The reviews are back and my emails are lit. Every Friday morning. My subscribers are receiving five things Friday, where they get access to five cool tips, strategies, and ideas that can help grow their money and their real estate business. If you like to have your inbox lit, just go to CandleLockett.com/newsletter. Episode 10 real estate is lit because today we are lighting up wholesaling.
As always, the goal on this show is to shine a light on people's strategies , systems and ideas that will help you meet your real estate investing goals. Are you ready to become a real estate investor, but you don't have enough money saved? Become a wholesaler. It's an opportunity to be a part of an investing transaction. You can make with a profit without spending any money out of your pocket. My guest today, Kay Jones is an experienced wholesaler.
Who's going to walk us through the life of being a wholesaler. She even tells us a simple script to use. When talking with the owner of a property you want to possibly wholesale. And at the end of the show, she leaves a great resource for the listeners. Let's go,
Hey K ay. Welcome to lighting up real estate. Hi Kendall. How are you today? I am wonderful. I t's s unny outside. How are you doing? I'm good. No complaints.
Well we have been talking for weeks and probably months about getting together and talking about wholesaling. And so we have , uh, known each other through a real estate deal. And when you told me you were a wholesaler, I was immediately intrigued. We exchanged phone numbers and I just love the role of a wholesaler, which is why I wanted you on the show today. So let's talk about wholesaling. Okay . What exactly is wholesaling?
Well, wholesaling is taking possession of a property that you never buy. Essentially, it's basically, you're putting paperwork in place to take possession of a seller's home and you're pairing it up with the buyer who's looking for a property, you know, within your price or within that area. So you're mirroring up what the buyer needs, what you're never really buying the house.
The only thing that you're doing is taking possession of the house through a piece of paper, and you can do it one or two ways. You can do it within assignment, or you could do it with a contract and do a double closing. One, you just assign the property to a buyer from the seller, with all of your s ame stipulations that you have in place. Meaning that if you said you were g oing t o close on May 1st, then the new buyer has to close on May 1st.
So everything that you have w ritten up with the seller that stays the same a nd it passes on to the buyer, if that made any sense.
It does make sense. It does. So how would that work with earnest money if you're putting it down for, you know, then I guess would be the exchange of showing, how serious you are about buying the property. Would you be paying the earnest money or would that new buyer that you're going to, I guess, find, will be paying that earnest money down?
Typically I try to never come out of my pocket with earnest money, but there have been situations where I had to put down earnest money . Cause it was a really, really good deal. And I didn't have my buyer lined up, you know, just yet. Or the seller wasn't willing to give me many days of due diligence, but, you know, just because of how good I knew the property was and how confident I was.
So I guess basically bought out to confidence how confident I was that I'll be able to sell the house, you know, before I had a buyer, which I don't recommend that for anyone starting out in wholesaling, I actually put down earnest money out of my own pocket.
Oh, wow. Okay. So how did you even get started in wholesaling?
Well , um, believe it or not, my, what fueled my interests was a guy by the name of Carlton Sheets. I was still in high school , um , at the time. And he would come on during the late night infomercials, sophomore, how he could teach people to do real estate with no money down. And that's what really peeked my interest in it. And it was until I got back here to Atlanta when I really just stretched out and started wholesaling.
Got it. So tell me about your first deal. Like, did you mean to be a wholesaler? Did you just happen to just fall into it? Cause I know you're also a real estate investor as well.
That's true. I, I kinda just, I always wanted to do wholesale and get started in it, but I kind of fell into it. Uh, believe it or not. I was looking at a property that was not , I was going to one property and I think, yep . I was on my way to the second property and the property was already gone because when I pulled up, it was other people there at the same time, there was two gentlemen.
So they were, you know, looking at the house, just going over the schematics of what they were going to do. So essentially I just got there late, but the guy who was there showing them the property, he had access to a lot of inventory. And you know, I had been reading my books, say, you know, Hey, get your buyers list.
So I had been taking down the numbers on the bandit signs that I've been seeing calling people and you know, so I had built my buyer's list, but I didn't have any inventory at the time. So when I linked up with him, of course he had inventory. So I was telling people that sometimes you don't have to be, direct to seller this, you know how most people want you to be most of the time, but you don't have to.
You just want to be able to get inventory somehow, you know, starting out and, you know, as you grow, as you progressed , you know, you will make those connections where you can be direct to seller, but I did not start out being direct to seller.
So do you need a certification to be a wholesaler?
No. No. After skills , this skill , um, you know, being coachable, you have to be coachable , but there is no certification out there that one would need per se. It's just understanding. Okay. You know, what's a good deal. What, isn't a good deal. And just being able to network, I mean, just a little bit, you don't have to, you don't have to just go out there and be this super great networker, just network just a little bit, because like you just mentioned earlier, like you need the buyers list.
So let's take us through, what is the day in the life of a wholesaler? Like what does that look like?
Well, it depends on how aggressive the wholesaler, you know, he, or she may be because I know some hosts that like some of the most aggressive wholesalers, you know, they get up in the morning, they may have their follow- up phone calls, their emails, their social media blasts that they're sending out. And then some actually still go out and drive for dollars. And that's basically driving for dollars: you're going into certain zip codes, certain neighborhoods.
And you're looking at, you know, the homes that are abandoned. You're taking out those addresses and you're compiling a list to come back and skip, trace those addresses to try to find any one who may be associated with the owner. But while you're out there, you're also talking to people, you know, you're still putting out your bandit signs.
So you know what are bandit signs?
Absolutely. If you've ever seen , um, like when the elections are coming up a vote for this mayor, a vote for this governor, you know, they are advertising themselves. They want your vote. So abandoned sign is nothing more than we buy houses. We sell houses. We want to buy your house. Quick, closing, closing, 10 to 14 days, all cash sale. It's a wholesaler's way of getting inventory and putting themselves out there and letting the neighborhood know that, Hey, I buy houses.
Now do a wholesale , really buy a house? No. A wholesaler. W e g et t hat house sold. But the wholesaler isn't buying a house, but we want to put a contract on it so that we c an sell it for you.
Right. Because pretty much what you are is like the middle person you are, you're the middle person. So you're like the plug from the seller to the buyer.
Yes. The wholesaler is the plug. That's true.
Because I mean, when I met you and you'd explain wholesaling to me, I still didn't quite get it. And then when I started rehabbing a property, I wanted to find my next property and I did not have time to go find the next property. I was like, this is where Kay is involved. Now I see the purpose of K because you are the one looking for the next property for us rehabbers.
Absolutely. And it cuts down a lot of your time. I've at times, you know, I go out, I do videos for, you know, buyers who may be out of town. They can't get to a property in time because time is everything, you know, you don't have a week essentially because your schedule is busy to get out here and see this property, you know?
So I'll go get pictures, you know, do FaceTime calls any and everything I can to assist that buyer, with making that decision as soon as possible, because they don't want, you know, you don't want to lose the deal.
So do you have a daily conversion of how many signs you need to put out each day or how many calls you need to make or conversations you need to have so that you can, you will know how much you can get paid ?
A conversion, I will say it's good to have in place. You know? Um , just depending on how aggressive you want to be at the business or how much money you want to make, but if it's good for accountability and helping you, you know, achieve the goals that you want to achieve. But as far as bandit signs, you know, I'll be honest with you. I got away from them very early on. I don't recommend getting away from them, you know, for someone to starting out at a wholesaler .
Cause they're great, but I just got away from them. But they're, they're great tools. So I know, I think I did in the beginning maybe about 60 bandit signs.. But I never did another bandit sign after that. And my properties are sold. I'll put then the signs and you know, in those yards, but I never went out and did ice call it "area canvassing" . I got away from it. It's a great tool though. But one of the gentlemen that I know he closes about anywhere from six to eight wholesale deals a month.
And I know, I think he would put out at least 10 bandit signs a day, you know, in the beginning. Oh wow. In the beginning. I mean, he was really, really aggressive at it and it paid off.
So how do you market?
I'm a dinosaur Candle, just, you know, I meet people i n the street. I talk, I a sked for referrals directly and indirectly just depending on the conversation, but I a m a people's in s pace. You know, I do call the numbers that I see on the bandit signs because most of the time it's wholesalers, but every now and again, you know, it may actually be a company. I t alked to a gents, you know, agents know people who have homes.
So I just, I talk, I talk, I don't have a large social media presence, which that is something, you know, that I know would help propel my business. But I just love to talk to people. I l ove to get out there and talk.
I mean, I think building the relationships is probably the most effective way to, to be successful in this business.
It is. The other forms of marketing. They're so less personal to me.
Right, right, right. So do you have a team? Are you working by yourself?
Well I have my sister , um , you know, she assists me a lot, but it's mainly , um , mainly me. It's mainly me.
Okay. So walk us through, let's say we see this house and we're wholesalers and we see a property that we know has been , uh , it's vacant, it's abandoned is no signs in the yard. It's the first thing we need to do is probably start looking for a tax records to find out who owns the property.
Yes. Correct.
Okay. Okay. And then we reach out, we find out that let's say it's a , a distant cousin that inherit this property and you find them and they say, Hey, we don't want it anymore. Get rid of it. Which is typically how is probably, is that usually how you get your clients is people that just don't want the properties anymore? Or is it financial situations?
A little bit of both, but those are the best ones. The ones where the people just don't want the property.
Yeah. They have no emotional attachment to it whatsoever. So the distant relative says, Hey, we don't want it. Kay. Get it off our hands. So immediately. Is this when you go to your buyers list or do you put a sign in the yard? What do you do next? Or do you do a contract with them?
You do the contract . You have to lock it down. Control of the property first. Because a lot of times, sometimes when people realize that they have something, if one person has called and said , I want to buy your house, let's say, you know, I told the cousin, okay, I want to buy your house for 40,000. Most of the time people would think, well, she's willing to pay me 40,000 for, I probably can get 55,000 of course.
And so sometimes just when they get curious, like that, they start calling around and then they may cause most people, they know real estate agents, you know, they know realtors and then they call you candle and you say, sure, I can sell your home for you. And then you run your numbers and you tell them, yes, you know, I know I can sell this house for you for 50,000. Who are they going to go with? Right.
Because I , if I'd never locked their property down, they're going to do a contract with you. And then you're going to , you know, post her house and you're going to make the sale.
So do you keep contracts in your car?
You better know what I do. I do admin traffic lights, writing contracts, you know, scanning them in on my phone and emailing them at the net Shepard light or I will pull over. Absolutely. Yes. Get the number on the side. If I see a house, I , I get the number, you know, I'll call the person, the seller is selling it, find out a little bit more about the house hadn't even went into the house shit and you know, I'll get their email address . Okay. Are you going to have an offer coming ? Wow. Wow.
Okay. So they've signed the contract. So then the next thing you do is this is when you reach out to your buyers.
Oh yes. I blasted them because now you want to find a buyer as soon as possible. And you will have certain buyers who may buy from you all the time . Who wants to be exclusive because they, you know, they don't want to feel like they they're competing or they've seen the house a thousand times that , you know, another 12 markups on it, meaning that if I'm selling a house for 50,000 to my buyer, if it's circulated so much, by the time it gets to certain buyers, the house may be at $80,000.
Okay. So let's break that down. Cause I know what you're saying, but if somebody is new to this whole wholesaling idea and this career let's break down what you just said. Okay. So exclusive, that means that you are not sending that new contract that you have with that house to anybody else. You're just giving it to that one particular investor. Correct?
That's correct. And I give them 24 hours to make a decision.
Okay. And then it goes out to everybody else. Do we have to pay extra for this exclusive , uh , right. That we have? Or how do we get the role to be exclusive? Cause I'm like, okay, if they're not in Atlanta and there's somewhere else, what strategy or what could you do with that wholesale buyer to be that exclusive investor with them?
No, I don't, I don't charge them anything. It should to be an exclusive vibe , but it's one of my buyers who I know closes all the time, you know, who is , couldn't be a cash buyer and they may even be a buyer that, you know, goes through hard money lending, but they're consistent with their closing. You know, if this is a house that they they're ready to pull the trigger on and it doesn't take them all day to make up their mind. So if they're not local, I'll go do the FaceTime calls.
I do the videos, I do the pictures, I run the numbers mainly that, you know, I'll pull comparable home sales, you know, on the front end showing what the distress homes have sold for. And as well as the back end to show what the retail fixed up homes , you know , are selling for so that they can see their profit line.
Okay. Okay . So can you explain how it is when you have secured that property you've made the assignment and it might start at 40,000, but by the time we get to closing is at $80,000 that this property is being sold.
Oh, absolutely. Simply put, we call it a Daisy chain, meaning that it's a lot of wholesalers in the middle, between the time it went from secure and at 40,000, let's say if I secured it at 40,000 with the seller, I'm the owner. I blasted it out to all of my buyers. And of course, you know, some of my buyers are wholesalers who have other buyers or as wholesalers who know other wholesalers, but once you do that, bless the house goals .
It just goes, it will go for one wholesale to another wholesaler, to another wholesaler. And meanwhile, everyone is adding 5,000 to the top. Some are adding 10,000 to the top. So it's not surprising when you get to closing it's another 40,000 has been added and just wholesaling fees because it just went from one wholesaler to another wholesaler, to another wholesaler. And finally that last wholesaler actually had an end buyer.
Wow. And so that's how it finally gets to closing. Yes. So does, everybody thinks that the same terms that you have set with this seller, cause you're saying in that assignment, like , Hey, I can close this house by May 31st. So that every deal that comes, I guess, from one wholesaler to that investor or that next wholesaler, they'll all sick into those same terms.
Absolutely. Wow. Guess they're bound to the same stipulations that I had in the initial contract.
Okay. So what happens, let's say all these people, all right , this house is so popular as in a hot area and that price is just too good to be true. So you have all these people involved and then the seller was like, Hey, forget it. I'm out. What, what do you do then?
It does. It does. It will happen. You know, at times you can do what they call like a lis pending on the house. Basically if the seller vacuum that's just because they want more money. Um, but you're able to close the house, basically that list pending will prevent that seller.
Let's say if they try to go say, cause I see it's a 40 K markup and they're saying to themselves, well, they could have just sold the house, you know, for at least 30,000 more and make 70,000, you're at least paying that will prevent them from selling that house without them coming to some sort of agreement with you, a monetary amount in order for them to sell that house because their title won't be clear.
Right. So do you tell, I mean, I'm pretty sure in that contract, I mean it's pretty cut and dry black and white, but is there ever a conversation or this might be just a matter of a wholesaler's own ethics that you might go by because everybody is different, but do you have the conversation with that particular seller at the time of that contract or assignment that this price is probably going to be marked up, it will sell for more than what you're going to get money at closing table with.
Does that make sense?
It does. Now . I've never told anyone that it's a possibility that once we get to closing, there may be like a 30 K markup. I've never, I don't even know how I could say that. And you know, that go over smoothly. (Exactly, exactly.) But you know, as a wholesaler, you will know when that property maybe comes across your lap and it's so low based on what the other distress homes are selling for.
You will know Dan that, Hey, I'm going to do a double closing to save this deal because let's say if the wholesaler knows, they're going to Mark it up to the, you know, 18th degree days just have to do a double closing and paid a double closing fee to just try to Savage that sale and not lose it. Cause no one wants to see someone else make 40,000 off their house disrespectful.
Okay. So when you say a double closing, explain what a double closing is.
A double closing is basically A to B contract and a B to C. So let's say if I'm the greedy wholesaler and I have this house under contract with the seller, we should be the A to B contract for 40,000. And on my contract with the seller, I'm signing as the buyer, I'm buying the house , the 40,000, then I turned around and I know you are also an investor. Who's looking for a house in this area and I do my B to C contract with you. But now on this new contract, I am the seller and you're the buyer.
Got it, got it. Okay. So that makes perfect sense. So what happens, let's say if I decide I don't want it anymore, the numbers just aren't working out from my rehab. Can I get out of this deal or have I lost my earnest money? What happens?
No. It depends on how the contract is wrote up. Uh , cause if you have due diligence timeframe, as long as you terminate before close the business of the last day of your due diligence period, then you're fine. You'll get your earnest money back.
Okay. Okay. But as long as I'm staying within those terms of the contract, I can get the earnest money back.
Yes. Oh , it happens a lot. It happens really because typically on my contracts, what's the , unless I'm just really, really trying to be aggressive or I'm competing to get a contract on the house. I put in my stipulations that, you know, earnest money will be deposited 24 hours after expiration of due diligence period. So I'm not putting my money up anyway. Right.
And you know, once I terminate prior to the due diligence period, expiring, I've never turned out my pocket and put a furnace money anyway. Okay. So you have to worry about fighting for his money back. Oh, absolutely.
Yeah. Cause this seems so systematic to go from that conversation to getting that contract the assignment and then putting it out to the buyer's list and then getting another contract. That's a lot of paperwork that you have to put in place. So how many, how many can you do at one time?
It's not, no, not at all because my contracts are just only two page contracts. The assignment is only one page. And you know what I'm thinking of? Like Sally residential, we have seven forms. You've got to complete. So I'm just like how in the world can I keep up with all of that in my car? Because I'm listening and I'm picturing me doing, like, there was no way, no way, no way at all. You could not do that with the car for no, no, no , absolutely not.
So yeah. Okay. So now it's making sense now. Okay. So let's say that we are pretty much at the closing table. Had you never had any issues with title like that person? What are you supposed to be selling the house? So they had no right. Or that cousin that we were talking about in the beginning, didn't have the rights to sell it. Are you already bending that contract over? Cause like , what we have to do is we have to send it to the lender and also send it to the closing attorney.
Are you sending it to the closing attorney as well while you're under contract?
Yes. I sent it to the closing attorney. I typically do not send it to the lender, the person purchasing the home. We'll send it to their lender, but I do send it to the closing attorney along with my operating agreement, you know, in any other seller or buyer information sheet that they need from me. But I do make sure that the closing attorney gets it as soon as possible. So they can go ahead and start running title.
So how long does that take? Like from the time that you get the assignment? If I want to be a wholesaler, I get the assignment with that particular seller. I put it out to the buyer and the buyer a group. Well the investor (buyer) wants it. How soon can we get to the closing table?
My best closing time yet I s ent the contract on a 10 stay and we were at closing on Friday. No way I kid you not. He was a cash buyer, one of my good cash buyers right here. T hat's an exclusive buyer right there. You better know it as exactly we were at closing on Friday Candle. T hey did it, I kid you not, I didn't think they could pull it off, but they did.
Wow. So how do you choose your closing attorney? If someone is out there and they want to get into wholesaling, do you go and search for closing attorneys that specialize in wholesale deals or quick closings or investment properties? Like how did you choose yours?
Actually, I started out with closing attorneys that my mentor u sed and I formed my own relationship with them from there. But I do, I seek out closing attorneys who can close quick or if there's an issue of title, they can normally get those resolved quickly.
Okay. So how do you go from one deal to the next? Because in the end, the field, like this schedule that you have is still amazing me.
So you can have multiple, what is the most that you've had under contract at one time to manage? At one point I was sending them out like it was unreal. I mean , I was sending out, but under contract most at one time, somewhere between seven and nine.
Oh my gosh. And you just keep that consistently going to , if you would say your conversion rate is like, I have to make sure I have at least five under contract at all times .
That's what I shoot for. But now, you know , down here on planet earth, it doesn't always work out that way, but that's my goal. That's, you know, that's the goal shoot for. I've never been that high again. But at that time, you know, the market was just foaming coming and I was just linking up and networking and buyers were just coming out of the woodwork and they were buying multiple properties. And that was the good thing.
You know, I had several buyers that was buying multiple properties from me.
So I've heard people say like the best way to get into real estate investing is to start wholesaling. And since you are a wholesaler, but you're also a real estate investor, you're a landlord and a flipper. Do you agree with that statement?
To me, I think most people wholesaling is the best way to get in with that coming out of your pocket with any money. And it can be, you know, more of the simpler way to get into it. But I started actually flipping, living , have the larger profits, don't get me wrong wholesaling. They make great profits.
You know, if you Mark someone's property up exponentially as well, but wholesaling is the one with kind of almost like the least amount of headache at one time, because you know, if you don't sell a property, you terminate, you go on to the next. But when you're flipping a house, you have to look over and make sure that the contractors are doing what they need to do.
You know, making sure that your contract is on deadline, you know, to what a meeting realize you have to take into account holding costs. You know, the market changed , you know, well , my house we'd done in the cold season? Will my house be done when the market is hot, do I have to wait a couple of months before I listed? Because I don't want to be on the market too many days. So it's a lot that goes into flipping. But to me, flipping is , is so rewarding. I love flipping.
I do understand that you really love flipping more than you love wholesaling, or you just have mastered the art of wholesaling because you know it like the back of your hand, right?
I love flipping s lips. L iving is my passion. That's where he said, you know, I i n interior designing of it, the schematics that that's what I love.
But I think with, with you, I think you use wholesaling as means of providing that income for you while you're flipping.
Yes, I do it in the interim. Well, I always do it. Don't get me wrong. You know, I never stopped , but yes, it's a good thing for a flipper to do in the interim.
Yeah. Yeah. So let's say you have convinced me. Kay. I am going to start flipping. I mean, absolutely. I'm going to start wholesale it . I am going to start wholesaling. So the first thing I need to do is what?
You need to find inventory and you need to get some buyers.
Okay. So getting inventory is pretty much driving around or baby doing the research first to find out those hot areas that you were talking about?
Correct? You want to find the hot areas and then you want to start calling the numbers on the bandit signs because either those people are going to be buyers or they're wholesalers with buyers or their wholesalers with inventory either way, it's good to network with them because you can get something from them, whether it's inventory and you know, you may only be able to put a thousand dollars on top. I went to closing and have only made 500.
You know, that was like the smallest amount I've ever made. But I tell people, going to closing and making something is better than not going to closing at all. Cause I just come walk the property up anymore. But that property actually came from another wholesaler.
I , like I said, I'm going to be a wholesale like you now, how do I know how much to put on top of that deal so that I can get paid as a rule of thumb? Or do you have a standard rule or do you go by percentage of how much you think it should go for?
Well, no, you want to take into account the formula, the maximum allowable offer formula where the wholesalers maximum allowable offer formula to make sure that you're in by your, the numbers still make sense for your and buyer. So you gotta always keep in the back of your mind. I can not Mark this property up so high so that I can't get rid of it.
So even if I only have to put a thousand on top of it, that's great because that's a thousand more than you had before you went to closing and you didn't come out of your pocket with anything, right . You're just by yourself together. So you just have to, in a sense, protect your and buyer, make sure it is deal still makes sense for your and buyer because what , that's your Ambar . You don't have a deal.
Yeah. I like that's great advice because it also builds trust with you as well, because I know I've worked with investors before and they will say, how do you know this wholesaler? How do you know how much they're putting on top of this thing? And it's kinda like they don't trust that wholesale. We've been talking about the relationships that are established. So they know that not looking out to make all the money you're looking for the best interest in mind for your client .
Then you get continuous deals with them.
Exactly. And they come back, they send referrals to you. They want to buy multiple homes from you . You know , it's just, it turns into a great working relationship. Yeah . So what skills do I need to be basically just able to read from , right? It's very simple. It's not difficult, but if you can dedicate yourself to driving, looking at bandit size , taking pictures of them and commit yourself to calling those numbers.
When you get back or going on Craigslist, going on social media, looking for, you know, the investors and calling those people, you know , but sometimes picking up the phone, making that first phone call can be frightening. What do I say? Um , you know, I don't have much spirits , you know, you don't want to stumble. You don't want to sound any spirits and you don't want to sound crazy, but take away all of that fear and make those phone calls, call those people with network . Okay .
So that phone call, like if you were calling me, what would you say to me? I'm calling you from what standpoint? What point of view,
Let's say you were calling because I have a property that my, my uncle left me and it's just sitting there and you want it.
Oh, okay. All right . (ring).
Hi.
Hello. My name is Kay. How are you today?
I'm well, how are you?
I 'm well, hopefully I c aught you at a good time. Is this a good time to speak?
Sure. I can't go anywhere or do anything. So you've got me what's going on?
Awesome. Well, that was in the neighborhood and um, I saw your property and I spoke to a neighbor and they gave me your number. I'm looking to , uh , purchase in this area and I really would love to purchase your home.
Okay. Okay. I'm interested in selling it, so you've called it a good time. Okay. Awesome. Well , if you don't mind, can you tell me a little bit about the property? You know, just roundabout, how old it is and you know, if any repairs are needed , Um , it needs a lot of repairs. I know it needs a new roof. Uh, I've had utilities turned off since I inherited the property. So that's been about maybe two years. I haven't been inside of it. I'm pretty sure it's mold.
Uh, it was built back in maybe 19, maybe 1980, 1981. And that's all I could really tell you. It's a three bedroom, two bath, and everything needs to be torn out of that house. I don't even want to touch it or be bothered with it. I thought about it, but it's just too much work, so I don't even know what to do with it.
Okay. Okay. Well, I think we'll be able to help you out with that. And are you the only owner? Yes. Okay. All right . Well, if I'm able to close that house in about 14 days, which was set and offer a $50,000,
I was thinking it'd be more about maybe 60. I've talked to a couple of realtors and they said I could walk away with maybe 60,000, $60,000.
Well, just with all of the repairs or , you know, in everything that you needed. I was accounting for that, where it's been sitting for so long, the wiring needs to be redone. The roof, everything has to be good at. That's why I came up with 50, but , uh, you know what I'm sure. Can we meet in the middle at 58? That sounds better. If you can close within 14 days. Yes, I can definitely get it close to 14 days. And how much will I be getting at closing? You'll be getting 58,000.
At closing, unless, you know, there's some lanes on the property, you know, if someone has a lien against it, then that will come from that amount. But if you don't have any leins to your knowledge,
No, I own it free and clear. It's no lanes on it. I paid the taxes. I just want to make sure that I'm not paying any, I guess, additional fees to you. So how would you get paid?
No , no, no, no. I will pay all of the closing costs. I don't get paid at closing. I'm actually paying you to get your keys so that I can buy your house from you.
Okay. Okay. If you would send over the , uh , a contract, I'll look it over with my husband and we can go from there. But I would say right now we can do a verbal acceptance. Okay.
Well , that's awesome. And would you prefer for me to email it or would you like to meet face to face?
Let's meet face to face? I would like that, that way we can just talk about it and go over the contract together in case I have any questions.
Exactly. And I'm a people's person. I really love doing business in person. And I love to put a name with a face.
I mean, we can't be that close five feet apart, but I could definitely meet you in person. Exactly , exactly. Right, right. Okay. Okay . So that's typically how it would work. So do you have a lot of pushback with no, I'm not selling it at that price or hanging up in your face and how many times you keep, I guess being persistent until you just say , okay, they're just not ready to sell it this time. No, I haven't got hung up on shit , shit, but I have had
The outrageous, no, my house is worth 130,000. Oh yeah . Worth 130,000 in my mind. You know? So , uh, but those, if you , I just continue to follow up with them and um, I don't know. I might call back say, Hey, I saw a house just sold on your street. There's some of that 83,000. And you know, they live heaven forbid if another one dropped in the sixties, Hey, I saw another house sold on your street.
I , you know , I noticed that the price is dropping and before it drops too low, I was just trying to see if you're still interested in selling the house because the price points are really dropping right now. And I know you wanted 120,000, but right now it's still in the sixties . And I definitely be willing to buy it from you right now for 75. Wow. To say I'm not selling my house. Yes ma'am.
Wow. And I guess I did mention that in our conversation, but I just wanna make it clear to anybody listening that you are buying these properties as-is. So you're not having to go in and fix up anything and neither is the seller having to do anything. It's just how it is at that time is how you're selling it. That is nice. That's nice.
Because you know, when, like, even when we were doing the mock phone call, when I said 50,000, I already knew in my mind I would have paid 75,000 for it. But whatever price people are always gonna say that was going to go up another 15,000. See if they can get more money, which was still under the price point that I needed to be under anyway. So when it gives rooms for negotiation and it makes the seller feels like they're getting more.
Yeah. Yeah. Especially when it's like, in a sense you're actually solving a problem because I don't want to be bothered with that house. It's an eyesore, I'm tired of paying taxes. I'm tired of getting the lawn cut. I'm tired of the neighbors complaining to me about this thinking house. And if I could just inherit, you know, that amount of money that was sale . Okay. That's fine. So I think sometimes you really don't have any pushback about how much everyone else has made after the deal is done.
Absolutely. And sometimes you have to spell out those things for people, you know, this would be a leaving, like you just said, relieving you of those taxes, keeping this grass cut. You reiterate those things, you know, and people start thinking you're right. I love to pay those tests. Don't have to get the claims . Right. I don't have to worry about the pesky neighbor. Right .
Putting yourself in a position as a problem solver when you're talking to these fellows,
Correct. If you start to get some type of pushback and sometimes people are just ready to jump at all 50,000. Okay. Well, if you can give me, you can have the keys tomorrow if possible.
Yeah. I'm pretty sure you do get that. I'm sure. So, Kay . How has COVID19 affected your wholesaling business?
Oh goodness. This shut it down. Point blank period. Shelter in place, shelter, quarantine on everything. Even the house that I had renovated, I lost three buyers. Three buyers. Wow. Yes. Have you got it back under contract yet? Yes, absolutely. That was the good part. And uh , I even got another backup contract offered to the contract that's currently in place, but thankfully, you know, once I lost one buyer, someone else will come out and visit it the next day.
Maybe a day or two later, it was back on the contract. So that was the good news. But getting them to that finish line, because one lender, they changed their lending criteria. Their credit score increase. Of course my buyer no longer qualified another one. She lost her job. So of course, you know, the lender don't see the security lost that contract. And it was two , two actually where the lender changed their lending criteria and lost two that way.
Yeah . I can imagine. Cause even like, when you saying the wholesaling has completely shut down, it's like a trickle effect. Cause right now I have an investor saying, Candle, I need more properties. I'm ready to get another property. I'm like , but uh , wholesale , like I said , uh , really working right now. So, so it was kind of holding him back from him, meeting the goals that he wants with real estate investing. Cause he can't find anything available.
Cause he's trying to sell one to buy another one and he can't do it right now and it's driving him crazy. Wow. It's like , we've got to yeah . We're like , we just gotta be patient so, well I have some inventory now what we're going to talk, we're going to talk, wait a minute. We're going to talk. W e w ill definitely be talking because I just realized like it's hard because he's like, Hey, I need some more properties, cities t hat w ere properties.
A nd I'm like, o kay, u h, you do understand we're all l ocked down. But I understand how everybody a t at most is trying to keep business as usual and k eep some things normal. Even though we're having to adjust to this new n ormal.
Exactly. Exactly. And a lot of times, you know, right now you can get some of your greatest discounts, you know , some buy , if a person can afford to buy, you know, safely.
I agree. I agree because I mean, if there , I mean it's there. I definitely agree with that. Okay Kay, so we are going to get financially lit with you. Awesome. I'm going to put you in the hot seat cause you know about money. You've taught me some things about money. So I can't wait to ask you these questions. So this is financial literacy, one Oh one with our teacher, Kay. So I'm going to ask you some questions and I just want you to answer.
And if you want to, you can answer them quick or you can elaborate on them, but you are schooling us on money.
Okay. Okay. So what financial book changed the game for you actually like Robert Kiyosaki, Rich Dad, Poor Dad.
What would be your second? Because everybody that I've asked, they always say that book and we all know why. Cause you've all read it, but what would be your second book?
The secret, the secret, you know, it's not just spending that mathematically equations in it, but The Secret.
Yeah. Yep . I can agree to that. I still watch it on Netflix. Oh nice . Yeah. I used to keep it in my car because my car had a DVD player and I had it on DVD and I would just let it just play it out and just listen to it all the time. It makes a difference. Yeah. I could definitely. I've never thought about The Secret. Yeah, I like that. Okay. So what are your five rules for wholesaling?
I would say , um , be consistent. You have to be committed, be honest. That's one of the most important was be honest with people. Be honest with yourself and do honest business, but be committed, be committed to seeing it through. Um, and you have to be persistent and have confidence because you're going to get no's. You're going to get a lot of nos , but knowledges means numerous opportunities. This think of no means numerous opportunities for you to go out here and find a house to sell .
And it just needs a person isn't ready to say yes yet. That's okay.
Right . Cause I think they told us in real estate sales keep hearing no until you get to your yes. (Yes, exactly)... and the more n os you hear get more excited. C ause eventually the y es is going to come. Exactly. What was the best financial advice that you were told that you didn't learn in school also as it pertains to r eal e state,
Say you never want to invest from a flipping perspective. You never want to invest in more real estate than you can manage, meaning that you don't want to over leverage yourself. Don't buy too many houses at one time.
So you know, just know what you have in your bank account in relations to what is going to cause you to finish your projects because you don't want to get to a point where you can only finish one project, but you're paying out another $10,000 a month in holding costs and you're not even touching the other homes. Wow. You know that there's like about, you're about to go down 40 miles of bad road.
That's a great point. That's a great point because obviously many investors overextend themselves. Exactly. What financial lesson have you learned with COVID-19?
Oh my gosh. Patience , patience . But I would say just financial lesson . You have to be prepared for the storm. You have to have money set aside because you never know what's going to happen and when it's going to happen. But one thing for sure, you know, your bills will continue. And a lot of, you know, lenders and creditors are doing forbearance, but you still have to be able to live. You have to be able to eat. You have to be able to get basic essentials. Oh yeah .
Oh yeah. And it's the things that we've taken for granted and now we're back to the basics. Exactly. Exactly. Okay. So Kay . What is your ultimate goal ? Ultimate goal
Is to change my family's legacy. I want to leave enough properties behind to where, you know, my grandkids and my great grandkids will understand the things that I did. And I put in place as it pertains to real estate and our family dynamics for them. I really want to change my family dynamics in that aspect because I don't have a house that was left to me, you know, are , as of this point, don't get me wrong. I still have both of my parents. And I thank God for that.
But you know , I want my grandkids to be able to say, we have a summer home in Hawaii, you know, I would have loved to have been able to say it, but unfortunately, you know, this just wasn't in my time, but I want them to be able to say, okay, you know, we have a rental in California, we have another rental in the Poconos changing family dynamics. Yeah.
And that's a different level right there. And I mean, and you're making it happen. That's the thing.
Yes. Yes. One house at a time. And that's all it is. It's one house at a time.
Yeah. I love it. I love that. That's really thinking big too. I love that. Thank you . Okay. I thank you so much for taking time out on this gorgeous day to share some knowledge about wholesaling. Oh, you're welcome. You're welcome. Thank you for having me. It's been great. Not only did Kay , give us a great script to use. She also left a sample contract. You can also use with owners to get access, just go to CandleLockett.com and download this resource and also learn the script.
This episode is transcribed. That's all for now. Stay safe, stay sane and stay lit.