How To Sell $100 Million in 2 Years with Adam Oback & Bobby Nilsen

Sean: Go ahead and introduce yourself and let everyone know who you are and how you guys got into real estate investing.

Bobby: So I’m Bobby and the way I got into real estate investing was actually through college. I knew I didn’t want to go to school. So I tried finding a way to get out of school and that was through real estate. I knew that the way most people got their wealth, kept their wealth, and had a lot of residual income was through real estate in some form or fashion. And if you look at most of the wealthiest people in the world, all of them have some type of business that has to do with real estate.

Most people who have created their wealth is with real estate in one way. I knew I wanted to do that in some form fashion. So I just started reading a lot of real estate books and got really into it in college. I actually dropped out a few times, got my license, and kind of did my own thing trying to get into it.

But that was right around 2008 when the market crashed and I thought “Well, I guess real estate isn’t the thing to get started in right now.” So from there I joined the military  and worked for the city, then I worked for the federal government. I got in the military so I worked for the federal government and had a couple different jobs with them.

One requires traveling a lot. I was probably gone I think maybe about 50% of the time and then I really quickly found out that I can’t be gone this much. In the military I was gone quite a bit as well . I was living apart from my wife then and with kids afterwards. So I thought I need to get back home and stay put. So I got a job at NASA and finished off there. And that’s kind of really where the flipping and investing started taking off.

NASA allowed me the time to kind of focus on it a little bit more. So from there, I thought NASA is the place I have to drive to everyday, but real estate is where we’re going to start picking up real quick. Adam and I had always been involved in some type of business in some form or fashion pretty much since we met each other in college at San Jose State.

So we kind of re-hooked up after I got out of the military, since I was back up in the area now and we were trying to figure out what we were going to get started next. We had a couple of different ideas ,and then there’s real estate, which is of course his passion as always . So we figured out that we’re going to get something done with flipping houses and we’ll start managing that. So then once we put our heads together for that, we spun our tires for about a year and a half  to two years and then just exploded.

Adam: I got into this as well kind of like Bobby. We’re both very into real estate. I always joke that we’d be like in a biology class doing some free reading time but inside of that Biology book, I have like Robert Allen’s Zero Down or something and I was always just super impressed by all these real estate techniques I was reading about. So after college I actually became an agent. And to this day I have only done one deal as an agent and that was buying my own property back in around 2009 right after the crash. I bought a five-bedroom, two-bath home in East San Jose. It’s a large 2000 square-foot home that I bought it for 300,000.

I used my license on it and with that commission, I basically eradicated the cockroaches and got rid of all the mice. The place was beat to shit. I got new carpets and paint. Bought pizza and beer for my friends to help get the place taken care of. And to this day, that was the only time I’d ever used my license.

And from there. I just rented out the rooms to a bunch of friends and really didn’t do anything until about maybe right around three to three and a half years ago. That kind of ties into a when Bobby and I were starting to put our heads to this and get serious with this.

In the last two years now we have bought and sold a little over a hundred million worth of real estate and we’ve been the agents on none of these. A big part of our business model has actually been working with real estate agents. So we never want to step on toes, we never wanted our licenses to get in the way of that. So we just we kind of drop those. That was kind of the history.  So I guess you could say I was an agent at one point but really I use it as an investment property. Recently I sold that property and moved that money into a mountain-view four-plex.

Sean: Yeah, it sounds like me. I have a license but I don’t use it.

Adam: Exactly, same as me. I represent myself as a buyer and like I said, I used that commission to get rid of the cockroaches and the rats. I cleaned the place up and did a heavy work.

Not too long ago for a little shy of a million.

Sean: Damn, congratulations.

Adam: Thank you.

Sean: It’s really cool. It seems like you guys have been into it from a very young age. I’m surprised that you guys even knew to go into real estate because most people don’t even find out about that until like after graduation in college when they’re working and then they hate their job then they try to find out a way out of that. But it seems you guys had it a long time ago.

Adam: I think I’ll speak for both of us. We both knew real estate is where we needed to be before we even graduated college.

Sean: Nice! So what kind of projects are you guys currently doing?

Bobby: Great question! So at the moment we have a couple of projects. We have a couple of multi families we’ve been doing. We’ve done quite a few of those. We’ve probably done at least seven or eight multi families over the last year as well as single families.

As of the time of this podcast, we’re slowly unwinding. So we’re going to be taking about a month and a half off. We’re always looking for deals and we still have people here working on our behalf. But personally most of the stuff we currently have on the books are mostly multi families and we had about three or four single families that just got sold off.

So we’re trying to get everything off the books. We’ll probably take on a few wholesales before we leave but we’re both out of here in about ten days. Bob, he’s heading over to Columbia and I’ll be heading over to Japan to take some time off.

Bob: So for this year, for example, we’ve sold one house and we’ve done three whole sales. We’re slowly starting to change because wholesale’s a little bit easier to do remotely versus having to do the hands-on with the managing the construction, managing all the projects and all that stuff.

Sean: So yeah, you know we’ve been going to the same real estate investing meetup groups were in the same circuit and we’ve probably been going around in the same time frame in the past two or three years. So what changed for you guys these past two or three years that made you guys just explode from spinning your tires to where you are now?

Adam: Good question! I would say something about our first deal. I know a lot of people in the investment circles know Mr. John Paiva, another savvy investor and a very good friend of ours, awesome guy. Awhile back,  and this was interesting. It was a random story. My mother actually pointed this out. I was at a Harry’s Hoffbrau for my dad’s birthday. And there was a meetup that they would do there. My mom says “Hey sweetheart, you do real estate, you should go in there.”

So I had gone in there and basically said “Hey I’m here for my dad’s birthday. I got about five minutes. Who are the three big fish in this room I should talk to?” And John Paiva was one of them and the only one I remember . He’s the only one I stayed in touch with. And with John Paiva, he ended up sending us our first deal. So our first deal was actually a super heavy fixture in Concord. Bobby and I had literally just cashed out our life savings to buy the same cash.

Bob: This just goes back to the old adage that says “Luck favors the prepared” because this was just straight up luck.

Adam: Yes, John had too much stuff going on at the time. He didn’t want to deal with Concord. So he was like, hey boys, I don’t want this but I think it’s a good deal so look into this. When we got there the house has about four inch variance.

Bob: There were cracks about that big in the ceiling.

Adam: Yeah. It’s like four inches. It looks like one of those movies like Mars Attacks where the  building was shot a couple of ways. It was just destroyed. It was water damaged and has cracks probably 3 inches thick going from the ceiling to the floors. It was just heavily beat up. But fixed up it was probably worth, I think 550 to close to 600 (thousand). So we basically bought that for the low 3s and we do nothing about it. We’re kind of scared. We knew we had a deal but we don’t know how we’re going to get rid of the deal. We admit we had no experience.

So we ended up buying it. We thought we’ll make this work. We’ll figure it out. We pooled all the money  we had. We cashed all of our stocks. Everything we have we put into this. And we got lucky. We took it on. We did a quick little cleanup. There’s  probably about 15,000 pounds of garbage. So we ended up with about maybe eight truck loads of garbage out of there.

And we just kind of started pulling it around. We tried Craigslist and whatever medium we could just to piece it out there and see if we can get an end buyer. And lo and behold, somebody ended up coming and they bought it for about $50,000 more than we had paid for it. Maybe a little more like 60K or whatever it was.

So after everything was said and done we walked away with just shy of about 45 to 47 grand in profits. And that was kind of our  “Aha!” moment where we kind of created that muscle memory. We thought you can make money in this and it does make sense.

Shortly after that, we parlayed that capital into a four-plex off of 10th street downtown San Jose. That was a winner for us. We ended up buying that one for 1.2 million. We put about maybe a hundred and fifteen thousand into it and we sold it for a little over two million. My understanding is it’s still one of the highest, if not the highest priced four-plex in San Jose. We actually got a call from, I think, it was Loopnet Co-star. They called it an outlier and they want to verify that that was the correct price. So if you do the math, we made just shy of 700 thousand on that one. And that was like a big big “Aha!” moment.

So having that kind of cash reserve (because neither one of us got enough money and we’ve just been saving) we just leveraged hard. We feel like we’re invincible. So within probably six months of that, we’re holding close to about 20 million dollars from the projects. We had somewhere around 12 projects at one point.

Bob: At one point we had about seventy thousand dollars a month in holding costs and we had at one point about five hundred dollars in the bank account (little bit less, like 497K) and we had a couple properties on the market getting ready to be sold.

But that was just how much leverage we got. So we scaled quick and we just went big. We  figured if we’re going to do it then let’s go all in. The timing of the market was right and it didn’t look like it was going to be cooling down anytime soon. Realistically we started out with a single family home and then we just jumped from there straight into a four-plex which I don’t think most people would do. We kind of went hard real fast.

Adam: At the time we didn’t have a contractor lineup. We didn’t know anything about hard money. We had to figure all of that out. So a little tidbit there was we interviewed several several contractors. We basically brought out about eight contracting teams all during a one-hour window just so they can see and think like “Hey I have a competition and other bids. We better come in with a great price.” And lo and behold, we had people quote us as low as maybe 110,000 up to about 250,000. Maybe one guy offered like 300,000 to do all four units. This would have been two bedroom and one bath; a complete remodel. The place is really shot and we got lucky we ended up getting a great contracting team.

They weren’t even the lowest bid. It was a lady (but it was actually her husband) who we dealt with. It was a Chinese lady actually. She’s a total sweetheart and to this day  we always tell her it was her handshake that got her the deal like that. We’ve done over 20 projects together. Including a lot of these are four-plexes or more so they probably worked on least 40 doors for us over the years. And we told her we chose you because of your handshake; a strong, firm handshake. She’s always been good to us even when we were highly leveraged.

Like Bobby was saying, we had about 70,000 in notes and we had 500 bucks in the bank. We asked her kindly if she would parlay us paying her what we owed her on a few projects and once they sold out we would give her a bonus. She was just so sweet and said “No problem, you guys have always paid. I like what you guys are doing.” So she took care of us and we eventually took care of her and we’ve had a great working relationship with our contractor ever since.

Sean: Well, so you just use her as the main contractor. Do you have anyone else doing jobs for you?

Adam: Every so often we might just send in someone like Quickstops for light stuff, but for the most part they kind of become our in-house contractors. We really help them expand their business. It’s at the point now that we can just call them and they’ll start the next day. So we have projects fall on our laps tonight and we’re good to go tomorrow. They’ll literally be there at 6:00 AM ready to work.

Sean: Awesome. Awesome. Can you talk a bit about how you’re closing on so many deals at once? I know you guys have a lot of cash, but are you guys also using like private money lenders?

Adam: Hard money.

Sean: So it’s just hard money and you guys are funding everything else?

Adam: So, originally we were using a lot of hard money and we still do. And at a point too when we were getting extremely leveraged we would even do private money and a combination of even partnering up with people too. We’re always finding a lot of deals. We had no problem partnering with others to bring them in on it and have them close on it. And we might take x amount of percent of the profits.

Normally we try to take half or more based on kind of who came up with what. But using those techniques allowed us to get very leveraged. Even at one point Bobby cashed out like everything he had. I even leveraged one of my properties and kind of pushed off. This is where we can be very leveraged at 20 million plus range.

So whatever we have, we borrow against it. Be it our vehicle or my PlayStation 4, like whatever it was. We were willing to use it as collateral  just to get us some more money

Sean: Nice! So how are you guys currently finding deals? And what is your buying criteria when you look at a deal?

Adam: We market heavy. We have all sorts of techniques that we use a lot. Of course have our own proprietary techniques that we use online. We do a lot of heavy online marketing. We’ve created our own systems to find the right people and stay in contact with them. We also use a lot of agents. We have built a lot of organic relationships with high-quality agents and they see that we do deals. They see that we’re timely and were consistent. We don’t try to skip them on commissions. We take care of them and lo and behold they take care of us. That has been a great source.

Bobby: Another huge factor that has played a role in us getting deals is just the synergy that Adam and I bring to the table when we go in to purchase a property through the negotiating  to the rapport building and everything that goes into getting a purchase completed. We just go off of each other and were able to really get a lot of deals that way through agents, straight to the sellers. Pretty much through any way, we find deals, just through that. We’re able to get pretty much in the bag when we go out there if we go out there.

Sean: And what would you say is your percentage between buying a property direct from the seller versus getting an agent to do it for you?

Bobby: We’ll split it up into this way: so from sellers and then through wholesalers and through agents. I think those are the three major outlets that we use. So straight to sellers is probably about I’d say 15 to 20%. And then wholesalers is about 5 to 10%. And agents are about 60 to 75 %.

Sean: Well, that’s a big percentage. So do you guys do direct mail at all? Or is it all online marketing?

Bobby: We do direct mail.  We like direct mail.

Sean: And what do you think is your marketing budget for all that?

Bobby: It’s funny because we recently did one very large marketing campaign roof. I spent about ten thousand to market, but before that we’re probably below like 6,000 for the budget (less than $20,000). To this day, we’re less than $20,000 on marketing. And that marketing that we’ve done has probably generated at least three to four hundred thousand in profits.

Sean: You actually have like the complete opposite model of most of the people I’ve talked to besides Elisa. Everyone else uses direct mail very heavily. Some people even do like 10 grand per week.

Adam: I haven’t heard of Elisa’s podcast. She’s a friend of ours actually. About a year or two ago she actually  took us for some coffee. And she was just picking our brains and we just knew she was going to be successful. She’s so ambitious. She’s crushing it.

If you’re watching this Elisa, we’re super proud of you. It’s really nice to see you coming up. It’s nice to see just really nice people be successful in this industry. You don’t need to sacrifice your own moral standards for success. So we’re really glad to see her come up, but I never saw that podcast. What was her budget, out of curiosity? I’m curious what she was spending on marketing.

Sean:  Zero.

Adam: She’s taking the whole  “straight-up agents”, I believe.

Sean: Yep. She said she would lock herself in a room and just called agents for hours. She’d be calling  700 agents and of those 700, you know, you meet with maybe a hundred . And then out of those one hundred maybe 10 people actually give you something.

Adam: Yes. That’s fair. I don’t think that’s too far off. It’s like the hundred-ten-one rule. You talk to a hundred agents. Ten of them might send you something that kind of makes sense. You’ll get one deal out of it. I don’t think that’s too far off.

Sean: Yep. So are you getting like most of your deals from one agent in particular? Like one guy sends you guys most of the deals?

Bobby: No. To this day I think our best agent found us like two or three properties. So we have three agents who have found us multiple deals. One found us two in one shot. So we bought two properties at the same time. And those made us quite a bit. And then another agent he found us one. It’s actually funny. He found us one that he tried selling and he had it in contract with probably four people and none of them wanted to close on it. This is all off market. So it came back on the off market and he found us. We were pretty much the last shot before he was going to bring it to market. And the house was just a total mess. So we picked it up and then we held onto it and cleaned it up  and got some things done with the city. There’s some permitting issues. We didn’t really get them cleared up, but we got a lot of questions answered to make it more clear for the next person and ended up selling it. And we made like a quarter million more in profits on that and that’s a major. We just did our second deal with him about two to three months ago.

So he was the next one that we did two outside of being in the same transaction. And then there’s another agent we’ve done probably three or four deals with.

Adam: This was actually a close friend that I personally known for a good decade plus, and over the last couple of years has become a very good friend of both of us. And that is probably the gentleman who brought us the most deals. So yeah, let’s just say that there’s just one or two agents who are bringing majority of the deals, I don’t think so. If an agent brings you two deals, they’re an all-star in the industry my opinion. Very rarely have we seen agents bring more than two to three deals. Keep in mind that we’ve only really been doing deals for the last two or two and a half years. We had another one lined up with them that we’re still working on and he just brought us two more today. So he might be our new superstar agent. So you never know. In time some people might start shining through but I think we’re still young in our career to find out who are the 10 plus deals agents are going to be.

Sean: Gotcha, going back to when you had the whole contractor line up and you have a bunch of them coming for that one hour to like compete against each other. How did you even find them in the first place?

Adam: Yelp and Angie’s List. Google. The internet. One or two referrals.

Sean: And then the contractor you ended up using, she was from Yelp or the referral?

Adam: Yeah, they’re from Yelp. They’re just phenomenal. Like we said, we think the bids came in fairly tight for the most part just because everyone’s seeing each other there in one spot. I think if someone’s looking for a contractor, that’s one golden nugget right there to help you get to build your team

Bobby: That can go up to the handshake, no limp fish handshakes.

Adam: Yeah, we like good eye contact or handshakes, that tells a lot about a person.

Sean: All right. Very cool. Can you go back and talk about your buying criteria? Like when you see a deal, how do you know this is a deal I want to go on versus passing on it and moving on to the next one?

Adam: Realistically when we get a property, there’s two things we ask for: address and price. From that we can pretty much get a good feel for what we need to be in contract for unless there’s some major foundation issues or say the roof is missing or something new just that’s out of the norm. If it’s a normal, kind of keep the same square foot and just rehab it, we can get a pretty good idea of where we need to be. So within five minutes were able to figure out exactly what we need to do. And with that we go off of the buying criteria. We need to make at least, at minimum, 10% of the resale value. So if the property sells for say a million dollars (realistically in this area 2 million is a better number), so if the property sells for 2 million, we need to make two hundred thousand.

Bobby: So that was kind of a criteria that we use. Sometimes it is a little bit higher or lower. It was something that we start sharing with our students. We’ve seen a lot of these other programs like Fortune Builders and whatnot where they want you to buy at 60 to 70 cents on the dollar minus the cost of repairs. We were never big fans of that. So something that we start sharing with our students was this 10% philosophy. Us personally we probably switch to about 15% now because we’re getting pickier for something we’re going to take on because we’re getting a lot of deals sent our way (because we can be picky).

I don’t know if we mentioned that,  we recently started an Americanflippers.com and we’ve been taking on a quite a few students actually .It’s something that we’re proud of and what we’ve kind of teach them was aim for the 10% . If you can make 10% of the after repair value you got something good. So that’s kind of where were at.

Something that you always want to consider is, well let’s just use easy math. Say you’re looking at a million dollar property. Say we know it’s going to sell for a million . All the comps are between 980K and 1.2 million. We expect this offer about a million. We’ll walk backwards. So we’ll subtract a hundred thousand for our profit, our 10% (probably now 15% but we encourage our students to do 10%). We’ll subtract the agent’s fees so we’ll say 5% which would be about 50 grand. We”ll subtract our rehab costs, which is a little bit different based on the project. So we try to keep between sixty and seventy five dollars a square foot in the property and then we’ll subtract probably two or three percent for just acquisition cost, hard money, points, closing, title, escrow, etc. And from there that’s where we come in with our offer price.

Sean: Okay makes sense. And if they say no you just move on to next one, right?

Adam: We have other strategies as well. Sometimes we’ll work in some other factors like if you want top dollar, maybe we can help you with this or that because we know a lot of agents. So we think there’s other techniques that we utilize rather than saying sorry on the next one. So our goal is if there’s any way for a property to exchange hands we want our hands on that transaction

Sean: Make sense. And what is the agent incentive to work with you guys ?

Bobby: A smooth transaction.

Sean: Yeah, do you offer them like the whole like triple dipping strategy?

Adam: Yeah, we’re totally open to that. Yes. We allow the multiple commissions we just try to take care of them the best that we can. Sometimes we even go above and beyond as to incorporate whatever makes sense for all parties, but we’re big fans of “Do not be selfish with the agents. They are the major lifeblood of our business” and we try to treat them accordingly. So yes, definitely multiple commissions as well as whatever else needs to get done in order for them to bring a deal to us.

Sean: Let’s imagine you have to start over. What would you guys do?

Adam: With connections without connections.

Sean: Without.

Bobby: Go to meetups, start with meetups. Start right there because realistically you don’t know exactly where you’re going or what’s going on in the market at that time. So going to meet ups is a great way to meet a lot of other investors, a few agents and kind of find out what’s working or not. It’s at the meet ups you’ll find out, say if bandit signs work. No, they don’t work anymore. They will in 2009-10. That’s when those were working. Do mailers work? Yeah mailers work in 95% of the country but not the Bay Area

Adam: And they’re harder. They become costly. If we didn’t have, say, all the money that we have currently I don’t know how long some people can sustain that.

Bobby: And then from there you can kind of find your approach on how you need to start working to find properties.

Adam: Yeah it’s amazing because you talk to a lot of people who have been going  to meetups. And a lot of people say they don’t actually get deals from meet ups but I think we’ve dealt with at least 25 percent of people who we’ve met at meetups.  We’ve done something with them in some form or fashion deal wise.

Sean: I mean it’s true. Like I got my deal from Elisa because I was her buddy at the meet up. And without me there means I won’t have that opportunity. I totally believe in that. Now, here’s a question. Now that you have connections, what would you do differently?

Bobby: With our connections, we’d be behind the phone in a room for hours on end.

Adam: If we had to rebuild everything? Yes, there would be a lot of phone calls (knowing what we know now, say we’re able to carry our knowledge over). It’s what we’re actually working on with the whole Americanflippers.com. It’s our own in-house software and with a few clicks of buttons, were able to get in touch with anywhere between ten, fifty, to a hundred thousand people. We’ve created these systems to be able to put the word out there to the right people. So I think we would utilize some of the techniques that we have spent a lot of time, a lot of money, a lot of energy on developing, we would probably plug that system back in. And I think anyone who adapts that system within a month or two, you should have your first deal or two very easily.

Sean: Can you go into a little more detail on that?So you guys have a software that connects you to agents or to direct home owners?

Bobby: Both

Sean:  Okay, and then you’re just going to be calling them.

Adam: They will be hearing from us in multiple outlets . Their computer is getting pinged to us. We would make sure that with any form of communication they would be in touch with us. Again, Americanflippers.com. If you’re ever interested, we used to give it out for free, now there’s a charge for that.

Sean: You guys have a new course down. Do you want to talk a bit more about that and what people can learn from that?

Adam: Yeah. I appreciate the plug. I’ve been plugging it  enough myself. We started unofficially a year ago. We took on our first mentee. The guy knew nothing about real estate. He was just an old friend from college. He was just sick and tired of his job at a bank and felt like he reached the glass ceiling and just wanted out. So he knew nothing about real estate. We brought him in. He’s been doing five deals in those first six months with us. And from there we kind of had our “Aha!” moment.

We’ve been asked to speak at several meet ups across the Bay Area over the last year or a year and a half. And from there we’ve had a lot of other people that have come to us for advice and sometimes we’ll just give a couple of just very light tidbits of information. With that, some of these people called us a week later saying like “Oh my gosh, I spent like thousands of dollars through this guy and just nothing came from it. But when you guys gave me this information for free it already found me a deal!” So some people started saying “Can you mentor us?” And it just kind of started growing and growing. We got to almost a weekly point where people  say “Hey can you teach me? I’ll come and I’ll do this. I’ll do that.”

So we started kind of helping people out and we realize that it’s became very monopolizing on our time. We love helping people. We probably helped pro bono at least 30, 40, to 50 individuals before we thought we need to start charging for this. You have to put up some sort of gate, otherwise we’ll end up getting probably 20 phone calls a day from random people trying to learn a lot of this stuff and it got to the point where this is getting a little heavy and it’s taking up a lot of our time. So then it became like “Hey, if you’re interested, we offer these programs and we charge x amount of dollars depending on what you want.” And this kind of allows us to properly focus on our students. To this day we’ve had about 80 percent success rate with all of our students.

We see a lot of these programs like Fortune Builders, Renatus,if you  know these other ones. I think they got like a 94-95 percent failure rate. So we do this hands-on and we only take on ten at a time with the idea that within six months or less, we want you to have at least a deal or two and then we want to see you just go out there and flourish. That once they get that first deal (it was the same for us) they have to have that “aha!” moment. And once you have that “aha!” moment, you can kind of replicate this.

I’m sure you’ve seen that as well. Once you do one, then you do two. You do two then you do five. Once you do five then you can do ten. And you can start to slowly scale this business out. And that’s what we’ve been sharing with our students. As well as it’s a great thing because we’re constantly marketing so we always have deals fall in our laps. We actually found this deal today (for one of our students) about this new Los Gatos property that we pass on to him. So this would be a good one for him and it was nice. That fell into our laps and we pass it on to our student and it’ll be a good project for them.

So that’s kind of what we’ve been heading as of recently. And we’re kind of walking the line of wanting to go more full-time into the teaching side of this and I think that’s kind of where our heads are at. We’re starting to kind of branch this out. We’re creating our own proprietary software to help really jumpstart their marketing for very little money and that’s kind of what this whole Americanflippers.com program is teaching: local Bay Area real estate investing from two guys who knew nothing ,very little about real estate, and in two years, like I said, we bought over a hundred million dollars worth of real estate (bought and sold). I guess that’s kind of what the program has been teaching and like I said, so far it has 80% success rate and the one or two students who haven’t done a deal yet, they’re still working very hard. So we’re staying on top of them.

Some people are more motivated. Some people will do more calls. One of our students might do a hundred calls a week where another one do 20 calls a week. So it’s definitely a numbers game. There’s definitely a level of determination but our goal is to see everyone to the finish line so they get a least one done. And once they’ve had that one we think they can replicate the process because they now have a muscle memory of how to get this done.

Sean: And how much do you charge for your program?

Adam: So we have three separate programs. We do a weekend event. We’ll be hosting that one coming up in the next couple of months. We will be doing that once or maybe twice a year where we just charge $5,000 for the weekend and we just lay it all out; all the secrets ,access to our marketing software, just chock-full of information. It’s just nothing but nuggets and we just give it all out. And then if people want more hands-on, we offer two hands-on programs. One’s three months where we spend time with you every week, you get so many phone calls, we get to take them on field trips, and really just involve them in the process. That’s $20,000. And we offer a six month program where they can bring in one friend, the same inclusions: field trips, hands-on experience, a lot of one-on-one time, a lot of phone calls. We just kind of guide them through everything. All the golden nuggets are of  course shared with them and that’s $40,000 for two people.

Sean: Okay, sounds good. And can you give us some mini action steps that you kind of give out in your lessons ?

Adam: Right off the bat, just like Bobby’s said, go to meetups. Find people who are pertinent in your industry and start building yourself a database. Get some connections with some agents. Just get out there and do it.  Go door knock. Just get out of your comfort zone and grow and grow and build as you go

Bobby:  And a real big one (this is kind of why we started it as well), be genuine. And when you’re with someone, when people put their money where their mouth is, they’re actually going to, probably about 50%, do what they say they’re going to do. Where as if they don’t then they’re just going to look out for themselves and kind of be on their own. So when you are dealing with other investors, other real estate agents, other people through the real estate community, be genuinely honest and upfront with them. Don’t be trying to screw it around then trying to just feel like “I need to get my first check!”. You’re going to crash and burn. It’s going to go around fast, and it’s not going to work out for you.

That’s kind of why we started training because we’re helping people. The whole idea is to work with other people in this community because that’s how you grow. And I mean, that’s why I work with Adam. Because Adam and I could both be doing this on our own, but  would we be as successful as we are together? No, we wouldn’t. We’d be doing just fine, but we wouldn’t be doing what we’re doing. And when other people can join us and also create a different type of synergy, it only benefits everyone, versus if we help someone and then they just kind of go out and do their own thing. It’s like I just heard you did a deal and you kind of use our techniques and now you’re just kind of doing your own thing? That’s cool. So now we don’t share our information with you anymore. Because at the end of the day it doesn’t matter. We’re still going to do it we’re going to do.They do what they do. And it’s just a relationship that you don’t want to have.

Adam: I think what Bobby’s saying is just that, always be forthcoming and take care of people. We had a gentleman whom we’ve given a bunch of information to a while back with an idea. He said as soon as I find a deal I’m gonna bring it to you. All right, so we’ll be sharing them quite a bit. This is like when we’re early in our career. And lo and behold, he got one using not only our marketing techniques. It’s even used verbatim, some of the stuff that we were sending out. We actually hand over to him to kind of like reconnect these people. He ended up doing a deal and cut us out of it (and it was fine), but word got back to us. Eventually, we saw him at a meet up. We called him out and he was very apologetic. But I think what Bobby’s saying  is just be genuine. Go out there. Do what you say you’re going to do. We’re huge fans of putting everything in writing nowadays when you start dealing with these multi-million dollar transactions, especially when you’re teaming up with people. If you don’t have an airtight contract, everyone seems to do some form of mental gymnastics that will start to favor them when it comes to the finish line. So I think it’s these: be genuine, get everything in writing, and just do what you say you’re going to do. When you become a performer, it’s nice when we can talk to you and you say “Hey, here’s 15 projects we did in the last nine months.” That’s a very powerful tool. We’re not just some guys who we’re just trying to figure this out. So we realized (even with our students we offer that to them) when you’re part of our program you have access to all of our off-market inventory at any given time. We probably have five to nine properties off Market that we’re pulling around and we share those with our students so that when they’re out there reaching out to people they can say stuff like “Hey the company I work with has this much stuff going on.”, “Oh, by the way, we’re looking for our next project.” And we realized that’s very,  very powerful for the people in our closed circle .

Sean: That reputation is so important, especially in this industry. So I totally understand that. What are some typical failures that you’ve seen that people have been doing?

Adam: We have a couple of buddies who were getting too ambitious. Always be careful when you get access to other people’s money and you decide and start to like squint so much that it starts to kind of make sense in a certain deal. Like if that was your own money you would probably stay away from it. We’ve been seeing people use hard money — private money. None of their own capital and going in on something that’s just not what they should have been going in on because they’re like, “hey, it’s not my money.“ So I guess a big one is, always be very cautious of your comps. Never use the comps the agents sends you. Learn how to analyze properties on your own. Don’t do the mental gymnastics to make something work when you’re first starting just to get in on a deal.

Bobby: Yeah, we had a meeting with a couple agents today. And one of their clients had just sold a house where he lost quite a bit of money on it. And the reason the agent said that he lost the money was, he wasn’t buying real estate with his own comps. He was using the agents comps . So the agent was telling them “You know, this is what it’s going to resell for. This is what you should buy it at.” Done. Bought it. And then as everyone knows, the agent’s always going to sell you to the highest, to get the deal done. So it didn’t work out too well for that person. The other thing I would say is buying real estate mid last year.  We’ve seen that one bite a few people; it bit us.

Sean: That’s me right there.

Adam:  We have all lost of money. Be sure you include it. If you have not lost money in the last six months, you’re not doing enough deals, you’re not doing deals in general . Every heavy investor that I know has lost money in the last six months (ourselves included) or they’re holding out to wait and the holding cost is just killing them.There’s a good chance of this not going to be successful. So everybody who was a major player in this industry has lost money in the last six months. One other piece of advice I would give, actually I got this from John Paiva and I always appreciated this. He once told me that the reason we’re going to make so much money is because we need to get used to doing everybody’s job for the. And as much as we want to  automate our business and slowly be able to back away, like we’ve hired people and we really kind of created a thriving environment here. But at one point, especially we’re kind of bootstrapping this, we would have to go in there and I sometimes do the final touches that our contractors might have missed. We had to be there to shepherd our agents to make sure they’re fully marketing this property. We had to be there even to our cleaning ladies to be like “Hey, why is there all this dust here and here.” Every little detail even down to the landscapers and be like, “Hey, man, there’s not enough Gorilla hair here.”, “This looks terrible.”, “This sprinkler is not hitting that.” There are so many little things. At one point I used to get so upset, like get mentally flustered, that there’s so many things that we’re doing but why am I doing somebody else’s job for them? But at the end of the day, they’re getting paid 25-30 bucks an hour or whatever that might be. We’re going to make fifty to five hundred thousand dollars on this project. Get used to being willing to do people’s work for them. And that’s why we’re making the big bucks. So once you get over that mental hurdle of having to wear 20 different masks…

I remember a story. We once have a guy who was working for us. He was one of our head marketers and we kind of taught him the secrets of the calls. He found us quite a few deals using our techniques and eventually it got to the point where he was like, “Hey, I feel like I should get half of these. I’ll have a half of what I would generate on these deals.” And after that we encouraged him and said,  “Hey if you want we’ll give you half but we want you to bring those deals to fruition without asking us any questions. You need to go for it and go for it.” And his whole thing was like step one get them on the phone. I get the agents on the phone and pass them on to us. Now that was pretty much it and what a lot of people don’t realize is there’s Step 2 through 28. Anytime you got a deal in contract you probably need to make at least seventy-five to a hundred phone calls to get money back in the bank if you’re going to be doing a complete flip rehab with this. Even a wholesale. You might have all these people you talk to, some we’re interested, some aren’t. Every deal, we do probably at least a hundred or a hundred 50 phone calls from the day we talked (that first phone call ) and it’s locked in contract to the day we get that off the books. And that 150 phone calls requires us to call real estate agents, landscapers, contractors ,subcontractors,escrow agents,  cleaning ladies all the way down to the end buyers, the banks (to make sure they’re pre-approved and there’s no funny business), the home inspectors. It goes on and on.

So one piece of advice especially for new wholesalers is don’t get greedy. Never look at an investor and be like, “Hey how much will you be getting?” Especially even if you’re wholesaling something. One of my biggest pet peeves is when we go to sell a property to somebody and they’re like, “Well, how much are you making?” It doesn’t matter. Are you able to make your margins? If it works for you then move forward. If not, because you might get a great property and contract for a million dollars that’s worth two million dollars and only needs a hundred thousand worth of work. And if you tell someone the price you got it for and they say “How about I just give you 800,000?” That’s like “You’re crazy!” You’re still gonna make a killing on this thing. That’s an extreme example, but we’ll say it’s worth 1.5 million and only 200K worth of work. Never shortchange people in this industry. Learn to have your metrics and if  a deal passes your criteria, allow people around you to thrive and prosper and move forward. That’s been kind of speaking from the heart and lightly rambling. But that’s something that we hugely credit our success. We would never ask people who brought us deals, “Well, how much are you making?” We don’t care we learned that from the beginning. I don’t care what you make you know what I want. I want 10-15%. but we’ve always stuck to our criteria if it matches our criteria. We move forward.

Sean: Yep, make sense I have pretty random question. Your guys companies called ARON homes. How did you just come up with that name?

Adam: Adam, Roald, Oback, Nelson.

Sean: Okay. Got it. Pretty simple.

Bobby: There’s nothing fancy about it.

Adam: We started thinking about some cool story about us, like the African jungles or something. But nah, it’s just an acronym I guess?

Sean: Yeah, I mean because we know you guys as Adam and Bobby, you know, like an A B, and then we see ARON we’re like wait, that’s no one’s last name. Where’s this come from?

Bobby: Sure. Yeah, that’s actually my name. Lots of people they go by Bobby. That’s  my name Robert.

Adam: I have heard Roald pronounced probably 20 different times over the years. Different ways, excuse me. So Ronald, Ralphie,Roll. I’ve heard at least 20 different ways, it’s really original. So I kind of applaud people when they come off very creative, but you know, Bobby’s always just gone by Bobby to make it very just easy. But I think the name Roald must be really cool.

Sean: Okay, got it. So those are all the questions I had for you guys today. You guys have anything else you’d like to say ?

Bobby: ya know for anyone who’s looking to get into real estate, it’s a long hard grind but well worth it. Like Adam and I, we both started in about 2007 and realistically we didn’t start making money off of real estate as a full-time job until about two years ago (two to three years ago, 2016-2017). So that is about 10 years, mind you. The first few years we were just trying different aspect of real estate as agents which didn’t work out for either of us. Wasn’t either of our gigs. And we just kind of kept on going at it really hard. I mean we hit the ground running and we haven’t looked back realistically the last 13 years or whatever it is. So if real estate is something you want to get into it, it takes time. It’s not like I’m gonna read a book about wholesaling and start doing quarter-million-dollar wholesales. There is a few people I know, they’ve been doing real estate for a long time. So there’s no get-rich-quick scheme that goes on here. Realistically if you pay someone to help you do real estate through a mentorship program, it’s not just gonna start giving you deals. You got to put in the time and effort. But the time and effort is well worth it.

Adam: And on that, surround yourself around the right people. That old adage, “Your net wealth is equivalent to the five people you spend the most time with” is very accurate. The problem is today (we’ve seen this with our academy) is a lot of people that offer all these programs and we keep hearing about all these people that kind of get burned or they weren’t able to actually learn anything.

I’m a huge fan of, even if it’s not our Americanflippers.com, even if it wasn’t us, I would say find the right mentor who is doing what you want to do, in the area that you want to do it, and add whatever value you can to their lives. When we first started we would do anything. We would be taking our mentors out to lunch. John Paiva was one of them. I’d always try to take them out to lunch. The guy was making a killing. I had really no money in my name, but I would always say “John, lunch is on me. Lunch is on me” every time. Anything he needed, anything I can help with,  I would try to help these people and add just the maximum amount of value that I could and Bobby as well. We were learning this we would just try to give back anywhere we could to anyone who shared information with us.

So I think it’s just pivotal to find the right people, surround yourself around them and add value in any way you can because you will be amazed at how quickly you can jump-start your career by associating yourself with people who know what they’re doing. I wish I have known this when we first started because we went to spend a year and a half spinning our tires. We would have went straight to the experts and we would’ve been like “My cup is empty (our cup still empty, we’re always learning but our cups are still empty and we are always ready for knowledge). How can we add value to your life?” And I think that’s a huge step for anyone getting into this. Reach out to the right people and just add as much value as you can, be genuine and you will see that they will reciprocate 10x.

Bobby: And be willing to open the door You don’t want to open.

Sean: That’s right. I love that advice.

Bobby: That’s big right there.

Adam: Yeah true. When Bobby and I, a  story, when we were starting to implement these proprietary marketing techniques we’ve been using and we were using these when we first started. There was a day where we received about four hundred phone calls in one day. We’re just getting blown up left and right and it was just nuts. We’re both like “Oh, hey, this is Adam how may I help you?”, “Excuse me, please hold.”  Sometimes we can’t just put them on hold. We had to take them and then over the next four days, call back all these people who are blowing our phones up. And at the end of the day we’re both like sweating. We were just like malnourished with no time to eat and no time to drink. We looked at ourselves like “Are we getting in over our heads?” Our phone has been blowing up non-stop. Granted we learn these great marketing techniques. But are we in over our heads? Is this too much? And we both came with a consensus of no, this is exactly where we want to be. If we are getting comfortable we are not growing as businessmen. If at any point we get comfortable with what we’re doing I want to find the nearest door or nearest window, go into the next room that has a lower atmosphere, less oxygen. Just the amore of the unknown that just takes us out of our comfort zone. We always want the pressure on us because over time it’s no longer pressure. It’s Monday. And the more doors you can enter that just constantly take you out of your comfort zone and just grow you as a business person, you will just see yourself skyrocket and that’s been a huge secret to our success.

Sean: Yeah, I love how you guys are so inspiring. As you know, I recently wrote a blog post about how I got spanked real hard in the past six months. And to see that you guys who started on the same time I did are doing so much better, it just shows that if I do the right things I can get to you as level. Amazing words of advice. Thank you very much for sharing everything with me. How can people contact with you?

Adam: They can reach us at Americanflippers.com. There’s like a little ad, you know a place that you can put all your information down there.Or if they want give us a call. The number is 408-755-6745. Again 408-755-6745. Just get in touch with us. We always love to chat.

Sean: Thank you guys so much for your time. I really appreciate it. And hope to see you guys around soon.

Adam: Awesome. Thanks. Sean greatly appreciated. Thanks for having us on your podcast. I really really love what you’re doing here. You can provide great content. So thank you for taking the time to to get us on here as well.We appreciate it. Keep up the good work. We will be chatting. Bye!

Sean: Here are some key takeaways I got from speaking with Adam and Bobby. Be genuine and do what you say you’re going to do. Don’t shortchange people who bring you deals as long as your numbers work. Don’t worry about what the wholesalers make. If you’re just starting out, the best thing you can do is go to meetups. When you’re new, you don’t know what’s going on, but you can meet a lot of other investors who do. Find out what strategies are working and what’s not. Start reaching out. Get connections with the agents. Go door knocking. Do something. Add value to people and they will reciprocate that by 10x. Grow and build as you grow and constantly get out of your comfort zone so that everything that’s scary to you today will just be “Monday” in the future. Remember the reason we get so much money is because we do everyone’s job for them. So get used to fixing other people’s mistakes. And if you want to contact them, you can check out their website Americanflippers.com. Thanks and have a great day.