• Wholesalers generally sell fixer-upper properties that are below market value and often off-market.
• Don't rely on a wholesaler's estimate of a property's value. Always do your own due diligence and underwrite the deal yourself.
• Be clear on your objectives and devise a plan to accomplish them. Identify the rules of the game and what you're willing to sacrifice upfront so you don't compromise on your values later on.
• To find a good wholesaler, start by Googling "sell my house fast" and opt in to talk to the wholesaler rather than clicking on their ad. Once you buy a deal from a wholesaler, other good wholesalers will find you.
• When working with a wholesaler, be responsive and perform when you say you will. Don't back out of a deal unless there are substantial changes.

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Brandon Hall  

Our guest today is Steve Trang. He's the founder of Real Estate Disruptors. He started his podcast in 2018 to inspire wholesalers and real estate agents to double their incomes by adding a second leg to their businesses. Steve's goal is to generate 100 millionaires through teaching other investors about real estate. Steve, welcome to the show.

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Steve Trang

Thank you for having me. I'm really looking forward to this. Your audience? tech guys. Well, I love to talk to you because that was my background. 

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Brandon Hall  2:20  

You were an engineer. Right? I was an engineer. Yes. All right. Well, we'll get into that. My big question right now is, how many millionaires have you created? Verified 1515? Okay,

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Steve Trang  2:32  

You know, we have people that send us messages on Instagram, Facebook, and so on, like, hey, you know, because you, I became a millionaire. And it's great. But I'm the kind of person that always likes to, like, verify. There are a lot of people, entrepreneurs, real estate agents, investors on, you know, sometimes they like to go live over top. And so I'm the first one is always like to validate things. And so we have 15 people that have been able to share weather from their accountant, bank accounts, tax returns, whatever, but they're actually millionaires. And the reason why I verify and that might sound crazy. The reason why we verify is we actually send you a plaque, right? And we commemorate and we like do videos and content around it. Cool and no charge, right? We want to celebrate this because we want to genuinely make you laugh lasting impact in the real estate community.

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Brandon Hall  3:21  

That's amazing. That's amazing. So you kind of gamify the 100 millionaire, what are you gonna do when you get 200? millionaires?

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Steve Trang  3:28  

We probably open up to 1000. I mean, you know, like every entrepreneur, we got milestones like, hey, once I do this, I'd be happy. Now once I do this, we just hit him with a milestone, move the goalposts. That's great.

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Brandon Hall  3:37  

All right. Well, I know that you got into real estate in 2007. You were an engineer, before that, so. So let's go all the way back to 2007. What was your life? Like? What were you doing? What made you want to get into real estate?

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Steve Trang  3:49  

I appreciate you asking this question. So I did the thing that mom and dad wanted us to do, right? Get good grades. So you can go to a good college, you can do a good job. Graduated Arizona State University. You mean good colleges objective, right. But you know, I got a full ride to ASU. I graduated oh two right after the whole.com bust, there weren't a lot of engineering companies hiring. And as with the degree in electrical engineering, if you don't have a Master's, you actually came and doing the design work. You're kind of relegated to a tester. So I went to graduate school and I went to UC San Diego, I had a whole bunch of different options. But I went to UC San Diego for two reasons. A, they were willing to cover my tuition and be in San Diego, right? Like, how cool is that? So I went to UC San Diego as a PhD candidate left after a year and a half of the master's degree because I realized the amount of work required for a PhD was not the kind of work I wanted to do. And so I went to go work at Intel for a few years. And man, I'm sure for the people that are listening this stuff that's interesting. In college and grad school, like reading the papers like publications on like the future of engineering. You're reading Yep. Remember like this is 2002 2003 Right? Reading about the future of Oh LEDs, and like how I mean, like foldable displays, like I get to work on this stuff, it's amazing. And then you get to a real world, and you work for a corporation. And none of that you don't get to do any of that stuff, you don't get to do any of the cool stuff, right? Like, once you work at an engineering company, you're just a cog. And so for myself, I literally got to do nothing innovative, you know, all I got to do was like, tweak previous design. So when I first started, we're working 45 nanometer technology, I'm sorry, 65 nanometer technology, then we moved to 45. And while I was there, we got down to 35 nanometer technology, which is great, all I did was just take a previous design, and just update it from the three volts to the 1.8 volts. And you know, working on USB 3.0, again, is back in 2006, and 2007, you're working on a USB 3.0. But this is not what you got your degree for. Right? You got your master's degree. So you can work on cool, innovative stuff, and actually made a complaint about this, right? They had to sit me down in management. And they basically said, Steve, we're not going to let you do this. And here's why. If we let you go do these things. And it doesn't work. It will cost Intel billions of dollars. Right? Like they can't just have this new graduate at a college doing the, the fun, cool stuff, they got to have their 20 year PhD guys doing it, which makes a lot of sense. It makes complete sense. But that's not what I went to school for. I didn't go to school to learn cool stuff. And then wait 20 years,

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Brandon Hall  6:35  

I'm just gonna jump in right here because this is probably across all industries. Because I had the same experience in accounting, I graduated with a with an accounting and a finance degree and went up to work at PwC big four accounting firms think they were number one in the world at the time, they always flip flop back and forth with Deloitte and I joined their consulting practice, right. And so the pitch was, you're gonna work with all these great business owners, it's glam, you know, it's gonna be amazing. And then you get into the actual practice, and you're just, you're a spreadsheet monkey. You're doing the wrong because you're not even doing like fun spreadsheet stuff, you're just doing the same, like one process of the spreadsheet every day. And and I had the same I'd very similar conversation, I was like, Dude, there's got to be more to like being being a consultant than this. And the manager sat me down, and like, you have to do this, because this is what we're billing you for. And if you don't do it this way, then we're not gonna be able to just like, Yeah, this is not what I wanted to do.

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Steve Trang  7:35  

Alright, the monotony the mundane, it's important. It's critical, just not for me.

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Brandon Hall  7:40  

So you're sitting there, you're doing the monotony. And then what you recognize that real estate might be in an option? How did you How'd you make that connection?

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Steve Trang  7:49  

So I know when I started Intel, you learned there's a few different things, right? You learn that after seven years, you get sabbatical, you learn after seven years, all your stock options best. So like from day one, I was like, okay, seven years, maybe at Intel for seven years, get my stocks to vest, do the sabbatical thing, hopefully by then get married, have a wife that's got insurance benefits, and I'm gonna be an independent contractor. I'm just gonna do the cool stuff. I'm not gonna stick around and do the mundane thing. That was the plan. And then somewhere along the way, I read the book, Rich Dad, Poor Dad, right, three half years into my seven year plan. And after reading the books, like wait a minute, there's a way that you can make money that is passive, and exceeds what you can make active will let's do that thing. And so then I started buying rental properties with my best friends. You know, the four of us got together, we made an LLC, we started buying rental properties. This is 2006 ish. 2007. Right before, you know the whole market correction. And so while I'm reading this book, and learning these things, trying to acquire properties and meeting the real estate broker is like, what do you do? And he's like, Yeah, I just help people buy houses, buy rental investment properties, and this and that's like, how much do you do making as like, you know, over 100k And keep in mind again, this back in Oh, seven, I was making 85,000 a year benefits this and that. But I was working like 25 hours a week, right? Because again, it wasn't really hard. What I did didn't really take a lot of like brainpower, but it was totally unfulfilling. So I was like, Oh, I can just like talk to people all day and make 100k a year. I can do that. Right. Plus, I've met other realtors. I don't think they're the smartest. Right? This is my arrogant mindset. It's like I can do this. And so I go get my real estate license, quit my job, and go all out and real estate as a real estate. Now, here's the thing. This is one of my very few regrets in life. The book says, buy rental properties, get passive income so that you can quit your job once your passive income exceeds your active income. That's what the book says as incredibly wise. But I have a bit of shiny object syndrome. I saw this other guy is making 100k a year And all he does is just kind of like talk to people. That seems way more interesting than what I'm doing over here at Intel. And I took my completely off the ball and wasted, I would say probably about nine years of my life, doing realtor stuff, when that's not what the book said. So, one of the very few regrets. So you know, for everyone who's listening, like if you if what I'm saying sounds interesting to you, just make sure you always keep your eye on the ball. Because shiny object syndrome is a real problem for entrepreneurs. So you

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Brandon Hall  10:29  

take it, you left your job, you resign, just jumped right into real estate full time. Yeah, I

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Steve Trang  10:36  

submitted my two weeks notice. Yeah, I submitted my I got my real estate license, I submitted my two weeks notice. And, you know, it's actually kind of funny, my, my boss pulled me aside, he's like, hey, you know, why are you leaving? I was like, Well, I'm not getting what I need over here is like, what would it take for you to stay? Because like, we actually see VP potential in you, right? Like, you've got some recognition in the company, like we see like potential VP in the future, as like, Well, for me to give up on my dreams, because at this point, that's what it was. I only need like a base salary like 200k. To which you reply, I wish you the best of luck out there.

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Brandon Hall  11:15  

At least you had the conversation, you had the opportunity. That's nice. That's nice.

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Okay, so So you got into real estate and this was 2007. Yeah, not the best time. And and you're you're trying to broker or, you know, be real estate agent broker deals. Why did you say you wasted nine years of your life?

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Steve Trang  12:12  

Yes, because the book says to buy properties. It doesn't say to sell properties. If you're buying properties, you're buying an asset that has appreciation that has cash flow, you can depreciate on your taxes, and you have a tenant paying down your mortgage, right? There's like four reasons why owning real estate is a great wealth builder, being a realtor doesn't do any of those things.

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Brandon Hall  12:37  

And when did you buy your first property? Well, I

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Steve Trang  12:39  

bought my primary as an engineer, and oh six, I bought a property I want to say can oh nine, but it's only because we were facing foreclosure and our primary home. So we bought another property just in case, the loan mod didn't work out. And so that was the other property bought. And it wasn't till I think like 13 that we bought another property.

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Brandon Hall  12:58  

Okay, so it was 2013 like the first rental or,

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Steve Trang  13:02  

well, turns out the property buying oh nine was our first rental because we were able to do a little more keep the property and so on. Got it. But 13 was our first one. We're like, okay, we're buying this solely as a rental. And we bought some other properties before I quit my job, right? It was just while we're buying properties, I got distracted from the objective, right? The primary focus should have been buying properties not selling properties. Got up. But 13 was the first one we're like, okay, we're buying this solely as a rental. And we bought some other properties before, beforehand, before I quit my job, right? It was just while we're buying properties, I got distracted from the objective, right? The primary focus should have been buying properties, not selling properties.

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Brandon Hall  13:43  

So how did you work your way through 2008 2009? The very,

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Steve Trang  13:47  

very fortunate thing for me, you know, as a complete blessing, I actually got to sell properties for banks, right, whether it was Bank of America, Chase Bank, Fannie Mae, and so on, I got that opportunity. I mean, I'm not going to sugarcoat it. The only reason why I got is because I'm a minority.

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Brandon Hall  14:00  

I was just about to ask, how did you get that opportunity as a new agent? A lesson here, maybe

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Steve Trang  14:05  

for some people is if you tried to go to the front door, the front door is generally pretty securely shut, right? Like I went to Bank of America, Chase Bank, Wells Fargo, and apply it on their website to be an REO agent. Right? That's what the that's what it's called when listing properties. And I went to all these ones, right? It's just like you apply for all these different companies for jobs, you get the auto reply, thank you for your application. We got your resume, we'll get back to you. And then that's it. I had to evaluate like, well, the front door is clearly not going to work because every realtor in America is also applying for this. So I saw that there was an REO conference. So there's a conference where all the asset managers and bankers all kind of hang out, right and they talk about how they're moving their deals. And so once I figured out where the conferences were, and I went there, identify the bankers. That would be you know, deciding which realtors to work with. And I took them out for drinks, right? Like this is the way business is done. It's relationships. So I Talk to them. Hey, what are you doing after this? Hey, how about we go grab some drinks later on. And I took the bankers out, clubbing guy don't drunk got bottle service. You know, he's spending $1,500 A night, wining and dining bankers, but you get back and you got business. So I'm not saying this is like the, the right way to do things. But I will say this is probably the real world way to do things love that.

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Brandon Hall  15:26  

I think that's good for a lot of accountants to hear do because in our space, a lot of the great accountants are very technical, you know, they're not very outgoing. Not to say that they can't build great relationships. But that would scare a lot of people that you just described. So that's good. That's good. All right. So talk to us about what your portfolio looks like today. And I know you've got like a couple different businesses, let's hit the real estate portfolio first, and then we can talk about the businesses too.

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Steve Trang  15:56  

Sure. So I will say my my real estate portfolio, just truthfully, it's not very impressive, you know, a lot of the books talk about buying properties leveraged Isn't that so you know, I've got some scar tissue from, oh, 709, and so on. Because I saw a lot of realtors go through divorce, right? When money's not good. Bad Things Happen relation is relationships, right? That's how a lot of realtors get divorced. A lot of contractors I knew as well got divorce because you know, business dried up in that time. So I'm not saying this is rational or logical, but definitely impacted myself and my spouse, right, because we suffered terribly and during this time as well, right, having a stay paying job to extremely unpredictable income. And so all the properties we own, except for the most recent one, we just own it outright, we pay cash for him. So we have multiple properties that we own free and clear. So I want to say, we've got got three rental properties that we own free and clear. And then the one we bought recently, was the first one we actually financed it. And I wouldn't say it was a good buy. We bought it only because we thought that maybe my mother in law would need a place to live, right? Okay, let's buy this, it's in a good area. You know, if she needs a place to live, she can live there. If she doesn't, if she decides she does want to live there, we'll just put a tenant in there. So as the first one we bought that actually has a mortgage on it. So I will say our portfolio isn't very impressive, because even though I have a very high risk tolerance, I got to witness the aftermath, in trauma from everyone else that suffered when the market has a 30% correction. Well,

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Brandon Hall  17:29  

and the interesting thing, and I can kind of talk because I've had very I haven't gone through that personally. So I haven't witnessed that. But my theory is I run a CPA firm. So I'm creating wealth, that's my wealth creation vehicle, right? I don't necessarily need real estate to create income or wealth for me, I need it to maintain my wealth, basically just not lose it. And so I guess my question to you is, do you kind of look at it in a similar fashion, because you're still you're still buying real estate, it sounds like but you're just very risk reduced.

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Steve Trang  18:04  

I would say real estate is a great way to store wealth, preserve wealth. So for me, I look at my portfolio really is all of the businesses that we run, right? We run multiple businesses. And if you look at like, you know, the guys that do really well, on the stock exchange, and so on, right, it was like, they took a company that built it up, and they sold it. Right, you can create way more wealth, and exiting a business, or active income and a business in less time. But long term wealth is definitely it's definitely real estate. Yeah.

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Brandon Hall  18:38  

Yeah. Well, I like that approach. I think that a lot of people in the real estate space would say, you know, you're crazy for not using debt. But I can tell you personally, every year when our bonuses go out to to the team and to all the equity holders of the firm. That's the thing that I'm looking at is okay, what what debt am I am I paying down and I'm 32 years old. And I think people would also say you're crazy to pay down debt, 32 years old, let it ride. I want to create wealth, but I also don't want to lose more on the loss prevention. So wealth preservation as you you said, well,

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Steve Trang  19:15  

and you know, there's something that a concept that I've gotten into recently, right, like, I get, you know, the leverage and so on. And I think there's a lot of wisdom to it. I'm getting to an age now where it's more important to not lose than it is to win. Right, as far as the wealth goes. And so leveraging it works, but there's a you know, we're in interesting times here, if there's a correction, right, we saw in 2009. Right? What was it was a voluntary foreclosure, people would just intentionally just walk away from their houses, right? Like that's what caused the last crisis was we had people losing their houses, and then after enough people lost houses, everyone else was like, well, what's the point of keeping my house? Right and that's what really drove prices. is now. So yeah, you can have a lot of wealth. And as long as the cash flows, that's great. But man, as a realtor during that time, I got to see what real wealth did. Right and real wealth I'm talking about people come in and with $80 million proof of funds, we had one guy that won't get one fund came in, right. So he needed proof of funds, like $83 million, like, okay, like, this is what real wealth looks like. They just buy properties, cash, they just wait for the waves, right? When market crashes, they buy everything cash when the market appreciates. They either sell them or refi out, but real wealth operates in cash. And so

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Brandon Hall  20:31  

you are selling again for the bank. Right. So So these guys were coming in and buying blocks of foreclosed homes, I imagine. Yeah. Yeah. That's crazy. Well, I mean, I guess it's good that you kind of linked up with the bank. And it sounds like it has now all paid off. So what what are you what are you doing on the business side,

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Steve Trang  20:48  

so we have a few different businesses, the one that I am most passionate about is our sales training business. You know, we get to work with investors across the country, on how to have an actual conversation with the homeowner so that you can buy the properties. So that's the the biggest one. The other one is we do wholesale in the Phoenix market. And for those that are unfamiliar with wholesaling, basically, we are the people that are sending the direct mail, like we buy houses cash, you see the billboards, when we buy ugly houses, that's not us, but comparable, those ugly bandit signs on the side of the road, you know, they say like we buy houses, that's what we do, it's pretty ugly, the kind of marketing that we do, right? I'm not going to sugarcoat that either, but it's also very effective. And so where the guys are contracting houses anywhere from 45 to 75% of market value after repairs, and we sell them to flippers, or buy and hold guys who will perform on the property prior to close of escrow. So let's just say for example, I got a property is worth 300,000. I go into contract it for 160,000. I sell it to Brandon for 180,000. And then he actually shows up on closing day with $180,000. Well, that delta which 160 180 is revenue to myself for sourcing the property, marketing, paying my staff and all these other things. That's That's what wholesaling is it's just arbitrage. Same thing as like how BestBuy buys Frigidaire is from a wholesaler and then sells it on the store floor. We're doing the same thing. We're contracting it selling it to a person that's going to do something with the property.

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Brandon Hall  22:29  

So in case anybody's interested in kind of exploring your businesses further, what are the names of these businesses that you're running?

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Steve Trang  22:36  

So if our wholesale companies, our financial solutions for our education company, it's just disruptors. Sorry, sells disruptors. And then for our title company, because we also own a title company because we're doing volume as well and a title company, right? You might as well sell the fries and coke with it.

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Brandon Hall  22:53  

That's smart is vertical integration. I love it.

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Steve Trang  22:57  

It's vertical integration. Right. So for that, that's Magnus East. And then we have multiple joint ventures, we have the world Club, which teaches certainty, we have sales leadership was teaching salespeople, business owners how to manage salespeople, because salespeople manage and effectively are absolutely insane. Right. So we teach people how to manage salespeople. And we have a group here within our organization that services all the media is the reason why this looks the way it does, because I've got the best world class guys to make this all look good. So we have an internal media team that I aspire to one day to also offer media services to outside our company.

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Brandon Hall  23:37  

Good for you. Okay, so just a personal question. Just kind of curious, what made you like get into the sales coaching business? Like what what made you realize there was an opportunity there? And then jump for it?

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Steve Trang  23:50  

What made me realize it was because people kept asking for it, you know, and it sounds totally cliche, Hey, I didn't want to do this. But you guys kept asking for it. So I made it. But that's the truth. That is honest to goodness, truth. We had a I got a chance to speak on stage, there was an event, Gary Vaynerchuk was the headliner. I was one of the small, you know, guys in the lineup. And, you know, they're like, hey, you know, we want you to talk like, well, I want to talk about what we do when we're running our appointments, right? And I kind of shared it. And I think it was like a 4550 minute presentation. And like, we had so many people reach out to me, it's like, man, Steve, we use your line and it works here. Wow, that was really powerful. Hey, I want more of that. And we had all these people asking me to help them. And, you know, I'm a business owner, right? Like, if there's something that you want, I can get revenue from it. I'm gonna figure out how to get that revenue. And so we launched this and it's been incredibly powerful. And by the way, again, former engineer, I was an incredibly lousy salesperson, horrific salesperson, right? Because as an engineer, you want all the facts and all the data the way I was though, because I'll give you all the facts and data, people don't buy that way. So I had to completely unlearn my, everything I believed about the way sales should be right as an engineer, and actually learn how to sell effectively, which is, how to meet prospects, where they're at what they want. And then once we figured out what they want, give them a solution that matches perfectly with what they want. So before I just like, give things to you and figure out which one you want it now I was like, Brian, what do you really want? And I'll figure out if I can give that to you or not?

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Brandon Hall  25:35  

Yeah, well, I spend a lot of time in sales at my, my company as well and trying to train people on sales. And the number one thing that I've learned is, when people will have any sort of objection, you don't just throw facts and figures at them, because it just hardens their objection, right? They're just like, yeah, exactly. That's why I'm, I don't like the the price is too high, or this doesn't make sense for me. You can't convince people to buy your product or your service, or whatever it is, they have to convince themselves. So your job is to figure out how to ask questions, and then frame your offer in a way that makes them convinced themselves. So that's, I was curious about that, because I've been spending some time in that space. And just just wondering. So circling back on the wholesaling pieces, I want to ask a few questions there. My first one is just a curious one. So over the past few years, you know, I've been on like bigger pockets in and out and stuff. And I always see people that like roast the bandit signs, they hate the bandit signs. Why is that? Why? Why does everybody hate bandit signs? Like when I'm driving around? I don't like look at the bandit signs ago, I cannot believe this is happening?

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Steve Trang  26:37  

Well, because they're ugly as hell. They're eyesores. Right? Like, there's code enforcement has to go out, either mark them or pulling them out on a regular basis. Right. Like they're, they're an eyesore.

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Brandon Hall  26:48  

And so what happens when they do that they like they penalize you

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Steve Trang  26:52  

depends depends on on the city and so on. Right? Like and depends on how, how much street smarts you got, you know, like, if you get a call from a really angry person on your on your bandit sign, I wouldn't, you know, invite them to an appointment. If they're calling on a bandit sign, and they're like, you shouldn't have this here. It's like, okay, but what do you want me to come over to your house? Like, that's just not the direction we're gonna go on that appointment? We're gonna cut that appointment fairly, or cut that conversation fairly short. But yeah, I totally get why people hate him because they're ugly. But again, it's kind of like, if you look at campaign season, right? Like, everyone hates negative ads. Everyone hates when you tear it down to the person, right? If you survey everybody, like 90 plus percent of people hate negative ads. But there's a reason why there's so many negative ads. It's because they work.

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Brandon Hall  27:41  

But they work right. I actually I read that. I think it was a Russian media conglomerate or something years ago, did a test campaign where they ran like a weekly it was just for one week. They did nothing but positive news. And they ended up losing like two thirds of their readership during that week. Like their their views just went way down because nobody was interested.

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Steve Trang  28:06  

No, we don't need good news. Because good news isn't interesting. We need bad news so that we feel good about ourselves.

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Brandon Hall  28:12  

Right, right. Yeah, you're right. You're right. Yeah, I can I can justify why I am better than the bad news that I'm reading about. Wow. Interesting. I never thought about it like that

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Steve Trang  28:21  

series. Why watch reality TV? I mean, I don't but that's the reason why reality TV exists. Oh, yeah.

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Brandon Hall  28:25  

Yeah, selling sunset. It's awful. Anyway. Alright, so wholesaling is obviously a really big business. When should real estate investors work with a wholesaler? Or maybe why would a real estate investor work with a wholesaler,

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Steve Trang  28:39  

I would only work with the wholesaler, if you're able to secure funding, that's like cash. So whether it's cash, or a home equity line of credit, or a self directed IRA, or you can borrow private money, or something along those lines, and those instances where you can perform like cash, I think it makes sense. You can get hard money loans to but hard money loans are really expensive, right? In many parts of the country. It's two points, a loan origination and 12% interest rate. So we don't generally recommend that unless you're going to be really, really fast operator, so that you can minimize the interest, interest cost. So if you can perform like a cash buyer, I think in those instances, it does make sense to work with a wholesaler. Because for you to buy from a wholesaler, you need to act like cash, you're not going to get a mortgage, you're not gonna go to Bank of America and get a 30 day loan. You have to be a cash buyer. And the reason why that is if you look at all these bandit signs, right, it says we buy houses cash. This is the promise we make to the homeowner, right? They're gonna get a cash offer. So if you're if you want to work with a wholesaler, you can't try to get a loan. You've got to behave like a cash buyer. The other thing too is I would say do your homework, you know, be aware of the pitfalls right? Like, we have a property that we bought with a private loan, you know, from one of the investors that we had that trust us, we trust them. And like we bought it sight unseen, because in the market, and like, we got the inspection report, after we bought it from the buyer who was buying it. I like their reports like we bought that property. Okay. Right. So whoever buys whoever buys from us is going to do a lot of repairs, you know, we I want to say we bought that one for 235 Cash, right, and private money loan, but operated by cash. And what's it like the fair market value somewhere like in the high three hundreds, whoever buys this, and they have, we're closing I think in a week or two, they've got like 45 to $65,000 worth of remodeling work, they're gonna have to do, right. So again, you need to be able operate like cash, you need to have resources with contractors, someone that can do repairs for you. This is not, we're not selling houses that are moving ready. The people we sell to are the ones that make the houses movement ready.

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Brandon Hall  31:06  

Yeah, that's a really good point to bring up that. Generally speaking, I would say it's probably true about wholesalers across the United States, in my experience. You know, they're not selling moving ready houses, they are selling fixer uppers. But they're also bringing you below market deals and typically off market. Would you agree with that? I mean, definitely off market, but

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Steve Trang  31:29  

100% You're walking into a property with equity, you're walking into property with equity, right? When you buy a property from a wholesaler. Again, if you can operate like cash, you're walking in with equity that you can unlock whether with a contractor or with sweat equity. Yeah.

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Brandon Hall  31:43  

So there's more opportunity for people that are willing to put in the work or figure out the systems that can work for them and rehabbing that property and then getting it rented out. A lot of our clients actually will buy from wholesalers, fix it up, rent it, and then refinance it, kind of like that. That burr strategy on remodels great. And that has been great. My partner who was on I think, episode one of this podcast, his portfolio now is like $30 million, or something like that. And he built it all over the past 10 years by doing pretty much exactly that. I mean, he would just find these off market deals, he'd put in the sweat equity, the labor the money to get them up to speed, read them out, and then you refinance. Go find the next one, the next one. Next one, he just never stopped doing that refinance model. And because the real estate market just was on a tear over the last 10 years, he made it really, really well. So that's kind of the benefit there. Now. Now my question to you, Steve, is if I'm an investor, how do I find a wholesaler? Do I just like, Google? I mean, you got to have your VIP list, right? Like, you got to have your guys that you know, are gonna close every single time. So how do I how do I finagle my way in to get deals from you?

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Steve Trang  32:57  

Well, generally speaking, if you buy a deal, once from any wholesaler, all the other good wholesalers will find you. That's one of our objectives. Right? So I gotta find motivated homeowners that want to sell fast for cash. That's just half of the business, though. The other half of the business is I need to find people that are willing to pay a price that makes sense for me, right? If they can pay 85%, I'm pretty happy, right? Because there's a Delta there of 10 to 15%, that I can, you know, rely on as revenue. So one side is a source motivated homeowners. The other side is to source cash buyers or buyers up behave like cash. So if you close one deal, then other good wholesalers will find you. The other thing is, if you were to go on Google, sell my house fast, right? Now, here's the thing I'll ask you, and everyone that's listening. When you do sell my house fast, don't click on that Google ad, because it costs me $78 Every time you click on that ad, so don't click on that ad, right? Well, I would ask you is to copy the URL into a separate tab, and then opt in and talk to us. Nothing more aggravating than that. Had someone click on one of our ads. And we talked to him was like, Thank you for costing me. I mean, that was that's a nice dinner with my family. Cool.

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Brandon Hall  34:20  

So So number one is to potentially Google sell my home fast, and you'll start seeing who's ranking for that in your geographic area?

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Steve Trang  34:31  

who's spending money to source properties off market? Yes.

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Brandon Hall  34:35  

Okay. Okay. And then once you do a deal, you've kind of solidified your spot as somebody serious, you raise

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Steve Trang  34:43  

your hand. And the other good wholesalers that are running good operations will find you and how do they do that? Public Records and so we have a person whose job he's a salesperson. His job is to find the buyers. So public records or biosonar profit Dream property radar, these are all different tools that we all use to source properties or source buyers.

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Brandon Hall  35:05  

So if I'm a new investor, and and then this is my first time or maybe I'm even an experienced investor, but this is my first time working with a wholesaler. How do I know if I'm working with a good one or a bad one? Like, what are some things that I should be looking out for?

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Steve Trang  35:18  

As a fantastic question? Truth be told, we have a hard time telling even within the industry, because our industry attracts people that are not rule followers, right? Their rule followers, they will probably have like regular jobs and so on, we attract highly independent, less compliant people. And so with that, it's kind of hard to tell who's real and who's not. Even in our circles, one thing you can ask for are settlement statements. So one thing we require so we have real estate disruptors as podcasts that we run, for you to come onto our show, you actually need to provide a settlement statements again, we verify right to prove that you're actually doing deals, because there's no way to tell whether you're doing deals or not now as a realtor, right, because as other had i, where as a realtor, every time we do transaction is recorded in MLS, because we recorded MLS is verified right as it's validated, been wholesaling. The only way we can do it, since it's not a regulated industry, is the A copies of their settlement statements.

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Brandon Hall  36:22  

And wholesalers don't need their real estate license.

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Steve Trang  36:26  

Nope. No, unless they're in Illinois, Oklahoma. I think very recently, there was another state that was added to that list that came in which state that was,

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Brandon Hall  36:34  

do you see more states moving that direction, requiring wholesalers to have license currently they're like effectively doing the same thing as being an agent? Right?

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Steve Trang  36:42  

They're mostly doing the same thing? Yes, I would say, I wouldn't be surprised if within the next three to five years, is regulated in more where you have to be licensed and more than half the states,

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Brandon Hall  36:54  

because the license protects the consumer at the end of the day. I mean, you've got a, essentially, if something goes wrong, you've got somebody that you can sue, right. And and I guess it would be much harder to do that with the wholesaler.

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Steve Trang  37:05  

I'm not really sure it protects the consumer, I'm of the belief that every time we get regulation in the way just kind of screws things up. And this is, again, speaking from anecdotal evidence, you know, like I was around during the short sell times. Right. And I remember we had with, with short sellers, we had Dodd Frank come through, right. And when Dodd Frank occurred, so many homeowners got screwed. Because if you just look at the human psychology, right, like people won't do things, to fix their situations until it's almost too late. That's just the way we are as a species, right. And so a lot of people won't talk about their foreclosure, or accept the reality of their foreclosure until about like three to four days before foreclosure day, right? Six months, notice three months notice all these things like they're like, I'll figure it out. I'll figure it out. But reality starts to set in with two weeks ago. But what Dodd Frank did was you were not allowed to start a short sale process, unless it was three weeks prior to foreclosure, because they don't want people taking advantage of the people going through foreclosure. Right. Like that was the law stated that way? Right? There are so many homeowners I reached out to us that we just generally couldn't genuinely could not help. It was beyond aggravating because these people needed our help. And we couldn't help them.

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Brandon Hall  38:28  

Interesting. That's a very good perspective. Thank you for sharing that. So if I'm an investor, and I'm working with the wholesaler, what are some tips that you could give me as the investor to make our relationship better, more collaborative, more effective? Like how do you how do investors work? Well, or better with wholesalers?

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Steve Trang  38:47  

I think the biggest thing for investors working with wholesalers, I think, is being responsive. And then performing when you say you're gonna perform, right, like if you say, there's a deal that works for me, don't back out, you know, afterwards. Now, something substantial changes, right? Like, yeah, I totally get it. But the way we generally work is if someone's committed to buying the property, we're operating as if they're buying the property. And when they back out, you know, the day before, a week before, that puts us in a really bad spot, because we made a promise to a homeowner that we're going to close on this date. So for us, fortunately, we have operations in place where I can source my own capital and perform on that property. But I believe that I'm in the minority in that regard. Most wholesalers, if the buyer backs out on the deal, they can just get capital and close on the property. And so what happens then, is the wholesaler looks really bad, and homeowners pissed. And so I would say the biggest thing you can do is if you're going to commit to the property, do whatever due diligence you need to do, right like we're I'm not saying don't do due diligence. But if you say you're going to do it at that point, you've got to go through with it because if you don't, you're not gonna get another deal from the wholesaler. And that homeowner is the one that pays the price. When you back out

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Brandon Hall  40:14  

good tips, what are some common mistakes that you see investors make when they buy properties through wholesalers?

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Steve Trang  40:22  

I wouldn't say it's necessarily a common mistakes, but it's a glaring mistake when I see that happen, and is believing the wholesaler when they tell you what the house is worth. Right? So I say, hey, Brandon, I've got this property is worth $300,000 is 200,000 to you? Are you interested? You better underwrite that deal yourself, do not rely on a salespersons perspective, their job is to maximize revenue. So recognize you're dealing with a person whose goal is to get as much money revenue from you as possible. And I've got no qualms about it. I'm a capitalist through and through. So you know, for your side in working with a wholesaler, it's Caveat emptor, right? Buyer beware. Do your research verify that those numbers make sense. Because if the numbers don't make sense to you don't jump on it just because you feel like you have to by the way, urgency is something we're also really good at as well. Right? So don't feel like at the jump on it. Because like if you don't take it now I got five of the buyers lined up don't commit to multiple six figure decisions on a gut feeling. That's what I would say Caveat emptor

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Brandon Hall  41:37  

sounds like sounds like you've seen that happen a few times.

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Steve Trang  41:40  

I have and those buyers get added to our list. Well,

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Brandon Hall  41:43  

thanks for sharing all that about wholesalers are they take this a little bit more macro for a few more questions. What's something that you wish that you knew? Two to three years ago?

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Steve Trang  41:53  

I wish I would have gone on tick tock earlier. I know that sounds ridiculous, because tick tock is mostly dead now. But it was like a goldmine for a bit, right? Is it really for lead generation it is. So they really dialed it back. They're

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Brandon Hall  42:03  

trying to make you pay now?

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Steve Trang  42:05  

No, just the algorithms always changing. So like there's a period of time, where if you jumped on it, you could really leverage it. But right now you can't. So I will say, you know, looking back, there's that I wish that I had exercise a little bit more restraint. You know, we all have this problem where we believe our own BS. And so this idea of the party is gonna go on forever. And I knew the party wasn't going forever. But I was absolutely convinced that when the party when the music stopped, that we'd still be totally fine. But man, our Phoenix market is just it's so quickly that when the music stops, in June of last year, we had to make some really, really tough decisions. And I thought like, Hey, we got three months reserves, you know, we're good, man, those three months reserves. They lasted, I want to say, almost a year, right. But they got depleted. So you know, we had to make some tough decisions in a very short period of time. So I would say looking back, just the I have a tendency to always go fast. I wish I would have just slowed down a little bit, and believed a little bit less of my own BS,

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Brandon Hall  43:17  

right. Very wise words. And sorry to hear that. What are the next one to two years look like for you? Like what do you what are you hoping to accomplish or grow?

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Steve Trang  43:26  

I will say the biggest thing. So there's two things we're working on. We got one of the flagship product was our sales leadership, where we help other business owners, outside of real estate, just any industry, that business owners on how to effectively lead and manage your salespeople, because they're like managing staff is one thing managing salespeople is another thing. Right? So we've got that, you know, we've been pushing that for Let's see, next month, right, July, will be a year since we launched that. So I think that can be really big that can make a big dent. The other thing on the other end of the spectrum is ourselves disruptors, which is our sales community, where for $97 a month, people can learn from us on how to be an effective salesperson. Right? So we got both ends of the spectrum, right, how to become a better salesperson, how to manage salespeople. So those are the two things that I think for the next one or two years is what I'm most excited about. Because my goal my ambitions is 510 years from now, sales will be completely different and revolutionize, you know, right now the way it works is people are terrified to go to a car dealership. Because that is the classic image of a salesperson. I don't want to sell it to be done the right way where it's a consultative approach, having a conversation, figuring out what's important to you, and then figuring out whether I can service that or not. And then there's no one that we've seen at scale. Show how to effectively manage salespeople all we see is like a lot of people directing and micromanage. Doing salespeople but not leading them effectively. And I think that's a big opportunity for us as well.

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Brandon Hall  45:07  

Yeah, I love hearing that. Actually, as you're talking, I'm like, I'm gonna look this up after, after our call. Because I need that. That's awesome. All right. Well, I've got three closing questions for you. We are coming up on time. So let's get started with this. So what is your favorite book? It does not have to be a real estate related book or business book. I think it kind of knows you already mentioned it. But what is your favorite book?

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Steve Trang  45:30  

I mean, I will say right now is rigging the game. I actually have this little cheat sheet right here in front of me. But I will say rigging the game is by a friend of mine, Dan Nicholson, and a mentor as well. And you know, a lot of people in the entrepreneur world are fast stars quickstarts hard charging people. And that's great for the most part, like the world needs that. But because we're hard chargers and fast movers, we don't always exercise or straighten. That's how we get in trouble. So I think you look back and all the financial mistakes I've made. If I didn't, if I could just get rid of all the financial mistakes I ever made. I'd be incredibly wealthy. Right. So what can we do to slow down be introspective so that we can reduce our financial mistakes? So rigging the game?

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Brandon Hall  46:17  

Very good. All right. Question number two, what is more important in real estate investing cash flow or appreciation?

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Steve Trang  46:23  

Oh, cash flow for sure. Because appreciation is great for wealth. It's amazing for wealth, right, that is the best the hack. Right. But cashflow is how you sustain good market, down market. Bad market whatever. cashflow is great, right. You can sustain almost anything so long as cashflow positive. I said I have very few regrets. My biggest regret in real estate was when I started oh seven was I didn't take out any hard money loans. Because I was seeing these hard money lenders for 18%. I was like What idiot would ever get a loan at 18%? Right. But there are a lot of properties that were available for 3040 $50,000. They have I bought those for 18% interest, I would have cash flow, right. And those properties now are worth 10 times more. So I wish I bought those at 18% interest rates, because I would have cash flow from day one. And then I would have taken because of the cash flow, I've been able to take advantage of depreciation, but without the cash flow, there's no appreciations. You have to you have more chances of getting blown up before taking advantage of depreciation.

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Brandon Hall  47:32  

That's very good, wise words, hindsight is always 2020. Alright, question number three. Last question. What is one last piece of advice that you would love to leave our audience with?

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Steve Trang  47:44  

I would say be very, very clear, be crystal clear on what your objectives are. And then devise a plan to accomplish that objective. So I said earlier, I got shiny object syndrome. I wanted to buy properties. And then I became a realtor and then a wholesaler. Right? So many people are like, Hey, I'm gonna buy properties. And then they quit their job like I did, to source to source properties. If your goal is to have rental properties, stay your job and buy rental properties, right? If your goal is to have a real estate business that buys properties that have a real estate business that buys properties, but be crystal clear on your objectives. Identify what the rules of the game are, what are you willing to sacrifice what you're not upfront, so you're not compromise compromising on your values later on. And then execute. Like, be consistent, be steady, and execute.

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Brandon Hall  48:38  

Love it. Love it. Steve, if somebody is listening to this, and they want to know how to contact you or connect with you or any of your businesses, where should they go?

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Steve Trang  48:48  

The best place to find me is on Instagram at Steve Trang Ste dot tra ng or you can find us on disruptors.com or sales disruptors.com Those are two different outward facing websites.

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Brandon Hall  49:02  

Awesome. Steve, thanks so much for coming on the show today. I appreciate it.

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Steve Trang  49:05  

Absolutely. My pleasure. Thank you. Thank you so very much for having me. I was honored when you guys reached out I was like I don't know if this is gonna fit but I'm really glad that we did this

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