Why 58% Of Real Estate Deals Die And It’s Because Of This One Reason

David Olds: Sooner or later, somebody is gonna screw over a senator's niece. Right? We're going to get some spotlight that we do not want. I don't know who's teaching this in their $47 discord group, but, you know, oh, just just lock it up and just take your shot. And if he doesn't sell, that's okay.

Just cut it loose. Well, this is why we're getting regulation. This is why Terry Norton proposed that we need to have an association. We need to have some rules. We need to have something out there.

Blue, red, Democrat, Republican, they don't give a hoot about us. We are just the bad investors, and it makes them look good to say, I filed this bill, and we're going off after the investors. Like Trump's saying, we're going after institutional buyers, Wall Street, who owns point 4% of all the properties in The United States. And it makes them sound good, but it's actually doing nothing. However

Steve Trang: Welcome, and thank you for joining us for today's episode of disruptors where millionaires are made. Today, we got my good friend, David David Olds, with EZRI closings and David Flynn from Chattanooga to talk about why 58% of real estate deals die today. I'm on a mission to create a 100 millionaires. Information on the show alone is enough to help you become a millionaire in the next five to seven years. If you'll take consistent action, you'll become one.

And before we jump in, if you're here to learn how real entrepreneurs are building real empires, make sure you hit that subscribe button because every week, we're dropping lessons that could create your first or your next million. And right now, you have a 100,000, 250, maybe even more just sitting in your CRM, resurrect all your old and dead leads with the objection proof AI calling agent, text cash to the phone number 33777 to unlock the money that's just hanging out in your CRM. Ready?

David: I'm ready.

Steve: Alright. So when you were here last time Yeah. We talked about your journey, about how, you were wholesaling, and then you had this idea for this

David: Crazy idea.

Steve: Transaction, company. Yeah. Right? And, and how you made this jump and then, how you kinda counseled me Mhmm. To get focused because I was trying to do too many things.

So, a lot has changed, I think, in the last couple of years. Yeah. By the show, we got a new studio.

David: I love great studio. Love it. Thank you.

Steve: Thank you. Beautiful. Really all credit to my real, to my media guys. But yeah. So, like, you, really all in on on on the transaction management, business.

So how's that business been going?

David: Good. Good. Definitely a little bit of a slowdown. I think our whole industry took a little slowdown last year.

Steve: I heard some crazy stat. Something like 60% or 80% of wholesalers just

David: gone. That was from from batch. Right? Yeah. I heard that.

I didn't hear it

Steve: from batch. Maybe it was batch. I should probably just call Jesse directly.

David: I I think that's what I think Brent told me the other day that it was a study that they did. Somehow they figured it out. And, you know, again, I'm not sure if 60% of wholesalers left or maybe now less people are wholesaling and they've gone into other niches, niches, like, you know, storage or something. But but, yeah, there's there's definitely fewer people. Now the people who did stay and who buckled down and figured out how to run their business, they are doing more deals.

Mhmm. For us, our average let me I make sure I say this right. The average contract submitted per client has actually gone up a little bit. Yeah. It's gone from, like, 2.1 to 2.3 Mhmm.

Contracts submitted to us per month. So there are definitely people making a lot of money in real estate, but it did get a little bit harder for sure, which which often kinda confuses me a little bit, Steve. Like, you've been around a long time, I've been around a long time. If you could make money a couple of years ago when real estate was bonkers, right, when it was, you know, everybody and their brother was making money, you could put a sign in front of the house and your dog makes money. Right?

Like, it did not take any talent. Think about those days. The seller could literally do do anything to sell their house. Right? Mhmm.

But yet as investors, we're still we're still making a lot of money. Fantastic. But now today, where the market's down a little bit and days on market are up and sellers are struggling to sell their house, how is it that you as an investor can't make more money? Mhmm. Right?

Because that's our job as investors. Right? We're here to go out and help people. Right. We're like Liam Neeson.

Right? We have a special set of skills. Okay. And, you know, we do have the ability to come in and talk to these sellers, hopefully build some good rapport and figure out how we can find a solution for them. So it always befall befuddles me, confuses me a little bit why people aren't making more money now than when it was at the height.

But maybe people are just looking for, you know, looking for it to be easy. I don't know.

Steve: Well, there are words that are thrown out there, not to, disparage, but, the expression in when you go into divorce is accustomed to a certain lifestyle.

David: Sure.

Steve: Sure. And I think that there's probably elements of, like, it was so freaking easy

David: Yeah.

Steve: That they don't know what they had or they don't realize the amount of work involved. Right? And I don't blame them for it. Right? Because if you get in when you got all the wind behind you I mean, like, I started doing this 2012, twenty eleven, 2012.

Like And it was really tough. It felt like it was really hard. Yeah. It felt like it was really hard. Mhmm.

But I feel that by taking my knowledge set and skill set today and go back to 2012, I would be printing money.

David: Oh, a 100%.

Steve: But at the time it felt really hard. Yeah. Yeah. Right? And so I think there's there's elements of, like, things are getting harder, and they're you're accustomed.

Like, if I do this much work, I make this much money.

David: Right.

Steve: And I was like, I'm working harder. Mhmm. And the revenue is, like, maybe the same, but the take home's definitely not the same.

David: Sure. Sure.

Steve: So I don't know. I think there's elements of that.

David: Yeah. There's some perspective issues. Right? Like, they don't definitely don't see the things that we see after going through two or three different market cycles. Yeah.

You know, I I have this fantasy sometimes that I'm I'm sitting there and I'm like, gosh. If I had just started real estate in college when I was at UMass in 1992, how much money would I have made? Right? But then I go, oh my gosh. Like, I don't have any software.

Like, how do I comp things? Like, how would I do any of the things that we do now? So I don't think people realize how many tools that we have, and and we're gonna talk a little bit about the amazing tools that you have, but there are so many tools out there that make this business easier. Yeah. And when we started, when we're out putting out bandit signs and door knocking and putting little stickies on the door and door hangers and all that stuff because that was normal back then.

That was that was what you had to do. But I was I was talking to, Lou Brown one time. I'm like, Lou, you started this in the seventies. How did you, like, how did you do it? Like, there was no, you know, batch or prop stream or prop wire or any of these things.

He's like, oh, man. We opened the newspaper. And rentals and properties were listed by neighborhood, and that's how we comped.

Steve: Yeah. I'm

David: like, would have thought of that. That's that's fascinating. But you always find a way, and that's

Steve: It's almost like working in a nondisclosure state.

David: Yes. Exactly. Right. Exactly.

Steve: Yeah. Because, I mean, I've I've had, Eddie Speed on the show, had Jerry Green on the show.

David: How did

Steve: you guys do it back then? Yeah. Like, you know, back in the day.

David: Right. Back in

Steve: the day. It was newspapers.

David: Yeah. But, you know, the thing is you figure it out. Right? If you want something bad enough, there there's always a solution. Mhmm.

Right? And that's something I know we're gonna talk about a little bit, but as you're as you're in your business, we're all gonna have challenges. Everybody. Right? Like, no matter what business you're in, whether you're in the real estate business or the muffin business or the newspaper business, whatever it is.

Steve: No matter how smart you think you are, how much you gotta figure it out.

David: Right. You're you're always going to have those kinds of those kinds of problems, but you just have to know there's always an answer. We just have to figure that out. And that's that mentality, I think, is what's the

Steve: right entrepreneur is from You know, it's, I was hanging out with Nick Perry. I went to the Suns game the other day, and, he said something to me that kinda, like, blew my mind. Right? We're just, you know, just watching the game. Quiet, whatever.

And so he's like, yeah, my cost per lead's gone down. Like, my cost per leads are so low now. Like, I can't believe how much easier it is right now, which is very different than, like, the message we hear out there. Like, right

David: now, it's very gloom on social media.

Steve: Yeah. But he was like, yeah. I can't believe how cheap like, cost for leading cost for contractors are. That's pretty cool.

David: Yeah. The people that are serious. You know? Yeah. Especially like Nick Perry, they're happy that people have left the business.

They're like, okay. No problem. I'm still here. Yeah. I will buy as many houses as I can.

Steve: So you're seeing, I guess, more transaction count

David: Mhmm.

Steve: Per client.

David: 100%.

Steve: How about number of clients?

David: Number of clients, we we came out with some new programs last year, you know, one off transactions and a pay a close plan Uh-huh.

Steve: To

David: try to make sure that we had something for everybody because not everybody is running, you know, Nick size business. Right? But lots of people still need prop or still need help with their transactions. So, definitely, you know, our client count exploded, probably tripled last year. Mhmm.

Not all of those people are always submitting deals, but, you know, that's what we do in our community is try to be there and nurture them and help them Yeah. Solve the problems that they've got. And one of those is having a lot of deals that die. Mhmm. What is it that causes that?

Steve: Yeah. And I definitely wanna touch that later. So all in all, still, EasyRx is still growing? Yes. Okay.

David: Yeah. In fact, we just moved into a brand new office. It's, like, 16,000 square foot. Mhmm. I have 50 cubicles in there because they're like, how many cubicles you want?

I'm like, as many as you could fit in here because we're gonna grow into it. And, yeah, that's our goal by the end of the the years. We have about 25 people out there is to put 50 butts in 50 seats. So now we are aggressively growing right now. Wow.

Yeah.

Steve: And then, you know, one of the things that we do as entrepreneurs is we have these really good ideas.

David: So many. Like, we're in laying in bed. We're in the shower. We're driving down the road, and it's the the greatest thing that's ever that's ever come across our mind.

Steve: And so I'm at ClickFunnels. This is like we're in family mastermind. It's a ClickFunnels. It's like the week after. So I go to both.

Yeah. And I go to so I go to ClickFunnels, and I'm talking to these guys, and they're like, oh, you're a sales trainer. Like, we don't need sales training, but you know what we need. What do you need? Like, we need a we need a sales floor.

You need a sales floor. Tell me more about that. And they're like, well, like, there's only a handful of, sales guys out there. Right? They're also they're also sales trainers and a different arm that you don't really hear about as much as they also run a sales floor.

And we'll tell me more about that. Right. And they explained it to me, the model, the compensation, this and that. I was like, that sounds pretty cool. Right.

Right. Particularly marketing agencies. Mhmm. They're really good at marketing, but they're not really good at managing salespeople. Right.

Right? And I love sales. I love every I love all things sales. Right? And sales is, like, the biggest the sales department is one of the biggest headaches for a lot of organizations.

David: And it's a different skill set.

Steve: Different skill set. Yeah. And so, I was like, alright. Let's run with this idea. And so we decided to launch, a done for you sales solution.

Right? We work with Chris Jefferson. Yep. I was kinda sharing with you what I was doing, and you were kinda lamenting to me. Like, man, like

David: We had lost some salespeople, like, a day before.

Steve: Yeah. They're quitting. Right? Because you had two Mhmm. And then you had one, and you weren't really happy about that one.

No.

David: And then he was going to Florida and want to work remote, and we weren't gonna do that.

Steve: Right. And so we had this. I just, hey. Why don't we do the Salesforce thing together? But that didn't quite work either.

David: Yeah. It's yeah. And and this happens in your business. Again, you know, we talk about this in our team all the time. The first off, the problem with us as visionaries is we always wanna try new things.

Mhmm. Like, we haven't implemented the last thing, and we have two more things on on the docket. Right. And it drives our team absolutely crazy. I know my poor team.

Luckily, I've given them permission to just say, like, no. We don't come back to that. Let's finish this first.

Steve: Not right now.

David: Yeah. Yeah. Can we just can I can I just finish this first? So yeah. So by nature, we're always wanting to do the next big thing because this this is how we're built.

Right? We all we always have our ideas. Our we have ideas, and our brains are always always churning. And, you know, a year ago, every idea I had, I I thought was perfect. Mhmm.

And in reality, where we're at now, I look back and I'm like, oh, that was good, but it wasn't quite what we needed. So, you know, we were talking earlier. The way I think about it is always molding clay. Mhmm. And my business is the clay.

And I think I've got it right, and I'm getting close, and we're gonna try that, and I'm gonna mold it some more. And I'm like, that is the thing that I really need. Why didn't why didn't I think of that three years ago? That's the answer. Yeah.

And because now we've hit on something that's actually popping. We're running ads. It's going it's going absolutely crazy. And I was talking to my website guy, Nolan. I think you've talked to him before.

We're like, why didn't we think of this before? And it because it's just a process. You you have to work through that process.

Steve: And iterate through it.

David: Yeah. There's no you can't run a marathon all of a sudden be at the end. Right? You've got to go through the 27 miles and learn things along the way.

Steve: Yeah. So I bring that up because you're the one that you know, you're one of the two people that we worked with.

David: Yeah.

Steve: And, it's always an experiment. It's always learning opportunity. And then the other thing we talked about was that you were, you had this other great idea about title.

David: Yeah. Yeah. Yeah. I thought, you know, listen. Title will be great.

We're running at least 2,000 files a year through through our company. Wouldn't it be great if we could just funnel that into our own title company? And on the surface, that that does sound great. You know? And I even knew a little bit that title wasn't as profitable.

It's not the best business to be. Right? It's very high risk in insurance business. Right? It it's literally you're in the business of insuring these these deals.

But, it's very complicated. You're working with you know, we were in six states, and we're working with six different state insurance commissions and underwriters. And there's just a lot of moving parts. And at the end of the day, it's it's difficult. It's just a difficult business to run.

So we realized that this probably wasn't the best place for us to spend our

Steve: time. So you you you put yourself out there as, like, maybe this was not as smart as we thought.

David: Yeah. And and as a leader, you have to be able to say that. There are lots of things that that I have to tell my team, you know, because, you know, it's like, oh, it's all your fault. Like, no. That was my decision.

I I decided that we were gonna offer this plan or we were going to do this or we were gonna go in that direction. And sometimes you have to go, well, that that didn't work. And,

Steve: Didn't work as planned.

David: It didn't.

Steve: And I can say this as a person who's had a title company. Yeah. Right? Like, it was a really good idea, and it was really profitable. It was really smooth and seamless Yeah.

Until the real estate commissioner starts asking questions. And then you start thinking Yeah. I want no part of the real estate commissioner wanting to talk to me.

David: No. There's there's not a lot of

Steve: And she's best buds with the attorney general.

David: Right. Right?

Steve: And so now I'm looking at it.

David: I was like, making

Steve: $2,000 a month. Right? Like, at at its peak, I was making 15,000

David: a month.

Steve: Right? It was really, really good. Yeah. But when the market slowed down, and then we have a new real estate commissioner, and she comes in, and she's like, why do you have had a company? Right.

Because Steve's like, whatever. I'm a

David: good guy. Right?

Steve: Yeah. Yeah. But once you started asking questions like, hey, guys. Let's just let's just close this out right now Yeah. And just put this chapter behind us.

David: Yeah. Which is a complicated thing to close it down. Uh-huh. And, you know, you realize the title companies, there's a reason. Sometimes we have clients who are like, just tell the comp title company to push it through.

I'm like, bro. That's not the way this works. Because the title company, you know, if they insure a property, like, they're on the hook for that if they miss something. And I've had title companies miss things on my personal deals Mhmm. Where they missed a a, you know, a memorandum and a cloud on title, and I had to go through a super quiet title to fix that.

And, you know, ultimately, luckily, we, you know, we sued this guy. We got him to pay the core cost, but that could have been the title company's problem. Mhmm. So, yeah, it's, it's not as glamorous. Like, I was telling you, people have called me and, like, I wanna start a title company for lead gen.

I'm like, bro, there are better places for you to spend your time and and energy. Go out and just do one more deal, and you'll make money.

Steve: I am a big fan of title companies if you're a one market person. Yeah. If you're a one market person. But the the nationwide thing because, like, I I was very spoiled, like, being in Phoenix, being in a larger metropolitan area, where, like, there's so much competition. There's so much business that they're all fighting for it, and they all wanna give good service.

They have to give good service, so they're not gonna compete.

David: Because there's not for the people that are listening, like, there's no, like, title company that's, like, 50% cheaper than anybody else. All the fees are set by the state. Title insurance, the biggest charge that you have, that's set by the state. It's just a percentage. The county does, you know, your recording fees and all that type of stuff.

So literally, at the end, you're you're talking about, you know, the the title fee the the fee that they charge you to pay their people and the rent. Mhmm. And maybe it's $500, maybe it's $600, and you want them to do it for 200. Like, that's how they pay their people. So there's just there's not this huge swing.

So you're exactly right. What you're looking for what the real question you should be asking with the title companies, are they good? Mhmm. How quick can they get this done? And, you know, is it going to be the paperwork going to be right?

Steve: And that's what I figured out when we went to Albuquerque, New Mexico and we went to Oklahoma City. Right. They do not operate with the same sense of urgency No. No. Because the there's not that much competition.

David: Right.

Steve: So I got so spoiled by the quality of title and escrow Right. In Phoenix. Well, I can clear title in twenty four hours. Yeah. That is not a concept No.

In those other states.

David: No. It's not. And for us, with over 600 clients and, you know, we've done thousands and thousands of transactions, the one of the hardest things for us was finding title companies nationwide. Mhmm. And, again, this fantasy at the very beginning, like, when we first started the company, like, oh, I'm just gonna get one of these nationwide title companies, which there are no nationwide title companies.

None. None of them.

Steve: Mhmm.

David: Not one not even First American is licensed in everything. So, you know, if somebody says they're a nationwide title company, what they're doing is they're partnering with somebody else. That person is gonna charge you, and then these people are gonna put their money on top, and you're gonna have these outrageous fees. But my fantasy was I'm going to have this one place. I'm gonna send all my deals over there.

We're all gonna be rich, and it's gonna be Yeah. And we broke them. Like, three of them. Yeah. So we have almost 800 partner title companies across the country that we funnel our clients' transactions to.

So if you suck, we are not sending you any more deals. If you're, you know, important for us to to make sure in every state, I have somebody that'll do an assignment. Just because they'll do an assignment doesn't mean they'll do an ovation or a sub tour, an FHA sub tour. So that's why you Well, we

Steve: went through a whole deal with installment method. I was like, David, I need an installment method attorney in Texas. That was a

David: a complete deal. They just they don't wanna do it that way. They just will not do it that way.

Steve: Oh, so hang on one second. Hey, Manny. You turn the AC on? This is not an interrogation yet. Alright.

Let's see here. So, thank you.

David: I can

Steve: hear that. It really sounds great. So, you know, again, like, one of the things that you kinda counsel me through because, like, people ask me I was actually talking to someone the other day, who has a lot of things going on, and he asked me, like, how hard was it? Oh, I know what it was. He has his, business where he helps the government unload their properties.

Great setup for him.

David: Right? Nationwide. Source of leads.

Steve: Nationwide. Yeah. He's doing pretty good. He also has a real estate team. He's like and he has property management.

He's like, if you look at these three sources, one of them brings in the least amount of profit, take home, but it's also the biggest source of headache. Like, how hard was it to shut down? I was like, well, like it was really easy. Like you just like dissolve the LLC. That part's easy.

The identity part was hard. And, and so I remember, cause like Jason Medley was in my ear pushing and pushing and pushing. And I was like, all right, let me talk to David. Right. Cause he stopped his wholesaling company.

David: I remember where I was when you called me. I'm like, I saw your name. I'm like, oh, what have I done wrong?

Steve: So I called you. I was like, Hey, like, here's, what's going through my mind. Like, I can't build this sales training organization to the level I want it to be. If I'm continue wholesaling, How hard was this for you? And you're like, it was really hard.

You walked me through it. Cool.

David: Right? It was literally my identity. I still feel like I'm a wholesaler. Mhmm. I'm driving down the road and I see a a boarded up house or something.

Like, feel like my car pulls to the right because I because I want to go in there. Yeah. I joke all the time that I'm an old school knuckle dragging wholesaler. Mhmm. But and this kinda goes to the bigger bigger picture for people who are entrepreneurs is what made us successful in our wholesaling business is we were in our lane and we stayed in our lane.

Mhmm. Right? When we ran Nationwide Property Liquidators and we were, at one point, in a 114 markets, the reason that we were successful is because we only wholesale. Right? We weren't fooling around with novations at the time.

We weren't, you know, we weren't doing storage units. I wasn't buying multifamilies to start managing because all of those are distractions. Right? And you've only got so much brainpower. I don't care who says they're ADHD and they can do five things at once.

Your brain cannot. You you just can't. You can only have one thought at a time. So, you know, instead of trying to train our team to do 14 different deal types. Right?

Steve: Oh,

David: we're gonna start a wholesale. If it doesn't go there, we're gonna do novation. If it doesn't go there, you know, then we're gonna ask them a bunch of questions. If they own it free and clear, we're gonna do owner financing, and then it's gonna go to sub two. You know what I mean?

And and installment method, and we're gonna do all these things. Like, your team is not going to do that. They are unfortunately always going to fall to the lowest the lowest level, which is what's the easiest thing to get this contract signed?

Steve: Yeah. They're gonna go

David: to Novation because I can give them the highest number. Right? But is that always going to work? Maybe, maybe not. But yeah.

So we we very much stayed in our lane and made sure that we did, we did one thing and and, you know, for us, we wanted to do it better than anybody else. And I think you have to you have to achieve that, and then you could start to layer on some other things.

Steve: Yeah.

David: Right? And, hopefully, you know, there are things that kinda run parallel to what you're doing.

Steve: Yeah. But since then, you've gone back to now helping people move their deals.

David: I know. It's like How did this happen? Well so, yeah, I was very much against it once, once we got out of the title company business. Right. We're we're all in you know, we're on transactions, which, you know, we we always were.

We were very, very focused on that. And so I have meetings with my team all the time with marketing and business development managers and video guys like like you. We're like we've got people that run all these different departments. And the sales team was in the office one day, and we're we're talking. And I said, okay.

Hey. What objections are you getting from people who call in? What questions do they have? Like, just give me as much feedback as you can because we can take that and put it into our marketing. So they said, well, people keep asking us if you do dispositions.

I'm like, why? They're like, because that's all you talk about online. I'm like, oh.

Steve: Is that what you talk about a lot more?

David: I don't feel like it is. I feel like I talk about rentals and all kinds of stuff, but just general real estate. Yeah. I know it did give me a little bit of a complex. I'm like, am I only talking about about one thing?

So I said, well, like, that's not that's not what we do. And, you know, we sort of we were in the room, and and we're very open with our our leadership team. We're actually having a meeting next Monday where we're bringing them all in once a quarter and, like, it's a safe space. You can say whatever you want. Like, I wanna know from all the different departments what what problems are you having, what do you what do you need.

Like so this is the kind of conversation we had. I said, well, okay. Let me be a good leader and and not just dismiss it out of hand. We could we go back to doing dispositions? But at that, I know.

Like, I coached some of the biggest teams in the country, even like Nick Perry's team back in the day. Maybe let me see if I can find somebody that that I can bring in that can just just help do a couple of deals. So we opened it up, and we took in 35 contracts in ten days. I was like, oh, this might be a thing. Yeah.

And, you know, what I realized at at the end of the day is I said, okay. Well, let let's open this up. And we took in a deal, and it was one of our clients. She couldn't sell this deal. It was in Compton, California.

We sold it in two days for a $140,000.

Steve: They made an album about that city. They made an album about

David: that city. Perfect. And so we split it. She made $70 on a deal she was gonna cancel. Mhmm.

$70. So I'm like, oh, this is really good. No. We we we did a small

Steve: deal. 70?

David: We each made 70. We split it $50.50.

Steve: We couldn't move it, and you each made 70. Yeah. Wow. Well It's pretty good this month.

David: We're good. We have a really good process. We're not just slinging it out there on, you know, on a couple Facebook groups. So I said, okay. And, you know, I was talking about a little bit on on social media for our clients.

This is something we're doing. And then people started hitting me up. Hey. Can you sell our deal too? Like, well, I mean, it's really good revenue.

It certainly does nothing but help the bottom line. Mhmm. And I said, okay. Let's let's take in we'll we'll open it up, and we'll take in take in a couple of deals. And the problem with running JV Dispo business is you have acquisitions.

It's exactly the same problem. All these files that keep coming in we're getting, like, 20 a day right now. All these files that come in, you have to underwrite them and see, is it a deal? Mhmm. Because I have people in my office that are doing dispo.

Right? I don't wanna saddle them with a bunch of deals that they can't sell because I'll burn them out. So we're very, very selective, and we wanna make sure it is it is a real deal. So then I realized, okay. These people are having the same problem that's our existing clients are having, and that is they're putting stuff under contract that doesn't end up close.

Mhmm. Right? So I need to do some I need to do something to help them because we know what the answer is. One, we ran a very successful wholesaling company, made millions of dollars, and we also have data. One thing that we have that I will put up against pretty much anybody out there except maybe some of the massive CRM companies is data.

Mhmm. After doing over 9,000 files, we've seen everything. So we know what are the best markets, where do things close, what are the best strategies, what works you know, we can buy market narrow down like, hey. This is where every novation over $50,000 has closed. Mhmm.

We've just been doing this for four years. So I said, well, we need to we need to do a little bit of education because if I can help Jimmy who comes and gives us a deal, whether he's a client or he joins EasyREI DISPO, like, if I can help him only go to the best markets, right, where the cash buyers are the hungriest, right, what does that mean? Deals are gonna sell quicker Mhmm. And they're gonna sell for higher assignments because a lot of people looking for them. And let's tell him where not to go.

Mhmm. Right? And this is really one of the biggest fallacies in our industry is because Well,

Steve: hang on. Before you get into the Okay. So you're talking about, like, you know, the pockets. What sells, what doesn't sell? Yeah.

So, I was reminiscing. I was picking, my daughter and my wife. We're going to a volleyball tournament. Right? Got two kids in club volleyball.

Expensive, by the way.

David: You're always on the go.

Steve: Yeah. I have to raise our pricing on all our services because club volleyball is expensive. Yeah. Yeah. Right?

And so we're driving, and we're on the 17, and then we're about to hit Peoria. And I just said it to my wife, casually, like, that's the exit. She's like, what's the exit? That's the exit. She's like, why?

It's like, I bought more deals getting off of Peoria Avenue Mhmm. Off the 17 Yeah. Than anywhere else. Right? Like, you have you you have this epiphany one day because I was doing all my Google PPC.

Mhmm. Right? And is it one day, it's like, wait a minute. All my deals are in this part of town.

David: This is where buyers want deals. Right?

Steve: Well, this is where buyers wanna deal. Like, this is the area where if I lock it up, sellers are willing to take less, buyers are willing to pay whether it makes sense. Right? I I could do East Valley. I could do Americo, but I could do Scottsdale.

But the Delta where I can make the fee over and over again is not the same, but I could just blank it. Right, this part of Phoenix and do, like, I wanna say, like, 60% of my deals, right, which is that part of town. And we're just talking, like, a few exits. Right? But Peoria was that was the exit where, like, I just felt like if I get off that sign Mhmm.

Like, I was making money that day. Right?

David: And that's running your business on data, not feelings.

Steve: Exactly. Right? And so when you're saying, like, hey. The the 9,000 transactions, I'm assuming this you're talking easy REI, process 9,000 transactions. So you know what properties move at in every ZIP code.

David: Pretty much. I would say every county. Maybe not down maybe not down to the ZIP code.

Steve: Every county. Yeah. Right? So I think that's incredibly valuable data. Yes.

So, like, you know, the the nationwide wholesale and the underwriting Yeah. You got all sorts of challenges. Because, like, when I was doing nationwide wholesale, just for a bit, between non disclosure states, finding comps within three miles within the last six months was a challenge. One of the tools, one of the tips, and not try to hijack your, your, your, podcast here, but like, you know, one of the advantages I had to do nationwide wholesaling was that I'm actually a licensed realtor.

David: I think that helps some.

Steve: Well, being a licensed realtor, I have access to NAR RPR Sure. Which is a data source

David: Right.

Steve: That you can't get if you're not a licensed realtor.

David: I get it. But what that doesn't give you is cash transactions that happened outside of outside of

Steve: MLS. I don't think. Pretty sure it did.

David: Really? Now in a disclosure state, it will, but in a nondisclosure state, I don't think you'd you'd get it.

Steve: I still remember, like, when we were doing, like, Closers Olympics when I was a judge and we had to, like, comp it real quick. Yeah.

David: I was

Steve: pulling stuff way faster than ARRPR than other guys are pulling with ProStream. But, anyway,

David: Oh, yeah. I I agree. You know, for for me, when when we ran and we're again, we were in a 114 markets. You know, I found that the Northern market's kind of the the top part of the country, very slow. Great place to be a landlord, not a great place to be a wholesaler.

Yeah. Right? And those things are different, and I think that's people have to understand that. So I wanted to be kinda Sunbelt South. Right?

Like, we kinda went up the coast a little bit, maybe New Jersey, and the West Coast is always great. You can get high assignment fees. But I I wanted to be under that kind of a smiley face across the top of the country. Right?

Steve: Imagine this this map in your office.

David: Well, I'll send it to you, but I don't think you could post it because it says f desk. Because I was so mad one day. I'm like, no more deals up here. We're done. Tired of spending money.

So then, you know, we look at we look at, we look at what's below the line, and, you know, we pull this off InvestoLift, which has amazing data. Right? And I'm like, well, I don't wanna be a nondisclosure state. Because what that means is, as a wholesaler, I wanna see what cash buyers are paying. Mhmm.

Right? That makes sense. It's like the teacher's edition for the book. Right? Mhmm.

I if I know what cash buyers are paying, then I know what to offer. I wanna go $20 less, and that's my offer. It's very simple. I can train anybody in my office in, like, three days to come in and do this. So cool.

So I'm below the line. I'm knocking out whatever's left of the 13 nondisclosure states other than Texas. You gotta be in Texas because it's like its own country. Right? It's you do just too much activity.

So we make an exception for that, but all the rest of them are done. And then I'm still left with 20 or 25 states. Like, there's plenty of places to go do business. Right? And then I'm just gonna take those, and I'm gonna run some data on cash buyers, and I'm gonna rank them top to bottom.

And I'm just gonna go where there's the most number of cash buyers, and there's the highest volume of transactions. It's not complicated.

Steve: It's not that different than the model when we had the hedge funds buying.

David: Well, so here's what happened. When I when I first went to PPC and because I switched we started with Brent Daniels. We were on talk to people.

Steve: We do not talk to people. Before that. I mean Okay. What I meant by that was that you know where they're paying the most. Sure.

David: You know

Steve: where the volume is. You know where they're paying the most. Let's just mark it there. If you're a real estate investor with a sales team and you're stuck babysitting reps instead of growing your business, this is for you. Right now, your reps are burning through your expensive leads like their practice numbers.

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So you disagree, so go ahead.

David: A little bit. I I I little bit.

Steve: Oh, please.

David: Well, I went to I I did. I did the I did exactly what you're saying. I went to all of the top you know, all their websites and where where were they buying, and I ended up in Buffalo. Like, one of them, I don't remember which one, is buying in Buffalo. Well, the the the lake is here.

Buffalo sits right on the edge, which by the way, it's the coldest place. And I went there once for a Patriots game. It was horrible in, like, December 29. But, anyways, it's a big county. Mhmm.

But I didn't know any better. Like I told you, we've invented ways to lose money. So I was doing PVC to the whole county, and I'm getting properties out here 30 miles outside the city and literally could not find a sale

Steve: Mhmm.

David: In the previous year because it's all farmland. Yeah. Right? So, yeah, again, hedge funds are buying there because some of them. Because they're buying for long term rentals.

Because rentals are a great place to put your money. It's better than it's better than Wall Street. Right? But, you know, in a lot of these northern places, you know, they're they're it's not a 1% rent multiplier. Meaning, for those that don't understand, it rents for a thousand dollars.

I can it's roughly worth a 100,000. Right? That's 1%. Up here, it's a 2%. They're buying for 50, and it's renting for a thousand.

And the reason that is is because there's less buyers in inventory. Mhmm. So now buyers are in control. And what do you always wanna do? Wanna force the price down as

Steve: low as you can.

David: So when you get into a market like that as a wholesaler where I'm working virtually and maybe I'm not as familiar with everything that's going on is, well, if they're buying it for 50, and I wanna make 20, 30, and that's hard. Mhmm. Right? So why wouldn't I just go to Jacksonville

Steve: Mhmm.

David: Right, where I can make 20 and 25 all day long? Meaning, if I'm working virtual, just pick the markets Yeah. Where I can make more money, and I have to work hard. Right? Work smart, not hard.

That's what my dad taught me.

Steve: Yeah. Alright. So now you're counseling your clients. Here's where to go.

David: Here's where to go.

Steve: Are you counseling on what to pay?

David: No. We I mean, well, in the sense that we do teach them how to comp deals for our acquisitions team the way that we used to.

Steve: Mhmm.

David: And I don't believe I think the 70% of ARV minus repairs minus like, that's the biggest nonsense ever. It it just it just is, and I'm sorry, Lou and Robert Allen, all the people who ever taught that. Because I think

Steve: know the names that taught it. I just know I just Yeah. Well YouTube videos. All that.

David: All the old school people. I I think it sounds really great, but let's be honest. You know, I bring somebody in off the street. I get them all hyped up. We're gonna go do deals.

You know, Joey, 70% of ARV. They're gonna look at all the comps. Which comp do you think they're using?

Steve: Best one.

David: The highest. Mhmm. Right? So let's just say their the comps are 145, 146, 147, 148, 190. Mhmm.

Guaranteed, they're going to one ninety. Why? Because they want the least path of resistance. So if I do one ninety, 70% of that right? And then let's talk about the repairs.

Probably, if we're doing this remote and we're doing it over the phone, they're not doing a great job of establishing the repairs, and this is a big thing that we see. Hey. You know, missus Smith, you know, fantastic. I'd love to buy your house. Tell me about your house.

How's the kitchen? Kitchen's fine, Jimmy. Great. And the bathroom? Awesome.

Great. We lock it up. And then we get some pictures back or we start sending buyers over there, Steve, and the buyers are like, bro, these are like plywood cabinets from 1940 with green laminate in the middle of metal band. Like, I gotta budget $30 to do this kitchen. Well, you didn't budget that.

Mhmm. So what does that mean? You're probably priced too high. Yeah. Right?

So this is what happens. 70 percent. We go to the highest number. We go to the lowest number on repairs, and this happens because we just cracked. Mhmm.

Right? Just whoever it is, I get it. I just want the contract. I wanna feel good about it. Mhmm.

But if your odds are literally 58 that that deal is going to die, what did you accomplish? Right? And now we have the problem of we've locked up a deal. That person, when they sign that contract, they think you're closing. Mhmm.

They are packing up boxes and getting ready to move, and you're gonna run a bunch of people through there. You're gonna spend your time, your energy, your money, and just everything. And at the end of the day, you're not going to find a buyer because all your offers are probably gonna be lower than what your contract price is. Yeah. And now you have a problem.

Steve: Well, I know that, for us, especially, when our team transitioned from being a Phoenix nationwide, again, we were very spoiled by the Phoenix market.

David: Yeah.

Steve: Right? Because, like, I if I have a deal here, pretty much moves. Yeah. With a deal.

David: It's a great market. It's one of the top markets. Yeah.

Steve: Right? And so we don't really have to be as disciplined Yeah. In the pricing and underwriting. It's so important, but it's not nearly as critical because the demand is high enough. Right.

When we went to rural, our team failed to account how much was involved in rehab. Right. Because here, you know, Jimmy in a truck, you get anywhere in Phoenix. Right. But if it's, like, two hours from the nearest town

David: Mhmm.

Steve: And you get a a guy that's gonna rehab it who you don't have a relationship with Right. You're not getting a good price because of volume or relationships, and you're getting the surcharge for being two hours away.

David: Yeah. Your margin for error in these rural areas just shrinks.

Steve: Yeah.

David: First off, you didn't ask probably great questions. Mhmm. So, you know, you contracted it with your buyer. Whatever it is, he starts doing his due diligence. And now he's like, oh, man.

You And tell me this foundation that's sinking or there's sewage leak. Like, you know, your margin for error just just goes away.

Steve: Mhmm.

David: So that's why, you know, on the acquisition side, that's where you can solve so many of your problems by doing a better job there.

Steve: So how would you do that?

David: What's that?

Steve: So I'm a new horse I'm a new wholesaler

David: Yeah.

Steve: Going nationwide. How would you coach me to make sure I underwrite it well?

David: You know what? The most important thing is, Steve? Pretend you're actually gonna buy this property. I don't want it to be super complicated here, but pretend that you're 200,000. Just pretend.

I get it. You may not have 200,000, but pretend. Mhmm. I promise you, you go in with that mentality, you're gonna ask a lot better questions. Mhmm.

Hey, miss Smith. Do you have a smartphone? Would you mind taking some pictures for me so that I can look at this and make sure I'm giving you the highest

Steve: possible price? Sight unseen. What I

David: want to know? What would you wanna know? Right? Do not be in and that's a different mindset. Those are two different tracks.

Right? I just want the contract so I can ring the bell, hit the gong.

Steve: Mhmm.

David: Right? Order the jet. I'm gonna be rich. And, oh, wait. I'm actually gonna wire $200,000.

Right? Let's put ourselves in the buyer's frame of mind.

Steve: Mhmm.

David: What is our buyer going to want to know? But even beyond that to get and I don't we I know we didn't wanna go down this road, but, you know, your acquisitions, you will close far more deals if when you're contracting this property before you contract it, you understand how the buyer makes money. Right? So and this is something when I was running around the country all the teams when when that was the thing that I coached is I would first sit down with the acquisition. Right?

Let's let me talk to you and, like, what is your process? Oh, well, this I right up the road here told me that if I just contract between 4852% of Zillow, I'm gonna be right 70% of the time. Okay. Or you could just ask the seller, you know, some good questions and figure out, oh, this property, the seller's moving out, and it needs a full rehab. So who's my buyer?

A rehabber. Well, let's let's evaluate it that way. Or ask a question. Hey, Steve. Tell me about the house.

And you're like, oh, it has a tenant in it. Fantastic. How long is left on the lease? Oh, eight months. Well, now I need to know what landlords are paying.

Right? Like, that's a completely different track. Or, oh, it's raw land or it's a house that needs to be torn down. Mhmm. Great.

Now I need to evaluate this based on the value of the land. Mhmm. And that's pretty simple. Just gonna go search for new builds within a half of a mile, and I'm gonna just look back in the property records a little bit and see what they all paid for the land. It's the data is there.

This is not complicated. Yeah. You just it just takes a couple of extra steps. And what this will do is shoot your conversion and your close rate up.

Steve: Kinda sounds like we need to learn how to underwrite deals.

David: Yeah. Yeah. You can't do it with Zillow. Zillow is not gonna give you this kind of information.

Steve: Zillow is not gonna give you this information. But are you having the acquisition people learn how to underwrite multiple exit strategies?

David: Well, no. For me, wholesale. We're doing wholesale. We're gonna do one thing.

Steve: Well, I mean, exit strategy, poor choice of words. Learn how to underwrite if this is gonna be a flipper, buy and hold, or someone's gonna build from Yeah. From scratch.

David: You have to you have

Steve: to learn how to underwrite with those three hats off.

David: Yeah. But that's a lot simpler than me trying to teach you wholesale, ovation Mhmm. Sub two, owner finance, installment meth you know what I mean? That's those are completely those are, like, different degrees at a university. Mhmm.

Right? Which we as owners, and if you're watching this and you run your own company and you're doing the phones, 100% you could do that. I did that. You've done that because just our brains work. Right?

Like, we're the guy or the gal, whatever it is. You know, like, we can make those transitions. Like, it's like shifting without even thinking about it in the car. Like, you'll drive stick shifts? Maybe I'm showing my age there.

Steve: Yeah. I I can't think of anyone that

David: You drive a Tesla, which does nothing. Right? Like, you just get in and close your eyes and it takes you home.

Steve: I only use one pedal.

David: Like, I don't ever want I

Steve: don't even wanna use the brake. Just take off my foot off the gas. I have

David: to brake. Okay. So that was a that was that was a dated example. But, yeah, it it that is not complicated to teach them to look what cash sales are. Mhmm.

Like, that that's not hard at all.

Steve: Yeah. Okay. So, you go straight to the acquisition, teach them how to interact. It's not the dispo having the relationships. You don't start with the dispo.

David: I we always start with the end in mind. Mhmm. Right? So if we understand at the very beginning what happens to this property. Let's let me ask you this.

We're we're at the end of our deal. Right? Put it under contract. I sold it. I've done all the things.

At the end of the day, we get paid. Right? Mhmm.

Steve: Who pays us? Who pays the title company?

David: Well, who pays the title company is really the right question. Right? The buyer.

Steve: Buyer. Yeah.

David: Cool. Well, that deal does not stop and exist just because we got paid and we walk away. That deal has a whole another life cycle.

Steve: Mhmm.

David: Awesome. Now it's your buyer's problem. Mhmm. If they are not going to make money on this or they can't see how they're gonna make money on this, well, they're not gonna wire you 200 the title company $200,000. Mhmm.

Right? So this is the part of the deal that you really need to be looking at. How will my buyer make money? Is it an Airbnb? Is it pad splitting?

Is it a rehab? Is it a student like, how can they make that deal work? This kinda goes into a little bit of your disposition marketing, and I know we're all over the map with this conversation. But if acquisitions can understand what happens here

Steve: Right.

David: Your likelihood just goes through the roof because they will price it correctly. Mhmm. Or at least you have a shot of pricing.

Steve: Yeah. Well and then maybe I'm overcomplicating it. You know, like, seeing something like the the some of the most successful organizations, like, the bigger operation we're talking about high volume. Yeah. Acquisitions, you got dispositions, and you have an underwriter.

Right? And then, like, the, again, high volume teams, like, I think once a month, everyone's in the same room underwriting deals together. Because what happens a lot of time, acquisition is overly optimistic underwriter.

David: Yeah. One ninety ARV, 15,000 repairs, which you can't do countertops and carpet anymore fitting. But yeah.

Steve: But this position is like, why the hell would you put this on my desk? Right? And now I'm gonna be the jerk because I'm gonna push it out to my relationships, and they're gonna think, oh, this guy does not underwrite. He only sends me bad deals. So but I think goes back to kind of what you're talking about in regards to why deals die.

So 58% is a pretty hard number. This is this you didn't pull this out of the No. It's like, you know, it's about 15% of deals. 50. What is that number?

Where did where did it come from?

David: Yeah. So that and and that's my COO, Heather. She does all of the the hard stuff, all the complicated things. She's a smart one.

Steve: Let's be honest here.

David: To me. Let's be honest. It is not me. I'm, the guy who shows up with some debt bad dad jokes. But, yeah, 58%, if you contract a property in a rural area Mhmm.

58% it's going to fail. Couple of different reasons. One, who's my buyer? Mhmm. Property is two hours from any place, and let's just be extreme and say it's a town of 2,000 people.

Okay. Cool. I don't care which one of these three things it was. Rehab. Awesome.

Okay. I could get this thing for 30¢ on the dollar. Like, that's a win. Right? We're all going to say that's a win.

But who's going to buy it? Who's going to buy this property, hold it, pay hard money or put put up their own money, and then sink another $40.50, 60, whatever it is into that property, how long is it going to take for that person to sell this deal in that town to 2,000 people? Because who's moving there?

Steve: Not anybody, really.

David: Nobody. So why would he do that? Mhmm. Why is that the best place for him to invest is $200,000? This is not a hobby.

He's doing it to make money. Okay. There's a tenant occupied property. Different guy. Okay.

Why am I going to buy this property?

Steve: Mhmm.

David: And who am I going to rent it to if it goes vacant, if it is if it's not already vacant? It's a town of 2,000 people. Mhmm. What is going on in that town? Is Amazon moving?

Is there anything that says people are going to be moving here? No. It's a town of 2,000 people. Okay. That's a problem.

Why would why do you want to do that? It's raw land. Fantastic. There's one builder in town who does decks. Right?

And I'm going to call him because he's the contractor for whatever little town it is. Why is he going to buy that land to build on it? Mhmm. Because who is he going to sell it to? If the deal does not make sense to your buyer, they're not going to buy it.

So why are you locking up these deals? Right? And, like and, again, everything will sell at a price. Right? If it's a dollar, it will sell.

I remember years ago, I was in Virginia, Virginia Beach, somewhere over there. And this was back in the day before we did Zoom coaching, and I would actually fly out to people's offices and help them. And I remember we're sitting in, like, Bojangles or something, and and the the wife, she was, like, very aggressive. Like, she wanted to do this. The husband, he was a little bit of, like, a a naysayer.

And, he's like, not everything will sell for a price. I'm like, that's not true. And I pointed to this, like, this, like, old barn that you could kinda see through, and it was weathered wood, and it was tilted. I'm like, you know, whatever, Joe. Would you buy that for a dollar?

Yeah. Well, of course, everything will sell for a price. But now it becomes, what's your time worth? You know? Yeah.

I could sell that house and make a thousand dollars, but is that worth my time? Is that worth the two months that I'm gonna have to to do this? If me, Robert Wensley, and Tony Montt are your dispositions team, like, the dream team. Right? Like, you'd have our banners up in here.

How long are we gonna stay with you if you're giving us those deals?

Steve: Mhmm. If

David: we're like, f this. This is stupid. Like, I'm killing myself, and I'm not making any money.

Steve: Right.

David: Right? Like, if you wanna do that yourself, I think it's dumb, but it's your time. But when you have people that work for you, especially if you have people who are on commission only Mhmm. How long are those people going to be Well, that's

Steve: just commission only. Even hourly, that that's gonna eat right into your thousand dollar profit.

David: Well, there you go. Right? I mean, I'm just saying there's just a lot of problems with it. Yeah. So given the choice, and if you're virtual, you have the ability to be any place.

Why not be in the best market? Mhmm. And you can literally figure that out in an afternoon. We show our clients and our partners how to do that. We've got a video that literally use PropStream.

Here's how you do it. It's very, very simple.

Steve: Yeah. I mean, I remember, so Brandon Bateman, he was on the show.

David: Love Brandon.

Steve: And, he he did his we had a visual Mhmm. Of, like, here is what, the country looks like at night.

David: Yes.

Steve: Do not buy

David: Where it's dark. Where it's dark. Exactly.

Steve: Kind of the similar message here?

David: Pretty similar. Pretty similar.

Steve: I mean, so I had this property. Again, we're Oklahoma City. Right? Because, like, we're gonna do we're gonna go big. Right.

We're in Oklahoma City. We're doing TV. Right? I'm doing the TV spots, blah blah blah. And we got this lead came in, and I remember my old partner was like, hey.

Like, they only want, like, $8,000. Like, lock it up.

David: Gonna be rich. Lock it up.

Steve: Like, how could this thing not move for $8,000? I think three months into it, we're like, yeah. This is not gonna move.

David: Right. So that happened to us. We we started going virtual before it was, like I think Chris Chico might be the one who coined the term. I don't even know. But we were doing that before it was a thing because we were in Chattanooga, and I brought on a fourth partner.

And I'm like, hey. We're splitting these deals four ways. We need we need to do more deals. Mhmm. And, you know, there's an absorption level in every market.

There's only so many deals that you can put out. Even in in Phoenix, you could probably only put out three deals a week. You can't put out five.

Steve: Mhmm.

David: Because what's I mean, maybe they're selling that quick, but, you know, I put out a deal on Monday, and I get somebody who's interested. But Tuesday, another deal goes out, and he's like, oh, I really like this. You know, you there's just a a just you can only put out so many at a time. So we're like, okay. Great.

But if I could be in 20 markets or 10 markets and do two deals a month, 20 deals. Right? Mhmm. So I can increase my volume. Great.

So, like, what market do we wanna go to? Well, the partner I had is Birmingham. Like, alright. That makes sense. It's close.

We could drive down there if we ever really needed to. Birmingham, terrible market to be in. Again, so much inventory, so many tax deeds that you just there's just so much inventory, not as many buyers. Like, you just can't make a lot of money there virtual. If I lived in Birmingham, I'd be the king of Birmingham because I'd be there.

I would know things. But when I'm working with JV partners and I'm having to split deals, not great. What made me think about this was our next market, St. Louis. Have you been to St.

Louis?

Steve: Driving through. Great. Good barbecue.

David: Good barbecue at the arch. Very scary. But there is a section of St. Louis. I don't know what it is.

It's maybe, like, 10 or 20 square blocks. Like, people, if you're watching this, put it in the comments about what this area is. They're beautiful brownstones, or they were probably eighty years ago. But now they're all abandoned. I think it's because some maybe some factories or something went out of business.

So this is what happens. We're locking up, like, nine of these in the first day. Again, like, 4,000 to 8,000, like, cheap. And I'm like, we were applying what we do in Chattanooga to there, and I'm like, or order the jet. We are gonna be so we are the smartest people that have ever graced wholesaling.

Like, you know? And, again, what we realized is there are a thousand of these things. Nobody wants them. Like, the city doesn't even want them back. They're not even enforcing tax sale.

Like, they just don't want these things. And, I didn't realize it until we drove up there because we had this hotel under contract. And I feel like I'm pretty brave. I was driving this four door Jeep at the time, and we're up there, and I would not bring my Jeep to a stop at a stop sign. Like, you like, windows are broken out.

There's homeless people. Some have been burned. Like, it was scary. Yeah. I'm like, this is why none of these things are selling.

Mhmm. Because because nobody wants them. Yeah. So this is the importance of understanding the market and are people buying thing that you're out there pushing.

Steve: What is the number? Is there a number that you consider, okay, this population Yeah. Just forget about it. It.

David: So here's what I tell people. Pick a market that you know is good. Right? So whatever market. Personally, for me, what I tell our deal partners is two fifty to seven fifty.

Like, population in in the in the the county or the MSA, Metropolitan Statistical Area. Right? That's a good size. I'm not coming here to play with these guys in Phoenix. Right?

Because there's too much competition. It's probably a little sophisticated of a market. So I wanna be in that secondary kinda market. So the reason I say two fifty is that's the size of Chattanooga, maybe 300,000 now. But I know in Chattanooga, it will support a good wholesaling business.

I can wholesale five or six, seven deals a month there, 20,000. Like, that's a good business. So that's I use that as my baseline. What I'm saying is figure out a baseline. And for me, anytime we went into a new market, I would just pull up Chattanooga.

Very simple. PropStream. Cash buyers, Chattanooga, last ninety days. I just wanna see how many transactions are. And this is how you can can run any market.

Right? Cool. So I know there's, you know, a 187 cash sales in the last ninety days. Awesome. Now I'm gonna use that as my baseline, and I'm gonna just start picking some other markets in areas where I wanna be.

And it's a very I'm scratch paper. Right? And then when I'm done, I did this live, I don't know, maybe a month ago. Like, okay. Savannah, Huntsville.

I don't know. Whatever it was. Four or five markets. I'm like, okay. Let's just rank them.

Mhmm. That's where I'm gonna do my marketing. Like, that's a first pass. It takes fifteen minutes.

Steve: So people that are listening

David: Mhmm.

Steve: They're like, hey. I wanna start doing nationwide, this bow, whatever with you. You will walk them through, do the underwriting not underwriting. Do the evaluation.

David: Yeah.

Steve: Markets research.

David: Yeah. We all of our deal partners, and and it's stupid cheap to to to be with us and have the ability to do this. We have created some videos, and it's not there's no kumbaya, motivational, like, you know, motivation will lead to the church and Tony Robbins. Let them do that. This is very tactical.

Like, dude, here's a fifteen minute video on how to pick markets.

Steve: Mhmm.

David: This will take you thirty minutes. Do not we're not messing around with this for four weeks. My goal is to get them from wherever they're at doing deals in the right markets as fast as humanly possible.

Steve: Yeah. And then, I guess, try to think about, like, for someone that's coming in, someone's listening, right, and wants to get involved in this, are you working with, like, are there qualifications to work with you? So for example Yeah. Right? It's like we've we've had a coaching business.

Now we're a software business, but we were coaching since 2019. And one thing we did, we made a decision at some point. Like, if you've never done a deal before, I'm not your guy. Yeah. Right?

Right? It's not that I don't wanna work with you. It's not that I don't wanna help you. It's just I don't have the bandwidth to give you what you require if you've never done deal before.

David: Do you

Steve: have any kind of, like, qualifications?

David: Yeah. You you gotta be hungry. Right? I remember when I was first starting out and had not done my first wholesale deal yet. I said these words a lot.

It's ugly, and nobody wants to see it, but I would cartwheel naked down Main Street to get my first deal. That is That's how bad I want. Nobody wants nobody wants that. Right? But that's you've gotta want this.

Yeah. You know, I I had a a pretty new guy. We do a a call every single day with our people, and he's like, well, how long will I have to call? I'm like, I don't know, man. How bad do you want this?

Steve: Mhmm.

David: You want it bad enough? You'll call from eight in the morning till eight at night because it's just it's just repetition. Right? It's, It's

Steve: like rocket science.

David: It nothing we are doing is is we can explain to any third grader on the sidewalk out there what we do. We buy low, we sell high. This is not complicated. People make it a little a little squirrely. But how do we compress time?

Well, you have to put in the reps. You know? So what is there, like, 5,000 something feet in a mile? I could walk one one foot a day. I could walk a thousand feet a day, or I could do it all in one day.

Right? So what you think you can accomplish in a year, you can accomplish in a month, two months. Just how how hard, are you willing to work and, you know, as RJ says, you know, put the blinders on and hedgehog and just put your head down and go do it. So that's really the question. So, yeah, to me, I don't care.

We work with clients. You know, some of our transactions clients that do 40 deals a month. We help sell their deals. I've also got brand new people who are like, oh, this is it? Because it doesn't take a you know, we overcomplicate Yeah.

This business. Let's pick a market. Let me give you a basic script. Pick up the phone. Start calling them.

We'll give you some free leads. I'm out you know, I was on talking on the call on my drive over here today, and, like, if you don't have money, there are a lot of ways to go get free leads. They're not gonna be great, but they're going to get you some leads. But you have to do whatever it takes to to do this business.

Steve: Yeah. If I heard you correctly, basically, if RJ Bates can figure this out, you can figure it out. It's what I believe is what I heard you say here.

David: I I I think that's what you said, you know, with all those belts and chains and all all of that.

Steve: That's that's that's my takeaway Yeah. From this. So the other thing too. So I'm I wanna go go back to what you said earlier Yeah. Much earlier in the conversation, which is you figure out, hey.

Our number of objection for people not buying EZ Ri Yeah. Is because they can't move their deals.

David: Right. Yeah. They

Steve: say we have all money. So there's a problem here that we solve this problem. Not only is this an additional revenue stream Right. But this actually goes back to now we've they can afford EZRA.

David: Right. Yeah. So not only our clients who are existing. Right? We have clients that are closing 75 to 88% of their deals.

The industry average is 50. Yeah. Right? So what makes those people special? Mhmm.

They listen when we give them the data. And we provide this for all of our clients. We give them the data quarterly. And then we also do an annual roundup. So we'll tell them exactly where the deals are happening.

But then we also solve the exact same problem for the people that were coming in. And, you know, our industry and some of the coaches out there, they're really good at getting people excited and getting that first contract, and then, like, port kind of dies. Like, hey. You got a contract. We guarantee you'll get a contract in ninety days or whatever it is.

Great. You're in the middle of Nebraska. There's a pond, a turtle, a guppy, you know, and the turtle has three legs, and there's an outhouse. Like, who are you selling that deal to? Congratulations.

You got it under contract. That's awesome. But if it's not something that's sellable and you're not gonna make any money, what was the value? Yep.

Steve: Well, where I wanna go with this Yeah. Is you made this decision Yeah. And then you found a person to run

David: it. Right.

Steve: David was not the disposition company.

David: No. No. So what happened was yep. I I had this one outside person who was helping us, and then I brought in actually, some of my team that used to work with us at Nationwide Property Liquidators. So I was able to bring back people who already understood our system.

Steve: Well, the first guy you brought in

David: Right.

Steve: Can you say his name?

David: It was a girl. Her name is Kristen.

Steve: Kristen?

David: She's actually here in this market. She's a friend of mine.

Steve: I saw you brought in Kristen.

David: Yep.

Steve: And she moved 10 deals Yeah. 35 in ten days. What was that?

David: We got in 35 contracts. They're not all they're not all winners. Right? Like, certainly, we have to sort through that.

Steve: But she was able to get involved.

David: We got proof of concept.

Steve: 35 properties in ten days. But the key I wanna hit here is David did did not get distracted from EZRAI.

David: No. No. And that's we we've talked about a lot of things, and that is very important as as an owner that this is what happens when you when you build a company. Right? And this is scaling up.

Like, over time, you bring in people that hopefully, they like you on most days. But they believe in the company, and they believe in the vision, and they wanna be on that journey with you. Right? And over time, you collect these people. Not every person is not not every person is going to wanna be with you for five or ten years.

And over that time, I I have those people. Heather and Hannah and Angela and Steve and, you know, and Nolan and and Matt. Right? Like, that people that that becomes, like, your core kind of leadership

Steve: team. Mhmm.

David: And as you ascend those people up, you put them in charge of the part of the business that they're really great at, and you let them run with that, and you pay them, and you compensate them. And then, yeah, those people now they run that critical, that that section of the business. So, yeah, Heather does operations, and Hannah is our business development manager. And Steve is the manager over our transaction coordinators, and Angela handles client services. And no one handles everything that's website and copywriting.

Right? Like so now I have those people that I can lean on. Now I can be the CEO, and I can be the person who who runs the business. Now you'll have to temper me a little bit on all of the new ideas, but, yeah, so we brought in somebody who can manage the like, a real disposition process, and we're bringing in more dispo people so that, yeah, that is their that is their job. My job, right, as a CEO is marketing, right, keeping everybody's funnel busy, whether sales team for easy, REI closings, the transactions company, or for the dispo team.

My job is to be here excited, hopefully. Mhmm. And doing some bad jokes, but bringing in clients that we can serve because, you know, once you do scale up Well, now my biggest concern every day is, you know, do we have a company that's growing? Are we gonna, you know, make payroll and pay all the bonuses? Because all those people are depending on on me and the company.

Mhmm. Because I've got a wife and a girlfriend or maybe not both. Hopefully, not both. But, like, kids and BAs and dogs and kid you know, they need shoes. Right?

Like like, they have lives. So it's important to us if you do wanna scale up your company that you are running an operation that can support all of the people.

Steve: How did you come to decide Kristen would be the right person?

David: I've known her for a couple of years. She had sold a lot of deals. She, I think, had sold the biggest deal on ever on investor lift. And we had become friends just over the years because I'm super involved in the investor lift, all of the different people. So, yeah, I needed somebody that I knew could actually sell Yeah.

That had a track record.

Steve: And once you're able to put the concept, then you brought back the old team.

David: Yeah. Then I brought I'm like, oh, well because I didn't think it was going to be a thing. Mhmm. Like, I really just wanted to keep doing the transactions, but then I'm like, oh, this is really something that people need. And where I see our company evolving to a little bit more on the public side is, like, you go out, you get your deal, and just hand that off to us, and we will take it from there all the way to closing.

It's literally it's a done for you. We will, we will market it. We will dispo it. We will lock it up, negotiate with the buyers, and we'll also do the transaction coordination. So all of that work that you did on the front side, you have a higher likelihood of getting paid.

And I'm gonna give you all of my data if you work with us and you wanna partner with us and tell you where are the best places to go fishing. Mhmm. Right? Let's not go to grandpa's pond that's overrun and it's green on top. Mhmm.

Just because that's where grandpa used to fish with grandma when they were 15. When there's a recreation pond right down the road that a dump truck puts bass in, you know, every single spring, let's go to the places where the most number of fish are. Let's work smart, not hard, and let's all make a lot of money.

Steve: Yeah. Okay. So someone works with you. They lock it up. Yeah.

You take care of the dispo and the TC.

David: Take care of the dispo and the TC for them.

Steve: And once you take care of the acquisitions, they don't have to do anything. They just spend money on marketing.

David: Right. Right. We're gonna talk about how they can use AI here a little later and how they can use that.

Steve: Yeah. Well, we're working on that. We're working on that. So alright. What else?

You know? You're you're you're you're seeing a lot of transactions. So we talk about the rule. Yeah. Right?

So, like, what I'm understanding here is if it's a rural property, like, it's probably not gonna make it. What are some other things you're seeing, trends, situation, or like, hey, guys. Like, maybe this is not a good practice.

David: Yeah. So one of the things that we saw last year was a little bit of shift in the deal type mix. In 2024, it was pretty even. About 40% of our files were innovation, 40% were wholesale. That shifted last year, which actually really surprised me with all the attention innovations.

I think doing this off the top of my head, I think wholesale went up to 56 and novations dropped into the high thirties. So that was surprising. That was surprising that, novations dropped down a little bit. And I don't know if that's because of retail market and interest rates. Not really sure.

Yeah. But, yeah, there was definitely that shift. And then, you know, that kind of that last 15 or 20%, that could stay pretty steady with, subject to and creative deals.

Steve: Yeah. Well, I can tell you just the people I've heard stopped the innovations. The reason why is that it's a lot of work, and there's still no guarantees.

David: No. No. There's no guarantee.

Steve: But that was the the reason why it's like because it was like, well, we do the we do this extra work, then it's worth it, right, when it closes. But there was a lot of, like, we did all this extra work, but this market is really difficult. So we do all this extra work for nothing.

David: Well, one, Novations, you can definitely make higher spreads, but they're the easiest to screw up. Because now we're working with a retail agent and a retail buyer and a mortgage company. We're adding a lot of complications, and this is why you need a transaction coordinator because if the wrong files go to the wrong place. But and this goes back a little bit to when things were, you know, absolutely on fire a couple of years ago. So when we say, like, strategies have changed and what worked three years ago or four years ago doesn't work now, is interest rates were 3%.

You could go contract that property in the, town of 2,000 people because buyers were buying everything. Right? It was the reverse. There were more buyers and lower inventory. So they were literally they were searching out further than they normally would.

Mhmm. And they didn't care about buying this out here. Yeah. It's two hours away, but it's gonna sell. And I'm locking it up today, and it's worth 300.

But in ninety days, it's gonna be worth $3.40, right, or $3.20. Right? Maybe I'm exaggerating. But they were making money through just just elm luck appreciation. Mhmm.

Well, when all of that ended, well, they're like, oh, you know, I need to be more a little bit more conservative with my dollars. I wanna make sure that I'm only investing in the areas that matter. So we lost all the dumb money that was in the market. The doctors, the lawyers were just like, real estate's on fire. I'm just gonna buy something through my realtor or through some investor, and I'm going to make money.

Like, those days are done. Now maybe on May 15, something new happens, and we get a new Fed chairman. Mhmm. We do know that Trump is going to put somebody new in, whether you love him or hate him. Doesn't matter to me.

Mhmm. He has signaled every way possible that he's gonna put somebody in that will do everything they can to lower interest rates. So lower interest rates, now all these people that are sitting on the sidelines, now they're back in the market. Yeah. So I do expect real estate to really, as a whole, really pop the second half.

Steve: Gotcha. What surprised you in, last year? I mean, we talked about the mix of deals, but with EZREI, you know, you talk about, like, you're still growing. The count per client is growing. What else have you seen that's been surprising?

What because you like you said, you have more almost more data than anybody else. Like, what else are you seeing nationwide that, maybe isn't talked about enough?

David: Well, regulation. Yeah. I don't wanna say scary, but it's coming fast. Mhmm. You know, here's our job as a investor.

Right? Yeah. And we we have, hopefully, solve some problems, but let's just talk about wholesaling. Wholesaling is the best way to get into real estate. When I started, I was half a broke.

We've talked about that. Had literally no money. So wholesaling, whether you're tall or short or fat or skinny or red, white, blue, purple, like, doesn't matter. You can come in, find a seller who has a problem, and every single one of us, no matter where you're at, within one mile of you, unless you're in the farmland, somebody's losing sleep over a property. Right?

So we just have to find those people, figure out a solution, and then we match a buyer. Mhmm. We assign our contract to that person. We can make money. Easy peasy.

Right? Mhmm. So that's great. Bad thing about wholesaling is anybody can get into wholesaling, and there are a lot of unscrupulous people. Mhmm.

And they come in with the intention to screw people over and take advantage of them. So because of that and people locking up deals that they can't close, I don't know who's teaching this in their $47 Discord group, but, you know, oh, just just lock it up and just take your shot. And if he doesn't sell, that's okay. Just cut it loose. Well, this is why we're getting regulation because there's so many people out there doing it.

Right? And I've always said, sooner or later, somebody is gonna screw over a senator's niece, a, you know, a US senator, and that's going to be the end. Right? We're going to get some spotlight that we do not want. Right?

This is why Terry Norton proposed that we need to have an association. We need to have some rules. We need to have something out there. But yeah. So there are a lot of people angry with investors.

Right? And maybe it's, you know, it's it's Ohio, and some broker gets gets elected to the state legislature, and this is her rallying flag. Yeah. And as investors, blue, red, Democrat, Republican, they don't give a hoot about us. Mhmm.

Right? We are just the bad investors, and it makes them look good to say, I filed this bill, and we're going off after the investors. Like Trump's saying, we're going after institutional buyers, Wall Street, who owns point 4% of all the properties in The United States.

Steve: Great talking point.

David: It's a great talking point. And it makes them sound good, but it's actually doing nothing. However, you know, some of these states have enacted some laws that are challenging for us. Mhmm. And can they do away with wholesaling?

No. But can they start to make it really hard? Like, if this is our playing table, they're cutting it in half, and then they're cutting it in half, and then they're cutting it in half again. And they're they're they're boxing us in. And they've started to figure out that it's through marketing.

Right? That's you're not gonna do away with assignments of contract. That's common law going back two thousand years. Right? Every every contract is assignable.

So I don't think that's the angle, but it is the marketing. That's where

Steve: All the all the laws have come out Yeah. Have to do with marketing.

David: Marketing and disclosure. Mhmm. So that is the spot where they're they're going to come after us. Now should you get scared? No.

Act with some ethics. And at the end of the day, here's the thing, Steve. If I'm out talking with, you know, missus Smith and I use this all the time. Missus Smith needs to sell her house and move to Phoenix because her cat has psoriasis. Right?

Whatever it is. Right? She's got to do she just wants somebody that's gonna solve her problem. That's it. Right?

Do that. Figure out what her problem is. Build some rapport. Give her the right price. Solve the problem and close the deal.

That's that's the most important thing. Let's not you know, I don't wanna say that all the laws aren't aren't important. They are. If they want you to get your license, go get your license. I used to be against that, but now I'm like, hell would they just go get your license.

Yeah. But work on focusing on the people that we're we're working with. You can't be a psychopath. You've gotta really, like, genuinely have some empathy and wanna help people. And if you do that, you'll be good.

I've I've been doing this twenty four years. Not once has some old lady in the middle of Walmart going, that guy f'd me over. Mhmm. You know, there are gonna be times you just let people out of a contract. Right?

Just sometimes you just take the loss and move on.

Steve: We had a a bill that was drafted, and, Jerry Norton posted about it.

David: Oh, I've seen it.

Steve: And it went it went absolutely crazy. It was unfortunate, I think, that he brought that much attention to it because that thing was going nowhere.

David: It's it's great click bait. Like, I get it. And it is important, and and Jerry does a great job.

Steve: Oh, Jerry's doing a great job. Like, I don't I don't fault him for it, but that thing was going nowhere. And the reason why I say that is, you know, I have friends down in the legislature. I was like, hey. Like, where is this going?

They're like, it's going absolutely nowhere. No. This guy is just one of those things that he's trying to make himself look good. It's a great talking point.

David: It was the most ridiculous. I read through it. I'm like, in two seconds, I knew this bill. You're gonna make the title company be the enforcement arm. Not one sing not the bar association in Arizona is never letting that get through.

So that was your first thing. But, yeah, that happens in Tennessee. We had this bill, and it did get passed. And a friend of mine, you know, talked to the the guy who wrote the bill, and, like, he was having a conversation and, like, he didn't, like, they he didn't understand what it was that the reality of what this bill was. Right?

Well, I

Steve: think that's all of them. I think I think I think if we could just have, like, the lowest bar, like, the ones that can't read good, go work in government, go work in the in in in the state congress and then eventually graduate to federal. I don't know. That's I don't wanna get too political here. No.

So, but, yeah, I mean, I I think this is really, useful information. Again, like, for people that are listening that are doing deals nationwide, locally, whatever, there's a lot of good information here about how, you can move the deal move their deals. Because before, it was just, let's take care of your TC work. Yeah. Buy back your time.

Right. Right? Focus on the things that Mhmm. Are revenue generating. Right.

And now you're saying buy back even more of your time.

David: Well, we realized in that, you know, that chain where we took over, there were still problems in front of it. Right? So I I think I probably said this last time. When we started this transactions company, EasyREI closings, Heather and I sat there. We were like, oh, well, here's what we're gonna do.

And I thought, isn't it enough that we're the greatest transaction coordinators that have ever walked the face of the earth? Right? Like, isn't that enough? And, no, that's just one problem that clients have. Right?

They have a variety of problems. Mhmm. Maybe it's sales, maybe it's CRM, maybe it's PBC, and we need to send them to Brent Daniels. Right? Or they need a good CRM.

We're gonna send them over to Jerry Norton to PropStream. Right? They have other problems. So how do we help them kinda plug as many of those holes as we possibly can? And I think that's what most coaches should be doing out there.

Right? It's, I think it's great that you have this system that you teach, but people have other other issues. Right? So we need to be able to look at that almost on a client by client basis and say, okay. This is what we have somebody this is her whole job is to talk to every client once a month.

Hey. What's going on in your business? Where are you struggling? What can we help you with? Because if I can help them shore up that part of the business, well, then they're gonna stay with us longer.

That's good for them. That's good for us. That's good for the industry.

Steve: Yeah. And we hire that role as well.

David: Yes. Oh, yes. Yeah.

Steve: Yeah. So alright. Perfect. Anything we didn't talk about that we wanna make sure we mentioned? I

David: feel like we said it all.

Steve: Alright. Perfect. Well, it was great catching up. Thank you for coming back. Thank you for sharing.

Yeah. Yeah. Of course. And, again, it's really fruitful information. I think that a lot of people definitely need to be paying attention to, especially if you're nationwide wholesaling.

Just figure out where the buyers are. Yeah. Figure where properties are moving. Thank you so much.

David: Thanks, man. Appreciate you having me. Love the studio.

Steve: Thank you. Thank you guys for watching.

David: See you guys

Steve: next time.

David: Out to Steve train. Jump on the Steve train. Disrupt us.