How To Do Off Market Deals through Wholesalers with Ron Walraven

They just, sometimes it just works out for them and even they even go around me and generally, if I smell. I’ll just lean up the property with the seller. I can do that within about 12 hours between getting the dock to the title company and getting it recorded. So the chances of somebody really, if I smell that, bill know they’re in trouble at that point, because they’re coming to me anyway.

So at some point, Yeah, so your relationships and your reputation and real estate are everything. And it’s not worth it. Is it worth your reputation too, save a thousand bucks or something when you could make, significantly more than that on a deal, go for the big thing, right?

Your long-term reputation is way more important because even back in the REO days, what’s, it’s a big technique. Is the buddy up with the REO? Hey, go straight to him. Your buyer agent, who found you the deal, they go straight to me who was the broker, because then those days I’d had three, 400 listings a month.

So my phone was just banging and starting and people are just clamoring and they want the deal and be all back in the mid-two thousand. It was low-hanging fruit in regards to Argos. And so those guys would get so mad at me because I wouldn’t take them, I wouldn’t double-dip with them to make the deal go for.

That’s not what I would do. Cause I always tell him, I said, you want me to ruin a relationship with a seller who hands me 15 deals a month for one deal with, you know that in half. So then I, of course, I carried that over and that’s what allowed me to transition into the wholesale world is that integrity in that relationship at the beginning of that, that how I operated, followed through.

And those guys just know that Ron’s not lying to them. And that’s important to me at the end of the day. And it should be to everybody is your word should mean something. And many times I get, even now I get a deal where two guys got inside, and then they call me and say, Hey Ron, what’s the deal. And then I tell them, and then I take their deal.

And then the other guy calls me back. 20 minutes later, says, Hey, Ron, this is what I’ll give you. So sorry, man. I just sold it. He said, what did you sell it for? I’ll give you five grand more. I said, no, I’m not doing that. So what’d you want me to do that to you? If the other, if it was flipped around?

No, then, of course, I’m not going to, I’m not going to do, I like an extra five grand. Of course, I do. But that’s now you know that I’m not going to mess with you the next time that I give you the deal first as my word matters. 

And that, that focus on. Reputation and, keeping the long-term in mind is definitely very important in real estate.

And you mentioned getting to the close and, you don’t make any money until the property closes. And in that context, we talked about buyers, over negotiating with you and trying to nickel and dime you rather than, close a deal. And the other part of that closing is the money, right?

They have. Have the money somehow. And from your perspective, how do you like to see, say again, somebody that is new to you, how do you like to see that demonstrated that they have the capital to close? What, what, makes you feel good about a new buyer? Generally, I don’t take earnest money deposits from repeat buyers.

I just don’t. And so if it’s a new buyer, I make them pony up five grand and make a non-refundable. It gets deposited into my account, not the title company’s account so that if they walk away, that hurts. And then of course I can, we all have because we’re on the phone so much, you can smell somebody that’s not very experienced, or if they’re bringing hard money to the table, who is that? Who is that lender that’s going to do that deal? Are you just feeding me a pre-approval from a hard money guy that you can type up on your computer? Anybody else can, so what’s their worst nightmare is when I know that hard money guy because I generally know who they are locally and I call them up and say, Hey, how’s this guy going right.

He’s brand new and blah, blah, blah. So does he have any money? Because obviously they generally want 10 or 20% down. There’s skin in the game. And I said, does he have the cache? He’s good. And I said, okay, then we go ahead and do it. Then of course I try to mitigate that window of appraisal that they say, they’re not doing an appraisal, but they really are because the lender’s not going to do the deal if it’s not a deal.

So then what happens to the deal at that point? When the lender says, oh, no, these numbers are bad. Because every lender on a planet, that’s a hard money guy is going to take every deal he can until he can’t. He’s not turning it down. So I’m very good at it. Weeding out those guys that way.

And if they can’t give me 5,000 bucks, how do they have 40,000 to buy a house? Yeah. They need 20,000 bucks that closed the deal on a hundred thousand dollar deal. Anyway, closing costs and down payment and all that. And then, of course, they got to come up with the rehab cash. If you ain’t got 5,000 bucks, you’re not a buyer, but this.

Yeah. Yeah, totally. 

So I want to dig into the state of the market. You mentioned the RTOs early on, and then we had the great recession, which obviously, resulted in a lot of foreclosures. And then here we are today where home values are way up. So most people have a lot of equity in their properties and Inventories are down in basically every market, at least in on the MLS.

So how are you finding, distressed sellers that, see the value, in selling their property through you these days? What’s the angle that’s working right now? 

The best. I’m not going to say the pain point is. No mom and dad had finally passed and you got a house that the has got to sell.

I live in Michigan where it’s cold. People moved to Florida, Arizona to be warm. So when mom and dad still live in Michigan, because that’s just where they live. They don’t want to come back here to live and they don’t need the house and they don’t need any of the furniture. And then it’s just a, generally, there’s always been some sort of long term.

The issue to their death in regards to their health. Most people linger for a while. They don’t just die right away. So they have a lot of emotional ties and pain to the house. And I just want to be done, not to mention, it seems like our best sellers in regards to that tend to be the family who hasn’t been around for a while.

And all of a sudden the neighbors. See the families show up because mom and dad passed and they don’t want the embarrassment of all the neighbors knowing what’s going on. Cause the house was full of stuff and doing the estate sale, blah, blah, blah. We just come in there and relieve all that pressure to get that relief or pressure allows the.

To be where we needed to be. And a lot of confidence in us as a company that can actually close. It was always is always like a top thing. Meaning the rapport that we build gets deals all the time over and above price because they look at me and they say, Ron, you got gray hair and you’re almost 60.

And he didn’t drive up in the escalating. You drove up in the. So the biggest advice I could give to any new wholesalers doesn’t drive up in your brand new Camaro. Don’t do that and look like you can pay cash because when you’re looking them in the eye and say, you can pay cash, you need to be able to do that. 

And if you’re selling contracts, just tell them that I sell contracts. For us, our stick is always there’s always, we clean it. We’ll clean out the house for you so you can walk away. And number one, we will always call. In other words, once we get to our price, there is no question about what the price is going to be.

Even if I can’t find an end-user, because I always tell them I’m going to my, my main exit is to wholesale this property to one of my friends. If I can’t do that, I’m going to buy and one of the five or six people that generally go through a house as my private lender, he goes through it. He says, Ron, this is what I’ll loan you.

I got him in the back of the. Waiting. And if I don’t get the deal on somebody else, then I call him up and we do the deal. It’s simple, it’s quick, it’s fast. And subsequent to that, you’ve got taxes and mortgage foreclosures and. And grass violations are an empty house that they haven’t seen in a while.

There are all kinds of stressors that we can see internally online through list providers. I call, they’re aggregators of data. We get the most likelihood of. I’m a landlord, tired. Landlords are always great. When they’ve got 60 years or 70 years old, they’ve got 150 properties and they want to cash it out because they want to go to Florida.

Those are guys that are even better because you can usually get them to do some sort of terms and financing. After all, they don’t want it. You can convince them they don’t want to pay all those taxes. Because they have to pay taxes on the game. Plus the recoup of the, of the depreciation they’ve been taking for years, that’s used sometimes it’s an easy sell to them to buy a million dollars worth of houses for 10% down and, an X amount per month.

But I love the probates. Generally, most people don’t, it’s hard in Michigan. That’s not a database that you can pull off online, easily into our spreadsheet. So it takes a little more work to do that, to get those names out of the, what we call the legal news to get ahold of the rep. And then we actually wrote a book about five years ago, called how to sell your house, and then the state and Michigan.

So when we send out that empathetic letter, we’ve got this little 30-page book that goes in there. And they open that up and, we’re just a little different than most now that book package doesn’t cost 41 cents. It costs like $5. So they send out a hundred of those a month, which isn’t cheap.

And the percentage of those people calling on you is very small. We all know that one or 2%, it’s a good return on any kind of direct mail. So you’re taking a chance and so make yourself stand out from that. And people are a pain, right? The answer to your question is it’s always about their pain point and can I solve their pain?