Dan Breslin has been in the real estate business for almost 12 years now. He is also one of the most prolific in the industry. In fact, he has 83 deals all lined up for him as of the moment. While he is now one of the most successful people in the real estate industry, his journey actually started out rocky. Fortunately, he came across 2 books that helped him change his life for the better—the Bible and Rich Dad Poor Dad.
Earning a $6,000 assignment fee on his first deal however was not a guarantee he won’t get back to his old ways. Thankfully, he picked up the Bible again and from there went on to give his life back to God and decided to follow the right path wholeheartedly. If you are looking for inspiration and motivation to start your real estate journey, this is one episode you shouldn’t miss!
Insight of the Week:
The difference of wholesaling versus wholetailing
In this show, you’ll learn:
- Dan’s background
- The business you can do without any money
- The marketing method he uses to find deals
- Working with business partners instead of business employees
- On whether he prefers flipping or wholesaling
- Becoming the source of deals
“Wholesaling is the business you can do without any money.”
“Take responsibility. There’s nobody else in charge of this deal except you.”
“The only thing that all of us have here on earth that’s limited is TIME.”
“You need to know your market.”
“Become the source of deals.”
“I believe that we all sacrifice things in this world especially as entrepreneurs.”
“I just pray that all of you guys would go home and lead your families.”
Profile: Dan Breslin
Thanks for Listening!
Brian: Brett, there is a lot of water in this boat man.
Brett: We need to get a big old bucket or shovel or something. Why don’t we go up top? Maybe we can fly together.
Brian: We would be like kings of the world up there.
Brett: I think you are the king.
Brian: It is so cold.
Brett: Just put on a sweater, dude. It is just windy and chilly. Anyways, let us wholesale this boat and get out of here. This is the Simple Wholesaling podcast episode 113.
Welcome to Simple Wholesaling. A Christian podcast that supplies simple, yet effective content for real estate investors and business entrepreneurs. Get advice, tips, and tricks so that you can stay true to your values and achieve your dreams with real estate investing you can trust. Now, introducing your host, Brett Snodgrass.
Brett: What is going on all you Simple Wholesaling fans out there? Thank you for joining us again on another episode of the Simple Wholesaling podcast. I am your host of today’s show, Brett Snodgrass. I am with my amazing bearded king co-host, Brian Snider.
Brian: What is going on audience and Brett? How is it going man?
Brett: I am doing fantastic. We just got back from a cruise. Actually, no, we did not. I love the movie Titanic. Remember when that came out?
Brian: Yes, I do remember that. I went solo in the theater and I think I laughed like when the guy like the boat is like up in the air and like the guy fell and hit his head, on that part of the boat. I remember like laughing out loud. I got some looks.
Brett: Wow. I can imagine everybody else is like crying and they are just tearing up. Like not pretty crying, ugly crying, that is what my wife would call it, and you are laughing.
Brian: I was that guy.
Brett: Yes. Everyone of my friends I think went and saw that movie seven times in the theater, like not at home, but actually in the theater. Anyways, great movie. If you guys have seen that, that was from the Titanic and great soundtrack. My wife can play the My Heart Will Go On the piano.
Brian: That is nice. Does she play anything else in the piano? I did not know that about her.
Brett: She does that one and she also does a really cool song by Michael W. Smith. We actually played the song at the wedding and she does that song too. I forgot what it is called but it is really good. She is a really good piano player. Anyways, we have a great show for you guys. We are going to talk about real estate and not Titanic the entire time but we have a great show for you today. We have a guest by the name of Dan Breslin.
Dan comes from Philadelphia and he has an amazing story. If you want to hear about the struggles of one’s life, he was living a life just the wrong way. A lot of foolish living, partying, and drinking, and some drugs and he kind of goes through that and ends up in prison. Someone gives him two books. They give him the Holy Bible which is the best book ever written because it is God’s word. They also gave him Rich Dad Poor Dad which some people would consider the Bible.
Brian: That is like the bible of real estate investing.
Brett: Right. But amazing story, he is absolutely crushing it and took his life, turned it around, and is now he has under contract and right now 83 deals cooking and he is in several different markets and doing an amazing job. He really breaks it down and give some amazing advice.
Brian: Yes. It is really cool to just like I mean hear his energy that he talks about this stuff, his enthusiasm and then just like his passion for educating and teaching and helping other people too. It is pretty incredible. Definitely, you guys want to listen in to this one.
Brett: Yes, definitely. Before we get into that, so we have an iTunes review of the week. Brian, why don’t you go ahead and take that man.
Brian: Yes. We have a five star review with the heading of awesome, I like that. It is from KHal, ‘Simple Wholesaling is a great podcast. I listen to the real estate podcast often and was very impressed with a platform. Thank you, thank you for building the business on a foundation of integrity. Thank you for giving the glory to God. I have a ton of respect for your walk and let us not forget that they have deals. I hear all day about that there are no deals. Nearly every property Simple Wholesaling has, it is on their website, is a winner. Many 2% plus positive cash flow every day with the tenants. Come on guys, take action and grow with this awesome company.’ That is a great plug there, I really appreciate that KHal. You did part of my dispositions job for me, I think.
Brett: There you go. Yes, thank you so much. This really hits every aspect of our business, not just the content and the education that we provide but the deal side as well and just a plug out there, if you are looking for deals in Indianapolis, we have really dialed in to this amazing city. We think Indianapolis is so amazing. It has cash flow properties that you are exactly right. You can get 2% cash flow properties where what that means is the formula behind that is if you take the rent and divide it by 2%, that could be the purchase price. It is a $700 rental, you could be all in at $35000 which is absolutely amazing.
There is some amazing flip areas as well, Fountain Square, Bates Hendrix, St. Claire Place, some of the downtown areas are really growing and they are taking older houses and revitalizing them. Houses that I used to buy for twenty grand, they are now selling for $200000, 250000, $300000 and it is just amazing what is going on in the market. I know there is some other markets out there too that are great but we really dialed in Indianapolis because I feel like it hits all cylinders. If you are interested in properties, please go to our website at simplewholesaling.com.
All of them are on there and there is our podcast and our meet up and some educational blogs and a lot of different materials if you are interested in wholesaling, also go to our website at simplewholesaling.com. Thank you so much, KHal. If you are interested in leaving us a review, go iTunes. Leave us a five star and we will read it on the air and we just really appreciate you guys so much for listening and just being with us today.
Brett’s Insight of the Week
Now, simple tips and tricks that make real estate investing easier, faster, and better. Brett’s Insight of the Week.
Brett: For today, we are going to talk about Brett’s Insight of the Week the difference between wholesaling and wholetailing. This wholetailing word has became kind of a buzz word in the last a few years. Wholesaling has became a buzzword in the last ten years I would say. When I first got into this business ten years ago, I did not know what wholesaling was. It was not really a real estate term that a lot of investors used. I think that some started to use it and now has become a huge word in the real estate industry. But basically what wholesailing is you buy a property and you get it on our contract and then you either sign the contract or you double close on the property and or you buy it and then sell a little bit later. But the whole premise is you do not fix it up. You do not paint it, you do not put new carpeting in it, new appliances.
You basically buy it as is and you sell it as is with the same condition. That is wholesaling in a nut shell. Wholetailing is a little bit different where you will take a wholesale property, you will close on it, buy the property and then you might do a little bit to the property. You are not going to fix it up a lot with all new kitchens, new bathrooms, new flooring throughout it or anything like that. That is more of a retail model where you make it bougie is what I call it and then sell it on the retail market.
Wholetailing is you take parts of the house and you fix those to make it more desirable to the next investor. You are still selling a property probably to an investor but let us say you buy a property and the foundation is bad and you know that investors are really going to look at that and they are not going to buy it because of a broken foundation. You have a crew of contractors that you can choose. They can fix the foundation at a reasonable price, you go ahead and do that and then now the investor does not have to worry about the foundation and it is more desirable to them. Or another example is let us say a house needs painted or cleaned out or the bush is taken out or something like that and you are not going to fix up the house on a retail level, you are just going to do $3000, $5000 worth of work and then make it more presentable to get more money in the long run. Why would you do something like this?
I believe that a lot of people cannot get past some of the things that an as is house has to offer. For example, my wife, if she were to walk into some of our houses that were completely trashed and they were a hoarder house, they had ten loads of dumpster personal belongings in it, she would walk into the house and probably say to herself this house is a mess. I would never buy something like this, why are we even looking at this? When another investor might look at it and they can look past all of that. What we try to do is we create a vision and take all the personal belongings out of there because behind all the personal belongings and all the trash is actually a decent house.
We do that a lot, we clean our houses and they just look more presentable. The pictures look a little bit better, people have to step over broken glass or toilets or whatever it is and it just looks more presentable. That is just a that is an example of wholetailing versus wholesaling. I think that any house you get, you can do both. Sometimes this is an example of a good wholesale property and sometimes hey we can put in a few thousand dollars but then make ten more thousand on the back end and that might be a good wholetail, right? It does not take too much work.
Do you dream of a life that is purpose-driven and makes a difference? Spiritual Foundations.
Brett: On today’s Spiritual Foundations, this is a section of the show that if you are just tuning in, that we really like to dial it down. We know this is a real estate podcast, we talk to business entrepreneurs all over the world, but we like dial it down and put our priorities in check. We are a Christian podcast, men of faith, and we like to glorify God with whatever we do. There was something that happened here locally that really shooked my community here and really shook me personally. If you have read the news over the past couple years, there has been so many school shootings. When I grew up, we did not have to worry about any of that. School was always a safe place and it was a place that we did not have to worry about people coming in and shooting each other. The world has changed so much now and we draw fear.
We have seen so many shootings, I believe there has been 20, 22, 23 shootings in schools this year and it was always in a different place where I live. There has not been that many shootings in Indiana until two weeks ago and this really really drew close to home for me. Let me paint the picture for you. It was Friday, I am sitting in our business meeting around 9AM and we are going over our scorecard and our metrics and just being together as a team. I got a text. Usually I do not look at my texts that much during our business meetings but for some reason I looked at this text and it was from my daughter’s mother and the text said that there is an active shooter at the Noblesville Middle School and Kaylin, my daughter, has a field trip there today. If you can imagine as a father, nothing else mattered to me.
The scorecard did not matter, the metrics did not matter, whatever we were talking about in the business did not matter. I felt completely hopeless and helpless on what to do in this situation trying to protect my daughter. That just kind of has been a reflection for me. If you read the news at all, basically kind of end of the story was seventh grader came in, he targeted a girl in his classroom and he took out a gun and he shot the girl and he shot the teacher. Fortunately, all the glory to God, that nobody died. According to my daughter, her field trip was actually the day before. She was not there at the middle school. My daughter is a fifth grader. She is at the elementary. She was there the day before.
The girl that had gotten shot was one of the tour guides showing my daughter’s class around at this seventh grade school. My daughter was going to be going into this middle school. The reason why I say all this is that we live in a very busy very chaotic world and sometimes it is awful that we have to have something like this happened to really slow down and to put our priorities in check. I have been reflecting on it for the last couple of weeks, has put my priorities in check.
If my daughter would have been there, if something would have happened, would I have thought back and thought could I have been more intentional with her? Could I have been with her more? Could I have shown her a little bit more love, could I have put more focus on my family? I believe that we all sacrifice things in this world, especially as entrepreneurs, we sacrifice a lot times our families. I have seen many many many successful entrepreneurs lose everything that is important to them. When something like this happens, that makes me think that I need to sacrifice for the important things in my life.
I need to sacrifice for my family because yes I am a successful entrepreneur but if something would have happened to my daughter, I would have given everything for her life. I would have given all my money, would have given any recognition, any success, anything for her. Fortunately, nothing had happened to her. I have been praying for the families, the victims of this tragedy. But it is just is a great time for me to say I need to put my foot in the right direction, spend more time with Him and buy more time back for my family. That is why we all do this. We all are entrepreneurs to build that freedom, to be able to spend time with how we want with our families or with our mission, our purpose in life.
One of my big purpose is in my mission field starts off with my family. It is easy to come on here and talk to all you guys and talk to people I do not know and people that only know me and then sometimes the hardest stuff is at home, to go home and to lead your family and to pour on your daughter when she knows all your crap or your wife when she knows all the baggage that you hold and mistakes that you make and the flaws that you do, that sometimes the hardest mission field. That is a challenge to me to take it home and to focus on that first, to lead them first before I lead the company or you guys or whatever. I just pray that all of you guys would go home and lead your families.
That is really what this is all about, just a great reminder of that. Hopefully this helped you guys out today. This has been on my mind. It has been on my heart and just want to share with you guys today.
Brett: Now we are going to get into the interview with Dan Breslin. You are really going to love this interview. He really takes it up a notch but I want you to also to focus a back when he got started, he is basically an expert in the wholesale space right now and throughout his career he has been able to do more quality deals by assuming each property in a contract will be a fix and flip. Dan has been able to put himself in the buyer shoes whether that is an investor or an end buying consumer with very little background in 2006 and after a brief stint in prison which he is going to talk about, Dan began getting out of his troubles and he came across the book Rich Dad Poor Dad which is the author Robert Kiyosaki.
Dan started to have faith in himself and hustled for a check of a little over five grand to start his wholesale empire. He now continues to focus on wholesale deals. He also organizes meet ups, he runs his own podcast, and not only has Dan and made a name for himself in the real estate space but he is also on a mission to help others by bringing actionable ideas and strategies to his audience and to yours. He has an amazing story, he is in seven different markets. If you really want to know how to scale your business, this is the guy to listen to. Let us get to the interview with Dan Breslin. Hey, Dan. Are you there? Welcome to the show today.
Dan: I am here. Thank you for the invite. It is my pleasure being here.
Brett: No problem, we are excited to have this.
Brian: Yes, yes. We are very excited to hear your story and just get into this and have another wholesaler out here so it is great.
Brett: Definitely. Dan, why don’t you kind of start off with your background story. We know that you have an interesting story and I have heard a little bit about it but I know our audience is going to want to hear all the ins and outs of how you got started in real estate, where were you at before, and bring us up to speed.
Dan: Cool. Before the show, I wanted to have the exact number of deals that I have under contract just to kind of actually give you a number, not some pulled from the average number. In some process of our phase, I originally started out wholesaling but now we wholesale, we fix and flip, we do that in Atlanta, Chicago, Tampa, Miami, and Philadelphia where I grew up. We have 83 deals cooking. some of them are fix and flips we own, majority are going to be contracts that we have waiting to be sold or settle upon or actually already sold and waiting to go to settlement. We got to a point now where we are closing like half of those deals using cash, investor’s cash, our own cash, and then the other half that we actually wholesale out are going to be just straight assignments.
Give you a little background about how I got here from where I was. I started off with no money. I grew up and I was on a different path, not good path in life. I basically love to party, I had an issue with drinking, would do drugs, everything like that. I woke up from a blackout sitting in a prison cell and found out that I was caught in a car that was not mine. I spent a year in prison for that crime and during that time I remember like having a couple books handed to me. We would go down to the chapel on Sundays. One of the books was the Bible and I started reading that for one of the first times in my life. I also was handed Rich Dad Poor Dad and I read that while I was sitting in there. I did not really know that I was going to get out and start wholesaling and flipping houses. It is kind of a farfetched dream.
I thought I would have to have money and here I was, a newly minted convicted felon with no ability to get any type of a job, being released in early 2006. I think it was like right around Christmas time or right after that I came home and went to a couple of seminars, the get rich in real estate seminars that everybody who has probably listened to the podcast right now has been to or knows of the existence of. We see them on TV and etc. We went, it worked. Months later, I still had no car, no money to speak of, put a classified ad in a newspaper. I actually used to work back in 2006 for lead generation and did a deal for $5500 in one of the worst areas, lowest value, highest crime, drug infested areas right outside of Philadelphia.
I am not going to smear their name and mention the city but a lot of the listeners, at least on my show or in that area probably know what I am talking about, and I sold it a couple weeks later. Went to settlement for $11500. That is $6000, sign it, represent it, proved to me that business could happen and just a complete life change event for me. It has been one heck of a ride here. I wish I could say that I was on the straight and narrow since 2006 but I did get off the path again in a year or two later. The money that I was making was passed, it went to my head, the ego came in a little bit, and I had to turn my life back.
I remember in 2011, 2012, the market crashed and I was broke again. I decided to pick the Bible up again and ever since it has been… It was at that point that I really decided to give my life back to God and go on a new path wholeheartedly and it has been an ever brightening day from that point on until here we are at May 22nd 2018. I guess just roughly six to seven years after that recommitment of my heart that I was able to share something like 83 deals at the beginning of our interview here.
Brian: Wow. Thank you for sharing that with us, thank you for the transparency and just I know our listeners out there really appreciate that and that is the good thing kind of about this business is. No matter what your past is, really as long as you can put in the time, you can put in the effort, you can do this business.
Brian: I mean that is very attractive about that. I do want to kind of talk about that a little bit because just like you said you started basically with no money to start wholesaling and we always hear about that at all. Wholesaling is a business you can do without any money, is that really true? I mean is that able to do for anybody?
Dan: I mean I actually had a $100 at the time and the classified ad cost like $79 for seven days and the lead that turned into a deal came in on day six. I was pretty much down and out when I got in there. I also had to get a ride by my dad to do the deal and I had my soon to be six or five years old, my daughter in tow at the time, brought her along with me to the lien. She is just playing with the seller’s granddaughter and everything.
It was very surreal for me and looking back I mean it seems like a miracle as I am sure a lot of people on the front end before you actually do a deal, the deals look like a miracle. You just want to do one deal to make sure this thing works. After you do a few of them, some of them still feel like miracles. A lot of them feel like a system and a routine and repeatable process but yes, it is definitely possible to get started without money for sure.
Brett: Wow. That is awesome man. Again, thank you so much for sharing your story and someone handed you the Bible and Rich Dad Poor Dad. What some people would maybe say that is the Bible for real estate. But our stories are very similar too. Not that I was sitting in prison but your first deal with $6000 assignment deal and it was in the inner city part of Philadelphia. Mine was actually in Youngstown, Ohio. It is a very similar similar stories but let us really dive in and obviously you are doing so many deals today and a lot of our listeners might not be able to comprehend how you have 83 deals cooking and all that.
I am going to dial it down just a little bit and let us just kind of focus on what are you doing today as far as marketing wise go because I know the market probably has shifted through the eleven or twelve years you have been doing this business, obviously it crashed and you had to bounce back from that. But even when you talk about marketing, do you feel like you are always huffing to do different things with marketing you do hitting hard the same marketing strategy as you always have been? Kind of dive into that. How are you collecting your deals through marketing?
Dan: Well, being a lot of different areas, one of the things that I had taped in my wall on my vision board of inspiration was a Mark Cuban quote and I might butcher it a little bit but the essence is to build the best business that you possibly can. People will notice and opportunities will come to your direction. I always focus on trying to improve every incremental little piece of my marketing, my interface with the buyers, my interface with sellers, my interface with my podcast audience, etc. I am a fan of always trying to pay attention and dive deeper and dig in to the details as opposed to the school of thought of set it and forget it.
I am not putting in place a high equity or probate mailing campaign and then leaving it alone forgetting about and expecting the same reason to continue because as we are walking in to 2018, 2019, and the inventory is tightening across United States, you better believe that sellers are becoming more and more resistant to the marketing and they are going to need to see more and more detail and improvement for people who are going to succeed and continue to get deals a long time. I do not care whether I am in Youngstown, Ohio or whether I am in Chicago, Illinois or whether I am in Miami, Florida, it is going to take continuous improvement.
That said, I know people are looking for a granular easy simple answer and I would say DirectMail is a really great place to win. It is becoming a competitive space but the more detail you can get in your list of selection and then talking to the things on that list, the better you are going to get at actually doing deals. What I mean by that is I will send a slightly different letter to a probate mailing then I would send to say a foreclosure mailing who is going to have a completely different state of mind and I might send to somebody who has a house in a neighborhood that just is known for maybe it is gentrifying and their values are increasing.
My letter might say something different in that scenario as well. I do Google PayPerClick advertising, I have digital Facebook campaigns running at all times, and the DirectMail is definitely our biggest piece. But we also have referrals from people in the markets. I mean it is just a variety of things where I guess I will describe it like when you first find one of these things, it feels like a silver bullet, vacant house mailing or a probate list or whatever it is, and in fact they are kind of silver bullet moments and you put that into place but never rest on the last hit, never rests on the last silver bullet idea that you comes up with. At least for me is how I tell myself.
I have had hundreds of them, if not thousands, of those revelations. Those silver bullet moments where I thought man this is the fantasy, this is going to be the end goal, this is handed down right from God Himself, to deliver many many deals. I do not have to do anything else after this, just this one right. But continuing to keep putting those building blocks in place is what allowed me to get to have an organization that does the number of deals that we do now.
Brian: Nice. I kind of want to talk about those building blocks a little bit. Because you are in a couple different markets. I think you said you are in Philly, you are in Chicago, you are in Atlanta. I think you started in Philly. Can you just kind of talk us through maybe like how you just went from the Philly market to one other market? Do you jump in after that? Maybe there is people that are out there thinking about getting into different markets. What is kind of a good process that maybe they could utilize in doing that?
Dan: First, I guess it is important to understand why I went to a different market and I would not necessarily recommend doing that and I would not add more markets now because I have discovered that going deeper in the market can net the same, if not a greater return, as long as there is a large enough population base in the area. I prefer a large metropolitan areas with roughly five million or so people were better in the areas. I know that everybody in going to have that same luxury but going deep in a smaller market will definitely net, at least in my opinion, a great life changing result for anybody.
I was in Philadelphia and in 2006, we already discussed, I went away for a year. My daughter and her mom moved out to Chicago then so being a dad for me became weekends at the airport, if and when I could afford a plane ticket. It was a great day when my daughter could fly by herself on airplanes and it was always a pipe dream. I mean this was a must farfetched single goal overriding my life up until 2014 or 2015 when I actually did have a team in place in Philadelphia, enough momentum of success in Philadelphia that I could afford to pick up and move out to Chicago, a completely new market. I was actually moving out there so I could be a real dad, close by my daughter who was at the time about 12 years old, that drove me to open the Chicago market. Then I got here, it was freezing cold, the lake was frozen over.
I did Tampa, Florida as an excuse to go to Florida in the winter time. I went one time for years that really worked out super effectively for my travel. But when I am going to a new market, it is more around the person who was presented to my life at that point in time. When I opened Chicago, I had like, by the grace of God, an Introduction to Aaron Lockhart who is my vice president here now in Chicago. Together, we worked to develop a team of people here, lenders, contractors, acquisition managers, etc.
We try our best to create big opportunities for the people on our team which is we try to develop business partners as opposed to employees is kind of our mindset. When the Atlanta Vice President appeared at our networking event that we have here in Chicago and he was a newbie but he had just a great attitude. It was like God placed him in my life. It was I knew I wanted to go to Atlanta because I heard about the growth. Listening to people’s experiences and deals that were happening on a lot of real estate podcasts that I was listening to before we opened Atlanta.
I knew I wanted to go there for the growth that was taking place but I never would have gone there had the chance to current meeting with Olsen Stack, my VP there, taking place. My reasoning for entering a new market is if I have an outstanding business partner. Somebody that would have full faith in their ability and full faith in their commitment and I feel inclined in my heart to create the opportunity with and for that person in that market as opposed to saying I want to be important or enclosed to markets.
That is really what drove my entry into the markets what it was more life circumstances and then the specific partners who I was helping to build the opportunity together for them. Not so much in Dan Breslin wants to make $500000 or $1000000 a year or whatever out of each of these markets. It was not money driven reasoning but it was more the people behind it and lifestyle things that really drove the expansion into new markets.
Brian: That is awesome. I want to get back to just a little bit about you said you wanted to kind of grow business partners instead of employees. What are maybe some things that you are doing to create that culture in your business?
Dan: Well, it is dangerous. Number one, we do not have payroll company. No one is taking salaries, nobody is being paid a “commission”. When we are doing a specific deal, it is a portion of the deal. Like it is a chunk of the deal for each piece of value that is done. Some of the stuff is relationship with money mentoring. Some of the people that I have had the honor to help grow in life and find new levels of success and what they are doing like a lot of us, especially myself, like I kind of had a relationship with money issue.
There would be guild surrounding money and there was a great book recommended by one of my mentors that I would share along with some of my mentees, “business partners”. That is Thou Shall Prosper by Daniel Lapin. He is actually a rabbi and he really takes business principles in combination with biblical principles and it really helped me to grow mentally when I started to think about money, especially fitting in with my faith. Little things like that that most people would not expect to be a conversation topic.
Behind the scenes with my business partners, that has been equally as important in developing these partners and teaching them to get an LLC and making sure they are doing the taxes and telling what can be written off, what cannot be written off, and referring them to people to help build out like in a sense their business so that when like do a deal, roughly 25% off of our deals goes to marketing. Sometimes it is greater especially when we are opening the market and depending on the time of the year and sometimes it is less 25% comes in is like my company portion.
Roughly 25% is like the Vice President company portion and 25% is like the acquisition manager who is on the ground and everybody who is involved in those deals is pulling weight and making their value add and contribution to that amount where that is actually a very fair split. We are always trying to find a more high ground when we are doing splits in the partnerships sense rather than this guy goes out, makes like 10% commission, and that is that. Also, they are not restricted.
They are not like hourly, we do not have… I mean we do definitely have their time and commitment but in a sense of like the definition of an employee, that is just never really the mentality that we had. We also teach them the difference because a lot of times people have more of an employee mentality and so we want people to take like an ownership of the deal. Take responsibility, there is nobody else in charge of this deal except you, no one is going to get the title pulled.
I do not care if the title company, it is their job to get the title pulled, like if it is your deal you have got to be on top of the title company. Making sure the documents are chased down, the deed stamps are purchased ahead of time, like you are driving this deal and we really try instill that ownership mentality in everybody that is working on the team.
Brett: Do you feel like this strategy, this is very interesting… I have not heard anybody doing something like you are doing. I normally hear the commission getting paid, percentage of a commission, people on salary, but do feel like doing this strategy helps your business? Do you think it is a great strategy and do you think it helps people to have ownership? Because I think that the problem with the other way that I even deal with sometimes is about the people feeling ownership of the deal or the company or whatever it looks like. Is this a reason why you went this direction and is there other reasons you might want to share as well?
Dan: I guess the reason I went to direction is I like teaching people although I do not do any coaching. I kind of like teaching people that I am doing business with so that I get to participate in the deals. I get to satisfy that end of it for me. I also felt like early on it was just a fair way to structure things. It took me eight years to come up with a structure like that as I was trying to find a way to continue doing business in Philadelphia when I moved to Chicago. That was why I came up with that piece but more than that, I mean I kind of want to teach the guys the skills like when we start rehabbing properties which we were doing. When we started rehabbing properties, some of the guys have never gone anything like that.
Now, they are managing contractors. I mean before 2006, I kind of grew up on a construction site so I understand construction practices. My dad was a electrician growing up, I would work side jobs with him. I actually rehab houses partially with my own hands back in 2006, 2007, 2008. I like to pass those skills along too. Although they are called acquisition managers, they are also in the process of managing contractors and that is like new skills for some of those people. I try to really develop very high value partnerships there where their skill set is almost irreplaceable and then some of that also will transfer back to when they are initially negotiating an offer with the seller, with a real estate agent, because now they are talking about doing a flip and they are actually doing a flip.
They are not just wholesaling property and trying to make five or ten grand and keep moving. But these guys are now becoming knowledgeable in construction practices and can talk about things like the sewer line that may back up after settlement which is a risk for us. They can talk about changing out new cabinets and the fact that the properties’ roof is ten, twelve, fifteen years old. They are not talking about these things because somebody else told them on a podcast to talk about these things.
They are talking about these things because cutting checks for these items that we are finding on renovations that we are doing real time as we speak, sometimes in the same neighborhood where we are trying to negotiate deals. The combination of all those skill sets building up in everybody who is on the team, it helps us to do higher quality deals, higher volume of deals, and really translates into a better bottom line in the end.
Brett: Awesome. That sounds great. Just a couple of notes that we have been talking about with Dan Breslin present here for those of you who are listening, he mentioned a book Thou Shall Prosper. Who is the author that again?
Dan: It is Daniel Lapin. I may be butchering the last name, I might even have that wrong, but if you Thou Shall Prosper. It is also on Audible. It is a really long book and it is a great Audible listen. If you want to go that route, that I would recommend personally.
Brett: Definitely. You can find that in our show notes at simplewholesaling.com/episode113. Thanks for sharing that, Dan. It sounds like you do a lot of wholesaling, you also do a lot of flipping. I know there is a lot of different strategies that you can do in real estate investing, which one do you prefer? Wholesaling or flipping or do you have a formula that you look at versus whether you should wholesale it or flip it? What do you kind of look at and all that with your exit strategies?
Dan: For me it is all about the velocity of money, the return on investment, that is calculated not in dollars only but in consideration of time for my team. Most of my value add is trying to find ways to save time or maximize our time investment. Like the only thing that all of us have here on Earth that is limited is time. Most of us who have gotten started with no money will waste our time and not realize how valuable that was. It is my job to really make sure we are allocating our time in the most effective as possible. If I can buy a property or sell a property with a minimal amount of work, minimal amount maybe is a paint and carpets because maybe the kitchen was done or whatever the case is. I kind of look for rehabs that are not going to be extensive. Like we are not hiring architects.
I do not care if I can make $200000 on the deal. We are not going to hire architects and go through a nine month or a yearlong or a year and a half $200000 or $300000 rehabs which there are a lot of those type of deals floating around here in the Chicago markets. The high priced down town area and you can get into $200000 or $300000 renovation. There is quite a few of them floating around. We will avoid that even if that meant assigning that deal and taking $10000 or $20000 instead of the $200000.
We are going to take that one because it is not going to be effective four times as we have to spend a year, give or take, with managing that process. But if we have general contractors, there is going to be too many phone calls, too much on a huge job. If we can make a nice chunk of money upfront on an assignment, obviously that is like preferable because we are not going to have to own the property or take any kind of risk at all but we will close out and re-sell deals. We are trying to make the most money in the shortest amount of time possible even if that means we are going to spend a month or two putting a new kitchen into a place and doing like cosmetic rehab.
Those are the kind of rehabs that we would like to get into but this is the type of market now. I do not know about the Ohio area or the Indiana area but I know where we are located in Chicago, Atlanta. Both my Florida markets and Philadelphia where the livable house that is kind of grandma’s house with the wallpaper and everything, we can buy a lot of those and do like a minimal clean out, maybe a paint carpet job on those and people are buying those to live in at a premium than what we could get from cash investors if we were to just wholesale something like that out.
That opportunity exists right now only because the market is hot and the inventory is so low. Like when 2009, 2010, 2011 rolled around the market slowdown, that house would have sat on the market. Nobody at all would have bought it, no one cared if it was a good deal for the person who was going to use a mortgage and buy it. The people who could get mortgages in that arrow, were buying renovated inventory only. I think that like we are taking advantage of some of those type deals to knowing that this is the hardest season that we are in.
Brett: Yes. I do not think you are the only one taking advantage of the markets. I think that that is just where we are at. I think that that is really important is that you need to know your market. I think that if you are in any metropolitan city area that your market is good right now. I think yes, you should take advantage of that. Right now, flips, it is hard. I am actually looking for a house in just south of Fort Wayne and it is difficult and I am like why are these prices so high? It is just because that is where the markets is at. That is a great job.
Brian: I want to wrap up this section before we jump into the next section here. Just real quick. You have been doing this business for roughly around 12 years now. Do you have any like some big like tips or maybe what is like maybe the one or two top lessons that you learned and maybe hey do not do this if you are getting started or you should definitely be doing this as you are getting started?
Dan: Well, I think that my highest impact skill especially early on in 2006 when I did not even know the deals I was bringing to the table. I was trying to understand them but looking back I had no idea what I was working with. Like I said, they felt like miracles. But like if there is one thing you got to focus on, like a lot of people will get distracted and go off in different directions thinking that I have to go get pre-approved for our money. I have to go ask my Aunt Matilda if I can borrow a $100000, I have to find the money before I can go out into the real estate.
But you will become a magnet for things like private money investors, for things like hard money lenders, for things like even bankers who start to see your balances increase over time will sit you down and offer lines of credit and you can go get all those things once you have done this one thing first and that one thing is become the source of deals. Once you learn how to generate real profitable deals that people can make money on in the market today, not buy it, hold it five years and sell it later, not if the rents increase by XYZ the pro-forma. But today’s market, if you can buy the deal and then turn around and re-sell that deal to profit or not even close on the deal but wholesale a deal or profit it. If you will learn to do that consistently, the door to your real estate career for the rest of your life is going to be wide open.
Brett: Yes, I love that. That is what I teach in all the meet ups and if you can be the resource for great deals, then yes, just like Dan said, you will be a magnets. When I started providing deals, I would just sit up in my meet up and I would say hey I am also looking for some lenders and people would come up and they will realize that we just did a hundred deals last year or something and they would just offer right away. Great advice there. I think it is time.
Brian: Let us do it.
Brett: This is the section of the show that we like to call Going Deep.
Brian: Going Deep.
Brett: In this section, Dan, we want to ask you basically some questions we heard a little bit about your past and everything that you had gone through and your lifestyle and some of the choices that you had made. Since then, going through all of that, what have you learned a little bit? What are some of the habits that you have changed in your life here recently going through the experience of going to prison and that journey?
Dan: Back in 2010 and 2012, I would have an occasional drink of alcohol. It was not like the fallen down drunk that I remember when I was growing up where I blackout stuff. I thought I kind of had like my stuff put together. At that time I was like okay I am showing up for work, I am kind of showing up for like I am not losing jobs, I am not eating out, spending then everything I am on party and stuff like that. But after I turned my life back to God, it was kind of like came on my heart that this like half-hearted commitment to that really was not acceptable. The biggest change that impact, I used to smoke cigarettes right around that time too, the biggest change was on January 21st 2012. I decided that I was done with like all of that.
No more trying drinking, no more partying and whatsoever. Like a 100% removal of those distractions from my life and that really was what opened up the space for learning to build my real estate business, becoming a master of marketing. I guess I am not really master but becoming much better at marketing. One of the things I also did right around that time was join the gym and started working out. I have since added professional trainer two to three days week. It did not make sense to me when I was like standing outside of the gym.
After that first or second week, I was like smoking cigarette, this is not conducive. This is like in-congruent here so I quickly quit the cigarettes. That was ten minutes a day, pack a day, twenty cigarettes. Almost three hours, I think three or three and a half hours of the day standing outside smoking cigarettes. Like what could you do with three and a half hours a day if you had that habit and then you release that habit. Really, cleaning out the distractions and cleaning up my life and obviously I walked away from people who are this distractions back and then and it made a point of going to the meet ups and introduce myself uncomfortably at the time to people who are now business partners of mine, to people who are associates, people who lent me money or over time, you name it. I got rid of the that and made room and then actually welcomed in the good life building habits with my life.
Brian: That is awesome man. Congratulations on being able to do that. That is great and you can see the fruit from it so I mean that is fantastic. We have one more question for you here. I know you mentioned that you love educating people, you love working on the education piece and you have your meet up and you have your own pockets and stuff. Can you talk a little bit about just what that means to you to be able to educate those people around you?
Dan: Yes. I mean the biggest thing for me, I do not have time to do a lot of one on one lunches and phone calls with a lot of people. I am not really available so much like that like I was years ago because I have to keep myself cleared and up on the phone with any one of my 15th or 20th or so partners in each of these markets in the midst of real time for a deal. What I do now is I put the podcast together that I host, the REI Diamond Show and I make a point of just like you guys are doing, trying to extract valuable nuggets wisdom, real estate investment jewels of wisdom that I can share with, number one, it is like my own personal mentor program. Then number two, it is recorded and shared with the audience.
It is not a direct step by step by step but it is an interesting way for me to share a variety of topics from land development, wholesaling, high volume landlords to financing and the list goes on. I do the podcast as a way to help educate the people in my network and then also people who listen to the podcast, I make it known they can contact me through the podcast and I have had the opportunity of a few of my business partners actually coming from the audience who never did a real estate before, coming through the podcast audience, and are now members of the team.
It has been really good to be able to do that. Of course, anytime I am invited to a show like your guys’ show today or just speak at the meet ups, I am always doing my best to accommodate that in my schedule and it really is fulfilling to kind of help leave a path, a trail of bread crumbs if you will, for the next guy or gal coming down the pike who is getting ready to change their life through real estate.
Brett: Awesome. Well, hey, thanks for opening up and sharing. I just want to kind of mention when you talk about your habits, it is not only about creating good habits in your life as there are so many good habits that reading the Bible, getting up early, eating healthy, working out, things like that. But sometimes you have to stop doing certain things like you did, Dan, like when you talk about smoking cigarettes you wasted two three hours a day. If you are listening out there right now and you are saying I cannot create anything more in my life because I am too busy, think about what are the things that you are doing that is wasting time that you can create and get rid of those things so you can start doing the good things like Dan talked about.
Touch of Randomness
It is time for a Touch of Randomness.
Brett: We are going to ask you three questions, Dan. Just kind of name the first thing that comes to your mind. Are you ready?
Dan: Let us do it.
Brett: Alright. Number one, who was your childhood role model?
Dan: I would have to say my dad and his business partner. They brought me out to a house they were flipping at the time. They ended up going broke together and losing the four or five rentals they put together but when I did the math on their rental, compared to the math on my newspaper delivery route, they were killing it and they had to do less work. I knew I would do real estate someday.
Brian: That is nice. Question number two, what is the dish that you are best at cooking?
Dan: I love my grass fed rib eye steaks.
Brett: Alright, last question. If you could wrestle anyone in the world, who would that be?
Dan: John Cena.
Brett: Nice. Sounds good. Well, hey, thank you so much for joining us on the show today, Dan. Such great information and I know you have a couple of things for our audience that they might want to read or listen to. Name those couple of things and also what is your contact information and the best place for someone to learn more about you and what you do.
Dan: Cool. The best place is reiDamonds.com. That is also my podcast and if you go check out that site, I have a download request for the book I wrote on wholesaling which is pretty much business planning that I put together in 2012 – 2013 as I was trying to leave that path for my own partners to figure out the business. The book is 164 pages. That is a step by step on wholesaling and it is called Become A Wholesale Real Estate Master. If you go to reidiamonds.com, put your e-mail address in the form right at the center of the page. You will have to confirm your e-mail but the download link will come to your e-mail.
Brett: Awesome. We will go there right now. If you are listening, you are going to want to download that book and listen to Dan’s podcast on his website. You are going to find all of those links on our website at simplewholesaling.dot/episode113. We thank you so much, Dan, for being on the show. I know you are a busy guy with all your markets and your 83 deals cooking right now but we appreciate you so much for taking the time and visiting us today.
Dan: Absolutely. Brett and Brian, it has been my pleasure and of course thanks to the audience for listening in.
Brian: Alright. Thanks a lot.
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