Does the seller ever say: who's all these other people?
Greg: Eh, I mean a lot of times what you do is-
David: They just kind of know that when they're in the law office, that the law- the attorneys are going to handle it and just kind of shut the hell up.
Greg: Yeah, I mean it's funny you say that. We've- we did a double close- I'll never forget this. This is like back a couple years ago when we first started getting momentum. I remember I did a double close and it was a total like random like I didn't think we were going to be able to sell this thing. We ended up selling it for 20 g's and the buyer was like, we call him Joe Blow buyers, like he's not a savvy guy. He's not listening to this podcast, he's not going on BiggerPockets. He's like- he saw our Facebook ad, said I want to buy that house. It was down the street from where he grew up. Long story short, he buys it from us. So we buy the deal at like 12 o'clock and we- the guy literally we walk out of one closing, we resell the deal at like 12:30 and the guy walks out and then goes into the other room so like yeah, we literally did a double close like that and the guy- it was like- it was the weirdest thing ever. I'm like, oh my gosh, this is how double closes work.
David: Isn't that- yeah, so we do that same thing and we'll have our buyer and seller come like 10 minutes apart just like you said. You know, we'll have the seller come in first just because we have to be able to buy it to sell it first, right?
Greg: Yeah, yeah.
David: And the cool thing is- Greg, is Missouri. I think it's- I don't necessarily know if it's state by state, I think it's really more about like title company to title company, but it may also have to do with the state cuz I know in California, they don't really do this but maybe it's even- it's not, you know, not something that is even legal there but in Missouri where I do all the majority of my deals, I can use my end buyers funds.
Greg: Same in New York, yeah.
David: To close on mine, so I don't have to necessarily- now sometimes I'll need transactional funding because my buyer may have a loan. They may have, you know, they may have a lender and that lender won't allow an assignment and/or they won't allow me to sell it to them without it being in my name first, super annoying. It does happen from time to time but most of the times, if I get a deal at 140 and I have it sold at 150, what I'll do is I'll have the buyer come in first and fund the deal and I'll have him come in 30 minutes before and sign all the paperwork and then I'll have the seller come in right behind him and we'll use that guy's money to follow all the way through the whole transaction and if it's an assignment, I'll just get a $10,000 check right there. It's amazing.
Greg: That is amazing. In New York, we do that. We do the double closes like that. We actually prefer to do that because when you assign, a lot of the time- like I mean if we're assigning something for 50 grand, like a lot- if we don't know the- like if it's a buyer that we're cool with, like I did one last week for 33 and it's like my friend, but if I don't know this guy and he sees I'm making 50 grand, he might have a problem with that, especially in New York, people like to count your money. So to mitigate that, we always generally do that. We'll do a double close where the buyer- my attorney's a ninja man, he just does it. I mean you can do it New York legally. I'm not an attorney by the way, it's not legal.
David: Sure sure.
Greg: Yeah, we can- yeah, we do that and it's so much easier because you don't have to- you're technically the owner for 2 seconds and yeah, I mean I love doing that if I can because it just makes everything cleaner and sometimes when-
David: Yeah, I can see how the assignment though Greg would be very, very, very valuable if you have a closing cost of 4 to 7 grand on both sides of the-
Greg: Not a double- see, not on double closings.
David: Okay, so there you go.
Greg: See that's the one loophole, yeah. My attorney is an absolute blackbelt when it comes to this stuff.
Greg: So basically, because you're basically like- it's almost like when you throw a rock and it kind of skips on the lake for a second. You're like skipping title kind of, so you avoid like the mortgage recording tax, you avoid like the buyer takes all the closing costs, you just pay obviously the legal fee and then I think the-
David: Just the transfer tax basically, for the attorney.
Greg: Yeah, small stuff like that.
David: Yeah, yeah, yeah. And when I say tax, I don't necessarily mean the government tax, I'm just saying like the cost to just transfer the thing over real quick. Well that's cool then, that saves you guys a ton because man if you're spending, you know, four, five, six grand and then you have to turn around and do that.
Greg: No, no, not on double closings, no.
David: Hey, let me ask you this: so are you- whenever you're buying- cuz you're on both coasts, you're doing deals in California, you're doing deals in New York. Are you typically paying the sellers closing costs?
Greg: In New York, I will do it a lot because it's- that's big value proposition when I'm dealing with a homeowner like hey, I'll pay your closing cost, I'll pay your-
David: Yeah, especially if you're gonna get a great deal, like yeah.
Greg: Yeah. I don't care. That's tripping over pennies on your way to dollars.
David: I totally agree. Totally agree. So here in the Midwest, to sell a property let's just say you got yourself a hundred-thousand-dollar property, you know, something really easy, real simple. To buy it, you're looking at maybe eight hundred to a thousand bucks. To sell it, you're looking at probably $300 so when we say-
Greg: Oh my gosh.
David: Yeah, so when we say hey we will pay your closing cost, I'll be able to negotiate somebody down three, four, five thousand. We did it today, we got a guy down eight grand on an offer that we made. We were going to buy this duplex for 130 and we got him to agree to sell it to us for a 122 thousand. However, we were going to pay all his closing costs but little does he know that that's only like three or four hundred dollars. So that's why I was asking so you know, is that customary? I would think if you can get them down like you're tripping- you said it best: tripping over pennies to make dollars but I think a lot of people they don't realize that the closing cost on the sell side is cheaper. Now, if you're having to hire an attorney to come and be present, you're going to be spending a little bit more than three hundred bucks to sell a property.
Greg: Yeah, it's a little more than that but it's- hey man, the math always works out. I mean I literally just did a deal last week. There's two examples I can share. It was a 30- I was supposed to- a realtor didn't do me well on this, I was supposed to make 50 on the deal but she basically hosed me and I ended up only making like 30, 32 on it and still had to pay commission but I digress. But I mean, the big value proposition on that deal was seller, I will pay your closing costs which includes your attorney fee so you're going to net this and Mrs. seller because you're in Texas and you're not even here, If your lis pendens, it basically if we are pay- if we don't get the payoff done by February 28th and it rolls in to March, I will pay your per diem, so you're still needing the same amount of money and I will eat the cost. Thank gosh, we closed it on the 20- the 26th I believe, but I mean that's a huge value proposition, that's a lot.
David: That's a massive vale add though, right.
Greg: Sellers want certainty man. They want certainty and a lot of the sellers that you and I work with, they're not hedge fund managers, they're not complete knuckleheads but they want clarity, they want simplicity, and they want certainty and they want people to explain things clearly so they- it's almost like they can take what you explain to them and they can go explain it to somebody else clearly and that's how I communicate with sellers so that like we get on the same page and yeah paying for their closing cost is a huge value-add cuz they know their net price is their net price, you know what I mean? Like that's how I can get all the deals David cuz I try to communicate as best as I can with these sellers and be just like a true problem solver for them.
David: Yeah, and that's really what it comes down to man. I tell this to everybody, I'm like you know, as an investor, I only really have like three things that I can offer people. That's really it, right? Like, I can offer cash, I can offer quick and I can offer as is and that's really it. Now, there's other things I can obviously do. I can offer to pay this- the closing cost and I could pay for a moving company to come, and I can do this and that but really at the end of the day, it's just about the convenience, like all we really are doing is we're trading convenience to somebody for a discount hence the name of the podcast: the discount property investor, right? It's- you know, all that we're doing is we're looking for deals at a discount and how do we get them at discount? We offer to bend over backwards and just say, you know, we're going to offer convenience. And the funny thing is you know, if you learn how to buy property at a discount which obviously you're a pro at Greg, I'm pretty good at it myself, done it about 650 times at this point.
Greg: Love it.
David: You- all the doors open for you, you know I'm saying? So if you want to wholesale it and you got it at a good price, that's an option. If you want to rehab it and flip it and get full retail, that's an option. If you want to turn it into a rental, hopefully with little to none of your own money which we like to call the BRRRR method, right? you can get all of it back, that's an option but if you don't buy a property at a discount, none of those doors are open to you guys, none of them.
Greg: That's so true.
David: So you really, you know, first step in learning about how to become an investor and it doesn't even have to be a wholesaler specifically guys, if you just want to be a landlord or a fix and flipper, that's fine too but the first thing you need to learn is that this is a marketing business.
Greg: All it is man.
David: If you want to find these leads, you gotta learn how to get good at marketing and once you close the deal from your marketing efforts then you become an investor.
Greg: Boom. That's so true.
David: But not up until that point, right?
Greg: I hope everyone rewinds the last 2 minutes of what you just said, cuz I wish I knew this when I got started five years ago or almost six years ago now, time flies. Because I thought I was a real estate investor David. I was not- I did not know that I was in the leadgen and conversion business, and because of that, I'll pull this book out real quick, I started studying marketing. There's a book called Over Deliver by Brian Kurtz who actually has been on my show.
David: Yup, I love it. I haven't read that one yet.
Greg: Oh man, you'll love this book and it's- the better you can get at marketing and communicating which is what we're doing right now, and just being a good communicator, you're going to make so much more money because you're going to get people to see your side of the table and you know, it just- it's- the best skill you could ever learn is how to be a good communicator. I can talk about this till I'm blue in the face but once I started studying marketing, direct marketing, how to run mailers, how to qualify a prospect to see if they're a pretender or a contender, how to negotiate with a good seller like that changed my life man. It changed my life.
David: It's all marketing, yeah.
Greg: Yeah, I'm sure it's the same with you. It changes your life cuz you're able to- it's a very powerful skill to have because you're transferring certainty to another party and you get a seller to see that you're there to really help them.
David: That's a good way to- I like that perspective.
Greg: Yeah, it's- man. I just- I love being able to be a problem solver in this business whether that's solving a problem for a lender that I'm working with or a buyer who's buying a retail product from me or a seller who I'm getting a house at a discount from. If you can be a good problem solver, I mean you'll write your own check in this business and you'll have more money than you know what to do with.
David: That's funny that you said that if somebody would have told me that- so like, you know, I've been in buying real estate since I was 20 years old and I'm 36 years old so it's been 16 years since I bought my first house and I actually just sold it last week.
Greg: No way. [inaudible].
David: Cashed a six figure check on it buddy, yeah. That's what I'm talking about.
Greg: Now we're talking.
David: Now we're talking.
David: But the this is when I first started buying, I didn't know anything about these motivated seller people, right? I didn't realize that there were these people that would like give you their property at a discount in exchange for all of this convenience that you can offer, right? And I spent the first ten years Greg, buying retail. Basically, I was buying about a property a year for the first 10 years as a rental. I've never been that good at saving money so I just went- once I save up you know, 20, 30 grand, I'd just try to go find a house that's worth a hundred and get a loan on it and park the cash, right? Just kind of park the cash, that way I can't spend it, right? And the first ten years of my investing career, I did about one a year. I think I got to like 11 houses by the 10th year so maybe I did two one year but basically one a year paying full retail and six years ago, I learned about these motivated seller people guys and I haven't paid retail for a house since and I bought 600 houses since then. So you know, whenever people say: I don't know how to find motivated sellers, well that's fine we can teach you that. But when they say: I'm having you know, I can't find them. Well the answer to that problem is you're not doing enough marketing, do more marketing.
Greg: So true.
David: If they're not finding you and you're not finding them, the simplest way to solve that solution guys is just to do more marketing. Now, marketing typically requires time and money. There's ways to fully outsource it to where you just pay for it but typically, it's going to be a time-consuming thing and it's going to be a costly thing. But the return on those two efforts are sometimes they can be a 100x guys, literally 100x.
Greg: It's so- that's such a nugget you dropped there. Once again, I hope these listeners re-watch this episode cuz if they just take one or two things that we're talking about now, it can change their whole life especially with the marketing stuff here. If you're a new investor and you don't have a lot of money to spend on marketing, look at everything you're doing as a return on your time and effort. Like when I got started David, I didn't have a lot of money, I was 20 years old, I was in college, I had 2 G's in the bank, I sound like one of those like seminar stories, right? but it's true so I spent a lot of time and effort on getting leads, right? So I would put out bandit signs, I would you know, door knock and all that stuff. So I looked at like how much time would it take me to get a deal to earn money to then invest that money back into marketing. So if you're listening to this right now, you don't have a lot of money. Figure out how much time you can spend every week on the activities that actually move the needle and then track and monitor those activities to see what results you're producing.
David: Yeah, credit scorecard. You got to track it. If you don't track it, you're never gonna get good at it.
Greg: Yeah, you got to score yourself. And if you're doing bad and your scorecard is showing it, you know what you can start to diagnose to get to the root, right?
Greg: Like if you don't know what's working, you don't know what to fix, you know what I mean? And I didn't- it took me years to realize this David because I was going out there always motivated, always hungry. I'd get a deal every once in awhile but I had no system, I didn't have KPI's, I didn't know how to, you know, profitably spend advertising every month and like you know what I mean? Now I can spend my own ads and I'm like oh, I'm gonna get a [inaudible] on this cuz I know the numbers.
David: Right. Know the numbers, yeah exactly. You know one thing that I really liked that you said Greg is that you got to track it, you gotta have a scorecard, you got to be consistent, right? So when I bring on a new student, I say hey here's the deal: you are not allowed to just do this on a Saturday. It's not- it's not- you're not allowed. Here is why: if you miss this Saturday cuz you have a wedding and then the next week like something bad happens and like you now have a funeral to go to on that Saturday, you're 3 weeks out from getting anything done. Right? It's better to spend 10 minutes a day than one hour a week because if you missed that one hour a week, nothing happens and then when you start spending 10 minutes a day, that turns into 30 minutes a day and before you know it, you're hobby starts getting fun cuz you're like man, this is a lot of work trying to find these motivated sellers but when I do find it, the rewards are awesome.
Greg: It's amazing dude.
David: So fun.
Greg: I'll never forget my first big- well, reasonably sized deal. It was off of mail, I made 15K on a wholesale deal.
Greg: I was 21 I think and I was like-
David: Dude, that's a home run at 21.
Greg: It was a big deal man, because it proved my concept to my parents and then I remember we spent, we went out to dinner and it was just like euphoria man and I'm like oh my gosh, like this is amazing and then obviously ever since then, hundreds of houses later, like you know, you start to- it starts to become a rhythm but when you're new and you're starting and you- if you want to think this business is worth it, I can tell you right now, a thousand percent worth it if you do what David said and actually do the work consistently.
David: Yeah, consistently. I love it.
Greg: Consistency man, that's the name of the game.
David: Hey Greg, tell us about your podcast before we wrap up. Pave the way podcast, I want to hear about it.
Greg: Yeah, yeah, so I appreciate it. Let's see here, I started the show back in I think 19, I think it's been about two to two and a half years. My memory-
David: Two and a half years, okay yeah.
Greg: Yeah, I have a- my memory isn't the best but anyway long story short, I started the podcast- over the years, I've been able to build a pretty good network up and a lot of successful investors like you, I get to call my friends, I get to call as friends so I started bringing them on the show and interviewing them and just you know, recording it, putting them out. One thing led to another, we started putting out two shows a week and now we have a great podcast where we bring on real estate entrepreneurs, we bring on best selling authors, I've had some pretty big hitters on there and we bring on people-
David: And I'm looking through your list right now man, I recognized like probably 60% of the names on here so that's awesome man. You got Gavin, you've got Don.
Greg: Oh yeah.
David: You've got Chris Arnold, my homie Chris, Lauren Hardy.
Greg: We're gonna have you on soon, we're going to talk about the BRRRR. You'll be a great guest.
David: Hell yeah, Ryan Dossey's on the podcast. My man, Gary Boomershine. Dude, you got all the good people on here. Steve Cavanaugh, my boy. Hell yeah. I love it. That's what's up.
Greg: We got everyone on there yeah.
David: Yeah. You know it's kinda funny the podcasting community, it's growing but it's still a very small community of individuals and everyday there's a new guy that's coming in which is great. I love it, I think it's amazing, but there's really not that many individuals out there, at least ones that have had a hundred plus episodes on their podcasts. Looks like you're up to like 142 right now man so you're crushing it. Yeah, that's-
Greg: Yeah, so we're putting out more content, hiring an assistant as we speak to really take that and take it into the next level, and I really just- it's a way for me to honestly give back. I mean, I started this business, I was 20, I'm 25 now, there's a lot of people I think my age who want to be real estate entrepreneurs, maybe they went to college and they weren't happy with it or whatever and they want to find a way to do something different and hopefully my podcast could be a big resource to them and it's a great networking tool for myself. I mean, I connect with some high-level guys and we were able to add value to each other. I had our buddy, Chris Craddock on the show this morning actually.
David: Love Chris. Yup, is he talking about turning trash leads into cash leads?
Greg: Yeah, yeah, we're talking about that.
David: That's his thing man, he loves it, I love it too.
Greg: Yeah, that's his thing man.
David: He's helped me with that. Yeah, he's helped us with that recently and we haven't really gone full into that mode cuz it is a lot of work, but what we are doing though is we're- we know, you know, that we have that tool in our belt, right? So if we get somebody on the phone, that's- their only going to be considering a retail play, cool but don't just like say oh, thanks have a great day like okay cool but guess what? I got an agent that you know, would love to help you sell this property and his whole approach by not trying to go in with the 6-month listing agreement and you know, just doing like a couple weeks and having the scarcity affect meaning like it's not just on the market for anybody to go look at it, like you have to schedule times just to view it or just have windows, you know, this Saturday from 12 to 3, anybody and everybody can come but then what happens is people come and there's other people there. Yeah, he has a very, very good approach. I really like Chris's- his model a lot.
Greg: And we got a lot of guys on there so yeah, I mean that's the show. I mean, it's been cool. I mean, I've gotten a lot of great feedback on it and you know it's out there to help people and be a good resource. I try to bring a lot of experts in certain topics. I've had some BRRRR guys, I think you'll be a big asset to this show too. We'll have you on here, we'll unpack the BRRRR on my show and yeah, that's like a great-
David: Let's do it baby.
Greg: Yeah yeah yeah.
David: I'm ready.
Greg: That's the- I guess that's the 30 thousand foot view over that podcast and really I think it actually ended up coming from a conversation. Me and my buddy, we're in Hawaii having some mai tai's and man, you know, we kind of got started at the same time and like man, we've learned a decent amount. I mean, we're obviously not experts at all but this was a few years ago and I'm like we should just do a podcast like you know, just record some of these conversations we're having. I mean, I feel like other people could benefit from them. That's how it started you know initially.
David: Yeah, yeah.
Greg: Now it's turned into like a whole thing.
David: That's kinda how my podcast, this one here, started with my partner Mike Slane. Same thing you know, it's like man, we're learning stuff as we go and it'd just be really cool to just kind of share that information and just kinda- and we try to have fun man, you know, on all of our shows, we try to have as much fun as we can. You know just kind of joking with each other and you know, talking about different things so I love it. Greg, thank you so much for coming on the discount property investor podcast, I'm honored to have you here. I'm grateful for your time today. I really do appreciate you. Guys, don't forget to go check out Greg's podcast, it's called pave the way podcast. Greg's a young guy but he's got about five years of experience under his belt, hundreds of deals, multiple six figure deals. He's doing virtual BRRRR, flipping, wholesaling, he's in multiple markets. I mean just- he's the real deal. I love- I love this guy, he's the man. Greg Helbeck, H-E-L-B-E-C-K for anybody that's curious, pave the way podcast. You can also go follow Greg over on Instagram and your handle is Grego_37, right?
David: That's what's up.
Greg: Grego_37, you're like a mind-reader man. You got- you know all your stuff, you do your homework.
David: That's what's up. Yeah, just search Greg Helbeck in insta and there's a link to his podcast right there on his page.
Greg: There you go.
David: And then of course, pave the way podcast guys. Check it out, for sure. Greg, thanks again for coming on. Thanks for not only educating the audience but educating me as well about this whole closing attorney thing man.
Greg: Oh yeah.
David: It's so foreign to me but I just did the math and there's 22 states in the US here that require it and honestly before this episode, I thought there was like three, two or three. I thought it was so rare but man, like that's basically like half the country. So, if you guys are not in a state that requires one, now you know just like me. I love it. Alright guys, thanks for listening. Greg, thanks for coming on. Until next time, signing off.
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