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SHOW NOTES FOR EPISODE 221: WHOLESALING REAL ESTATE WITH ZERO CASH
Broke and unemployed, Dan Breslin desperately sought out real estate investing as a solution to his dilemma. He took some seminars and read a lot of books but, after 6 months, still he had done nothing. With his last $150, he bought a 7-day classified “We Buy Houses” ad in a local weekly newspaper for $79 and on the sixth day, he received a call from an old woman with a distressed house. That call, turned his world around. In this podcast episode, hear how Dan took this first wholesale deal and leveraged it into a multi-million dollar business enterprise flipping houses in Philadelphia, Chicago, Atlanta, Miami and Tampa.
What You Will Learn
- What it takes to become a wholesale real estate master?
- How to put a piece of marketing material to a profitable deal?
- What are the reasons why people sell their property?
- What is an absentee owner?
- What marketing strategy that will make you to win?
- How to scale your real estate business through marketing?
About Our Guest
Daniel “Dan” Breslin
Daniel Breslin is the Founder and President of Diamond Equity Investment. Diamond Equity Investment is a real estate investment company, flipping properties in Philadelphia, Chicago, Atlanta, Miami and Tampa. Dan has been a full-time real estate investor since 2006 and averages 25 deals per month. Throughout his career, he has been able to do more quality deals by assuming each property he has under contract will be a fix and flip deal. He currently focuses on wholesale deals but he also organizes meet-ups and runs a podcast.
More About Dan
Broke and unemployed, Dan Breslin desperately sought out real estate investing as a solution to his dilemma. He took some seminars and read a lot of books but, after 6 months, still he had done nothing. With his last $150, he bought a 7-day classified “We Buy Houses” ad in a local weekly newspaper for $79 and on the sixth day, he received a call from an old woman with a distressed house. That call, turned his world around. In this podcast episode, hear how Dan took this first wholesale deal and leveraged it into a multi-million dollar business enterprise flipping houses in Philadelphia, Chicago, Atlanta, Miami and Tampa.
How did Dan Got Involved in Real Estate?
- Dan started in real estate with no money.
- In 2004 – 2006, Dan is used to be a car salesman, work with his hands as electrician, carpenters helper, and tons of different jobs.
- It was in 2005 – 2006, Dan found himself broke, pretty much failed and out of life, and every other options that he had on the table.
- His dad took him to a “Get Rich in Real Estate” seminar.
- Used credit card for this higher level seminar on a weekend.
- This seminar paid off and gave Dan a solid foundation and basic knowledge of real estate.
- His dad wasn’t that much interested in real estate, so he sent him off to do on his own.
- It took Dan 6 months to do his first wholesale deal.
- It took several years of trial and error, meeting a lot of other business owners, learning about the business and developing skills – marketing and strategy, negotiations, and a lot of other skills.
- His first deal, he found a property in an area, in Chester, PA, that is very difficult to sell – drug infested neighborhood, lot of crimes.
- His dad drove him to the area, along with his 5-year old daughter, because he has no car at that time.
- He had no idea what to offer and how to pull the comps and figure out what the values were on that neighborhood.
- But his friend, whom he met in a networking event, paid $6,000 on a property nearby, around the corner of that area on Remington Street.
- When he asked his froiend if he would buy his property for $6,000, the friend said, “Heck, I’ll sell you mine for $5,500. The reason they call it Remington street is because those are the types of bullet shells you’ll find all over the street!”
- So, he decided he would find a deal at $5,500, sell it to his friend for $6,000 and make the fastest $500 he ever made in his life.
- His mistake was, instead of doing 2 deals, he missed one deal 2 weeks earlier and found out that somebody else made $11,500 with the same buyer he had for his $6,000 deal. So, bought a property for $5,500 and sold it also for $11,500, making $6,000, instead of $500.
- He did it again, 3-4 times, other deals and from then on, started to earn reputation as a person people can invest with.
How Dan Found His First Deals
- He found his initial seller as a bit of a miracle. He was down with only $100, he placed a $79 classified ad in a local newspaper, which was still effective back then. He was left with just $20+ change to live on.
- On day 6 of the 7 days run of the ad, is when his first leads came in – and he got 4-5 sellers.
- For a long time, he ran his entire business almost from a $250+ local newspaper classified ads running continuously.
- If you are consistent with your ad, overtime, high quality leads will come. But it requires a good timing.
- Later on, he was able to develop a better system using websites, pay-per-click advertising through google, Craigslist, and direct mail, which allows a limitless amount of creativity and a near limitless ability to scale once you start to do more deals and have more money to bank role for advertising.
Targeted Mailings
- He is hoping to find people at the right time who need help with their home.
- There are myriad of reasons and situations why people sell.
- Currently, Dan has an existing 84 deals on the board, spread over 5 cities waiting to settle.
- 50% of these are estate sale, but they didn’t show up through probate. Someone inherited the house. They have been holding on to it because they didn’t know what else to do and now they want to get rid of it.
- He mails to “absentee owner” lists, which means sending mail to owners who live in different addresses than the property address.
- Hoarders – people overwhelmed with the mess who just want to be free of it.
Marketing Strategies
- Dan wants to transform communities.
- Doesn’t believe in Section 8 housing.
- His mission when doing direct mail is to promote home ownership. Put a piece of marketing material in the hand of a seller and negotiate the deal as profitable as possible so that the deal may continue including their investors who buy the property, wholesale it, do the renovations, and turn it around and sell the property for profit ideally to somebody who is going to live at the property.
- His marketing budget ranges from $50,000 to $150,000 per month.
- Buys more generalized lists, instead of specialized lists.
- Prefer a very large list – Inheritance list or probate list (smaller) is available from listsource.com.
- Can pay up to a $1 per lead on a good probate list but it isn’t really cost effective.
- He’ll buy a large absentee owner list as opposed to a small estate sale list.
- If he had limited funds
- Get a hold of a probate list.
- Call the people on the list.
- Would find a partner/mentor, who could provide funding for direct mail in exchange for 50% of the deal.
- But before you can even get lists, you need to know WHERE to get the lists for.
- You need to analyze and understand the market, and understand the pricing of properties before you can talk with sellers.
- You need to understand your markets and move quickly.
- Wholesalers are like day traders.
- You need to understand shifting and changing markets.
- It takes years before you can understand pricing and markets to make profitable deals.
- You have 30 days or less to move a deal – find a buyer, fund the deal, etc.
- To win over other competition, Dan always look for an edge e.g., sometimes, one word makes a difference. For example, his letters said “We buy houses.” He added the word “land” to that statement to read, “We buy houses and land.” They got calls where they made $75-80,000 profit in one deal.
Selecting Markets
- He would not recommend newbies to select 5 different markets
- Dan is currently in 5 different markets – Chicago, Miami, Tampa, Philadelphia and Atlanta.
- Dan is trying to drill deeper in each of these 5 markets and discovering untapped potentials for each market
- He would rather do 20 deals in a market, instead of 80, and make the same money because it is less paperwork and less aggravation
- In 2005-2006, his daughter moved back to Chicago from Philadelphia with his ex-wife. To be near his daughter, he moved to Chicago and opened up Diamond Equity Investment in Chicago and started building his network.
- In 2014, he was able to develop markets from afar.
- The freezing Chicago winters motivated him to get a place in Florida for the winters.
- He got a place in Tampa and opened up that market as his refuge during winter time.
- He added Miami and Atlanta where there are really good people who had read his wholesaling book and who came from his networking group and through his podcast.
- Going to other markets forced him to figure out how to study what makes the markets tick, which did not happened overnight.
- It took him 2 years to find out what are the desirable areas where they are going to set records and get bidding wars.
- You need to understand local construction/rehab costs as well because they vary widely from market to market.
- He does wholesaling, flips and buy and hold, depending on the deal.
- When he buys a property to hold
- He looks at gentrification.
- Identify the area in the city to look for ares that are improving and gentrifying that have the potential to double in value in the next 5 – 7 years.
- In South Philly, he invested and saw 40% increase in value.
- Dan is a proponent of getting the rules of your investment philosophy written down before you buy any rental properties to avoid mistakes.
- You need to articulate the reason why you are buying any particular property.
- He wants to invest in an area that is appreciating, where rents are increasing, where he can sell it and profit later on and where other investors are making large investments in property.
- He looks for areas where major restaurants, stores are coming in, where there is new construction, etc.
- He likes single family homes and small multi-families.
- Dan is focused more on building the business, building a “money machine,” the wholesaling business generates most of the deals.
- The rental properties are seen more as a savings account for the future.
Biggest Mistakes
- In 2007, he separated from his experienced partner and others too early, going solo, with the thought that he didn’t need people. He floundered around and thought he could do it on his own.
- Hit rock bottom.
- He realized, later on, that he needed people with more experience than he had.
- There are people, especially in wholesale, who did all the work, with infinite ability to profit, generated leads, have stronger relationships with the buyer and get them to pay more money, tell you how much to pay, communicate with the seller.
- Negotiate and see nuisances in the deal, community, market.
Biggest Success
- Figuring out the money machine.
- Developing the skill to be able to put his money back into marketing and get a return and have the deals come out.
- It is a little bit of an ever-increasing return, especially with direct mail and to be able to stay in possession of that seller indefinitely.
- Sellers hold on to the letters for a long time.
- Early on, he spent 75% of his profits on marketing. If he made $40,000 on a house, he would spend $30,000 on marketing, immediately afterwards.
- Even today, he will spent 50-70% on marketing to grow more.
- Biggest success is his ability to scale up his business through marketing.
Advice to Old Dawgs Interested in Real Estate Investing
- If you are an entrepreneurial person and if you want to start a business, you can read his book, “Become a Wholesale Real Estate Master.”
- It is a business plan that he wrote in 2013-2014 to give knowledge on basics of wholesaling business.
- Depending on the size of the net stake, find the right person or right place to test the water and get a good passive return, without having to own the property, without going through the closing costs, marketing cost, etc.
- Sometimes being in the passive role is better for people to develop that skill set in their retirement age.
- That way, they don’t have to chase after houses, go into bad neighborhoods, waste lots of time searching for deals.
Where He Sees His Business in the Future
- In the process of opening up “DEI Realty” in Atlanta as a test pilot. Structure is set up – with great network.
- This will cater to properties that are retail ready and which do not fit through the wholesale channel.
- Promote homeownership by being able to serve more of the real estate market that they are currently in.
- Create more opportunities for players on the team to succeed in the markets that they are in as the motivating and driving force and plans for the future.
Rap-It-Up
- Favorite Real Estate book: Rich Dad Poor Dad by Robert Kiyosaki and Never Split the Difference by Chris Voss
- Favorite business book: The 4-Hour Workweek by Tim Ferris
- Most valuable web site for success (other than your own): podio.com
- Favorite app: podio
- If you had to start all over, knowing what you know, and you only had $1,000 cash, what would you do to launch your real estate investing business? He went broke in 2010, had to start over, live with family again. In 2011, got a part-time job – being a handy man for another real estate investor. He latched on to those guys who were well-funded and find work to get started with someone aligned to what you want to be doing. Place pay-per-click ads, direct mail, etc. Go out and find deals.
How to Get Dan’s Free Book “Become a Wholesale Real Estate Master”
- To get a FREE PDF copy of his book (need to input your email address) click here.
- To order a kindle version for $19.99, click here.
How to Reach Dan
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