BiggerPockets Podcast 012 with Sharon Vornholt Transcript

Sharon Vornholt Podcast BiggerPockets

Link to show: BP Podcast 012: Wholesaling and Marketing with Sharon Vornholt

Josh: This is the Bigger Pockets Podcast Show 12.

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Josh: Hey everyone, this is Josh Dorkin with the BiggerPockets Podcast show #12. With me today, as always, is my cohost mister Brandon Turner. What is happening Brandon?

Brandon: Show 12, that’s incredible! We’re getting pretty far on this thing. That’s cool.

Josh: I’m shocked we haven’t killed each other by now.

Brandon: I know, it’s amazing isn’t it?

Josh: It is indeed. Nah, it’s going well man. 12 shows is great. First 11 were really good. I think we’ve come a long way so certainly excited to knock out yet another, and this one is—this is another good show as always. We’re exploring another topic we haven’t really gotten into very much. The topic of—

Brandon: Wholesaling!


Brandon: Wholesaling.

Josh: Yay! Hey, I want to be a wholesaler Brandon!

Brandon: Everybody wants to be a wholesaler. That’s, like, the most popular thing in the world because everyone thinks it’s really easy and it’s free.

Josh: It’s free. You don’t need any money, or time and all you have to do is just say “I’m a wholesaler” and suddenly you’re going to make $5,000 to $10,000 a property without doing any work, isn’t that right?

Brandon: That’s completely right, and you can actually do it while on the beach in the Bahamas.

Josh: I once wholesaled a property on the beach in the Bahamas. In fact, I didn’t even turn on my computer. I literally just got to the beach, sat down, and suddenly I blinked my eyes and I had 10k in my bank account. It was awesome.

Brandon: That’s pretty incredible.

Josh: Yes. Yes, it is. Well, as anyone who is listening probably knows – that is just not true, and, frankly, it’s not as easy as everybody says it is. We’re going to talk a little bit about that today.

So, it’s a good topic because there are a lot of people that want to be wholesalers and the person that we’ve got for today’s show, Sharon Vornholt, is—she’s been doing this for a while and she’s pretty savvy at wholesaling. She’s also savvy at some of the skills you need to do well at wholesaling, but anyway, we’ll get into all that.

Let’s first get into today’s Quick Tip.

Quick tip

Brandon: Terrible. Wow, that’s terrible.

Josh: We were supposed to get somebody to do a Jingle or something.

Brandon: Yeah, we’ll have to get on Fiverr and find someone.

Josh: For sure, for sure. Alright, so, for today’s Quick Tip we want to let you know that you should go out and add a photo to your profile. Why should we be adding photos to our profiles Brandon?

Brandon: Because if you don’t have a—if you have a profile without a photo on it it’s a man holding a dollar sign and I see that a thousand times a day, and, frankly, I’m tired of the man with a dollar sign. So, make a nice little picture and as an added benefit, besides my enjoyment, you also interact people a thousand times better on the site. When you’re on the forums if you have a picture people are way more likely to talk to you to give you advice, to help you out and to make deals happen.

Josh: Yeah. Well, it shows that you’re going to put the time in into the site, and that you’re vested in the site, and that you care, and that you’re a real person. You know, I think people have a hard time identifying real people when they just see some blank, generic avatar. So, by putting up your personal photo that makes it easier for them to relate to you. So, anyway, that’s today’s Quick Tip. Get up your personal profile—get your personal profile photo up and make sure you’ve got a nice headshot picture of your face so we can all see you, and with that let’s get on to the show.

So, Sharon began investing in Real Estate in the Louisville Kentucky area back in 1998 and while she’s actually been a rehabber and buy and hold investor in her previous life, but her primary area of focus is definitely wholesaling now. Sharon is a regular contributor on the not to be confused with because if you lived here in Colorado in the area called Louisville you would call it that, but of course down in Kentucky they have a whole different way of saying it. Anyhow, with that let’s just welcome her to the show. Sharon, nice to have you.

Sharon: Hey, Josh! Glad to be here.

Josh: Glad to have you, glad to have you. Alright, so let’s just jump right into this thing. You are a marketing—somewhat of a marketing expert and certainly well known around BiggerPockets and elsewhere as a savvy wholesaler. Maybe you can tell us a little bit about how you got into real estate. What’s your story? What’s your background?

Sharon: Well, I started out, as a lot of people know, in the home inspection business in 1991. As a result of that business I became friends with a number of realtors, and one of those realtors in particular took me to my first REA meeting long around 1998 and I got absolutely hooked on real estate investing. So, I kept that home inspection business open until 2008 and I invested all of those years, about ten years, while I had the home inspection business and in 2008 I closed that business and started investing full time.

Josh: Okay, okay. So, you got so hooked that you said “I don’t want to inspect properties anymore as a hired gun. I’m going to do it on my own for myself”. Maybe, really quickly, we could talk about that inspection process and the transition. Do you find that having that background is an asset? I would assume the answer is yes, but, you know, where does it help you maybe rise above what other people do in their investing? Just having that skill set?

Sharon: Well, I think it’s important that you know the basics of the property. Now bear in mind I was the owner of the home inspection business and I had hired inspectors, but I still went to all the trainings, got the certifications and those sorts of things even though I was not the person crawling under the house. I had to know if they were doing a good job. So, when I started looking at properties I had a big advantage in that I could look at a panel box and tell gee, it’s really, really small, or, you know, it has fuses. I knew what to look for with structural problems and those sorts of things so it was a big plus I would say.

Josh: Gotcha. Okay, and so, you know, as I mentioned your focus, I guess your focus, we would say, is wholesaling. Maybe you could tell folks; What exactly is wholesaling?

Sharon: Well, I think of wholesaling, or a wholesaler, as being kind of a transaction coordinator. Like what we talked about before— one of my strengths is marketing. I do a lot of marketing and especially a lot of direct mail.

So, initially I was doing rehabbing and I was a buy and hold landlord. Long around 2008, about the time I started investing full time, the houses here started staying on the market a long time and that’s when I started thinking “maybe I need to do something else” so I got into wholesaling almost by accident, you know, it wasn’t something I started out doing. It was only after I wanted to let the rehabbing go for a while, and I found out that I didn’t like being a landlord so that was where I ended up in wholesaling and by that time I had made a lot of contacts with other rehabbers and landlords and those sorts of things.

Josh: So, you know, you started with the buy and holds and the rehabbing and just naturally it kind of brought you over into this wholesaling space then?

Sharon: Kind of backwards actually. I would—most people probably start the other way, but yes I did that. To be truthful about—in the beginning I had a hard time wrapping my mind around wholesaling and making offers on a lot of houses and cash offers so I guess— maybe it was not the natural way that most people would have done it.

Josh: Right. Okay, okay.

Brandon: So, when you first got started, Sharon, I guess— what did your first few deals look like? I mean, not necessarily like the land lording part of things, but when you started wholesaling how did that come about? What was your first deal?

Sharon: Well, as I said, I was just doing marketing and a property came up when I had decided that I was going to try to wholesale it that was just actually a perfect candidate. And I just simply called, you know, it was a regular little three-bedroom house that was, I’d say, lower maybe blue collar lower-end-bread-and-butter type of house, and I just called up some investors in my group and I sold it and it just worked out easy for because I had been in that arena for a while. So, from my perspective, at that point in time, wholesaling was pretty easy.

Josh: Gotcha. So, you get this—you find this deal and you just started calling people and suddenly it was sold? I mean, how does that process work?

Sharon: Yeah, I have, for a long time, kind of simultaneously built a list of contacts. The easiest way people can really do that is through their REA group. If you can get a list of people that belong and get their emails, then you know those are people that have an interest in buying real estate. Once you have been in your REA group for a while, then you’re going to figure out who the real players are, who the top 5 or 6 or 7 cash buyers are. So, I built my list initially straight out of my REA group.

Anytime I wouldn’t have a house sold in a week or so then I would put it on BiggerPockets, and I would put it on Craigslist and I’ve gotten a couple of good buyers from BiggerPockets. That’s something everybody should realize. It was, I say, like an accident.

Josh: Awesome. Hey, we love it, we love it, that’s great. That’s great. Cool. Okay. So, you’ve got these opportunities and, you know, you just start reaching out to folks and since you’re finding good deals they’re jumping on it. That’s pretty much the basics of the wholesaling game, right?

Sharon: It is, but it’s about relationships and knowing that—knowing who the people in your sphere are. Who the cash buyers are, and I will say to people “you don’t always know who the cash buyers are”.

One of the buyers in particular that came from BiggerPockets was a guy, fifty-ish kind of guy, who had retired from his corporate job and he had a great big ol’ 401K, and he had his house paid off, so he was able to just simply go to closing and write a check from his, you know, equity line of credit. So, you might be surprised at the people who are actually cash buyers. You might not realize that they’re cash buyers.

Brandon: Okay. Well, that makes sense. I mean, a lot of times I think people try to build their list by some weird like, I don’t know, you have to hire like some company to bring you cash buyers. You have to pay for a list of a thousand people online. So, I think that’s awesome advice to just go to a REA and find out who the big players are. I think that’s probably one of the biggest values in a REA. It’s not so much about the education you’re going to get, even though that might be great, but it’s the connections you make and find out who’s actually doing the deals. I think that’s where the real value is. So, yeah, very cool.

So, Sharon what does your business look like now then? Are you still doing the same thing? Has it changed over the years? I know you’re still wholesaling, but yeah, what does it look like now?

Sharon: Well, it looks different, you know, as you grow. I think one of the hardest things for me was to try to outsource some of the things. Outsource some of the direct mail and once you can do that it enables you to stay on track a little bit better.

I also continue to network to grow my buyers list, and I think it’s important that people know that you have to nurture that buyers list. You have to let them know that they’re important to you and it’s a great day when you have buyers call you and say “Hey, do you have anything?” You know then that you’ve got a really responsive list, but I pretty much do the same things. I market for deals, it’s just that my exit strategy has changed.

There is one other place that you can find cash buyers that I would encourage people to do too, and that is to go onto your local tax accessor site. In my area it costs about $25 a month and you can pull up any street, or adjacent streets, to your property and start looking on there to see who has bought multiple properties.

Brandon: That’s a good idea.

Sharon: And you can find out pretty quickly because a lot of land lords work in areas, and you can just go through there and if you see Brandon Turner’s name on 5 or 6 properties you know he’s an investor, and he likes that area. So, that’s a pretty low-cost way to scope out buyers for your list too.

Brandon: Okay, so generally you would recommend then, when you’re wholesaling, you’re not going to be selling to motivated—I mean, you’re not going to be selling to homeowners, you’re probably going to be selling to investors, correct?

Sharon: Always to investors. My end buyer is always an investor and it’s always a cash buyer of some sort. They’re never going to get a mortgage. Now, they may work with an investor-friendly bank that closes in 7-10 days, but that is still a cash buyer in a wholesaler’s mind.

Brandon: Okay, well let’s go back a little bit and go a little more basic. You know, like you said, wholesaling is sometimes hard to wrap your head around. I know it took me a long time, I think you said it took you a long time. Let’s just walk through the whole process beginning to end then. So, the very first thing you do is what? Marketing?

Sharon: It’s Marketing. You market, and some people use bandit signs. I don’t use those anymore. My primary source of leads is direct mail, and then I think that you should have a website. A website that is a lead capture website where people can put in their information.

So, once you get the lead, then I will look at the house, and when I make an offer and get an accepted offer on the contract it’s always in my contract that I’m going to put a lockbox on the house because all my properties are vacant. They’re always vacant, and they usually need a lot of work, so I will have a lockbox on that property.

I try to buy myself a little bit longer time period to close if I can. Some people close at— say they’ll close everything in 7 days, and I have closed in 7 days, in reality it’s kind of tough to close in 7 days. You know, it takes people a little bit longer than that, but most, in my area, most people don’t have any problem with closing. If you say I’m going to put 30 days in the contract, or if you think it’s going to be tough to sell you might even put in 45 days, but you can tell them that my goal is to close in two weeks. I hope to have a buyer in a couple weeks, then we can just be done. So, once we have it under contract, then for investors that I have worked with, and investors that I know I will simply, if it’s someone that I know buys in that identical area, I’ll just make a phone call or two. You know, I— that’s why I call them my A-buyers. They’re always—they’re the phone call buyers and then I’ll give them a 24—no more than 48 hours—head start because investors are notorious for just hanging out at Starbucks and, you know, being late to go look at houses, but then I will just put it out to my list, which is everybody, and, once again, if I know them I will give them the lockbox code. I don’t give out a lockbox code from someone on Craigslist, or someone that I don’t know because I don’t want them to come back later that night and take the copper out of the property so those people I meet.

The other reason I meet those people is I want to talk to them and see if they’re really cash buyers. Are they really somebody that I want to nurture on my list? Or are they just kind of out looking at houses and they’re not really investors? But I kind of want to vet them.

Brandon: Okay, so, let’s say you have a house under contract then and you—you’ve used direct mail and you’ve found some really motivated sellers and now those motivated sellers, those are people right? You don’t do this with bank repos, or do you?

Sharon: I don’t do that, but you can do that. The bank will always want you to use their title company, and that’s fine, but you can—well, they will always want to prepare the paperwork, I should put it that way, but in most cases then you can have that paperwork sent over. In my area we use closing attorneys. Some areas use title companies, but in my particular case the attorney here closes those bank owned deals all the time with a double closing.

Brandon: Okay, and I think we’ll talk about double closing hopefully a little bit later, but you find that you’ve got this—you’ve found a buyer now, you know, somebody from your REA says “yeah, I like the deal. It’s great” So, how do you get paid then? What happens?

Sharon: Well, in most cases, I do a double closing. It costs me about $350 more than if I had signed the contract. I have assigned contracts, but I like to double close.

Brandon: So, what’s the difference then?

Sharon: The difference is that I’ve got to just—if you do a double close then your seller, who you have negotiated a great deal with, will not know what you have resold it for. If you have someone come into a closing and close on the deal as an assignment they’ve got to agree to give you a check on the side, or separately, or they have to— you have to get paid out of that closing in which case your seller is going to know how much you’ve made. You can imagine they get upset sometimes if you’ve made $8,000 or $10,000 then they’re going to be upset, you know, about that. So, for me I just like to double close. It’s just cleaner.

Josh: Sharon, so, for those people who, you know, I think this is one of the things that we will see the most confusion about and, you know, I think you’re doing a pretty good job of explaining it, but let’s just to kind of reiterate the point then, there’s two ways we can close, correct?

Sharon: Right. The first way is that you write up an assignment. In my area it’s a simple addendum to the contract. You just— you’ve got your contract, and then you say I’m going to assign all my rights to this other person for this amount of money. It’s really simple. It’s just another piece of paper.

Now with the double closing let’s say that I buy the house from Josh and I am the wholesaler and I’m going to sell it to Brandon. I tell Brandon to come at 2 o’clock and I tell Josh to come at 2:15 and they are in two separate closing rooms. We actually go in and sign the paperwork on, it’s called the B to C – or the second closing, and then, bear in mind this is an investor and he knows I’m doing a double closing. He knows I’m using his funds to close the first deal. Then I’ll walk into the other room, we sign the paperwork, close that deal, and since they’ve—you always have to bring certified funds to a closing. So, just to be clear; The A to B closing is where I buy the house from my seller. The B to C closing is where I sell it to my buyer. So, we’re going to close the B to C closing with his certified funds so we know the money is there, he knows I’m doing a double closing, then I walk into the other room and sign the paperwork with my seller and then the closing attorney goes off and cuts all the checks. I shake hands with the seller, and then I go back into the other room and thank my buyer for, you know, the transaction.

Josh: Okay, and in this case on the double, do you actually own the property? You actually hold the property for X amount of time?

Sharon: Yeah, for five minutes I actually take title. You know, people have varying opinions about that and there are some investors that claim that Brandon would give them a $10,000 check and just let them show up at closing and hope it closes. I don’t personally know a single person that would do that.

That’s, you know, some people it’ll work and I think people are a lot more comfortable if they’re going to just be giving you $2,000 or $3,000. If you’ve got a big house and maybe a $10,000 or more pay day there’s going to be a difference in how they want to handle that.

Josh: Gotcha, gotcha. Okay. I think that definitely clears it up, and I think anyone listening would probably have a better idea. So, that’s great. I definitely appreciate that. Oh, go ahead Brandon.

Brandon: Yeah, real quick. We’ll also include a few links to some articles on the show notes about that. So, that’s at so, we’ll have some articles. I know, Sharon, you’ve written some really good stuff in the past on double closings and why you do that so we’ll make sure we link to all that stuff. People do want more information. Again, this is kind of a—little bit more complicated of a transaction. We’ll have some more links there so…

Josh: Great, great, great. Well, I was gonna jump, before I was rudely interrupted by that show plug, I was gonna jump over to the topic of direct mail because I think it’s one of those things that, again, you’re pretty good at and a lot of people may not fully understand. So, direct mail. Let’s go to the real basics. How exactly does direct mail work?

Sharon: Well, direct mail has four major components. The direct mail piece, the message that’s on that mail piece, the list, and the mailing campaign.

So, there’s four parts to each one. The first part is, well I guess the first two parts would be the direct mail piece. Are you going to send a letter, or are you going to send a postcard? The message on that mail piece, and it will change because the message that you give to a probate or a pre-foreclosure is very much different than what you give to an absentee owner. So, that’s what I mean about the message is going to change. Then you have your list. You can get your list from various sources, and I personally have gotten my absentee owner list from List Source, and places like that. Some of the postcard companies will also go through the list companies and get your list.

When I first started out I first got my absentee owner list from the PVA—from the tax accessor site. The problem with that list was I couldn’t put any filters in the list except to exclude zip codes. For instance; I couldn’t say I only want houses with 50% equity. That is the real bonus for getting a list from a place like List Source. Like I said, there’s other companies, that just happens to be the one I’m familiar with. So, you get your list and then you set up your direct mail campaigns. Now you can save all of this stuff in the computer, but I’m a big proponent of putting it up on the wall. You know, if you’re going to mail on the first of every month then I think you need a great big wall calendar and you put absentee owner mailing down when you want it go out. Then you back up from there, and you put your print dates, or whatever you have, or if you’re calling a mailing service put it on a calendar. Get it scheduled, and then it will go out like clockwork because it’s all about the repetition.

Josh: Gotcha, gotcha. That’s great, and you had mentioned probates and pre-foreclosures. So, ultimately, when you send direct mail you’re going to select, kind of the target, what you’re most interested in, right? So, you know, be it probates, whatever you think it is, you know, you can set up various different types of campaigns. What’s your favorite?

Sharon: My two favorites are absentee owners and probates. Absentee owners may take a while to become motivated, but almost all of them will become motivated to sell at some point in time. I only mail to absentee owners out of state, and that’s because I live in Kentucky, and Kentucky is a relatively small state so you can get anywhere in three hours, just about, here. Now, if I lived in California or Texas I think—what I tell people is you have to figure out what—how far away do you have to be to evoke the pain in the neck feature? I think it’s about 3 to 3 ½ hours, maybe a little bit more. People within that window will still drive in to take care of a property, but you get out 4, 5, 6 hours then it becomes a real challenge unless you have a management group to manage your properties. So, that’s what—that’s kind of my criteria. So, I do out-of-state absentee owners and probates. By and large the probates— the houses are always going to get sold out of the estate with few exceptions. They’re almost always very motivated.

Brandon: Okay, so you send out these letters, and you send them out repeatedly. I know you’ve said that a lot on the blog, and you said that earlier. You send them out over, and over, and over. That way when the person becomes motivated you’re there, like, you’re the first person they call. So, what is a typical, like, what does the typical response rate look like when you’re sending these things out? I mean, do you get 50% of people to call you or, you know, .005% to call you?

Sharon: Well, you know, if you get somewhere—a low response rate generally in the industry is considered about 1% and average about 3 and anything above that is good. But the thing with direct mail is that your actual purchases, your actual deals, will go up with subsequent mailings.

Your first mailing or two you’re going to get the people that say “take me off your list” or “it’s not showing up, but I’ve sold the house” you’re going to get a lot of calls, but you’re not—I don’t want people to take this the wrong way and think you’ll never get a deal from those first mailings because you can, but the statistics say that after the first contact you might get a 2% response. After the third contact you’re up to 6% and then after the fifth contact you will get 81% of your deals. Now not calls— deals after that fifth contact, and it’s somewhere after the first few mailings that most of the people will quit mailing.

So, I call it— you want to be the last man standing. You know, if they’ve gotten your letter, and I’ve pulled up to places before and they’ve got my postcards or my letters all rubber banded together. They’ve kept every single one of them, and they’ll say “well, I had a card here and I had a card here, but here you did this every month” and that’s why I get the call.

Josh: Nice, nice, that’s great. Can you just clarify really quick on that 81%? So, if I’m to understand the odds, you’re talking about the odds of receiving a phone call from the person with whom you’re sending the mailing to, correct?

Sharon: No, what I’m saying is that—let’s say you get 10 deals this year from direct mail. 81% of those deals will come about after the fifth contact.

Josh: Gotcha, okay. I was a little confused. So, that definitely makes sense.

Sharon: Well, now, and here’s an important point too. People will call sooner and they may call and say “gee I’ve got the house listed so I don’t really—I just wanted to let you know that” in which my response is always “well, if it’s okay with you, I’m going to keep you on the list just in case that doesn’t work out or your circumstances change. Is that okay with you?” and they always say yes. Several times a year I get a call from someone who’s had the house on the market a year, fifteen months, eighteen months, and then they are motivated. They just want to be done.

Josh: Gotcha, gotcha. How much does somebody make wholesaling from a deal, Sharon?

Sharon: Well, I’ll tell you what my goal is, and I don’t always hit it, is $10,000.

Josh: Okay.

Sharon: Now, some years ago, three or four years ago, probably four, I was noticing that it was just coming up to be about $7,000 and then I started trying to raise that up a little bit because— maybe you’ll make $12,000 on one and you might have to cut down to $8,000 or $7,000 on one because it just doesn’t— maybe it doesn’t sell as quickly, or you find out it has a problem that you overlooked, but I like to leave some leeway in there, but the thing of it is my end buyer is always going to get that deal the way he should get it; 70% of the ARV less repairs. If there’s going to be anybody that’s gonna get cut on, you know, doesn’t make as much, it’s going to be me. So, my challenge is to buy the property so that I get what I want to make out of it, and sometimes I don’t make that much.

Sometimes it’s still a deal, and, you know, who’s going to turn down $3,000 or $4,000?

Brandon: Yeah, you know, Sharon, you touched on something really important there I think. You know, a lot of people get into— they want to get into wholesaling because they believe that’s the easiest way to get into real estate investing, and, whether or not you believe that or not, the fact is you have to get deals that are better than even house flippers can get. I think Jay Scott said that once I think on his podcast. He said that how—actually Marty said that too at one time to me—that as a wholesaler you have to find a deal that will give the investor profit and you profit so you’re, like, doubling the amount of the deal you get, is that right?

Sharon: Yeah, it’s definitely harder if the rehabber finds the deal then he doesn’t have to—he can pay that person more. And I’m trying to find a balance here because most of the homes that I buy need a lot of work, and the people know that they need a lot of work, and there’s a certain, you know, way that you—there’s a certain skill involved in even getting the deal, but in the end, like I said, my buyer, that’s why they buy from me over and over again. They get the deal with the 70%. You know, I work the formula and I put in what I call a fudge fund, a what if I don’t, you know, didn’t find it originally or it shows up that they buy from me time and time again because I give them good deals and I don’t try to fudge on their end. If I have to fudge on something, it’s my fee that gets cut.

Brandon: Okay, yeah.

Josh: Nice.

Josh: Hey, Sharon, so, what do you say in these letters? What do the mailings say? Obviously I’m assuming they’re going to differ based upon the different types that you’re sending, but you had mentioned absentee owners and probates. You know, maybe you could kind of— you don’t have to read your script, but kind of give us the essence of what you’re talking about in there.

Sharon: Well, I have about four or five letters that I, and I’ve kind of tweaked these letters up— you know with a probate I might start out, and there’s different views on this, whether to acknowledge they have a loss or they don’t have a loss, but the first question they’re going to ask you is how did you hear about me? So, I like to just put it out there and say “ I’m sorry for your loss. I understand that you’re handling the estate” and then the next time I might say something like “I’m checking in to see if you’ve gotten started, if you might be interested in selling the property” and it kind of goes down to where I get, you know, I’ll say “well, you should be getting ready to finish the estate now” it’s just kind of a natural progression. It’s the same letter, but with the words changed, and with absentee owners I don’t vary too much from that letter.

It’s just, you need to go over what their pain is, you know, I have a house and I live 7,000 miles away or hit upon, maybe, the different situations. If you’re sending out a more generic letter it might be “how can I help you with this situation. Are you an absentee owner? Have you inherited a house you don’t want? Have you lost your job? Did you relocate and you’ve got two houses?” So, you have to hit upon the pain and the pleasure. What are the benefits that you can provide them so that they can get rid of their pain, whatever that pain is?

Brandon: Okay, yeah, that’s awesome advice. So, cool. So, you get this—you got a, you find a motivated seller, you find out their pain, you got em through direct mail, all this. So, what happens next? You’re talking to them, do you go and meet with them in person if you can? Do they, you know, presumably they either call you with a number or they enter in some information on your website, but what happens next then?

Sharon: Well, whenever possible you meet with the person. Now, with absentee owners unless they happen to be in town they’re probably gonna give you a contact to go and look at the property and I’ve done that many times. I’ve looked at the property, I’ve made an offer, they’ve accepted the offer and I never meet this person. I talk to them on the phone and all the documents are sent out, FedEx-ed or UPS-ed overnight. They sign the documents, and many times we’ve actually closed those easily within a week if I’ve had a buyer on hand. But with probates it’s a very— it’s a very different conversation. You have to acknowledge that this is a tough time for them, and it is gut wrenching for them to look at their mom’s worldly possessions, which really are nothing, you know, they have no monetary value, and it’s gut wrenching for them to have to dispose of them.

Josh: Oh, definitely.

Sharon: So, I always try to ask whether it’s an absentee owner or a probate. I mean, in addition to money there’s always something else that they want. Maybe they need help cleaning out the house or they’ve got back taxes or they’ve got—I bought a house once that had a $3,000 lean from code enforcement on it. So, I always try to find these things out, and they will usually tell you. You know, what is your situation? Just keep asking better questions, and once they tell you “gosh I don’t have any money for closing and I don’t—and I have a $3,000 lean on the house from the code officials” then you know your offer has to be $3,500 less than what it would have been because you’re going to offer to pay for those. You know, whenever you can just tell the seller what they’re going to net out of the deal then that’s easier for them to understand than to understand all of your figures with the closing costs and the I’m going to pay this and that.

Brandon: That’s great. So, how do you decide if it’s worth actually pursuing? I’m assuming you talk to a lot of duds. A lot of deals that aren’t going to work out. How do you decide?

Sharon: Well, I talk to a lot of duds and see, if you’re a buy and hold landlord like I know you are Brandon, you’ve got some property.

Brandon: Yeah.

Sharon: You can do different things with deals that have less equity. You can maybe do a lease option scenario, or you can do something that a wholesaler can’t do. Now, they often give you a price and that’s just a price. I often say where did you get that price? “Oh I just thought it up” or “the house down the street sold for this”.

Brandon: That’s a great question.

Sharon: And it’s off, but I’ll say yeah, but I see that in the comps that it’s completely renovated. “Yeah...” See, they really know, but you can’t blame them for throwing out a ridiculous price. You gotta try to bring them back into— I like to say “adjust their expectations”, and it’s a process. You can do it. I try to start the process on the phone. If I think that I can turn it into a deal, then I’m going to start that process on the phone. Once I get out to the property then I’m going to continue that conversation and I’m going to continue to just ask them questions. What you want to find out is; What is their motivation? Money is certainly always part of it, but it’s not always money. They may need something else. They may need you to say I will clean out this house that has two feet of stuff everywhere.

Brandon: That’s great. Cool. Alright, well, we probably should be wrapping this thing up pretty soon. So, before we go I do have one final question before we get to the final questions. I’m just curious, we touched on this a little bit earlier, and a lot of beginners, a lot of beginners, want to do wholesaling. It’s kind of the guru choice today. It’s like “oh, get into wholesaling. It’s the easy way, it doesn’t take any money”. Is that, I guess, what do you say about that?

Sharon: Well, I think I made the same mistake that most investors make when they’re brand new investors; I paid too much for the property. If you have bought the property, and you have paid too much and you’re going to be a landlord you just gotta kind of suck it up and figure it out. Hope you can work out the rents, but if you’ve paid way too much for a wholesale deal you’re going to be stuck. You may sell it, but you’re probably not going to make any money. I think learning how to buy property is probably, or how to buy it for the right amount of money, is probably one of the things that people, nobody, knows in the beginning. So, some people wholesaling may be the way to go, and it’s certainly a way you can get in with little or no cash, but it’s possibly not the best strategy to start with in that you don’t really know what you’re doing. You don’t know what a good deal is.

Josh: Yeah, that’s definitely true. Hey, Sharon, what, I guess then, would you say be your best piece of advice for new wholesalers? Somebody who’s just totally fresh off the boat who doesn’t really know too much about real estate investing but has heard that wholesaling’s great. How should they go about kind of getting into it?

Sharon: Well, the best case scenario is that you can align yourself with a mentor, with an experienced real estate investor, and that, you know, you can learn what a good deal is. I’ve had people call me with properties that didn’t even know what the 70% formula was. They bought it $10,000 under retail and they thought they had a great deal. So, if you can find a mentor, and you can usually find someone at your REA group, that’s a great place. BiggerPockets is a great place to find somebody. You can go on there and say “I’m looking at buying my first property and I don’t have a clue what I’m doing” and people will jump in and they will help, but I think education is the key. But there’s also a certain amount of practice. You just have to go out and talk to people and make offers and get over that fear of— a fear of dread that most people have.

Josh: Yeah, for sure, for sure. Well, and I think, you know, bringing up a great point on the mentor thing, you know, a lot of folks think you have to go out and spend a lot of money to go get a mentor, and, exactly as you said. I mean, if you go to your REA, if you go to your local group or your local meet up, I mean, you’re sure to be running around with folks who are successful, who are doing business, and doing deals, and, frankly, there’s a lot of people who are just happy to help you out, and just happy to mentor you. So, you know, I’m glad you mentioned that, and I do want to reiterate how that’s really, at least in my opinion, that’s the best way to find a mentor. Find successful people in your local area who are out and about doing it.

Sharon: Yeah, because they know your area and by and large people— I’ve never had anybody turn me down. Now, when I first started in real estate we had a mentoring group in our REA group which is something, I know why they stopped because it was a lot of work, but it was the best thing because they had a different investor come every week for 10 or 12 weeks, and it was the hour before the meeting and maybe one week it was on filling out the paperwork, then it was on the formula for the offers, and they had a natural progression on down to where they spoke about lease option, wholesaling, but it was one person for one week, and you left there at the end of that and you had gotten so much education in an orderly manner. You know, that’s part of the problem too. You jump on in and you learn about land lording, then you say “well, maybe I should learn about wholesaling”. You don’t always get the information at the right time or in the order that you need it.

Josh: Sure. For sure, for sure. Hey, so, yeah, great advice on the REA and I think, you know, I think there really is a lot of value in going and in that personal person-to-person interaction, but overall I guess can you tell us, you know, like really, really quickly if, you know, I’m going to jump in, I’m going to be a wholesaler— what are my first actionable steps to take?

Sharon: Marketing. Marketing is your first thing. You have to have leads to ever have a hope of getting a deal, and anybody starting in real estate should plan on spending about two hours a day marketing. Now, maybe you don’t do that every day. You might do it on Saturday in the evening, but you find your list. You get your mail piece going if you have to handwrite them, or order them, or whatever you do, but you have to market or you’ll never have a deal.

Brandon: Awesome. That’s great. Alright, so, let’s wrap this thing up with our Four famous questions here at the end. Number one— what is your favorite real estate book, Sharon?

Sharon: Well, I have a lot, but probably the one that made me think about money differently the most was Rich Dad, Poor Dad.

Brandon: Ooh.

Josh: Nice, there you go we haven’t heard that before.

Brandon: That’s a good one.

Josh: How about your favorite non-real estate business book?

Sharon: The Success Principles, Jack Canfield. It’s a great book, I’ve written all over the book, it’s little short chapters, everybody should read that.

Josh: Nice.

Brandon: That’s good. I’ve never heard of that one.

Josh: No, no. How about hobbies? Surely real estate is not the only thing that you do. I know you’re, you know, you like to write, but anything beyond that?

Sharon: Oh yeah, I love to travel. I don’t get to travel as much as Brandon. I love to go to the beach, I like art fairs.

Josh: She just called you out Brandon.

Sharon: Brandon, yeah Brandon the world traveler.

Brandon: Yeah…

Sharon: So, travel to any beach, art fairs, I’m an avid reader and I have a granddaughter who’s 12 that I spend a lot of time with.

Josh: Aw, great, great, and Brandon I know you’ve got the big final question here for Sharon?

Brandon: Alright, so, Sharon, there’s a lot of wannabe wholesalers out there, probably more than any other field of real estate. I mean, people that come and go every day on Bigger Pockets that say I wanna be a wholesaler, and then never do it. So, what makes them stand out, the ones that actually do succeed and the ones that are making it happen, and those who don’t?

Sharon: Well, they just don’t quit. That’s the first thing. When things get rough, as they inevitably do, they don’t quit. They are lifelong learners, that is vital, and they change with the market. When I was in my REA group about a week ago there was a fella who’s been investing since—well, probably 45 or 50 years and he said “I sold and bought real estate when interest rates were 17% and I’ve sold and bought real estate when interest rates are, you know, where they are now. You just have to change what you do and change your marketing as the market changes” and he’s very successful.

Josh: Wow, that’s great. Great advice. I want to actually pick back up upon Brandon’s question here for a quick second. You know, wholesaling really is the field where, I mean, I can’t tell you how many countless, you know, tens of thousands of people we’ve probably seen over the years say “hey, I wanna be a wholesaler. Cool, cool” and then they’re gone within months. How can those guys beyond just, you know, having that sheer perseverance, how can those guys make it? I mean, how do we stop these guys from falling off? How do we get more of these people to be successful and to actually make it? Is there anything we all can do other than what we’re doing now which is writing, trying to educate people, trying to give them the tools?

Sharon: I think it’s all in the learning and having a mentor. Because I think for so many people, they jump in, they think it’s going to be easy, they think it’s going to be one way or the other and when they get some houses under contract, they didn’t buy them cheap enough, they can’t sell them, you know, whatever happens they just get frustrated. Instead of saying “okay, that didn’t work out. Now let’s sit back and dissect this whole thing and see what happened. Okay, I paid too much or I didn’t have a buyer’s list”. I think if you look at it from that perspective and then you just go “next” but it’s in the learning. If you go out there and you think you’re not going to have to learn and change and learn everyday you’re just sadly mistaken.

Josh: Yeah, that’s for sure. Well, I tell ya, oh, sorry, I was just going to say really quickly that is one of the reasons that I started Bigger Pockets. I mean, I started the site because I needed a place to go, I needed a place to learn, I needed to find… I needed mentors. I needed help. So, I created the site because I personally, for my own real estate investing, needed a place. So, that’s a really good point. I mean, you know, having the ability and knowing that you need help. Not just quitting, but, you know, going out and having the guts to say “you know, I don’t know. I don’t know. What do I do?”

Sharon: Well, one of the hardest things to do, I think for anybody, is to come on Bigger Pockets on the forum and say “boy I really screwed this up. What did I do wrong?” but you have to be willing to do that and that’s another benefit of belonging to your local REA group and actually meeting people that you can call them up and say “gee, I don’t know what I’m doing wrong” or “what am I doing?” and they will just flat out tell you.

Josh: Yeah.

Sharon: And it’s just great, but yeah, your site has provided education, certainly to me, and because, even as many years as I’ve been doing it, I don’t proclaim to know everything, or, you know, I’m the first one to tell you it’s going to change tomorrow or next week.

Josh: Right, yeah, well, I tell ya anybody who claims to know everything is full of crap. Stay away from them.

Sharon: Exactly! They are, they are.

Josh: Alright, Sharon, well listen this—oh wait! Actually, you know what, Brandon! Didn’t you have something you were going to add? Sorry.

Brandon: Oh, yeah, real quick. I just wanted to add—something you said earlier about finding mentors and local guys? Just from a personal standpoint I would love, like personally, I mean, I’m a cash buyer, I can close in two weeks and I don’t have time to find deals, like, I mean, I struggle finding time. So, like find a guy like me in your area who can close in a couple weeks and just say “Hey, what kind of deals do you want? What are you looking for?” I mean, if somebody in my town came up and asked me that I’d say “Yeah, I’m going to want this, this, this, and here’s how you’re going to go find it” and I would walk them through step by step through that process and there’s nobody around to do that. So, out of the millions of wholesalers that are out there. Do that.

Sharon: Well, yeah, and boy you should have somebody like that because one of the first things I like to do is I ask the person where do you buy, what price range do you buy, where won’t you buy? And I get that criteria down which is how they get the call.

Brandon: Yeah.

Sharon: You know for me you’re a dream person. I want to have a Brandon on my list, you know, to call.

Brandon: And I want to have a Sharon!

Josh: Aww. Alright, well, Sharon lots of really, really good stuff. Valuable information. Lots of really great tips. I think this will help a lot of the new guys out so I definitely want to thank you. We really appreciate having you. Sorry that this is a little bit shorter than usual, but, you know, thank you so much for coming on the show.

Sharon: Well, thank you for having me! I loved it.

Brandon: Awesome. Well, thank you Sharon.

Josh: Alright everybody that was our show with Wholesaler and Expert Marketer Sharon Vornholt. Of course you can review all the show notes as well as find links to all the stuff we talked about over on

Before we go I just wanted to say thanks to everybody for listening to the show as always! We’re now up to 166 five star reviews on iTunes so thank you guys very much. Thanks everybody who has left us a review. If you haven’t already done so please take two minutes, go over and leave us one. It definitely helps us out, and, finally, please be sure to come and like us on Facebook at As always we’ll see you back on the site at If you haven’t been around in a while, please jump in. Get involved in the conversations. Welcome some new members. Get engaged in any of the activity that’s happening onsite. It will definitely help you expand your network and grow. So, hopefully you’ll do that and that’s about it so thanks so much for listening and we’ll see you next time!

I’m Josh Dorkin with my partner here Brandon Turner. See you later!

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