January 29, 2025 • 33 mins
Jamil Damji is a nationally recognized real estate investor, entrepreneur, and educator with a passion for empowering others to create generational wealth through real estate. As the Co-founder of KeyGlee, the largest wholesale real estate operation in the United States, Jamil has helped scale the business to 118 markets and counting, making it a powerhouse in the industry.
In addition to his success with KeyGlee, Jamil is the visionary behind AstroFlipping, a thriving community of over 4,000 real estate investors from around the globe. This community has collectively generated tens of millions of dollars in profits, with Jamil providing guidance, mentorship, and a strategic framework that helps members thrive in the world of real estate wholesaling.
Jamil’s expertise and engaging personality also earned him a spot on national television as the host of A&E’s popular show, Triple Digit Flip, where he flips houses while sharing his wit and wisdom with viewers. Whether on screen or in person, Jamil's mission is clear: to teach others how to profit in real estate while maintaining integrity, ethics, and balance in their personal and professional lives.
During the show we discussed:
- Securing Discounted Properties And Selling Contracts For $10-15K Profits.
- Target Undervalued Or Distressed Properties To Maximize Returns.
- Generate Leads Through Networking, Referrals, And Cost-Effective Strategies.
- Find Quality Leads With Creative, Low-Cost Marketing Approaches.
- Master Negotiation And Due Diligence To Close Deals Effectively.
- Build A Strong Network To Access Consistent Deal Opportunities.
- Decide Between Wholesaling And Flipping Based On Property Condition And Resources.
- Accurately Estimate Repair Costs To Maximize Flip Profits.
- Use Branding, Social Media, And Networking To Stand Out In A Competitive Market.
Resources:
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Transcript
Episode Transcript
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(00:02):
(Transcribed by TurboScribe.ai. Go Unlimited to remove this message.) Welcome to the Business Credit and Financing Show.
Each week, we talk about the growth strategies
that matter most to entrepreneurs.
Listen in as we discuss the secrets to
getting credit and money to start and grow
your business.
And enjoy as we talk with seasoned business
owners, coaches, and industry leaders on a variety
(00:22):
of topics from advertising and marketing to the
nuts and bolts of running a highly successful
business.
And now, to introduce the host of our
show, financial expert and award-winning author, Ty
Crandall.
Hello, and thanks for joining us today.
I'm super excited you could be here because
today we are going to help you build
an effective and efficient and profitable real estate
(00:45):
business.
We're actually gonna help you in a lot
of different areas, especially fix and flips.
And with us to help make this happen
as well, one of A&E's most popular
stars.
So with us today is Jameel Damji.
Now, Jameel is a nationally recognized real estate
investor, entrepreneur, and educator with a passion for
empowering others to create generational wealth through real
estate.
Now, as the co-founder of Kegly, the
(01:07):
largest wholesale real estate operation in the United
States, Jameel has helped scale the business to
118 markets and counting, make it a powerhouse
in the industry.
Now, in addition to his success with Kegly,
Jameel is also the visionary behind Astro Flipping,
a thriving community of over 4,000 real
estate investors from around the globe.
Now, this community has collectively generated tens of
(01:29):
millions of dollars in profits, with Jameel providing
guidance, mentorship, and strategic framework that helps members
thrive in the world of real estate wholesaling.
Now, Jameel's expertise and engaging personality also earned
him a spot on the national television as
the host of A&E's popular show, The
Triple Digit Flip, where he flips houses while
sharing his wit and wisdom with viewers, whether
(01:51):
on screen or in person, Jameel's mission is
clear, to teach others how to profit in
real estate while maintaining integrity.
and balance in their personal and professional lives.
Jameel, thanks for joining us today.
Thanks for having me, excited to be here.
Yeah, man, I'm really excited you could be
here.
So let me ask you this, like what
got you into, you're really a specialty in
a lot of different stuff, but what is
a part of real estate that you specialize
(02:12):
and enjoy doing the most?
Well, so I cut my teeth in the
world of wholesaling.
And for those who are unfamiliar with what
wholesaling is, that's where we find a property
that's in distress condition.
You can recognize these in your neighborhoods where
they're boarded up, maybe there was like a
hoarding situation going on in there, but they're
typically vacant and not habitable.
(02:34):
And those properties tend to become eyesores in
the neighborhood and devalue property.
And so my specialty is finding those abandoned
or those unloved properties and placing them with
investors who will then fix and flip those
properties and make them beautiful and put them
back into the retail market.
So for me, my favorite strategy is wholesaling
(02:56):
because it minimizes the risk.
I don't have to necessarily buy the property
and flip it myself.
I can get contractual rights to purchase the
house, and then I sell those rights to
another investor for a fee.
And that's what I created my business model
on.
So we do anywhere between 60 to 100
of those contract flips in my corporate store,
and then nationally hundreds of those every single
(03:18):
month.
And you can make profits on anywhere between
10 to $50,000 on one single contract
flip.
And so it's a very lucrative strategy.
It de-risks in the situation that you're
not really holding anything.
So if the market turns on you for
whatever reason, you're not gonna be exposed.
And it's a great beginner strategy because it
(03:39):
doesn't require you to have a tremendous amount
of cash investment to get involved in it.
So that's where I got started in the
real estate space.
I still wholesale because it's an easy way
to create value.
And it lets me find the best projects
to fix and flip myself.
So I'll pass on other deals to other
investors.
And then when I find the one that
(04:00):
really speaks to me, I'll buy that one
and flip that one myself.
So essentially I monetize the deals that I
pass on.
So I love everything you said.
Is it accurate that maybe you make about
10% of the sales price potentially in
profit for a wholesale deal?
Is that, I heard that the other day,
and I don't know if that number is
any accurate.
(04:20):
Not on a wholesale deal, on a flip,
somewhere between 10 and 15% is we're
averaging out right now.
And on a wholesale deal, my average profit
on a wholesale contract flip will be about
10 to $15,000 per deal.
So about 10 to 15K per deal.
Now when you go into wholesale deal like
this to begin with, and you said very
(04:40):
little money out of pocket.
So typically what's being asked for is the
money in the earnest deposit, right?
That you're buying it from, that's the money
you're exchanging.
Correct, yeah.
And so EMD, earnest deposit, is typically the
amount of cash outlay that you need to
get into one of these things.
But there's ways to defer the deposit of
an earnest money until after you pass your
(05:01):
inspection period.
So you can structure these contracts in such
a way where if you really are strapped
for cash and you don't even have the
thousand or $2,000 to put down as
an earnest deposit, you can make it such
that your EMD isn't due until you waive
your contingencies.
Now, typically what happens in a wholesale deal
is you sell the contract during your inspection
period or your contingency time.
(05:23):
And so if you're successful in lining up
a buyer for your contract, you can have
the buyer deposit the earnest money and now
you're into the deal for nothing.
And typically you're lining up those buyers before
you're even going in.
I mean, you have a massive audience of
students.
So that's probably what you're instructing them is
to line up your buyers before you even
go in to make an offer on the
property.
Absolutely, yeah.
So one of the things that we do
(05:43):
well at Kegley is we've built some incredible
relationships across the nation with fix and flip,
mom and pop shops, hedge funds, different types
of real estate investors looking for these types
of devalued or undervalued opportunities.
And they're waiting.
They're essentially waiting for us to get something
good under contract.
And then when we do have one, we
just send it out on an email blast
(06:04):
and the bidding begins.
I love Kegley.
That name is cool.
It's a fun one, yeah.
I mean, I don't want my ADHD to
take me to a sidetrack, but who came
up with that name?
Did you come up with that name?
Funny that you asked.
So my ex-wife and I will probably
have different answers.
I think she thinks she did it.
I feel like I did, but maybe it
was the two of us.
But what happened was we were really struggling
(06:26):
with finding a name that we could get
a good domain for.
So if you've ever tried to buy a
domain from GoDaddy, you'll find that anything that's
single word is gone, or tens of thousands
of dollars.
And so we figured out that maybe we
don't have to use a real word, right?
Maybe we can make a word up.
And so we thought about what do we
(06:46):
do, right?
What is the essence of our business?
And it really is trading your keys and
making yourself happy, right?
So we took Key, we took Glee, put
them together and there you have it.
I love it.
I love that.
And when we talk, we help a lot
of businesses set their business up properly.
It's the same thing I said.
If you want a good company name, you've
got to choose something that means nothing to
(07:06):
anybody.
Then you can get the domain and then
it's something cool.
But Kegley, the way that those two go
together, I just think it's brilliant.
And the underlying meaning, you could tell, Keys,
Glee.
Yeah, it's great.
It's wholesome, it's neat, and it gets the
message across, so all boxes checked.
Yeah, so lessons to everybody watching this, because
this is a really good strategy to be
able to come up with your company name
(07:27):
if you don't have one for one that
you're launching.
So that being said, back to wholesaling, when
you're buying the property and you've got a
tentative buyer lined up.
So when you're evaluating it, how are you
evaluating?
I mean, how does somebody, how do you
teach?
I know how you, it's going to be
different.
So let me rephrase the question.
How does it, you teach a student to
properly evaluate, to know that there's enough room
(07:48):
in that property to be able to know
what to buy it for so they don't
make a mistake on that first contract?
What a great question, Ty.
So the thing that I really pride myself
on is my capacity to value property.
So what I essentially did early on in
my career was I went to appraisal school
and I learned how to appraise a home
the way an appraiser would.
(08:09):
And then I interviewed a hundred appraisers and
I found out what were the common attributes,
the common values, the things that lined up
between myself and these hundred appraisers.
What were the meat and potato items that
we were looking at in order to determine
value?
And what I was able to do was
(08:30):
come up with a framework.
And that framework is what I call my
appraisal rules.
And when you use these appraisal rules, you're
essentially going by the guidelines of how an
appraiser would value the property.
And you can do this when you commit
the appraisal rules to memory, which I essentially
have.
What it allows you to do is get
really, really dialed in on what a property
(08:50):
would be worth once it's fixed up.
So I teach people how to do that.
I use some free software like Zillow, or
you can even get paid software that mimics
the MLS, whatever you're interested in.
But Zillow is just as good.
And I can show people how to take
a look at the property that you have
as a subject and how to extrapolate what
(09:11):
it could become with a renovation.
And so we're looking for what's called an
after repair value, an ARV.
And so as long as we stay within
the same subdivision, the same property type, plus
or minus 250 square feet in size, plus
or minus 10 years of construction year date.
And we have these things.
It's like, the way I like to think
(09:31):
about it is that if I'm gonna compare
two apples, they can't just be the same
apple.
They've gotta be two apples grown from the
same tree in the same orchard by the
same farmer in the same season.
And when you can get those commonalities, it
gets the accuracy of the value of that
subject property to become pretty precise.
And so I teach that.
I do a YouTube live stream called Straight
(09:51):
Outta Compton.
Had some fun with it because of the
movie and the old 1990s NWA rap song.
And so I do a stream where I
show people, they bring an address and they
put the address into my YouTube comments.
And then I'll show them how I would
value that property.
And I walk through the different things that
I'm looking at, thinking about, and then I
(10:12):
create for them what I believe the after
repair value would be.
And then once you know what the after
repair value is, you have to determine what
it would cost to get you there, right?
And so that will help you determine what
your buy price should be.
So do you help your students with this?
Do they have access to that framework and
the tools that you're using?
Absolutely, yeah.
(10:32):
So if I'm sitting here going, oh, that
makes a lot of sense because I don't
want to interview a hundred appraisers and I
don't want to, I don't know, go to
appraisal school, let alone the vast experience that
you have, then I can go key glee.
And one of the benefits that I'm getting
there is that you're helping me with the
framework to make sure I'm buying the property,
right?
Correct.
The key here is that something has to
(10:52):
be a deal in order for somebody to
want to buy it, right?
Not every property is a wholesale deal.
And that's the thing, something that people have
to keep in mind, right?
We're not in the business of taking equity
from people.
If a home is beautiful or retail ready,
it's not typically for me, right?
Because that's a home that I think would
be better served, sold on the MLS through
a real estate agent to a retail buyer,
(11:13):
getting a retail loan.
The kinds of homes that I typically go
after are ones that aren't even financeable by
traditional lenders.
So these homes need to be purchased with
cash or hard money.
And because of that, we can get a
better discount or a better deal on that
property.
And so that's the framework in which we
make our purchases.
And we have to be pretty clear on
what it's gonna take to get this property
(11:34):
from here to there in order to be
profitable, A, as a wholesale transaction, but B,
for your end buyer to then make money
on their flip.
Yeah, which makes a lot of sense because
I think about that in the back of
my head, even though I haven't asked.
I'm like, how do you get real estate
agents to play along?
Like I'm in Florida, so in your Phoenix,
so the demand is not pretty good demand
for properties.
We're in both areas.
So if I'm trying to go in and
(11:55):
I wanna do this and do that and
do that, these real estate agents are gonna
take another offer.
But if I'm coming and buying a distressed
property, there's not as much demand for that
property.
So more than likely, it's easier to get
concessions from the seller and from the agent
to make that deal work.
Correct, and oftentimes if you do it right,
so one of the things that I teach
and the framework of how I generate leads
(12:16):
is by creating relationships with real estate agents
so that you get to take a look
at the property before they ever listed on
the MLS.
And so what you become is the go
-to cash investor for an agent when they
come across a home like that.
Now, the reality is, is when a homeowner
has gotten to that situation where they've got
a home and it's in such distress that
(12:37):
you can't traditionally finance it, there's usually a
situational distress accompanying the property distress as well.
And so these sellers are typically looking for
a fast solution.
And so the more convenient I can make
my offer, the quicker I can make my
closing, the more convenience that I can provide
to the seller and the real estate agent,
the more likely they are to wanna do
(12:57):
a deal with me.
And the reality is, is for the most
part, these folks don't want their houses listed
on the MLS for the entire world to
see.
There was a home I bought not too
far from where I live here in Phoenix.
Sad story.
The children had left, moved to another state.
Mother had passed away decade ago.
Father was living in the house and had
developed a mental illness where he was collecting
(13:18):
feces.
I know this is not probably is what
people wanna hear, but it's the truth.
This is what happened to the poor guy.
The kids hadn't really come to visit him
in a long time and ultimately he passes
away.
And when the kids finally got to the
home and they saw what had happened to
dad, they were heartbroken.
They were absolutely heartbroken.
And they couldn't then take that home, put
it on the MLS so that the entire
(13:39):
neighborhood could see what happened to dad in
the last decade of his life, right?
They were embarrassed.
They were embarrassed for him, they were embarrassed
for themselves and they wanted it to be
a quiet, quick sale.
And so one of the conditions that they
sold me the home with was that I
was not allowed to allow anybody that was
either related to the neighborhood or anyone else
for that matter to come in and see
the home until I had already beautified it,
(14:01):
right?
And so that was a deal that I
made for them.
They sold me the house at a great
price.
I did a great job on the remodel
and they were so happy that that home
became, went back into the retail market for
another home, another family to come in and
build a life and memories and have love
in.
But this is just what happens sometimes in
people's world.
And so when they sought me out, they
(14:23):
wanted to have somebody that they knew would
have discretion in the situation that would comply
with their hopes were for how to manage
the sensitivity of the subject of the home
purchase and then to just do a great
job.
And so I gave them the maximum that
I could give them given the condition of
the home.
So they were super happy with the price.
And then I was able to make a
modest profit once I flipped it.
(14:44):
So it was a win-win situation for
me, win-win situation for the seller and
for the real estate agent who didn't necessarily
wanna be touring that house over and over
and over again.
A little bit of time, I imagine, takes
to get the credibility you have.
So that being said, I'm sure a lot
of your students come in with, oh, it
won't work for me type of mentality.
So what are some other strategies you teach
them outside of relationships to go and find
(15:05):
the right wholesale properties to buy?
Well, there's a couple of ways to do
this.
You can go directly to homeowners and you
could go through real estate agents, right?
Those are the two main sources of finding
deals in my opinion, right?
And so one of the ways you could
do is go find lists of people who
own rental properties and talk to folks who've
owned rental properties for five or 10 years
(15:26):
and find out if they're still happy with
owning a rental property.
You'd be surprised at how many mom and
pop real estate investors buy a rental property
and just get in over their heads with
repairs and all of the issues.
And they just couldn't be bothered with wanting
to keep it another day.
And all of a sudden they get a
phone call from a nice real estate investor
who is interested in buying their property for
cash and take this problem off their hands.
(15:48):
And there you have it.
You can create a deal there.
Sometimes I go to the county court office
and I look at probates.
So I go and find out who's passed
away and who's the personal representative of a
probate.
And then I reach out to that personal
representative and let them know that I'm a
resource.
If they want to sell the house quickly
for a cash price, I could be of
service to them.
So that's a great way for me to
(16:08):
get a good lead.
I also pull lists of people who may
have had a life situation that no longer
requires them to own the home that they're
in any longer.
For instance, empty nesters, they tend to hold
onto properties a little too long sometimes.
And so you've got these people in middle
age, children have left the house, but they're
living in these 3000 square foot homes with
(16:31):
five bedrooms and three bathrooms, and it's just
two of them.
And so they've got all of these rooms
that they're just storing belongings in now that
are becoming kind of wasteful for them, where
they could take that money that they've got
trapped in that home and go and have
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Different experience in life right now.
(17:12):
And so looking at life situations is a
great way to approach this type of strategy.
Again, situational distress is also a great way
to find good leads.
So bankruptcies, divorces, code violations, people who are
in over their head with HOA violations and
city liens and city taxes, tax deeds, tax
(17:33):
liens as well.
People who get majorly behind on their taxes
is a great way to get people out
of that situation and take possession of a
property at a great price.
And so there's a number of different lead
sources for this type of deal.
One of the things that I, and why
I don't necessarily go through directly to a
homeowner, is I like having a real estate
(17:54):
agent involved so that they can be an
advocate for the homeowner to make sure that
everything is above board and that everyone's being
honest.
The reality is there's something to be said
about a real estate agent's fiduciary duty to
a seller to get them the best situation.
Now, best situation doesn't mean numbers.
It doesn't mean just price.
Sometimes it has to do with closing dates.
Sometimes it has to do with, just wanna
(18:14):
leave all the items in the home behind.
I don't wanna have to deal with any
of the dumping or maybe they need a
post possession.
They need to stay in the home 60
days after close so that they can get
their affairs in order.
Whatever that is, I can structure that and
help that homeowner get the best situation for
them as possible.
And when they have an advocate like a
real estate agent involved in the deal, it
just helps everybody make sure that everything is
(18:36):
going the way that it's supposed to be
going.
So I prefer working through real estate agents
just for liability standpoint and to make sure
that everybody's being taken care of in the
appropriate way.
But that doesn't mean that I won't necessarily
just buy directly from a homeowner.
I just think that you open yourself up
to more issues and potential liability going directly
to a homeowner who may not be educated
(18:58):
on price and understand what the value is
of the property that they're selling.
So for me, it's just, I prefer real
estate agents, but there's a lot of wholesalers
that go directly to the seller as well.
Any advice on finding the right real estate
agents?
All real estate agents come across this type
of home.
And so one of the things I don't
do is filter through who I should talk
(19:18):
to and who I shouldn't.
The reality is, is that even the agent
who maybe sells three or four houses a
year, eventually will get their hands on one
of these types of homes.
And they are even less aware of what
to do with that type of property when
they get their hands on it.
So for me, I cast a wide net
when I'm talking to agents and I develop
those relationships.
And because I perform on the promises that
(19:40):
I make and the contracts that I write,
I become a go-to person for them
in whatever market that I'm working in.
But for a strategy for people, if you
were watching this podcast and thinking, hey, this
sounds like a pretty decent approach, what could
I do here?
Well, one of the best sources for potential
leads is the MLS.
(20:01):
So you can go onto Zillow and you
can look at properties that have been maybe
sitting on the market, 60, 90, 100 days
and look through the pictures.
And if the home looks dated or distressed
in any way, then what that means is
that the real estate agent or the sellers
have overpriced that home.
The markets rejected the number that they've put
(20:22):
on this price.
And so there's motivation that's starting to brew
there.
Now the real estate agent knows the home
is overpriced and they're probably just acting on
the seller's behest to price it at that
number.
And so they're waiting for the seller to
come to reality.
And the seller needs a little bit of
prodding to get to that spot.
And so my favorite strategy in getting these
is going after a stale listing that's sitting
(20:44):
on the MLS for like 100 days and
just asking the realtor, I'm looking at this
property, I see that you've got it priced
at, let's just make a hypothetical here.
You've got it priced at $300,000.
And so I started looking around in the
neighborhood and I found that $300,000 would
be the right number for this house if
somebody had renovated it fully.
(21:04):
And I think it's gonna take 80 grand
to get to that number judging on the
pictures that you've posted here online.
And so there's a big gap between where
you're listed and what this property is worth.
So the question here is who drove price?
Was it you or the seller?
And quite often they'll just be honest.
My client was really wishful that they'll get
a really great price, but they know they're
(21:25):
overpriced and they're just waiting for somebody to
write an offer.
Wonderful, I'm the guy.
I'm the guy who's gonna give you an
offer today.
It's not gonna be anywhere near where you're
listed at, but I think you know that.
But it's gonna be fair and it's gonna
be realistic.
How quickly does your seller wanna close?
Because I wanna factor that into my numbers.
And so I put together a strong case
for why my price is where it's at,
and I make a presentation.
(21:46):
And one out of every 10 times it
sticks.
How do you make the decision between wholesaling
and fix and flip?
So I'd imagine you're in the know, you've
got all these people sitting at these opportunities.
Some of them are wholesaling, you're just moving,
and then you find the one you love.
And that's the one as you're describing, you
fix and flip.
How do you determine which one that you
(22:06):
really love and wanna fix and flip versus
wholesaling?
Well, there's a few factors, right?
So there's sometimes I make the judgment based
on architectural features, like I'm a sucker for
a mid-century modern home.
And so if I can get my hands
on something that was designed by a famous
mid-century architect like Ralph Haver or Al
Beadle, then I will buy that home and
(22:28):
flip it myself because I just nerd out
on that kind of renovation.
But other times it's just convenience.
How far of a drive is it for
me to my home?
And is there enough profit margin in here
for it to be worth my time?
And so I make the decision based off
of potential profit.
I make the decision based off of my
own personal interests.
And then lastly, just distance from where I
(22:51):
live.
When somebody is getting into fix and flipping,
I would imagine the one thing that would
scare me being new to it would be,
I don't know what my true costs are
gonna be to fix this thing up.
Like I would imagine that's a problem that
a lot of your students deal with.
How do you help them get over that
hump to get enough confidence to really stick
it out there and make the first jump
into fix and flip?
Well, funny enough, I track rehab costs across
(23:14):
the nation.
And so I provide for the students in
my community a pretty solid dollar per square
foot estimate on where renovations will be if
it's a cosmetic job and where renovation costs
will be if it's a full gut.
And outside of California and New York and
some other areas in the North and Southeast
there, I'm pretty accurate on what those numbers
(23:37):
tend to be.
And because we're always paying attention to pricing,
that number is dynamic and typically changes by
the quarter, but it's pretty close.
And so if we can give a good
ballpark estimate on where we think the renovation
will come in based on square footage and
condition, then that just allows us to input
a pretty standardized number into our calculation so
(23:57):
that we can make offers fast.
Now, of course, during your inspection, you're gonna
get into the meat and potatoes of what
things are actually gonna be.
So not only will your buyers be bringing
in their contractors, but if you decide you
may wanna flip it yourself, you may go
and get some bids yourself.
And then you can see how close the
estimate was to where the numbers actually came
(24:18):
in.
So that makes a great opportunity to determine
where the costs are.
But I think when you're first getting started,
it's really important to learn from somebody who's
done this, speak to fix and flippers in
your neighborhood or in your state and local
market, go to networking events and talk to
people who are in the business and ask
them, where are you coming in right now,
(24:38):
dollar per square foot on a cosmetic remodel?
And a lot of people would be happy
to tell you.
You can ask them, where are you coming
in dollar per square foot on new construction?
And they'll be happy to tell you.
You can also ask, where are you coming
in on your dollar per square foot on
a full gut remodel?
And again, they'll be happy to tell you.
You'd be surprised at how sharing real estate
investors can be with one another when you
(24:58):
get them in the right environment and you
ask the right questions.
People love being asked their opinion and people
love sharing their expertise when you give them
the opportunity to do so.
So get out there and ask questions.
You have a phenomenal supportive community and you
talk about, when we've talked a little bit
about avoiding mistakes, what is one of the
worst you've seen?
Like somebody that comes into you, because there's
(25:20):
so many things that could go wrong here.
And that's why you have your community, right?
You provide the guidance, the tools, the resources,
the mentorship, everything somebody needs to avoid the
mistakes and cut the line to succeed.
So what's a horror story that you've heard
or seen, maybe you, maybe somebody else, but
that didn't know what they were doing and
came in and you're like, oh my gosh,
I can't believe that happened.
Where your training would have helped them avoid
(25:40):
that mess.
I think the most common mistake, and I
don't necessarily think it's a horror story, but
I think it's where wholesalers, it's like the
wholesaler graveyard, right?
It's where the ambitions and the hopes die,
is when somebody doesn't come in and really
take seriously the numbers and understand where value
should be at.
(26:00):
They're not spending enough time really learning how
to comp a property, understanding where a property
needs to be bought at in order for
it to be a wholesale deal or a
good fix and flip.
And they just try throwing spaghetti at the
wall.
Now, what ends up happening when that happens
is they lock up contracts too high and
then they get themselves into a pickle with
a real estate agent who's upset with them
(26:21):
and the wheels fall off and they feel
terrible because they have to cancel the deal.
Now, typically they're not gonna lose any money
on that because if you cancel during your
inspection period, you'll get your earnest deposit back.
But what ends up happening is they fail
and in that failure, they lose confidence.
And after a couple of times of doing
that, they give up.
And that's a shame because if they had
just spent some time really understanding value and
(26:43):
really taking this craft seriously, it's a skill,
right?
Learning how to value property is a skill.
And you wouldn't tell somebody to go frame
a house if they didn't understand how to
be a framer.
If they didn't learn the skill, why would
you try doing it?
So one of the skills you need to
learn when you're wholesaling homes is how to
value property.
And if you're just gonna come in and
(27:03):
start making phone calls and writing offers willy
-nilly, well, you missed the point.
You haven't gained that really important skill that's
gonna help you succeed at the business.
And so when you've canceled contracts and you
start to get frustrated because nothing's working, it's
your own fault.
And that's what I see 80% of
wholesalers doing.
And that's why they quit, right?
And so the really good ones are the
(27:25):
ones who they spend time learning how to
value, they make mistakes, they screw it up
a few times, but they know that eventually
they're gonna get it right.
And the more practice and the more reps
that they do, the closer and closer and
closer they're gonna be to getting these numbers
right.
And then eventually something clicks.
And then once it clicks, and then once
they get consistent on their lead generation and
(27:45):
they get consistent on the number of offers
they're putting out on a daily basis, and
they get consistent on communicating and building relationships
with buyers, what ends up happening is a
business forms and then their lives change.
And so if people can just learn the
techniques, learn the tools, and then have some
consistency and know that it's not gonna be,
nothing is easy.
Nothing worthwhile is just gonna fall out of
(28:07):
the sky and be a cakewalk to do.
What I do is difficult.
It takes time, it takes effort, it takes
tenacity and consistency.
But if you put the work in, you
can build a business where you're making 50
to $100,000 a month and not taking
any risks.
For me, that's a great life.
You know, it's interesting because if I take,
(28:28):
and by the way, phenomenal advice.
I mean, if I listened to what you
just said and I replaced real estate with
running a business or starting a business, it's
exactly the same thing.
I mean, like if you're watching this, I
really suggest that you literally go back two
minutes and start over what he just said,
because what he's describing is exactly where entrepreneurs
fail.
I mean, spot on exactly what happens.
(28:49):
And that advice is so telltale.
I mean, literally, like my hair stands on
my arm because it's like, you literally describe
why business owners fail at whatever they're doing.
And then you followed it up with the
exact path that you need to take to
succeed.
So I just, it means a lot that
you say that because everybody watching here today
is an entrepreneur.
Thank you.
Yeah, and these parallels are true, right?
(29:10):
I think one more thing that not a
lot of people talk about, but I don't
fear doing it.
I think that there's a connection between the
spirit and your success in entrepreneurship.
And there's a lot that you can do
from the inside that will reflect on the
outside.
And so for me, I was able to
take the journey inward because of entrepreneurship.
(29:31):
It's what led me to practices like meditation
and breath work, visualization.
And those practices have accelerated my life and
accelerated my success to a degree that I
can't explain.
And so I invite people who are curious
about why they're here, what their purpose is
and how they may be able to do
(29:52):
more with less.
Maybe it's not outside that you need to
look.
Maybe you gotta go in.
That's powerful.
(Transcribed by TurboScribe.ai. Go Unlimited to remove this message.) Welcome to the Business Credit and Financing Show.
Each week, we talk about the growth strategies
that matter most to entrepreneurs.
Listen in as we discuss the secrets to
getting credit and money to start and grow
your business.
And enjoy as we talk with seasoned business
owners, coaches, and industry leaders on a variety
(00:22):
of topics from advertising and marketing to the
nuts and bolts of running a highly successful
business.
And now, to introduce the host of our
show, financial expert and award-winning author, Ty
Crandall.
Hello, and thanks for joining us today.
I'm super excited you could be here because
today we are going to help you build
an effective and efficient and profitable real estate
(00:45):
business.
We're actually gonna help you in a lot
of different areas, especially fix and flips.
And with us to help make this happen
as well, one of A&E's most popular
stars.
So with us today is Jameel Damji.
Now, Jameel is a nationally recognized real estate
investor, entrepreneur, and educator with a passion for
empowering others to create generational wealth through real
estate.
Now, as the co-founder of Kegly, the
(01:07):
largest wholesale real estate operation in the United
States, Jameel has helped scale the business to
118 markets and counting, make it a powerhouse
in the industry.
Now, in addition to his success with Kegly,
Jameel is also the visionary behind Astro Flipping,
a thriving community of over 4,000 real
estate investors from around the globe.
Now, this community has collectively generated tens of
(01:29):
millions of dollars in profits, with Jameel providing
guidance, mentorship, and strategic framework that helps members
thrive in the world of real estate wholesaling.
Now, Jameel's expertise and engaging personality also earned
him a spot on the national television as
the host of A&E's popular show, The
Triple Digit Flip, where he flips houses while
sharing his wit and wisdom with viewers, whether
(01:51):
on screen or in person, Jameel's mission is
clear, to teach others how to profit in
real estate while maintaining integrity.
and balance in their personal and professional lives.
Jameel, thanks for joining us today.
Thanks for having me, excited to be here.
Yeah, man, I'm really excited you could be
here.
So let me ask you this, like what
got you into, you're really a specialty in
a lot of different stuff, but what is
a part of real estate that you specialize
(02:12):
and enjoy doing the most?
Well, so I cut my teeth in the
world of wholesaling.
And for those who are unfamiliar with what
wholesaling is, that's where we find a property
that's in distress condition.
You can recognize these in your neighborhoods where
they're boarded up, maybe there was like a
hoarding situation going on in there, but they're
typically vacant and not habitable.
(02:34):
And those properties tend to become eyesores in
the neighborhood and devalue property.
And so my specialty is finding those abandoned
or those unloved properties and placing them with
investors who will then fix and flip those
properties and make them beautiful and put them
back into the retail market.
So for me, my favorite strategy is wholesaling
(02:56):
because it minimizes the risk.
I don't have to necessarily buy the property
and flip it myself.
I can get contractual rights to purchase the
house, and then I sell those rights to
another investor for a fee.
And that's what I created my business model
on.
So we do anywhere between 60 to 100
of those contract flips in my corporate store,
and then nationally hundreds of those every single
(03:18):
month.
And you can make profits on anywhere between
10 to $50,000 on one single contract
flip.
And so it's a very lucrative strategy.
It de-risks in the situation that you're
not really holding anything.
So if the market turns on you for
whatever reason, you're not gonna be exposed.
And it's a great beginner strategy because it
(03:39):
doesn't require you to have a tremendous amount
of cash investment to get involved in it.
So that's where I got started in the
real estate space.
I still wholesale because it's an easy way
to create value.
And it lets me find the best projects
to fix and flip myself.
So I'll pass on other deals to other
investors.
And then when I find the one that
(04:00):
really speaks to me, I'll buy that one
and flip that one myself.
So essentially I monetize the deals that I
pass on.
So I love everything you said.
Is it accurate that maybe you make about
10% of the sales price potentially in
profit for a wholesale deal?
Is that, I heard that the other day,
and I don't know if that number is
any accurate.
(04:20):
Not on a wholesale deal, on a flip,
somewhere between 10 and 15% is we're
averaging out right now.
And on a wholesale deal, my average profit
on a wholesale contract flip will be about
10 to $15,000 per deal.
So about 10 to 15K per deal.
Now when you go into wholesale deal like
this to begin with, and you said very
(04:40):
little money out of pocket.
So typically what's being asked for is the
money in the earnest deposit, right?
That you're buying it from, that's the money
you're exchanging.
Correct, yeah.
And so EMD, earnest deposit, is typically the
amount of cash outlay that you need to
get into one of these things.
But there's ways to defer the deposit of
an earnest money until after you pass your
(05:01):
inspection period.
So you can structure these contracts in such
a way where if you really are strapped
for cash and you don't even have the
thousand or $2,000 to put down as
an earnest deposit, you can make it such
that your EMD isn't due until you waive
your contingencies.
Now, typically what happens in a wholesale deal
is you sell the contract during your inspection
period or your contingency time.
(05:23):
And so if you're successful in lining up
a buyer for your contract, you can have
the buyer deposit the earnest money and now
you're into the deal for nothing.
And typically you're lining up those buyers before
you're even going in.
I mean, you have a massive audience of
students.
So that's probably what you're instructing them is
to line up your buyers before you even
go in to make an offer on the
property.
Absolutely, yeah.
So one of the things that we do
(05:43):
well at Kegley is we've built some incredible
relationships across the nation with fix and flip,
mom and pop shops, hedge funds, different types
of real estate investors looking for these types
of devalued or undervalued opportunities.
And they're waiting.
They're essentially waiting for us to get something
good under contract.
And then when we do have one, we
just send it out on an email blast
(06:04):
and the bidding begins.
I love Kegley.
That name is cool.
It's a fun one, yeah.
I mean, I don't want my ADHD to
take me to a sidetrack, but who came
up with that name?
Did you come up with that name?
Funny that you asked.
So my ex-wife and I will probably
have different answers.
I think she thinks she did it.
I feel like I did, but maybe it
was the two of us.
But what happened was we were really struggling
(06:26):
with finding a name that we could get
a good domain for.
So if you've ever tried to buy a
domain from GoDaddy, you'll find that anything that's
single word is gone, or tens of thousands
of dollars.
And so we figured out that maybe we
don't have to use a real word, right?
Maybe we can make a word up.
And so we thought about what do we
(06:46):
do, right?
What is the essence of our business?
And it really is trading your keys and
making yourself happy, right?
So we took Key, we took Glee, put
them together and there you have it.
I love it.
I love that.
And when we talk, we help a lot
of businesses set their business up properly.
It's the same thing I said.
If you want a good company name, you've
got to choose something that means nothing to
(07:06):
anybody.
Then you can get the domain and then
it's something cool.
But Kegley, the way that those two go
together, I just think it's brilliant.
And the underlying meaning, you could tell, Keys,
Glee.
Yeah, it's great.
It's wholesome, it's neat, and it gets the
message across, so all boxes checked.
Yeah, so lessons to everybody watching this, because
this is a really good strategy to be
able to come up with your company name
(07:27):
if you don't have one for one that
you're launching.
So that being said, back to wholesaling, when
you're buying the property and you've got a
tentative buyer lined up.
So when you're evaluating it, how are you
evaluating?
I mean, how does somebody, how do you
teach?
I know how you, it's going to be
different.
So let me rephrase the question.
How does it, you teach a student to
properly evaluate, to know that there's enough room
(07:48):
in that property to be able to know
what to buy it for so they don't
make a mistake on that first contract?
What a great question, Ty.
So the thing that I really pride myself
on is my capacity to value property.
So what I essentially did early on in
my career was I went to appraisal school
and I learned how to appraise a home
the way an appraiser would.
(08:09):
And then I interviewed a hundred appraisers and
I found out what were the common attributes,
the common values, the things that lined up
between myself and these hundred appraisers.
What were the meat and potato items that
we were looking at in order to determine
value?
And what I was able to do was
(08:30):
come up with a framework.
And that framework is what I call my
appraisal rules.
And when you use these appraisal rules, you're
essentially going by the guidelines of how an
appraiser would value the property.
And you can do this when you commit
the appraisal rules to memory, which I essentially
have.
What it allows you to do is get
really, really dialed in on what a property
(08:50):
would be worth once it's fixed up.
So I teach people how to do that.
I use some free software like Zillow, or
you can even get paid software that mimics
the MLS, whatever you're interested in.
But Zillow is just as good.
And I can show people how to take
a look at the property that you have
as a subject and how to extrapolate what
(09:11):
it could become with a renovation.
And so we're looking for what's called an
after repair value, an ARV.
And so as long as we stay within
the same subdivision, the same property type, plus
or minus 250 square feet in size, plus
or minus 10 years of construction year date.
And we have these things.
It's like, the way I like to think
(09:31):
about it is that if I'm gonna compare
two apples, they can't just be the same
apple.
They've gotta be two apples grown from the
same tree in the same orchard by the
same farmer in the same season.
And when you can get those commonalities, it
gets the accuracy of the value of that
subject property to become pretty precise.
And so I teach that.
I do a YouTube live stream called Straight
(09:51):
Outta Compton.
Had some fun with it because of the
movie and the old 1990s NWA rap song.
And so I do a stream where I
show people, they bring an address and they
put the address into my YouTube comments.
And then I'll show them how I would
value that property.
And I walk through the different things that
I'm looking at, thinking about, and then I
(10:12):
create for them what I believe the after
repair value would be.
And then once you know what the after
repair value is, you have to determine what
it would cost to get you there, right?
And so that will help you determine what
your buy price should be.
So do you help your students with this?
Do they have access to that framework and
the tools that you're using?
Absolutely, yeah.
(10:32):
So if I'm sitting here going, oh, that
makes a lot of sense because I don't
want to interview a hundred appraisers and I
don't want to, I don't know, go to
appraisal school, let alone the vast experience that
you have, then I can go key glee.
And one of the benefits that I'm getting
there is that you're helping me with the
framework to make sure I'm buying the property,
right?
Correct.
The key here is that something has to
(10:52):
be a deal in order for somebody to
want to buy it, right?
Not every property is a wholesale deal.
And that's the thing, something that people have
to keep in mind, right?
We're not in the business of taking equity
from people.
If a home is beautiful or retail ready,
it's not typically for me, right?
Because that's a home that I think would
be better served, sold on the MLS through
a real estate agent to a retail buyer,
(11:13):
getting a retail loan.
The kinds of homes that I typically go
after are ones that aren't even financeable by
traditional lenders.
So these homes need to be purchased with
cash or hard money.
And because of that, we can get a
better discount or a better deal on that
property.
And so that's the framework in which we
make our purchases.
And we have to be pretty clear on
what it's gonna take to get this property
(11:34):
from here to there in order to be
profitable, A, as a wholesale transaction, but B,
for your end buyer to then make money
on their flip.
Yeah, which makes a lot of sense because
I think about that in the back of
my head, even though I haven't asked.
I'm like, how do you get real estate
agents to play along?
Like I'm in Florida, so in your Phoenix,
so the demand is not pretty good demand
for properties.
We're in both areas.
So if I'm trying to go in and
(11:55):
I wanna do this and do that and
do that, these real estate agents are gonna
take another offer.
But if I'm coming and buying a distressed
property, there's not as much demand for that
property.
So more than likely, it's easier to get
concessions from the seller and from the agent
to make that deal work.
Correct, and oftentimes if you do it right,
so one of the things that I teach
and the framework of how I generate leads
(12:16):
is by creating relationships with real estate agents
so that you get to take a look
at the property before they ever listed on
the MLS.
And so what you become is the go
-to cash investor for an agent when they
come across a home like that.
Now, the reality is, is when a homeowner
has gotten to that situation where they've got
a home and it's in such distress that
(12:37):
you can't traditionally finance it, there's usually a
situational distress accompanying the property distress as well.
And so these sellers are typically looking for
a fast solution.
And so the more convenient I can make
my offer, the quicker I can make my
closing, the more convenience that I can provide
to the seller and the real estate agent,
the more likely they are to wanna do
(12:57):
a deal with me.
And the reality is, is for the most
part, these folks don't want their houses listed
on the MLS for the entire world to
see.
There was a home I bought not too
far from where I live here in Phoenix.
Sad story.
The children had left, moved to another state.
Mother had passed away decade ago.
Father was living in the house and had
developed a mental illness where he was collecting
(13:18):
feces.
I know this is not probably is what
people wanna hear, but it's the truth.
This is what happened to the poor guy.
The kids hadn't really come to visit him
in a long time and ultimately he passes
away.
And when the kids finally got to the
home and they saw what had happened to
dad, they were heartbroken.
They were absolutely heartbroken.
And they couldn't then take that home, put
it on the MLS so that the entire
(13:39):
neighborhood could see what happened to dad in
the last decade of his life, right?
They were embarrassed.
They were embarrassed for him, they were embarrassed
for themselves and they wanted it to be
a quiet, quick sale.
And so one of the conditions that they
sold me the home with was that I
was not allowed to allow anybody that was
either related to the neighborhood or anyone else
for that matter to come in and see
the home until I had already beautified it,
(14:01):
right?
And so that was a deal that I
made for them.
They sold me the house at a great
price.
I did a great job on the remodel
and they were so happy that that home
became, went back into the retail market for
another home, another family to come in and
build a life and memories and have love
in.
But this is just what happens sometimes in
people's world.
And so when they sought me out, they
(14:23):
wanted to have somebody that they knew would
have discretion in the situation that would comply
with their hopes were for how to manage
the sensitivity of the subject of the home
purchase and then to just do a great
job.
And so I gave them the maximum that
I could give them given the condition of
the home.
So they were super happy with the price.
And then I was able to make a
modest profit once I flipped it.
(14:44):
So it was a win-win situation for
me, win-win situation for the seller and
for the real estate agent who didn't necessarily
wanna be touring that house over and over
and over again.
A little bit of time, I imagine, takes
to get the credibility you have.
So that being said, I'm sure a lot
of your students come in with, oh, it
won't work for me type of mentality.
So what are some other strategies you teach
them outside of relationships to go and find
(15:05):
the right wholesale properties to buy?
Well, there's a couple of ways to do
this.
You can go directly to homeowners and you
could go through real estate agents, right?
Those are the two main sources of finding
deals in my opinion, right?
And so one of the ways you could
do is go find lists of people who
own rental properties and talk to folks who've
owned rental properties for five or 10 years
(15:26):
and find out if they're still happy with
owning a rental property.
You'd be surprised at how many mom and
pop real estate investors buy a rental property
and just get in over their heads with
repairs and all of the issues.
And they just couldn't be bothered with wanting
to keep it another day.
And all of a sudden they get a
phone call from a nice real estate investor
who is interested in buying their property for
cash and take this problem off their hands.
(15:48):
And there you have it.
You can create a deal there.
Sometimes I go to the county court office
and I look at probates.
So I go and find out who's passed
away and who's the personal representative of a
probate.
And then I reach out to that personal
representative and let them know that I'm a
resource.
If they want to sell the house quickly
for a cash price, I could be of
service to them.
So that's a great way for me to
(16:08):
get a good lead.
I also pull lists of people who may
have had a life situation that no longer
requires them to own the home that they're
in any longer.
For instance, empty nesters, they tend to hold
onto properties a little too long sometimes.
And so you've got these people in middle
age, children have left the house, but they're
living in these 3000 square foot homes with
(16:31):
five bedrooms and three bathrooms, and it's just
two of them.
And so they've got all of these rooms
that they're just storing belongings in now that
are becoming kind of wasteful for them, where
they could take that money that they've got
trapped in that home and go and have
a completely.
And now a quick break to hear from
our sponsor.
Hey, it's Ty Crandall with Credit Suite.
Many of our subscribers want to get the
(16:52):
most money to grow their business at the
best terms.
Whether you're looking for startup capital, low interest
credit lines and loans, or business credit, we
can definitely help you.
So give us a call at 877-600
-2487, or schedule your free consultation at creditsuite
.com forward slash consult to see how much
money you can get approved for today.
Different experience in life right now.
(17:12):
And so looking at life situations is a
great way to approach this type of strategy.
Again, situational distress is also a great way
to find good leads.
So bankruptcies, divorces, code violations, people who are
in over their head with HOA violations and
city liens and city taxes, tax deeds, tax
(17:33):
liens as well.
People who get majorly behind on their taxes
is a great way to get people out
of that situation and take possession of a
property at a great price.
And so there's a number of different lead
sources for this type of deal.
One of the things that I, and why
I don't necessarily go through directly to a
homeowner, is I like having a real estate
(17:54):
agent involved so that they can be an
advocate for the homeowner to make sure that
everything is above board and that everyone's being
honest.
The reality is there's something to be said
about a real estate agent's fiduciary duty to
a seller to get them the best situation.
Now, best situation doesn't mean numbers.
It doesn't mean just price.
Sometimes it has to do with closing dates.
Sometimes it has to do with, just wanna
(18:14):
leave all the items in the home behind.
I don't wanna have to deal with any
of the dumping or maybe they need a
post possession.
They need to stay in the home 60
days after close so that they can get
their affairs in order.
Whatever that is, I can structure that and
help that homeowner get the best situation for
them as possible.
And when they have an advocate like a
real estate agent involved in the deal, it
just helps everybody make sure that everything is
(18:36):
going the way that it's supposed to be
going.
So I prefer working through real estate agents
just for liability standpoint and to make sure
that everybody's being taken care of in the
appropriate way.
But that doesn't mean that I won't necessarily
just buy directly from a homeowner.
I just think that you open yourself up
to more issues and potential liability going directly
to a homeowner who may not be educated
(18:58):
on price and understand what the value is
of the property that they're selling.
So for me, it's just, I prefer real
estate agents, but there's a lot of wholesalers
that go directly to the seller as well.
Any advice on finding the right real estate
agents?
All real estate agents come across this type
of home.
And so one of the things I don't
do is filter through who I should talk
(19:18):
to and who I shouldn't.
The reality is, is that even the agent
who maybe sells three or four houses a
year, eventually will get their hands on one
of these types of homes.
And they are even less aware of what
to do with that type of property when
they get their hands on it.
So for me, I cast a wide net
when I'm talking to agents and I develop
those relationships.
And because I perform on the promises that
(19:40):
I make and the contracts that I write,
I become a go-to person for them
in whatever market that I'm working in.
But for a strategy for people, if you
were watching this podcast and thinking, hey, this
sounds like a pretty decent approach, what could
I do here?
Well, one of the best sources for potential
leads is the MLS.
(20:01):
So you can go onto Zillow and you
can look at properties that have been maybe
sitting on the market, 60, 90, 100 days
and look through the pictures.
And if the home looks dated or distressed
in any way, then what that means is
that the real estate agent or the sellers
have overpriced that home.
The markets rejected the number that they've put
(20:22):
on this price.
And so there's motivation that's starting to brew
there.
Now the real estate agent knows the home
is overpriced and they're probably just acting on
the seller's behest to price it at that
number.
And so they're waiting for the seller to
come to reality.
And the seller needs a little bit of
prodding to get to that spot.
And so my favorite strategy in getting these
is going after a stale listing that's sitting
(20:44):
on the MLS for like 100 days and
just asking the realtor, I'm looking at this
property, I see that you've got it priced
at, let's just make a hypothetical here.
You've got it priced at $300,000.
And so I started looking around in the
neighborhood and I found that $300,000 would
be the right number for this house if
somebody had renovated it fully.
(21:04):
And I think it's gonna take 80 grand
to get to that number judging on the
pictures that you've posted here online.
And so there's a big gap between where
you're listed and what this property is worth.
So the question here is who drove price?
Was it you or the seller?
And quite often they'll just be honest.
My client was really wishful that they'll get
a really great price, but they know they're
(21:25):
overpriced and they're just waiting for somebody to
write an offer.
Wonderful, I'm the guy.
I'm the guy who's gonna give you an
offer today.
It's not gonna be anywhere near where you're
listed at, but I think you know that.
But it's gonna be fair and it's gonna
be realistic.
How quickly does your seller wanna close?
Because I wanna factor that into my numbers.
And so I put together a strong case
for why my price is where it's at,
and I make a presentation.
(21:46):
And one out of every 10 times it
sticks.
How do you make the decision between wholesaling
and fix and flip?
So I'd imagine you're in the know, you've
got all these people sitting at these opportunities.
Some of them are wholesaling, you're just moving,
and then you find the one you love.
And that's the one as you're describing, you
fix and flip.
How do you determine which one that you
(22:06):
really love and wanna fix and flip versus
wholesaling?
Well, there's a few factors, right?
So there's sometimes I make the judgment based
on architectural features, like I'm a sucker for
a mid-century modern home.
And so if I can get my hands
on something that was designed by a famous
mid-century architect like Ralph Haver or Al
Beadle, then I will buy that home and
(22:28):
flip it myself because I just nerd out
on that kind of renovation.
But other times it's just convenience.
How far of a drive is it for
me to my home?
And is there enough profit margin in here
for it to be worth my time?
And so I make the decision based off
of potential profit.
I make the decision based off of my
own personal interests.
And then lastly, just distance from where I
(22:51):
live.
When somebody is getting into fix and flipping,
I would imagine the one thing that would
scare me being new to it would be,
I don't know what my true costs are
gonna be to fix this thing up.
Like I would imagine that's a problem that
a lot of your students deal with.
How do you help them get over that
hump to get enough confidence to really stick
it out there and make the first jump
into fix and flip?
Well, funny enough, I track rehab costs across
(23:14):
the nation.
And so I provide for the students in
my community a pretty solid dollar per square
foot estimate on where renovations will be if
it's a cosmetic job and where renovation costs
will be if it's a full gut.
And outside of California and New York and
some other areas in the North and Southeast
there, I'm pretty accurate on what those numbers
(23:37):
tend to be.
And because we're always paying attention to pricing,
that number is dynamic and typically changes by
the quarter, but it's pretty close.
And so if we can give a good
ballpark estimate on where we think the renovation
will come in based on square footage and
condition, then that just allows us to input
a pretty standardized number into our calculation so
(23:57):
that we can make offers fast.
Now, of course, during your inspection, you're gonna
get into the meat and potatoes of what
things are actually gonna be.
So not only will your buyers be bringing
in their contractors, but if you decide you
may wanna flip it yourself, you may go
and get some bids yourself.
And then you can see how close the
estimate was to where the numbers actually came
(24:18):
in.
So that makes a great opportunity to determine
where the costs are.
But I think when you're first getting started,
it's really important to learn from somebody who's
done this, speak to fix and flippers in
your neighborhood or in your state and local
market, go to networking events and talk to
people who are in the business and ask
them, where are you coming in right now,
(24:38):
dollar per square foot on a cosmetic remodel?
And a lot of people would be happy
to tell you.
You can ask them, where are you coming
in dollar per square foot on new construction?
And they'll be happy to tell you.
You can also ask, where are you coming
in on your dollar per square foot on
a full gut remodel?
And again, they'll be happy to tell you.
You'd be surprised at how sharing real estate
investors can be with one another when you
(24:58):
get them in the right environment and you
ask the right questions.
People love being asked their opinion and people
love sharing their expertise when you give them
the opportunity to do so.
So get out there and ask questions.
You have a phenomenal supportive community and you
talk about, when we've talked a little bit
about avoiding mistakes, what is one of the
worst you've seen?
Like somebody that comes into you, because there's
(25:20):
so many things that could go wrong here.
And that's why you have your community, right?
You provide the guidance, the tools, the resources,
the mentorship, everything somebody needs to avoid the
mistakes and cut the line to succeed.
So what's a horror story that you've heard
or seen, maybe you, maybe somebody else, but
that didn't know what they were doing and
came in and you're like, oh my gosh,
I can't believe that happened.
Where your training would have helped them avoid
(25:40):
that mess.
I think the most common mistake, and I
don't necessarily think it's a horror story, but
I think it's where wholesalers, it's like the
wholesaler graveyard, right?
It's where the ambitions and the hopes die,
is when somebody doesn't come in and really
take seriously the numbers and understand where value
should be at.
(26:00):
They're not spending enough time really learning how
to comp a property, understanding where a property
needs to be bought at in order for
it to be a wholesale deal or a
good fix and flip.
And they just try throwing spaghetti at the
wall.
Now, what ends up happening when that happens
is they lock up contracts too high and
then they get themselves into a pickle with
a real estate agent who's upset with them
(26:21):
and the wheels fall off and they feel
terrible because they have to cancel the deal.
Now, typically they're not gonna lose any money
on that because if you cancel during your
inspection period, you'll get your earnest deposit back.
But what ends up happening is they fail
and in that failure, they lose confidence.
And after a couple of times of doing
that, they give up.
And that's a shame because if they had
just spent some time really understanding value and
(26:43):
really taking this craft seriously, it's a skill,
right?
Learning how to value property is a skill.
And you wouldn't tell somebody to go frame
a house if they didn't understand how to
be a framer.
If they didn't learn the skill, why would
you try doing it?
So one of the skills you need to
learn when you're wholesaling homes is how to
value property.
And if you're just gonna come in and
(27:03):
start making phone calls and writing offers willy
-nilly, well, you missed the point.
You haven't gained that really important skill that's
gonna help you succeed at the business.
And so when you've canceled contracts and you
start to get frustrated because nothing's working, it's
your own fault.
And that's what I see 80% of
wholesalers doing.
And that's why they quit, right?
And so the really good ones are the
(27:25):
ones who they spend time learning how to
value, they make mistakes, they screw it up
a few times, but they know that eventually
they're gonna get it right.
And the more practice and the more reps
that they do, the closer and closer and
closer they're gonna be to getting these numbers
right.
And then eventually something clicks.
And then once it clicks, and then once
they get consistent on their lead generation and
(27:45):
they get consistent on the number of offers
they're putting out on a daily basis, and
they get consistent on communicating and building relationships
with buyers, what ends up happening is a
business forms and then their lives change.
And so if people can just learn the
techniques, learn the tools, and then have some
consistency and know that it's not gonna be,
nothing is easy.
Nothing worthwhile is just gonna fall out of
(28:07):
the sky and be a cakewalk to do.
What I do is difficult.
It takes time, it takes effort, it takes
tenacity and consistency.
But if you put the work in, you
can build a business where you're making 50
to $100,000 a month and not taking
any risks.
For me, that's a great life.
You know, it's interesting because if I take,
(28:28):
and by the way, phenomenal advice.
I mean, if I listened to what you
just said and I replaced real estate with
running a business or starting a business, it's
exactly the same thing.
I mean, like if you're watching this, I
really suggest that you literally go back two
minutes and start over what he just said,
because what he's describing is exactly where entrepreneurs
fail.
I mean, spot on exactly what happens.
(28:49):
And that advice is so telltale.
I mean, literally, like my hair stands on
my arm because it's like, you literally describe
why business owners fail at whatever they're doing.
And then you followed it up with the
exact path that you need to take to
succeed.
So I just, it means a lot that
you say that because everybody watching here today
is an entrepreneur.
Thank you.
Yeah, and these parallels are true, right?
(29:10):
I think one more thing that not a
lot of people talk about, but I don't
fear doing it.
I think that there's a connection between the
spirit and your success in entrepreneurship.
And there's a lot that you can do
from the inside that will reflect on the
outside.
And so for me, I was able to
take the journey inward because of entrepreneurship.
(29:31):
It's what led me to practices like meditation
and breath work, visualization.
And those practices have accelerated my life and
accelerated my success to a degree that I
can't explain.
And so I invite people who are curious
about why they're here, what their purpose is
and how they may be able to do
(29:52):
more with less.
Maybe it's not outside that you need to
look.
Maybe you gotta go in.
That's powerful.
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