How Jarrod Closed His First Wholesale Real Estate Deal
In this post, we'll be sharing how Jarrod Frankum went from having $0 to making $9550 on his first wholesale real estate deal. As someone who was completely new to real estate investing and wholesaling, this was a major milestone that gave Jarrod the proof of concept that this business could work.
We'll walk through how he found the off-market distressed property, negotiated with the sellers, found a cash buyer, and ultimately profited on his first deal. This post is for anyone who feels intimidated about getting started in real estate and wants to see that with persistence and hustle, you can make it happen.
Jarrod's Real Estate Investing Origin Story
It all started when Jarrod was finishing up his mechanical engineering degree. During his last semester, he stumbled upon the audiobook for Rich Dad Poor Dad and it completely changed his perspective. He knew he had to get into real estate investing in some capacity.
He started consuming as many books, podcasts, and materials as he could get his hands on. However, it still seemed so intimidating - like it was only for "other" people.
Long story short, after finishing school Jarrod ended up moving to Brazil to do some ministry work. But he knew when he came back to the U.S., he wanted to finally take action on real estate investing.
When Jarrod moved back, he was dead broke. Jarrod literally spent his last dollars on the plane ticket home. But he was determined to figure this business out.
Finding His First Real Estate Deal
Jarrod started by simply driving around neighborhoods and writing down addresses of any houses that looked distressed - broken windows, high grass, vacancy signs, etc.
This was his CRM before he had any fancy software. Jarrod just used a notebook and pen to log each lead.
He was pinpointing only the worst of the worst houses. Why? Because Jarrod figured they would be more motivated to sell at a discount. And he had $0 for repairs or renovations.
For about 3 hours a day, he would catalog addresses and then type them up when he got home. Jarrod then started sending handwritten letters to each homeowner introducing himself and his interest in buying their house.
This was around 300-500 letters per month, all handwritten and mailed. It took him nearly 3 months before he got his first phone call from a seller he had mailed.
Negotiating the Deal
The seller had a triplex that was in bad shape. He wasn't able to get the rent prices he wanted and was overwhelmed with managing it along with his restaurant.
He wanted to walk away and made Jarrod an offer of around $100k. However, after inspecting it Jarrod knew his buyer needed it closer to $30k in order to make a profit.
He showed his buyer the inspection report highlighting issues like the car jacks propping up the foundation. The seller agreed it was worse than expected and agreed to his lower price of $30k.
Jarrod didn't use any special formulas here. He just knew his buyer's threshold and negotiated the price down so he could make his minimum $10k assignment fee.
The seller accepted and they had a deal!
Finding a Buyer
This was before Jarrod even knew about real estate wholesaling. He had planned to buy and hold the property himself.
But through going to local real estate meetups, he had met a few investors in his area. When he put this deal under contract, Jarrod reached out asking what to do next.
One of them ended up being his buyer. He not only bought this first deal from Jarrod but became his top buyer for future deals as well.
Key Takeaways
- It took Jarrod 3 months of consistent daily action to get his first deal
- He made $9550 on his first assignment fee
- Having a buyer lined up is critical before putting a property under contract
- Real estate networking and relationships are hugely valuable
We hope this post demonstrated that with hustle and persistence, you can get your first deal done. It starts with simple actions like driving for dollars and networking with others.
