The possibilities in real estate are truly endless when armed with the right tools and insights.
In this week’s episode of the Raising Private Money podcast, Jay Conner delves into the world of real estate with the remarkable Lauren Hardy.
Lauren shares her journey from a local house flipper to a successful virtual wholesaler, offering invaluable insights into her strategies and experiences.
Here are the key takeaways from the episode:
- Lauren’s decision to pivot to virtual wholesaling due to dried-up inventory in her market territory post-recession.
- Insights into choosing the right market for virtual wholesaling and understanding market dynamics.
- An in-depth explanation of wholesale marketing and the process of wholesaling a property.
- Strategies for direct-to-seller outreach, utilizing TV ads, and digital marketing to generate leads.
- The importance of collaboration, flexibility, and adapting to market changes in real estate investing.
You’ll also find out about Jay Conner’s free book, “Where to Get the Money Now,” and Lauren’s alternative approach to offer pricing in real estate investing.
Get ready for an episode packed with practical tips and expert advice on virtual wholesaling and real estate investing!
Timestamps:
0:01 – Get Ready To Be Plugged Into The Money
1:25 – Jay’s New Book: “Where To Get The Money Now”- https://www.JayConner.com/Book
2:24 – Today’s guest: Lauren Hardy
4:27 – How Lauren Hardy started in the real estate business.
5:50 – Lauren Hardy’s early struggles and how she overcame them.
8:12 – What does your real estate business look like today?
14:36 – Get Lauren Hardy’s free wholesaling course – https://www.LaurenHardyCo.com
15:14 – How do you choose the market you are going to invest in?
16:52 – What is a wholesale deal?
24:34 – Know the average purchase price in a certain market.
28:47 – Best ways to locate real estate deals.
30:35 – What kind of team do you need to make your virtual wholesaling business work?
33:14 – What is your formula for deciding the most amount you can offer for a property?
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Jay Conner is a proven real estate investment leader. Without using his own money or credit, Jay maximizes creative methods to buy and sell properties with profits averaging $67,000 per deal.
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Transform Your Real Estate Business: Virtual Wholesaling Essentials with Lauren Hardy & Jay Conner
Jay Conner (00:01):
Are you a brand new real estate investor, and you’re still struggling to get your very first deal done because you don’t have the funding and the money to do it? Or are you a wholesaler and you’ve wholesaled some deals, you got some assignment fees, but there are some deals that you want to stay in, but you can’t stay in the deals because you don’t have the money to fund the deal? Or are you a seasoned real estate investor, and you just want more funding so you can do more deals at really super cheap interest rates? Well, if you answered yes to any of those questions, don’t go anywhere because I’m getting ready to plug you into the money.
Jay Conner (00:46):
Well, welcome to another episode of the Private Money Academy podcast. I’m Jay Conner, your host also known as The Private Money Authority. And if you’ve been tuning into the show, you know, I always have such amazing guests and experts come here on the show. Today is no exception. My guest is known as the epitome of being a virtual investor. Investing in properties all across the nation in markets that she does has never even been in herself in person. But before I bring my guest on to talk about virtual wholesaling and being a virtual investor, I’ve got a gift for you just for showing up here on the show. That is, I wanna send you a free copy of my new book, which is titled “Where To Get The Money Now, How and Where To Get Money for Your Real Estate Deals Without Relying On Traditional or Hard Money Lenders”.
Jay Conner (01:39):
So this book will plug you step by step, how to quickly get Private Money for all of your real estate deals and have extra money sitting on the shelf. You’re gonna have a good problem. You’re not gonna be able to put all the money to work. This will show you step by step how I went from having no Private Money to over $2 million in Private Money for my deals in less than 90 days. I love to autograph a copy for you. Ship it out to you. The book is free and covers shipping and handling. You can get it at www.JayConner.com/Book. That’s, www.JayConner.com/Book. Well, my good friend today is a real estate investor and she’s got what we call a servant’s heart.
Jay Conner (02:31):
She has got a put “People’s First” approach to business. Now she has invested in hundreds and hundreds of properties in her career. And when you hear how young she is, it doesn’t even sound fair, but anyway, she’s invested in all these properties of her career and she’s got a very, very special and unique reputation of being called a successful virtual investor. She has not lived in many of the states where she has invested in properties. So in addition to that, she’s been able to preserve in extremely competitive markets by constantly following the markets. So she perseveres, she competes no matter how competitive the market is, and she’s flexible. And since she’s virtual, she can move from this area to that territory, to other markets, depending on where the hottest markets are. Now, she currently lives in Southern California with her two daughters and she invests in properties all over the country. And with that, I’m so excited to have as my guest here on the show, my dear friend, Ms. Lauren Hardy. Lauren, welcome to the show.
Lauren Hardy (03:42):
Hello! Thanks for having me.
Jay Conner (03:45):
You’re welcome. How is it out in California today?
Lauren Hardy (03:49):
It is nice. You know, it’s sunny, but the weather’s a little crisp and cool. It’s nice for almost December.
Jay Conner (03:57):
That’s awesome. That’s awesome. Well, Lauren, I know that all of our listeners want to hear the nuts and bolts about how you’re able to virtually invest in properties. I mean, how do you find them in other markets? I mean, what kind of team do you have to have in place and all that kind of stuff? And I want all of our listeners to also know that you’re gonna be giving away here on the show, a free course on wholesaling, but we’ll give that out a little bit later. So before we jump into all of that, I’d love to start with Lauren. How did you get started in real estate?
Lauren Hardy (04:32):
Well, I got started in real estate almost 10 years ago, nine years to be exact. I got started mainly because I just didn’t wanna have a corporate job anymore. I didn’t want to, you know, check in to my eight to five. I just had my first child Reese at the time, and I learned very quickly, you know, that being a mom and having a full-time corporate job with an hour commute is very, very difficult. And as soon as I became a mom, I said, this is not for me, I got to find a way to get out of this, you know, grind. So I was fortunate that my brother had started flipping houses in the local market, in Orange County at the time. And he just made the suggestion. Why don’t you try flipping houses? Like I do. I had no interest in real estate investing per se or house flipping at the time. I didn’t even really know what my brother did. I never really paid attention. But I said, wait, I don’t have to have a full-time job. Like I can stay home and probably do this while working from home or with my kids, sign me up, whatever it was. So that was the beginning of a very, very long journey, which I’m sure we’re gonna get into today.
Jay Conner (05:49):
Well, that’s fantastic Lauren. So when you started you know, what were some of your struggles and challenges and difficulties that you were faced with and how did you work through them?
Lauren Hardy (06:01):
Well, when I first got started, I had to still work my full-time corporate job because my husband and I are now divorced. To give you some context. I was married then and between, you know, my husband and I, we weren’t making a ton of money. We were dual-income and we both needed those incomes. So I could not just go quit and, and start this new venture. I had to work a corporate job. The hours were eight o’clock in the morning, and five o’clock at night, and it was an hour’s commute there and back. So I had to stick with that and, you know, figure out how to start this house-flipping business on the side. So time management was a big struggle. I pretty much for a year had to give up any type of social life and watch TV.
Lauren Hardy (06:48):
There was no time for that. So I really, you know, but I was focused. I just kept dreaming of, you know, quitting that full-time job and I kept that vision centered, you know, in my brain every day that, you know, I’m only gonna have to do this for maybe a year because I’m gonna hit that goal. And my goal was I wanted to have a full-year salary saved up before I quit my full-time job. So it did take me a year to do this. Now. One fun fact is that I also was pregnant. So I found out I was pregnant with my second child, right? As I was starting this business. And that was part of the motivation I don’t wanna have two kids now in daycare every day. So I was pregnant.
Lauren Hardy (07:32):
I was tired. I had a full-time job, but I said, you know what? None of this matters because I need to be able to quit this full-time job. I do not wanna go back to it after maternity leave. So it took me a full year. I flipped two houses in that first year. And within that, I did them with my brother. So I split the net profit on both, but with those proceeds, I was able to save up a full year’s salary. And I was able to, you know, quit my full-time job right before I had to go back from my maternity leave. So it worked out. But it was very challenging.
Jay Conner (08:10):
So you started 10 years ago. What does your business look like today?
Lauren Hardy (08:15):
You know, the thing about real estate investing is I think, you know, need to be flexible with what you do otherwise you’re probably not gonna be very well suited for this business. I have had to be very flexible and pivot and my business has changed so much. What I did in 2000, you know, ’13 is not what I did in 2016 is not what I’m doing now. As markets change as the real estate market changes, you know, you change your exit strategies, you know, you change, you know, your markets. For me, I’ve changed my markets. So back then when I first got started, I started as a house flipper in my local market and some of the surrounding counties. So that’s Orange County, LA County, Riverside County. That was my market territory as the real estate market started picking up because when I got started, this was like post-recession.
Lauren Hardy (09:11):
So there was a lot of inventory. It was very easy to flip a house. Anybody who wanted to flip a house could be a house flipper. But not very many people wanted to, cause of, you know, the recession that we just went through. So in about 2015, I noticed that inventory was drying up in my market territory. And it was getting very hard to find a deal that penciled and made sense, you know, by the time I flipped it and put all the costs involved, you know, I was maybe making a 5% cash on cash return and you’re going, you know, this is risky now because this could get eaten up by a construction cost. And what’s crazy is, you know, people were still paying. I mean, I was competing with other investors offering these insanely competitive offers to sellers.
Lauren Hardy (10:03):
And I, I just go, gosh, like I don’t feel comfortable paying these prices anymore because I’m using Private Money lenders to fund these flips. If I lose their money. I mean, I’m not losing their money over my dead body. Right. So, you know, lucky for me, I’m pretty well networked. I had a lot of friends all over the country and I’m hearing, you know, what my other fellow flipper friends are paying on homes and their returns and their returns are still in the healthy, like 10 to 15% cash on cash, you know, level. They’re not having to spend so much in direct-to-seller marketing to get that one deal I was getting where we were spending $10,000 to get one deal. So it was getting crazy. It was getting crazy, you know, you’re going, oh my gosh, after we’re spending all this money, like, do I even end up making money?
Lauren Hardy (10:54):
You know, at the end of it, it was crazy. Right? So in 2015, I started talking to other people that were in other states and putting things together, you know, and going, wait, it’s just my market. Like there’s still other areas in the country where we could still real estate, you know, invest in real estate, make the returns we wanna make, and do the volume I wanna do. I just need to learn how to do this in another state. So in 2016, I picked up my first virtual project, which happened to be a new build. So in 2016, I started building houses in Nashville. And so that was weird, you know, that was just, I kind of went with it and it was an amazing time. I made great money on those things. And it got me to, that was my first virtual experience was, you know, new builds when I was in Nashville though, I noticed there was so much demand for these lots, for new builds.
Lauren Hardy (11:53):
So I started marketing, you know, with the idea that I would wholesale, you know, what I didn’t want. So we started marketing and first it was like the idea of marketing to, you know, for potential development projects to then sell to other developers. Then it turned into, you know, just marketing to any other seller, you know, and absentee owners and just see what I can pick up, cuz there were hedge funds that were buying there and there’s, I mean, tons of people were interested in buying Nashville real estate. So that’s when I got more into the volume wholesale model and I started wholesaling houses and flipping and developing less because it is very difficult, you know, to flip from a distance, I will say that’s a pretty hard thing to pull off. Developing is a little easier for different reasons. But that’s when it turned into more of a wholesale model from there, I went, and I pivoted to a different market.
Lauren Hardy (12:56):
Nashville started getting very competitive, Nashville returns started shrinking and you know, I realized I needed to pick an area. That’s not like California, not like Nashville, cuz they’re kind of similar in their extremely, just hot, like, you know, on the map for very desirable areas to live right now let’s pick like your more bread and butter, middle America area. That’s like, you know, just not in the news for anything. So I picked Oklahoma City. It’s a good landlord and rental market. Prices have been relatively stable in that market. So I picked Oklahoma City and actually, I’ve been in Oklahoma City ever since. I’m now in like three other markets, but Oklahoma City is one of my main ones. So now my business let’s fast forward nine years later, I am focused on wholesaling right now. And I do have the goal of 2022 to start getting a syndicated multi-multifamily deal.
Lauren Hardy (13:58):
But right now it’s strictly virtual wholesaling. And the reason I’m just virtual whole wholesaling right now. I’m not getting in any flip projects I coach wholesaling. Now I coach virtual wholesaling. I have a course. So I use my virtual wholesaling business as a test kitchen for my coaching program. So I’m very, very just niche-focused on virtual wholesaling and for markets that are kind of different from each other. So I’ve got a lot of variety. I got a lot of real hands-on experience and then I’m able to better serve my students and my coaching program on how to virtual wholesale. So that’s what I do now.
Jay Conner (14:35):
That’s awesome, Lauren. Just in case we’ve got some listeners that have to jump off early. I want everybody to go ahead and get the website where they can get the free wholesaling course that you’re giving away. And that’s at wwwLaurenHardyCo.com
That’s wwwLaurenHardyCo.com And you even got a flip calculator and you’ve got a seller script there as well. Don’t you?
Lauren Hardy (15:06):
We got lots of freebies in there. Yep.
Jay Conner (15:09):
That’s awesome. Thank you for offering that to our listeners. Now this virtual wholesaling thing is very, very intriguing. First of all, how do you choose? I mean, it’s easy to choose a market. You need to leave if you’re not making money, but how do you choose a market and research it to where it’s a market that you want to go? Where do you find the information the facts and the statistics and what are your criteria?
Lauren Hardy (15:37):
Right, so it depends on your objective. You know, are you, what is your long-term goal? So my, I’m gonna stick with more of my student base. So primarily the students that come to me want a wholesale. They want a wholesale volume. You know, they wanna quit their full-time job and, and they want, you know, to replace it with, you know, steady income of doing wholesale deals. So if wholesaling is, you know, your end goal, you need to pick a market that’s conducive to wholesaling. If you are like wanting to develop houses one day and build houses one day, well you need to pick a market that is conducive to development, where you see that there, you know, is a demand for home, you know, for houses and you know, development is the thing I call a developers-market like development is the thing there to do. So if we can, let’s pick one, you know, for the sake of this show, pick one exit strategy and I’m gonna choose wholesaling, assuming that that’s you know, what you might look to do and you’re looking for a market to wholesale in
Jay Conner (16:46):
That sounds good. Lauren. Now, before you go forward, let’s make sure everybody’s on the same page. Give everybody your definition of what a wholesale deal is and what makes it a wholesale deal.
Lauren Hardy (16:59):
Perfect. So wholesaling is when you get a wholesaling, a house let’s say wholesaling, a single-family residence is when you get a property at a discount and then you around and you sell your contract to that property to an end buyer. So you’re not traditionally, you are not closing on the house with your own money. You are selling that contract before you even have to. So we will get a purchase contract on a property. And what I’m doing is I’m turning around and I’m gonna market my equitable interest. So what that’s called is equitable interest and I’m gonna sell my equitable interest for a fee. We call that a wholesale fee. So wholesaling is just a jargon term. If you talk to an attorney who’s not specialized in our business, they’re gonna look at you with a blank stare and not know what you’re talking about, what you wanna call it is contract assignments. Then an attorney is going to perk up a little bit and know what you’re talking about. So I’m assigning my contracts for a fee.
Jay Conner (18:09):
Excellent. All right. I interrupted you, but I wanted to make sure we’re all on the same page. So go ahead.
Lauren Hardy (18:14):
Oh, perfect. I’m glad you did. So assuming that is the exit strategy that you wanna do when you’re picking a market, you’re gonna look at two things. Okay, there, it’s gonna be data in two categories. There are statistical data, which is actual data. You can pull in its numbers. Right. But then there are also gut feelings. I think I like to put some weight on gut feelings. I just think that’s a good term for it. Right? So the first thing when you’re picking a market and it sounds kind of crazy, but it’s so simple and it’s in the gut feeling category is I wanna find the proof of concept. What I mean by that is, are there other people in this market doing what you’re trying to do, that it’s as simple as that, can you go and easily find five people that are wholesaling five houses a month, relatively easy?
Jay Conner (19:16):
Now how do you find them?
Lauren Hardy (19:18):
You can go on Facebook and type in the market you might be interested in. So let’s assume you have five markets that you might be interested in. And the reason you’re interested in these five markets is that you want to college to want at one, you live in one I don’t know, your friend moved to one, you know like you have some ideas of markets. You heard one is doing well right now. You know, these are all the reasons people come to me with different market ideas, start with that. And in those markets, you know, you can, you can go to Facebook and look up and see if those markets have a real estate investment association, Facebook page, usually, all of them do most major metros do even the smaller metros do. So start there and look to see who, if people are posting deals, you’ll know the wholesalers that are posting deals, they’ll say I’ve got a contract on a house and they usually post a picture and they write, you know, some of the deal, statistics and facts and what they’re asking for.
Lauren Hardy (20:16):
So if you can, with relative ease, you know, find the proof of concept. That’s your first step. If you’re having a hard time in that area, finding the proof of concept, it’s gonna be a harder area to wholesale houses in. That’s just a fact. And that’s just outta like 350 students I’ve had, like, I just noticed that it’s this weird gut feeling thing, but it’s necessary. From there, let’s go to statistical data. So I like to put a lot of weight on the population. I don’t wanna go anywhere. That’s too rural. So I wanna stay, you know, at least 150,000 population within the county at minimum, you know, anything smaller, you’re gonna run out of people that are probably buying there and you’re gonna run outta sellers to market to, so I like to stay 150 or more.
Lauren Hardy (21:14):
I also like to look at the average house price. So I don’t want anything too cheap and I don’t want anything too expensive. So this is where it kind of depends on your tolerance. It’s subject to opinion, but I enjoy more of a volume wholesale model, meaning that I’m doing more deals, but in return, I have to give up something. And what I’m giving up is my average deal size. So I prefer to do smaller deals, but more of them than large deals, but they come once every three months or four months. So I like to call it elephant hunting versus squirrel hunting. So squirrel hunting is easier to do. You’re gonna be getting more of the elephants. You’re kind of waiting out for that big elephant to hunt. I have people that, you know, they’re all about elephant hunting. And this is where, when I say this when I go into this spiel publicly, I usually will get a couple of comments.
Lauren Hardy (22:19):
Whatever you wanna do, whatever is good for your psyche, you know, is best for you. But when you’re in a squirrel-hunting mentality, here’s the price range you need to stick with. I like to stick between, I don’t wanna, I like to stay where the average house price in the area in the county is between 130 to 200,000. So that is a perfect squirrel-hunting zone for me. So if that market, you just google average house price, Philadelphia, and you see, you know, it’s 180,000. I’m just guessing. That’s great. You’re in that squirrel-hunting zone. If you choose to be an elephant hunter, which is not my choice, but if you do then yeah, you are gonna be okay with a $300,000 average purchase price. The people that I see who are elephant hunters usually fall into this category, they’re they don’t have a lot of personal obligations, you know?
Lauren Hardy (23:22):
So if they don’t make, you know, money this month, it’s not that big of a deal. They’re usually single. Don’t have kids can kind of, you know, low expenses, low personal expenses. Those are the best elephant hunters and good, like good for you. I had got two kids, I’ve got mouths to feed, so I need to see checks coming in. I just need that me psychologically, not seeing checks coming in, but knowing there’s a $60,000 paycheck in 38 days, all I’m thinking of is if that deal falls apart, I’m not gonna be able to pay my, you know, kids’ expenses. Like that’s all I’m thinking about for 38 days and I’m having a heart attack, you know, I’m not sleeping at night and I don’t want that life. So back to, you know, my point here is you gotta under, you gotta understand your psychology and what, what kind of business do you want here? What do you wanna be in? For me, if you are in the squirrel hunting business, that 130 to a hundred thousand dollar purchase price average is a real sweet spot for that. So hopefully that gives you an idea.
Jay Conner (24:31):
Now Lauren, just to be sure. We understand the hundred and 30,000 of 200,000. Are you talking about the after-repair value of the house or your purchase price?
Lauren Hardy (24:46):
No. What I’m saying is in the territory, ’cause we’re talking about what market, like picking a market. Give me a market name.
Jay Conner (24:57):
Why don’t we say Irving, Texas,
Lauren Hardy (25:01):
Irving, Texas. Perfect. Right. I wanna know that the average house price in Irving, Texas is between 130 and 200,000.
Jay Conner (25:13):
Okay. Define price,
Lauren Hardy (25:16):
The price, the average, literally the average purchase price of a property in Irving, Texas.
Jay Conner (25:21):
That’s what they’re selling, That’s what they’re selling for.
Lauren Hardy (25:23):
On average. Yeah. That’s and that is like on the market, on the market on average.
Jay Conner (25:28):
That’s what I mean by the market price, on the market price in the multiple listing service.
Lauren Hardy (25:35):
Yep. And you can find that, you know Zillow has a great page for this. So if you just Google the average house price, in Irving, Texas, usually Zillow will be the first or second and it’s the Zillow market’s page. And I love that Zillow market page. It, gives you sort of like a, you know, a little summary of Irving, Texas, and it’ll say the average house price is 150,000. So that’s what I’m looking for.
Jay Conner (26:02):
Gotcha. So I just had another question come to my mind that I wanna jot down and make sure that I ask you now what is in that 130,000 to 200,000 average prices what is the average wholesale fee or contract assignment fee that you’re seeing that wholesalers can get? Yeah.
Lauren Hardy (26:26):
An amazing question. So on average, it’s more of a percentage. I’m gonna give you a percentage, cuz you can take that with you wherever you go. What I’ve noticed from high-volume wholesalers that I network with, talk to my students, and myself is on average, wholesale fees tend to be about 10% of the sale price to the end buyer. So not so much, don’t so much have to do with, with the, you know, ARV or anything like that. It’s more of what you sold to the end buyer there, usually around 10%.
Jay Conner (27:04):
So you’re talking about like, if I’m a wholesaler and you are another real estate investor, so wholesalers buyers are other real estate investors. That’s got the cash to take the deal down and close on that contract. Right? So you’re saying the average is 10% of whatever you sell it to the other real estate investor for?
Lauren Hardy (27:28):
Yes. So if you got a property under contract, as the wholesaler for $90,000 and you sold it to an end buyer, I call it end-buyer. You sold it to an end buyer for a hundred thousand. You’d like to expect $10,000 as a wholesale fee. There you go. Now, are you gonna always get it? No, because you might not have negotiated well enough. And you know, the end buyer doesn’t wanna pay what you want them to pay. I mean, some of this is just subject to your negotiation skills or abilities with the seller and buyer demand, but you would love like to see, I like to use 10% as a benchmark because if you see yourself on average, lower than that, two things are happening. You either need to fix your machine. There’s something wrong with you. Or you’re just in a saturated area. You’re in an area where there’s a lot of other wholesalers going after the same houses. And I’m because I’m in four markets. I can say, like we have some areas where, you know, that’s just saturated and sellers have options and they bid up the price. So if you’re better than 10% now, that’s good. You’re probably in an area that’s not very saturated and you’re doing good. You’re doing good. Your machine is not,
Jay Conner (28:47):
You know, Lauren, this side of COVID has presented us with a very, very interesting market. Inventory is still pretty much tight across the nation. And you know, I’ve been in this business full time since 2003, and it’s more of a challenge today, at least in my little teeny, tiny market to find a deal because of inventory, than it was, you know, leading up. So with that in mind, what is your favorite or the best way that you like today to locate sellers? Locating deals?
Lauren Hardy (29:22):
Yeah. I mean, inventory is a problem across the board. But I am still going direct to the seller and we primarily focus on text message blasting and TV ads right now.
Jay Conner (29:38):
Yeah. I’ve got some, you and I have got some fellow friends that have, I mean, I got one friend, you probably know who I’m talking about in the Philadelphia area that is investing $40,000 a month in TV ads.
Lauren Hardy (29:54):
I believe it, that’s crazy. That’s a lot, that’s a heavy, yeah, that’s a heavy budget. I think mine is about 7,000 a territory.
Jay Conner (30:03):
But I want our, I want our listeners to know you don’t need a 40,000, a 20,000, 10,000, or even a $5,000 a month budget you know, to get started if you haven’t. You know, one of the most consistent ways that I’m getting leads here in my small market is Facebook leads and Google leads are the most valuable because those motivated sellers are looking for us. They’re searching, you know, buy my house fast, sell my house fast, and that kind of thing. So what kind of team do you need in place in an outside market to make the virtual wholesaling business work?
Lauren Hardy (30:44):
Yeah, so, you know, you’re gonna start small, you know, you’re not gonna start overnight hiring a bunch of people and being, you know, fully sustainable in your market. You’re gonna have to rely on some partners at first. So I told all my student base at first, you wanna find another whole sailor to work with as a joint venture partner. So I call that your JV partner and that’s your first mission is to find one to three JV partners that you can work with regularly until you get that market figured out. And that’s gonna take five to 10 deals for you. Even us being, you know, I’ve been doing this almost a decade and we still use a JV partner. Every time we go into a new market because every market has nuances that would take you forever to learn on your own, but you work with a JV partner and you’ll figure it out in five deals, and that’s worth it cause time’s money.
Lauren Hardy (31:39):
So my first recommendation, is you want to get a JV partner and that person is gonna help you, you know, go and do the inspection and walk buyers through and, and anything that requires like boots on the ground, right? That is the first person that you need. You know, once you start phasing out where you don’t need a JV partner anymore, maybe you’ve built your own buyer’s list to a point where you can move deals on your own. You can replace those activities that the JV was doing with what I call a runner. So I’m the runner. I made up the term. I don’t even know. Maybe someone else made it up. I, I call like an errand-runner. So I call him a runner and it’s somebody that we find like on Craigslist that we hire on a needed basis to run these types of errands for us.
Lauren Hardy (32:30):
And we train them, you know, we train them how to walk through a property and take the photos and walk buyers through the property and handle buyer walkthroughs. So though we do rely heavily on runners and that’s pretty much it as far as boots on the ground. I mean, everything else, of course, you’re gonna need your local escrow company. That’s, you know, that’s kind of a given, but you need that. Even if you weren’t virtual. But having a local presence, you just need either JV partners or runners to start. We do all of our acquisitions over the phone local to me, cause I wanna be able to manage my team. So we don’t need, you know, a local acquisition person. We do everything over the phone.
Jay Conner (33:13):
That makes sense. So what is your formula for deciding what the most that you can offer for a property?
Lauren Hardy (33:23):
Good, that’s a great question. I don’t use any type of formula, like ARV times 70 minus repair. I am known to publicly say that I hate that rule. I think it’s the worst rule ever. And it’s got people in a lot of trouble. The ARV times 70% minus repair rule does not work in all markets because of the 70%. So like if you were in California, it would be ARV times 95% minus repairs and then you’d maybe have a competitive offer, right? ARV times 70 doesn’t work in Oklahoma City because it’s a landlord market. People aren’t my end buyers and aren’t usually flippers. They’re people that are buying these things for rentals. So what do you do as a wholesaler? Cuz you don’t know who’s gonna end up buying your property. You’ve got this pile and some of them are landlords some of them are flippers and some of them are hedge funds and they have different requirements, you know?
Lauren Hardy (34:29):
So there’s a point where you gotta just look at the value of the real estate and you just look. So what we do is we look and we just look for comps. We, look for what we look for, what are other investors paying in this area for homes? So we will, for every property, just put the address in and we are looking in that immediate area, maybe a half-mile or less. We wanna find the obvious investor purchases, the fixer-upper homes, and the sales that went to the LLCs. We look at that pricing right there and we try to compare our house to those properties, to see where our fairs, where ours, you know, match up. Sometimes this is a super easy process. You find comps that are so just in that obvious range of 75,000 to 85,000, for example, and it’s just so obvious, right?
Lauren Hardy (35:26):
And you just tell the seller, all right, I’ll offer you 75,000 ’cause you’ve got comps to support it. You’ve got addresses to say well, but Mr seller, look, this house sold here on the main street for 75,000 and this one sold for 74, and this right. So we do this so we can support our narrative to the seller as we’re negotiating. When you do this formula, the seller’s not gonna care about your formula. You know, they’re not gonna care about what you want. They just wanna know, you know, that they’re getting paid a fair price. So you have this backup data to say, you know, I’ve got three comps that sold within the price that I’m offering. You, you know, that’s how we come up with the price. And that’s what helps us in our negotiations. One of the things that I see newbies do and we always crush them in our market or my newer students as well, you know, and I crush them and I beat this thought out of them is they use formulas.
Lauren Hardy (36:24):
They use, okay, ARV is this, I’m gonna times it by this. And I’m gonna pull out some number, some random number for repairs that I made up. Usually, it’s always $30,000. And like, that’s my offer. The seller doesn’t care. The seller’s like, what do I care? So I try to reframe, people’s thinking with this with pricing, if you can think of pricing these houses the same way you would price your used 1995 Chevy Tahoe that you’re selling. If you could think of it like that, you’ll, you’ll be much less stressed when you’re coming up with offer pricing.
Jay Conner (37:09):
That’s brilliant, Lauren. Brilliant. The wisest advice I’ve heard on that subject from almost anybody Lauren, one more time. I want people to know how to connect with you, and how to get your wholesaling course. And that’s again at www.LaurenHardyCo.com and parting comments there, Lauren.
Lauren Hardy (37:34):
Well, I just wanna thank you so much, you know, for allowing me to hang out with you today. And I do think, you know, when it comes to the offer pricing thing, that is something that I am very, very passionate about. So if you guys do need any help also know that on YouTube, I’ve got a bunch of videos where I comp outhouses and I come up with offers on homes live on the spot, not planned out. And you’ll see my thinking process and I talk out loud. So if you go on YouTube and you just search Lauren Hardy, you’ll find my YouTube channel there. There are a bunch of virtual wholesaling videos there.
Jay Conner (38:09):
That’s great, Lauren, thank you so much for taking the time to share your experience and your expertise with me and the listeners.
Lauren Hardy (38:16):
Thanks for having me.
Jay Conner (38:18):
All right. There you have it, folks. Another episode of the real estate podcast academy, and we always appreciate you subscribing, rating, and reviewing if you’re watching this on YouTube, be sure to subscribe and ring that bell. So you get notified every time that we go live with a new episode. So wish you all the best looking forward to seeing all of you right back here on the next Private Money Academy podcast.