911: The Best Buyers in the Business: Real Estate Investors with Adam Whitmire and Jared Garfield

June 18, 2020
Why focus all of your time and money on real estate leads that, if converted, will only produce one or two transactions? On today’s podcast with Adam Whitmire and Jared Garfield of Housefolios, we discuss why building relationships with real estate investors is one of the best ways to ramp up recurring business. In addition to sharing strategies for finding investors to work with, Adam and Jared cover the skills agents need to win high-value clients who buy and sell multiple properties per year. We also talk about investing in single-family homes and a must-have tool for finding great deals in any market. Want to find the best real estate deals in your market? Click Here to Get Started on Housefolios.com.
Jared GarfieldAdam Whitmire Listen to today’s show and learn:
  • Adam’s start in real estate [6:52]
  • What all new real estate agents should do [9:13]
  • The importance of giving value as an agent [13:52]
  • How a team can help you thrive through a correction [19:01]
  • Working with big real estate investors [22:09]
  • The best properties for cash flow [27:13]
  • Why working with individual investors is great for recurring business [29:37]
  • How to find investor clients [31:15]
  • What real estate investors want from agents [32:40]
  • Software for finding the best real estate deals instantly [34:08]
  • How to start finding the best real estate deals with Housefolios [42:21]
  • The best back-up plan for real estate agents [45:03]
  • Final words from Adam and Jared [47:06]
  • How to break through your goals.
  • Plus so much more.
Adam Whitmire Adam Whitmire is a third-generation investor/developer with over 17 years of real estate experience in operating single-family and multifamily properties, land development, and new construction projects, with a strong focus on investment portfolio management and real estate market development. From acquisitions to fund administration, Mr. Whitmire is highly valued for his market analysis, investment advisory and negotiation skills. He has represented eight of the largest institutional investment funds in the U.S. in acquiring hundreds of residential assets. During his tenure with The Whitmire Group, Mr. Whitmire acquired over $56MM in single-family residential assets. Mr. Whitmire received his degree in Visual Communications and Digital Design. He has completed his Certified Commercial Investment Member (CCIM), Certified International Property Specialist (CIPS), Certified Investor Agent Specialist (CIAS), Certified Foreign Investor Specialist (CFIS) and Broker Price Opinion Resource (BPOR). Mr. Whitmire is securities licensed in Series 6, 63, 26, 65. He also holds a Real Estate and Insurance license and is a former advisor representative for Transamerica Financial Advisors LLC. Trained and educated agents in the real estate and financial services industry, teaching over 500 classes and speaking at 36 industry events across the country. Jared Garfield Listen to his podcast “ROI Wealth Watch” on ITunes or GooglePlay, that’s one way he likes to give back! Jared helps a lot of beginning investors and large investment funds tap into the very best deals in the country. Their teams have analyzed, closed, renovated, placed tenants and managed over 3,000 properties in 5 states. Hedge funds with assets totaling $30,000,000 – $1,000,000,000 have relied on them for turn-key investment bulk packages, allowing their investors a great exit strategy! Having developed some of the top real estate investment research, scouting and analysis tools in the U.S., while also knowing market trends and cycles, to take advantage of market timing, they’ve built full investment teams in top cash flow markets. This superior knowledge came from extensive investment experience and successfully coaching over 1,000 clients, as they built real estate portfolios. Jared hosted “The Rich Life Real Estate Show” on Fox affiliate radio stations WDUN AM 550 and FM 102.9 for two years, and has been a frequent co-host of the nationally syndicated “Rich Life Show” on financial planning and investment. Often a key-note speaker, Jared advises clients around the world. He spent three years working with Robert Kiyosaki training the “Rich Dad Poor Dad” coaching staff and helping clients build real estate portfolio’s. He has trained and worked with the Carleton Sheets, Dean Graziosi, Than Merrill, Armondo Montelongo, Robert Allen staff members. They have run investment bus tours for “Millionaire Mentor,” the guys from “Flip This House,” and “Flipping Vegas.” Many of these trainers personally buy properties from them and they have sold to the chief provider of Donald Trump’s real estate events. In his 20’s Jared started a real estate brokerage, recruited & trained 42 agents. He has spent a career gaining training and education as a Graduate of the Real Estate Institute (GRI) and Certified Residential Specialist (CRS), and speak often at the IMN conference for Single Family Investment Properties and Real Estate Investment Associations. Jared loves helping people exit the rat race, and is active in community and church service with his wife and five children. Related Links and Resources: Thanks for Rocking Out Thank you for tuning in to Pat Hiban Interviews Real Estate Rockstars, we appreciate you! To get more Rockstar content sent directly to your device as it becomes available, subscribe on iTunes or StitcherReviews on iTunes are extremely helpful and appreciated! We read each and every one of them, please feel free to leave your email so that we can personally reach out and say thanks! Have any questions? Tweet meFacebook me and ask Pat anything. Don’t forget to head on over to Bare Naked Agent for Pat’s answers, and advice. Thank you Rockstar Nation, and keep rockin!

Aaron Amuchastegui: Real Estate Rockstars, this is Aaron Amuchastegui. Hey, I have a new interview today. I get to interview two guys that I met several years ago when I first started getting into single-family home rentals and traveling and going to conferences. I met both these guys, some of the first people that I connected with. Over the last few years, we’ve seen each other, at least a couple times a year, at some of these events.

These guys aren’t just real estate agents, they’re real estate investors. We get to talk to Adam Whitmire and Jared Garfield today, both from Housefolios Services, and really looking forward to seeing if we can talk to you guys about how you can combine being an agent with investing with all sorts of tools and tricks that are out there. Adam and Jared, thanks for coming on.

Adam: Thanks for having us, Aaron. We’re excited to be on the show.

Jared: Aaron, it’s great to be with you today.

Aaron: Thank you. Let’s start with Jared. Where do you live right now, Jared, and what’s the whole environment like for COVID, coronavirus, riots? What’s it like where you live right now?

Jared: I’m in Atlanta, Georgia right now. We’re doing investing across several markets in Georgia, Alabama, and Indiana right now, but obviously, the Atlanta market, people are concerned. There’s a lot of protesting going on. Most of it is pretty peaceful. We drove through a lot of protests on Sunday with mixed-race both White and African Americans joining together peacefully trying to make sure that their concerns are heard. Atlanta did get some looting and some damage to buildings as I think everybody’s seen on the media in Atlanta.

Aaron: Both the places that I live, we live near Sacramento, California, half the time and Austin, Texas the other half the time. Both of those cities also got hit with a little bit of everything. You get a little bit of protesting, a little bit of looting, a lot of peaceful protesting, everything else. Really, I think everybody would say it’s totally been amplified by the fact that after three months at home–

Atlanta was probably struggling just through coronavirus and COVID. I’ve had a lot of guys on the show recently from Atlanta that we’re still trying to do some deals. Adam, how about you?

Adam: Well, I’m also in Atlanta, Georgia in Atlanta native, so in the southeast. It’s like Jared said, but actually, Jared’s on the south side, I’m on the north side, so I guess is a little bit different. We’re not affected by COVID. I haven’t been affected significantly other than the quarantine. We haven’t been quarantined. It’s been a really interesting experience. Honestly, was able to get a lot of family time in and enjoyed spending extra time with family since the kids don’t have anywhere to go. We just had a baby three weeks ago, so that’s number seven. We’re done.

Aaron: Congratulations.

Adam: I’ve just been working at home the best I can. Putting in noise blockers and everything in the background, fake backgrounds from space, all that stuff that you do when you’re working from home.

Aaron: I love how you very subtly said you just had number seven. Like, “Hey, I had another baby number seven.”

Jared: [crosstalk] Basically said number seven.

Adam: [laughs]


Aaron: I always love it when I get to brag to people and say, “Hey, I got four kids. When we’re on a plane, we take up a whole row or a whole side,” and you’re like, “Now we’ve got seven, Aaron.” I’ve never felt so weak.

Adam: We don’t get on planes. We just do the horse and carriage to cross country. We migrate when we go visit cross country.

Aaron: When you had your baby, totally off real estate topic, when you had your baby, was everything’s still on shelter in place quarantine type of stuff?

Adam: Yes, we were completely quarantined, so I was wondering if they were going to let me in. It was just me and her. Nobody could visit, and nobody could really leave. We were literally quarantined in the hospital, and it was awesome. When you’ve got six kids at home, there’s never a dull moment. For us to be in the hospital for a couple of days of quiet, peaceful, other than my wife delivering the baby, was obviously very difficult.

The funny thing is, and she did it like a champ. The funny thing is, she had to take a COVID test while we were there that’s part of their procedures. She said that was worse. That was the only time I saw her cry the whole days we were there.

Aaron: I heard that that COVID test is so brutal.

Adam: It’s horrible.

Aaron: One of the things you said there, too, is the part of quarantine for me and my family has been good. There’s plenty of bad if you look for it. There’s plenty of struggle and bad and business struggles, and everything’s more difficult, but it has helped us focus on family time and what’s important.

Adam: Seeing the kids come together and spend more time together. It’s been pretty amazing.

Aaron: Totally. When you find just anything, when you look for that silver lining, and when you look for the positive, you can usually find it, when you look for the negative, you can find it, and there’s a lot of lessons to be learned. [crosstalk] Go ahead.

Adam: You know how people often say, “Stepping stones or stones or stumbling blocks,” right? The COVID, I think has really been a stepping stone for us as a family and for us as a company. It allowed us to make that leap from being about 92% virtual office and company to 100% virtual. We still have an office that we don’t use, but this has really allowed us to spread and become more scalable and we’ve really enjoyed it.

Aaron: It forced a lot of technologies to jump and grow, and we see Jared bring his family on there now, too. That is one of the things that we get to do during quarantine. My son, Brax, I think you guys have seen on social media, he jumps into the podcast, he runs some of the shows. Adam, we’ll stick with you for just a minute before we jump back and forth to the team that you and Jared do together. When did you get started in real estate? How did you start?

Adam: Interestingly enough, I just served a mission in Japan for two years. I had just come home. I have a background in real estate, everybody in my family. I grew up with a lot of real estate investors, builders, developers. As soon as I got home, Jared was like, “Hey, go get your real estate license and come work with me.” He had started a company called A Wonderful Life Realty. He actually paid for me to get my real estate license come work with him. Him and I worked together prior to living in Japan.

I got a license. I was really only interested on the investment side, primarily. Jared, I think was really interested in the investment side as well, because his business went that direction, as well. That was in 2002, about 18 years ago. We did the traditional real estate for just a couple of years before getting into the investment side and focusing on that.

Aaron: Wow. You and Jared have been working together since 2002?

Adam: Since 2002, him and I have been working together on and off. We have our own companies, and we have some joint venture companies as well.

Aaron: I didn’t realize that. From all the times we’ve chatted, I didn’t realize how long you guys been working– That’s like a lifetime ago.

Adam: It is.

Aaron: One of my business partners, we started working together with JJ in 2009, so we’re on year 11, or 12. That’s been my longest time, but you guys had us by like seven years. That’s incredible.

Adam: I don’t know what company this– We’ve done this for so many different, real estate companies. I don’t know what number company this is, but it’s been a long time coming. It’s been a blessing. We’ve seen a lot of success, seen a lot of challenges, like every real estate agent, we’ve found out what works, what doesn’t work, and found out the hacks of working with investors and have really found our niche in that side.

Aaron: You said your first couple years, you were traditional real estate agency, and after a couple of years, switched to more investment stuff. Now you guys mostly manage for investors or own investments and things like that.

Adam: That’s right.

Aaron: If you’re going to give someone advice when they’re first starting as an agent, what’s something that you wish you would have been told in your first year when you were just doing traditional real estate that you learned later about any of it?

Adam: Honestly, I think the two big things, the biggest things, are taking a profile test and knowing what you’re good at what you’re not good at, which I did early on, and I knew. You spend the rest of your career trying to figure out how to adapt, who you are, what your passion is, what you love doing with this industry so that you can make money. The first one was understanding what you’re good at and what you’re not and just dealing with that.

Then the second thing was finding mentors, and coaches, and people that you can work with. Nobody gets where they are on their own. Just doesn’t work that way. Everybody has help. Everybody has a coach, a mentor, or someone. Those were the two things that were very important. The first one, I did a little bit but when you’re young you think you can improve yourself. You think you can change. You do get better at what you do but at the end of the day, you have to understand that you’re built for something specific, and you spend all this time trying to figure out what that is. If you align that with your passion, your goals, and your drive, that’s when you make amazing things happen.

It took some time to figure that out, where that was and what I was going to do. Then finding the right mentors along the way and the right partners which happened to be the right partner, plus only working with people that you just would just trust. Only work with people you can take a vacation with. Only work with people that you’ve been to trenches with. That’s it. I’ve had to learn all of these, in some respects, the hard way but ultimately we’ve found the way.

Aaron: I like that. You said, “Find your skillset and your personality because everybody’s got one and then focus on that niche, whatever that is.” Some people love crunching numbers. I love doing data now. I love crunching to see how much is this house worth. Really getting down to– If I’m going to sell it three weeks from now, this is the price. Finding your niche, find a mentor. That’s a great advice to give around and then something you threw at the end was choosing your partners wisely. I think those are three good things for new agents.

Aaron: Jared, let’s jump over to you. You got your license a few years before Adam, right? I think you said that you’re part of a big KW Office and you’re at number 2 out of 350 agents. Something like that. When did you get your license and tell us about that? Why did you get into real estate?

Jared: I got my real estate license shortly after watching a late-night television show on TBS that had a Carlton Sheets advertisement about making money with no money down. That appealed to me at 21 years old. Like Adam, I just got two years of missionary service to our church. I didn’t have any money, I was a broke college student. We had about $20,000 that we could use for a down payment on a house ourselves. I bought the Carlton Sheets course. They wanted $6,000. I got them down toward the gig. I need everything except for the coach for $79 and then I thought for $79 I’m sure I can learn something.

I started going out and buying houses using the Carlton Sheets program and the agents that I got were so lousy, I’d ask them about what the return of investment was, what the cash on cash returns, the cap rate was, and they would look at me dumbfounded. They didn’t know the answers to any of those questions so I said, “Lets start with something simple. What’s the square footage?” They didn’t know the answer to that. They’re like, “Let me check the tax records.”

I would literally walk through houses and people would go, “Hmm. This is the library and that over there is the formal living room.” I just thought, “This is ridiculous. I don’t need somebody to– You’re an overpaid locksmith. You’re opening a door telling me nothing that I don’t already know that I can’t get right out of the MLS or right out of the Real Estate book.” That’s how old I am. I actually would use real estate books back then.

I was just disgusted by the service that got from most real estate agents and so I decided to get my real estate license. What I did, was I went and found the lady who was willing to be my broker and I said, “Look, I’m going to do a ton of deals, I’ve already got six people ready to let me sell them their first house. Become my broker I’ll give you a 10% cut.” She sad, “Great, I’ll do that.” She took a 10% cut when everybody else wanted 50% and I went out and recruited about 35 agents. We opened up a Wonderful Life Realty on the concepts from the movie with George Bailey.

Aaron: When I hear you describe that, the biggest reason you actually got your real estate license is because the real estate agents you were hiring weren’t providing value. You’re like, “There’s got to be a way to be able to provide better value.” They weren’t helping you in the process. If you were going to give an agent advice, when they’re first starting and their showing houses for an investor or somebody, it sounds like maybe part of that would be know your numbers when you get in there, but what advice would you be giving someone new in real estate?

Jared: I think the first thing is give tremendous service. Do something that sets you apart where people would say, “Wow, this guy’s amazing. He really gives incredible services.” One of the guys in my team had a BMW 745 in his 20’s and it was a three-year or four-year-old, five-year-old model but he would carry around a cooler with drinks and a little mini refrigerator and he’d give drinks and champagne glasses and stuff like that. Figure out something to make yourself set apart. Know what you can do better than anybody else and do that. I think that’s really important.

I think it’s really important to get into some business that ends up being residual. Whether that’s that you go find a home builder. Adam, when we first got his license, he went and worked a brand-new subdivision for us, where we were developing a new subdivision. Those builders, once you have that relationship with the builder, they come back to you and give you more and more inventory if you do a good job. Maybe you can’t list a whole subdivision, but couldn’t you get some small speck builders that were doing two or three homes at a time?

The investment space, I believe that every agent needs to get into the investment space as part of their portfolio because when market cycles change, a lot of people aren’t prepared for a 2008 type of collapse. I think that when you can have investment properties, you make money buying, you make money selling and then you make money again when those same investors decide that the market’s gone up enough and they want to sell their property with you five or seven years later. That’s almost like building some sort of annuity.

Aaron: We’re going to get into that in a second. There’s almost a strategy where even when you’re an agent buying for your own properties or selling for your own properties, you’re still making money as an agent in that transaction. Maybe it’s going into your equity or maybe it’s helping you on the other side, but even if you’re your own customer, you’re making money out there making transactions and so it counts getting a transactions. I talked about it a lot, but a few months a go the market slowed down, I made a lot of money buying and selling foreclosures but the foreclosure market completely stopped with the moratorium. Thank goodness I have a bunch of rental properties. My rental properties has been my income that has kept everything going the last few months with my normal day job has been shut down.

You got your license in, you said, ’98 or ’99. You got to go through 2001 where the economy starts booming, interest rates are getting lowered, they’re trying to fix everything after September 11th. 2005, you’re an agent where the market is really at a peak, and then you’re also an agent during the 2007, 2008, 2009 crash. What was that experience like for you? Because you’ve been through it and we may be heading towards something like that right now. We may be going toward a little bump. We may be going through a big correction, but I think it’s important to talk about when times got rough before.

Jared: At the Dot-com bust originally in 2000-2001, my first month in real estate, I made about 17 sales. Not all closed, but 17 that I got under contract in the first month, 17 because I was young, I was in my 20s. All my friends were getting married and they had all known that I was getting my license so they waited for me and I had a lot of things lined up. As soon as that happened, one of the things we did was we grew a team. We had Adam working on the subdivision. We had a brokerage.

The first stage of it when I started to hit– I remember where I was when the planes crashed into the World Trade Towers, we were negotiating a billboard for our real estate brokerage when we heard the news. When that first storm hit, we diversified by building teams and making sure that we were making lots of money and doing less transactions because we recruited a bunch of agents that were working with us and we got a percentage of their deal. We still did well. I think that if you’re an agent, figuring out how to build a team, how can you have a team? Maybe just some buyers, agents onto your team and just delegation.

Train others and help them make money and succeed. I think that can really help as well.

Aaron: Adam, when you started transitioning from being a traditional agent to represented to becoming an investment specialist, what was that transition like and what triggered that? Was there a moment that said, because you talked about finding the niche you’re good at was there a moment you like, “Hey, this is what I’m good at. I’m going to go all in on this.” What was that like?

Adam: Well, yes, but the moment– it took a while. There was this initial was, “Hey, this is what I’m interested in,” and I was interested in investing and learning how investments work. After, like I said, a couple of years, and traditional real estate, actually started getting my securities licenses. I got licensed in securities and insurance and I ended up doing financial planning and investment advisory services for about seven years. I did real estate on the side until the market crashed.

When the market crashed this previous recession, I was doing– but also maybe more commercial real estate on the side, more focused on multifamily Self Storage, things like that. When the market crashed and Jared, I think, at the time was doing some real estates and coaching with Robert Kiyosaki and Rich Dad, Poor Dad, he was Rich Dad, Poor Dad coach out in Utah, and the market crashed, he flew back, I think, just before that around that time.

Him and I got together, he had been focusing on single family homes. I’ve been focusing just on working with investors and cash flowing commercial product and we just really started working together at that time and focusing on the greatest opportunity that we saw, which was all these single family homes that were so discounted in fantastic markets. I left what I was doing, jumped into real estate full time. Jared jumped in there full time, stopped doing the coaching and we focused and we sold hundreds and hundreds of single-family homes that were $20,000, $30,000 and $40,000.

I remember the first time we sold one house, it was four-sided brick, five bedrooms, three or four baths $50,000, we were like, “Man who’s going to buy this for $50,000?” It was built in like 2003, or 2005. All of these properties were 1990 and newer, they were all built within the last 10, 20 years. There were discounted, it was just amazing. We first started selling to investors and then the hedge funds, different wall street came in, they saw what we were doing, they loved it and then we started selling to institutional buyers. We represented about eight of the largest single-family buyers in the country, and did acquisitions I guess, over 1000 properties during that period in time.

Aaron: My most rewarding transaction during that time period was a personal friend of mine that was a Rich Dad, Poor Dad coach with me, and we helped him get about seven properties in over 10 years, he made nearly a million dollars off of the cash flow and then the equity once he sold the properties and 1031 exchange. He made nearly a million dollars in 10 years off of seven properties that I’ve done with down– I’m sorry, with autism, that it really made a big difference in their lives because they worried about, taking care of their son and being able to to provide a good life. He was able to live off of all the passive income he has from assets.

It’s really rewarding. I can’t believe how many real estate agents go through these cycles, and they sell investment properties to other people and they don’t participate themselves, and I think that’s a really important piece of advice. Don’t take all of your commission’s and go buy the boat, or move to the bigger house in the country club. Make sure you’re building a real estate investment portfolio off of some of the bigger commissions. Take some of the big months and roll it into assets that will put passive income in your pocket.

Aaron: There’s no industry I know of like real estate, that has the ability for you to become an expert without a college education, like to be able to learn from other people and start making a bunch of money quickly, but then also where you could invest a little money along the way and have seven properties and make a million dollars like that is– it is crazy, I don’t know of another industry out there like it.

It’s one of the reasons why I get so excited about and I think so many of our listeners get excited about it. I mean, honestly, a lot of people get into real estate because they go like, “Whoa, the commission for that was $3,000. Oh, the commission for that was $6,000. That’s what I make in a month, that’s what I make in two months, I should go become an agent.” I think money is one of those draws at the beginning but then really seeing how big of an opportunity there is I don’t think all of our all the people that are new agents quite comprehend that yet and it’s exciting to see that. Right now, how many transactions have you guys done in the last year and what do you think the average price of those is?

Jared: Over 300 transactions we’ve done in Huntsville, Birmingham, Montgomery, Atlanta, Columbus, and Macon, Georgia, and South Bend, Indiana. We did about 65 doors just in South Bend. I think one thing about that is, there’s always a great market, if you think your markets dried up, you think there’s no investment properties where you are, there’s always a different market, if where to look. We’ve been able to do a lot of transactions and I’ll let Adam answer the second half of that.

Adam: Yes, in most of the products anywhere, transactions ranges from, maybe $125,000, average up to $200,000 on average on those transactions, some a little bit lower, some a little bit more, but ultimately, remember, we’re focusing on investors and it really, most investment product cross the nation, good investment, cash flowing rental properties are less than 250,000. New or existing.

We analyze markets all across the country, we find out where we thought the best deals are, the best opportunities are, and we identify those markets, and then we move from there into finding the best product in those markets. Utimately, we can determine, “Hey, is this an 8 cap market or 12 cap market or what type of returns does this market throw off and what direction is it going? Where’s it at, as Jared mentioned in the lifecycle. Then we go in there, and we just drill for oil for our investors find the very best deals.

Aaron: You guys have even built some software about that. We’ll talk about that in just a second that kind of shows you how to jumpstart that, but how many investor clients do you guys write offers for now? Is it one or two people that you’re buying and selling a lot of deals for when you do those? Do you have to reduce commissions?

Adam: No, not at all. It’s in a rally is we’re not doing really anything for any institutions right now that that kind of shifted as it was funny as the as the market started to come back. We used to had to have at least a 13 cap on a deal for an institution to buy it and as that went down to 12, 11, we saw the market because we had almost everything in the market. The average these deals once they got below double digits down below 10% caps.

I’m talking about cash on cash return, I’m talking about cap rate and then people started to disperse. There were people that stayed in the market long term, there were people that went to chase yield, went to other markets, which was funny, I stayed in this primary market, Jared went and found better returns and some tertiary markets and some secondary markets. Both worked out really well, different strategies though. Right now, it’s mostly individual investors. One investor will sell maybe one, two, or three properties and we sell the other properties to other individual investors.

Jared: Sometimes we’ve even done 1031 exchange where we’ve sold 30 properties at once and that’s been been a lot of fun but we’ve got about 5,000 investors in our database that buy from us on a regular basis, they’re repeat buyers, and I think that’s one of the opportunities for agents to be able to get into investment. business and make sure that you’ve got a database of people who come back to you again and again. They buy it from you, then they often will flip through you. If they’re buying it, then you can get a commission in the front end, you get a commission on the back end. Then you may end reselling it five years later sometimes. I really like that aspect of it.

Aaron: That’s an amazing point. We always talk to you guys, all you listeners out there, about building that database. About building that database and reaching out to that database, and growing that database through time and how people grow it. Something that Jared and Adam have talked about here though is if your database is investors– if your database is people that are buying and living in their home, they may do you a couple of transactions with you in their lifetime. Chances are they’re going to buy a house live there for five years call you back five years later, so maybe it’s two or three.

If you have an investor in your portfolio and you do one deal for them, there’s a much better chance that you’re going to be doing a deal for them every year or a deal for them a few times a year. If you had 5,000 investors in your database or 15,000 end-user buyers, I would say the 5,000 investor database is going to get you more transactions. What was your biggest secret of building that list of investors?

Adam: Jerald, I think in the beginning we didn’t have a list. Actually, I think–

Jerald: We were going out there hunting homes because anybody could advertise in the beginning.

Adam: Listing them.

Jerald: We would shoot videos and post them to Facebook and get tons of buyers who wanted to buy based on seeing our videos on Facebook. That’s how we started.

Adam: Honestly, though now social media has become what it is with Facebook, Youtube, Instagram, and LinkedIn, there are so many more ways to network people. Sometimes I’ll always think to myself and people always ask, “Do you have to go get an investor first? Do you find the deals first? Is it a chicken and egg thing?” I always default to property first. Go find the deal, and that’s where Jerald and I started, go find the deals, market those deals, and then buyers come.

Aaron: You guys would even do it when it wasn’t– You would go out to a hard home-

Adam: They weren’t ours.

Aaron: -that wasn’t yours and say, “Here’s the deal if you’re an investor, here’s your return,” the stuff that Jerald was asking. This one’s 1,400 square-foot you could probably rent it for $800, Here it is, and so you would get the people that way. Maybe you’re going to get a deal so you’d focus on that property. That is a great idea for people. Right now people go to houses for other agents and that’s a way to get there. That’s another method of finding the deal, marketing that deal, but marketing toward investors. What are the things that investors are asking you for statistics? If you’re going to bring an investor a deal what is the stuff that you put on that email?

Adam: Now we have proformas and the proforma tells everything. We want to give them what the cash on cash return is, what the cap rate is. We want them to be able to know how much cash flow per month they’re going to have. We give them coms, so they can see what the other properties are selling for so they can see that it may be an equity position. It’s a lot of that–

Jerald: Call in costs, how to pocket costs, things like that.

Aaron: Yes.

Jerald: It’s quite big for the area.

Aaron: Yes that’s a good point too. That’s how you make a million dollars over 10 years because it’s not only cash flowing but you have appreciation and you get it for dealers. There’s a lot to that equation. You guys for the longest time were doing this was like slide spreadsheets. Then you built your own software to try do to this analysis and try to see it. Then more recently, you’ve actually built that software in a way you can actually market it and other people can start using it.

When I built my portfolio builder software it’s the same thing, right? I just built it for myself. I started using it in 2009. We would add a feature, and add a feature, and add a feature, and last year for our forclosure listing service we started releasing that, right?

It was the stuff we built for ourselves and now are sharing it. Now, you guys have done that through Housefolios. Tell me about the evolution of creating Housefoliosand then have a chance to tell people what that is if they’re going to look for it.

Jerald: Adam’s more technical man. I’ll let him talk about the details but when it started, we would get up at 4:35 o’clock in the morning because it was a red hot market and we were competing against other major hedge funds. We had to analyze the MLS, then Adam figured out how to download it all into our spreadsheets. We would literally sort through, go through the pictures, go through the numbers, decide which ones make sense.

Then we would send out a team of scouts to literally go through 30 to 50 properties a day with three or four different scouts in different segments of the city, shooting pictures, telling us what we thought the rehab scope was going to be, gathering all this data, while our analysts back at the office would plug all that stuff into the spreadsheets.

Adam: Yes it was just like Jerald said it was really interesting. We’d spoke with some investors, Jerald and I were talking and decided we need to find out what are the very best deals on the market in all of Metro Atlanta right now. We need to put that list together, we need to get it over to our investor. In doing that, I quickly narrowed it down to about 200 properties. They seemed to be very good deals in Atlanta, and I had to underwrite all 200 or maybe even a little bit more than that of those properties.

It took me three 10-hour days. After three days, 10 hours a day, literally 10 full hours for three days, I said, “Here it is. These are the very best deals in the Atlanta Metro right now.” Then as soon as I had finished it, it was outdated. I was like, “Okay, we got to come up with a better process in this.”

Jerald: Sometimes the spreadsheets would get so overloaded that it would be finking and you thought you were dealing with accurate data. You’d have a sell that was pretty important like maybe what your equity was or how much profit there was in the deal and it was off by $10,000.

Aaron: Dude, I remember the days of Excel where, yes, the computers were not fast enough to update all the time.

Adam: Yes, yes, we did. We exported all the data from MLS and we went through this analysis process. It took about 45 minutes. In about 45 minutes which was a huge improvement from three days to 45 minutes. I could tell you where the very best deals were on the market, at any given time. You could get whatever buy box you had. If this way your buy box, whatever algorithm it was, we could apply that and run that across everything in MLS, and tell you where the deals were.

As we would find those deals do those buy box, so you can see how a lot of the institution buyers loved that model. Where we could basically run is a 48-hour or 72-hour model. We would analyze all the deals get them out. The scouts would go scout the property, make offers from the driveway. We were just turning and burning. Then overtime as we were using this for ourselves, we built it into software.

Once we had built the software the first piece of the software, the first time we built it, it took 60 days to build it, cost maybe like $7,000 or $8,000. Within five minutes I could tell you where the very best deals were anywhere in the Metro Atlanta, in five minutes. Huge improvement, way less work. Then we pushed it all to a website and our investors would just go to that website and make offers right there on the website. Then our agents were order takers. They would just take orders and it was fantastic. Honestly, actually, Jerald, do you–

Jerald: We had in there what the rehab cost was going to be, what the after repair value was, the perform, everything’s there-

Adam: Yes, all the numbers.

Jerald: -as a real estate broker one thing I loved about that is I was actually turning down clients that wanted me to go sell them a half a million dollar home and taking $15,000 driving them around for three months, was a lot more work than just getting one guy who wanted to buy five investment properties that my car, and we just look at our analysis from our website and pull the trigger based on the proforma. It was way easier work and more lucrative.

Adam: Well, when you give them, most agents were just sending them MLS links. Send them a listings, right? When you do the underwriting and do the work and you can tell if it’s a good deal or not. You say, “Hey, this is a good deal.” All of a sudden, they’re not telling you what to buy, they’re not driving the train. You’re telling them, “Look, once you get to know them this is what you want to do.” Okay great, “This is what you need to buy. This is what it’s going to look like, and this is where you need to buy.” You’re telling them what to do, and you’re driving it.

Jerald: There’s agents out there that are thinking, “Well, you’re selling $35,000 and $50,000 houses I want no part of that. The commissions are too small, I don’t want to mess with it.” Here’s the thing we were charging a minimum of $5,000 fees if they paid a $900 commission the client would still write a check to us for $4,100 because they recognized for us to get them the homerun deal we couldn’t keep our doors open at $900 asking and I would still work for them.

Adam: Then we got busy and then we started charging them $1,000 upfront. If they wanted five properties, they gave us $5,000 or whatever it was. We started charging them $1,000 upfront to go do that work because it became so popular. Jerald, I was reminded if you remember when we first started doing this we were just doing it part-time, to see if it will work. Our first I think it was a month and a week we put 25 properties in the contract, that first month.

Jerry: Yes.

Adam: We were like, “Okay it works,” and we were just selling online. We basically were just an online thing. We send them to a website, they tell us you had all the financials, had everything in there, and wanted to see and they just like, “Okay, I want this one, this one, this one, and this one,” and we were just taking orders.

Jerald: We sold so many of those properties three and four times. We accumulated enough that we started selling a lot of them to the big hedge funds who were buying packages of 30 to 50 homes because these foreign investors had packaged together enough properties that we were selling them to the big hedge funds.

Aaron: Man, I am convinced by your strategy that your guys’ strategy to focus on investors has worked out really well for you. Not only is that investor leads somebody that’s going to do multiple transactions. You’re saying the house can even turn into multiple transactions because you bought it for one investor, you sell it to another investor. Now that investor is going to help you.

So, you can actually sell the same house four times working for four different investors, that investor could have you do four different deals for them as they do it. You could even charge a premium value if it’s like, some people are like, “Hey, I don’t want to write offers on $50,000 houses because the commission is so small,” but if you’re actually the one telling them this one is a deal, and here’s why you’re also saying that as an agent, you could go to people and say, “Hey, I’m doing this special, you’re going to make 20,000 on it, so I need an extra $2,000 or $3,000. I guess when it was a hot market, that was a much easier conversation to have.

Adam: Later down the road, they partner with you.

Aaron: Yes.

Jared: There were other times where I would have disclosures banks and I’d have painting crews and I would let them use my painting crews on my flooring crews and I ended up making money off the painting or the flooring sometimes. you get another disclosure sign for that, where they acknowledged you may make some end but then on top of that when you’re referring it to the property manager, there’s been months where I’ve made $4,000 to $5,000 a month extra just from referrals to property management. You don’t get rich off of that, but it’s multiple streams of income.

Aaron: Yes, multiple streams of income in investing and being able to do that, so many ways. Well, we only have a few minutes left, so if somebody goes to Housefolios, and I think we’ve got like a special link or something that we can share for our Real Estate Rockstars listeners, we always have special codes that get them extra pretrials, but if an agent goes there, what are they going to get?

You said, you go to a city and it’s going to make it really easy to see the deal. So if you’ve got an investor in Dallas–Fort Worth or an agent. Says, “Hey, I want to be an agent, I’m going to represent investors in Dallas, I need to tell them what the best deals are.” Do they go to Housefolios? Do they type in Dallas and says, “Hey, here’s the best deals?” How does that work?

Adam: Yes, you can go to Housefolios and I think we do have a special link and a discount. You go to housefolios.com/rerockstars, but ultimately when they go to the site, we’re continuing to build out the site. Right now it has three very important things. It allows you to plug into the MLS or take a large list if you’ve got a portfolio of large list of properties, upload in the software and you can filter and screen through all the stuff that you don’t want to see down to the very good deals that you do want to see.

You can filter lists or you can filter the MLS, and then you can take those properties, those 5 or 10 deals move them over and underwrite them within minutes, you can do a quick underwriting check coms, check your renovations, check your rents, and your after repair value. Do a quick underwrite and then you create a proforma. Create a nice looking professional proforma that you can email to your hard money lender if you’re buying, or you can email it over to your investor and let them make a buying decision.

All of that within minutes, you can do a gray label site if you’re selling or flipping properties on a regular basis. Right now we’re still building out some other components. There’s a sourcing component, we’re building out offer to close portfolio management, a disposition marketplace we’re about to release. A lot of good things in the works that we’re pretty excited about.

Jared: I love that you can look at any property in your portfolio and see them a list and see which one’s your top-performing, which one has the most equity, which one has the highest cash on cash return, which ones are bad, which ones are bad losers and I know which ones to sell and which ones to keep.

Aaron: Yes, I reached out to you guys because I have this pool of houses that I’m looking at, and so it was like, “Hey, this hedge fund type company,” and said, “Hey, here’s 400 houses I could offer on.” Their team is uploaded to the system and so now I can look at it and say– because that’s always the worst. When they say, “Hey, you can buy any of these houses,” and you’re trying to figure out which ones are better than the others.

Once you can say, “Hey, here’s the winners, here’s the ones that you should buy, here’s the 100 that you shouldn’t touch at those prices and here’s why.” They’re a really cool way to get people jumpstarted, and I think two-fold. One of the things that we’ve been trying to talk to people over the last few months is that we need to have backup plans. Whereas maybe three to six months ago, we were talking to agents and we were focused on, this is how you can be a Rockstar agent and we weren’t saying anything else.

Now over the last few months, we’ve been reminded that it’s okay to have a backup plan. I think the best backup plan for real estate agents is to also become a real estate investor. To be able to invest in some of your own stuff, maybe that you buy one house a year or one house every five years or one house every 10 years, we just heard Jared’s example of the seven houses to a million dollars within 10 years. Like that is fantastic.

Having that backup plan so you can become an investor yourself, but also from what we’ve heard today, agents out there, if you guys aren’t already tailoring to investors, if you don’t have a part of your business that’s tailoring to investors, I would hear the argument here that a lead of an investor is a super unique lead that could be very valuable, that can go a bunch of different ways.

One of the tools that these guys are bringing is you can go to, if you’re an agent right now, from what it sounds like, you can go to Housefolios, you can plug-in to your market and find 10 deals that are listed on the MLS that should be great. Now you can send them out to people on your list that are investors or go figure out how to market to those investors and say, “Hey, I found 10 deals on the MLS right now that are active, there’s no offers on them and they’re great investments.”

Being able to use tools like that to form and start your investment company, and maybe you’re going to find some along the way. I remember I’ve met a lot of agents that were like, “Hey, we tried to buy this one,” and they ask the buyer, David Osborne, one of his first deals, he showed a guy and said, “Hey, do you want to buy this one?” His client said, “No, I don’t want to buy it.” David said, “Okay, then I’m going to buy it for myself.” It was going to be the agent first and that turned out to be one of his first investment homes, now he owns hundreds and it’s still there.

That was a really fun, almost hour of us getting to talk about your guys’ focus and expertise, anything that I’m forgetting any thoughts, so the link again, housefolios.com/rerockstars. It’ll be on our YouTube link, it’ll be on the website when it’s there or go to Housefolios and say, you heard about us on Real Estate Rockstars. I definitely think you guys should go check it out. I build and sell my own software and I think the stuff that they’ve built has been great, but Adam, and Jared, anything I’m forgetting, any last thoughts you want to tell the real estate agents out there right now?

Adam: Really, it’s you believe in yourself. We started this 10 years ago, we are on a mission. We are going to change the way people buy and sell real estate. People are going to buy and sell real estate differently in the future because of what we’re doing right now and you’ve got to believe in yourself and always have goals.

Jared: I think it’s really important to make sure that you’re providing value. Really lead with what you can do for others. Nobody cares about your resume or what you’ve done for you in the past, or why you’re so good. Talk about what you can do for them. How are you going to help them? Why are you providing value for them? If you lead with value and people think you’re just way over providing value more than anybody they’ve ever seen, you’ll get the business and you’ll get so many more referrals and you’ll get great and incredible client loyalty.

Aaron: I love that advice from both of you guys. Usually, I get to see you guys every few months and some of these conferences, I don’t know when the next time will be, since COVID has put a damper on some of those things that we get to meet at, but it’s always fun to get to chat with you guys. Even though I’ve got to hangout and talk to you guys a bunch of times, I learned so much from you guys today, parts of stuff about your story that I hadn’t realized before.

Adam, big congratulations on adding baby number seven during all this craziness. Big congratulations to both of you and not just keeping your business successful and being able to have something that can work right now while everybody’s at home, but also launching the software. I know you guys have a few other partners on this thing and everybody’s really excited about.

Thanks for coming on the show, Real Estate Rockstars, hopefully, you got a ton of value from that episode, and remember you go find all of our toolbox from every agent that comes on, you get a special deal with Housefolios right now if you use our link and then go to highbanddigital.com or anywhere podcasts can be downloaded Real Estate Rockstars. Thank you.

Adam: Awesome. Thanks, Aaron.

Jared: Thanks, Aaron, that was a lot of fun.

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