00;00;00;01 - 00;00;18;15
Unknown
Now. The problem today is the cost to acquire a contract has risen between 5 and $10,000. If you talk to anybody in the industry who's doing volume. I'm not talking about somebody hustling for a deal or two who can do it with a lot of their own time, energy and effort. I'm talking about just like you have an actual business.
00;00;18;17 - 00;00;43;16
Unknown
They're going to be between 5 and $10,000 often time to acquire a contract. In today's market, it's just the way the market is. They're going to be, on average making 18,000. So if I spent 10,000 on marketing to get it and I make 18,000, I have to do a lot of deals to make that margin worth it. Like I have to have a high volume.
00;00;43;19 - 00;01;03;21
Unknown
All right. Welcome back to the seven Figure Flipping podcast. This is the bottom line where real stories meet real numbers. Each episode we bring you real world investing insights, strategies, and stories from our own deals and experience in the field. At the end of the episode, we'll answer a few questions from our very own 7 or 5 podcast listeners.
00;01;03;24 - 00;01;23;10
Unknown
And I've got my I'm Adam Whitney, your host, and I've got my co-host today, Doctor Sherry Floral and Doctor Fallon, welcome to the show. Thank you so much. I'm excited about this episode. So excited. Yes. And today we're going to talk about the chaos of, real estate. Just all the things that go on, the wild stuff that nobody really talks about.
00;01;23;10 - 00;01;41;03
Unknown
We talk about deals and numbers and profit and all the rehabs, and we just don't really talk about the crazy stuff that happened. So today we're going to pull the curtain back behind the scene on that stuff.
00;01;41;05 - 00;02;03;20
Unknown
I mean, in real estate investing, we we want to think about spreadsheets and numbers because that's comfort. We want to be able to predict life. We want to know that when we're buying something or making a decision that we understand the outcome. But the reality is within a spreadsheet and outside of the spreadsheet, that's not how life works.
00;02;03;25 - 00;02;24;28
Unknown
Stuff happens. People get mad, feelings get hurt. I mean, all these life happens. Even life outside of real estate still impacts our real estate investing journey. So Adam and I both have our own unique experiences and challenges within that. And we just kind of wanted to share a little bit of that today because you have chaos as you're listening.
00;02;24;28 - 00;02;51;28
Unknown
I am quite sure if it's not today, it's going to be tomorrow. And we just want to make sure you understand you're not alone. And this is part of the journey. Yeah. And I think I think for me as a, as a leader in the industry, I do have a target on my back a little bit. So I have to be it's no different than when certainly when I served in the Marine Corps for 20 years as a marine officer, you are just expected to do the right thing at all times.
00;02;52;01 - 00;03;13;27
Unknown
If you don't, you don't pass go. You don't keep moving on in your career and you're on 24 over seven, not just while you're at work. So I feel the same kind of responsibility here at seven for flipping and leading our team at blackjack real estate. So I know that folks are looking at us to, to be, the North Star in the industry.
00;03;13;27 - 00;03;46;14
Unknown
Now, look, we're not perfect. I will say that we certainly have made many mistakes, and we typically own those mistakes. But I've had three occasions that I can think of that have, really been somebody trying to assassinate my character, which I take very, very seriously. And, you know, there's some there's some bad actors in the industry. So like one one of the situations, recently was over a notice of interest.
00;03;46;14 - 00;04;16;06
Unknown
Right. So a notice of interest or memorandum of contract is a tool that you can use when you have the right to purchase a property. And then maybe the seller doesn't perform or something, or maybe like another person was coming in trying to snake the deal from you, you file a notice of interest. Now in the industry there are bad actors that with every contract they get, they file a notice of interest on whether they intend to close on it personally themselves, or even if they're wholesaling it and assign it to somebody.
00;04;16;09 - 00;04;33;08
Unknown
They file a notice and this can get really, really bad in the industry when people go and they lock up a house too high, they know they can't move it to a buyer. They file a notice, it falls out of contract, and then some other investor comes in and tries to get it at a reasonable price. The seller agrees and then the seller can't sell it.
00;04;33;08 - 00;05;00;27
Unknown
And then they have to get that other investor to sign off on the notice of interest. And, sometimes it's like extortion. Now I file a notice of interest when our company believes we are ready to close on something ourselves, or assign it to an end buyer, or either or, and we feel like the seller has, either misrepresented or not performed on their contract.
00;05;00;27 - 00;05;26;13
Unknown
And in this case, the seller just didn't perform. We filed the notice of interest for future interest on a property based on something vesting later on. And, somebody else contracted it, and then they were just they they thought we were being shady with our notice of interest. The truth is, we weren't. I think we have two very different perspectives, based on information available to us at the time in which we had this deal about a year apart, a lot of things obviously have changed.
00;05;26;13 - 00;05;48;22
Unknown
So, and then you got to come to an agreement and be able to work collaboratively with somebody. I have paid other investors dozens of times to release their notice of interest, and I've been paid dozens of times. I think if you've been in the industry for any amount of time, it's a pretty common, it's a pretty common practice.
00;05;48;22 - 00;06;05;17
Unknown
I don't, I don't like of course, I'll go in and I'll if I'm trying to get a notice of interest signed off, I want to go for zero. Usually that's never the case. They'll say that I want 50% of your fee or whatever they want. We'll negotiate. We'll come to a term that we're both okay with, and then we'll move on with our lives.
00;06;05;20 - 00;06;26;15
Unknown
And but it's happened to me both ways, right? Like, I've, I've gotten paid on a few notice of interest, and I've also, paid people probably more than I'd like to mid on them. So it's easy for somebody to accuse you with their version of a story and, and just talk about unethical stuff. But you know, this is 2025.
00;06;26;15 - 00;06;53;22
Unknown
We keep receipts. Everything's digital. I have attorneys, they have you know what I mean. So like, I just hate that it has to come to that kind of stuff. Like why can't we why can't we be civil? Why can't we be collaborative. Like and then when I see this sharing, this is where I'd love to hear you weigh in is when these when egos get in the way, when egos get in the way and people start taking start personally attacking and gaslighting people.
00;06;53;25 - 00;07;15;23
Unknown
And it's no longer a business conversation. I think that's when things get dangerous. What do you how do you feel about that? That is that makes my blood boil? Just hearing you say that part of that is because I have my own trauma around this, about ten years ago, I had a brick and mortar business and somebody that worked for me.
00;07;15;28 - 00;07;36;18
Unknown
So I'm a psychologist. I had a mentor for mental health practice. I had a whole team of of therapists that worked under me and for me and one of my therapists, who was provisionally licensed, meaning he hadn't been licensed long. I had a twinge when I hired him. Like, in my gut. Guys, listen to your gut.
00;07;36;21 - 00;07;59;04
Unknown
Anyway, that's a whole nother story. So he ends up going rogue on me, meaning that he broke confidentiality on a, client of ours. And it wasn't just out like it's an individual client. It was a it was an entire organization that he was doing some stuff for. And so I, I consulted heavily on what I should do in my responsibilities.
00;07;59;07 - 00;08;21;00
Unknown
And it really boiled down to what what did I feel like my ethical about responsibility was as a leader of the organization and as a leader, a psychologist in the community. And that was what drove my decision. And it it's yeah, it was not fun. He retaliated. It was horrible. But it was it's I kept on for myself.
00;08;21;00 - 00;08;45;26
Unknown
I kept on coming back to the question of like, what type of person do I want to be? How do I want to respond based on my own values and based on my own integrity? And at the end of the day, if somebody were to get all of my text messages, all of my emails, dig through my brain, do I want them to see somebody that's honorable, that did the right thing, and then try to do do my best in the situation.
00;08;45;26 - 00;09;10;17
Unknown
And it that's that's yes. And so and that's hard because you know there's part of me that wants to, you know, just like or like retaliate back and like obliterate them in whatever means possible. And so it's like it's weighing those two things, you know, it's like, but usually none of that. I feel like none of the,
00;09;10;20 - 00;09;29;22
Unknown
It's not you got to be careful. Like me against you or us against them or. What's in the best interest of the greater good? Right? Like, what's, You know, I weigh my time value of money. Like. Like, what's my what's my time valued at? Like, how much time is this going to take for me? And then how does it violate my principles?
00;09;29;24 - 00;10;11;26
Unknown
Yes. And I think that's where you can get confused with ego or things like that. I think there are certain things in my principles that like there are just things I'm not going to let slide. Right. And I, I will I will be willing to allocate meaningful resources to and feel very confident that my if somebody is calling my character or my integrity, that my 20 years of service to this country with accolades for days and just proven ethical standards like I, I've done nothing in my life but be more ethical, be the top tier of ethical operator and to highest integrity.
00;10;11;26 - 00;10;31;13
Unknown
And it's well-documented for decades. So I feel very confident standing up against, just about anybody on that kind of a thing where they're trying to assassinate my character or the character of people on my team, in my company. So, yeah, it's just it's a principle for me. And, and, you know, it's it's usually never about money for us.
00;10;31;13 - 00;10;47;15
Unknown
Like, that's not and that's never something that's important to us. But when people want to go there, you know, sometimes I feel like people want to be the David to Goliath, right? They want to slay the dragon and and try to prove a point and and make a name. That's fine. You know, they're welcome to try to do that.
00;10;47;17 - 00;11;08;19
Unknown
I would prefer to be civil and collaborative in the industry. I think that's when the best work gets done. And I think it's where we can help the most amount of people, personally. But you know, when you when you say, well, you're not being collaborative, this is the way like, this is the only way you're, you're you're a bad like, you know, you started gaslighting calling names and it's like, all right, we can't we can't do business.
00;11;08;19 - 00;11;30;08
Unknown
Okay. Anyways, I, I'm going to digress because obviously that's hard on my mind. And, it's probably taken up way too much mental bandwidth for me. I want to switch over to something that you were talking about this week. We have, performance pod, a little small group accountability. We meet on Wednesday mornings. It's a Wednesday, right? Yeah, we meet on Wednesdays.
00;11;30;08 - 00;12;01;21
Unknown
Yes. And you started in the conversation. I just want to hear more about that and, and kind of where you're what you're thinking about this week. Yeah. So Wednesday I recounted my Monday. So let me just briefly do that here Monday last week was Thanksgiving of 2025. So half of the week was, you know, had extra family around, lots of food, trying to just disconnect from work for a little bit to just enjoy people.
00;12;01;21 - 00;12;20;08
Unknown
So Monday rolls around and errors. Every good entrepreneur dies. We're like, all right, we're excited for the week. We have our list together. We have our plan and what we're going to do. I've been doing a lot of work on figuring out, how our scaling process is going to go and what my next steps are. So I've got that all laid down.
00;12;20;09 - 00;12;48;21
Unknown
I'm super excited. On a Monday morning and an hour into my day, as I just started to dig into some stuff, I got a phone call and it's the school. Then my kids go to a few of my kids go to, and apparently my youngest was in weights class doing one legged hops and hurt her knee. And the nurse says you need to come get her and you need to take her to the orthopedic urgent care.
00;12;48;27 - 00;13;14;16
Unknown
Now. And there went my day. There went all my great plans, there went my productivity. There went all of the things that I was so excited to move forward in our business. And I didn't really get much done. On Monday, I spent a lot of time focused on my daughter, and rightfully so. Tuesday rolls around and I'm like, all right, I think, you know, we can we can I can pick up the slack.
00;13;14;18 - 00;13;37;10
Unknown
Well, Tuesday I had two, medical appointments in the morning for two separate kids. And of course, it's like an hour of running around, you know, for each one. And then towards the end of the day, I had my own chiropractic appointment with my daughter. So there was so, so come Wednesday morning, I'm just like, can I please have a day where I can just focus on business?
00;13;37;12 - 00;14;10;15
Unknown
And so that was I had a little bit of a rant on our on our pod, but here is here. Here's the bigger story. I am a mom of four kids. I am not unique in being a mom and being a real estate investor at the same time, and I often find that I feel pulled in two different directions and when I shared this with our pod, one of the other moms in the group also, she sent me a message later, and I just kind of wanted to read you her text message to me.
00;14;10;18 - 00;14;32;15
Unknown
She said, I keep thinking about what you said yesterday. So she texted me the next day, business versus family. And honestly, it felt so validating to hear it coming out of another woman's mouth. I love both of these worlds and when I am in one fully, I love each, but constantly feel like I'm straddling both worlds and frustrated.
00;14;32;15 - 00;15;00;23
Unknown
My brain is fractured between them and doing a bad job all the way around. I, starting starting is hard and it feels messy. Just the family doctor appointments, the random chiropractor runs, emergency vet visits. You know, those random things, even when even those feel like, full time position. And so I know I'm not the only one that struggles with this.
00;15;00;26 - 00;15;27;16
Unknown
And this is just my perspective. Every family, every marriage functions a little bit different. But I, I believe that my role that God has placed me in my family is to support my husband and to help him do his best work. And his best work is definitely not being the nurturer. It's definitely not having the hard conversations when my kids are crying because their hearts got broken.
00;15;27;19 - 00;15;50;19
Unknown
It's definitely not the you know, not not any of those things. It's not being able to multitask. The, the family, the, the, the physical mess going on. And doing remodels. And just his brain is not designed for that. And I have that capacity for that. And so I feel like in a lot of ways I have the harder job.
00;15;50;22 - 00;16;18;27
Unknown
But that's that's what I feel is right for our family. And so rather than wallowing in the pity of all of the things that I have going on, which sometimes I do, I definitely wallow. I really try to shift my perspective rather than looking at this split that goes on in my life at times, as debilitating. Rather, how can I see that as a superpower?
00;16;19;00 - 00;16;47;08
Unknown
How can I see the fact that I can multitask and move forward and nurture not only my kids, but I can nurture my team. I can nurture sellers. How can I use how can I see that as a superpower, as my ability in the house is actually why I'm able to do so well in business, rather than focusing and getting stuck on the, you know, feeling pulled in multiple directions.
00;16;47;14 - 00;17;12;22
Unknown
There is no simple, easy answer for how to solve the the feeling split and and pulled in multiple directions. I. At this point in my life, I as I have accepted that just is going to be. And so instead of judging it as a negative, how can I see it as and use it and harness that capacity in a positive way.
00;17;12;24 - 00;17;45;15
Unknown
And so I think that's that's where I'm at. I think that's where a lot of the women, particularly moms in our community that I have had some of these conversations with already, also feel. And so that's my chaos right now. It's not a lawsuit, although I've been through that. It's that mundane, everyday life of trying to trying to raise for humans to be amazing, productive citizens in their own right and trying to trying to meet $1 million goal in our real estate investing.
00;17;45;18 - 00;18;23;00
Unknown
This I love this. I just have so much admiration for women entrepreneurs. You know, typically the parents, particularly the ones who are mothers. I watch my my spouse who's not in the business or, you know, certainly not, doing the things that we're doing in business. But nonetheless, I wouldn't want to trade my job for hers. So then I look at somebody like you or Lindsay, who's both operating a seven figure business at a high level, and moms at a high level in parenting and being a good wife.
00;18;23;00 - 00;18;43;29
Unknown
And like all these life requirements, which are much more heavy, at least in my house on on the home front for my spouse than they are for me. And I don't know if it's that way for everybody, but I just I watch, I watch you, I watch Lindsay, I watch staff, I watch all these powerhouse women in our community.
00;18;43;29 - 00;19;07;09
Unknown
And I'm just like, I have no idea how you guys do. I really don't like I'm like, dude, I have no, I, I can't imagine it's hard for people like, man, you work a lot. You know, you got to work ethic and you're always you're focused, blah, blah, blah, blah blah. Like, yeah, but I also have somebody on my home front taking care of everything on my home front, which allows me to be crazy like I am.
00;19;07;12 - 00;19;26;29
Unknown
And honestly, Adam, there are times where I feel jealous of you in that way because I'm like, man, you know, if I could just be 100% in like, oh my gosh. And I sometimes I dream about you know, five years from now or however long it takes. You know, what my kids have, you know, spreading their wings and their off doing their own amazing things.
00;19;26;29 - 00;19;44;00
Unknown
I'm just like, oh my gosh. But it's a secret weapon. It's a secret weapon. And I tell, I tell like Lindsay and I, I'm like, Lindsay, you need a Jenny, dude. You need a Jenny. Like I have like it. It really is. It's it's I think it's one of those. We talk about this in the military a lot, right?
00;19;44;00 - 00;20;12;06
Unknown
Because the military families are moving all over and they're typically the, the, the military service member, male or female, is like working and being deployed and has no control over their schedule. And whoever's on the home front is just dealing with the chaos and uncertainty all the time. So 20 years of that. Jenny has pretty well conditioned going into entrepreneurship, but that is the engine that allows a lot of that's be the behind the scenes, that allows a lot of people to be successful.
00;20;12;06 - 00;20;36;26
Unknown
Like, I'm probably not who I am or where I am today without that behind the scenes, which makes it all that more impressive to watch the powerhouse women in the community do what they do, like they're doing what I do as good as me, and in some cases better. And mommy and wifey and doing these things and I'm like, oh my gosh, I would be just worn out, completely worn out.
00;20;36;26 - 00;21;07;23
Unknown
So it is impressive for me. Well, I appreciate that. And I, I also look at some of the other women in our community. And also I'm impressed by by what they're doing. And I just want to I don't want women and I don't want myself to get stuck in the mindset of, I can't wait until my kids are gone or I wish, I wish I could be like Adam, but rather having gratitude for the fact that I do have kids.
00;21;07;23 - 00;21;31;24
Unknown
Having gratitude for the fact that I love it when they come home or walk through the door. They lock my desk where I'm at right now and they're like, telling me all the stuff that happened today, you know? And just when I was in the middle of of doing something and now I have to like, you know, switch my brain into a different context for a while and then, like, engage with them and have that good banter and then they go off and do their thing.
00;21;31;24 - 00;22;02;21
Unknown
And I have to like, okay, where where was I again? What was I doing? I don't I don't want them to not talk to me. So it's really embracing what life currently is and recognizing that it is growing me in a way that if I didn't have to context switch so often every day, if I didn't have to hone my emotional intelligence so that I could interact with my kids in a way that's not triggering me, and so that I can help them increase their own emotional intelligence.
00;22;02;21 - 00;22;24;21
Unknown
If I didn't have to learn how to prioritize seven things at the same time, if I didn't have to do all that stuff right now, I would not be. I will not be the leader business owner in the future that I will be because of all the stuff that I'm doing right now. So let's let's just embrace and have gratitude instead of just frustration.
00;22;24;23 - 00;23;09;12
Unknown
Yes, I, I, I love it, and, Jenny and I were just talking about, there there was something she said it was like joy is just simply being, like, present in the moment and, like, happy with what's going on in the moment, you know, not not living in the future, not not dwelling on the past. But like, if you could just be in the moments that you're in and grateful, an attitude of gratitude, you'll have a lot more joy and happiness and, in your life and I, I believe that and I also find a lot more joy in the journey of who were becoming than I do of the destination.
00;23;09;12 - 00;23;34;29
Unknown
Anytime I've ever arrived at any destination I've set, I've never it's never really done anything for me. But the journey to get there does the journey to being a parent is amazing. Like I, I'm grateful every day. Whatever phase my kids in, whatever the frustration is, whether my daughter still sleeping in my bed or, you know, my, my son's turning 13 and going through that part of life.
00;23;34;29 - 00;23;53;01
Unknown
And, I'm just grateful, like I'm grateful to have the opportunity. I get to drive them to school in the morning, Sherry, every day. And it's one on one time. And I get to just kind of get in his mind a little bit, and we get to have quality time and quality conversation for ten, 15 minute drive every day.
00;23;53;01 - 00;24;20;15
Unknown
But that's like, that's a that's a lot. That's very impactful. Absolutely. One of my so one of my, one of my values is around how much is it around impact like that? That word is meaningful to me. And and I'm often thinking what kind of impact am I having? And Adam, I think you hit it right on the head that, the financial impact I can have on my family is go out 50 years from now.
00;24;20;15 - 00;24;46;14
Unknown
The financial impact is not as important as the impact I'm having relationally where they can, you know, I'm helping them make decisions. I'm helping them think about things in different ways. I'm shaping how they view and interact with the world. That's my impact, and that's the impact that matters to me way more than the financial. And so I recognize or rather, when I recognize in the moment that that's what's happening.
00;24;46;14 - 00;25;01;21
Unknown
Like last night when I was sitting at this computer, I was doing some I was, running some, some comps numbers on a property. And my youngest comes into my office and she's like, mom, can you play a card game with me? You know, part of me was like, oh, I'm random, you know? But I was like, I did not say that.
00;25;01;21 - 00;25;21;03
Unknown
I was like, I stopped and I turned and looked at her. I said, I would love to, and I said, just give me five minutes to wrap up what I'm doing. And and then I went and played card games with her, and it was a blast. And so it's those moments when we can choose what our best self would not always what we want impulsively.
00;25;21;05 - 00;25;54;04
Unknown
That's where I think the power lies. I, I was at a meeting last night, cherry, with a guy who's been in the real estate industry since 1967. That's a long time. How many decades is that like? Oh, yeah, all of them. Right. And, so that's when he was probably 18 at that time, and he speaking last night and he talked about, well, you know, people said how or what he's, he's known as the greatest mind alive on creative finance.
00;25;54;04 - 00;26;15;14
Unknown
His name's Pete Fortunato. He he's not going to I mean, I hate to say this, I'm not sure how long he'll be around, but he's obviously his time is not infinite. So if you can ever get to like a Pete Fortunato, he does everything in paper. You get a three ring binder. I have one in my office from our event, and he goes through all the creative finance stuff you could ever think of.
00;26;15;18 - 00;26;35;16
Unknown
He does it in Florida. He also meets at McDonald's every day at 8 a.m.. If you want to just go sit in. He trades houses with people like it's the he's the craziest dealmaker you'll ever meet. And, but the point last night was he said two things that really stuck out to me. You know, people he said, well, people ask, well, how did he get so smart?
00;26;35;16 - 00;26;57;06
Unknown
He goes, well in 19, you know, 70 or whatever. I bought a house in Boston for $30,000, and I still have it today. You look really smart when you hold on to any property for about 50 years. So it's like the longer I hold the property, the smarter I get. So I was like, okay. Yeah, that's that's, you know, that that's like a principle, right?
00;26;57;06 - 00;27;11;02
Unknown
That's a principle right there. Like, you hold on to that stuff. Don't just exchange everything. You get cash all the time. So that was one the other thing he said is like, I left high school and I said, never want to work for anybody. How do I not work for anybody? I must get assets to become an asset.
00;27;11;02 - 00;27;36;07
Unknown
And he doesn't have any money. He's not lendable. So he goes and he becomes this creative finance guy. And as his kids were growing up, he said, all my kids became real estate investors. And he said, I thought it was because I preached every day and I taught, and I was this great mentor. But what it was was every summer, the day that school ended, we laughed and we said, where do you want to go?
00;27;36;10 - 00;27;58;05
Unknown
And we road tripped until the day they had to go back to school. We'd go from Boston to California and do whatever we wanted every summer. And the kids thought, I want, I want that too. Not that dad's smart, not that dad's is great. Oh, you know, OG Creative finance, but, like, I just want that freedom. Yeah.
00;27;58;07 - 00;28;27;26
Unknown
And that modeling of the life, not the money, but what the money does for you. Encourages kids to go down that same, same path and acquire that same level of freedom. To focus on the experiences, the relationships, more than just getting the money. The money, the money is shallow, really. The more you get of it, the less you care about it, you know?
00;28;27;26 - 00;28;46;02
Unknown
And it's like, well, of course people say that because they have money. It's like, yeah, but if you're 80 years old, if you're 80, 85 years old today, Sherry, would you prefer to have the $10 million in your bank account, or would you prefer to be 30?
00;28;46;04 - 00;29;10;20
Unknown
Yeah. What do you think would be more important to you? 30. Have the money or have the have the years back 100%. It's never the money. Yeah. It's it's hard it's hard to wrap our minds around that because it is something that it is a it is the most needed tool to do the things that we feel like we want to do or have the experience of, well, all right, Sherry, I'm so grateful that you shared that and grateful that you continue to be a leader for the women in the community.
00;29;10;22 - 00;29;38;03
Unknown
I'd like to go to our next segment, which is the ask us Anything segment. Hi there. I, I keep seeing people online saying that wholesaling is dead or that it doesn't really work anymore. I'm still pretty new, so it's hard to tell what's real and what's just noise. Is wholesaling actually still a viable strategy right now or is it even worth pursuing?
00;29;38;05 - 00;30;01;08
Unknown
Thanks. So much, Doctor Phelan. I'll let you go first. Okay. Those are bad wholesalers. If they say it's dead, like just being real, if it's that they they're not getting the same results that they were and they're just saying, oh, because I can't do it anymore, or it's harder. It's harder to find, deeper discounts in some areas.
00;30;01;11 - 00;30;25;24
Unknown
It's I think that's for sure. True. That's what we're experiencing. I think they're just blowing smoke and saying that it's it's dead. I will say there is one complicating factor. In some states, there has been some legal decisions made about wholesaling that wholesaling without a license, is, is not allowed. So there are some the landscape of who can, who can't.
00;30;25;24 - 00;30;55;28
Unknown
And how that happens is changing, which might also be compounding the statement that it's dead. I don't know all the details of which states have adopted that in which. Heavens. But it's it's I think that's maybe a small piece of it. Yeah. I, it's a, it's a wholesaling is an exit strategy. And it requires you to have a business model that is focused primarily on marketing and sales.
00;30;56;01 - 00;31;21;16
Unknown
The reality is, is there's a there's a numbers to this game and a wholesaler goes out and spends money or time and energy on marketing. So if you're a new wholesale, you're probably gonna try to like get a list, skip, trace it, call it yourself, because you don't really have a bunch of money to spend on marketing. Or maybe you spend a little bit of money on people, and even then you need to get at least 20 leads to sign a contract.
00;31;21;16 - 00;31;47;23
Unknown
They're going to cost you 2 to 400 bucks on people. So it's like not cheap. So you typically have to put a capital outlay out in hopes that you who probably don't have good sales skills just yet, can turn those conversations into a contract. You can, and the longer you do it, the better you get. But in the beginning, it's hard.
00;31;47;26 - 00;32;16;03
Unknown
So it was a great strategy when marketing was super efficient, meaning you could go out and spend $2,000 in any marketing channel, give or take a grand or two. And you could have you could get a contract signed based on that marketing. You spend the leads that came in, then you could assign that contract as a wholesaler for an average of 15 to $20,000.
00;32;16;05 - 00;32;25;21
Unknown
So the the multiple on that, let's even call it 4000. And you're selling it for 20.
00;32;25;23 - 00;32;56;27
Unknown
That's A5X multiple. If you're anything less than A3X multiple on your money, the other cost and the business will often eat your profit. So you'll be basically doing it for free. Now the problem today is the cost to acquire a contract has risen between 5 and $10,000. If you talk to anybody in the industry who's doing volume, I'm not talking about somebody hustling for a deal or two who can do it with a lot of their own time, energy and effort.
00;32;56;29 - 00;33;17;23
Unknown
I'm talking about just like you have an actual business, there going to be between 5 and $10,000 often time to acquire a contract. In today's market, it's just the way the market is. They're going to be, on average making 18,000. So if I spend 10,000 on marketing to get it and I make 18,088, like I have to do a lot of deals to make that margin worth it.
00;33;17;23 - 00;33;43;11
Unknown
Like I have to have a high volume. So what you should do if you're going to spend money on marketing is look to maximize the profit or the gross profit margin on every deal. And the truth is, is the average gross profit on a flip nationwide is about $41,000. So if I spend 10,000 bucks to get the deal and I make 41,000 now, I have a I know I have a solid business model.
00;33;43;14 - 00;34;12;00
Unknown
So is wholesaling dead? No it's not it's not dead. But it's not a it's not you don't have a market advantage going into that and just only focusing on that. Instead, you should be thinking about how you can acquire an asset and how you can get the best margin or opportunity for yourself and become a real estate investor, a deal maker, not just a wholesaler.
00;34;12;03 - 00;34;30;17
Unknown
We need to learn how to raise capital. You need to learn how to get hard money and be able to take an asset down. There's so many great tools today that you don't have to be the best project manager in the world. You don't have to be, the most savvy construction person. You just need to know the right people.
00;34;30;17 - 00;34;53;23
Unknown
You need to be able to build the team. You need to be able to raise capital and and have. You don't have to take every house on. We've wholesale we've assigned maybe three properties this year, and we bought the rest previous year. We assigned 90% of our inventory. But and and today's market is the margin is just not there to run a profitable outfit.
00;34;53;23 - 00;35;17;14
Unknown
And for us we have tools. We can do creative, we can do cash offers, we can do house flipping. We can we can buy rentals. I mean, if every house is a nail, then your only tool is the hammer. You're going to be less efficient and less effective. You need multiple tools if you're going to grow a legitimate business now in the beginning, sure.
00;35;17;15 - 00;35;35;00
Unknown
Go try to wholesale a few deals with some grit and hustle and bring money. And like nobody in my opinion, the new people who come in, they can come in and do a deal. That's easy and it's like a year long journey. It's kind of rough. It feels hard, but then once you do it, your belief system changes and then you just kind of skyrocket, is what I've seen.
00;35;35;03 - 00;35;54;16
Unknown
But the I tell all new people like, go bring in $250,000 of revenue. I know it sounds like a and if it doesn't relate to bringing in $250,000 into your business, like you shouldn't be doing it. I don't care about your CRM. I don't care about your follow up sequences. I don't care about your website. I don't care about your business cards.
00;35;54;19 - 00;36;14;25
Unknown
Go bring in $250,000 and then we'll build your business. But until then, you're just going to make deals. Like, let's just be honest, you know, all these people come into the industry and they want to be cool. I want to build my business A to Z, go make 250 grand first and then we'll build. We'll build your actual business until you're making money.
00;36;14;25 - 00;36;35;16
Unknown
You don't have a business. It's not a business. You've spent money on an LLC for, maybe for an asset protection. But you have no assets. There's no money. So go, go make 250 grand. I digress, I think I get this a lot and yes, wholesaling is not dead, but I wouldn't I wouldn't start out building a business around it today.
00;36;35;16 - 00;36;56;04
Unknown
In today's market, as that being my only exit strategy, I personally would focus on flipping houses right now and good markets. I personally would focus on creative finance strategies. I personally would focus on buying assets that I can borrow out of in the Midwest. Like those are all still really viable strategies. I can still achieve financial freedom goals and a meaningful way.
00;36;56;07 - 00;37;21;22
Unknown
So I digress. Doctor Salon, that'll be, the end for me. So bottom line, what's your final takeaway today? I just wanted to follow up with what you said, that if, if, if our listeners are listening to this and they're feeling a bit overwhelmed because they're like, I don't know how to capillaries, I don't know how to take down properties.
00;37;21;22 - 00;37;51;19
Unknown
I don't like that there's so much that ultimately needs to get put in place to actually be able to do all that stuff. My encouragement to you is, it's okay. You don't need to personally know everything. That's why communities like the seven figure flipping exist, because there's amazing people who've already learned it who can distill the simple steps, who can connect you with the people that can take, do the things that you then don't even have to learn.
00;37;51;19 - 00;38;25;09
Unknown
Like there's just there is so many ways to move forward without you being the sole preneur that has to learn and do everything. So please get out of that mindset and recognize that real estate investing is is collaborative and you can learn everything from other people. Yeah, I think that takeaway to me is like like that. That is that is like when I think about that and that just hits me so different today because I was that person.
00;38;25;09 - 00;38;57;29
Unknown
Sherry, I was that person. I wanted to build it all A to Z. I wanted it to all be done today. Day one, and I unrealistic expectations on the journey. Yeah, when I first started. So I really appreciate that. My final takeaway, today is to step back and look at the whole picture of your life, your family, your health, your wealth, your business, your people, your relationships and think about what you're grateful for in those moments.
00;38;57;29 - 00;39;30;25
Unknown
And look at it holistically, because in a day I feel overwhelmed. But overall, things are really good. In a moment, I feel frustrated. But overall, things are really good. And when when you challenged me to step back and when you talk about, you know, I've got mommy and wife and real estate and ownership and all these things going on and, you know, it's it just I got this visual that Andy McFarland gave me once, and he's like, imagine you have ten arms.
00;39;30;25 - 00;39;50;18
Unknown
And on each arm you're spinning a plate on a finger, right? You're spending a play. You get all ten of your arm spinning plates, and then they all started at different times. Those one starts to wobble, and then you focus your attention there and go spend that one. And then now another one wobbles. So you go over here and you spin this one and you just keep the plates spinning.
00;39;50;21 - 00;40;16;07
Unknown
And to me that I think that is what real balance looks like in life. I think that's the reality of balance is we focus our energy where it needs to be focused and we prioritize and we just be grateful in the moment. So and I learned a lot of that from you, Doctor Flow. And like I just listening to the things that you say and and extrapolating how that relates to my life and it's super impactful and I'm grateful for you today on this podcast.
00;40;16;10 - 00;40;38;10
Unknown
Thank you Adam, I appreciate that. Okay. This was another episode of The Bottom Line. So make sure you go leave us a five star review. Don't forget to submit your questions. That Doctor Flynn and I can address on the show. We'd love to do that. Share this with a friend. It is. It is the holiday season. It is the giving season.
00;40;38;10 - 00;40;56;14
Unknown
So, you know, you you got somebody, you know, who's been thinking about real estate or interest in real estate. Send this podcast to them. There's a there's almost a thousand episodes of Just Gold on this podcast. This podcast alone could probably make somebody an expert in real estate if they took everything they learned from this and put it into action.
00;40;56;14 - 00;41;07;17
Unknown
So do me a favor. Share this podcast with a friend. This giving season, we appreciate you continuing to be a listener, listening to this podcast and we'll see you on the next show. Bye.
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