Jason Rios has spent about 30 years of his life in Las Vegas and entered the real estate industry there over a decade ago after graduating cum laude from Pepperdine University with a degree in Business Administration. He started out as a traditional Realtor before transitioning into the investing side several years back.
Mr. Rios is familiar with a wide array of investing strategies and enjoys utilizing his entrepreneurial skills along with Alex to help expand their investments. His goal by 2020 is $100,000/month in passive income. In his spare time, Jason enjoys time with his loved ones, attending sports games & concerts, traveling, thrill-seeking, playing softball and giving back as president of his local alumni chapter.
Alex Wentland was born and raised in Chicago,IL and has been living in Las Vegas for 3 years. Prior to getting into real estate he went to a community college and was planning to work in the medical imaging field. He was waiting tables for the last 7 years and finally decided to pursue an entrepreneurial path after reading an impactful book despite most people’s opposing opinions. He chose real estate as it seemed like the most traveled path to financial success.
Alex's goal by 2020 is also $100K/month in passive income and to become a millionaire by age 30 with the help and teamwork with his partner Jason. Alex loves spending time with his fiancée and 2 dogs, taking hikes, going to movies, sporting games and traveling.
Their dissimilar paths brought them to the same REI circles, leading to a partnership in 2016 that started as wholesaling and has evolved into a multi-faceted investing approach. Their first deal together closed in 2017 and has since led to over 100 completed transactions. Alex and Jason feel this is truly just the start of what they will accomplish together.
Hillary and Marco got married and became pregnant in 2015. In an effort to build the future they both wanted their family, they both quit their jobs that same year. Since then, they have built their real estate portfolio and build a wholesaling company that closes numerous transactions each month. With a team of six people in Hilco Homes, they look to grow strong in the new year of 2018!
Marco and Hillary got their start like most investors do. They were looking for a way to generate an income for their growing family and needed something that worked. Having already known the business, they decided to go for it and start their real estate investing journey. Hillary started studying up on everything she could. She read all of the books she could find on real estate investing and dove in. Marco helped her with some concepts, and together their wholesaling team was born. Now the two are unstoppable!
“I’m learning the best that I can,” Hillary says, “But Marco has 10 years on me.”
They had two major focuses.
1 - Marco and Hillary wanted to generate cash flow, or a passive income. This consisted of getting houses to rent. Marco points out that, even though the rent is paying for the house, that’s not a huge passive income for a family to live off of.
2 - Marco and Hillary needed an active income. This came to them through wholesaling houses. While they were building up their rental properties business, the two focused on finding wholesale deals to keep their lifestyle afloat.
Their wholesaling houses team started when a gentleman named Juan contacted Marco and asked for guidance in the real estate investing market. He was let go of a previous position and was looking for a job in the real estate market. Marco taught him how to bring in wholesaling deals with the profits being split between the two 50/50. The rest is history! Juan became a part of their team, and everything grew from there.
“We refined all of our systems and processes,” Hillary says, “It’s all about finding the people who work best with us.”
Their wholesaling houses team is up to 7, including their virtual assistant, and is still looking to grow. “We’re bringing on an eighth next week,” Marco says, “It’s a constantly evolving thing. Some people work out, and some people don’t.”
What are some of the lessons learned from hiring and letting people go?
Marco and Hillary have the idea of not hiring good people, but hiring great people. “We don’t just want to hire to fill a seat,” says Hillary.
Hiring high quality team members will only strengthen your wholesaling houses team over the long run. In the past, they required that applicants submit a resume, but have recently changed that policy. Seeing the pen and paper resume as an “out-dated system”, Hillary has decided to do video resumes instead. Marco and Hillary ask that applicants answer 3 questions in their 2 - 3 minute video submissions.
“I feel we’re a pretty good judge of character,” she replies.
If an applicant makes it past the pre-screening questions and video application, then they move on to a full interview with Juan. At that point, if Juan thinks this person is qualified and a good fit for the company, then they get moved on to Hillary for the final interview. This process has taken Marco and Hillary a few years to work out, but they’ve found it’s the most successful for finding people to add to their wholesaling houses team.
Chance started getting serious about real estate around 2 years ago. He did 16 flips last year and has been doing 2-3 a month this year. He gets around 30% of his deals through wholesalers and market for the others.
Chance and Danny were talking at the Mastermind class about deal sources and where their deals come from. Chance had mentioned to Danny that about 30% of his deals were coming from other wholesalers, which is amazing! Let’s see how he’s working these relationships to keep that percentage up.
Chance got started in real estate investing when he bought a house from his mother in 2008 / 2009. A subject 2 property (even though he didn’t know what that meant at the time), turned into his first house he took over. It needed the work to get it to market value, but Chance lived in it for a few years. When he decided to sell it in 20013, he ended up making a profit for roughly $50k with little work put into the house. When he moved, he told his wife, “We have to get into real estate!” And that’s how it started!
The benefit of working with wholesalers came around by networking as much as possible. Meeting anyone in the business opened doors and opportunities to connect with active investors who have profitable deals for flippers and rehabbers. There were always wholesalers who were more reliable than others, but it’s all about making quick decisions to get the deals done. Chance spent his time networking with other investors to grow his business.
Other than just networking with other investors, you can talk to homeowners and business owners to get your name out. When it comes to bandit signs, as long as you’re in communication with them, they tend to be ok with you posting your sign in their yard. For example, offer to pay their water bill for the month to keep your sign in their yard if it’s near a busy road. It’s something simple to get your business’s name out there and expose you to other investors.
The deals that are coming to Chance, as of now, are coming from Facebook groups (Mastermind, Flip Pilot, etc), mailing lists, and networking. Mailing lists tend to be for lower experienced buyers who are willing to spend more and make a little less. As far as the work that Chance does, the majority of mailing lists that come to him tend to not have the deals he’s looking for, but there’s always the occasional solid lead.
IFTTT.com (If This Then That) is a great place to look for the best keywords to search on sites like Craigslist and Backpage. Chance looks for “fixer upper”, “rehab”, “ARV”, “vacant house”, “motivated seller”, and finds a good amount of leads. IFTTT.com is a great place to set up ‘recipes’ to look for Craigslist queries to see which keywords you should be searching to find the best leads online. If you’re interested in hunting for leads from your desk, this is definitely a place to start.
Chance’s focus for the future is leaning toward sourcing their own deals. Their ability to source their own has grown, and in order to turn the dial up and flip more properties, the best option is to work for themselves and find more deals. As long as there’s someone to do the busy work and go to those properties, it’s very manageable.
Kyle is a founder and managing partner at H L Homes, a Houston based real estate investment company, founded in 2011.
He and his partner, Eric, formed their LLC to start flipping houses as a side gig. In 2014, though, the business expanded into a larger business to grow it and make it official. When Kyle first quit his job, the situation became “how do I monetize this and start making money quickly?” He started heavy marketing and going to appointments, but their buyers list was growing from the start. His first move became to network with other investors throughout the Houston area to meet other wholesalers. He would ask for their biggest problem and be there to fill their issues. Buying houses from wholesalers that no other investors wanted became their niche area, and generated lots of revenue in their first year.
The tactics depend on the wholesaler or the other investor. Sometimes, they’re just looking for exposure. At that point, Kyle and his partner just look for a percentage of the fee. As long as the other investors are happy and continue sending deals to them, they want to make it as equitable as possible. There are also a few investors who are just looking to entirely wholesale the property, in which case Kyle and Eric take it on and become the assignees for the property.
What contracts in place do you have? Is it just trust built?
It depends on the individuals. When Kyle first started marketing deals to people, it was exclusively a trust thing. The majority of people are honest, that’s just how business works. If you’re helpful, you will get help in return. The few people who were either dishonest, or didn’t close the deals, ended up parting ways with Kyle.
A few years in, the title company gets invoiced for either a set amount or percentage depending on what got negotiated. If H L Homes took it, it would be a standard assignment. Because of the invoice to the title company, you know you’ll be paid at the closing. Definitely something to keep in mind. No title company will close a property without fulfilling the invoice. “Shout out to Allegiance Title Sugar Land!” We know the title company wouldn’t turn their backs on an invoice.
Why are you transitioning away from wholesaling?
There are several things that lead up to that transition.
H L Homes started taking feedback from their sellers. “Of course, we thought we were great,” Kyle said, “but how can we make it better?” What they found is that what a seller wants more than anything is to be respected and be told the truth, and to have as few inconveniences as possible.
Start off being honest with intentions when it comes to price, and if it doesn’t work then we can market to other investors with different buy criteria. There are other wholesalers saying they would close on a property, and then not come through. Kyle found that they were losing deals by being honest when others were closing by not being honest. Going on a private money raise and tweaking the buy model helped them to be able to buy fast to help the sellers.
Being able to take properties down to wholesale gives Kyle more time with the properties. Because of this, Kyle is able to access different buyers because of the time allowed to advertise the market to.
Have there been times when you’ve lost money for taking down the prices?
Short answer: yes. It’s going to happen, but not frequently. Usually, money isn’t lost on “short take downs”. Typically, it’s on rehabs where estimates are done wrong, or a contracting issue comes up. Most of the time, the worst case scenario is already known. There are the buyers who have bought from us in the past, so we know what to sell to them. Because Kyle knows his buyers, the confidence in closing is significant.
What’s the process after closing?
As long as they have access to the property before hand, they try to do pre-market, however, most things are done at the same time. Listing, blasting to the buyers list, etc. Whatever the property will be sold for at open market value is what Kyle and his business sell for, which makes great deals for the end buyers and his business.
As far as listing, H L Homes does it themselves. There are 7 people in-office who all have different jobs to do. Eric, Kyle’s business partner, is on the sales side. Most of what happens in the business is done in-house. “Except our online marketing,” Kyle says, “LeadPropeller does that for us.”
All of the property management, construction management, etc. is all done in-house. The long answer is: they manage sales, closing, and acquisitions in house.
Just a few years ago, Cody was selling insurance and didn’t know much about Real Estate. He heard about a little niche known as “Wholesaling” and got interested. He quickly decided to go “All in” on Wholesaling and generated over $500,000 in his first year and has since created a 7 figure Wholesaling business.
After going to a seminar in Utah, Cody jumped in to wholesaling. He took on what advice he was given and found a mentor. In 2015, Cody started listening to every real estate investing podcast he could find and that was it. He found a mentor and got in to wholesaling as fast as he could!
Wholesaling appealed to Cody because it was a great start. “I started with the end in mind,” he says. “You’ve got to build a cash buyers list. If you don’t have an end game in mind, it doesn’t matter because you can’t do anything with it.”
Building cash buyers is simple. There are a few ways to find them:
1 - Go to REIA meetings in your local town.
2 - Get on the phone on Craigslist. Call land lords or people trying to sell their rentals, they’re always interested in listening to what a wholesaler has to say. You want to look at a vacant landlord. See if those landlords are willing to sell. If they are, great! If they’re not, then try to see if they’re interested in becoming a cash buyer. Take notes from them on where they would prefer their properties to be, and boom. You just got another buyer to add to your list!
3 - Get with a realtor and have them run all of the cash deals that have been done in a certain market. From that list, look for the address and names of the buyer on the title and add them to your direct mail list. By doing this, you can see what they’re willing to buy for, and how active they are in purchasing for cash.
The bigger the buyers list, the better. 600 or more is preferable for such a large market like Salt Lake City. If you can get 20 people to inspect a home at the same time, you’ve just build up a feeding frenzy. Making scarcity and providing competition drives up your properties prices, which makes your profit even better. You want people to pay top dollar for your deals.
Because Cody markets the contract and not the property, he sends out a suggested price for the house in the promotional material material. That way, you can use that as a negotiation point to drive your profit.
Cody does anywhere from 7 - 10 deals a month, and every time there are always multiple buyers interested. Even though the market has been competitive, Cody is still bringing in a great flow of business!
A question Cody gets asked a lot is “Why don’t you just keep the properties to fix and flip?” The answer is simple:
If Cody can focus on one thing really well, and continue to do it really well, then why not keep doing that? With house flippers, you have to focus on so many things. You have to deal with contractors, title companies, realtors, all of that. When you’re wholesaling, you don’t have to. “I’m in and out quick,” Cody said.
When it comes to marketing, it’s about 3 things.
The right thing, to the right person, at the right time.
In his first year, Cody had a budget of $1200 for marketing with direct mail. He was told to get uncomfortable because that’s where the profit comes from. At day 44 in his mentoring program, his first deal landed him $24,000.
That covered the course, the marketing, and still had a lot left over. So now, Cody puts aside 50% of his profit toward marketing so that he can continue to grow his business.
Over all, marketing is expensive. It needs to be. But you have to hit a lot of people or else you won’t hear back. $1200 is a great starting point, but you need to keep your marketing budget up to make sure you’re marketing the right way.
Brandon, house flipper, landlord, senior editor at Bigger Pockets, all around real estate investor shares what he feels is the best way to get started in house flipping.
He recommends people start with a live-in flip. The strategy involves buying a house that needs work and living in it while you fix it up and then selling it, either right away or several years later.
I completely agree with Brandon that this is an awesome way to get in the business and learn the ropes.
The benefits he describes makes this insanely obvious. Those benefits include:
* Getting a much cheaper loan than hard money
* Learning how to properly fix up houses
* Avoiding capital gains taxes when you sell the house (if you live in it for more than 2 out of the last five years - reference link here)
You can also get first dibs on HUD foreclosures as they usually give a 10+ day window where only homeowners can buy their houses. During that period, investors cannot bid on them. How awesome is that?!