Can we talk for a second?

I’d like to share something with you that I don’t think anyone else has – at least not as far as I can tell. Let me be completely transparent with you…

About the “REI Wired” Buzz…

If you’re on any of the real estate investing email lists (most of us probably are) you’ve no doubt noticed more than a few emails flying around lately about the Mike Collins’ latest “REI Wired” videos.

As of the time I’m writing this, he’s released 3 of them – the first a tongue-in-cheek introduction, followed by two content videos, one of which we’ll call “Dapper Dan Does Whole-saling” and the other, a live segment clipped from his last “No Pitch” REI event in Tampa (which I actually attended).

(Update: Doors are now closed to new charter members, but should re-open at some point.)

Now I’ve known Mike for about the last 3-ish years or so, so hearing these videos were forthcoming I’ve been admittedly interested in seeing what he’s got cooking.

Sadly however, last week included the untimely death of my trusty 2005 laptop due to sudden “Imminent Hard Drive Failure” (another story for another time).

Suffice it to say I’ve been pretty out-of-pocket and unable to catch either of the last two until just now.  I actually just finished up both of them.  So right now, while it’s still fresh, I’d like to offer you…

My Frank and Honest Assessment…

First off, I should say “thank you” to Mike for putting these out – I think they’re good content, worth watching if you want to “get your head straight” about how to contend with wholesaling profitably in today’s real estate arena – which seems to be the macro goal of both videos.

I’ll admit, these clips were a little longer than I expected. It’s not necessarily a bad thing, but I was expecting maybe 10 minutes apiece, and instead found around 90 minutes (cumulatively) of thoughtful, sometimes “heady” stuff.

Thankfully with that crazy-awesome MySpeed Plugin I told you about, I zipped through ‘em in about half the time of most everyone else. (Seriously, you’ve got to try this thing out – nothing beats it for consuming online video and audio like Speedy Gonzales – It’s still free {for now} and I honestly don’t know how I got along without it before!)

The Bottom Line…

It’s no big secret Mike’s putting these clips out in advance of his forthcoming “REI Wired” product. And like the tantalizing samples at Costco Kara and I enjoy grazing on so much, the pre-launch clips have been touted thus far as,

“… hard-core real estate information…no fluff, no filler, no sales.  Just content.”

After watching the latter two videos, I’ll vouch that there’s real information and no selling in these clips. But I should also clarify this is NOT an exhaustive “how to wholesale” type of thing, in case that’s what you’re expecting.

You’ll see from my “Cliff’s Notes” below it’s really more an exercise in opening your eyes to…

• …how the wholesaling business has shifted (and is still) today,
• …how to contend with it actively and profitably, and
• …ultimately how Mike sees the good money being made in the wholesaling arena these days.

“Mike, I Respectfully Disagree…”

I should also say that, while I think almost of what Mike shares is right on target, I honestly don’t agree with all of it. I just want to be upfront about that.

In particular, he shares a few beliefs about the role of the MLS in today’s arena (or lack thereof) that I think my friend Bob Norton is blowing out of the water right now.

But no disrespect to Mike – I can’t think of anyone I agree with 100% of the time (except for Kara – you’re always right, sweetie 😉 and overall I’d rate these videos as well worth watching (especially at 2x speed 🙂

(Update: Doors are now closed to new charter members, but should re-open at some point.)

My Personal “Cliff’s Notes”…

If you’ve missed any of the 3 videos so far, you can click the links below and they’ll open in a new window.

And just because I think it might be helpful, here’s a quick copy/paste of the notes I took while listening to these two videos as well…

Video 1. “The ‘Smashing’ Opener”

I already sent this one out a few days ago.  It’s Mike’s short series opener, where he smashes a TV making a point about how we spend (or waste) our time.

It’s short and made me smile a little, but not a “must see” by any means. Feel free to skip right to the other clips.

Video 2. “Dapper Dan Does Wholesaling”

Mike in a business suit (whooda thunk?) sharing from his office about wholesaling.

• Collinsology: Wholesaling is “Job 1”
  • Why every real estate investor should have wholesaling as a key tool in your back of tricks
  • How it’s by far the best way to generate cash quickly in real estate
    
• Get educated
  • Specifically, get educated locally
  • Get an in-depth knowledge of the players in your local market
  • Collinsology: The wholesaler’s primary target buyer in today’s arena is the cash-bearing landlord
    
• Collinsology: Stop “Elephant Hunting” (i.e. trying to find something you can “feel good” about dolling up)
  • Instead, see houses as commodities
  • Ideal: 3/1 or 3/2 in solid blue collar n’hood below the median price range in your area
  • Needs to cash flow as a rental
  • Collinsology: Cut your teeth on bread and butter deals before you try to specialize on a niche
    
• Learn values, learn values, learn values
  • You’re getting paid to know values in your marketplace
  • Retail values aren’t that hard to learn from browsing the MLS
  • Learning wholesale values is a bit trickier
  • TIP: Realquest.com
    • One of the largest data providers in the U.S.
    • Uses actual courthouse sales
    • Do a radial search of all sales in your target area
      
• Learn direct marketing
  • Why direct marketing Vs. “image” advertising
  • Collinsology: “Don’t spend a ton of marketing to start with – test first”
    
• Find a niche and focus hard on getting really good at it
  • A niche in your marketing and in the type of deals you’re doing
  • Get a “farm” area
  • Your “farm” area will grow outward concentrically
    
• Other stuff:
  • Collinsology: “You should do at least 10 wholesale flips before you ever decide to become a landlord.”
  • Collinsology: “The future of our industry belongs to the wholesalers.”
  • 30%-50% of the transaction often goes to the wholesaler
  • At first, don’t worry about “lists”.  Instead use your direct marketing to lead you to dealing “belly to belly” with the seller b/c the experience is invaluable to your perspective (setting your head straight) early in your career.
  • The biggest deals tend to be repair-related issues, rather than financial-related issues
  • Look for the “Earned Equity Phenonenon”
  • Collinsology: “Everone we did a killer deal with was someone who did not earn the equity in the property they had control of.”)
  • The wholesaler’s biggest competitors right now: THE BANKS
  • Focus mostly on being a deal finder – and ideally an “advertising driven wholesaler”
  • Set your business model up correctly
  • Wholesale your first 10 straight deals (for the education, experience and contacts you’ll make)
  • Learn your target marketplace inside out
  • Collinsology: Cherry pick some of the best houses for keep for yourself along the way

Video 3. “The ‘No-Pitch’ Illumination Speech”

A segment from Mike’s presentation at his last live event. (and at one point, you see Cory Boatright nerdily answering Mike’s questions  in the audience 🙂

• Mike’s Formula: Sellers Leads + Knowledge of Values + People Skills + Contract Knowledge + Guts & Action = Cash and Freedom
  • Least important of these is contract knowledge (b/c it’s just not all that hard)
  • Collinsology: When cutting your teeth, try dealing directly with the public rather than foreclosure lists or the MLS (not sure I agree)
    
• Wholsaling Grows Up: Then, Now and Tomorrow
  • Collinsology: “The industry is standardizing, comoditizing and become more and more liquid than ever.”
  • Interesting: Realnet.com – licensed agents who are basically wholesalers first
    
• What the wholesaling industry is rapidly becoming (and why)
  • 70%-80% of the country has pricing structures for double exit strategies for wholesaling houses
  • You should start wholesaling to landlord
  • You make your money when you buy – it’s true!
  • Collinsology: “You need to reduce selling to a clerical event – it must be systematized and automated as much as possible.”
  • Collinsology: “It’s not about wholesaling, it’s about execution.”
  • There tends to be a big gab between information and actionable knowledge
  • Mike has at least 200 houses he’s purchased b/c the person selling it to him “just didn’t like” the other guy (his competitor)
  • “What’s the story?” almost always trumps “the numbers.”
  • How Mike uses “overstaying his welcome” as a negotiation tactic w/sellers.
  • Collinsology: “Listening is hypnotism”
  • Collinsology: Repair distress is almost always more profitable than financial distress
  • How to offer the same as your competition, AFTER your competition, and still get the deal
    
• Learn values, learn values, learn values
  • Block to block in your “farm area”
  • The most important number is the “Wholesale Number”
  • Become a “Transaction Analyst”
  • (which of course requires knowing the numbers in your area)
  • Collinsology: Look for the lower end of the bell curve in your area. (not sure I agree w/this either)
  • Collinsology: “You cannot find what you’re looking for in the MLS.”
  • (Really don’t think I agree with this as an “absolute”)
  • You’re looking for “virgin deals”
    
• Business Model Development:
  • Lack of focus is the new investor destroyer
  • Learn your market’s values
  • Find your market’s cash buyers
    • Go to your courthouse sales and look for someone willing to bid on a house all cash, who’s maybe never even seen the inside
  • Generate leads
  • Write the contract
  • Sell the contract
  • Cash the check
  • Make sure it clears!
    
• Other Stuff:
  • Doing 10 wholesale deals first “sets your knowledge base” for the rest of your career. (I wholeheartedly agree)
  • Collinsology: “Small deals run your business – big deals make you wealthy”
  • Collinsology: “It’s never too late to be what you might have been.”

Hope you found that helpful – using my notes and the MySpeed plugin should save you some time at the very least.

Please leave your comments below.

(Update: Doors are now closed to new charter members, but should re-open at some point.)