Keep the best and sell the rest. That’s the motto of David Dodge, a killer wholesaler from St. Louis. He’s on the show today dropping some real nuggets for real estate investors of all kinds. David is on fire right now, doing wholesales, fix and flips, and he just published his first book. Tune in now to catch this guy while you can, because his real estate investments are really about to take off!
David then started renting properties out early on but quickly realized there’s a better way to do this business. That’s where the inspiration for David’s real estate investment strategy came from, and it’s really evolved over the past decade. You’ll want to pay attention to how David developed his profit master strategy. He’s professionally cherrypicking the wholesale properties that fit in with his goals and he’s spending the rest of his time honing in on what he calls the BRRR strategy.
This BRRR strategy David breaks down today is something banks love, too. We’re not talking about big banks here. In fact, David prefers to have his property loans with a few of his favorite banks rather than just one or two. He shares why other real estate investors should be jumping on this trend, and delves further into why he’s using private lender funds to invest in his wholesale properties.
Remember – none of David’s success happened overnight. He took the time to invest in his education through books and mentorships in order to get to the point he is today. David shares where this consistent motivation comes from, but I want you to remember that it starts right here. The challenge for you is to apply the golden nuggets you learn today to your own business and your own profit master strategy to see what works.
2:44 – Here’s the man: David Dodge
3:25 – David’s got his new book sitting right next to him
5:05 – What’s David’s focus in real estate investing?
8:18 – Something changed five years ago that changed David’s path
11:10 – Did college influence David’s real estate strategy?
15:15 – What’s David’s business motto?
18:34 – David breaks down his profit master strategy
22:32 – Have you ever heard of the BRRRR Strategy?
27:00 – Why portfolio lending with smaller banks is better
32:13 – What books inspired David the most?
37:39 – David’s got a couple of motivational quotes
43:45 – David’s favorite mobile apps
44:20 – How important is a good dashboard?
48:05 – A few apps and sites that can help you develop a dashboard
49:42 – The greatest lesson David learned in wholesaling
51:17 – The only 2 things that matter about CRMs: Notes and Tasks
54:30 – What’s the “perfect seller appointment”?
56:33 – How to use Tasks the right way in the CRM
58:18 – David’s true definition of “wholesaling”
59:30 – Does David get 8 hours of sleep every night?
59:46 – What’s David’s morning routine?
1:01:46 – David lays out the whole team that’s rocking the St. Louis market right now
1:05:22 – Why (and how) is David using private lenders?
1:11:21 – What does the wholesale market look like in St. Louis?
1:13:37 – What is David most grateful for?
1:19:55 – How do the things and words you say affect your mood?
1:24:47 – How many coaches has David used in his career?
1:27:50 – Why David isn’t afraid of taxes anymore
1:29:18 – David is rocking radio advertising right now in St. Louis
1:35:30 – Where can you get your hands on David’s book: The Ultimate Guide to Wholesaling Real Estate?
1:36:49 – Connect with David on Facebook and Instagram
Links and Resources
What is going on my party people? My name is Cory Boatright. I am your host and founder of Real Estate Investing Profit Masters, our podcasts series, and I am pumped, excited. I am jazzed about having our guest, Mr. David Dodge, on today out in Saint Louis, Missouri. He is a wholesaler out there. They also do some fix and flips.
He has a company called House Sold Easy. The guy’s been doing investing for just about 15 years. I think from 14-15 years. Really interesting story that he’s going to share with you today and some of the great things that he’s doing that’s working. I tell you, the guy is on fire right now.
He just recently finished a book and so you definitely want to go and get that book. You have to listen to get the link and you’re going to love it. We’re going to get some great nuggets today and a lot of value add. Make sure you are taking great notes.
Speaking of taking notes on something, have you downloaded your ultimate real estate investing quick start guide? Have you? The Down and Dirty Ultimate Real Estate Investing Quick Start Guide is available right now to you by texting the word PROFIT to 38470. 38470 text the word PROFIT and it will automatically be sent to you.
Also, if you’re interested in learning how to wholesale real estate, we do over 100 deals a year, great team, great system and processes in place. Do not recreate the wheel. Go to coryscoaching.com. I’ll ask you a few questions, watch a simple little 2-minute video, and see if that’s the right fit. Here you go, Mr. David Dodge. David, David.
David: Hey buddy.
Cory: What’s going on?
David: How are you? I’m doing good.
Cory: Matt Damon in the house right now. I’m glad you turned into real estate. I think it’s a smart decision.
David: That’s right.
Cory: What’s up, dude?
David: Hey, not a lot man, not a lot. Just trying to get organized here this morning. I got a couple deals in the pipeline that I’m trying to get closed this week. I’ve just been working hard, focusing on getting some of my students their first deal, which is awesome. Just got our book published and busy, busy dude, busy, busy.
Cory: Let’s see it. Let’s see the book. You got a copy of the book next to you?
David: Yeah, right here. It’s The Ultimate Guide to Wholesaling Real Estate. We just published this maybe about a month ago, give or take, and we’ve had a really, really good response.
Cory: That’s awesome. We’ll talk about where you get that, put that in the show notes here. Thanks for taking the time to be on here. You and I connected, I think through Facebook in the beginning, and then we started talking about crypto stuff together then we got involved with some crypto together, which is interesting, but real estate has been the bonding element through this and it’s pretty funny.
Now, some people I work with out there in St Louis, Jimmy and your stomping ground out there. You’ve known Jimmy for a while now, too, but I know other people out there in St. Louis, too. Shaun Mccloskey is a good friend that’s out there. I think McCall is pretty close to St. Louis or around Kansas City. Some of my students are out there as well. I love St Louis. I love the arch. My mom is a huge Cardinals fan, clearly rage out Cardinals fan, 75-year-old woman that just goes nuts on Cardinals. One of my things to do is to take her out to a game. Maybe when I’m out there, I’ll have to look you up.
I wanted to ask you a couple questions about your business. Why don’t you let everybody know who you are and where you are involved right now in real estate? What’s your focus on who the ideal client is?
David: Absolutely. My name is David Dodge, as we had mentioned. I’m out of St Louis, Missouri. I’ve been investing in real estate full time for about four years. I’ve been investing in real estate total for about 15 years, but the first 10 years I didn’t know that you could buy properties at a discount. I was buying them on the MLS, with a real estate agent, typically a friend. I was buying properties that didn’t need any work and I was just renting these properties out.
Cory: Okay, you weren’t a real estate agent, though. You’re an investor or you were an agent?
David: I’m not an agent. I never have been.
Cory: Yeah, me neither. Okay. I work with my team though. You worked with […] team?
David: I actually own a brokerage now and I’m not an agent, still, but going back, the first 10 years I just had friends who were agents and I’d have them help me locate properties. We go out and we’d find good properties that we could rent out. In the first 10 years, I bought about 10 properties, I bought a property a year. About four to five years ago. I realize that there’s a better way to go about doing this.
Cory: I see. You guys started around maybe 2004 or 2005?
David: Yeah, 2004 actually, or 2005 I think actually was the right date, because I was in college. You probably heard people talk about this in the past, but I didn’t even know what house hacking was when I got into real estate investing. That was the first rental that I bought. I was in college. I borrowed money from my grandparents to put down as the 20% and then I went and got a loan from the bank for the 80%. It was a four bedroom home at the University of Missouri in Columbia where I went to college. I rented out three of the bedrooms, lived in one of them, and my mortgage payment was like $60 a month because of the rent that I was collecting to offset it. I was basically living for free.
Then year number two, I did the same thing again. I moved into a new house and got a new primary resident loan through a bank. I did that three times in college. After college, I went and I had different various jobs in sales and marketing, but I continued to buy real estate. To me, it was a great way to invest money and hedge against all my other investments. But really, what turned me on the most about it, Corey, was that somebody else was paying the note. Somebody else was paying it.
I often tell people that if you’re in real estate long enough—I hate using the word guarantee—you’re guaranteed to create some wealth because somebody else is paying down your debt. That’s the goal. To speed things up, about five years ago, I started reading a lot of books about real estate investing. I started realizing there’s a lot of people out there that are not doing it the way I’m doing it.
Cory: Which ones?
David: I’ve read like 300 books in terms of real estate. I’ve read every one. I’ve even read some of the ones you’ve published.
Cory: The courses?
David: Yeah. I’ve read them all. If they’re on Amazon to be sold and they have real estate on the title, I own them.
Cory: Same thing man or eBay, did you go on eBay to take courses?
David: Yeah, absolutely, I’ve read them all, but what I have found in the beginning of doing my deep dive was that the people that were really successful in the business, they were buying properties at a discount. If you’re watching this video, my business, you can see behind me, is discount property investor.
Cory: That’s cool, I like that.
David: It’s also the disposition side of my wholesaling business. We have a coaching business that we use this name right here. I didn’t even know what wholesaling was, but I learned about it. I learned about marketing and I hired several coaches. Joe McCall was one of my first coaches. He explained to me, “Hey, if you want to be a wholesaler, you are in the marketing business. You’re not really a real estate investor. You become a real estate investor when you start rehabbing or you start owning these properties as a landlord and you’re in it for the long haul. As a wholesaler, you’re in the marketing business.”
I ran with it and for the last five years, I would say I have not paid retail for a property, I’ve done over 300 wholesale deals, and I just published a book. I’m rocking.
Cory: Rocking it right now. That’s awesome, dude. Joe is a great guy. Joe’s been a part of our mastermind for a long time. He’s been a part of our mastermind. We actually talked about doing a podcast together. We did a couple of episodes together which was real estate technology. We both like technology and Joe’s just a great guy, gives with his heart, smart guy. Really, in my opinion, one of the first guys that really started putting Podio out there for real estate investors.
David: Podio Joe.
Cory: Podio Joe, right. He’s been instrumental in a lot of different areas of investing and just a really great guy. He was a big influencer for you. Did you have a breaking point, you said you went to college. Was real estate a distraction? What was your major?
David: My major was finance with the emphasis in real estate. I learned a little bit about it, but you know how college courses are, Cory. You learn about real estate investing on e a massive scale. You don’t learn about buying a single family home and renting it out or flipping a property. It’s all numbers in a text book. A lot of it didn’t really make sense to me in terms of how I invest in real estate today. It was good to have those courses of course. I was grateful to be able to go to college and my grandparents helped pay for that, of course. What I learned in college had nothing to do with what I do now, unfortunately.
Cory: To hear that, it’s not uncommon but it’s weird when I hear it because so much money is spent on different colleges and especially some guys that go Ivy League. It’s the common thing that keeps coming up more and more is that, “It was great. I learned some things but I didn’t use a lot of it for application. I really didn’t learn much to be able to have an actual business that I can go and run,” it just keeps coming out there. Obviously, that’s cool that you had major in finance with an emphasis in real estate because you really did go into doing real estate.
You were in college and you went right from college into starting your own real estate business or did you work other businesses before?
David: No, I didn’t. I had other jobs for probably five or six years in sales, in marketing, and I did some traveling for a little while with the marketing company. I was doing business-to-business sales for Cintas Corporation; everyone’s heard of them. I was doing document shredding. I was doing storage. I was even doing like floor mats and soaps and stuff for restrooms and in restaurants and whatnot. I did all kinds of different jobs in sales and marketing, but I’ve always been an entrepreneur, Cory.
I’ve always had like a side gig, a side job. I shouldn’t say job, a side business, and for the most part, I just decided after about five or six years of working that I just didn’t like working for somebody else anymore and I want to be my own boss. Then I opened up a web development company with a couple of my buddies and we did some web development and some marketing. Probably, about four years ago, it’s when I took the plunge and I went full time into real estate. I started out just doing wholesaling, that was my main gig.
Again, I have hired Joe to help me get my feet wet and to do my first couple deals. Since then, we’ve branched out, we still have a wholesaling business and we’re in the St Louis market. We just do our own market. We don’t have any virtual thing going on at this point. We’re averaging about eight deals a month and then we branched off since then. In the last, maybe two years, we’ve started rehabbing properties quite heavily. We have anywhere from 5–10 rehabs going at any time. I think right now I have seven going.
Then we own about 40 rental properties, I say we, me and my two business partners. We are about 40 rentals. Our goal was to get to 150 and then at that point will each have about 50 of our own at that point, too.
Cory: 150 by what time, David?
David: Two years, so I’d say by the end of 2021.
Cory: That’s great. Okay, cool.
David: Two-and-a-half years, I would say, but yeah.
Cory: Yeah. Are you looking at wholesaling as your gateway to building up that portfolio?
David: Absolutely, Cory. I’m glad you brought that up. We have a motto here at my company and it goes, “Keep the best, sell the rest.” Wholesaling to us is really just a means to an end. Wholesaling is a job and if you’re new to the real estate investing and your new the wholesaling, you’ll know, wholesaling is time-intensive. It cost you money, in terms of marketing or it cost you time, in terms of doing a time budget for cold-calling and door-knocking and banded signs and all that type of stuff. At the end of the day, wholesaling is a job and we cherry pick those wholesale deals for our rehabs or wholesales, and then we, of course, cherry pick the rental properties that we want.
My goal ultimate goal is $100,000 a month passive income. Right now, I’m at about $7000 or $8000, so I’m doing okay. I got aways to go, though. I want to get to $100,000 a month in passive income and there’s no way to possibly do that wholesaling. You have to get income that’s passive.
Cory: Yeah. […] over again at the end of the month. That’s one reason that I started looking into multifamily, is having so many units to be able to have some of that passive income coming in, along with also being a silent partner in other businesses, but the name of the game is basically having that money work for you. Having rental properties is a great way to do it. I had up to 60 rental properties at one point before I went through a bunch of stuff that I went through, with the divorce and a bunch of other stuff—I don’t recommend that—you lose half of your properties.
The passive part of this business really has to do with you getting a new mindset of you’re not going to be the one that has to go and do the business, to make the business run all the time and all of the effort and everything’s up to you. You don’t have to go knock on the door, you don’t have to go sign up the contract, you don’t have to go find a buyer, queuing up to do all that stuff. The team that you have that you put together can go do those things and you can really start focusing on the book like Traction, where you’re either the integrator the visionary and you get real clear on that like you said with your partners.
I would guess that one person is more visionary, one person is more the integrator and how you guys set that up. There’s not one person not better than the other, but definitely when you have two integrators, then there’s not enough growth that happens with the business. You just stay at a certain place and everybody is getting stuff done, but no one ‘s getting creative to grow the business, but you get to meet missionaries then nothing is getting done. There’s all these grand ideas, but there’s no application and execution on the ideas.
What’s one thing that’s working in your business right now, what we call your profit master investing strategy. What’s something that’s really working well that’s giving you some leverage in your business?
David: Our rental properties are doing really, really well. We try to do in-house property management where we hired a girl in our office and we’re doing rehabs already. The maintenance is pretty easy for us to handle, but it just really wasn’t working out very well in-house. We outsourced it to a really small outfit. It’s two folks, it’s a guy and his assistant. They only manage about 130 properties, 30 of which are ours, and they only want to get to 200, that’s it. He’s not taking on any more clients and we have essentially said, “We want to add 70 more to you.” we’ve got a really good thing going with our property manager.
Cory: Can you disclose, is it between 5%-10% of the management fee of the rents?
David: Yeah. I’d love to talk about that. We pay 8%, however. Here’s the thing that a lot of people don’t know, Cory. Hopefully you know this, but typically between 50%-70% of all profits made by a property manager, comes in the markup of services. It’s not in the actual management fee. It’s whenever you have to turn a property or you have a maintenance call. They’re going to either do the work themselves or they’re going to outsource it to somebody and they’re going to mark it up.
Consider about half of your fees that go to a property manager, they’re not even in the monthly management rate. They’re just in fees that just come throughout. What we’ve done is we negotiated with our property manager that we’ll pay 8%. We’re happy to pay that, which isn’t necessarily a killer rate, it’s a fair rate, 8%-10% is pretty standard.
However, any maintenance that that happens, it goes through him but we are the contractor. He’s not outsourcing that to different people to do it. It just comes to us and we send one of our guys that we’re already paying $10, $12, $14 an hour or two, to go handle those service calls so it cuts down a ton on the cost of the maintenance. In return because we’re taking money out of his pocket on the maintenance side, what we do is we allow him to be the leasing manager.
When he leases a property, he takes 3/4 of the first month’s rent as his fee. Sometimes, he’ll show in twice and I’ll get a tenant, but sometimes he has to go there 5-10 times to do it. He has a profit center on the management, of course, at 8% which really is just collecting rents, chasing people down, making sure that everything is running smoothly. We handle the maintenance and then last but not least, he handles the leasing.
We’ve got a really good thing going with him and with 40 properties, our average cash flow is about $250 a property. We’re doing pretty well on that. Ideally, we want to get to over 100. Our goals 150. We’re at about 40 today. We’re rocking man, we’re doing good with it, but that’s one thing that we’re really focusing on right now. Our goal is to buy one a week and essentially turn one over a week. We’re using the BRRRR strategy. For all your listeners and viewers that aren’t familiar with BRRRR, it’s so simple guys, it’s B with a couple of Rs behind it. Buy, Renovate, Rent, Refinance, and then last but not least is Repeat.
The strategy that we use is we have a couple of different banks that we work with. These banks give us between 75%-80% of the appraised value. I’m going to repeat that. This is very, very important. They give us between 75%-80% of the appraised value. Whenever I first got started in this business, banks would lend me between 70%-80% of the purchase price and they may or may not account for the repairs, but after you get up to maybe 20-25 properties, the relationship that you carry with your bank becomes stronger and they no longer care about what you bought it for and how much money you put into it, they just want to see that it is appraised for X and they will lend you a roughly 80% of that.
Whenever you go from the point in time whenever you’re getting loans for 80% of the purchase price compared to 80% of the appraised price, it’s a whole different ball game. The bank, in order for us to have them lend on 80% of appraisal, they just want to see that we’ve improved the property by at least $10,000-$15,000. We have to submit our repair invoices, paid invoices to the bank, but they no longer care what we bought it for. Why does that matter? It’s very important because if I can go out and I can buy a property at $0.60 on $1 and then I got to put another $0.20 on $1 into it, I’m all in at 80% of what it should appraise for.
What that means is with the BRRRR strategy, I can go and refinance every single nickel out of that property. Out of the 40 properties that we have now, we probably only have about $15,000 total invested in those 40 properties, because occasionally, some of these properties may have to leave $2000-$3000 in. But there are scenarios which is kind of hard to believe where we’ll walk with $5000. We buy a property, we’ll renovate it, we’ll get it leased, and we’ll be into it for less than 80% but the bank will say, “Hey, we’ll give you an 80% loan on the appraisal and we’ll actually walk with some money.” That’s kind of rare. It’s more few and far between, but there are scenarios that that happens. The goal for us is to get to 150 properties and have zero of our own money invested in it.
Cory: I love it. What kind of amortization schedules are you using right now?
David: We’re doing all commercial loans with a 20 year amort. We’re staggering between 3-5 year terms. All of the loans that we’re getting are from small local banks. We’re not walking into Bank of America, or US Bank, Wells Fargo, so and so forth because you cannot build a relationship with a bank that is that large. Our goal is to find banks that have anywhere between maybe 3-15 branches.
If they have over 15, it doesn’t mean that they’re not a good bank, if they have under three, it doesn’t mean that they’re not a good bank, the sweet spot for whatever reason is between 3-15 branches. They’re growing typically and if I need to talk to the president of the bank, I can call them up on their cell phone or I can email him. I have the contact information of that individual.
If I for example get an appraisal that’s low and I need to argue my way up a little bit, I’m not leaving $8000 on the property and I only leave them $2000, I just send an email and usually he’s like, “Okay, approved. No big deal. It’s not the end of the world.”
Cory: Yeah, because you got 40 deals with them.
David: I have 40 deals with them already, right. We’re scattered amongst about three different banks right now. You don’t want to be too leveraged on just one bank. I circled back to talk about the fact that we’re using these smaller banks, but the reason I did that is because these banks are lending what’s called portfolio lending. They’re lending on their own assets. They’re not taking these notes that they’re creating these mortgages and selling them off.
Now the big banks, Bank of America, Wells Fargo, US Bank, if you get a mortgage with them, it’s very likely that after 2-5 years, that mortgage gets sold off in the secondary market to another bank. We don’t want that. The reason is because when we go to renew our loans at the end of these 3-year terms, or these 5-year terms…
Cory: You’re talking about balloons that you have on there.
David: Well, they’re not balloons and that’s what I’m going with this, Corey.
Cory: They’re not just soaring? Or they are?
David: No, hear me out. They’re fixed rates. They adjust either at the 3-year or the 5-year mark but for another 3-5 years. Here’s a beautiful thing. Whenever you hear somebody talk about a commercial loan, let’s say it’s a 5-year loan with a 20-year amortization, 90% of these loans, 95% of the loans that are out there, they balloon like you had mentioned. It’s a 5-year term even though it’s amortized over 20 years, but it balloons. That means that after the 60-month term, you are required to go back to that bank or another bank and go get another loan. The problem with this is your amortization starts all over. I do not believe in amortization starting over.
When you’re working with these smaller banks that have what we call portfolio loans, or portfolio lending, meaning they’re leaning off their own assets, when that 3-year or that 5-year term expires, the loan does not come due. It’s not a balloon. Instead, what they do is they call it a renewal. They charge anywhere from $50 to maybe $300 and they do what’s called a desk review or a BPO on that property. Then what they do is they will issue you an additional 3-5 year term. However, your amortization does not reset.
If I do a 5-year note on a 20-year amort and I get through five years and I go back to my bank and I say, “Hey, let’s renew this for five more years,” well of course my interest rate will adjust, because that’s how the bank makes their money. They’re going to say, “Okay.” Hopefully it’ll adjust down, but most of the time, it won’t. It’ll adjust up a little bit which is fine. I’m back into another 5-year term but I’m going on year six of my amortization table versus starting all the way over at year one.
Anybody that’s using the BRRRR strategy that is not going to small banks and getting portfolio loans that renew—keyword there—is doing it wrong. You are refinancing these every 3-5 years and you’re starting over on your amortization table. You will never, I repeat myself here, you will never pay them off. It won’t happen. You have to renew these loans and keep that amortization steady.
Cory: Great point David. I’m glad you brought that up, too, because there’s other fees that are involved whenever you do a reset those on balloons. One other thing that I did, that I don’t know if you’ve asked the bank to do it or not, but it was basically just from asking. Same thing, but not with the president or the vice-president of the bank. Basically went in and said, “I don’t know if your county assessor values are higher than your appraisal values,” but like what I just said, and to save the bank money, because the bank got to pay for those appraisals, “if the county assessed value is higher than what I think the appraisal value is, are you okay with just using the county-assessed number? For a few of the properties, the vice president was fine with doing that.
That was actually just one question that I asked and that thing saved me several thousands of dollars. Sometimes, the county has the numbers really skewed in my favor, but some other times, if I got the appraisal that I knew I was going to be a better situation, but just before I forget one thing that if you haven’t done that you might ask, it’s about that. “If the county assessed value is higher than the appraisal, can you go off the county assessed?”
David: Yeah. I’ve never heard that before. That’s seems like a great tip, though.
Cory: Yeah. It was basically one question and it was approval. Like you said, if you have the decision makers, they’ll either say yes or no, but it saves them money whenever they don’t have to go do that and they typically think that the assessed value is lower than the appraisal, but just being…
David: Yeah. In my market, I feel like the assessed value is always like a third, but I’ll have to look into that, Cory. That’s actually a really, really good piece of advice.
Cory: Yeah. Check that out.
David: I’ll look into that. That’s a great idea. I love that.
Cory: I’m sure you read a lot of books. You went through some course. What was a book that really made a difference in your life for real estate investing that you want to share?
David: As everybody says, the first book that I read that was eye-opening was the Rich Dad, Poor Dad book. I read that a couple of times. I really want to expand on this for a second Cory because I had a college professor, again, I went to the University of Missouri in Columbia here in Missouri, and one of my finance professors was obsessed with Robert Kiyosaki. He had basically asked and begged and asked and begged some more and some more to the university for them to put in place a financial course that was basically brought off the principles of Rich Dad Poor Dad. By the time I was there, they had this course so I took it.
In this course, we actually read Rich Dad Poor Dad as a class and then after every day’s lecture or chapter, we would discuss. That was really, really cool to break the book down and to spend a whole semester on the principles and ideas behind that book. It was really cool because the professor was a real estate investor and he owned about 50 pieces of rental property in Columbia where the university was at. Every month, he would bring in his pay stub from the university and he would say, “Where are we mailing this to donation today?” because he didn’t need the money from the job. He had enough passive income that he was going to live off of that.
Every month, he would come in and he would say, “Who’s got on charity this month?” and we would sign over his pay stub to a charity and mail it off. It was the coolest thing, but it went deep with me because it was like, “Man, this guy is doing this as a passion, as a hobby, but his income really comes from real estate investing and that’s when I went and bought that first house and started that house hacking.
Cory: I never heard anything like that before, man. That’s amazing. That’s a great story.
David: Yeah, isn’t that cool? Of course, Rich Dad Poor Dad, and then again, I read a ton, any book that is real estate related, I’ll tell you right now, I have never read a book that is real estate related that I haven’t got at least a couple little nuggets of gold out of it. You know what I’m saying? There’s really not necessarily one that I like over the others, but the Rich Dad Poor Dad… Oh nice, I haven’t got that one yet.
Cory: Look how freaking thick it is, dude.
David: Yeah, that’s a big one there.
Cory: It’s so thick, but it’s good. It’s really, really good.
David: Yeah, I’m going to check that one out, I haven’t read that one yet. But, of course, then we just published our own book as well, Cory, just because we found that there was a hole in the market for wholesaling-specific, there’s only a couple of books out there. Dan Merrill has the bible, he’s got that one and then there’s a couple of other people that have one, but there wasn’t 40 books, let’s put it that way, on wholesaling. There was maybe six or eight and we just saw, “You know what? There’s a good opportunity here to be a little bit more niche in real estate investing because we could talk about real estate investing for days, weeks.” There’s a million ways to invest in real estate.
Cory: Yeah, I love to read your book. I’m a huge avid book reader. I’ve just finished a recommendation. Have you seen this one? It’s actually the […] by Tony Robbins called the Keys to the Vault, Roland Frasier recommended by Keith Cunningham, Infinite Banking which is becoming your own banker, I just finished them up. I’m always reading or listening to the Audible and I think reading is massively, massively important. It’s common traits with most successful people that do big things in life. They always like to read because you get a chance to get all the best information from people that they want to share the things that really impacted them or share stories and I just feel it’s hacking. I feel it’s hacking knowledge.
David: Yeah, it’s exactly what it is. All of the Rich Dad Poor Dad series of books, of Robert Kiyosaki’s books like Cashflow Quadrant, I think might be one of my favorite books of all time because that really breaks down the difference between self-employed, entrepreneur, a business owner, and an investor, that’s a really, really good one as well. There are so many of them out there.
Cory: That’s awesome, man. I want to read your book, too, and I want to find out…
David: Yeah, I’ll mail you a copy, Cory, absolutely.
Cory: I want to find out where we can get a copy of your books. I know people listening right now really want to check out your book, so I’ll get a link from you where they can go to get it in a second. I want to ask you a couple more questions if that’s fine.
David: Yeah, sure.
Cory: What’s your favorite motivational quote? I always ask this question from my guests.
David: Dude, I got a couple of them. Number one is Relentless. Have you read Relentless?
Cory: It’s a recommendation but I haven’t read it yet so I’ll write it down again. What was the quote in Relentless you liked?
David: Relentless is by Tim S. Grover. Here’s the thing about Relentless, Tim Grover is a sports nutrition coach and he’s coached everybody that’s anybody like Michael Jordan and Kobe Bryant, so on and so forth. Now I like sports but I’m not a huge sports fan. That’s just not me, but what I liked about this book is that all of these people that he’s coached that have become the greatest of the greats. They all have something in common and that is they are relentless when it comes to doing what they do and that book is just top-notch in terms of getting you pumped up and motivated. It’s just cool to hear about some of these routines that these athletes went through and that he coached them through. Relentless is my number one favorite book in terms of motivation and just getting you going.
Another one that I just read literally last week was by Jesse Itzler and it’s called Living with a SEAL. I just finished that book about a week ago and it’s about David Goggins who is a Navy SEAL and he’s an ultra-marathoner and just amazing individual. As soon as I finished that book, Cory, I immediately went and I bought David Goggins’ book called Can’t Hurt Me, I’m about halfway through that. I’ll tell you, Cory, this is some crazy stuff because I work out two to three times a week on average and since I started reading the book Living with a SEAL, and now, Can’t Hurt Me, I’ve been running four to five miles a day for the last two weeks straight. It has motivated the hell out of me. I got a couple for you, Relentless, one of my favorites, Living with a SEAL, great, great book, and then Can’t Hurt Me by David Goggins. But if you’re going to read the last two, I’d recommend reading Living with a SEAL first before you read the David Goggins one because it explains who this guy is without much, it’s very 10,000 foot and it’ll really, really intrigue you. I like those a lot.
Cory: Do you have any motivational quotes that you really liked that have really impacted you, like a mantra?
David: Yeah, not exactly from those books, my favorite quote of just of all time is “Consistent, persistent action,” that’s it, that’s the whole quote.
Cory: Who said that?
David: I’m not even sure exactly where I got that from, but I truly believe that you can be successful in anything. Let’s take it off a real estate for a second. You can truly be successful in anything in life if you are consistently, persistently acting towards that goal. Consistent, persistent action, that’s my life motto. Whenever I was like, “Oh, I want to write a book,” like 18 months ago, I was like, “That’ll never happen,” and I just thought, “If I can consistently just be a little bit persistent about this, maybe everyday, put in 10 minutes or every week, put in 2 hours, eventually, I’ll get it done,” and boom, 18 months later, I got a book. It doesn’t necessarily mean that you have to do things overnight, it just means you have to consistently be persistent about them.
Cory: That’s awesome, man. I was looking to see on Google who said that, but there are a lot of different versions of it, but that’s great. I love that, man. I agree, too. Whenever I was knocking doors in Oklahoma 100 degrees sun in June for Kirby selling home cleaning system, I’d knock 100 doors to put on 3 demonstrations and to sell one $1600 vacuum cleaner.
It was funny when you get to door 20, 30, or 40 and you have so many people rejecting you, it’s that point right there where you have to do three times as more to get one sale, and at that one point is when most people quit. When they realize that now I have to do, not double, but triple of what I just went through and even harsher rejection to get to the light at the end of the tunnel, to get to the result you want and most people just give up too soon, they give up and they’re 3 feet, in this example probably 20 feet from gold, but just taking what it takes to persist through all of that objection, through all of that conflict, through all of those things that come up and challenges to get to the result.
Like you said, consistent, persistent action. It isn’t just thinking about it. It isn’t just coming out with the strategy and putting this framework together. It’s actually getting out there, knocking the doors in this example, getting yelled at, getting told, “You’re the scum of the earth, get off my porch, and I can’t stand people like you,” and just all of that stuff and finding a way to smile through it, finding a way to learn through it because I always talk about if you fail, you actually succeed if you learn from it. That’s the most important thing.
David: Oh, yeah, absolutely.
Cory: Do you have any favorite mobile apps that’s changed your life? Do you use mobile apps on a daily basis in your business?
David: In my business, I can’t say that I do. I’ve used a lot of them in the past. Whenever we were doing heavy on bandit signs, we were using an app to track that. I can’t remember off the top of my head what that was called. I’ve used the Driving For Dollars app in the past, but I don’t use any of that stuff today.
One thing that I have been really focusing on recently is putting together a good dashboard. One of the things I just think all investors, Cory, not even real estate investors, all investors struggle with is having a good dashboard, specifically real estate investors, though. If you ask somebody, “What are your KPIs?” most of the questions are, “What does that mean?” If they do know what it means, they’re like, “Oh, we have a rough idea.” But do how many letters you’re sending to get a call? How many calls you’re getting to get an appointment? How many appointments you’re getting to get a contract? And how many contracts you’re getting to get a deal? Break all that stuff down to a cost. I’ll be honest, as of right this second, I don’t know my numbers exactly but I’m making a constant effort to focus on that and drill it down.
One of my good buddies, Chris Arnold out of Dallas, Texas. I don’t know if you know Chris. He actually lives in Tulum. He’s been coaching me a little bit lately on setting up these dashboards. He uses a software called Klipfolio. I’ve been using Klipfolio now as well, and basically, it just pulls data from all over the web. Whatever software you’re using, if you’re using Podio, if you’re using CallRail, if you’re using CallFire, if you’re doing RVMs, if you’re doing whatever, it’ll pull all that data into one centralized dashboard. Then from there, you can then break down your numbers. Again, I’ve been really focusing a lot lately on that. Klipfolio would be the app or website that I would, to answer your question that I am using. Other than that, no other apps per se.
Cory: Okay, like Dropbox?
David: Yeah, of course. We use Dropbox and Google Drive. We use those too. That’s a good point. I overlooked those because those are pretty common. We use Google Drive and Dropbox for photo sharing, we use Podio for our CRM, we also subscribe to REI BlackBook which is a St. Louis company, Damon Remy, good buddy of mine. We actually don’t use REI BlackBook as a CRM, I use it as a marketing machine. It’s got a really, really great tool for putting your properties up on websites and adding and removing those properties as well as emailing and text blasting your buyers list.
It’s funny, we use Podio as our CRM, it’s our catch-all, then we use REI BlackBook to market those properties. Furthermore, we use RightSignature because it syncs up with Podio via GlobiFlow to send our offers with maybe about 45 seconds and 8 clicks, so we’ve built that in to Podio. It’s just really cool too because we can send offers from there, but then when those offers get signed, they go back into Podio and they will notify you and you can create tasks and certain things that come off of that, so it’s really, really, really cool.
Cory: Yeah, we use Podio, customized, you can do a lot of cool things inside of Podio. There’s RealFlow, there’s REI BlackBook, there are a lot of different CRMs out there, […] which ones you like. The challenge is whenever you use one for awhile and then switching over can be a lot of pain for the people in your team and stuff, so just do a really good job of investigating which ones you like and why you like them.
Go back to your comment about dashboards, Klipfolio is a good one, a couple of other options is Plecto, if you ever heard Plecto. Have you ever heard of Plecto?
David: I’ve heard of them, yeah.
Cory: Plecto’s got a little bit more graphics, you can add a few more charts to it that Klipfolio is lacking right now in my opinion. I tested out Klipfolio as well. Then one Cyfe. It’s actually the least-expensive of all of them. Not as pretty but does a dang good job. It’s $10 or $15 a month. That’s cyfe.com. But Plecto is one that we’re leaning more towards right now, especially as you start getting team members and you can create these dashboards where they’re shareable, it’s not just one person, not just the CEO of your company or whatever. That’s cool, man. I love that. Klipfolio is a great, great tool.
Some of these have mobile apps and some of them don’t, so make sure you look at that, too. We’re pretty much mobile and most of the tools that are created now, they’re being created for people to use them on their phone, use them on their iPad because laptops are becoming more and more just not needed to be able to do all the functions, especially if it’s web-based applications, which I would say 80% of stuff that you do, most of it is web-based application. Good stuff, man. That’s good.
Going back, what’s maybe a lesson that you’ve learned in wholesaling that you like to share that’s maybe one big thing that really sticks out to you that you like to share with someone that’s new, getting started?
David: This business is all about follow up. It really is. On average in our business, we’ve done over 300 deals in the last 3 years. Actually closer to 4 years, I would say, we’re averaging 8–10 deals a month. The reason that we can do 8–10 deals a month is because we are persistently following up with our individuals. On average, from the time that we first contact a motivated seller to the time that we get that under contract is four to six months. Now, that doesn’t mean that I can’t go out in one call to close somebody, I do that all the time, but on average, it takes four to six months to go out and get that property under contract and then sold for a wholesale fee.
I’m going to take a step back, we were talking a little bit about CRMs, Cory. You have all these different options with CRMs. We use Podio and REI BlackBook. You had mentioned a couple of others like RealFlow. Infusionsoft is a good one. There’s a hundred of them, but at the end of the day, there are only two things that really matter with the CRM. Two things. One is your notes and two is your tasks. That’s it. I know some people that have CRMs that are so basic that I look at them and I laugh, but they’re doing just as many deals as me.
Now my CRM is pretty robust. We have about four hundred Globiflows, which just mean automations that we’ve built into Podio. We’ve spent years working on it and we’re constantly tweaking things. But at the end of the day, those automations, all they really do is save you a little bit of time. What really matters is that you take good notes on what’s going on with the property, what’s going on with the seller, when you last talked to them, and what offer you’re going to make. That’s really it. You can dive deep and get granular with all that stuff, but at the end of the day, just keeping good notes is very, very, very important.
Cory: Can you go with those again, David? Because people are probably taking little notes here.
David: Yeah, of course. What’s going on with the property? That could be how old’s the roof? Does it need a kitchen? Does it need a bath? Does it need landscaping? Just all things with the property. Then you want to keep notes on all things with the seller, like what’s going on with the seller? Are they in trouble with the law? Did they just have somebody die in the family? Just keep some basic general notes about what’s going on with them. Then, just some notes about the property in your offer, “I think the ARV for properties in the area are about X and this one’s pretty similar and it needs X amount of repairs, so my offer is going to be in this range,” Those are just your notes, but you want to make sure that you update those notes every time that you either reach out to that individual or that you speak to them.
If I just call somebody to leave them a voicemail, I’m going to go into my CRM and I’m going to say, “Hey, I left them a voicemail at 11:41 AM,” and make a note of that. That way, whenever you finally get them on the phone, you could pull up your notes and say, “Oh, hey Cory. I’ve been trying to reach you for 2 months and I’ve left you 6 voicemails and I’ve sent you 16 text messages. Where have you been?” Then that way, you have something to talk about. That way, you can keep that conversation flowing.
Cory: I love that you said that you use that as a conversation point. Sometimes, you get on there, there’s nothing to talk about besides you think money or whatever, you’re using it as a conversation of, “Hey, I’ve been following up with you, I’ve been wanting to reach you.”
David: Oh, yeah, I use it as a tool to give them guilt.
David: I have a buddy, Steve Trang. Do you know who Steve Trang is, Cory? No worries if you don’t. He’s out of the Arizona market. I just did a podcast with him a couple of days ago on my podcast. He’s got this really cool thing that he does, it’s called the Perfect Seller Appointment. He says that sellers, they lie, they cheat, they steal, and I was like, “What do you mean?” he’s like, “They lie to you because they just want you to think that you’re the only person looking at the property, they steal your time because they come out and they want to get all the information from you, and then they cheat because they tell you that,” and this is also lying, “‘Oh, we’ll be in touch.’” Then, they go into what he likes to call the witness protection program where you have unlimited access to their voicemail. Then they think that you’re rude when you call them from a different number and you catch them. They’re like, “Whoa, you know I’ve been trying to avoid you.” “Yeah, you have been. What the hell? This isn’t fair.”
Anyway, Steve’s got a really, really good thing that he does on the Perfect Seller Appointment. I think it’s great because if you can keep those notes going and then you can call the seller out like, “Man, I’ve been trying to reach you. I’m just trying to help you. Why haven’t you been returning my calls?” It puts them on the spot and I usually will follow up, but I’m not trying to be rude or abrasive. Those two things I don’t ever want to be, but what I do want to do is let them know that I am here to help them. It’s like, “If you want me to quit calling you, just tell me. Tell me right now.” When you put somebody on the spot like that, they’re typically not going to say, “Quit calling me,” and it’s happened many times, but typically they say, “Oh, no, you’re right, I get it, you’re just trying to help.” “I’m just following up. How are we doing on my offer?” for example. Those are just some tools and tips that we use to help with that.
The first part was notes. Notes are very, very important, but the second part is tasks and all CRMs have the ability to do these two things, guys. You can type in notes and you can create a task. What is a task? Why is it important? It’s very, very important because if I’m working seven leads, let’s say, and I need to make sure that I call each of these people every week, it’s not going to be impossible for me to remember in my brain or on a piece of note paper to call these people back. But when you have 2700 leads that you’re working—in our case, we do. We have over 3000 leads in our system just over 4 years of time. Everybody will get there at one point—there’s no way in hell that you will possibly remember 2700 of these individuals and when you’re supposed to call them back. You create these tasks in your CRM to just say, “Hey, follow up with this guy in two weeks,” and then in two weeks, you’re going to get an email, a notification, or whatever you want, however you set it up, to remind you that it’s time to follow up with that person again.
I think the point that I’m trying to illustrate here is that it doesn’t really matter what CRM you use. Some of them are going to have bells and whistles for certain things, but at the end of the day, the only thing that’s important are those two things, good notes and good tasks to follow up. That’s it, it’s that simple.
Cory: I love it. I love how you simplified it, David, and I agree that we can complicate things so much.
David: Wholesaling is easy, wholesalers are difficult.
Cory: That’s so true.
David: That’s a Joe McCall quote there. Wholesaling is easy. This business is so simple. Human beings make it difficult. That’s it. We always try to over complicate everything in life. At the end of the day, what is wholesaling? It’s marketing to motivated sellers, it’s putting properties under contract, it’s connecting them with cash buyers, and it’s closing. That’s it, that’s the whole business, there’s nothing else to it.
Cory: In simplified, we call ABC wholesaling. A, the owner. I don’t like calling them sellers because there’s only one owner and there are multiple sellers, so I like to call them owners. Owner is A, B is you the wholesaler, and C is the in-cash buyer. There’s easy, easy, easy understanding is you find a deal for $50,000, you find somebody else that wants the deal for $80,000, you make $30,000. That’s the simplest version of it. Now, if you unpack all the other stuff that goes into it, that’s where it can start to get complicated and more granular.
David: Sure, and that’s okay. Every deal is going to have a curveball or it’s going to require some additional work and that’s okay, but don’t worry about that stuff until you start doing the basics, which is marketing, finding that motivated seller, so and so forth.
Cory: Awesome, David. Do you get eight hours of sleep, my man? You’re recently married.
David: I don’t have any children, Cory, so I do. I probably get closer to 9 or 10. Man, I love my sleep.
Cory: That’s awesome, man. I have two step-kids so when you have some kids, you’ll probably change that potential a little bit. What’s your morning routine look like?
David: I didn’t work out this morning, but I typically try to work out in the morning before I get going.
Cory: You got trainer or no trainer?
David: I do have a personal trainer but I don’t work out with him in the morning. I have a personal trainer for boxing.
Cory: Oh, cool.
David: I don’t compete. I’m not into that. I just like the sport of boxing versus going and lifting weights. It’s just isn’t more fun to me. Tuesdays and Thursdays, I go do mitts with my trainer for 45 minutes and then every morning, I try to either go for a walk, or a jog, or do something around the home. I have a stationary bike and an elliptical. I hop on those occasionally. I try to get a 30 to 45-minute workout in the morning.
I’m not really into meditation all that much but, I do like to visualize. I guess you could say they go hand-in-hand, but I usually like to spend at least 5 or 10 minutes in the morning just visualizing. What my life is going to look in 6 months, what my life is going to look in 6 years, what my day is going to look like. I just feel the visualization, and again, it doesn’t have to be for an hour. I usually will only spend sometimes 3–5 minutes on this. I’ll just sit, eyes open, eyes closed, however I’m feeling that morning, and I just try to visualize in my brain what my life is going to look in the future, and that future could be the end of the week or it could be the end of the decade. Every day is a little different. I like to visualize. I think visualization is huge.
Then from there, I usually head into the office or I start running appointments. I have a wholesale business, we have two acquisition managers, a disposition manager, a closing coordinator, two virtual assistants, and two partners. We have a pretty big team.
Cory: Lay out your team again?
David: Yeah, I’d be happy to. We’ll start at the top. It’s myself and my two business partners, and then we have staff. That staff consists of a closing coordinator, it consists of two acquisition managers, we have a disposition manager, and then we have two virtual assistants.
Cory: Essentially, you’ve got six people in your group and then two partners?
David: And two partners, yeah. The reason that we’ve structured the business the way that we have is because it’s very difficult to operate a wholesaling business and also have 5 to 10 rehabs going and also add a rental a week by yourself, it’s very difficult. I’ve essentially partnered up with two other people in St. Louis in my market that are awesome, they’re friends, they’re rock stars and it’s like you said earlier like traction, right person, right seat.
I focus on the wholesale. I focus on the marketing efforts. I’m running appointments with my acquisition team. I’ll either run appointments with them or I’ll go run some of my own appointments, or I’ll just hang out in the office and wait until they have questions and support them. That’s me, that’s what I do.
Then my other two partners, one of them focuses on nothing but rehabs. Whenever we go out and we find that great rehab, again as we said it earlier, keep the best, sell the rest. Whenever we come across a really, really good property that would be a good rehab, we’ll send one of my partners out, he’ll review the numbers and decide if it’s one that we want to take on or not. He focuses his time and efforts on running the cruise, getting the properties ready to be sold and listed, dealing with the agents, and all that type of stuff, he does all of it.
Then my third partner, he does the rental business. Again, we’ve outsourced the management but he’s in charge of the rental acquisition which, again, I help him. As the wholesaler, my job is to get all the leads to come in the door and then if I get one that looks like a great neighborhood for a great rental, I just kick it over to my partner Mike and Mike handles the rental. He’ll say, “Okay, cool, I’ll run the appointment,” and if it doesn’t end up being a good rental, then he’ll just kick it back to me as a wholesale. Our goal is to get to 150 rentals and we want to do it relatively quick within 2–3years.
With that being said, we have to buy basically a rental a week. We don’t always hit that goal, but that’s a good goal to have. 52 weeks in a year, you could get to 150 in 3 years or less if you do that 1 a week. His job is to then go find those rentals, put them under contract, deal with the crews as well—different crews for the rental rehabs versus the retail rehabs—but he’ll get those rent-ready. He’ll deal with the inspectors within each city or county and then he’ll then turn them over to the property management company. He also does all the banking side for us, too, because we use private money to purchase everything. 100% of what we buy is with private capital.
Cory: Not through banks, so it’s private capital.
David: We have a line of credit that we use but very rarely, it’s more of a backup for us. We have about anywhere between $2 million and $3 million of private lenders’ funds that we have access to at any time. If we need to go buy 5 properties at $100,000 a piece next week, we just reach out to our private lenders. The beautiful thing with our private lenders, Cory, is they are also real estate investors, every one of our private lenders, they either have 30-plus rental properties or they have 2 or 3 rehabs going and they just have access cash.
Cory: They need to deploy that cash probably, too.
David: Yeah. I lend as well. I got a couple of hundred grand that I also will lend as well.
Cory: You typically get a couple of points in 10% or 12% or something like that?
David: Exactly. Our private lenders, we do a couple of different scenarios with them, but we actually give them the option on what they’d rather make. A lot of people don’t do it this way but maybe some people listening or watching can learn something. We actually say, “Hey, we’re willing to pay 10% or 12%, you pick, but there’s a catch, if you want 10% which is lower than 12%, we’ll happily pay you monthly.” One thing to keep in mind is when we borrow money, we borrow, purchase, and rehab. We get all of it, it’s not 70% of that. The house is $50,000, the rehab is $30,000, I need an $80,000 loan.
I’m going off on two different topics here but let me finish the first one. The first one is that all these private lenders are real estate investors which helps a ton because if we find something that we want to buy, we just send them over pictures of it, then we send them caps. We’ll do a desk review in typically an hour or two or less sometimes and give us a thumbs up or a thumbs down. We’ve only had thumbs down like three times in the last three years which is fine. Maybe the deal didn’t look that great. But typically, the investors say, “This looks like a great deal, guys, go get it,” and then they’ll lend us the money.
Cory: You say either get 10% or 12% but if you want…
David: Oh, yeah, back to that. So, then 10% or 12%. Ideally, we don’t want to pay anybody until we refinance. It’s truly no money out-of-pocket, so we’ll borrow all of their money. We’ll use it to purchase the property. We’ll use it to purchase the repairs and pay for the labor. Then we will refinance, and then we will pay all of their principal plus the prorated. It’s 12% annual or 10% annual. Ideally, we’re going to pay them 12% on the back end. There’s no monthly payments. It’s all in arrears, and we’ll pay a little bit more for that, we’ll give them extra 2%.
We never pay points because we’ve just never been asked to pay points nor have we ever suggested that we’re willing to pay points. If they were to come to us and say, “Oh, we got to start charging it,” then maybe we would do it, but at this point in time, it’s no points, it’s 10% if we make monthly payments with 100% of the principal applied at the last payment, of course, or it’s 12% where we don’t make any payments and we give them all their money back plus interest at the end.
It’s funny because we have several investors that we work with, we probably have anywhere between six and eight different private lenders at any time, and these investors will stagger them. We don’t have anybody that does all 10% or all 12%, they typically will do a couple 10%s and a couple 12%s because they want that monthly income, but they also like to have a little bit higher rate. Now you got to think, a lot of these investors are lending us money off of their own lines of credit.
Cory: You’re paying on time, so whatever they’re using on their credit, obviously, they’re getting charged more.
David: Yeah, sometimes they like to get to 10% monthly so that way, they don’t have to come out-of-pocket, but on the 12%, you got to come out of pocket.
Cory: How long […]? Are they like 30 days, 60 days, 45 days, 90 days?
David: No, it just varies. I’d say on average, it’s 2–3 months on average. Sometimes it might be two or three weeks if it’s just a wholesale that doesn’t double closed or assigned and we essentially have to buy it before the buyer can buy it. Other times, it might be 7 or 8 months if we’re doing a big $300,000 or $400,000 rehab project in a nice part of town. It just varies, but we make that clear to them when we’re asking for the loan. Again, we’ll send them pictures.
Cory: How often are you doing the deal that’s over $300,000?
David: We just sold one last week for $525,000.
Cory: Wow, okay.
David: Not that much though, Cory. Typically, we’re buying anywhere between $40,000 and $200,000, in that range just because we’re in the Midwest.
Cory: Yeah, we’re in Oklahoma, too.
David: Your market is probably not too much different than ours. Sometimes though, we’ll come across a property that has a $300,000 plus purchase price and it may need anywhere from $80,000 to $150,000. If the numbers look good and we can make $50,000 or $60,000 off of it, we’ll do it. We could always wholesale that deal for $10,000 or $15,000, but if we can make $60,000 just rehabbing into itself, why not?
Cory: You typically look at that on a rehab where you go, “I got to make at least double of what I’m going to make on a wholesale for it to make sense”?
David: I think more like triple. I don’t know about you but our average wholesale in St. Louis is low compared to the national average. Our average wholesale is about $6700, that’s one number I do know. We’re at $6700 on average. Now, have we done wholesales for $80,000? Of course, we have, but we also have wholesales that will do for $2000 or $2500. When you average all these out—I’m taking out the outliers here—the average deal that we do—this is more of a median than it is a mean—the median number is $6700. Now I know guys like my buddy that I had mentioned earlier, Chris Arnold out of Dallas, his average wholesale fee is $12,000 to $15,000. Our market, I don’t know if it’s just that the values are less here, or that we have more competition, or both, it could be both.
Cory: Yeah, you got some hedge funds out there, dude.
David: Right. It’s difficult for us to get a $15,000 or $20,000 wholesale on average. It doesn’t mean that we can’t get those. It just means that on average, we’re not bringing that wholesale down.
Cory: Basically, a wholesale is maybe $10,000 on high, $7,000 on the regular, and then on rehabbing, you need to make at least $21,000 to $25,000.
David: Yeah, our goal is typically $25,000 on the low end, if we’re going to rehab anything, we need to make at least $25,000, but again, as the prices increase, so do the percentages. If we’re looking to do something that’s $300,000 in terms of a purchase price, that’s a lot of interest that we’re paying on that money. At that rate, it’s like we need to be making maybe $40,000 or even $50,000 on that deal because the risk is higher. It has to equate.
Cory: Yeah, that’s great, man. That’s good information.
David: I know this podcast might not be your standard process or flow.
Cory: No, this is great, everyone’s learning. It’s great. I love it, that’s just what’s about learning. What are you most grateful for, David? Let’s take it back from a bit to more of a personal side, what are you most grateful for in your life?
David: That’s a great question, Cory, I’m glad you asked that. I am most grateful to just have the ability to be grateful, which is a weird way to word it, but I’m a very grateful person like ultra grateful.
Cory: Just like awareness.
David: Yeah, it’s just like awareness.
Cory: […] optimist.
David: Yeah, I think the awareness is a good way to word it. Here’s a really good example. My wife and I have been married a little over a year, we’ve been together for about six. We’ve only been in maybe three arguments or I should say fights and not a single one of those lasted more than two days, so we have a really good relationship. I think the reason that we get along so well is because we are both ultra grateful for everything around us, all of our belongings, all of our possessions, all of the friends and family that we have. I’m not just saying I’m grateful to have a Model 3 Tesla, which I do and I love that car, but I’m grateful for the little things, guys, I’m grateful for running water in my house and electricity and the fact that I don’t have to walk two miles to get water. I don’t have to worry about somebody breaking down my door and shooting up my house, I live in a good part of town.
I’m just grateful for all the little things, Cory. It’s maybe not the answer you’re looking for, but in my opinion, gratitude is the answer to curing depression. I’ve always had a joke with my college buddies. If we were dating some girl in college, for example, and she just was just a crazy broad, we’ve always had a joke like, “Let’s book her up a one-way flight to Kenya and then we’ll be a week behind them. Let’s see how bad your life is truly compared to some of these other individuals in the world.” We are oblivious to it, I’m not, but most people are.
If you start comparing yourself to the world as a whole versus just the neighbor, everyone’s heard the saying “Keeping Up with the Joneses,” “Oh, the next-door neighbor is getting a new car, I need to get one.” That’s fine, but if you can take on the ability to compare yourself to the rest of the world that doesn’t live in the United States or doesn’t live in a nice neighborhood. They’re living on $2 or $3 a day and they don’t have a house. Only one in nine people in the world own a car. I own three cars. It’s one in nine own a car, but ask yourself right now, how many of the friends that you have in your cell phone that don’t own a car? I don’t know a single person that doesn’t own a car, literally, unless they’re under 16. Only one in nine people in the whole world own a car. Start comparing yourself to the globe not just your neighbor.
Cory: Yeah, even comparison, Dave, to interject, I say this every single morning, I’ve been saying it for years, and years, and years and it is the number one thing that sets the foundation for the day and it’s my worst day is someone else’s paradise. Just being aware of the things.
David: Yeah, awareness, I think is the key.
Cory: Yeah, man, the gratefulness and being aware. I love that, man. I think that just the awareness and you’re talking about the fights that you have only lasting two days, it’s probably because you have this awareness of in the big scheme of things, this fight that we’re having, how important is this thing that we’re dealing with even though it’s strong emotionally, but in the big picture, whenever you can zoom out, that’s when your radar goes out.
Most people that are not grateful and don’t have awareness is they live in the focus zone of emotion only, and emotion is one factor that makes us human, that makes us excited, that gives us the ups and downs, but the challenge of living in just the emotional zone only is that it will actually kill you because your body is not designed to live with that much stress 24 hours a day, 7 days a week of going up and down.
Whenever you would zoom out, that’s when the awareness comes that you realize that you are such a small piece in a seven billion plus world. Then you start looking at yourself like that where there are so many other people that are going through so many worse situations than you are. We’re not even talking about the kids that are getting molested on a daily basis, on an hourly basis. We’re not talking about the people that are getting killed and murdered every minute, every day. We’re not talking about all of the horrible situations that are going on. We’re just talking about, just like you said, maybe going to a hut back and forth in Kenya because you don’t have clean water or maybe just some struggles that you’re going through. Maybe your kids are having to sleep in nets when you go to bed at night because of the fly.
David: Yeah, Cory, 1.7 billion adults worldwide don’t even have a bank account.
Cory: No bank account, which is one of the reasons why blockchain crypto is making […].
David: Yeah, we’re talking almost two billion people. Again, to me, it’s the awareness factor. It’s just like, “You know what? I have a home. I have a wife who loves me and I love her. I have a car. I have a job.” One of the things, too, that my wife and me—I rub off on her a lot because she’s awesome—pride ourselves on is that the things that you say and the things that you think affect your mood. We wake up in the morning and we’re talking to each other, we make a…
Cory: A concerted effort?
David: Yeah, there you go, we make an effort to make sure that the words that we choose are the right words. Here’s a perfect example, “Hey, sweetie, what are you doing today?” “I get to go to work.” It’s not “I have to go to work,” it’s “I get to go to work today.” “Oh, that’s great, I get to go to my work today, too. What time are you getting off this afternoon? Do you want to maybe meet at the park? Great,” but we don’t use words like “I have to” anymore, it’s “I get to”. When you start changing your mindset on stuff like that, the way you feel every day also starts to change.
Words are powerful, and just making little tweaks like that for whatever reason can really change a lot in your life, it can change your attitude, it can change your mindset, it can change your perspective, and it ultimately brings gratitude into your life whenever you have a positive outlook on certain things.
Cory: Great app that you should download and I’m going to encourage you to download. Actually just do it. It’s called ThinkUp. It’s an incredible app that every day I listen to and it is affirmations. The cool thing about that is that you can record it in your own voice, I don’t know if I’ve ever done this before but I’m going to do it really quick so you just hear one.
David: Yeah, let’s hear it.
Cory: This is my own voice I listen to every single morning. Usually, I’ll put my earbuds on and in the sauna, which is great because you’re just chilling, you’re doing nothing besides just sitting there thinking. You can’t really talk to anybody, really. I don’t. I’m just sitting there listening to this. I record these things in my own voice and you can choose a music behind it so I’ll let you hear it. “Remember, be a servant. I am worthy of my God’s love. The moment I accepted responsibility for everything in my life is the moment I gained the power with anything in my life. Lord, strengthen my faith to take you at your word, rise within me that I may boldly declare your truth.”
It’s things you can record these affirmations, but you can go in and see other people’s affirmation and record it in your own voice so you can say things that are in your own voice that means something to you. It is incredibly powerful and it gets you set-up for the mindset of strength, being aware, being thankful, and grateful alongside this bracelet I wear every single day. The reason I posted in the Grateful Project today’s date 1744 posting a reason to be grateful every single day. I think gratefulness is one of the biggest factors of successful people whenever you really dial it back, when you really get to zoom out. They are grateful people, they are incredibly grateful, and they do big things in life because they’re grateful.
David: I agree 100%, Cory, I’m with you all the way. I love that, I love that. I will check that out. It’s actually called ThinkUp?
David: Cool. I’ll look into that.
Cory: It’s awesome. You obviously train and you coach. How important has that been to your success and would you recommend it to others?
David: Are you talking about real estate investing?
Cory: Yeah, for wholesaling and for your coaching program.
David: Yeah, I’ve had several coaches. I’ve spent over $100,000 on education and that doesn’t even include masterminds, everyone always includes their masterminds into that figure, I’m talking about just hiring coaches, buying books, buying courses, going to seminars, that’s education in my eyes. I’ve spent over six figures on that. The other day, somebody was asking me, “Is there value in that?” and my response was, “100%,” every single coach that I have hired has provided me with value and I have not had a single regret in my entire life from hiring somebody to teach me and help me grow my business or even myself. I always have at least two coaches, if not three. I have a personal trainer, which is a fitness coach, I always have some sort of a real estate coach, and then I have a CPA who I pay additional to get on the phone with me once a month and help me tax plan.
Cory: You have not fractional CFO but CPA?
Cory: Is that an outsourced thing or is it somebody that’s local?
David: No, it’s a local person. I’ve used her in the past for several of my other businesses. We have a bookkeeper in our office. It’s one person I forgot to mention in my team. We have a bookkeeper as well here. I’ll have to add that to the notes here, but we also have a CPA just for the purpose of filing the taxes, overlooking everything, making sure we’re doing everything right, but also she’s very helpful in saving us money. She finds things that we can essentially write off that we may not know about. I happen to phone with her at least once a month for an hour or two and just talk about any changes in the tax laws, what I can do to pay less taxes.
Here’s the thing about taxes, Cory—I’m a nerd—the thing about taxes is there’s 60,000 pages of tax code, it’s just unbelievable how much tax code there is, but there’s only two or three pages that tells you when, how, and where to pay, everything else is essentially how to not pay. It’s crazy. Literally, there’s a tax bracket, there’s the date, there’s a website or forms online, where to mail those, where to go online and do this, but that’s it, there’s only a couple pages in the tax code that actually says when, how, where, and why, everything else—you’re talking literally 99.9% of the tax code—are ways to not pay, or deter, or defer paying, or not at all.
Here’s the reason why, I struggled with this for a long time but I understand it very, very well now. Laws are written by rich people to protect rich people. When was the last time that you saw somebody in Congress writing laws that wasn’t wealthy? Somebody doesn’t go from working at jack-in-the-box to being a senator, it doesn’t work that way. Laws are written by wealthy people to protect wealthy people. Once you start to understand that, you will have a whole new outlook on taxation. I no longer fear taxation because I take effective steps every day to know how to avoid paying it or paying the least amount possible.
That’s one of the other reasons why I like real estate. As we all know, there are so many advantages to real estate investing due to the taxation laws. That’s another one of my mentors that I have or my coaches and then I don’t have any paid coaching right now that I’m doing with other individuals, however, I’m doing a lot of swaps. I have a guy that’s coaching me on the radio and I trade him other aspects. He’s coaching me, I’m coaching him.
Cory: I love that, man. That’s cool.
David: I’m on the radio now doing radio advertising.
Cory: How’s that going for your radio advertising?
David: It’s going good, man. It’s going good. We’re spending about $1000 a week right now. We’ve been on for about three months, we’re on two different stations that each air between two and three times a day each on each station. So, we’re on the air anywhere from 4– 6 times a day for a minute every day and it’s going really well. The reason that I wanted to get into it is because some people I know out there in this space have transitioned into only radio, or only billboards, or only television, or only one of those three.
In my business, we’re doing bandit signs, we’re sending out direct mail which could be up to 50 different lists, we’re cold calling, we’re cold texting, we’re using RVMs and voice blasting services. We’re doing a hundred things in terms of marketing. We’re networking, we’re going to […], we’re doing everything, but once I can get to the point where I can scale my radio to maybe $15,000 or $20,000 a month, I no longer have to manage anything. It’s one thing that I’m doing and one thing only. It’s actually cool because it also carries a stigma behind it of—maybe stigma is the wrong word—if you’re on the radio, you’re legit, or if you’re going on television, you’re legit.
Cory: Yeah, we’re doing a couple of tests on Oklahoma on TV. The cool thing is—people don’t realize this—you actually write the questions for the interview on TV, people don’t realize that. For your book right now, dude, that would be great exposure for you, for you having a book, being able to go on there and talk about the challenges or whatever, and then say, “By the way, if you want my book, I have a book, I’ll give it to you for free, just pay the shipping and handling,” and then tell them to do that and have a call-to-action link or a phone number. The cool thing about the radio is that they have a phone number that’s actually capturing now email addresses, capturing now the information that people call in.
David: I’m with you, man. I love that. But one of the things that I wanted to do with the radio, obviously, I wanted to do more marketing but as time goes on, I want to do more radio marketing and less of everything else. I spend a lot of time weekly on dealing with what campaign am I going to be working on, what lists do I need to buy, what mailer am I going to send, how often am I going to send that, when’s the last time I sent the last couple, and when do I need to resend these, what part of town am I doing bandit signs in, what part of town do I need to focus on. It’s just a lot to do. It’s okay. That’s the business that I’m in. I’m okay with that, but maybe over the next six months to a year, I’d really like to transition away from all those other sources and then just be spending $15,000 to $20,000 a month on the radio. That’s what I’m spending right now about $15,000 a month on my marketing, but that’s scattered over about 15 different things.
Cory: Different channels, yeah.
David: Yeah, and I’d ideally like to close everything down, even AdWords eventually, and just be on the radio because it brings a sense of legitimacy to you. If you can get on five, six, or seven stations and you’re aired a couple of times a day, you’re basically reaching every single person that’s on those lists anyway that you’re mailing to, who doesn’t listen to the radio? You’re hitting everybody and there are only so many lists you can buy. With the radio, you’re hitting millions of people so I don’t know, I just like the bigger media personally, and again, the ultimate goal here is twofold, one is to just become better at business and bigger, of course, but two, be able to manage less.
Cory: Yeah, I think a lot of great points and basically, it comes back to simplification, doing less, and getting more results happening. I’m with you there, man, you and I have a lot of similar things, a lot of stuff the same way.
David: We do, we do a ton of stuff.
Cory: A lot of actually interesting from our past, a lot of it’s similar, I relate a lot with what you’re saying.
David: I’ll share a quick KPI with you guys. My radio is costing me roughly about $50 a phone call right now, whereas I’m also doing AdWords, for example, and my cost per lead on AdWords is about $97 per lead. I’m getting leads at 50% of the costs on the radio than I am versus doing traditional AdWords, and my mailers are even worse than that, I think I’m probably spending $150 on mailers to get a lead.
Cory: Yeah, I get it, man. You got to basically look at where’s the best bang for your buck and I think fan mailer is you’re seeing a lot of stuff when fans move in to radio. A lot of folks are moving to radio so the medium definitely works, but it’s not one thing. I don’t know if you just go right into that medium. Maybe you do, but I haven’t heard a whole lot of people just go right into doing radio because I do think that you need to have a foundation to set up.
David: I’m with you, absolutely. I don’t recommend anybody that’s brand new doing it.
Cory: Yeah, go right into radio.
David: Yeah. We have four years of experience at this point, we’ve built a good name for our business, so on and so forth.
Cory: You’re expanding that brand.
Cory: Cool. Let’s talk about your book on where people can go, and David, I know you got to go, I thank you for the time. What’s a place people can go, get your book, and how can we reach out to you? You shared some gold nuggets today, man, I really appreciate you.
David: Yeah, no problem, thanks for having me on the show, Cory. The book is called The Ultimate Guide to Wholesaling Real Estate: Learn How to Buy Properties at a Discount. I wrote this with my business partner, Mike Slane, you can see photos of us here on the back.
The book is exclusively sold on Amazon just because it’s easy, again, it’s simple. I think the current price is maybe $15.99, $16, something along those lines. It may change over time so if you’re listening to this episode two or three years down the road, that price might be different, but you can find the book on Amazon. Again, it’s The Ultimate Guide to Wholesaling Real Estate.
There is a free online course that we include with the book. You don’t necessarily have to buy the book to get access to the course, but we obviously plug the course in the book, and the domain for the course is freewholesalecourse.com.
Cory: Cool. Great name, easy to member, put this in the show notes. Awesome. What’s the way to get in touch with you on social media, my man?
David: You can find me on Facebook or Instagram, those are the two that I like to roll with, I don’t really do the whole Twitter thing. Facebook, just David Dodge, you should be able to find me on there. Instagram, @DavidADodge.
Cory: Cool. David, thank you so much for being on here. I appreciate everything you shared. I’m looking forward to getting all this on the show notes and lots of great nuggets here. Thanks for being so open and serving …] here, man. Appreciate you.
David: You got it, Cory. Thanks for having me, brother.
Cory: Awesome, man. Have a great phenomenal day. Download ThinkUp. You’ll love that. Thanks for taking the time. Thank you for listening and I hope you got some great nuggets from David. We’re going to bring on some amazing guests just like David to give you the best information, the profit master strategies that you need to crush it. Thank you, again. Remember, be a servant. Bye now.
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