From $0 to $27,000: Dan's First Real Estate Wholesale Deal
Meet Dan Toback - a living embodiment of determination and success in the realm of real estate! He pulled in a whopping $27,000 from his pioneering wholesale real estate deal, effectively exploding any boundaries he perceived around his financial potential. This triumphant experience was a turning point that completely transformed his life, and he's confident that his story can boost your morale and spur you into action. Now, he eagerly anticipates lighting the path for your own journey into the lucrative real estate industry!
A little background - Dan graduated college with an average GPA and didn't have any special skills on his resume. He got a basic job with a food distribution company in Denver and moved out there after college. He worked that job for a couple of years, but he really didn't enjoy it. The snow was fun but having to deliver bread in trucks during the Colorado winters was not!
Dan knew he wanted to do something different, but he didn't have the courage to take action yet. His brother Tom was just getting his real estate wholesaling business up and running in Florida at the time. One day Tom called Dan up and said "Hey, I know you hate your job. Do you want to move back to Florida and work with me on locking up some wholesale deals?"
Dan was super scared to make the move because it wasn't a stable salaried position - they would basically only make money when they closed deals. If they didn't close any deals, they wouldn't make any money. Dan's first thought was "How will a seller ever agree to sell me their house for 60-70% of market value?" He just couldn't imagine it happening.
But Dan decided to take the leap of faith, move to Florida, and give it a shot. They did a lot of direct mail marketing back then to generate leads. Dan spent many hours cold-calling sellers from their lead lists and getting rejected over and over again. He faced a lot of "Let me think about it" and "Call me back later" responses. There were many times Dan didn't think it would ever happen.
The First Deal
Eventually, they got a call from a gentleman named Stephen. He had a very sad life story - his mom had recently passed away from cancer. Dan went over to Stephen's house for an appointment and his mindset totally shifted. He stopped thinking about just doing a deal, and became focused on how this guy was really struggling after losing his mom.
Stephen had lived in this house with his mom for many years. Now he was stuck here, surrounded by painful memories after she had passed. Dan could relate because he had lost some close family members to cancer too.
That day, Stephen and Dan didn't even talk much about the house deal. They mostly talked about his mom - their relationship, memories together, and how hard it was for him to remain in this house after she was gone.
They ended up doing a deal that same day and got the house under contract. At the time their operation was pretty small, so Dan started calling the buyers in his network to see if anyone could purchase it. One of his good buddies Brian, who is still on his buyer's list to this day, ended up buying the property.
The deal ended up netting their company a $27,000 assignment fee. This was a life-changing amount of money for Dan at the time!
They did run into one obstacle during the process - Stephen's brother had retained a partial interest in the home that they had to clear up. But this experience taught Dan that obstacles will always pop up in this business. If everything went smoothly, sellers could just easily list with a real estate agent. Wholesalers like them are needed to solve tricky property issues.
Dan could not have done this deal without the help of his brother Tom, who provided the contract, attorney connections, buyers list, and overall training to get started.
You Can Do This Too!
Dan shares this story because he wants to prove that anyone can succeed in this business, even without experience. Here are some of the key takeaways:
- You need a strong support team: Surround yourself with others who can help you, even if you don't have a family member in the business. Title companies, real estate attorneys, probate attorneys, buyer's agents, and private lenders are all people you need to know.
- Lead generation is crucial: They used direct mail, but you can also use driving for dollars, bandit signs, social media, and many other strategies to generate motivated seller leads.
- Mindset matters: Dan's mentality shifted from "just getting a deal done" to truly caring about helping Stephen out of a difficult situation. Think about how you can add value.
- Follow a system: Tom already had the wholesale contract, attorney, and buyer connections in place. Look for a proven blueprint to follow.
How to Talk to Motivated Sellers on the Phone
A big key to Dan's success on this first deal was building rapport with the seller Stephen on the phone and at the appointment. Here are some of the techniques he uses on every call with a motivated seller:
- Assume you interrupted them: Say something like "Hey Stephen, this is Dan calling you back about the property on Maple Street. It sounds like I caught you in the middle of something." This empowers them to take control of the conversation.
- Ask questions and listen: "Tell me a little more about the property and what's going on." Get them to open up, don't oversell.
- Show interest: That sounds like an amazing property, why would you consider selling it?" Again let them explain their motivations.
- Build genuine rapport: Share personal stories and connections. Find common ground beyond just doing a deal.
- Set next steps: Based on what you shared, let's touch base again on Tuesday at 2pm after you speak with your attorney." Always schedule the next follow-up contact.
These principles allowed Dan to establish trust and likability with the seller, unlike the aggressive telemarketer stereotype. Rapport leads to deals in this business.
How to Find Buyers for Wholesale Deals
Once Dan had Stephen's property under contract, he had to find a cash buyer who could close on it quickly. Here are some tips on building a solid cash buyers list:
- Start with your inner circle: Leverage your existing network first. Brokers, agents, doctors, business owners etc. may be looking for deals.
- Prioritize relationships: Dan only contacted 5-10 buyers who he had rapport with rather than blasting a contract out to a huge list of unknown buyers. Less risk of issues.
- Provide value: Take buyers out to lunch periodically. Send them deals before posting publicly. Give gifts on birthdays and holidays. Build real friendships.
- Check credentials: Make sure potential buyers have funds available, can close quickly, and have experience purchasing wholesale deals. Avoid tire kickers.
- Communicate: Once you have a property under contract, text or email your top buyers immediately so you can move fast and get the best price.
By building a small group of highly engaged cash buyers that he had personal relationships with, Dan was able to call on them to purchase the deal from Stephen and make his first $27,000 assignment fee.
Dan hopes this deep dive on his very first deal helps motivate you to get out there and make it happen. Wholesaling real estate changed his life and it can change yours too! With the right mindset and systems, anyone can do this business.
If you want to connect or have any questions, please reach out to Dan on Facebook. He's always happy to add new friends and help fellow investors any way he can. Just search "Dan Toback" and send him a message. In the meantime, happy dealfinding!
About Benjy Nichols
Benjy has been a media specialist at DealMachine for the last 2.5 years. He produces, writes, shoots, and edits our media content for our member's DealMachine and Real Estate education.