00:00:06:23 - 00:00:22:02
Unknown
Welcome back to the Seven Figure Flipping Podcast. I'm your host, Adam Whitney, the CEO of Blackjack Real Estate and seven figure flipping. And I'm excited to day to talk about how it's never been cheaper to get a deal.
00:00:22:02 - 00:00:32:16
Unknown
And everyone's complaining. It's hard today, 2026 A few years ago, even I was paying 3 to $800 per lead for a single lead.
00:00:32:16 - 00:00:50:19
Unknown
Just one lead in my county. And today I'm paying like 150. Same leads, same county, same source. Everything's the same. But it's cheaper today. Literally cheaper to get the lead.
00:00:50:21 - 00:01:23:02
Unknown
Everybody in this business is telling you the same thing right now. It's hard. There are no deals. The market's brutal. It's drying up, it's going down. You name it and they're there. Right. Honestly it did get a little harder. But they're dead wrong about what it means for you now because when everyone decides it's too hard. I love this part because they stop marketing to sellers, and when they stop marketing to sellers, the cost to get in front of them goes down in.
00:01:23:02 - 00:01:47:14
Unknown
The seller has a different expectation. Today I want to make the case that the market everybody is complaining about is actually the cheapest. It's the least crowded market, the least competitive that we've seen in probably a decade. And I'm going to show you exactly what it takes to be the one still standing in front of the seller when everybody else tapped out.
00:01:47:16 - 00:01:49:01
Unknown
Okay, let's get into it.
00:01:49:02 - 00:02:20:17
Unknown
let me start with where the last couple of years actually took this business, because you have to understand the filter before you understand the opportunity. Now I've talked about this many times. The flip return on investment like the between what house flippers nationwide are paying and what they're selling for. Just the gross margin was down 25.5% in 2025, and that was the lowest gross margin on flips since the 2008 crash.
00:02:20:17 - 00:02:43:07
Unknown
And we had six seven straight quarters of falling margins leading into 2026. The median profit on the flip was down about 60 grand. That's gross profit, of course, from where it had been. And these are like real numbers. And I know talking to a lot of flippers, they felt that you probably felt that you weren't really you weren't just imagining it.
00:02:43:07 - 00:03:06:10
Unknown
It was literally less and less. Now here's the part that nobody really wants to say out loud that I'll say out loud. That washed a lot of the amateurs out, a lot of the wannabes, the flash in the pan. In this market, you either survive or you're brand new or you're one of the top dogs. And if you're brand new, you really just don't know any better.
00:03:06:10 - 00:03:26:10
Unknown
It's just the market that it is. So there's not really much in between. We lost a lot of the chaff in, in the market, so a lot less competition. So if you go back to 2020 through 2022 and think about who is flipping houses, honestly, everybody was flipping houses. You could buy anything, throw it up on the market and you all look like geniuses.
00:03:26:11 - 00:03:53:05
Unknown
We all look like geniuses because the tide was lifting every boat in the water. Now, let me just tell you an example about the market 2020 to 2022. We had a couple in our group up in New York. They bought a house. They didn't identify all the problems when they got into it. What should have been a 3 to 4 month rehab and maybe $100,000 turns into hundreds of thousands of dollars and 13 months.
00:03:53:07 - 00:04:17:14
Unknown
But because the market was so good, even though their execution was bad, then their net profit ends up being two, $300,000 on that flip. So if you do the exact same deal today, you're probably going to lose your shirt. And that's really the difference. A rising market forgives bad operations and bad operators. A flat market like we have today does not do that.
00:04:17:14 - 00:04:39:04
Unknown
So it's actually good news for us because the people who were in it for the easy money are gone and the tourists have left. And if I think about what's standing in the market today, it's professionals and a lot of new investors, rookies who are going to do it the right way. And then you get to decide which one you're going to be.
00:04:39:05 - 00:04:59:14
Unknown
Now let me show you what happened on the cost side when those people's people left, because that's the part that should really get you fired up. Now I buy leads from pay per lead sources in our market, and it runs kind of on a bidding system. So right now nobody is in there running up my budget on purpose.
00:04:59:15 - 00:05:30:18
Unknown
It just prices off of how many people are bidding for the same leads. So if you got 20 people bidding on leads, those lead costs go from, you know, 120, 550 to 2, three, four, 500 bucks today. They're sitting much, much cheaper there in that 125 150 range. Now a few years ago to buy that that same lead that I'm buying today for 150 on some counties I was paying 800 bucks, some 300 bucks, but it was not uncommon to be in that 250 to $500 range.
00:05:30:20 - 00:05:50:15
Unknown
Now, let me be very clear about what I changed and what did not change. The leads didn't change how the leads are sourced. The where I'm getting the leads from didn't change at all. They're coming from the same source, the same as same sellers raising their hand and saying that they need to sell. Now the quantity is the same.
00:05:50:15 - 00:06:10:18
Unknown
The only thing that really changed is how many people are bidding against me. Fewer bidders, cheaper leads. So your cost acquire a deal is not really a market, not really just a marketing number. It's also a competition number when you're looking at pay per liter people. And right now the competition talked itself out of the market, which is good for us.
00:06:10:22 - 00:06:48:02
Unknown
So the exact same leads that used to cost me and you guys 500 bucks only cost 150 today. So that's not anything with the market being special. That's not any kind of fluke. It's just simply the competition. And that's what happens on the buy side of marketing when everyone panics at the same time. So if you think about warm Buffett, everybody loves to quote them, but we're literally living in it right now where he says when others are greedy, that's when you should be fearful and when others are fearful and running away like we're seeing with flippers.
00:06:48:04 - 00:07:13:14
Unknown
That's when you get greedy. Competitions way down. So why did they leave? Why did the investors leave the market? And it's almost never because the marketing stopped working. Like what marketing channel works is marketing work. Yeah, it all works. It all works. It's because they didn't understand the cash conversion cycle and it honestly just broke their nerves. So let me walk you through what actually happens when you spend a dollar on marketing.
00:07:13:14 - 00:07:34:06
Unknown
So say I send direct mail, I get a list together on Monday. I send the list over to the direct mail company by third. By Wednesday, they're sending me a proof to confirm it, and by Thursday I'm paying that bill. So Thursday I paid the bill. That mail gets sent out on Friday doesn't land until the next week.
00:07:34:08 - 00:07:54:21
Unknown
So let's call it seven days end. After that, those calls from that mail drop continue to come in bulk by maybe two weeks. So now we're two weeks in. And of course I truck one after that. But the primacy of those calls come in for two weeks now. Once the lead comes to your database, raises their hand, said, I have a house.
00:07:54:22 - 00:08:13:23
Unknown
And by the way, write this timeline down. This is a cash conversion cycle. So we're two weeks into the timeline, sent mail, got calls, two weeks in, then the leads become part of your database. I have a house I want to sell, and it takes about 50 to 60 days of nurture. So let's call it 60 days of nurture.
00:08:13:23 - 00:08:32:02
Unknown
So now we're two months and two weeks into this before somebody signs a contract for you to buy their house. Now, how long does it take you to buy their house? It often takes you, I don't know, 3 to 4 weeks to close, typically. So let's just call them another month. Now we're three and a half months in.
00:08:32:03 - 00:08:54:05
Unknown
We bought the house. If we're going to rehab the house, we've got another four weeks, say a month to three months of rehab. Let's call it three months to be conservative for you guys. Now we're six and a half months in and we go on market and we're under contract in 30 days. That would be nice. Let's call it 50 days, almost two months.
00:08:54:05 - 00:09:13:04
Unknown
So 60 days. Now you're eight and a half months in and then you sell it, you know, 30 days later when the loan clears. So now you're really between that seven and nine month mark on a flip. So from the time you spend $1 to the time you bring meaningful capital back in, you could be nine months on a flip.
00:09:13:05 - 00:09:40:01
Unknown
Now, of course you can shorten the cash conversion cycle. And certainly you should is if you're going to flip wholesale, assign some of these houses. When you're doing direct to sell or marketing, you have multiple options, which is what makes it powerful. You can be under contract and sold in 18 days with cash in your bank account. Now, marketing is an investment and the math is really good on it right now.
00:09:40:01 - 00:10:07:12
Unknown
If you really think about this, I need you to hear this reframe though, because it changes everything downstream. Marketing is not a cost. It's an investment with a return. And that's the only way you should be thinking about it. If I spend $8,000. I'm not spending it. I'm buying a return and I want at least three times my money back, ideally more so if I spend eight grand on that eight grand to spend, I'm expecting to get at least 24 grand back.
00:10:07:18 - 00:10:35:09
Unknown
And here's what most people honestly get wrong. They think you need a $50,000 a month budget to compete. You don't. That is honestly like a brand scale market methodology where you got mail, Google ads and TV going, and that's a lot of big shops are doing that. But you don't start there. There's another lane that most investors, Vestas, really never touch or master, and that's where the margin lives.
00:10:35:09 - 00:10:57:07
Unknown
And you can create a lot of profit. And it's called niche marketing, where you're focused on a niche part of distress data. So instead of blasting thousands and thousands of records, you pull a really tight, specific list of people with a real solvable problem that you are an expert at, know how to solve, and you go all in.
00:10:57:09 - 00:11:21:04
Unknown
So you're talking like I pull a foreclosure list and I understand my state's foreclosure process. Then I work my tail off, call text mail on a very small list. Let's call it a thousand records. And I work to get a yes or no from all 1000 people and just seek to serve to help them to solve their foreclosure problem.
00:11:21:04 - 00:11:46:10
Unknown
If they go with me as a cash buyer, like, that's amazing. Now, I can do that for pennies, really, in the grand scheme of things, and then still make tens of thousands of dollars cash of 40, 50, $60,000. Check. While marketing director seller controlling my cost and control my profits because I do the negotiation. So, you got to work the math backwards.
00:11:46:10 - 00:12:06:14
Unknown
You got to start with the gross profit number that you're trying to make per deal and back in how many deals that's going to take and then how many contracts. Right. Because not all contracts closed, we call it, you know, 75% are successful. How many how many appointments, how many offers do I need to make? How many appointments do I need to go on?
00:12:06:15 - 00:12:31:17
Unknown
How many leads do I need to get to go to appointment, and then how many touches on that lead before I can turn it into an appointment? Now, I ran a 90 day test to get my numbers, and at the end of 24 and I predicted almost to a tee what we would do in 2025. It was something like 75,000 total spend to bring in 1.1 million or so in gross profit.
00:12:31:17 - 00:13:02:13
Unknown
So like the Roy is almost ten X111213X insane on a niche marketing list. Even the paid stuff like the the the PBL stuff really does pencil out right now because at 150 bucks a lead, just closing one out of every 30 is $4,500 to get a deal. And how much are we making on these deals like, I mean, on a wholesale deal on average nationwide, probably 18, 20,000 bucks on average.
00:13:02:13 - 00:13:24:17
Unknown
Of course, on a flip that's 40, $50,000 a deal. It's like $41,000 nationwide average. So the the math has honestly never been more forgiving because the data has never been better. Our access to information has never been better, and the leads have never been cheaper. Now you still win on the by and solving a seller's problem. That's fundamental.
00:13:24:17 - 00:13:45:06
Unknown
It doesn't change. That's a principle of why the the value we bring to the marketplace. Okay, now these cheap leads don't close them selves. So you got to keep that in mind. You have to actually solve a seller's problem. Nobody's giving their house away. Nobody's selling their house at a discount unless you're bringing some type of value to them.
00:13:45:08 - 00:14:15:14
Unknown
Okay, I, I signed a deal in Lakeland, Florida for 191,500 bucks had. Oh, no, this one I signed for 100,000. Had $190,000 of code violation liens on it. It was worth about 300 fixed up. It actually ended up selling for 300 fixed up. So 190,000 of code violations plus $100,000 purchase price 290, like most investors think they can't do that deal.
00:14:15:14 - 00:14:38:20
Unknown
But the truth was, code violations in that particular county in Polk County, Florida are 10%. So if I buy it and fix the code violation problem is 10% of whatever that violation cost was. So in this case it was 190. So it'd been 19,000 bucks or 2500 bucks, whatever is less. So you're talking two code violations, $2,500 total.
00:14:38:20 - 00:15:01:18
Unknown
You're going to have to pay for them even though everybody else sees 190. Now, my competition didn't know that. So a lot of people weren't even going after this deal. Same thing with foreclosures, right? We've got an agent right now. This one's a listing, but they, they come to us. They need if there's money to do a cash still, we'll do a cash deal.
00:15:01:19 - 00:15:20:12
Unknown
In this case, if we do a listing deal. So what? We do a listing deal. But either way, you need to know the process. You need to understand what's happening in the foreclosure process. How can you delay the auction long enough for you to help that seller out and then potentially make some money? Right. And that's just like a little bit of research in your own state.
00:15:20:14 - 00:15:41:12
Unknown
Same thing for inherited houses. I've got multiple probate people that were helping through the probate process, and they want to work with us because we're providing value to them. We're not just going insane. Our cash offer is the most important thing, and this matters right now more than ever. The supply of these problems is going up. There's challenges in the economy.
00:15:41:13 - 00:16:01:18
Unknown
Foreclosure filings have been up 21% in the first half of the year. There's more distressed inventory come in, and there are more sellers than buyers in a lot of these markets. So the people you want to reach are cheaper to reach than they have been in years. There are more of them showing up in. Almost nobody around.
00:16:01:18 - 00:16:21:01
Unknown
You actually knows how to solve any of these problems they're facing, even though it feels like there's so many investors out there, there's really not. So you have cheap access, rising supply, low competition. I want you to just think about that. Read that back to yourself, say that back to yourself and tell me that this is a bad market.
00:16:21:01 - 00:16:46:08
Unknown
There's no such thing as a bad market. It's usually either easier to sell or easier to buy. So let me leave you with this whole thing in kind of one breath here. This is how I'm thinking about this and how I think you can be successful in the marketplace. The market everybody is complaining about is the one that's handing you these cheaper leads, fewer competitors and more motivated sellers than we've honestly seen in years.
00:16:46:08 - 00:17:06:11
Unknown
And the people who quit read the same headlines you did and made permanent decisions about a temporary market, which we know changes all the time. And they tapped out right before it gets good. Because just think how good and skilled you're going to be in this market where you become an expert, and then you get a tailwind where the market lifts all boats.
00:17:06:11 - 00:17:27:21
Unknown
Again, you're going to be the expert that's able to capitalize. So you got to be disciplined on the by be the one who's consistently consistent on your marketing director sellers, when everybody else is shutting it off and actually know how to solve the problem. It's honestly not even that much more complicated than that. It's it's very simple. Those fundamental principles remain true.
00:17:27:21 - 00:17:56:14
Unknown
And the entire edge right now, it's really the entire edge right now and it's available to you. It's never been, in my opinion, easier to get into and do so this week. This week I broke down kind of our exact marketing and sales playbook in a live class, and I went through real data sources, a channel stack, conversion numbers, what you should expect when you do this, the budgets that can work for this.
00:17:56:14 - 00:18:19:03
Unknown
And if you want, if you want that, if you want the whole system, you can grab the marketing and sales playbook. We'll have the link in here, no problem. So just do me a favor though, drop a comment and tell me what you are paying per lead in your market right now. I want to know if this is happening, where you're at and what kind of lead cost you're getting, what kind of lead source you're you're using.
00:18:19:03 - 00:18:40:23
Unknown
Just drop it in the comments, let me know. Share with everybody and it'll be useful for you to see everybody else's coming too. And now, if this show has helped you in any way over the last ten plus years, leave us a five star review on Apple, Spotify, YouTube, wherever you're listening to this stuff, it puts us in front of more investors, and it helps to just serve and serve and serve the marketplace.
00:18:40:23 - 00:18:48:15
Unknown
I'd be super grateful. Awesome podcast today. Love getting on here with you guys and I will see you on the flip side.
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