This Week on Unstoppable Real Estate Investing we were joined by Benson Juarez. Benson got sucked into the real estate world, fixing and flipping. Fixing and holding and he has been doing it for a long time now. Now with his past of the IT world and his desire to make some things better and easier for real estate investors Benson and his partner created a software that will make it so much easier for you to find the right properties any where in the country so listen in and Get Privy!
Benson [00:03:37] I became licensed as a real estate agent. I'm still licensed to this day, started doing my own deals, started a mortgage company, and we're really started to move in the last. Eight years is during the last downturn, my business partner, Scott Fall.
[00:03:52] And I were brokers in the same REO office. And we were we had our office had lots of listings. So we were managing all of these investor leads. And what we found is it was just really difficult to scale and work with a lot of people effectively using traditional means. And, we had the MLS, right.
[00:04:09] And MLS is supposed to be the Holy grail of data, but it's not an effective tool of finding. Analyzing deals tracking markets. And so what we thought was there's gotta be a way to do this better. So my business partner, Scott is the brainchild of what we're running right now. And we formed this company.
That was just a sneak peak as to everything that you will here in this episode and as always if you need anything come find me at billyalvaro.com and billyssecrets.com
Talk to you all soon!
Billy
Billy: [00:00:00] Welcome to unstoppable real estate investing wealth. My name is Billy Alvaro, AKA the unstoppable BA former billion dollar mortgage banker gone bankrupt turn professional real estate fester where each week you'll learn the tools, strategies, systems, and secrets myself. And other a highly successful real estate investing entrepreneurs used to start, grow and scale their businesses, creating massive profits and how you can too.
[00:00:31] And we'll teach you how to put those profits to work. So you no longer have to get ready to finally experience financial freedom and generational wealth. Now let's get started. Welcome back. Welcome back. This is Billy Alvaro, the unstoppable BA, and I want to thank everybody out there for. Taking time out of your day to listen to me on this podcast on stoppable REI wealth.
[00:00:56] If you've been following me for a while, all about adding value, interviewing these people from around the country that are just bringing in doing ridiculous deals and things that you like. Sometimes wouldn't even hear us. If you're new to this show, I want to thank you for taking time out to listen, go to the podcast and hit, give me a five-star review.
[00:01:14] Give me a like start, following me also hit me on YouTube. And listen, if you want to get into this business, if you want to joint venture and start doing deals by all means, go to Billy Alvaro, com and hit the buttons that says partner with Billy. I'm looking for you. JV partners in New York, New Jersey and Connecticut.
[00:01:33] We are going to be rolling out the rest of the country soon, but right now we're focusing in on those three areas. What we have today is I have a gentlemen I want to bring on and I knew him and I recently just met online and he's been following me for a little bit, and I've seen his name out there.
[00:01:48] And we connected through an organization that we both belong to. And I got to tell you that a little background, this gentleman, he's doing some extraordinary things in the Midwest. He's a broker. He does flipping, he does buy and hold new construction. And he also has a pretty. Unique piece of software that we're going to be talking about.
[00:02:06] So without any further ado, I want to bring on my new friend, Benson Juarez, Benson, how are you doing?
[00:02:13] Benson: [00:02:13] Hey, Billy. I'm doing great. Thanks for having me.
[00:02:16] Billy: [00:02:16] Why don't you introduce yourself? Tell us who you are. A little bit of a background and what you do in the real estate world.
[00:02:23]Benson: [00:02:23] Yeah, thanks. Well, I've been in this business for close to 18 years now.
[00:02:27] I started out back in 2002. I was actually full-time in the military after nine 11 and we had a pretty forgiving schedule. We were working mid, so it's like 12 hour shifts from six to six. And what I found is like a lot of my time was off right in the middle of the day. Right in the middle of the week.
[00:02:46] And I've always been a hustler. I've always been an entrepreneur. And so I was thinking like, what can I do with my time? And I went out and I got licensed to do mortgages. They started doing mortgages during the day, working at the base at night. I was military police in the air force. Okay. And that's how I got into the business.
[00:03:02] So I started just cranking on loans, built up some money, started doing some investing. And then, what's interesting enough is who got me into the business who got my interest initially was Carlton Sheets, the late night infomercial, Carlton sheets tapes. And so I would listen to those while I was on post, working at the base.
[00:03:20] So that's how I got my start, but I went to school for technology, computer information systems right here in Colorado state university. Never used it. Never used it. I went right on and started a business in college, started doing other ventures that wasn't in the technology space or even in the real estate space.
[00:03:37] And then eventually I just got sucked in. I got sucked. I became licensed as a real estate agent. I'm still licensed to this day, started doing my own deals, started a mortgage company, and we're really started to move in the last. Eight years is during the last downturn, my business partner, Scott Fall.
[00:03:52] And I were brokers in the same REO office. And we were we had our office had lots of listings. So we were managing all of these investor leads. And what we found is it was just really difficult to scale and work with a lot of people effectively using traditional means. And, we had the MLS, right.
[00:04:09] And MLS is supposed to be the Holy grail of data, but it's not an effective tool of finding. Analyzing deals tracking markets. And so what we thought was there's gotta be a way to do this better. So my business partner, Scott is the brainchild of what we're running right now. And we formed this company.
[00:04:27]Where we now have real-time data from MLS has all across the country. We're currently in 21 States. We're going to be nationwide here within 60 days. And pretty soon we're going to be able to help real estate investors, agents, hard money lenders, title companies, to be able to get access to the best data so they can analyze deals, underwrite, potential opportunities, track what other investors are doing, and just find lots of amazing opportunities nationwide.
[00:04:53]Billy: [00:04:53] This is interesting. So you, I want to get into this service that you're doing, but I want to first go into your, I know your background. You said you did the mortgage thing. How many, what's your niche in regards to the real estate investment world that you a fix and flip a wholesaler? Do you buy and hold?
[00:05:09] Like, what's your background with that?
[00:05:10]Benson: [00:05:10] It started out as buy and hold. When I was a lender, we were doing lots of loans for people who were buying properties and fixing, flipping. And that's when I saw the opportunity. I'm like, I'm doing all this work for people. Why can't I just do it? So we kind of flipped the switch and started doing some JV deals.
[00:05:28] So JV was where I started and I think it's a great way for anybody who's trying to get in the business. You don't have the experience
[00:05:36] Billy: [00:05:36] , people who are listening.
[00:05:38] Benson: [00:05:38] It's a joint venture. So a joint venture is just you partnering up with somebody else and both parties or multiple properties, bring something to the table.
[00:05:46] You're either bringing money or you're bringing experience. You're bringing contacts. So those are like the main three things that you bring to the table. And so if you're brand new, being involved in a JV deal is not likely unless you have something to offer. So usually a non-experienced JV partner is bringing in money.
[00:06:03] Right. So that could be a thing or if you know the opportunities, right. So those are the contacts, right.
[00:06:10] Billy: [00:06:10] They bring it to deal. They don't know what they need
[00:06:11]Benson: [00:06:11] to deal. Right. Right. So the deal contact, I mean, that could be a thing. And this is where a lot of people get in with wholesale, right? They don't have the experience, they don't have the money.
[00:06:19] So they're finding the motivated seller, who is the contact, who has the property and that's so they can get a lot of people can get started. But after time you can build up your cash reserves liquidity. Now you've got some experience. Your network is growing, so you can do some deals on your own. And that's eventually what I did, but we took a big hit during the downturn.
[00:06:39] Right. I w you mentioned in your intro, in the banking world, I don't know if it was affected. When your career changed, right. When you pivoted, if that was because of the downturn or not, but I know a lot of investors who are active that time really took a hit and a lot of us had to kind of recreate ourselves and do something new.
[00:06:57] Billy: [00:06:57] Yeah. I mean, that was me. I went, I've been speaking about this and all the podcasts I went from having a mortgage bank that was doing over a billion a year to $14 million in debt overnight. And it, temporarily paralyzed me. That's a whole thing, but you know, your JV piece is key because.
[00:07:13] You said it's a lot with newbies, let a newbies joint venture, I'm finding that, but I'm also finding there's a lot of experienced guys that are out there that for one reason or another, they rather partner up with somebody than do the deals on themselves. This past month alone, we had four heavy fat JV deals that we did where two of whom were fixing flip.
[00:07:33] They came in, they brought the property in. We brought the money in, we manage the property, we fixed it up. We ended up selling it. 85,000 deal. Another one was a hundred thousand dollar profit deal, wholesale property that we partnered up and did a JV with it's $105,000. So look, I know with this prior to you coming on.
[00:07:51] We have a very killer JV program that we've launched out and we're doing this in New York, New Jersey just launched out in Connecticut. So if people are listening and they want to get started joint venturing, whether you're brand new and you bring, you have to do it with best and say, you have to bring some sort of value to the business relationship, right?
[00:08:07] There's a lot of guys out there that want to join venture, but they want the other partner to find a deal, fix the deal, fund the deal, flip the deal and give them half the money you got to bring in value. Generally it's either money. Or a deal. And so if you're out there, go to billyalvaro.com hit on the partner button or invest if you have money to invest and most definitely you and I can get together and do this.
[00:08:28] I'm sorry to do that at segway Benson.
[00:08:29] Benson: [00:08:29] No, I'm glad you did, because it made me forget about one thing and you implied it. Which is not, it doesn't always have to be somebody who's inexperienced. you, If you JV with somebody who's, who has the experience and the money often the thing is time, right?
[00:08:43] They don't have the time to go out and put these JV deals to get us. That's. The other element that I didn't touch on that I think is important. If you've got time, which is often our most valuable commodity. That could be something that you could bring to the table, or if you were putting in a lot more time and you're just grinding, know, you're hitting the phones or you're hitting the street.
[00:09:01] So you're going through and chasing leads. That can be valuable too.
[00:09:05] Billy: [00:09:05] Yeah, it could, a lot of the people that are coming in with us, I'm asking him like, why choose us to joint venture with, and we have a reputation, one for getting things done. With two, we have a very systematized way in which we do business.
[00:09:18] And a lot of the guys out there that are solopreneurs. They love the fact that they could join an organization without working for us, but they're working with them and you're able to leverage key word, this smart investors, leverage other people's time and resources. So these guys, like why would I want to take on the responsibility of the headaches?
[00:09:37] Of fixing it, raising the money. I'll hand you off the deal. You guys close it, manage it, do your thing. Raise the money, take care of all the payments that go out. I've just cut me my check in the back end. And it's like a marriage made in heaven because it's like, without them, we wouldn't be doing the deals we're doing without us.
[00:09:53] They wouldn't be able to get the deals done and see the returns that they're seeing.
[00:09:56] Benson: [00:09:56] Absolutely. And what that equals for a lot of these operators who are doing multiple deals is the ability to scale, right? You're instead of just doing, five deals that you could do on your own per month, now you can scale it in multiples because you're leveraging other people and the resources they have, and it can make a huge difference.
[00:10:15] Billy: [00:10:15] Yeah. And, I had my cousin or not too long ago about scaling and he's grown considerably in the last like six months. And. I'm always wanting to speak, but like word of caution, I'm an aggressive guy by nature. I love nothing but growth, but have gone through three different businesses and scaling them.
[00:10:32] You, I don't know if but I felt it firsthand. You could really outpace yourself with the growth and really burn yourself out if you're not watching cashflow. And if you're not watching you, you could be having a high profitable business. But if you're burning through cash, You're now left the end of the month saying where the hell is all my money or a lot of guys that are out there scaling, they're buying and holding a lot of properties, which eats up a lot of their cash.
[00:10:55] And they're always cash poor, and they have nothing to put back in their company to fuel it. So I'm a big advocate on scaling, but just scale the right way, know your numbers. Look at your balance sheet, look at your cashflow. Look at what your cash position is in the company. And most importantly, look at what your profit margins are because.
[00:11:11] A lot of guys end up blowing the shit out of their gross revenue, but their nets are like, five, 10%, which is horrible. Like stuff like that. How many deals a year are you and your team doing right now on the investment side? Not the real, not the brokerage side, the investment side,
[00:11:27]Benson: [00:11:27] it's not much, we, I took a break from the investment side and this is why we talked about, well, I mentioned by reinventing yourself, And this is where I think that I'm really going to start to kind of change myself and document my journey because I was a big investor and I took a huge hit and it hurt me financially, but it changed something in my mind too about investing.
[00:11:48] And so then I went into the mode of let's just help people invest. Right. And that's when you know, the technology getting involved with the technology and helping people to succeed. But over the last year, especially. I was looking at people who were just taking a back seat because of the uncertainty with COVID and the way that money was moving around, or the lack of movement and thinking, I need to turn this back on.
[00:12:13] Right. I'm telling all of these people that they should go out and invest that they should use our tool and I'm barely using it. So that's kind of the mind shift I had to do was like, okay, let's practice what you preach. Let's walk the walk. Right. And that's the plan for 2021. So let's get into it and you're a broker as well.
[00:12:31] Right? You guys are still actively in the brokerage space. Did you have a team working with, or not really? Well, we are a brokerage, so we have privy real estate, but we also, I don't use my license a lot unless it's for a deal or if it's for helping, a friend or family member out. Right.
[00:12:46] It's there when we need it. But we've got plans for that, which we won't talk about today, but we've got plans for the brokerage in conjunction with. What we're going to be doing with this, with the technology as well.
[00:12:57] Billy: [00:12:57] I want to really, the reason I had you on this show is because of the technology. Cause I was pretty blown away when I did the research on.
[00:13:03] What it could do for people in our space, in the investment world. So you opened up and said that the MLS data is really not that useful, or you said something like that. So explain what that means. Why is it not that we're investors?
[00:13:17] Benson: [00:13:17] Well, it in itself is just a database, right? So it's where. The MLS itself is where agents go to list properties.
[00:13:25] And there's some key information there. That's helpful for the agent to list the home, to find homes for their clients, but there isn't any sort of intelligence or algorithms built into it. It's just, you can run some filters and it'll give you what you ask for. the MLS is not designed for. Running comps or tracking markets or finding deals.
[00:13:46] That's where the intelligence and the AI and all of those other kinds of automation type things can get involved. But if you can get the raw data. The data that it's like, it comes out, it's in a database, then you can actually do some really cool things with it. You can actually curate that data and extract the valuable information that investors need to make data-driven decisions quickly, and you can run it through algorithms and have automation layered on top of it.
[00:14:13] And it can change the world for a lot of people. Cause believe it or not, even to this day, Billy. Well, I guess I believe it because I'm going to explain why as entrepreneurs, right. Investors are typically entrepreneurs. And what we do is we learn ways of short-cutting hacking situations, looking for the cheapest way to do anything.
[00:14:33] Right. And I do it myself. Yeah. And so I would rather sometimes grind and do something myself and figure it out and like delegating it. Right? So this is kind of the mentality of entrepreneurs. And this is why investors will hack numbers in this business. So this is a numbers business, and you being off 5%, either direction on say your ARV or your values is a difference between you losing money on a deal or making money or passing up on something you shouldn't pass up on.
[00:15:00] So how can you get a better value and get the confidence in that your numbers are accurate and it's starting with the best data. It's not going to Zillow or realtor.com where that data is not accurate. It's not designed for real estate investing in a pinch. If you have no other option. It can give you a sense of value, but like I said, small percentages, small margins, off on either direction and you could potentially be one and done it's that true?
[00:15:29] Billy: [00:15:29] All right. So I'm going to, when I have people on, right, I want to be able to speak Frank with them and really pick their brain. And sometimes. Disagree or question what they're saying. I'm going to do that with you. I'm going to put you on the spot. So you said MLS is not meant to run cops. I call bullshit.
[00:15:42] That's the only system we use to run comps is the MLS. So what do you say to that? Why is MLS, not the system you use comps , the values of their, what? They bought a Ford, all the Fords. They are the time on market is there. So how could you say we can't use that to run comps?
[00:15:56] Benson: [00:15:56] I think maybe either misspoke or you misheard me.
[00:15:59] I said, it's not designed to run comps the data itself. Now you could take the data and you can run comparables with it, but it isn't going to do it for you. It's a manual process. And unless you have access to the MLS, like an agent does, and even as an agent, you still have to go in there and it's completely manual.
[00:16:17] So as a professional and experienced professional, who's been doing this for close to 15 or over 15 years. It could take me an hour to properly run comps on a property. Right. And this is where investors are at a disadvantage. They go and they hack that situation instead of looking for the best data or partnering up with an agent who has access to that.
[00:16:39] And even that's a failing proposition, they go and they just use the Zestimate. Right. And that's where I think that maybe we missed the communication. Got it is the data is used for comping, but there's a better way of doing it.
[00:16:52]Billy: [00:16:52] So you're a better way. It sounds like. Cause I've been in the mortgage industry like you.
[00:16:57] And so back in the day, and even now AVMs like the automated valuation models. So how is this similar or different from doing an ABM to come up with? Cause it's algorithms, it's data driven. So narrative with those two.
[00:17:11] Benson: [00:17:11] Yeah. So one of the cool things that we do is that we've looked at all the different models.
[00:17:17] So an automated valuation model is. Sketchy at best, right. Look at Zillow, they're a billion dollar company. And even then they say it's off 20 to 30% and they're disclaimer. Right. So they haven't been able to figure it out. And it's because real estate is a very precarious thing, right? Every property is its own animal.
[00:17:36] And there's so many things that are objective that an AVM model. Can you clearly define, but there's so many things that are subjective that an AVM will absolutely miss. So if the subject property is on a main thoroughfare, if it's on the water, if it's facing one direction or another, you could have two houses that are exact same bedrooms, bathrooms, square footage in the same neighborhood, they will still have different valuations just by the simple fact of where they're located or which directions they face.
[00:18:06] So there's a lot of things that I think that. As much as we're moving in a technology direction in this business, I don't think we'll ever be able to 100% remove the human element. And I don't think I'd want to like. Our numbers are our dollars are tied up in these deals and to let an AVM make those decisions for you is a mistake.
[00:18:28] You need to have eyes on these deals to make sure you can verify what you think is true.
[00:18:33]Billy: [00:18:33] I even in my, the way my company set up now is I have an acquisitions manager who oversees four acquisitions people and lead managers. And I very rarely at this point, get involved with properties that we're acquiring very rare.
[00:18:46] If there's a certain criteria, here's our box. If it fits it, it meets this. They can sign off my name, get it into the pipeline and move. But at times it doesn't meet the criteria. And then another level of eyes of a set of eyes. Mine. Have to come to my desk and I want to review what we're actually trying to do.
[00:19:02] And even if my team runs the best comps and we have great comp packages and I have a whole process that they have to put it into Dropbox, even with all the documentation that they put together and curate and place on there. I still find myself going into the MLS myself and running the comps myself, because the way I'm going to analyze it may have been differently from the way they're presenting the data to me.
[00:19:26] And so is this like super similar to what you're saying? Like the ABMS and you running it yourself, you want to have assistance with the technology, but you still want to have that human element because the way our minds operate you and I might look at the same property and come up with a different value based on what we think we can do to it.
[00:19:43] How much value could we add? Right.
[00:19:45] Benson: [00:19:45] That's the key is the exit strategy, right? So the way you evaluate it is dependent upon what you think you're going to do with it on the backend. How are you going to make the money? But there's a really important difference between what we're doing and that nothing, no one else is doing out there, which is called investor activity.
[00:20:00] So we actually track. All the deals that are being done in the market. And I think that most investors make a mistake where they basically look for deals based off of convenience or what's familiar. So they drive for dollars in their neighborhood where they are, where they live. They look for deals on the way to work or on the way to church on Sunday.
[00:20:21] And that's all they know is that area. And they feel like if they have a niche and they carve it out, they're going to have an advantage because that's what they know or think you anything remote. That's not in their comfort zone. They feel like they have to have an attachment. They're like, well, I'll look for deals in Cleveland because my cousins there, or I went to school at Dartmouth.
[00:20:39] So I'm gonna look for deals. They're like, this is the mentality. What they should be doing is trying to reverse engineer. They're what their optimal outcome is. So if they think they want to fix and flip, then what they should do is they should use the technology to find where the fix and flips are located.
[00:20:58]And not just in general, like, Oh, I think that this is where we're at because there's a roll-off in the neighborhood. Like, no, what's the data. Tell you. So with our technology, you can actually literally say, show me every. Fix and flip that was purchased and sold at 60% of the after repair value in Maryland.
[00:21:15] And we can literally plot out on a map specifically where those areas at and create a heat map, a visual heat map. So you can see where these hot areas are at and then the investor and their team can put together a better strategy on how to target those areas. Because now if you find a deal in an area where there is investor activity, the chances of you being able to prove ARV are much simpler because.
[00:21:37] The examples are right there. And it's really hard to dispute that a value is what it is when the guy next door, it just flipped the house. Now there's the other side, which is true, which is okay. Let's say an investor is just chasing leads. They buy a foreclosure list and they start just cold calling and they find a motivated seller and it's the only person that's called them back.
[00:21:56] So they're chasing that deal down and then they go and they try to run comps. They realize nobody's done a deal. So that's the first option or it's only the second. Well, they're not going to let that you'll die. What they're going to do is they're going to chase it and they're going to try to force a square peg into a round hole.
[00:22:11] And the only way they can make that deal work is by throwing out a low-ball offer. Because if you're in an area where the values are 20%, less than a hot area, where investors are at, you have to offer 20% less to make the margins work. So they're already a disadvantage and the offers are less likely to be accepted, whether it's off market on market, no matter the source.
[00:22:31] And then if they do get another contract and say, it's a wholesale deal, no, one's going to want it on the disposition side of the business because they can't prove ARV because no one's done a deal yet. So when you reverse engineer the process based off of what your exit strategy is, and you work it backward, you solve a lot of the problems that you would encounter down the road.
[00:22:52] Billy: [00:22:52] So this is an interesting piece of software is I've never, I think there's one other company out there that does something similar. But with a couple of twists, but your systems who I can go in, is it just fix and flip or is it buy and hold as well? In a certain area,
[00:23:07] Benson: [00:23:07] we've got rental data as well. So you can see all the rental data for an area.
[00:23:10] If you're doing Burr and you want to take the benefits of both rental cashflow, and you want to look at the values and build equity. You can do all of it. And the thing about, rentals and buy and hold is they say, well, if you buy it right then you're way ahead of the game. Well buying it right means you're buying it at a discount, right?
[00:23:28] And if you can buy it at a discount based days, based off of after repair values are already way ahead of the game. And in most areas, values go up at a higher rate in an area where there's fixed and flip activity. Cause those are driving values up higher. Than the typical appreciation in a market of five or 6%.
[00:23:48] So buying a fix and flip or buy, I'm sorry, buying a buy and hold rental or doing Burr in an area where fix and flip activity is happening is a great strategy to follow.
[00:23:57]Billy: [00:23:57] So you got the fix and flip down, you got the Burr method down, I guess wholesalers could utilize your technology as well because they know who the audience is on, who the fix and flippers are, who are buying them.
[00:24:08] So then you can say, look, I got this property, I'm picking it up at a hundred. I see six buyers in this area who are buying at one 15, one 20 they're automatically have a buyers list. Do you give the data of the buyers as well? Like is there a skip tracing platform built into this to get. The information from the current owners, the LLCs, or is that like down the road, you're going to be doing it.
[00:24:28] Benson: [00:24:28] That would be down the road. We would have the information. So if you said, showing every fix and flip the clothes this week, we'll show you the 20 fix and flips that just closed. And then you could build your buyers list from right there. It'll tell you all the LLCs. And what's interesting about that too, is the old fashioned way of building a buyers list, right before, even before the pandemic, you go to the local Rio, you collect business cards, right?
[00:24:49] You got a bunch of people who say they're going to buy properties. Now, what they're doing is they're going into a Facebook group. That's in their target city and saying, Hey, who am I LA buyers? Right. They get 10 emails. It is not the best way to do it. I'm not going to say it won't work because you can get some things in there that might be useful.
[00:25:05] But the fact of the matter is you don't know,
[00:25:07] Billy: [00:25:07] it's a strategy you could deploy as an add on. So the ability your us, but it shouldn't be the end all be all. You should have other strategies that you deploy as well.
[00:25:16] Benson: [00:25:16] Absolutely. And if opportunity cost is in your mind and you're thinking, okay, here's something I can do, or I can spend my time doing something better, which is who is the, who are the people that are closing deals today?
[00:25:26] Who closed the deal yesterday? That's in the neighborhood that I want to do and look for deals in. So the hot investor activity area find buyers who are buying in those hot investor activity areas. Changing my outreach and my marketing strategy to target and look for deals there, whether it's mailing campaigns or driving for dollars, or, you have a realtor sending you stuff.
[00:25:49] All that stuff matched up in those hot areas will equal success. Now you've got a buyers list of people that are buying deals and Billy, they're buy box because you're looking at a house they just purchased fix and flip and sold. You know what price range are in, bedrooms and bathrooms, you know what zip codes you also will know what percentage of ARD they're willing to go up to.
[00:26:08] So like in Denver, That's a really difficult market. And the average wholesaler believes they have to get stuff at like 30, 40% to make a deal work. Right. Cause that's what people teach them. The fact of the matter is if you look at what the data says, you'll find buyers in markets all across the U S that are buying it's 70, 75, 80% of ARV every single day, because.
[00:26:33] It's their business and they're not trying to hit a home run every time. They're trying to hit singles and doubles all throughout the year. And it's all about volume. So if they can keep their crew busy and they break even they'll still deal, still do a deal. If that's all that's on their plate. Now, if they've got another opportunity where they can make 10 or 15% ROI, we'll do that instead.
[00:26:54] But this is the business we're in right now. It's so competitive that they will go up to 70, 70, 75, 80% in Denver. Every market's different, but let the data tell you where you need to be. So if you find a buyer who just closed a deal yesterday that purchase it at 75% of the RV, you better do everything you can do to meet those people.
[00:27:16] Because that means you can find something that's 70% and make the 5% more.
[00:27:21] Billy: [00:27:21] Yeah, it's crazy. I mean, the way the market's been. This post pandemic. I know we were talking before the show. We all thought it was going to go one direction and it absolutely exploded. I mean, the city here in New York is decimated, but even there it's going to come back and it's going to come back with a full vengeance, but the outside area is long Island and Connecticut, New Jersey, the burbs, I had like 25, 30% increase and there are guys out there.
[00:27:50] They're paying 80, 80 to 85% on the ARV, which is in my case, I would consider it extremely freaking, highly risky your model. Some of them are buying hold, so they have a certain model. And to your point earlier, some of these guys are contractors and they're like, look, if I can keep my guys busy and just make a small profit, I'm willing to do it, just keep the engine running.
[00:28:12]Everybody has a different model and that's the key point. So w with your software, Does it just do comps? Like it just tells you the area that investors are buying in. And what else does it do besides that? Is there any other services and I know you mentioned a few of the things.
[00:28:28]Benson: [00:28:28] Yeah, so that's the core, right?
[00:28:30] So we had to build it on a strong foundation. So it's number one, having the best data. Number two, having a comping algorithm that runs behind the scenes. It's basically comping out every single property in the system, 24, seven automatically. So the engine is constantly running and it will identify deals and opportunities for the investor or the agent or the hard money lender.
[00:28:52] Whenever it finds a property that matches their specific deal criteria. So the user defines what it is they're looking for. So they're looking for a buy and hold in a specific neighborhood where there's fix and flip activity. Our system will find that opportunity build a comparative market analysis.
[00:29:09] Comp it out for you and layer in all the fix and flips in the neighborhoods. So you can see what they bought them for sold them for all the before and after pictures. And then it curates that into that CMA format and sends you an alert with the link. You can click that goes right to that report on your computer.
[00:29:24] So you can look at it quickly to determine the ARV and what your maximum allowable offer should be. In seconds. So that is what it really changes the scene here is that there are so many opportunities out there. And here's the other thing that we found by looking at the data. The gurus will tell you, you can't find stuff on market.
[00:29:42] There are thousands and thousands of on-market deals out there that investors are passing up on because of their they're being indoctrinated because they don't ha they don't know what the truth is. We just talked about the 80, 85%. Well, I can find stuff at 40, 30, 50% of ARV every single day, all across the U S that's on market.
[00:30:03]The seller is motivated. You know exactly what they want for the house. The offer process is established and already in place. You have another team member there who can do all of this for you, which is an agent. Who's happy to do it because they're going to get paid, but they don't get paid by the investor.
[00:30:18] Who's buying the property. They get paid by the seller. Who's selling the property.
[00:30:22] Billy: [00:30:22] So I want to pick your brain on this if I can. So this is great. I love this part of it. So you're, I'm hearing you say that you could take. MLS data that's houses that are on the market. You can see, okay, what it's target, whatever these three neighborhoods, anything that's on the MLS, it can run through your engine and identify those properties that would meet my criteria as an investor, buy, hold, fix, and flip that I could then get alert and say, yo, this is a deal.
[00:30:49] Buy it at this number. You should make a spread of X that will the human element side. Do you have to plug in like what your repair costs are going to be to figure that part of it out? Or how has that come into play?
[00:31:00] Benson: [00:31:00] Oh, absolutely. That's the one key thing where I think a lot of investors wholesalers fall short is establishing and estimating construction costs and all actually all the costs.
[00:31:10] So when you set your percentage of ARV, That you want that to take into account some costs, right? So we won't know what the, what kind of condition the house is in. We won't know that if there's a tree growing through the middle of it, or if it's just a purely cosmetic flip or if it just needs paint and carpet, but if you set that at a reasonable.
[00:31:31] Amount, let's say you set it at 65% or better. It will find stuff at 30 and 40% that are complete remodels, or it'll find something it's seven or let's say 65% that just needs paint and carpet. But where that comes down to is the human element. So that the person looks at those alerts and says, this one is a slam dunk.
[00:31:51] This one here, I have to get four 60% to make the numbers work. This one here, I don't have time for it. So I'm going to wholesale it. Like all of these options are there, but. It's all about lead flow and if investor is focusing 100% of their time on off market deals. You're completely reliant on the ebbs and flows of those lead sources.
[00:32:12] And there are too many marketing campaigns that go. Flat on their face, where the investor, the wholesaler is trying to get their business off the ground or drinking water out of a fire hose. They're trying to learn the real estate business. They're trying to learn, skip tracing. They're trying to learn marketing campaigns.
[00:32:29] They're trying to learn cold calls and scripts, and it's too much. But if they layer in a process like this, with some automation, they can have more success because you've got consistency in your deal flow. When you've got consistency, you can build a business around it. But if you have a lead once a week, You can't build a business on that .
[00:32:48] Billy: [00:32:48] Yeah. For years when I first started in this business, I was all like 90% of my business came from the MLS Lee properties that were listed because we were in the foreclosure crisis. And then when the market started to shift, it got really dry on the MLS, at least in the New York area. Where it didn't have enough opportunities to pull down and actually make a decent spread.
[00:33:08] But even now with the market is high as it is. And with the inventory as low as it is. I agree with what you're saying. There are so many opportunities. On the MLS listed through realtors, that investors, if they had somebody utilizing a tool like yours, to identify what those hot properties are and instantaneously deliver them to your emails, you could have either a VA or an assistant or somebody.
[00:33:33] Call through a lead management say, okay, look, we just got 15 opportunities. These five are right. Let's go out there and get eyeballs on the deal and let's make this. And it's, you're bringing speed to the game to identify deals in a faster fashion. So you can get them off the market like this. I love the technology man.
[00:33:51]Benson: [00:33:51] There's one last thing that I would add on is that in their world where they've learned this business, they can't understand how there would be a deal on the MLS. Right? Part of it is because they've been conditioned to think that way, but they say, well, why would somebody, they think the price on the MLS is retail.
[00:34:06] They think retail is bad. The price that you see that's available. Is what it's for in the condition that you see it in. So that value is not what you're going to be selling it at. Right. That is what you can buy it at what they should be basing their value on. Is what percentage of after repair value is it?
[00:34:26]I'll pay $20,000 over asking price for a house on the MLS. If the ARV is 40% higher. Sure, absolutely. So the price you see in the MLS or the price that you can get from a seller who was in a distressed seller situation, doesn't matter. If that price is too high, you're going to offer less. If the price is too low, you may need to offer more to get that deal.
[00:34:49] So the main thing is if you have an accurate after repair value and you back out all your costs, and if that maximum allowable offer is lower than you can buy it for even higher, in some cases, You've got yourself a deal. It doesn't matter that it came from the MLS. It doesn't matter what the price is.
[00:35:06] If you offer lower or higher, if it is at a discount based off of your specific exit strategy, you just mentioned that you're seeing people buying properties at 80% of ARV and you get it for 75. That could be an amazing deal. All circumstances are different.
[00:35:23] Billy: [00:35:23] I couldn't agree more. Your algorithm. You said earlier with Zillow, the AVM they're off by like 30, 35%.
[00:35:30] I think that's what you said. How often is your algorithm to the ARV? Do you have those numbers available?
[00:35:36] Benson: [00:35:36] No. And that's the beauty of it is we don't use an AVM. We don't tell you what it's worth. So here's the beauty. So we run the algorithm and we show you all of the comparables for the neighborhood.
[00:35:45] But what our system does is it shows you all the fix and flips in the neighborhood. So your ARV is what the house down the street, which has flipped for it. That's your ARV. So what we do is we give you all the data so you can make it a good decision, but we're eliminating all the houses that aren't comps.
[00:36:01] So we'll eliminate all the houses that are too big, too small, too far away. And then we highlight the ones that have been renovated, so you can see, okay, here's what I can buy my house for the house. The comp in the same neighborhood just sold for 200,000. And my house is going to be where 200,000. If it's.
[00:36:19]Within reason now we've already eliminated all the other ones that don't have any sense, but like an appraiser, what they would do is they would make an adjustment. Yeah. So if the comp is worth 200,000, that was just fixed and flipped and it's two houses down. It's a three-two, mine's a three one, and I can buy it for $80,000.
[00:36:39] Well, my adjusted ARV for that might be. $180,000 because it has one fewer bedroom or one for your bathroom. Right. So you, all you do is you're assigning a value to the missing piece to make your property just like the comp. Yeah. And that's how you determine it. So this is where the human element comes in.
[00:36:58] Over the years, we've really watched Zillow closely and that's estimate and. How people just know that this estimate is junk, right? It's designed for consumers to get a sense of what their house is worth. It's not designed for real estate investing, but when you have the best data at your fingertips and you reverse engineer the process, and you are in an area where fixing flips are at, it is simple to determine after repair value, because you're just following the investor activity.
[00:37:26] Billy: [00:37:26] I love it. I love the concept. Talk, talk a price. Like, what is this? It sounds like it's expensive. What is this guy? What is this going to run?
[00:37:35] Benson: [00:37:35] It should be expensive because it literally can send you a deal today that you'll make six figures on, but it's only 97 bucks a month. $97 per month. We wanted to make it affordable for people.
[00:37:46]Billy: [00:37:46] You get one seat for that. Okay.
[00:37:49] Benson: [00:37:49] And the license.
[00:37:50] Billy: [00:37:50] Let me ask you this. Now, is that one seat for national database or are you specific to the market that you're investing in
[00:37:57]Benson: [00:37:57] it's national? So right now it will give you access to the 21 States were already established. And when we launched nationwide here in the next, within 60 days, Yeah, those other markets will be added to your account for no additional charge.
[00:38:11] The most exciting thing that we're adding Billy is I talked to you about the limitations of off-market deals. They're still great deals to be found. So we are launching nationwide off-market data. That will include owner information, mortgage information, transaction history, as well as the off-market leads.
[00:38:30] So foreclosures, absentee owners, vacancies leaned to properties other distressed situations or categories like cash buyers, REO's, zombie properties, like all of these. Kind of opportunities that a lot of investors go chase. We're going to have that all in the same system, but it's not going to generate a list.
[00:38:49] It's not going to send you a spreadsheet. It's going to send you, if you say, show me every foreclosure in this hot area where all the investor activity is, it'll find that property. And then it builds the CMA for you with all the investor activity attached to it and emails it to you. So now you're looking at a distress situation that's completely comped out and in an area where, you can prove ARV.
[00:39:12] Billy: [00:39:12] It is a good time to be alive, man, because I got to tell you, 15 years ago, when I got started in this, it was all manual BS. There was no, I mean, the skip tracing your services, the investors that are sewing can the young guys and girls, they don't have a clue on how freaking easy they have. I mean, you're giving them on a silver platter and not just the cops, but you're giving them deals.
[00:39:33] They can go out and buy telling them what to buy it for what the cop's sold for. I mean, you're doing it all. You should probably have a VA system actually buy the deals and sell the deals for them for Christ's sake.
[00:39:44] Benson: [00:39:44] Right. People come on like, well, wait, it doesn't write the offer for you. Like they expect everything to be handed to them.
[00:39:50] Right. These young people, because they grew up with an iPhone in their hand and they don't know any different.
[00:39:55]Billy: [00:39:55] It's insane, man. So we're going to, so how can people reach you? That's it? How do they find out about you?
[00:40:02] Benson: [00:40:02] So the easiest way to learn about privy is to go to get privy now.com that's G E T previous spelled P as in Paul, R I V as in Victor, Y getprivynow.com and there will be some more information about our service.
[00:40:19] There's also a link there to schedule a demo or to jump on a training, but that's the easiest way. We've got a bunch of videos on YouTube you can learn from, but it's, there's all kinds of places to find out about us.
[00:40:29]Billy: [00:40:29] Yeah, we're going to put a, we're going to put a link that you're going to give us over a billyalvaro.com and you're going to give them some sort of like special something like a month free or some crap that we'll come up with that you're going to give to the listeners out there who are going to come from a billyalvaro.com
[00:40:43] but on top of that, do you have social media? Are you on, Facebook, Instagram? Like if they wanted to reach out to you personally, how do they do that?
[00:40:52] Benson: [00:40:52] I would say the easiest way is to email me. So my email is Benson benson@teamprivy.com team and then privy.com. That's the, probably the best way.
[00:41:04] I'm not a big, I might have a big advocate and I haven't seen advocate. I'm not a big player in the Instagram world or the Twitter or the Facebook. I think there's some value there. You can definitely do some things, but. I've got my hands full and I love to help people. I'm spending the majority of my time, with the technology, making it better.
[00:41:22] We're doing testing, we're building new partnerships. We're doing a lot of training for our users. To reach out to me, I'm happy to show you how the system works, happy to put something together that makes sense for your business and what your specific target market is, what you're specifically trying to do on the back end.
[00:41:36] But one thing I want to close with, and it sounds like what we're trying to close up, Billy is. Don't let your crappy market determine whether or not you're going to have success in this business. If you're in a crappy market like Denver, like I am, you can literally run your whole runway out and quit the business because there's, it's so competitive.
[00:41:55] You're out priced out of the competition and there's so much competition there to get deals. Invest in other markets with the democratization of data and automation and how a system like ours is available. You can invest in markets all across the country that don't have those price barriers. They have amazing margins that you, the ability to get deals sent to you every single day from different markets all across the U S they're literally, this is literally the easiest time in our history to get deals done.
[00:42:26] And not just not because of us, just because of. Oh, the data and technology, it's absolutely amazing. Do not let your crappy market stop you and we can help you do that.
[00:42:36]Billy: [00:42:36] I agree Benson. And I think if you're in a tight market, like, Arizona is a very hard market Denver's Rhode Island. We're, we're based out of extremely competitive.
[00:42:45] And we've been adapting and we're doing business a little while with doing business in Jersey, but we'd started going in and do a virtual markets and. The way to do that is through technology and through the use of programs like yourself. Bro, I appreciate you having you on. It's been wonderful.
[00:43:00] Getting to know you a little bit, stay connected for sure. I mean, you're a solid individual. If I could ever do anything to help you serve you anything by all means it's heavy. You have my email, you have my cell phone and I'll be more than happy to help you out.
[00:43:12]Benson: [00:43:12] I appreciate it, Billy, I'm looking forward to working with you.
[00:43:15] I know we're going to do something great together. I don't know what it is yet, but I just feel like a good vibe here and I'm looking forward to it.
[00:43:21] Billy: [00:43:21] Likewise, man, take care.
[00:43:24] Thank you so much for listening to today's episode of unstoppable real estate investing wealth. My mission. Is to give you my listeners, the blueprint for success inside the secrets for starting growing and scaling your real estate investing business.
[00:43:39] So you can experience and live unstoppable lifestyle. I've made it simple for you to catapult yourself, says. Go to Phillies secrets.com at B L Y S secrets.com. There you will find every single tool tip trick strategy system and sprint. You used to make millions of dollars as real estate. Everything my team uses.
[00:44:05] And my guest use all in one place for you to tap into you can start, grow and scale the real estate investing business. I really hope you implement what you're learning. I hope you utilize tools, tips, tricks, strategies, and secrets. And I hope to see you on the next day. God bless. Bye-bye.