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How To Wholesale & Flip Houses On The MLS (Multiple Listing Service) - Video Interview

 

Hey Real Estate Skills Community!  Here's my podcast interview from the Real Estate Time Freedom Show by Investor Fuse.  I share a ton of real estate golden nuggets like how to wholesale & flip houses on the MLS (Multiple Listing Service)!  I also go deep into what makes a Pro Wholesaler versus an Amateur Wholesaler.  Enjoy & come learn the best ways to get started in real estate!

Here's a transcription of the video above:

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Carlos Zamora:              Awesome. Live now with new friend Alex Martinez. Thank you guys for checking out the Real Estate Time Freedom Show today by Investor Fuse, April 18th already. Alex Martinez is joining us. He is the Founder and CEO of www.realestateskills.com, a real estate education company providing coaching tools and resources to start a successful real estate business or career. He got started investing about eight years ago and generated over 12 mil in his first year alone. We definitely want to dive into that. We're going to touch on a few topics today outside of that I definitely want you to expand on when you give a little intro on yourself. But if you guys saw the title for the info I sent out for this interview, it's The Difference Between What Makes a Pro Wholesaler Versus an Amateur Wholesaler. We're going to get into some tips and tricks on how to wholesale & flip houses off the MLS (Multiple Listing Service), and we're also going to talk about realestateskills.com, which has some great resources on it as well. Alex, thanks for hopping on, man.

Alex Martinez:              Yeah, Carlos. Glad to be here, man. Thanks for being on here, happy with how to be here with your audience as well and share what I know about wholesaling and real estate investing. How I've learned everything is from standing on the shoulders of other people and learning from them, so I'm happy to share everything I know.

Carlos Zamora:              Very cool, man. I think anybody listening to this is going to be pretty intrigued by that first year generating over 12 mil, I'm guessing in gross revenue, but do you want to dive a little bit into that and maybe even how you got started into real estate before that first year there?

Alex Martinez:              Yeah, I'd love to. I'd love to. It's funny because yesterday I just spoke at San Diego State University.

Carlos Zamora:              Nice.

Alex Martinez:              About the same thing, how I got started. I actually got started while going to San Diego State. How it started, growing up I guess I wasn't that entrepreneurial. I did a lemonade stand here and there. I didn't know anything about real estate when I was growing up as well, but when I was about 18, 19 going to college, college wasn't as built up as it was supposed to be. I thought I was going to learn a lot more, and I thought that it was going to be a different experience. When I got to college, I just learned, hey, it was kind of like high school and middle school all over again.

Alex Martinez:              I quickly realized if I wanted to create my own destiny and live the life I want to live, be my own boss, I was going to have to try and carve my own path. I started reading books, and the first two books I read about 19 that really changed my life were Think and Grow Rich, and Rich Dad, Poor Dad.

Carlos Zamora:              Same here.

Alex Martinez:              Those two?

Carlos Zamora:              Yeah. Think and Grow Rich was the first one.

Alex Martinez:              Yeah, same here. Man, that's like a secret concoction right there when you're young. I read those two books, Think and Grow Rich gave me that belief you can really do anything you put your mind to. You hear that all the time growing up, but that book and just [inaudible 00:02:46] interviewing all the most successful people on the planet, really, really re instilled that belief, which was really important.

Alex Martinez:              Then number two, Rich Dad, Poor Dad, really expanded my mind, was that introduction to real estate for me. So, very quickly I knew I wanted to get into real estate. What happened was through a friend, through a fraternity I was in, he knew about an internship at a company called CT Homes. CT Homes was on a TV show Flip This House. He actually sent an email to about 150 members in this fraternity, and only three people responded. Right? I was one of those three. Then I got this "internship" to start out with.

Alex Martinez:              Well, low and behold, they had just moved from Connecticut where they were on the TV to San Diego, and the year before I came into the company, they only did about nine deals. Then I came into the company, and once again, I just read these two books, Think and Grow Rich, Rich Dad, Poor Dad. At this time, too, I was making sandwiches for 10 bucks an hour, man. I was making sandwiches, putting oil and vinegar on those bad boys, 25 hours a week making sandwiches, full-time school, and I was just like, "This sucks. I need to change things." Right?

Alex Martinez:              So, when this opportunity came up, I was like, "This is it, Alex. This is what you need to do to change your life forever." Finances for my family were always an issue growing up. The '08 crash really affected my family. So, I was like, "This is it. I'm going to go all in." Right? Within 45 days of getting that role, that internship role, which was really like, "Hey, we only got nine deals last year. We need to figure out ways to get deals." I kind of stumbled upon the MLS and became just an absolute savage at it.

Alex Martinez:              The first call I ever did on the MLS, I got that deal under contract. It's pretty wild. So, I was like, "Oh, okay. I can make this happen." Now, I did that one deal, that first call I made didn't go through, but that gave me that confidence of, "Hey, I'm onto something. If I can make one call and get a deal under contract, let's keep this rolling." Right? So, within 45 days of actually starting, I did get that first real estate deal under contract as a wholesale deal, got under contract for 328,000 and wholesaled it for 350,000. That first deal within 45 days of learning real estate investing I made 22 grand. That was the day my life changed, because I went all in, I read these books, I learned real estate investing, I had just learned about wholesaling, and now I just actually made it happen. I made $22,000 come out of the air from nothing, from putting zero dollars into it.

Alex Martinez:              I know now wholesaling is a lot more popular, but there weren't as many blogs or YouTube videos about wholesaling seven, eight years ago when I started, so it was just absolutely mind blowing. I just went on an absolute tear from there. That year, very quickly it felt like, "You're not really an intern anymore. You're kind of managing the acquisitions team for our company now." So, when they did nine deals the previous year, that year I brought in 33 deals that I underwrote and negotiated, I called on, I sourced, I found them, met with agents of properties, analyzed ARV, repairs, everything you needed to do. We did wholesaling and fixing and flipping.

Alex Martinez:              So, within that one year period, just my personal acquisitions generated over 12 million in gross revenues, like you said, but over 1.2 million in profit. That's the real number that we want to talk about, the profit number. Also, I hired on and had two team members under me who brought an additional 22 deals. So, collectively, it was about over two million dollars in profit, about 20 million in revenue that we did in one year.

Carlos Zamora:              You closed [inaudible 00:06:30] deals.

Alex Martinez:              Yeah, yeah. It was a big jump. That changed my life forever. That catapulted me to where I am today. I eventually left. It made sense to start my own real estate investing company, wholesaling and fixing and flipping houses as well. But I like telling that how I got started, because I think for anyone who wants to start wholesaling, you've got to number one, believe in yourself that you can make this happen. I think most people get in their own way. This is true not just for real estate and wholesaling, man, anything in life. You've got to believe in yourself.

Alex Martinez:              Crap is going to be thrown at you. There's going to be obstacles and you've got a big why on why you're going to crush through those obstacles and go through them. It really can't be money, I've come to find, because once you get the money, money is only going to make you happy to a certain extent. But if you're building something, if you want to build well for your future family, for yourself for years to come, or, "Hey, solving this problem now in real estate so I can solve bigger problems in life." That's kind of the why that fuels me today. I've had to change that why from when I was a 19, 20 year old to where I am now, but that's kind of how I got started in a nutshell.

Carlos Zamora:              That's awesome, man. A few things to unpack there, but I like how you described the two books, and I feel like a lot of real estate investors are the same way. They start out with Think and Grow Rich and Rich Dad, Poor Dad. Quite literally, you can do anything you can put your mind to. In Think and Grow Rich, my favorite part that I've been on a rabbit hole is the auto suggestion of trying to consciously influence your subconscious mind for the 95% of behaviors and action that you have. Then Rich Dad, Poor Dad kind of gives you that belief that you don't really learn in traditional high school or anything like that, where he actually does an assignment type deal in Arizona.

Carlos Zamora:              I like how you phrase both of those. Belief is absolutely the most important thing. I want to ask you what made you so successful that first year? The belief obviously, but what was there... and it's funny also that the first time I went to San Diego for Investor Fuse a couple years ago, I was out at the CT Homes office because they use Investor Fuse, so I was hanging out with a few guys there that we both know.

Alex Martinez:              Yeah, yeah. Over there in PB, right? Pacific Beach. Not a bad office location.

Carlos Zamora:              Not at all.

Alex Martinez:              That's where I was every single day, man. With the belief as well, belief is part of it. It's taking that damn action, man, every day, and living it. I was the first one in the office, last one to leave, beating the CEO, beating the CFO, greeting them at the office, chilling outside before they came. Guess what I was doing too? I was reading the book that they recommended that I read the week before while they came and showed up. They're like, "Damn, this kid is serious." If he asked me a question, I'm sure their mind set was like, "Okay, this guy is for real. If he asks me a question, if he asks me out to lunch, dinner, breakfast, he's worth my time. He's worth telling him.

Alex Martinez:              So, not only did I do those things, I was the first one there, last one to leave. I was the most curious kid in California. I was asking questions to everyone, exec team members, every single person in the company understanding everything. You don't know what you don't know, you've got to ask questions. You've got to learn as much as you can. So, I'd be the first one there, last one to leave, and so I was there every day. I was calling, submitting offers every single day being consistent. Then what I would do when I would go home is I would just go home, change, or sometimes I'd just go quickly right to Starbucks. I'd then grab a coffee and read whatever book I could on real estate investing.

Alex Martinez:              So, not only I had the belief, taking the action every day, being consistent, but then going all in, going all in. I made sacrifices, too. I don't want to make this sound easy. I think it's simple. It's not easy. It can be challenging, but if you do those things, if you go all in, if you learn as much as you can and continually learn, you don't have a fixed mind set where you think you know it all, because the second you think you know it all is the second you start declining and get a little egotistical. But if you have a growth mind set, you're always curious, you're always learning, and you continually learn and you take that action, then you will be successful.

Carlos Zamora:              Very well said.

Alex Martinez:              Yeah.

Carlos Zamora:              Yeah man, that's awesome. That's a book I'm checking out right now. The author describes it well. It's like a lot of people have goals, ambitions, they set this stuff up, but there's a huge difference between being interested in something and being fully committed to it, where committed it's like you won't let anything deter you and you're almost going to expect those bad days or obstacles, but you're going to work the same nonetheless.

Alex Martinez:              Yeah, yeah. One thing that I realized too, and more so now, is I don't think life is supposed to be easy. I think that for a long time, or I go through periods of my life where I think life or work, these things should be easy. But once I said, "Hey, maybe it's supposed to be challenging and that's what makes it rewarding and all work maybe is hard work," that's when life, funnily enough, became easy, because my expectation was, "Okay, it's going to be challenging. I'm going to have to figure out these issues, these problems," as opposed to having the expectation that everything should be easy. I think you'll have a very frustrated life and time working in real estate, but if you say it's going to be challenging yet rewarding, then things will start to go well for you. I think you set the expectations the right way.

Alex Martinez:              That's something I think that anyone going into this, don't think it's going to be a breeze. A majority of people's deals you hear on wholesaling, it's usually 50/50 of, "Man, that was a really easy deal," or the other 50% are like, "Dude, everything went wrong under the sun." There was an eviction, then this happened, then that happened. So, I think if you move your mind set towards the 50%, like, man, almost like Murphy's Law, whatever can go wrong very much can, then you're going to set the right expectations for yourself, because now if it's easier than that, great, you're relieved. You're good to go.

Alex Martinez:              So, I work with a lot of beginner real estate investors, Carlos. That's why I kind of talk about this mind set a lot, because as far as physical attributes and other person, where you're born, things like that, there's really no difference between two people, why one is successful in real estate and why another one isn't successful. The only difference, it's not a physical attribute, it's not where you're born, it's that mind set that we're talking about right now. I hate to be corny on it, a lot of people talk about mind set, but that's how important it is. If you have that belief, you go all in, you commit to it just like you were saying 100%, then you will be successful.

Alex Martinez:              There's a good quote, too, people often confuse failure with quitting, like failing at something. They usually say, "Oh, man, I failed at that. I didn't make it happen." No, the reality is you quit at it. Because, like we talked about, you can do anything you put your mind to. The people who make it happen, they usually just have more "failures" or it just didn't work out a multitude of times for them, but they kept going at it. So, I think a lot of people confuse failure and quitting. But if you want to be successful in real estate and anything, if you don't really believe in failure, you think that failure is a myth, then you're just going to keep working at whatever you want to do until you make it happen.

Alex Martinez:              Then you've got to flip from the short term gratification to the long term gratification, because most good things in life take a freaking while, to be honest with you. You know? I was able to be fortunate, right place, right time, and generated over 1.2 million dollars in profit in one year. Not everyone has the luxury to do that. A lot of things clicked, and growing older I'm like, "Wow. That was an awesome, perfect situation I took advantage of and was able to make happen." Making a million in your first year is a very far cry, but if you make $100,000 in your first year of wholesaling real estate, that is freaking awesome. That is phenomenal, because now you're creating your own schedule, you're building your own business and things like that.

Alex Martinez:              I think if you can start smaller, have these achievable goals, make five grand a month then 10 grand a month, now 20 grand a month, now very quickly you're going, "Wow, I need to scale. I need to make it higher. I need to replace myself, make myself dispensable so that I can scale this business and grow." I think that's a more bite sized approach for scaling and growing a wholesaling real estate investing business than having this aspirational goal of making a million dollars in one year and then always being frustrated every single day why you haven't made 100K this month.

Alex Martinez:              So, I think it's always good to start small. Mindset is number one. Get bite size pieces when you're starting. Get those small wins, get momentum and play the long term game. Play the long term game. If you want to get into real estate investing and wholesaling, man, say, "I want to make this work no matter what." Say, "If it takes one year, two years, five years, 10 years, I'm going to do it." If you do that, funnily enough, what I've seen when you have that mindset, it usually happens a lot quicker than that. For example, I have a student named Tyler, great guy. He started working with me to learn wholesaling and real estate. For a year and a half on his own and buying over $30,000 in different courses, spending 12K in 18 months on marketing, he couldn't get a deal in 18 months.

Alex Martinez:              I don't think it was on him, I don't. Really on the people that were educating him. They were kind of doing the whole looped around and not really telling him exact steps that he needs to do to make it happen. In three weeks of working together, first day was mindset, first day was setting expectations. I said, "Hey, I know you haven't got a deal for 18 months, but in your mind I want you to think, "Hey, we work together. You're not going to get a deal for 90 days." All right? That way, in three weeks, four weeks, you're not going to quit and be sad. Let's set that expectation.

Alex Martinez:              So, we do that, we work on the MLS like we're talking about, having a look at deals. It's something I really systemize and I teach a lot of people on. Then in three weeks he got his first deal, his first wholesale deal from the MLS and sold it, from starting to selling it. So, I'm telling that story because one, he had to re shift his focus from 18 months of being in the crapper of not being able to get a deal. Tyler is the guy who never gave up. Even after 18 months of spending over 42K in courses and marketing, I think most people would quit. But he kept going at it and then we quickly changed just a few things, and three weeks later he got his first deal. He's really a testament to everything we're talking about right now.

Carlos Zamora:              Yeah man. That reminds me of the Bruce Lee quote that the master has failed more times than the novice has even attempted.

Alex Martinez:              I love that. I haven't heard that exact one, but I love that. I love Bruce Lee, man.

Carlos Zamora:              Yeah. I have a book, Striking Thoughts. I've given that as a gift to a client before, but that's like one, two sentence clips on just different parts of life that are so good. Back to the point about failure and thinking that should just be the straight A to Z path of going up the entire time, one book that helped me get clarity and you guys should check out, I've mentioned on podcasts before, is Ray Dalio Principles. He is an illustration showing that success is really cyclical as far as you'll have times where you're going up, really seeing growth in your success, mindset, everything like that, and then you kind of plateau and come back down.

Carlos Zamora:              When you start coming back down, having failures or difficulties, stuff like that, that's when you should really double down and dive into those, because that's where you can get some clarity on where you can improve and how you can improve. So, as you start going down, having some failures, maybe you're sluggish or having some bad days, bad weeks, that's when you can really double down and focus on where you want to go, how you can do it, and just execute the heck out of it until you start going up again.

Alex Martinez:              Yeah. I second that, Carlos. That book, Principles, it made things a lot-

Carlos Zamora:              Such a good book.

Alex Martinez:              Yeah, such a great book. It makes things a lot more clear. Ray Dalio is one of the most successful hedge fund managers ever, has one of the most influential companies in the world. That book kind of teaches you how to think and the right way to think. The book is called Principles. A lot of it is on first principles thinking, which is like a different way to think, which is hugely important, which is reasoning everything by it's most basic counterparts as opposed to reasoning by analogy and what is already created. If you want to create something memorable and awesome and live a great life, I think that Principles book is one to study over and over again. I've already read it two times.

Carlos Zamora:              Absolutely. I'm going to go back in for a second time, but that framework has helped me a lot since I read it last year, just kind of keeping everything in perspective and being able to see the best in all those outcomes. Andrew, thank you for joining, man. Lessons are rarely learned in the wins. I don't know if you can see that on your side, Alex.

Alex Martinez:              Yeah, I see that. That's awesome.

Carlos Zamora:              Yeah, man. That's true. Let's talk a little bit... I know you got the coaching going on focused on different wholesalers, let's talk a little bit tactical and maybe a little bit of the MLS offers strategy that you were able to implement that first year. I know you're in the San Diego market. The deal that you mentioned was 320K that you wholesales for 350 sum. I think that's a little high in comparison to some markets like Baltimore, for example, where I'm at, but I still think that MLS, and I guess I'll let you expand on it, but do you think that's something that can be used across all markets, maybe when the median house value isn't as high as San Diego or some of the top markets like that?

Alex Martinez:              Yeah, yeah. Absolutely. I have students all over the US, UK and Canada doing this. I have a student in Georgia who in three weeks of joining, too, he did his first sale. He made 5K on a deal.

Carlos Zamora:              Nice.

Alex Martinez:              And he's made more than that on other deals. But yeah, the thing about the MLS, and I even heard about it seven years when I started. I'd go to Real Estate Investment Association meetings, man. At these meetings, you get all walks of life. You get the old people that have been there who have never done a deal and they're negative. There's negative Nancy's there who you talk about any strategy you're doing, they're going to tell you how competitive it is, why it doesn't work, and why you shouldn't do it. They'll tell you some other shiny object you should be focusing on.

Carlos Zamora:              You know what's funny, though, talking about mindset, dude? Not to cut you off there. You know what's funny, though? They're showing how their brain is programed, and those are really just the opportunities that are coming into them. So, for them, it's actually true, because that's what they believe.

Alex Martinez:              Yeah. Yeah, you're right, man. Yeah, so I saw that at a young age. You quickly learn that a lot of people you meet, what you hear from people, take it with a grain of freaking salt, man. Don't really almost assume everyone is wrong until it's proven by facts.

Carlos Zamora:              I like that.

Alex Martinez:              Because I was going to these REIAs to network, and I was making 50 phone calls a day, probably rocking the MLS (Multiple Listing Service) at that time harder than anyone, I'd like to think, anyone in San Diego, or at least right at the top. Given the amount of deals we were doing, the amount of offers. I remember sending five offers out a day, having quality conversations with listing agents. So, wherever you're at in the real estate cycle, my point is, people are going to tell you what you're doing can't work. Just put the pedal to the metal, become focused on your strategy, don't focus on five to 10 different strategies. If you're focusing on the MLS - Multiple Listing Service, you're doing banded signs, you're driving for dollars, you're doing direct mail, you're doing PPC, using click funnels for that, you're building SEO websites for this, and you're one person, it's not really going to work out. You've got to focus, first off, on one to two strategies. It's what I recommend.

Alex Martinez:              But on the tactical side of the MLS, one way to look at the MLS, a lot of people get it wrong, is that I look at the MLS like Craigslist. It's knowledge I've been able to kind of look at it now. So, think about it. If you want to buy a coach for $500 on Craigslist and you see it there, are you just going to go to Joe Schmoe and say, "Yeah, here's $500 for this couch. I like your price, it's perfect." Or are you going to say, "What about 400? Would 400 work for that couch?" That's the same way to look at the MLS, because every single listing price on the MLS is arbitrary. 95% of the deals that I've got in the MLS were below the list price. That's the first thing everyone needs to realize. People say, "The MLS doesn't work," or, "That property is way too high. I can't offer on it." Well, no, you absolutely can offer on it.

Alex Martinez:              One of my students got a $6,500 wholesale. He got it $100,000 below the list price. So, you've got to know that this list price of the property is arbitrary. You've got to submit the offer where it works for you on the property. So, for those that are rocking the MLS or want to rock the MLS, here's a great tip on the MLS. Every single offer that you send, call this listing agent and ask this listing agent if they're open to representing you as a buyer as well in this property. This way, they can get dual commission on each and every deal that they're working with you on. That way you can stick out from the competition easily from the get go from the second question.

Alex Martinez:              If you call Lisa as a listing agent on 1234 Hearst Drive, say, "Hey, just want to give you a call about your property here at 1234 Hearst Drive. Wondering if you had a few minutes to chat about it. All right, awesome. By the way, I'm an investor, I'm not an agent, so would you be open to representing me as my buyer's agent, by any chance?" If they say yes, great. You're a step ahead of the competition. They see you as someone, as a real estate investor they can make twice as much money with, and now when you need to over the phone ask about this property, understand the condition of the property, understand what's going wrong with it, understand why the seller is selling, do you think they're probably going to be more willing to tell you, or do you think they'll tell you more information about the property? Probably, probably. That's what I've seen to be true.

Carlos Zamora:              Yeah, that's a great nugget.

Alex Martinez:              Yeah. Start that way every single time. If you do that, you're probably going to increase the amount of deals you get from the MLS at least 50%. I'd probably say even higher than that. Most people don't even know that. So, doing that is really, really important. Then now let's be consistent. Also, people look at the MLS and they look at all the active deals in the market. Maybe there was hundreds of thousands of deals, and they're just like, "Oh my gosh. Where do I start?" Right? There's so many deals. So, the cool thing about the MLS is it's the database of all leads on the market in your area. There's brand new properties, there's distress properties. We're not trying to call them brand new properties that are retail, that are selling to a first time home buyer.

Alex Martinez:              We're not trying to compete with Jack and Sally who want to move into this house with their kids. No, we want to find the distressed properties, properties stuck in the '70s, outdated, properties that are rental properties that are not in good condition, probates are on there, short sales are on there, REOs are on there, trust sales, five different family members trying to sell one property at a time and they just want to get this property off their hands. There's people that need to move quickly from one state to another, they need to sell this house so that they can get the income to then buy a house in another state. There's all types of deals on there. So, if you tell me there's not deals on the MLS, that's, like Carlos and I are talking about, that's just your mindset telling you that.

Alex Martinez:              One strategy to find the best deal, since there's a lot of deals on the MLS, there's a lot of properties to look at, is you want to focus on the brand new deals that come on the market day zero. Look at these deals that come on the market, because they're going to be the freshest and hottest leads. I've got a lot of deals, my students have got a lot of deals, we'll be the first one to call a distressed property and this agent knows they're going to get a lot of calls. This agent says, "Okay, great, I like your offer. I trust you." If you can meet me at the property, I won't try to fill out any more calls. We just want to get this done. We want to move this property quickly. I've got a lot of deals just from being one of the first people calling, or the first, and so are my students too.

Alex Martinez:              Then you can look at 90 days and later, so listings that have been on the market for awhile. Usually, maybe these deals, there's a reason why they're not selling. Maybe there's litigation or maybe it was under contract and then fell out of contract. So, you can't assume from the description on the MLS of what is going on with this property. You always, always, always have to make a call, what I like to call the discovery call. You have to call a listing agent and see what's up with the deal, because you may call this listing agent and say, "Oh, it just came back on the market." Even if you're calling a contingent property or a property on your contract and you give them a call, they may say, "Hey, yeah, actually this buyer fell out. We're looking for a new buyer to fall right back in." It's a great way to get deals, just most people don't know those types of things. Those are a few strategies, a few tactics on how to get deals.

Alex Martinez:              If you focus on that, you will get deals. So, for those that are thinking about, "Okay, well, how many offers does it take to get one deal?" We've seen it takes about 15 quality offers with a listing agent representing you to get one deal accepted and make $10,000. That's what I've seen over seven years of working, seven, eight years of working on MLS.

Carlos Zamora:              That's a great metric. One in every 15. I don't know if you can see the live questions coming in on your end, but Andrew had a couple questions here, and you kind of went through that as far as he said, "I'm severely guilty about assuming the MLS is not a fertile garden for discounted deals. Can you articulate about the types of deals to target on the MLS? What are the specific seller types or home problems you look for?" You hit on that a little bit as far as... and I love that, that as soon as the deal gets up there day one, you and your team should be calling and try to be that first inquisition about the property.

Carlos Zamora:              Then you said about the ones that are sitting there 90 days plus, reaching out to those too. Do you have anything specific about the seller type, which I know that you mentioned, too, like probate or moving, inherited, things like that. But anything else to add onto Andrew's question for the specific seller type or specific problem or distress with the actual property?

Alex Martinez:              The way I like to make it easy for everyone is we're looking for two things. We're looking for a distressed property. That means the condition of the property. So, it's old, it's run down, there's mold, there's cat pee, there's dog pee, there's weeds in the front yard, it's distressed, the roof needs replace. Right? That's a distressed property in distressed condition. Then number two, the seller is in a distress situation. So, distressed condition, that's how the property looks, distress situation, what type of situation the seller is in.

Alex Martinez:              So, if you can get one of those two things, that's usually pretty good, but if you can get two of those in stressed condition and distressed situation, that's a double whammy, and we're looking for that. So, if someone said distress situation, like I said, it's a probate, there's a death in the family, even a trust sale, short sales are great. Some of my best deals have been short sales, guys. You can wholesale and fix and flip short sale deals. Some of the biggest discounts I've got on short sales. REOs, even traditional sales, guys, you can get discounts on. You can close them. Those are the types of deals that we focus on.

Alex Martinez:              Then it's really about looking through the... like I said, let's use the example of today is, what? The 18th. So, if you have MLS access, today is the 18th, what you want to do is go to the MLS and just pull up today's listings. It's going to give you maybe 10 to 20 listings. Now, through those 10 to 20 listings, you want to find and filter through those the ones that look like they're distressed or the people are in a distressed situation. There may only be three to five that are like that. I don't want you calling them 20. I want you to look at those three to five, check mark them, so then you have those three to five. Now look at those three to five and say, "Which one looks like the best deal just from the data of the description and the condition of the property?" And maybe doing a quick computer analysis through the MLS. It's why it's great. You can look at maps.

Alex Martinez:              So, now you just go through, you filter the ones that look the hottest, you make five phone calls. If they don't pick up that initial phone call... the cool thing about the MLS too, guys, is we're not skip tracing. The cell phone number of this agent that you need to contact to get this deal is right there. Usually if you call them, they don't pick up, you can send a text and their email is there. Guess what? Their brokerage office number is probably on there, their physical address is on there too. So, if you tell me you can't find deals, you can't make deals happen, and you haven't called, texted the agent and emailed them and called the brokerage office and asked for them, and maybe even drove by their freaking office and asked for them, then you're not doing what it takes to make it happen, because these are deals in the market, and people work with who they like and who they trust. I'm telling you the tactics on how to find these deals and how to contact them, but the next part is building that rapport and building that trust with the agent over the phone.

Alex Martinez:              So, if you're an A-hole, if you don't have personable skills, if you're unethical, that's going to come off over the phone. But if you're ethical, if you're very genuine about learning about this agent and learning about this property, understanding that you're a problem solver, understanding that you can help this seller out of a situation that they're at, you can be a no nonsense buyer that this agent can trust, then they're going to be happy with you.

Alex Martinez:              So, those are the tactics on how to find those types of deals. Then you need to build that rapport. I think in all real estate investing when you're dealing with sellers and agents, this is a whole another thing we can talk about, but it's sales, building rapport, and just being a genuine human being, man. That's the other half of all this mindset and tactics stuff.

Carlos Zamora:              Your tenacity as an intern with CT Homes, reading and being the first in, last out of the office has carried into making offers like a savage, as you said, on the MLS. I want to hit a couple questions here, man. You're providing a ton of great value, and we do have some questions coming in for you, if you could hit on these real quick. Andrew again wants to ask, he said he thought short sales and the banks wish is that the end buyer be the principle buyer. He said, "Are you able to wholesale those puppies?"

Alex Martinez:              You can wholesale those puppies. Different banks short sale different properties. There's a contract and there's an approval letter from the bank telling you what you can and what you can't do on the short sale. All right? So, it's not saying, "Hey, all these short sales, here's a blanket. Here's what you can and can't do with them." So, you can wholesale these deals, you can talk to the asset manager in charge of the deal and ask them to change the name of the contract from your name to your buyer's name, to your financing partners name. Where there's a will, there's a freaking way, man. Like I said, most people just accept it and don't go that extra step, don't talk to the asset manager. You can email them, you can have the listing agent talk to his asset manager and have him do it. Sometimes there's something called a deed restriction on short sales as well, where they won't change the buyer on title. They won't change you, so you've got to get creative.

Alex Martinez:              What you can do is change the title. A deed restriction says you can't change the title for 90 days. It says 90 day deed restriction. But on day 91, you can. Right? If you can't take yourself of a title for 90 days, you can do a tenants in common where you can transfer 99% of the interest of the property to your buyer and you own one percent of the interest. They own 99% of this property now because you did tenants in common, you own one percent interest. Day 91, you take yourself off of the title, and now after 90 days they own it. That is a riskier way because you still are on title, but it's how you can make these deals work where most people say you can't. It's about being creative.

Alex Martinez:              It's about being a problem solver, about doing things by the law and doing things legally, but that's how you work short sales, man. You can wholesale them and you can fix and flip them, but the contract is always the law of the land. Whenever the contract says you can't do something, then you probably can't. This isn't legal advice or anything like that. Always consult an attorney, but usually if you have a smart attorney, they'll tell you what you can and can't do and you can work around it. Don't just accept things for what they are. Like I said, take things with a grain of salt and learn the facts for your freaking self, and you're going to learn that most people are usually wrong and just regurgitating information.

Carlos Zamora:              Yeah, Andrew, I see you're active here. I appreciate the questions coming in. Definitely check out the link in for Alex, realestateskills.com, but that would probably be a good place to touch base with Alex, see some free training, stuff like that. This is one question that we get here from Luciano, appreciate you reaching out as well. This is one question I hear all the time whenever we're talking about MLS offers. The question is how receptive are agents to assignment of contracts? It's likely that you will make a bigger cut than they will before the property gets to the end buyer. That's probably a question that you get all the time as well.

Alex Martinez:              Yeah, yeah. First off, like we talked about, number one is I want to be a real estate investor. I hope you want to be a real estate investor too and not just a wholesaler, because I think wholesaling is a means to having properties that you can buy and hold and earn passive income with. Number one is if that's the truth, believe you're a real estate investor and say you're a real estate investor. Don't tell everyone under the sun that you're a wholesaler. The only people that should know you're a wholesaler are your buyers of your deals. These agents shouldn't know you're a wholesaler, because, guess what? If you call an agent and you say you're a wholesaler and I'm going to wholesale this property, you're just bringing on confusion, you're going to have to educate this agent on what wholesaling is, how it works, and guess what? Like you, probably, like most people assume wholesaling is illegal the first time you hear it.

Alex Martinez:              So, unless you want to go into a discussion and debate... I'd never took debate class, nor do I want to have a debate with an agent, I don't recommend saying you're going to wholesale real estate or saying you're a wholesaler until the time comes on the actual deal. There's different ways to structure it. Wholesaling is an easy way to block wholesaling into. That's the word that we use in your head. Well, lets use first principles, let's say there's no such thing as wholesaling, we're not going to reason by analogy what's already there. Let's just say, "Hey, we're real estate investing," and instead of cash buyers, what I like to call cash buyers are financing partners. Actually, I'm finding deals for my financing partners, we're working together, and I just get paid a consulting fee for finding them this deal.

Alex Martinez:              That's the way I like to look at it. I'm not following the herd. I'm looking at it as, "Hey, these are my financing partners, I'm finding them a deal, they're bringing the majority of the financing to the table, it's why they're a financing partner." I am not bringing up an assignment of the contract until the assignment of the contract needs to happen, guys. I'm not bringing that up on the first call. I'm not saying in a wholesaler on the first call, so don't bring that up until that happens. I don't want you to worry about that. When that time comes, you can say, "Hey, Lisa. On this property, I'm really excited to close this with you. In fact, my financing partner is going to bring a majority of the capital to the table. It's completely normal standard operating procedure, but instead of my LSC, we just need to transfer the contract rights to their LSC, so if we can do that, that would be fantastic."

Carlos Zamora:              I like that.

Alex Martinez:              Don't say anything else. It's standard operating procedure, it's what you're doing. We're not talking about assignment, we're not saying we're wholesaling it, we're not doing those things. You can talk about the details later on, but let's talk about what standard operating procedure is and let's move this forward. I've never lost a deal because of an assignment, and that's pretty cool to say. This lingo, it took me awhile to learn that. Guess who has said he's a wholesaler to agents? Guess who has used a, "I'm going to assign this contract?" Guess who says how much he's going to profit from the get go? I've done all those wrong things, so I'm telling you these things so you don't have to make those mistakes, because everyone does make mistakes. A lot of people make those mistakes. But that's how I would recommend handling it.

Alex Martinez:              At the end of the day, if an agent is going to be mad at how much money you're making, then that's a personal problem with them. We can't let that affect us. I don't think you can worry about that at this time if you want to be a wholesaler. Like I said, I haven't lost a deal because of that, but we've got to do what's best for one, everyone, but you've got to only think about what you can control, and you can't control that. So, if we're worrying about that right now, what you should be worrying about is probably submitting offers and getting deals, and not worrying about what someone is going to say, because if you're taking that action, you're submitting offers and you're sending contracts, I don't mean to be harsh or anything. From working with a lot of people, this is what I recommend, because I've seen people wait for six months, 12 months before taking action because they're worrying about all these what ifs in the situation. If you do that, man, you can think of about a million what ifs.

Alex Martinez:              But the most important thing is taking action. Guess what? There's going to be situations where you don't know what to do in that situation or what to say, but you're going to get enough information or you're going to have that belief in yourself and you're going to assume what's the best way to act and you're going to do that and it's probably going to be the right way after one point. You're going to stop having to talk to everyone or go to YouTube University to learn everything, and you're going to get to the point where you can figure things our for your own. When you do that, you're going to be in a very, very special place in a league of your own. When you do that, you're now, like I said, you're creating, you're not reasoning by analogy, you're on your own path going where you want to go.

Alex Martinez:              You will get to that point. You won't always have to talk to other people on what you want to do. Hopefully you'll utilize what I'm telling you and maybe think of other creative ways on what to say or how to find deals and build on these strategies. I think that's one of the best things to do. Really, this strategy, guys, my script, I call it discovery call script, everything like that, I was a young, naïve, 19, 20 year old when I did this. I didn't have anything to go off of, so this was something I just kind of created, which is really cool because I've used other strategies from other people, but it's cool to just figure something out, work at something so hard that, "Okay, here's a script that works. Here's what I said 200 times that works." When you do that, you're going to find what works for you and then create a system around that and that's how you're going to scale that business. Everything I'm talking about I've done and then plugged people into that so that they can take it and run with it, and so we can scale the business. That's a long winded answer to a short question, but kind of wanted to give you all the context around it.

Carlos Zamora:              Wise words from a very decent man. That was great mindset nuggets, even the way that you phrased that about just putting it in your finance partner's LLC and standard operating procedure, "Don't worry, we've done this a bunch of times. We could even show you the land records if you want." Stuff like that, I haven't heard it described just like that, and we already got some good feedback. Luciano, who asked the question, said, "Awesome. Thank you for your answer, Alex," with some clapping emojis. That, Alex, brings us into a nice transition of your first hire once you're getting some deals off the MLS. Quick side question. You're doing other marketing besides just the MLS offers?

Alex Martinez:              At this point I'm currently advising over 125 people, working with them, [inaudible 00:41:55] on deals, solely focusing on MLS. I'm studying things like PPC right now, but I like to look at the evolution of a real estate investor. We wholesale, we fix and flip, and we buy and hold. A lot of my time is focusing on building a fund right now to invest in multi family investments. That's where a lot of my [inaudible 00:42:14].

Carlos Zamora:              Very cool. Well, let's transition. You're talking about scaling a business. Let's transition into that first hire, when and how they should make that first hire for their team.

Alex Martinez:              Yeah, yeah. This is going to be around the MLS strategies we're talking about. That's what I focus on the most and what I like to think I became a master in. What I like to think about as the first hire is someone called an acquisitions associate. If you're a wholesaler, and really if you're a fix and flipper, guys, the most important thing is to get deals. If you're a fix and flipper, your business does not run unless you have deals. Right? An acquisitions associate, and what the acquisitions side is in charge of is getting deals. An acquisitions associate in this framework we're talking about is finding and filtering deals on the MLS, utilizing strategies we talked about, making calls using the script, incentivizing agents to work with us, and submitting offers every darn day.

Alex Martinez:              Now, if you have this strategy, if you're utilizing this strategy, I've made the mistake of hiring people and just give them all the tools and say, "Hey, good luck. Go make it happen." I don't recommend that. I don't recommend just set and forget it from the get go. Number one, I recommend that they shadow you. I recommend that you become really great and proficient at whatever system you're doing. Doesn't matter if this is MLS offer system, become proficient at it, have the tools, have the process written out so a monkey can come in and do what they need to do. But have them shadow you and walk through it so they can see how you communicate to an agent or a seller, how you talk to them, how you deal with objections, how you go to a property and analyze a property. Have them freaking shadow you so that they can fulfill your role, because there's a great book called E-Myth as well. It's about leveling up from a technician, someone who actually does the work, to a manager managing people who are doing the work, to an entrepreneur as that business owner.

Alex Martinez:              I like to believe that if you've done the technical roles and done that well and you can plug someone else in, you can train them and manage them and move up. That's the way that I've kind of learned business and scaling, so if you're a wholesaler, a lot of us start out as a one person army. Systemize what you're doing, create a process around that, focus on the acquisitions side and hire... the type of person that I would recommend to hire and that I've always done with an acquisitions associate is one, I usually make them an intern, first off. Tell them, "Hey, you're going to have a 90 day runway. It's going to be a test period. Don't expect a deal for the first 90 days," once again setting expectations so they're really focused and determined. Then I like to find young college kids that are hungry. I look for interns at San Diego State University, UCSD. Any college, there's going to be young, hungry kids. I'm trying to find myself.

Carlos Zamora:              I was going to say that.

Alex Martinez:              I'm trying to find myself seven, eight years ago. That's what I'm trying to do. There's entrepreneur societies at these schools. I just spoke at an entrepreneur site at San Diego State University. There's real estate societies. If you're trying to find good people to work with you, who better than young, hungry kid who wants to learn real estate and entrepreneurship and sales and all these things? You can't just take an introvert and really have them work on making phone calls and things like that. Usually that doesn't work out. But find an extroverted person that wants to learn these things, interns, colleges, they're young, they're hungry. A lot of times, guys, they can work for you for free and get college credit.

Alex Martinez:              So, if you're saying... what I like to do is set up a 10% commission of the wholesale fee for them. So, not only are they getting their class credit for doing an internship, but now they can earn a commission too. It's actually a win win. They're getting college credit, they're working for your company, they're building you out. Now if someone's good, this first hire, they're making discovery calls to the listing agents, they're going to the properties with you, they're submitting offers, let's get them consistent. At least an offer a day, but once they get rock and rolling, it should be three to five offers a day.

Alex Martinez:              If they're making money, start paying these people hourly. If you find a killer, and a killer is a great person who's doing a good job for your company, pay them hourly so you can guarantee a butt in the seat, and you can have them stick around. You always got to kind of have the carrot in front of the horse. You always got to keep incentivizing people, because, and I know you're going to pay more money to do this and it may be hard in the beginning when you don't get a lot of money, but if you're able to get a few deals under your belt and they get a deal or two, keep incentivizing them, keep them around.

Alex Martinez:              I'll tell you what, if you lose that killer, that person, or multiple team members just because you were greedy and didn't want to pay them an extra amount, then you have to go start from scratch of hiring someone and training someone all over again. It works to even pay someone and pay someone a little more than maybe even what feels comfortable to stick them around, because that's going to have a very successful business, that's going to make them happy as well. But what I recommend, that first hire, 10% commission. Find college kids, plug them into the business, have them shadow you. Don't just let them go and run with it, train them the right way. I'd rather you overtrain than under train. That's just what I've seen.

Alex Martinez:              It's painstaking, it's hard when you've got a business to run, but if you can train them and maybe in a few weeks they start making these phone calls for themselves and getting success and feedback, then it's just going to be so, so worth it for you. Now once you do that, you can hire another one, you can hire three. The best people, the best person, make them a manager. Make them a manager, all these people, and so then you can start leveling up. That's what I've been able to do with multiple different companies. I've been a real estate consultant for other investing companies as well on implementing this system in their companies, and that's what I really recommend. The rest from there is just putting in the work, guys, but that's kind of the... what I've seen to scale, wholesale business, utilizing this system, the best way to make that work.

Carlos Zamora:              Awesome, great breakdown mindset there. It probably is more appealing to find that type of caricature for your first hire, too, because as I was saying and you eluded to, that's exactly what you were just San Diego State's finest intern, just willing to be consistent with the work and gaining knowledge every day. Cool, man. We have a couple minutes here left, Alex. Can you give a quick synopsis? We've got to wrap up here in a couple minutes. Could you give a quick synopsis as possible on think evolution of the real estate investor? I know that you've been doing this for about eight years, but let's touch on that, the evolution of the real estate investor.

Alex Martinez:              Yeah, yeah. What I've seen, I've worked with thousands of real estate investors over the years. Fortunately enough, when I was young I had been a real estate consultant as well. I worked on the internet and marketing side. I've worked in all different types of sides in the business. The evolution of real estate investor, what I've seen, for people who want to start out real estate investing from scratch, it's really kind of what I showed before. Let's look at it like this. A lot of us start as a wholesaler, and then what you want to do is keep wholesaling while fixing and flipping, because fixing and flipping is going to give you those bigger cheques, 30, 40K, but they're going to take longer, six months, eight months, four months. But you never want to stop wholesaling is what I've seen in businesses, because the wholesaling can bring that cashflow, consistent cashflow.

Alex Martinez:              When you're fixing and flipping, it's not really an asset until you sell that property, because you've got utilities, usually stuff goes over budget, so I always recommend starting with wholesaling, so you can build a safe and secure fix and flip business by always wholesaling one or two months and cherry picking the best deals for your fix and flip business. Now once you're going up there, you kind of have this path of doing these deals, and you're going to start building a nest egg. That's when you can invest in these buy and hold properties now. That's what I think is the goal of why we're doing what we're doing. I mean, I like to think I do what I do, why do I like real estate, why do I like working. Well, a lot of this stuff is for freedom. I'm sure we just don't want to be an entrepreneurship or real estate entrepreneur and create another job for ourself.

Alex Martinez:              So, have an end goal. I think that end goal is getting as much buy and hold properties, rental property as much as possible. So, this evolution of a real estate investor is just an approach I like to share so that... I see people just get so caught up in wholesaling, like it's the best thing under the sun. It's freaking awesome making money with no money, but they get really caught there. I'm like, "But it's very short term focused." Making 20K on a deal is great, but what about making like 20K in a year passively through one property? That's super cool. But it's that long term mindset. The evolution of a real estate investor is really evolving up that. That's kind of the basis and the principles of real estate skills. It's what we talk about, it's the skills for achieving financial freedom through real estate.

Alex Martinez:              I don't want you to just focus on wholesaling. I want you to focus on being genuine, I want you to focus on building a sound business. We'll teach you and help you with all the skills you need to be a successful real estate investor and real estate business person, but no, you've got to have that end goal. Why are you doing what you're doing? I think a lot of it's for freedom, and that's what the evolution of a real estate investor allows you to achieve, that financial freedom.

Carlos Zamora:              Absolutely, man. I mentioned it last week and it's something I'm working on myself, tapping, relining and re focusing on my why just for taking those behaviors and actions to the next level. But Alex Martinez, San Diego State's finest, formerly of CT Homes, currently CEO & Founder of www.realestateskills.com. Definitely check him out. Dude, I'll be in San Diego possibly in first week of June.

Alex Martinez:              Awesome.

Carlos Zamora:              Definitely have to link up if so. Thank you guys so much. Are you on social media or anything like that where the listeners can check you out?

Alex Martinez:              Yeah, yeah. Guys, let's connect on Instagram, @AlexMartinezATM is my name, ATM are my initials, guys, so that's why it's there. You can find me on Twitter too. I have some YouTube videos if you guys have recommendations for what you want to see, if you want me to elaborate on stuff, check that out. Then @realestateskills for Instagram, you can find me there as well. I've got Facebook page and stuff like that. You can just search Alex Martinez Real Estate Skills, you'll find all that. But yeah, I'm active on the Instagrams, so if you guys want to connect on there, I'd love to.

Carlos Zamora:              Very cool. I'll give you a follow now. Thank you guys for checking out this episode. Alex, very much appreciative of you, man. Sharing a lot of value. I already got a text from my buddy. He loved the episode and getting some comments in here, so really appreciate that, man.

Alex Martinez:              Awesome, man. Happy to share, guys. Just keep learning. If I can share one thing and leave one thing with you is stay curious. Just stay curious, keep asking questions, and you're going to be golden.

Carlos Zamora:              Love it. Have a great day, guys. Thank you for checking out this episode.

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Hope you enjoyed this episode of the Real Estate Time Freedom Show by Investor Fuse!

If you'd like to learn how to start wholesaling houses like Alex Martinez & his students, then be sure to check out our free wholesaling training here!

 

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