What Makes a Successful House Wholesaler (HA 035)
What Makes a Successful House Wholesaler (HA 035)
Transcript:
Steven Jack B.: Jill and Jack here.
Jill DeWit: Hello.
Steven Jack B.: Welcome to the House Academy Show, entertaining real estate investment talk. I’m Steven Jack Butala.
Jill DeWit: And I’m Jill DeWit, broadcasting from sunny Southern California.
Steven Jack B.: Today Jill and I talk about what makes a successful house wholesaler.
Jill DeWit: I would like just to point out something. The way you just started the show just had a nice ring to it.
Steven Jack B.: Oh, because you’re first now?
Jill DeWit: Yeah.
Steven Jack B.: You know what we decided?
Jill DeWit: I was first there, but I wasn’t first on the names. Maybe we should-
Steven Jack B.: You know what we decided?
Jill DeWit: Are we easing into it?
Steven Jack B.: And it’s been this way all along, but it was brought to our attention, my attention recently that, “Hey Jack, it’s not about you, man. Hey Jill, it’s all about you.”
Jill DeWit: Thank you.
Steven Jack B.: “You’re just a sidekick. You’re just the guy who’s standing there trying to make everybody look a little bit more intelligent, just trying to.”
Jill DeWit: The one who’s doing the math, the man behind the curtain.
Steven Jack B.: The other thing too is that Jack and Jill sounds like we’re selling nursery rhymes.
Jill DeWit: Exactly, so we thought we’d go with Jill and Jack.
Steven Jack B.: So yeah, it probably confuses the hell out of everybody.
Jill DeWit: It makes you think. I hope it does, we’ll see. We’ll find out.
Steven Jack B.: Before we get into it let’s take a question posted by one of our members on the houseacademy.com online community. It’s free.
Jill DeWit: Aaron asks, “What exactly is SPS,” which is a Smart Pricing Service, “from offers to owners? Have any of you used it?” And I see someone’s already weighed in and answered here. Kelly said, “Is that an abbreviation for Smart Pricing Service?” Yes. “If so, yes, I’ve used it for a big list and it’s definitely worth it.” So without getting too into it and too brainy, can I-
Steven Jack B.: I got some instructions today about how the show should go, how we should record the show. Here’s the instructions.
Jill DeWit: Oh no.
Steven Jack B.: “Hey Steve”-
Jill DeWit: Jack.
Steven Jack B.: “Can you tone it down and just stop making this so brainy and so really nothing interesting?”
Jill DeWit: Well, I’m right on the interesting part. We like the brainy part. That part’s good.
Steven Jack B.: So I’m going to sit quietly and listen today.
Jill DeWit: No, that’s not the truth. Okay, so here is the deal. One of the things that we do when we’re doing our pricing, we all come up with our own … We have our own way of valuating these assets, looking at what’s available, but let’s take a step back. We all know … If you don’t, you should and you do now … that Zillow, Trulia, Redfin, Realtor, DataTree, all these companies spend a lot of money to put together their own unique algorithms for pricing properties. That’s why when you go on something like realtor.com it gives you it’s value. It’s not a made up number. It’s looking at comps, what’s available, what’s sold, probably square footage. I’m hoping the size of the lot’s in there, three bed, two bath, whatever it is. I’m sure they all do a version … I don’t know all the details and I don’t need to get into all the details here now, but they do some version of informative, elevated, smart pricing. So what we do is-
Steven Jack B.: It’s an algorithm.
Jill DeWit: Yeah, it’s an algorithm. Do you want to continue it?
Steven Jack B.: Yeah. So if you’ll notice if you look up your home address on Zillow, Trulia, Redfin, DataTree, it’s all different, but they’re all not crazy, crazy different. One’s not $500,000 and one’s $1.2-
Jill DeWit: Right.
Steven Jack B.: In very rare cases, that’s the situation.
Jill DeWit: Thank you.
Steven Jack B.: So they all have the different take on what’s in that algorithm. The ones that are my favorite lean heavily on recent sales or recent listings, not so much on the asset itself.
Jill DeWit: Right.
Steven Jack B.: And then they look at the lot size and square footage. So is one better than the other? I don’t know. But we don’t judge. We just line them all up next to each other and take the average, and so it’s a lot of work to look up all those properties. And we’re working on automating that so that you just hit a button and it goes out and brings all that data back into the spreadsheet in the correct format. But until then a human has to do it, and we choose our virtual assistant team in the Philippines.
Jill DeWit: Right, so we saw that on offers to owners. You can go in and you could put it … I don’t care if it’s 10 units or 10,000 units. We hit them with 20,000 and then they’ll work on it. Depending how many it is, it might take hours, it might take a day-
Steven Jack B.: It’s never taken longer than 48 hours and we do some 20,000 unit plus mailers-
Jill DeWit: Exactly-
Steven Jack B.: Often.
Jill DeWit: And they sit and look up all those numbers and put them in for you and send it right back. And then it’s great because then from there Jack still does his magic, if you will. And he uses that as a tool to price our offers.
Steven Jack B.: Exactly. And it’s very, very accurate. It’s way more accurate and more fun than the values that we come up with to buy land.
Jill DeWit: Right.
Steven Jack B.: That’s more of an art.
Jill DeWit: It’s true.
Steven Jack B.: This is more of a science.
Jill DeWit: It’s very true.
Steven Jack B.: Today’s topic, what makes a successful house wholesaler? This is the meat of the show.
Jill DeWit: You go first. What do you think?
Steven Jack B.: After I get my buy keyboard here thing up.
Jill DeWit: Okay. Is everything working okay there?
Steven Jack B.: Before we say … We talked about what a successful wholesaler is, let’s just define it. What is a house wholesaler? Oh go ahead, yeah, sure. I want to see if our answer’s the same here.
Jill DeWit: If you didn’t see that, for those of you that are not watching I raised my hand. And no, I wasn’t always that kid in high school that always had an answer for everything. Usually in high school by the way, I was in the back going, “Please don’t pick me. Don’t make eye contact.”
Steven Jack B.: Me too.
Jill DeWit: Even if I know the answer, just let somebody else go. It’s too much work. I’m over here doing my thing. I’m only here because I have to be here. So anyway-
Steven Jack B.: This morning Jill and I were having breakfast together and for whatever reason we were talking about when we were little kids and how our parents reacted to stuff, and how as parents we are. Jill and I just walk around and say, “Gosh, we’re the coolest parents there ever was.” All parents probably say that. Anyway I said, “What was it like when you were a kid?” And she said, “I broke a lot of glass.”
Jill DeWit: I said, “My dad was, “Really?”
Steven Jack B.: Did you really-
Jill DeWit: It’s so funny-
Steven Jack B.: Break a lot of glass?
Jill DeWit: Hold on a moment. Yeah, my dad was pretty chill. My dad’s like, “Just come on, can you get your act together here?” My mom was not that way, no. And so for some reason I seemed to drop glasses a lot and my mom would always have a fit. Whether it was emptying the dishwasher or just getting them from the table to the kitchen, I have no idea why. Actually, I do think I know why. You know what, this is Jill therapy.
Steven Jack B.: I want to hear this, too.
Jill DeWit: You know why? I have been and forever will be someone who wants to make less trips than more trips to and from the car-
Steven Jack B.: Me too-
Jill DeWit: To and from the kitchen, to and from anywhere. So what do I do? Oh, I load up man.
Steven Jack B.: Overload.
Jill DeWit: And so I’m sure that’s why. I was probably balancing 16 things because I thought I could do it in one trip and I was willing to risk it, to try. So what happens is I’m always dropping something, that’s why.
Steven Jack B.: When the kids were little I was trying to be a better parent, so I was read these books about parenting. And one of the things that stuck with me forever was this person who wrote this book, I don’t remember even what book it was, they said, “There’s a really big difference between telling your child that they made a mistake and telling them that they’re stupid.” It can be psychologically damaging forever.
Jill DeWit: Oh my gosh. What if somebody says, “You made a mistake, stupid?”
Steven Jack B.: You drop a glass, it’s not that Jill’s a … doesn’t make her a bad person.
Jill DeWit: No.
Steven Jack B.: She just made a mistake.
Jill DeWit: Exactly.
Steven Jack B.: And my parents did not know the difference between that.
Jill DeWit: Oh … oops, sorry. No, I got in trouble for the incident, not for being an idiot. It’s true. Nevermind, I was an idiot.
Steven Jack B.: My parents whole take on the thing was, “This is just another incident that confirms what we knew all along.”
Jill DeWit: “You’re not that bright.”
Steven Jack B.: “A long, long list of examples that you continue to add to. This is the most recent one.”
Jill DeWit: Nice. “Check, we knew that was going to happen.” Oh gosh. Okay, so back to what is a successful wholesaler?
Steven Jack B.: What is a wholesaler? A wholesaler is not what you see on HGTV. That is a rehabber. We don’t want any part of that. Our group is packed full of people who have long thrown their tools away. We want to buy an asset for 70% of what it’s worth-ish, mark it up 10 to $50,000, let’s say ballpark, and sell it to the person who’s going to clean it up or rehab it. We are wholesalers.
Jill DeWit: It’s the easiest thing. I love it. And imagine this, because you’re only dealing with other investors. You’re not dealing with the realtor who has the couple in the car, who wants to drive by and look at it and then bring the kids and maybe even have a picnic there to see if the view’s that good. You never know.
Steven Jack B.: Occasionally we hit an asset, we buy an asset that looks great, and we decide incorrectly to retail it-
Jill DeWit: Or to do a lipstick flip kind of thing.
Steven Jack B.: Yeah, we maybe change the carpet out or something and that’s it.
Jill DeWit: Right.
Steven Jack B.: And every single time we do that, we regret it.
Jill DeWit: We kick ourselves.
Steven Jack B.: It hasn’t happened much this year. We did one last year, but we made a hundred grand on it but-
Jill DeWit: We have to catch ourselves.
Steven Jack B.: It took four or five months to sell it, I think.
Jill DeWit: So much more work.
Steven Jack B.: Yeah.
Jill DeWit: A lot of talking-
Steven Jack B.: A lot of phone calls, a lot of real estate agent contact. So if you listen to this show at all you know how we feel about that.
Jill DeWit: Exactly. You know, the thing is too when you’re dealing with people who are just like you in the like mind, you bought it for cash, they’re coming in with cash. They love that you had the inspection, you hand it to them. All I need to do is walk it once and they’re done. I mean that’s really it. And that’s-
Steven Jack B.: And if you do it right you’re selling to the same person over and over again too, for the same five, eight, 10 people per market.
Jill DeWit: Exactly. So I think we’re describing not only what a wholesaler is, but what a successful wholesaler is.
Steven Jack B.: That’s a wholesaler. “So that’s great, Steve. Thanks for the definition.”
Jill DeWit: “I could’ve done this myself online.”
Steven Jack B.: If you’re actually still listening, here’s the topic. The successful wholesaler is data centric. The asset itself is merely the results of the manipulation of assessor data and how you’ve utilized it and looked at it and looked at the market.
Jill DeWit: Right.
Steven Jack B.: We are data people that happen to buy and sell real estate. We could be data people that happen to buy and sell stock.
Jill DeWit: It’s true.
Steven Jack B.: We know people that are like that, very successful people.
Jill DeWit: We could be doing this with cars-
Steven Jack B.: Extremely successful, yeah.
Jill DeWit: Boats-
Steven Jack B.: But it’s data first. So that’s in my mind what makes a successful wholesaler. But I’m the acquisition guy and I designed all this, put this whole thing together from scratch. I came up with it somehow, I don’t know why. Really because I didn’t want to talk on the phone. Jill, once the mail gets out, if you listened to yesterday’s show or whenever it aired, the most recent show before this, I’m done when the mail goes out. I’m done. What makes a successful wholesaler then is Jill. Every single person in our group who does very, very well is on the phone all day, all day. That’s what this business is. And so I don’t want … I think there … The ones who are great-
Jill DeWit: You mean getting inbound calls?
Steven Jack B.: Yeah.
Jill DeWit: Okay, yeah, yeah. I’m not outbound calls, it’s inbound calls.
Steven Jack B.: Inbound calls, responding to the mailer.
Jill DeWit: I want to make that really clear. Do you know what, that’s what’s interesting. I’m going to just say real quick, we talked about this the last show too, we’re just with a couple last weekend who thought they knew what we do and realized they have no idea what we do.
Steven Jack B.: Which we don’t talk about it anyway, we’re out having fun.
Jill DeWit: And it was so cute. Yeah, trust me, we don’t bring this up.
Steven Jack B.: They didn’t make a mistake-
Jill DeWit: No-
Steven Jack B.: Is what I’m saying.
Jill DeWit: Oh no, no, no. But what’s funny is people … and I can see where they get this, they think this is a cold calling environment. It’s not, there’s no outbound calls.
Steven Jack B.: The whole concept is-
Jill DeWit: It’s all inbound.
Steven Jack B.: We send out thousands and thousands of letters and then if you can envision these people opening their mail, all of them simultaneously sitting at their kitchen table … there’s only going to be a handful of them that have chosen themselves as a potential seller now. You just kind of rattled the cage. Then they’ve said, “Wow, this is perfect timing. I do want to sell this. I was just talking to my wife a couple of days ago. We need to sell this house.”
Jill DeWit: Right.
Steven Jack B.: “We need to move back to Boston. We need to,” fill in the blank.
Jill DeWit: Right.
Steven Jack B.: So they choose you, we don’t choose them.
Jill DeWit: Exactly.
Steven Jack B.: And so 20 or 30 people are going to identify themselves as a seller, per mailer, and maybe three, four or five of those people, the deals actually make sense all the way through, from a financial perspective and a location and all that stuff.
Jill DeWit: Right. Those numbers apply to a how many unit mailer that went out?
Steven Jack B.: For houses?
Jill DeWit: Yeah.
Steven Jack B.: Oh, those numbers … Let’s just back it back into it this way. I feel very safe in saying that between 1200 and 4,000 people … you want to answer this on the air?
Jill DeWit: You want me to answer this?
Steven Jack B.: Yeah.
Jill DeWit: All right, I’m going to answer real inbound. This is a seller calling me back. Who knows what this is going to be. Ready, here we go.
Jill DeWit: Hi, this is Jill.
Speaker 3: Okay, I called this morning. I got one of your … What are they called, purchase price things?
Jill DeWit: Yes.
Speaker 3: Okay, and I called you this morning because I want this name to be taken off your list.
Jill DeWit: Okay.
Speaker 3: Paul Romberg at 1435. Well, after the family did a little bit of research they want to make sure that you do that because it’s really worth three times that much. Because when you send things out as you know, it’s the seniors that you probably research sometimes.
Jill DeWit: I don’t-
Speaker 3: And they go ahead and agree.
Jill DeWit: No.
Speaker 3: How are these done?
Jill DeWit: You know what, I’ll tell you. Here in Southern California it’s tricky because it’s based a lot of it … There’s a lot of stuff that goes into it. The way things are valued here in California and what they’re really worth sometimes are very different, I totally understand that. And it’s a good thing because we all know that you don’t want to run down right now to the assessor and say, “Hey, I’m paying you too little in taxes. You all think my property is worth less.” We like it that way, so that’s part of the thing. So the bigger question is … And I know sometimes they’re off and I apologize, I did the best I can. But if that price doesn’t work and you do want to sell, what price would work and I’ll sure look at that.
Speaker 3: Oh yeah, they’ve already done that. They’re not selling.
Jill DeWit: Oh, okay. So it doesn’t matter what. I could have offered you three times what you really think it is and you don’t want them-
Speaker 3: He’s 92 and he’s not dead yet, so they’re not selling.
Jill DeWit: Okay, nobody wants to sell?
Speaker 3: We don’t want to get any more things like this because we don’t get them very often.
Jill DeWit: I understand-
Speaker 3: And it’s disturbing because if someone isn’t here to open the mail then it creates other problems.
Jill DeWit: Okay-
Speaker 3: And confusion.
Jill DeWit: No problem.
Speaker 3: And so that’s another thing. If you have a grandfather or a grandmother-
Jill DeWit: I do-
Speaker 3: Or something and they go, “Oh, this sounds good,” and they sign papers-
Jill DeWit: Oh no, we would … Oh no, I wouldn’t let it get to that point too, by the way. I would make sure and do my homework and make sure everybody’s on board, and exactly. Don’t even worry about that.
Speaker 3: I just want it clear that it’s taken off because I don’t think they’re going to sell it.
Jill DeWit: That’s a whole different thing-
Speaker 3: [inaudible 00:16:33].
Jill DeWit: Well you know what though, save it and who knows? Someday if something changes and you do want to sell it, let me know. And you can call back and say, “Hey Jill, I know I got this crazy offer from you two years ago, but we do want to sell and here’s the price. And you said you’d do it quick and fast. I might be interested.” So just let me know.
Speaker 3: [inaudible 00:16:59] the file.
Jill DeWit: Okay. Alrighty, thank-
Speaker 3: I wanted to know what was what because otherwise I’d be thinking about it and going, “What?”
Jill DeWit: Exactly.
Speaker 3: But thanks for explaining what you’re doing and-
Jill DeWit: No problem. I appreciate it-
Speaker 3: [inaudible 00:17:12] real estate, so-
Jill DeWit: Yes.
Speaker 3: Thanks very much, Jill.
Jill DeWit: Thank you.
Speaker 3: No problem.
Jill DeWit: Take care. Okay, bye bye.
Speaker 3: Bye.
Jill DeWit: You never know.
Steven Jack B.: That is how you take an inbound phone call.
Jill DeWit: Thank you.
Steven Jack B.: Jill, in a very firm and very respectful tone turned that call all the way around.
Jill DeWit: Thank you.
Steven Jack B.: She was mad. You could hear it in the beginning. At the end she was thanking Jill, and that is what it takes.
Jill DeWit: Thank you.
Steven Jack B.: I’m just going to go out on a limb here because I know I say stuff on these shows sometimes and you’re like, “God.”
Jill DeWit: Go ahead.
Steven Jack B.: If that is not in your skillset, what you just saw and heard, this business is going to be very hard for you.
Jill DeWit: Right. And you have to say that with these people. You’d be surprised how many phone calls that I have taken in the last 48 hours that I got a number out of them. They’re like, “Oh, okay, well let me tell you, if it was this much money I would be interested.” Okay, now we know. And so then I go back and we do our work and then sometimes it works-
Steven Jack B.: Exactly-
Jill DeWit: If it’s still a good number.
Steven Jack B.: But to finish my thought … Absolutely Jill-
Jill DeWit: Thank you-
Steven Jack B.: To finish my thought, I don’t have that talent that Jill has. I have it if I … It’s in here, I just don’t want to do it. That’s the truth. So I stick to the data piece and all that. Chances are you’re either like me or you’re like Jill. And if you find a partner that’s the opposite, you’re going to do just great.
Jill DeWit: Exactly.
Steven Jack B.: I’ve said this a million times on the air since 2015; when I teamed up with Jill, our revenue quadrupled-
Jill DeWit: Thanks-
Steven Jack B.: That week because she does what it takes on the phone with these buyers and sellers and gets them to do what she wants them to do. It’s classic Dale Carnegie stuff, and they don’t even have any idea that it’s happening. I live with her and she does it to me all the time.
Jill DeWit: I don’t even think it’s that. It’s not manipulation, it’s just figuring out if they really want to sell or not. What’s going on? It’s not manipulating anything, it’s getting to the bottom of it.
Steven Jack B.: Its helpful. That’s how I look at it.
Jill DeWit: And you know what, and if she doesn’t want to, she doesn’t want to sell. I’m not going to beat her up, who cares? But someday they might. She just told me the guy’s 92. Well you know what, he might not make it to a hundred. I’m not trying to be mean or anything but hey, that doesn’t mean I’m a bad person. My offer was off, who flipping cares?
Steven Jack B.: For the record, we don’t target-
Jill DeWit: I don’t target-
Steven Jack B.: There’s no age, or there’s no way to look at that in assessor data.
Jill DeWit: We don’t look at the obituaries. Could you imagine?
Steven Jack B.: We just send it-
Jill DeWit: We don’t do that. We don’t do back tax properties.
Steven Jack B.: Price per square foot analysis-
Jill DeWit: Exactly-
Steven Jack B.: That letter just happened to get to somebody who was older.
Jill DeWit: Right.
Steven Jack B.: That’s it. The next one-
Jill DeWit: The 20 year-old down-
Steven Jack B.: The next one got to a millennial-
Jill DeWit: The block got one too. Just bought his first thing. He got a letter too, so that’s exactly right. He probably just bought it six months ago, who knows? That property is zoned and priced the way we wanted.
Steven Jack B.: Exactly.
Jill DeWit: I think we covered it. That was good.
Steven Jack B.: We know your time is valuable. Thanks for spending some of it with us today. Join us next time for another interesting episode.
Jill DeWit: And we you answer your questions posted on our online community that you can find at houseacademy.com. It is free.
Steven Jack B.: You are not alone in your real estate ambition.
Jill DeWit: That was kind of fun.
Steven Jack B.: I think that was incredibly informative.
Jill DeWit: I hope so.
Steven Jack B.: I was hoping when it rang that it would be a deal.
Jill DeWit: I know.
Steven Jack B.: Because that’d be cool.
Jill DeWit: That’d be good. Well I’ll keep doing this on these shows now and then. When the call comes in I’ll just answer it. I think it helps everybody.
Steven Jack B.: I think it’s great.
Jill DeWit: You got to get over it, and a lot of people are afraid of those calls. You’ve got to get over the hurdle and it’s okay. Well, you know, I had a great call today earlier too. I had one that turned out that she didn’t want to sell. She’s a buyer, I could tell because she’s already down the process of doing their own … We hit another investor who’s already redoing the property. She’s thinking she’s going to sell to me now and then when it’s done. That’s not what I want. Slash however, now I can cue up deals to her. She’s a buyer, it’s really good. The House Academy Daily Show remains commercial-free for you, our loyal listener. Wherever you are watching, wherever you are listening, please subscribe and rate us there.
Both: We are Jill and Jack.
Jill DeWit: Inspiration-
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