Table of Contents - Wholesaling in Today’s Market with Tom Zeeb
Dave Debeau [00:00:09] Hey, everyone, this is Dave Debeau with another episode of the Property Profits Real Estate podcast. Today, we've got a returning guest with us, Mr. Tom Zeeb. Tom, how the heck are you doing this? Fine morning?
Tom Zeeb [00:00:21] Doing great, Dave. Thanks for having me back.
Dave Debeau [00:00:23] That's great. I'm glad to hear you're doing good. And and for those folks that don't remember our last interview, don't haven't had the pleasure of getting to know you yet. Can you tell us a little bit about, first of all, where are you at and what do you focus on primarily when it comes to real estate investing?
Tom Zeeb [00:00:39] Got you. I split my time between Washington, D.C. and Sarasota, Florida, and I focus on wholesaling real estate, so literally putting properties under contract and selling the contract rather than even the property itself.
Dave Debeau [00:00:52] All right. So that's cool. A lot of our we got well, now we're pretty international with our listeners, but we definitely do have a skewed towards Canadians here. And I love the fact that you're you're based in Washington, D.C., because if I'm not mistaken, that's a pretty expensive market. Would you agree?
Tom Zeeb [00:01:09] It's it's a it's a ridiculously expensive market.
Dave Debeau [00:01:14] What's the what's what's the average house price in your neck of the woods, give or take?
Tom Zeeb [00:01:20] D.C. is kind of a three state area. So depending on which zone you're in, let's say D.C., we're probably looking at around eight hundred thousand on average. If we shift over to the Virginia side, probably hit six fifty ish if we go to Maryland, probably two fifty to four hundred.
Dave Debeau [00:01:37] OK, very cool. And do you do deals in all three of those areas or do you focus primarily on the lower price area?
Tom Zeeb [00:01:45] No, I'll tell you, lately, the high price areas have been very good. So I focus on all the areas because I don't care about the price so much. Do I care about the value play? Like, what is that?
Dave Debeau [00:01:55] That's how you make that's how you make your bucks. Right. As much profit is going to be in in it for the end buyer determines how much they're going to be willing to pay. You don't want basically
Tom Zeeb [00:02:05] an extra Xeros or just extra zeros. Nothing to be afraid of.
Dave Debeau [00:02:09] All right. So the reason I bring that up is because definitely a lot of Canadians are kind of freaked out about our property prices up here, especially in Toronto, here in Vancouver, where they're they're pretty insane, those kind of downtown Washington, DC kind of prices, that's for sure. So good to know that this is working in high priced areas. Now, Tom, we were talking a little bit before we jumped on live that, you know, a lot of people with the whole pandemic and all the upheaval, the political crap that went on and everything that all the craziness has been going on. A lot of folks are are thinking there aren't any deals to be found like this, especially in a hot market. How can how can you possibly find a good wholesale deal when there are multiple offers on properties and all this kind of stuff? It really is a big deal and a lot of people's minds. So why don't you walk us through your thoughts on this? Because you seem to be doing all right.
Tom Zeeb [00:03:07] Yeah, that that old chestnut, again, it all seems to come up. So I find it very amusing. I'm pretty sure that people just like to make excuses why it's never the right time. Oh, it's not the right time because the market's too hot or it's not the right time because the markets crashed or it's not the right time. It was the market might be changing or it's not the right time with the markets flat. But if you really think about it, what we do, what I'm specifically looking for as a real estate investor, but in a real estate wholesaler, I'm looking for a property that's run down, dilapidated or has an owner that has a problem where they need to sell it even more than they want to sell it. Maybe they've got an old or they're tired of their tenants or they live out of town or move to the other side of cabinets. There's all these different reasons why somebody would need to sell it even more than they want to sell it. And that creates an opportunity. There's a value play there for us. And so it doesn't matter what the market's doing. And as a wholesaler, I don't get stuck with anything anyway. So if I colossally screwed up some of my numbers and got stuck with the property, I'm not stuck with it. I press the button in my contract and I get out scot free.
Dave Debeau [00:04:11] All right, so maybe let's back up for a second. I should have done this first, but why don't you give us your definition of what exactly is wholesaling?
Tom Zeeb [00:04:19] Good idea. OK, so in wholesaling, what I aim to do is market the fine motivated sellers. I negotiate great deals with them. I put them under contract. But then normally you would settle on that contract and own the property and then you would rehab it. And then instead, what I do as a wholesaler is I sell out my position in that contract so I never go to settlement. Somebody else buys that property. An investor that I sell it to is the one who buys that property from me. Actually, they buy directly from the from the seller and I get a wholesale fee.
Dave Debeau [00:04:52] Right. So basically, if I'm not mistaken, you sign your contract to the final buyer, is that correct?
Tom Zeeb [00:04:58] I always do.
Dave Debeau [00:04:59] And the seller and the seller knows this ahead of time. Write the seller has a pretty good idea of what you're going to be doing with the price.
Tom Zeeb [00:05:06] Yeah, I don't I mean, I don't go nuts trying to explain it to them, because if you think about how long it takes investors, I'm just I don't how to do it. I tell people it's real simple. I say, look, I have a number of people on my team. Some of them fix up properties. Some of them are going to look to buy and hold it and rent it out. I'm going to see which one of my team members is available and that you first match with preference of describing wholesaling in a nutshell, the segment.
Dave Debeau [00:05:30] And yeah. And you're not you're not pulling the wool over anybody's eyes and you're not. Yeah. That that makes a lot of sense. So something that I've heard about Tom, and I'm not sure if this is an issue in your areas is, you know, local real estate boards and government. State governments and whatnot getting uptight about wholesalers and and saying, you know what, you really should have a real estate license to be doing this kind of stuff, is that ever come up? Is that ever an issue
Tom Zeeb [00:06:00] in a couple of states? And Illinois comes to mind, but it's not totally across the board. But I give my students for the states where we've known there's issues, I've had attorneys work up addendums that make it good to go. You know, the thing is that it's based on old English contract law. Yeah, you have something called equitable interest when you have a contract to buy a property and you have the right to sell equitable interest. And Canada and some of these because America is based on all English contract law. So it's been pretty smooth sailing. Some states are getting a little crazy right now. We just either don't do it. And if you live in Illinois, I'm sorry about the other problems, but if not, use one of my agenda that our state specific.
Dave Debeau [00:06:44] Yeah, well, it makes sense. There's typically there's a way around it. Yes, that's for sure. All right. So, Tom, what do you think are the biggest advantages to you as a real estate entrepreneur focusing on wholesaling versus buy and hold? Burs Flip's? Yep. Or do you do a combination?
Tom Zeeb [00:07:05] I do a combination now, but I'm still eighty eighty five percent wholesaler. And I went through a good decade of being one hundred percent wholesale. I don't want to do anything else because I got burned by tenants early on and and I stayed burned and I stayed bitter and angry about it. Then I got over and had rentals. But honestly lately I've been, I've been rehabbing my rentals, selling them off because I'm just I'm just not interested anymore. I'm so happy as a wholesaler because it's it's quick. It's easy. I have no long term commitment. I'm in. I'm out. I make money and I move on. I get to do the parts of the business I love. I like marketing for deals and I love negotiating deals.
Dave Debeau [00:07:43] Now, it's interesting, I was talking with another gentleman the other day and he was complaining that some of the big players are starting to come into the game and it's getting a little bit getting a little bit more difficult to tie up these deals because the big guys can swoop in and buy all cash and this kind of stuff. Have you seen any issues with that or or do you have a way around that?
Tom Zeeb [00:08:05] Yeah, I've heard that in a few markets where I've come up against it a little bit, where I am, some of my students in other parts of the states saying, oh, you know, there's these buyers, they usually come in and spend too much. So they're not going to make any money in the long run. And so it kind of self defeats itself and they wind up not being an issue. Personally, I just keep digging for better deals and marketing and spend more time on the report building in the negotiation. And then that makes me the logical choice for somebody, not the big the big guy swooping in.
Dave Debeau [00:08:35] Right. Makes a lot of sense. Awesome. So any we can dove into it in a fifteen minute interview. That's, that's for sure. But any, any just big broad stroke thoughts on what's working now as far as marketing for motivated sellers, what do you find works best for you these days?
Tom Zeeb [00:08:53] I'll tell you, traditionally, I've always loved out-of-state absentee owners. I guess for you guys to be out of province absentee owners. Yeah but my number one lately has been long days on market, which are properties that are open listed, but they've been sitting there and in the hot market when everything sells in three days, if you have something that's been sitting for sixty, there is a problem. And so you can get in there and and solve that problem for them. You know, they want to sell. That's why it's listed. So you don't have that initial hurdle. They want to get rid of it, but they haven't been able to. So I've done really good with long distance marketing.
Dave Debeau [00:09:27] Well, OK, that just brings a question to my mind. OK, if it's long days on market, if it's listed for sale with a realtor, how are you able to do tie that up with a wholesale type deal? Because isn't the the realtors may or may not cooperate with that whole idea,
Tom Zeeb [00:09:42] but if they're hesitant, I have to explain myself, but I insure them. Their fee is safe. They're going to they should be happy because if they're going to get offers and I want to buy it, I'm coming in with a cash buyer. It's a cash offer. There's no strings attached. You just have to go with it. But yes, I do need to sign my contract. And so we change my contract over from being a contract to be done them. And now I have the full ability to sign and we take it from there. That way they're still happy because they get to sign their underlying contract, which is how they're trained. But I'm happy because we could sign my contract.
Dave Debeau [00:10:14] Yeah, OK, so very cool. So they still get paid. But obviously you're going to if the thing's been sitting on market for 60 days, it's probably overpriced. Yes. That's probably one of the main
Tom Zeeb [00:10:25] overpriced for the condition that it's no.
Dave Debeau [00:10:27] Yeah, exactly. So then you're going to have to give the give the seller and the realtor a real reality check on how much the damn thing is actually worth.
Tom Zeeb [00:10:38] Yes, yes. Yes.
Dave Debeau [00:10:41] Because obviously the seller had something in mind and the realtor went along with it because they listed it at that price.
Tom Zeeb [00:10:46] So but it didn't work and. A couple of months only only look, I'm stubborn, but you've got to be really stubborn after that long to not listen to any reason. And so usually there's some frustration at that point that they haven't sold it. And so I can come in there and speak to that. I mean, that's a negotiation that you want to get in there. Yeah, I want to put a little salt in the wounds because that that gets them a little bit irritated and motivated to really want to sell to me.
Dave Debeau [00:11:15] Now, give or take, Tom would like to make a deal worthwhile for you so you get a decent wholesale fee on it and to make it worthwhile for the end buyer. What percentage of RV you kind of shoot for for for your offers on these on these kind of properties?
Tom Zeeb [00:11:35] Sure. My buyers want to buy. So let's say it's a habit that needs renovation. It's my buyers want to buy at roughly 70 percent minus repairs in hot markets, maybe seventy five minutes. A person to a colder market. Sixty five. You you ask your buyers to find out how to tweak the percentage in that formula. And then basically my fee, a wholesale fee. I don't have a set percentage. I go after it simply. How much better than that number can I negotiate? I know what it'll sell. I know what my buyers want to buy it. So how much better than that number can negotiate with the seller? That's my fee. I like to have a minimum of five thousand dollars fee. I've the lowest I've ever had is thirty five hundred. Oops, a little bit. The biggest wholesale I have ever had is sixty five thousand one hundred eighty nine. Is it. That was beautiful. That's from a signing. A contract. I didn't, didn't swing a hammer, didn't clean the place out, didn't do a darn thing to the property.
Dave Debeau [00:12:32] What would you say is kind of your your rolling average give or take.
Tom Zeeb [00:12:36] Gotcher My personal average is like twenty three thousand something again in a high priced area. My students across the country average about ninety six hundred dollars.
Dave Debeau [00:12:46] So about ten hundred, ten grand give or take. Very, very close. So this is fascinating stuff, that's for sure, Tom. And I'm pleased to say that the time that people are going to be watching this podcast, you're actually going to be doing a special online presentation for my gang, all about the cool stuff that you do with wholesaling. And if you're just getting started really and real estate investing, this could be a really good way for you to get going with real estate investing. If you're already active, an active investor, you're looking for additional way to add some more revenue to your to your business or you're looking for some really smart ideas on attracting motivated sellers, hint, hint, nudge, nudge, or whatever the hell you're doing. It might be a good idea to to to attend. So we're going to be doing this on July the fourteenth, which according to my calendar, is Wednesday, Wednesday, July the fourteenth, starting at 6:00 p.m. Pacific, 9:00 pm Eastern Standard Time Time. Why don't you tell us a little bit about what people are going to get from this master class?
Tom Zeeb [00:13:49] Gotcha. Dave, I called the presentation. I'm going to do three people's wholesaling. Sixty days to done because the way I do wholesaling, you got thirty days to find the property and then you put on the contract in thirty days you've got assaults on sixty days you're done. But the focus is going to be on marketing, on negotiation and on getting paid, which if you think about it, those are transferable skills you'll use in any kind of real estate investing, whether you want to rehab or landlord or commercial anything. But I focus in on Olson because that's what I like to do. But those skills stay with you for a long time. So I'm going to I'm going to do something a little different. You're going to see me draw out a number of frameworks. So please have a pen and paper with you because you'll enjoy that. That's one of the ways I really get you to learn it and understand it. And then we're going to we're going to dig deep on marketing negotiation and what it takes to put things on a contract to maintain control
Dave Debeau [00:14:38] costs are very good. So people want to register for this master class. What should they do?
Tom Zeeb [00:14:42] Go to Tom Zebb, dot com Dave. So Tom Zebb is Tom Z, EB or Z if you're south of the border. I grew up right on the border. I'm from Buffalo, New York. Sorry, the Toronto is the big town right next door. So it was good to be one of the so yeah. Tom Z eb dotcom Dave to sign ups of Tom Z, E Biz and Boy Dotcom engaged.
Dave Debeau [00:15:12] Perfect. All right. So that's going to be again on July the fourteenth starting at 6:00 p.m.. Tom Z Borght. Dave, we'll get you registered. Look forward to it. I'll be on there myself taking notes like a madman, because one of the things I really love is learning new ideas for finding motivated sellers, because you guys, no matter what kind of real estate investing you're doing, motivated sellers just makes such a huge difference and so much so much better. Buying a property from somebody who really wants and needs to sell that property. You can you can negotiate way better deals you can come up with. We better win win solutions, so, yeah, it's going to be fascinating. Thank you very much for putting that on, Tom.
Tom Zeeb [00:15:55] My pleasure. Have a good time, Dave. I want to warn everyone. I don't hold anything back. I tend to talk very fast. I'm going to cram as much as humanly possible into 90 minutes for you. So be ready and apologize in advance. I talk fast. Just buckle up and enjoy the ride.
Dave Debeau [00:16:12] I'm sure it'll be fun. I'll see you guys. Well, Tom, thanks so much for being here. And everybody, thanks for joining in.
Tom Zeeb [00:16:18] Thanks, Dave.
Dave Debeau [00:16:19] Well, hey there. Thanks for tuning in to the Property Profits podcast, if you like this episode. That's great. Please go ahead and subscribe on iTunes. Give us a good review. That would be awesome. I appreciate that. And if you're looking to attract investors and raise capital for your deals, that may invite you to get a complimentary copy of my newest book right back there. There it is, the money partner formula. You can get a PDF version, an investor attraction book, dot com again, investor attraction book, dot com ticker.