Virtual Wholesaling And Disposition Methods In New Markets With Michael Nyszczot

FO 3 | Virtual Wholesaling

FO 3 | Virtual Wholesaling

 

Virtually wholesaling properties in any market without a buyers’ list is possible. In this episode, host Paul Lizell is joined by Michael Nyszczot, the Co-Founder of HouseDealsAmerica.com, as they talk about many disposition methods – from selling homes in rural markets, listing on the MLS, Craigslist, Zillow, and more. They also talk about some ninja sales tactics that most investors don’t use. Michael also tackles work-life balance as he is currently a full-time actuary and does real estate investing as a side gig and makes six figures a year at each job! Sit back and enjoy as Paul and Michael get into the nitty-gritty of dispositions of real estate!

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Virtual Wholesaling And Disposition Methods In New Markets With Michael Nyszczot

In this episode, I’m with Michael Nyszczot. He specializes in disposition in the sale side of real estate. I hired him to work for me. He sells a vast majority of my properties that aren’t known to MLS. He sells properties for some local investors that we used some students, investors that in other parts of the country that have trouble moving their properties that they’re trying to wholesale. Sometimes people reach out to us and we’ll move them for them and do it as a JV deal. He talks about some different off-market tactics to sell properties, which a lot of people are not aware of. We utilize newspaper to sell, especially in rural areas where we have an older population or poor Wi-Fi where people still utilize the newspaper to buy and sell home, cars, whatever it may be. These are some off-market tactics that a lot of you out there who do direct mail marketing don’t utilize enough.

Most of you either have your buyer’s list from your local REIA or you mail out cash buyers and we do that too in different areas as well. There are some other tactics to do it. You can scrape it off the MLS. There are a lot of ways to get cash buyers out there. He gets a good detail how he does it and some of his marketing tactics and even utilizing Facebook Marketplace, which I know a lot of people are doing. It starts to gain some traction. We sold some properties that way and hopefully we’ll continue to sell more. I expect it to be that way in the future. We talk about how technology has changed our business and how it allows me to do this, which I wouldn’t able to years ago. He said he got into remote wholesaling a number of years ago. It’s relatively new but with all the apps out there and all the different resources, it makes it pretty easy to do. Mike gets in pretty good detail about that. He gets into detail about how it helps him on the disposition side as well.

I have a good friend of mine, Michael Nyszczot who works with me with REO Auction Academy.

Thanks for having me, Paul.

Mike is going to bring a whole other dynamic to this that a lot of people can relate to because Mike is a full-time Actuary. Mike, give a little bit about your background as an Actuary and then how you got started into real estate investing. 

I’m one of those few people that actually knew what Actuary was going to the college. I went to Penn State and graduated with that degree in Actuarial Science. My day job is pretty successful and I work for a life insurance and annuity company. I’m one of those people that I don’t want to quit the rat race. I have a good job. I like what I’m doing but I always wanted more in life. I got into real estate investing back in 2006. When I graduated college in ‘03, I lived at home for a year or two with mom and dad, saved up and I was like, “I want to buy my own place. I don’t want to rent.” I didn’t want to live paycheck to paycheck and I wanted to still go out on vacations, go to the bars with my friends, pay off student loans.

I didn’t know what I wanted to do and then my girlfriend now wife, Tracy, gave me a book to read called Rich Dad Poor Dad, which changed my mindset a little bit. I went from thinking like a W-2 employee to a business owner or an investor type of person. I read it and then I was one of the people that actually took action and bought a two-unit in Northeast Philly. I still own it. I own that house, lived at home with my parents and had both units rented out. I had to wait for one of the leases to expire to move into the second floor. I got my taste in real estate, but I didn’t do anything after that.

FO 3 | Virtual Wholesaling

Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!

I put real estate investing on hold. I focused on finishing my Actuarial exams and then the only investing I did like every other American is equities and bonds, your 401(k) and a brokerage account. I said, “I wasn’t doing my investing, putting real estate investing on ice. In 2009, I finished up my Actuarial exams and I had all this free time and I’m like, “What do I do with it?” I went back into real estate investing again because my rental property was treating me well. Someone else’s rent was paying most of my mortgage and giving me a better lifestyle to live. I didn’t know what to do in real estate because there’s a ton of stuff that you can make money in real estate investment.

What I did basically was I joined a local REIA out in Philadelphia area. All I did was network, learn and listen to different strategies of different people who had successes in rentals versus rehabs versus wholesaling, etc. I decided at that point in time in 2009 is to do wholesaling in the Philadelphia market. I quickly realized wholesaling the traditional way. You’re not a real estate investor, you’re a sales and marketing company. I got expert on the acquisition side and the sales side of direct response, online and offline marketing. You’ve got to learn how to do sales and negotiating. I realize I’ve got to basically create a business to do, to deal volume I wanted to do.

I met my first business partner at the time, Eric, back in 2009 at a local REIA meeting. He was already doing it full-time. He’s done some rehabs with his dad and some rental properties. He and I partnered together and we decided to do wholesaling together for the most part in the Philadelphia Marketplace. I was the marketing guy. I ran the numbers, did the business operations. He was our sales and boots on the ground guy talking to home sellers and making offers. That was our business model from ‘09 to ‘12. We did a few rehabs, fix and flips in there and we did a lease option in a few rentals, but 90% of our business was wholesaling in the Philly.

The struggle during that time period towards the end was I wasn’t making the money I expected. We made good money but it was a grind. I was expecting to work less eventually as we hired people because we had a team of people. We had some acquisition people, we had an office manager even though we all work remotely. It wasn’t what I was reading in the books meant out to be. It was grinding for us. Internally I started to struggle too because I felt like a business failure. We were making money but it wasn’t what I thought I would make and decrease my hours overtime. I was just increasing them. I was asking the question, “Why I don’t have the financial success that other people at the local REIA has?”

At this time, things are going okay. We’ve got steady deal flow, but we’re spending thousands of dollars a month on marketing. We’re spending hours a day driving around talking to home sellers, trying to convince them why to go with us versus this with a real estate agent. Don’t get me wrong, we did okay money. It was just grinding work. The other hard part is that’s on the acquisition side. On the sales side is, I want my buyers to go visit the house. These houses aren’t vacant. They got people still living most of the time. It’s like trying to schedule all these potential buyers to go to the house and make an offer. It’s like two sides of the puzzles.

Many moving parts that you have to deal with that. 

We eventually hit a plateau in the Philly market. Me and Eric, we mail to the same list as everyone else. The pay-per-click stuff was getting more expensive. The competition in the Philly market was fierce. We decided to expand still using this traditional wholesale model. We went to Pittsburgh and Lehigh Valley area. I think we grew too fast and stretched ourselves too thin. At this point, Eric had this quarter-life crisis and he decided to pack up and moved to California. We closed out the business, sold any properties that we still had together and then mutually agreed to go separate ways as he started a new chapter of his life. This was around end of ‘12. I’m like, “I’ve got a good career and made some money. I’m cashing out of everything.” Plus me and my wife were starting a family at that point. We had our first child during that time. I don’t know if you realize, you were contacting me and I still remember in Starbucks. We had a coffee and you pulled back the curtains and explained to me your business model.

We all fail. The key is to learn from your mistakes, don’t quit, and keep going. Click To Tweet

Which is totally different. 

I was blown away. For those people that don’t know, Paul was buying REO auction houses and REO stands for Real Estate Owned. The bank already foreclosed on the house and they were vacant for the most part that Paul was buying. Your business model at that coffee break, I’m like, “This fits everything that I want to be.”

It’s a perfect match.

It’s like a transaction almost, like a trading stock in your brokerage account. There are no sellers to deal with. You figured out what the max bid, stick to that number and be persistent and then you win a house, you put a lockbox on it and then you sell it. There’s no human interaction. Obviously you’re dealing with title companies and the BPO agent maybe and then on the sales side, negotiating with buyers. All the other headaches of traditional wholesaling that I experienced with before were gone with your model. A few years later, I’m still having a blast doing stuff.

I don’t know whether we first met in 2010 or 2011 through Dig. We met a bunch of times. I get to know you pretty well and I was partnered with a guy named Juan at that point. In 2013, I went my separate ways. He and I did two different models we wanted to do. He was looking to get into some different stuff. I got into some different stuff. At this point, I was doing everything. I was doing the purchase, the marketing, the disposition. I was telling my wife, “This is too much. I need to find somebody who could do the dispositions for me and can handle the sellers, can handle that sales side.” I start thinking, “Mike is a sharp guy.” For those who don’t know, Mike is very intelligent guy and super detail-oriented and comes up with phenomenal systems. I figured he’d be the perfect guy to reach out. We negotiated a deal and we hit the ground running. We had deals hammering right from jump, which was great. You hit it right away. We started selling them and we had some big ears and as inventory has dropped, we’re still getting them. They’re coming in and we’re looking for different ways to acquire more properties there. It’s been pretty good. That whole different model totally rejuvenated you.

The thing I also liked about your model is if the Philly market went south, everyone went south with it. There are pain points everywhere, buyers flee. Whereas me and Paul, when we started out in ‘15, we were heavy in Indiana and Ohio and then pivoted to Jersey, PA, West Virginia and then Carolina. Some big states we have are Oklahoma, Texas, Wyoming, out of all states there are popular for us. That’s one of the things as every market has their cycles. We pivot and go where the hotter markets are.

FO 3 | Virtual Wholesaling

Virtual Wholesaling: Once you get comfortable, just start bidding on some properties. The key is to be persistent.

 

That’s the key with virtual wholesaling. A lot of people want to hit certain markets. Let the deals dictate your market, not let the market dictate your deals because the deal has got to drive the whole thing. If it’s not a deal, it doesn’t matter what market you’re in, you’re not moving that property. That’s what it comes down to. Thinking from a new investor perspective, if somebody comes up to you and says, “Mike, I want to get into virtual wholesaling. What would you recommend I do? What direction? What should I do? What should I look at? Where should I start?”

The easiest is pick an auction site. There’s a ton of auction sites out there like Auction.com, Xome, Hudson and Marshall and the list goes on. You can easily name ten. Pick one to start with something easy and then create an account. Get yourself familiar with the website, what they have the offer. If you want to be comfortable and stick to your state or hometown, pick Texas if you’re from Texas. Learn, look at the houses that are on that auction site in Texas and run some numbers. What are the high comps? What are the low comps? The tools out there, you don’t need MLS. The comp tools improved with technology in the several years. There are plenty of sites that we use, not just Zillow. Some are paid for, some are free that we bounce different, low and high comps off of. Once you get comfortable, it’s like practice, like anything else, just start doing it. Start bidding on some properties.

The key is to be persistent. Most of the time when you bid on your first property, you’re not going to win it right away. For the most part, let’s just say your maximum allowable offer is at $50,000 but no one else is bidding on it. At the end of the auction, you’re at $50,000 you’re like, “I want a house.” You actually did it for the most part because the reserve is probably $75,000. The name of the game there is don’t stop and give up on that house. When it comes back a week later, bid on it again, stick to your numbers. They either come back saying, “You’re the only bidder but you didn’t meet our micro reserve, would you take $75,000?” You say no and it comes back again. You’re going to start seeing that number go from $75,000 to $70,000. Still say no and then it’s going to continue to creep down up until where they take your offer of $50,000. Being persistent is the key. That’s one of the names of the games in the REO auction market.

He was referring to Trey who was one of our star pupils. He’s already got four deals, two bought and sold, one under contract. He’s killing it. Every once in a while, you get one. He might have caught the right auctions. That might have been in cycle six or seven, some of those properties he was getting and he bids on them and get them right away. It’s going to happen. We have other students who are a little more conservative and they get a few less deals and stuff. Trey has opened himself up to every market like we do. He is truly following our motto or some of the other students are still looking in their market, which I get. If you want to start out looking at Texas market, drive to the place, then you can actually feel it, touch it, see it, get comfortable with it and then understand that, “I know this is another market, it’s an Oklahoma, this other property, but it’s got some of the same intangibles,” and you could look at comps that everything online. You can lead everything. You can contact the agent or realtor and get information on a property. That was key. What do you think holds back most new investors? Do you see something in particular or was it many different things that hold people back?

There are a few things. Also some common things questions like, “They’re asking about asset protection.” I’m like, “How many deals have you done?” “Zero.” “Why don’t you get some assets first and worry about the protection later? Play the world before you even do a deal. Why don’t you do the first deal on your name and then worry about whether it’s an LLC or S-Corp, you’re going to talk to your tax professional and figure that stuff out. I’m not going to have that answer.” In my personal life and business, I followed Nike’s principle, “Just do it.” Learning off, network with the right people, get a coach if you need to be extra motivated and then start real estate investing with enough information and then continue to learn as you go. We all fail. I fail at stuff still. The key is to learn from it, don’t quit and keep going. Some people will try to be perfect in their responses. They have to know the answer for every single thing. That’s not how life works because you’ll never have the answers to everything.

The third one I see the biggest, I call it analysis paralysis. They won’t be able to pull the trigger. For instance, there are a lot of ways to make money in real estate and they might start out with wholesaling and end immediately. What about rentals or flips? I’ve made money in wholesaling, rentals, lease options, renovate and resells, private lending, transactional funding and notes. I didn’t do it all overnight. It comes over time. They’re busy reading these forums and listen to podcasts and hearing all these different things. I would recommend saying, “Pick one that makes sense for you. Day one, be laser-focused and worry about that and implement on that. Everything else is just noise. Once you master that one or done a few deals that way, maybe introduce another way to make money in real estate.”

The key on virtual wholesaling is to be persistent. Click To Tweet

The most important thing is let the deal dictate your disposition method. Ours is always wholesale. This didn’t work in wholesale, but we picked this thing up for $15,000, we could sell it to somebody for $35,000 with owner financing. Maybe get $10,000 or $15,000 down and then hold that note and then get paid arrears, which we’ve done several of that we’ve gotten.

I attached my mailbox money, Paul.

We love that model. We’ll continue to keep on doing those as well. Rental is always another option. We’ve got a lot of guys say, “It didn’t work that way, it’s tight.” I’ll fix and flip the property. We’ve had them where we’ve had to do those as well. You let the deal dictate it. 

We’re rehabbing the one in Wyoming and work off.

That’s going to be more of a wholesale one. Just get it mortgageable and move it. That’s what we recommend for anybody who’s buying out of state, full-fledged rehab can be tough. It’s better off just getting a paint carpet, doing the basics, make it FHA mortgageable and then move it again. Do that quick. You have to do that on a 90-day seasoning period, but it’s usually going to take a few days for you to get that rehab done, say 30 to 40 days and then it’s going to sit on the market and then the offers will start rolling and hopefully around that 90-day window at that point. 

I went to Penn State to pick up my filing and we want to Lake Wynonah. We bought that house. I was like, “Memory lane.”

FO 3 | Virtual Wholesaling

Virtual Wholesaling: It’s not cryptocurrencies or bitcoins that are going to disrupt real estate. It’s the blockchain technology that enables bitcoins to operate.

 

That was a good one. We did pretty well with that one. We love those when I hopefully continue to get more of those over down the road. How has technology changed to make virtual wholesaling easier? In your eyes, what are the biggest things you saw that changes?

Technology made real estate investing in the last few years super-efficient. I’m going to give different examples here. One, I got my one rental property. It’s only a 25, 30-minute ride but I didn’t visit it. I decided I wanted to redo the half bath and flooring and a new room. I knew my measurements already from the building. I went online to Home Depot, order the flooring, toilets, etc. I had my contractor pick them up, they took pictures when they were done and I paid them. I never visited the job or anything like that. If I’m doing this with a local property where some people will be forced to drive to check on it, but why waste an hour or two of your time of day to do that? With technology, whether it’s a remote rehab that’s something minor that we were talking about. Have your contractors take FaceTime daily of it or pictures of it if you need it. It’s not like a two-day job if you want progress updates along the way. That’s one example from managing contractors remotely.

Another one I would say is comps online have gotten tremendously better. You don’t need MLS to get good after repair values, low comps. There are tons of tools out there that has a lot of good public data information that benefited you and I in our virtual wholesaling. The big one is DocuSign. How are you even spending documents? Before you print it out, hand-write it in, scan it back and email it. Now, it’s like upload your PDF, tag it where you have to sign and two seconds later you’re done. That’s from an admin side. I think that’s a huge technology one there. The other one, we’re using Zoom. I use it as a screen recording thing for my virtual assistants. One of the things we didn’t talk about is you and I used VAs and we document everything we do so that we would work less. A lot of the stuff we do is repetitive from the REO auction perspective. On the disposition side, I outsource everything to a virtual assistant by recording screen documentation. Whereas years ago, technology wasn’t that great or there yet.

Technology has changed everything with that. With Amazon looking to get into real estate, with Zillow getting in real estate here involved. How do you think that’s going to change the future of real estate if it changes anything at all? It probably won’t affect mom and pop investors as much, but what do you think it’s going to do for real estate?

Are you’re talking specifically Zillow or any technology?

All those technologies, the big techs wanting to get in there. 

Technology made real estate investing in the last few years more efficient. Click To Tweet

I went to this blockchain technology event with IBM. It was in a different industry, but I think a great use case would be for real estate investing. Title companies, they pull public records and it takes weeks to close sometimes a house. What blockchain basically does is, most people heard of it, they think Bitcoin or cryptocurrencies. It’s not cryptocurrencies or Bitcoins that are going to disrupt real estate. It’s the blockchain technology that enables Bitcoins to operate. The blockchain idea is securely and transparently track transaction histories. For public records, like real estate transactions, this is a perfect solution potentially. The primary purpose for title companies that check title histories and record transactions, but what if this process becomes completely automated and secured by a blockchain technology? There might always be like some human element. When we have cash transactions, why would it have to take two weeks where you can have it closed that day using some technology like that that could quickly check if the title’s clean or not?

That is key, that blockchain technology. I love cryptocurrency and I talk about cryptocurrency in this show. That blockchain technology is going to change everything in our world. It’s going to be healthcare records. Your healthcare records are going to be downloaded onto the blockchain. It can be easy for doctors to pull that. It’s unhackable. You can’t hack this thing. It’s not hacking like you’re hacking into the internet. That’s one of the best things about it. All the information is out there. Let’s say there are 10,000, 20,000 computers on us. They all have to agree on this information, otherwise it’s spit out. That’s the safety of it. I think within the next five to ten years, all the counties are going to have all the deed recording, mortgage recording, all that info on the blockchain. It’s going to make things so easy for the title companies. 

It almost might render title companies obsolete. They’re going to be there to an extent because they still have to do the pricing and figure out all these different costs in the tech certs. It is going to change everything for sure. That is the future, blockchain technology. We’re going to get into some of the Ninja tactics you use, Mike, for selling these properties. There are things that your people would do direct mail. They’re generally doing direct mail in their market. They have their buyers list. I don’t know what they’re doing to try to get more buyers. Maybe they just have opt-in pages. You’ve gotten to some neat ways to sell these properties, especially rural areas. Why don’t you get into some of the disposition methods you use?

I’ll begin with the basics of marketing for everyone on the audience. There are five M’s of marketing, I call. It’s Market, Message, Media, Money and Multiple hits in months. The market is, easier house best for a landlord, like a buy and hold person or a rehaber, someone to look at it to fix it and resell it or a non-investor, like a retail buyer. The second is message. You want to tell your message to whoever your market is. For example, if your house is best for landlords, like buy and hold investors. Show me some cashflow analysis and a message and then maybe they’ll actually pick up the phone and call you like, “This is a deal that cashflow’s a lot.” Instead of putting up a price up there for them to figure out. Media is like a direct mail, newspapers, cold calling people. That still varies by market. Some of it works in all markets and some doesn’t so much. Money, everyone needs a budget and you should track your results. If certain advertisement is not working, don’t use them in that area and waste your money if they cost money. The last is multiple hits in months. That’s a fancy way of saying to be persistent. Don’t mail to your cash buyers once, mail to them three times. That’s what I do whenever I’m reselling a property.

That’s the high-level overview of marketing. I use these things where you and I will go on the cold markets all the time where we have zero buyers. We sell houses sometimes double close before we even purchased it with zero people on our buyers’ list. I’ll show some of the media we do. I got two groups, offline and online. I’ll cover some offline stuff that I do first. The easiest one is call real estate investors in your current database if you’re in the place you already marketed to. Another one is you can have your virtual assistant or you do it, find real estate investors in a new market. Go through Craigslist in the real estate wanted section. Google, we buy houses whatever city you’re looking in. Email them. I usually follow up with a phone call week later because not everyone responds to email. People respond to different technologies.

Another great source is join a local REIA. It sounds weird but one of the things I do for example, we sold a Pittsburgh area house. I went to ACRE out in Pittsburgh. They have newsletters from previous newsletters online. You download one, email all the board members or call them if there are phone numbers only and then go through the vendors. I’ve reached out and talked to hard money lenders saying like, “I’ve got a property in this city. Maybe one of your clients would be interested.” They’ll pitch it for you. I’ve gotten people who visit houses that way. Think a little bit of differently from that perspective.

FO 3 | Virtual Wholesaling

Virtual Wholesaling: Refresh your online posts. Don’t just send one mailing. Follow up and be persistent.

 

That’s something that almost no other investors do that. Not to the extent that they’re doing it here and you get a lot of buyers from doing those things. 

These are legit people who are advertising. It’s not easy like, “Let me check Facebook.” Not everyone uses social media, these are people actually paying money to be in a newsletter to contact them. Another one and people think this technology is designed, newspaper. Some areas are on the rural side, but people still read newspapers. We sold a handful of houses using newspapers. They were great. Don’t post a classified ad in there. Go to the For-Rent section and I’ll call out the people with houses for rent. Sometimes they’re a landlord and they might want to add to your real estate portfolio. We’ve gotten added buyers that way or even sold houses that way. Newspapers, it’s a dual thing. Posting your ad and then contacting a real estate wanted or for rent ads.

That’s my favorite Ninja tactic you use. Nobody thinks about that. We sell quite a bit that way. In some of these rural areas, you might not have great Wi-Fi, so you might not have a whole lot of internet access. You have an older population. The older population, my father-in-law, my wife still has to pick them up and fill up Inquirer every single day that he’s not in the area so he can get. He just wants a crossword. It’s a $3 crossword puzzle. They still do read the newspaper. That’s why it’s important in the older populations still do that. They don’t have our mindset yet. 

Another one is purchase mailing lists. If your target market is landlords, if I didn’t ask owners list from a marketing list. I only market with people that have two-plus properties. They’re landlords. We’ve gotten great ways to increase our buyers list that way or sell houses that way. Purchasing different lists is a great option. I usually send them a three-step postcard campaign. You could do letters and figure out what works best for you. I send postcards for the most part right now. Another one is you can list with a real estate agent. For hotels, especially these make sense. Most of ours, all we sell is the for sale by owner route. If that’s not working, “Let’s contact a local realtor and list with them as well.” Some of the things that we do sometimes is have a contingency clause in there where we bring the buyer and we pay a flat fee to walk away from their time. I still negotiate that. That way you’re minimizing the commission costs down the road.

I’ve also reached out to real estate agents with buyers. Once you own the property, Paul and I take them all down. We’re not assigning contracts from REO auctions. We’ll then contact potential buyers, agents saying like, “We’ll pay 3% to you. Do you have anyone interested in your market looking at that?” I usually have my VA scrape a bunch of local realtor offices in that area to get their contact information and we’ll send an email blast to them. Wholesalers, we use them here and there. 10% of them are good. You and I don’t lock up our properties with that wholesaler’s contract. If we do, we wait until they actually find a buyer and then we’ll figure out what a fee to pay them. I’d recommend not locking it up if you do put a heavy earn money deposit doing a few days and see if they actually do it.

I’m going to say this even though it’s not a media, follow up is the key. Refresh your online posts. Don’t just send one mailing. When your newspaper ad expires in two weeks, set it up again. Follow up and be persistent. That’s all the offline media that I use. I’ll cover the online media. We have our own website. It was easier when I was in the Philly market because I could focus on the SEO in the Philly market. It’s like a Pittsburgh market or Lehigh Valley. Now that we’re nationwide, it’s hard to do that but we get some leads from our website. Once you own it, post a for sale by owner ad on Zillow, Trulia, all those websites. You’ll get calls from there. They’re pretty good. The best online media for me is actually Craigslist and it’s free. Believe it or not, we sell house most through Craigslist probably. The newspaper’s up there as well and direct mail, but Craigslist is a great source and it’s free.

Many investors look at it and some people sometimes forget about it, but it is still the best way to dispose a property because you have people scouring every day looking for deals. 

Facebook Marketplace is gaining traction. The only thing I don’t like about that when I do Craigslist, my call to action is to call me so I don’t have to deal with guest emails. If you’re going to pick up the phone, you’re going to be serious. Whereas the Facebook Marketplace, I’ve got to do the messaging thing, but a lot of times they’re tire kickers more. They’re looking for rent to owns or owner financing. It’s an avenue we want to explore. I could contact them later. We’re all going to do a cash-out first and then plan B will be a rental or an owner finance with that exit strategy. We’ve sold houses on Facebook Marketplace that’s gaining traction. If you’ve got social media posts and join online real estate forums like BiggerPockets, you could post it there. That’s a good example. We sold one that way. It was worth my annual fee. Not too much traction there but it made it worth it. If you have an in-house email list, email your buyers list first. I actually have two lists. I have one from our House Deals America site. These are people I most likely haven’t talked to. They signed up with us and I have a lot of VIP buyers list where I know these people are serious. We’ve talked to them, you and I. They’re the first ones I’ll actually email and call.

First ones you hit with an offer and let them know the properties out there. 

I should mention most of them and there are other things I do, but that covers the bulk of the stuff.

I’m going to transition into our project we are starting. We had an initial quick success with it. There are always going to be bumps what’s going on here or two, but our MLS system and how we’re doing it. Break into how little we actually deal with that.

FO 3 | Virtual Wholesaling

The Ultimate Sales Letter: Attract New Customers. Boost Your Sales.

First of all, I will start with the why. There are ebbs and flows in the REO auction cycle. It’s a busy call. In the summer, it slows down a little bit. To supplement that slow period, me and Paul were talking, we’re sitting down and then we’ve planned out what we call our MLS virtual assistant model. We don’t do anything after building it. What essentially we did there is, Paul has access to the local MLS. We picked the counties we wanted to go in and we have two lists. One is an REO list and we look at REO houses over our certain criteria, 90 days or longer. We also have a list called fixer-upper list. It’s your estate properties, houses that aren’t in REOs that need work. You and I documented everything using Zoom videos and send it to our VA, where once a month I’ll pull a new list of houses and she’ll determine the ARV and the Excel spreadsheet will actually tell her the maximum allowable initial offer to make.

From there she then creates an agreement of sell. Those are all the DocuSign signatures for us. It takes our proof of funds letter with the signed agreement of sale and emails it to the listing agent. We started this and on our first cycle it was 30 houses. We got one under contract. It was for $135,000 and then we sold it for $150,000, so a $50,000 pay spread. I think it was a double close. It was the one in Montgomery County. Me and Paul, we’ll take away the time to build this thing out which is a few hours. We spend fifteen minutes a month on this maybe and make sure these numbers make sense when the owner comes back to us with a counter essentially.

We’ve had a couple that we’ve had under contract. We thought they might be deals and this is with anything like direct mail until you find out, they aren’t that great at deals. This has got an issue here. This is on the main road and it’s going to be a real tough resale on this one unless you’re buying and holding. There are going to be bumps and bruises with that one. The whole point is it’s a whole other way for you to acquire properties. It doesn’t cost anything. Essentially other than the virtual assistant that we’re using, she paid for herself in one deal finding that. We’re going to have several more of that over the course of the year through this system. It’s another great system. Mike, where can people find out more information on that and how to sign up and become an investor with us. What website?

If you want to buy some of our properties, the website is HouseDealsAmerica.com. Go to our House Deals tab and then you’ll see our current inventory for sale. On the right you could fill in your name, email and what states do you buy-in. You will only be sent states that you purchase in. If you buy in Florida, you won’t be sent PA deals. We don’t spam you with the stuff that’s outside of your market.

If they want to get into the educational side and learn a little bit about that, where can they 

contact us? 

Our educational website is www.REOAuctionAcademy.com.

We can teach them anything on that too, not just the REO model. We’ve done the direct mail. Both you and I have done a direct mail method. We still know how to do that. If people want to mix and blend and want to have that, that’s something we can help them with as well. What book inspired you the most other book besides Rich Dad Poor Dad?

Rich Dad Poor Dad changed my mindset to think not from a work hard and get a pension at the end of the day, an entrepreneur mindset. It opened the curtains there. Marketing’s a key piece in any business. If you want to learn direct response marketing, a book I recommend are The Ultimate Sales Letter and The Ultimate Marketing Plan by Dan Kennedy. Those are two great books that I’ve learned a lot in my marketing from. Another great book on sales is by Chet Holmes. It’s called The Ultimate Sales Machine. It’s great book as well that they formed the foundation years ago for me when I was taking off and doing all these thousands of postcards a month with the traditional wholesale model. That applies to any business.

Mike, you do this part-time. Do you want to tell people how many hours a week you do with your full-time job as compared to this your part-time fun job?

Some people will try to get out of their rat race and quit their job because they hate it. I’ve got a nice setup, good living in my day job and I love it. Everyone wants more. I remember back in 2007, ‘08, ‘09 where a lot of people lost jobs. The reason I got into real estate was to have a plan B like a supplemental eComm. I like having two six-figure incomes. I’ve got to get a day job that pays well and then real estate is on the side. I could quit my day jobs eventually. Maybe that’s something in the future, but I like what I’m doing. I have no intent to do that. Working on the side with you, I systematize everything. My VA works for me ten hours a week. I only probably put in an hour a night. When you do the math on it, that’s a pretty good living to up your lifestyle and maybe retire early with this.

That can be an inspiration for somebody who loves their job but does want to create some extra income.

There are things like that where they own their own business, call it a funeral home, but they use real estate to supplement all this on the side for early retirement or whatever that may be.

It’s something to teach your kids. If you don’t like the stock market or don’t want to get into the stock market or just want to have something even more diverse, the real estate is a great way to do it. You can do this part-time and make six figures a year. You could do five or ten deals a year and you’re doing pretty well. Mike, thank you so much for your time. 

Thanks for having me.

If anybody wants to be able to reach Mike and has any questions for him, we’ll be able to get you in touch with him. I hope you enjoyed it. It’s another great episode of Flipping Out.

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About Michael Nyszczot

FO 3 | Virtual WholesalingMichael, Co-Founder of HouseDealsAmerica.com, is the “Wizard” behind the curtain with regards to JP Homes Inc. and HouseDealsAmerica.com’s marketing systems, sales processes, management, business growth and strategy, and business systems. Michael believes that automating all business processes and creating business systems allows you to measure your business results to ensure success. Michael is a graduate of the Pennsylvania State University, with a work ethic few can match. Michael enjoys providing home buyers the opportunity to buy a home or investment property at a great price.

 

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