Fresh out of business college and a yearning desire to be an entrepreneur, Joseph Reyes sought a life of more than being confined to a 9-5 corporate position. He knew from his drive and high ambitions that he wanted to start involving himself in real estate – he just needed to start on the path to get there. From working in the restaurant business and as an Uber driver, Joseph temporarily took unconventional jobs that he knew would work around his schedule to spend his spare time on educating himself in the real estate wholesale business and looking for his first deal. Ultimately, through cold calling, driving for dollars and perseverance, Joseph came across his first deal and with the assistance of Don, was able to drastically change his life. Today, Joseph is one of Don’s most successful students and they have managed to generate over 90k worth of assignments in the past three months together.
On this episode of Multifamily Real Estate Investments with Don and Eden, Joseph shares his ability to generate solid leads through driving for dollars, cold calling, Don’s ability to guide him through the steps and use his connections to find cash buyers for his deals. Joseph also discusses with Don, the importance of having a mentor and why you should partner up with local established players when you are at the beginning of anything you’re going to do in real estate if it’s wholesale or if it’s real estate syndication and multi-family.
Highlights:
- Joseph’s Beginnings in Real Estate Wholesale
- How Joseph and Don Crossed Paths
- Why You Need A Mentor
- How to Pick the Right Mentor
- Current Projects- 5 Year Outlook
Connect with Joseph
#: 954-940-2366
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TRANSCRIPTION:
Hello everybody. Welcome to the show. Today’s episode is going to be a little bit different. I have Joseph Reyes here with me. Joseph is one of my students in my local market here in South Florida. And I’ve been teaching him the secrets of real estate wholesale which I’m still very much active in today despite being involved in commercial real estate and syndications. Joseph is one of my most successful students and we have managed to generate over ninety-thousand worth of assignments in the past three months together. And the reason we’ve been successful is Joseph’s ability to generate solid leads through driving for dollars and cold calling and our ability to guide him through the steps and use our connections to find cash buyers for his deals. So it’s critical to be able to partner up with local established players when you are at the beginning of anything you’re going to do in real estate if it’s risky at wholesale or if it’s real estate syndication and multi-family. So let’s welcome Joseph to the show.
Welcome to the Real Estate Investing podcast with Don and Eden where we cover all aspects of real estate investing with special attention to multi-family apartment buildings and off-market strategies.
Hello, Joseph, I’m so happy to have you here. Welcome to the show. I appreciate you having me on. Thank you. Of course of course. Well, you deserve it. If there’s anyone that deserves it, it’s probably you. So tell us a little bit about your day and what you’ve been doing today?
Today I have been cold calling driving for dollar leads and doing follow-ups, always grinding – so let me ask you this.
We have obviously had a relationship and we know each other very well for our audience. Tell us a little bit about your background and when did you decide to get into real estate.
So I was a finance major at the University of Florida. I was doing really well. I had my dreams of working in hedge funds and corporate America and just financial services. And after I graduated I was looking for that nice corporate gig. Kind of gets my foot in the door. Finally got a corporate gig and I was getting paid pretty well for about two years. It was really cool living, but I wasn’t satisfied because I was locked into a kind of a 9 am to 7 pm role. And it was just daunting and I had to be somewhere from 9 to 7 Monday to Friday. It really annoyed me. Ultimately that company kind of tanked and I got laid off. So I was in a position where I was thinking of my next step in life and I was kind of assessing where I want to go. And I know I wanted to make a lot of money in my lifetime and I wanted to be an entrepreneur and I didn’t really want to work for someone. So with that mindset, I always had in the back of my mind passive income and the concept of passive income really intrigued me and I took out a couple of real estate books to kind of educate myself on what real estate is and the whole business. And it ultimately led me to a different seminars and trainings which taught me the concept of wholesaling and wholesaling really allowed me to kind of say hey I can make money in real estate without utilizing a lot of capital because my previous knowledge which was just ignorance lack of knowledge was only thought you could fix and flip or buy and hold. I don’t know about this concept so then I started kind of going on Bigger Pocket forums and doing a lot of researching to understand this process. A lot of YouTube education and then I ultimately got my first deal and then that kind of just enlightened me and opened my eyes to OK this is a thing and then I just did more research on it. And that’s pretty much all it is.
Ok, so we’re going to talk about that first deal soon enough. But first I want to talk about a few things you mentioned. So you had a job in a corporate office and I know you and I know how talented and how motivated you are. And so that is something that I want to talk about with our audience because a lot of people don’t understand that you could be the strongest smartest person ever right, but then you could get laid off for whatever reason you know your boss and you don’t get along and you know nobody had faith in you or you maybe you were not doing your job right because you were not satisfied with your position that the amount of money you were making. And so that’s exactly the disadvantage of doing the corporate gig which you know is sort of the American dream like you know to go to study, go to college, have a degree, you know to apply for a job, get a job to have a career and so on. But what happens if you get laid off all of a sudden and you have a mortgage and kids and family and people that you’ve got to support then what happens? And so that is something that you discussed and it’s so nice yet sad to hear you know that from somebody like you that I know who you are and the things you know how to do. On one hand, it’s amazing to hear that you’ve got out of it and that now you’re doing so well in real estate as a real estate investor. But on the other hand, it’s kind of saddens me to know that there are so many people in that position that feel miserable and unhappy about their life and they’re not changing it. So I want to ask about that. When was the moment that you decided that you’re no longer going to try to get back into the corporate gig and that you know you’re going to get into real estate? Tell me more about that moment specifically.
I mean so in the back of my mind I just always had the thought process of passive income the ability to sleep at night and still make money always resonated with me and I know I couldn’t do that with a corporate job. So I was exploring the financial markets I was exploring real estate different concepts that I can utilize without having so much capital. I explored business ownership, but I had no business ideas and I thought about the unconventional lifestyles like entertainment there’s a lot of people that make money on Instagram and on platforms like Snapchat or Vine and stuff like that just unconventional professions in the world. But ultimately when I went to a training seminar like a workshop I would say that introduced the concept of wholesaling no money down, no credit, being able to assign contracts and double close on contracts that really piqued my interest. And the overall concept of it allowed me to say hey let me do a couple of these deals and kind of go into a position where I build capital and I can establish some type of like a rental for.
Ok. So you’ve learned that at a seminar. People talked about risk and also that’s the first time we heard about this.
First time I heard about wholesaling at a seminar I never knew there was okay.
And then when you heard about it what was the amount of money you thought an assignment would be?
I would say like to build between 3000, 10000 or 15000 if you go to probably on a contract that’s typically what the assignment fee is. And that’s what was being kind of explained to individuals and that’s what they always say see.
And so I want to talk about this so I thought when I got into real estate I thought that an assignment fee is 5000 -10000. But we all know that we know better than that right now. I mean I do 5000 and 10000 assignments. And after what you’ve seen and the deals that we’ve done together I guess you would also get used to something else. So for me just you know a typical assignment for me is 40,000-50,000 that’s what I’m trying to make in a wholesale deal. And it is possible if you do it in the right market and you have the right system and the right technique. So the first thing that I want to ask you about your first deal. Tell us a little bit about how much money you made? How did you find it and what was the assignment over there?
So that particular deal was an interesting one. I was driving in the City of Lauderhill and I came across a 15 unit boarded up an abandoned apartment building. I looked up who the owner was on the tax records and the property appraiser and I saw that the owner was a church. So then I looked up the church to see who kind of oversaw like properties that this church-owned because they owned several. When I looked them up through the tax records.
So I finally got a hold of calling numerous numbers got a hold of somebody that said hey this is the gentleman you speak to about our properties spoke to him and he was like hey we don’t want to sell that apartment. We have plans to do something with it but we do want to sell this three-unit triplex down the street and then I ultimately got into a conversation with him on what the price he wants, over rental details, what was taken for rent, who pays for what from tenant and landlord. So I got this information now and this is when I’m just really learning the game and I’m googling like a lot of terms that he was utilizing so ultimately I got that property locked up and I found a buyer. I had cold-called landlords to see if they wanted any deals and got the permanent contract for two o’ nine sold it to him twenty-nine and he gave me twenty thousand maybe ninety thousand – wow I could make more than five thousand I got about twenty thousand and one deal and that was their first deal and that’s exactly what happened to me in my first deal when I had my first day it was about forty-five thousand and I was shocked.
I was like wow that’s a life-changer. And I bet twenty thousand. How much time did it take to do that deal specifically?
From the time the first contact to closing, I would say 60 days like the first time I saw a gentleman when we closed about 60 so some people don’t make twenty thousand in a year.
And then you may twenty thousand which just pure profit and sixty days.
Yeah, most of the time was because of there’s a lot of levels to a church-owned property that I had to find out through a title company. Multiple people needed to sign multiple documents and that was really the main holdup.
But getting the prior getting the property and a contract signed by the church and then signing it took like 20 days. It was a process of getting all documents needed to close on it from everybody involved in the church. That’s the most time.
Ok. So let’s talk about that moment. You drove by that 15 unit you said right.
Was a 15 Unit and so you say that 15 unit – what caught your eye?
What was the moment you said ‘This is interesting I want to figure that out.’
So it was 3 p.m. It was an empty parking lot the grass was high every single window was boarded up. There were signs of light just wear and tear on their apartment building buildings as I hope this is interesting. So I just took down the address and then as I finished my day just went home and looked up or kind of put everything on an Excel spreadsheet of all the properties I found. And this was the unique one because of its situation and I know properties that had so many units can be such huge deals. And it was owned by a church. So that really sparked my interest I merely used a search engine looked up how can I get in touch with the people that own this and I mean that was a whole mindset.
Yeah well, that’s amazing because that’s really you know thinking outside the box. I mean I have never done a deal like that and I’ve been doing a lot of deals you know and I’ve been doing that for a long time but I’ve never done a deal like that something that’s owned by a church. You know I’ve got to the church and then spoke with the people in charge and then got a different deal from that from the church. That’s ridiculous. But it’s amazing.
So right after that deal, you made 20000 now. When was the time that you decided that you know you want to focus on that only on that? And you know what was the next step for you.
So it’s crazy I got laid off from my job I was like “Man I hate working for people I don’t want another 9-5.” Even though I was sending in a lot of applications I had work experience and educational background. So I was doing Uber and Lyft for a long time I had to kind of be disciplined and set a schedule. I got kind of annoyed and I did have a restaurant background so the restaurant gave me the flexibility to work there to pay my current expenses. And at the same time allow me to do things like the drive for dollars or find for sale by owner or just learn the business as a whole and really needed to free up my time and if a 9-5 allowed me to do that because at a 9 to 7 I had to do someone else’s work. And so once I got to 20000 it was kind of paying off a lot of the loan debt that I had incurred but then I used some of the money to reinvest in the business which to me was cold calling I send a few postcards out but I wasn’t really following up doing that. And the postcards like 38 cents a postcard. So I was like let me just cold call people and knock on doors. I did a lot of door-knocking in 2018. Got a lot of rejection a lot of the ‘get off my yard get out’ and ‘get off my property’. Yeah – I learned a lot from that. So through the combination of door-knocking through a combination of cold calling people sending out a few postcards here and there I was able to do some more deals free up my time and just learn the business overall and kind of put like systems in place to further scale.
Ok so then was that the part where you met me. Yeah. And we started doing business together. So I can’t remember exactly what happened there but I remember that I was at the gym. I was working out. So you call me when I was at the gym and you talked to me about this deal that you had in Pompano Beach which is an area that I really like. I’ve done a lot of deals over there and I know this area very well. So you were talking to me about this deal and then what was the case you had it under contract or didn’t you.
I didn’t have it so I felt this seller was an interesting guy. Yeah.
So it was interesting I lead, this particular lead had an auction date.
So I was like man she must be really motivated.
So the house is a vacant property. Then I had to look up I didn’t get a hold of this person. So the property address and mailing address were the same on the tax records. So I had no idea how to find her. Got a number of the property owner and she was like literally be at my house in two hours. She spoke a little bit about the situation and got into the condition of the property. Ultimately, we were having issues with price and that was pretty much like a stop right there. So a couple of days I followed up with her against the notion of timeline with an auction date and when did I get into the picture.
So I’m thinking this lady is so motivated to sell I eventually got her to a price that was 51 cents on the dollar which I thought was a good deal. I gave her at the time I had a two-page contract that I utilized. She reviewed and she said ok. Give me the weekend to think about it and just follow up with me on Monday because we had a conversation on Saturday when I had finally met up with her at the property. So I gave her a call on Monday. This is all speculation. So through the speculation period, I was looking for a cash buyer. Thinking like Hey she’s going to sign in on Monday I’m going to get a contract. I hadn’t signed on the cash buyer and I gave him a call. I was like Hey I’m going to sell a property in Pompano Beach.
OK, that’s all I want to say something about that. So that’s why it’s always important to tell people that you’re doing real estate always on my end. Right.
I was always giving out my business card to everybody and I would always say hey I’m a cash buyer. I buy houses. And then one of my business cards. I never remembered even meeting Joseph and one of my business cards got to him. And then he had my number.
And then he gave me a call when he had a deal on Pompano Beach and I remember that deal. It did not have it on the contract but I remember that it was interesting to me because it was for the right price. I don’t like as a wholesaler. I don’t like doing deals that are small. I think it’s too much work. I think it’s a lot of work to make five thousand dollars. You know I’m not. I’m in the business of making 5000 but I would prefer to make forty thousand on a deal. And I know yeah, of course, I wouldn’t. Who wouldn’t? But when I looked at a deal and or somebody shows me a deal and it’s 60 cents on the dollar then I’m very interested and so I remember with Joseph calling me and I was interested because the deal was it was right at the numbers. They looked right. So I told him I don’t know if you have it under contract or not, but let’s just meet. So we met what the day after or two days after it was a little both. So we met and then I remember that I’ve seen this guy that is very motivated and a very young man. How old are you, Joseph? I’m 29. So very young and very motivated and wants to succeed. And you know he’s already talking to sellers but he’s not really super educated about the business itself. But I did see the potential so we started working together and we started that you know teaching each other thing right of course. I was doing real estate for about five years at the time. And so I had a lot more knowledge but I was learning stuff from Joseph too. He had his own ways of getting leads and doing marketing. And he was driving for dollars which I always appreciate people that drive for dollars because that’s not easy but it’s very very profitable if you get a good lead because it’s going to be a solid lead if you get it. If you’re going to drive with that lead then that’s to be your lead you’re going to have not a whole lot of competition. So the price doesn’t go up. And so that’s the potential that I saw in the relationship with Joseph. And so we started working out these leads together and so he would drive for dollars and whenever he would need something or you know wanted to figure out how to do comps and this one property what it’s worth how to talk to the seller how to work the lead how to follow up and stuff like that the fundamentals of the business.
I remember the first thing I told you is that you’re very smart you’re very motivated, but you’re missing the fundamentals of wholesale and lack understanding how to do a contract. And so I think it was about two weeks after that he came over with a contract in his hand and that contract was very interesting it was like a two-page document.
Yeah, a two-page document from Google. Completely not an enforceable contract. So if the seller will decide it back out when the deal would be lost. And so the deal is good. What was the number there?
It was eighty-eight thousand sixty thousand. Yeah. It was sixty thousand the property was worth we sold it for I think, thirty-five thousand more. So we sold it. The profit there was thirty-seven thousand five hundred. So that was our first deal together. So the deal was good, but the contract wasn’t it. So we decided to start working together and teaching Joseph the fundamentals because it was a win-win situation and typically I charge for mentorship, but in this case I realized that the potential was so good and he had a deal in his hand that I decided not to charge him and to just walk on a partnership basis. And this is how I’m going to make money on that relationship which is going to be beneficial for both of us. So now that we’ve been doing some business in the past few months we’ve been doing a lot of business together. What would you say that you learned from our relationship? How did our relationship benefit?
I mean honestly the structure of the business systems of the business understanding I guess terms of the business, having the opportunity to talk to Sellers and being instructed on what to say to sellers. But overall just what was previously discussed which are like the fundamentals, the techniques, the technical aspect knowing like hey this contract is unenforceable. Hey, this is what you need to do. Hey, this is how you do this. This how you do this is just further increasing my knowledge in the overall business. So kind of having somebody to hold your hand to like hey this how you do this is how you do that has been like the most beneficial aspect of the relationship.
So what would you suggest for somebody that’s trying to get into real estate or real estate wholesale? What would you suggest about a mentor that they should they be looking for?
Definitely. A mentor that’s proactive like active in the business versus a mentor that is not doing deals at all. So that they in the business can tell you like a wide range of things and they have the experience to say hey this is going to be an issue or there’s going to be a problem or this is going to decide you should work on this particular thing. So the mentor is proactive in the business. That’s I guess the most positive benefit from the relationship and just also somebody that can just guide you through various processes because you want to be alone because I mean this is action taking the business.
So we are there taking action you are feeling or you’re making mistakes and you kind of need to mitigate those mistakes by having somebody say ‘Hey man I’ve done all these deals I’ve done all these transactions this is how you should do this to avoid making further mistakes down the road.’
Exactly. I didn’t take a mentor when I started and it took me about a year to make my first deal and everything I learned on my own and it was difficult. It wasn’t easy and I think looking backward if I took a mentor then I would learn the things that that I’ve learned so much faster and at this point right now where I am. I would have more money. It’s as simple as that. And so I think yeah you’re right about finding a mentor that is proactive because a lot of people are trying to mentor other students and they have the knowledge but they’re not doing it. And when they’re not doing it then even if they have the knowledge of how to do with say wholesale or how to do us and investing then there is still you know at the past because they used to do it but they’re not doing it anymore so they don’t know about all the things that are new. They don’t know about the improvements, the new services, the new ways of marketing, you know, the new regulations everything. They just don’t know it. And when you’re active then the benefits you get from a mentor is that you could do business together. So, for instance, Joseph’s brother he found a dealer in Orlando right. And we are based in South Florida. So Fort Lauderdale – Miami area and so he found a dealer in Orlando and we got a deal because of our connections in Florida. We were able to close on a deal and sell it for 40000 more. That’s the benefits of working with somebody who is active because I know investors in different areas of the state because I’m still investing and so any other mentor that you choose to guide you in the process of real estate make sure they’re doing business because if they’re not doing business and they’re just not in the game and I’m making it and they can’t overcome struggles when they need to be creative because finding a buyer and a market that’s not our market. It’s not easy. You know you’ve got to look carefully you’ve got to talk to people you know you’ve got to use your connections to be able to do that. And so we were able to do that because we’re so active and that’s a great point. I like it a lot. And so what’s your plans for the future as far as real estate? Where do you want to be in five years?
In five years is just a really build a tremendous rental portfolio. So that’s in the residential side of the commercial. That’ll be fantastic. Land development is something of curiosity to me as well wholesaling I think a wholesaling business just a fantastic amazing business model to make the amount of money you can make without having so much risk involved and how fast you can do things as compared to a fixed and flip who needs to kind of get a property and then it’s a project and timeline involved versus a wholesale so you get a permanent contract today and sell in 10 business days. So I’m just increasing capital to get a rental portfolio and then just retiring.
Yeah. You make money out of thin air. You see so in real estate wholesale you make money out of thin air whereas in a flip you have to invest money you have to put money down. You have to buy a house or take a hard money loan. And that is basically assuming the risk and it takes a lot more time. So yeah you can flip a house and you’re going to be making a little bit more than what you would if you wholesale the property but you’d be investing more time and your time is so valuable. There’s an old saying “A fast nickel beats a slow dime.” In wholesale, you make fast nickels, but you make a lot of them. You’re not taking a risk. You’re not really putting your money down, you’re only putting a deposit.
If you’re doing things right. You have 15 days to go to retrieve if you cannot find a buyer. Right. So, of course, you’ve got to be able to be on top of things. You can’t lose track of your contracts and whatever you’ve got that’s open. But if you do things right you can make money out of thin air. You can make money from nothing from not investing in properties not from putting money down which is terrific. And also the other advantage I was just talking to you about this before when we were at coffee right before this interview. The other advantage of wholesale is that you see Joseph here is of course still at the beginning of his real estate career. You’ve been doing this for one year? Yeah. So in the first year, you’re going through so much adversity and you’re just it’s like it’s you against the whole world. Right. I didn’t make any money my first year.
So the goal. Ultimately, is what you said to hold a lot of properties. That’s the goal you want to make the passive income you want to make money without working so that your time is free and you can be with your family or kids or whatever it is you want to do with your time. So the thing is that when you are in real estate wholesale in residential and in commercial you’re getting access to deals all the time. So the deal comes to you. And then if you’ve made one hundred thousand in real estate wholesale and now you want to buy a house so you could hold it then your hundred thousand that you made in real estate wholesale would buy you much more than somebody that made one hundred thousand in retail. So like if they’re let’s say somebody is working in the retail industry or somebody is working at something else and or in restaurants and they made one hundred thousand and I made one hundred thousand since I have access to deals that are coming my way at 50, 60, 70 cents on the dollar then my hundred thousand is able to buy two properties that are worth a hundred thousand. So essentially my money buys me more. So I’m getting rich on paper and that’s what’s so amazing about wholesale the fact that deals are coming your way. You decide what you want to do with them. If you want to hold them then you could. You’d be buying a property that’s worth two hundred thousand for one hundred thousand and you’d be fixing it for twenty thousand more. And now you have eighty thousand in equity. Right. So you’re 120 in and you own property for two hundred thousand. That’s great. That’s amazing and it’s not even taxable. You don’t even have to pay taxes for that money because there was no taxable event until you sell it. Right. And even when you sell it then you’ve got a lot of depreciation during the year. If you have it for a few years right. So if you want to hold properties you want to. You want to have a portfolio. Best way to start is boosted wholesale because you’re gonna have access to all the deals if you want to flip properties you actually want to start as a home seller because you get access to properties at a discounted rate the best rate. Right. Because we wholesalers we get it cheaper than anybody else. We get it cheaper than the flipper we get it cheaper than anybody else essentially. So If you want to flip properties you want to be a wholesaler get properties under contract and then you decide what you want to do with them. Do you want to wholesale them?
Do you want to flip them? You could do that. Do you want to hold them? That’s great that’s terrific. You can do whatever you want. And that is how I have managed to hold properties so I hold out I have a nice portfolio here in South Florida and that is how I did that.
I have never bought a deal from somebody else. All the deals that I have bought all the houses that I own are my houses that I got through my deals through my marketing and that’s what I teach you right. That’s where you’re gonna be in the next two-three years and I’m super excited for you. And I’m very happy to see you grow. And hopefully, you know we’re going to grow together in the future a lot more. So thank you for coming to the show. Joseph, I really appreciate it. Thank you for having me. Yeah. Do you have anything else you want to add?
I would say if you get in the wholesaling business just really take action man like there’s a lot of fear involved a lot of like preconceived notions like ‘oh man how does this work?’ I’m not going to make money. The opportunities there are you just have to take action and figure out your niche and how are you going to get a deal on a contract. I mean just get on your neighborhood you can find a rundown property and just knock on some doors look up some phone numbers you get a hold of the property owner and just like that in 30 days or 45 days- you can make 10, 20, 30 thousand dollars. Take a mentor is also a big thing as well because they can just guide you through the process. A mentor is a big asset. You have someone to lean on, someone to give you direction.
All right Joseph thank you for coming. Really appreciate it. And you guys have a great day.
Thanks for listening to the real estate investing podcast with Don and Eden. Stay tuned for more episodes. Til’ next time.
