Hey everyone, it’s Mark Ferguson with InvestFourMore. Welcome to another episode of the InvestFourMore real estate podcast. Today, I have a very interesting guest on, Peter Vekselman who is an investor, been doing this for many years. He also owns real estate agency offices, a lot of experience buying homes, investing in them.
Today we’re going to be learning a little bit about, how he got started, how his career progressed, what he’s doing now and I’m excited to learn from. Peter, how are you doing today?
Doing great, thanks for having me on Mark, I appreciate it.
I appreciate you being on the show and taking time to spend with us. What I like to start with, with almost all of my guest is, what first drew you to real estate? You know, did you want to get into it as a kid or was it something that happened later in your life? What was the draw?
Yeah, no. Definitely an accident. I used to be in the franchising business, owned about 15 franchises, doing quite well, but the company kind of outgrew me, became more of a corporate environment so I got out of that. Jumped into mobile homes, through Lonnie Scruggs and Deals on Wheels,
developed what became ultimately the largest brokerage here in Georgia.
Then, literally overnight that whole business changed, the financing, a lot of it. So we couldn’t pick up financing for our back end clients and so real estate was kind of the next most logical thing, you know? Mobile homes and real estate are not necessarily the same thing, but they’re close. When that business changed the mobile homes, went to a couple of seminars, got in and here I am 15 years later.
You know, when you first started out in real estate, was it flipping, was it rental properties, was it wholesaling? What was your focus when you first got into the business?
Yeah, right when I got in I did buy, fix, and sell. I did six of them, I did them to a tune of six months after getting in the business, lost about half a million dollars. That was my first kind of — that was my real first education in the business and ran with that for a little while and then recovered. I knew the business was not the problem, I was the problem. I just wasn’t sure how to do it the right way.
Then again recovered, started realizing you have to know how to build this not just from a real estate respect but from a business perspective and, you know, started developing some very unique models all the way to the day now, the way we approached the market and the way we do things is very unusual and probably not too many other investors or agents do what we do.
Very cool. Now I’m curious, you’re in mobile homes and you went to fix and flipping, do you think being in mobile homes maybe gave you some of the wrong ideas about how to fix and flip? Or was it just a completely different thing that you needed more time to educate yourself on how to be successful?
Yeah, it’s a different animal. A lot of people think mobile homes is like real estate, and it really isn’t. The model we were running, the models, what we were doing was different. It was just a different the way the money flows, the way financing works the ways comps are run, the strategies that we were using. All of those were quite different.
Okay. I know there’s a lot of people on my show, a lot of listeners who want to start flipping or beginning flippers and you hear all the time how people lose money on flipping, a lot of the most successful investors I’ve interviewed lost money on their first flip. What do you think, if you want to get into some of the details, were your biggest mistakes on those first flips? Was it knowing the ARV, or the repairs, or just the whole process?
It’s the whole process. Real estate is really nothing more than a business of making decisions, you know? Do I buy this house or do I buy that house? Do I use this realtor, do I use that realtor? Do I use this comp, do I use that comp? This contractor or different contractor?
A long the way, literally for the first six months, every single decision I made was the wrong decision. I mean, all the way across the board I just did not understand how to correctly make decisions and obviously then I learned how to decide, how to look at values, how to work with realtors, what contractors to use, what parts of town to be in, and things like that.
Okay, were those kind of low end flips or high end flips? What market were you in?
Kind of, in Atlanta, there were about $150 to $200. So pretty much right in line with where the market was and kind of where it is now on the average side.
Okay. Cool, so after doing that and learning you weren’t doing things the right way, how did your investing progress?
You know, again, I got in over my head, lost a bunch of money, realized that probably was not the right model for me to be doing. So at that point I actually changed the whole model. I went from buying, fixing, and selling into almost all exclusively wholesaling and you know, it wasn’t for many years or for a number of years afterwards that I did not get back into buying, fixing, and selling.
But I developed an incredible wholesale model, understood the intricacies of it, setup an office, hired personnel. Again, ran it like a real business. So, the big changes, I changed the model I was utilizing and the model I was running with.
Okay, what do you think, I mean, obviously you’ve been in both worlds, what was more appealing to you about wholesaling than the flipping?
Well, for one, I didn’t have to use money anymore because I would pretty much was run out of it at that point. Two, it was a quicker way to turn money, it’s a quicker way to get money. You know, you could do a lot of wholesale deals in the amount of time that it takes to do just one retail deal.
You know, an average retail deal could sit out there for three, four, five, six months. Whereas once the wholesale model, you know, is setup, now on an average week, I’ll wholesale as many deals a week. It’s a much quicker way and it’s a much more predictable to make money if you set it up from a systematized perspective.
Yes, for sure. I don’t do a whole lot of wholesaling myself, but I buy from a lot of wholesalers and I’ve know quite a few across the country. They all have different ways of running their business, doing things. What are some of the keys to yours? For one thing, when you’re selling them, are you doing a double close or an assignment? How do you end up transferring title?
We do all kinds, we’ll do double close, we’ll do assignments. Sometimes I’ll even buy it and hold on to it for a couple of days, a couple of weeks and still wholesale it out. The good thing is that now, being in the position I am now, we’re able to structure deals in pretty much any which way. As long as it’s a deal, structuring is no longer an issue.
Structuring is only an issue when you don’t understand what you’re doing, when you don’t have money or, you know, you’re out of your element. But once you got those things lined up, structure no longer becomes an issue.
Right, there’s a lot of people who want to be wholesalers. I talk to them all the time and I don’t know what the percentages are, but I would say 90% of people who want to start out wholesaling don’t do a deal. Do you have any estimates or numbers on that? Is that kind of what you see to?
I’m asked all the time that and I really think reality’s probably less than 5% of people make money in the business overall that get in. No matter what technique and what strategy they use.
It’s a business that everybody wants to be in but in the end, very few become successful.
What do you think — I guess I can tell you first. When I see new wholesalers, I think one thing they think, they don’t really need any money, they don’t need much experience, it’s kind of taught to be a get rich quick scheme, which it’s not. Some of their mistakes, knowing ARV and finding deals are the biggest things I see.
What are some of the ways you’ve been able to find those deals and make sure you have product that other people want to buy?
Well, it’s all about marketing, I mean, it is all about marketing. I mean, I actually have a whole call center of callers now to take my inbound seller calls. We’ll generate sometimes as many as a couple of hundred seller calls a day in the markets I’m in. When you know how to market — see, marketing overcomes everything else. You might not understand how to do a wholesale deal very well but I promise you, you got 200 sellers a day calling you, somebody’s going to give you that house for nothing, you know what I mean?
I’m a really — I’m just a very good marketer and I understand how to get that phone to ring and again, I have a whole call center of people that are on standby talking to sellers, negotiating deals, cranking appointments out for our agents. It’s a real machine at this point.
That is impressive. Getting that many calls a day, you’re up there at the very top of wholesalers. How long did it take you to get to that point where you could have that many calls coming in?
I’m not sure it’s really how long, I mean, probably in the last several years, that’s what I’ve been running at with a call center and stuff like that. Really, what that becomes too, obviously you have to know what you're doing, you got to know how to setup the machine and then it just becomes a budgetary thing, you know? How much money can you afford to put into marketing? And that’s how all of that works.
Once you understand how to market, once you understand where to market, how to market, then it’s a matter of just, how much money you want to run through your marketing system?
Right, that makes sense. If you don’t mind sharing, you know, what are some of the ways you’re marketing to people, are you using websites, direct mail, signs?
Yeah, we do everything. There are no secrets in marketing, you know what I mean? We do everything everyone else does; direct mail, signs, web based marketing, I just think we do it at a much higher level, that’s really where it comes down to. As a matter of fact now, the way we market is we actually have people across the country market with us.
For instance, somebody in Wyoming may want to spend $2,000 a month in marketing and so what they would do is they would deploy that money until it’s a direct mail into Atlanta, which is where I’m out off.
So they send $2,000 of direct mail out, they take the initial call, ask the seller a couple of questions. Then they get those leads over to my professional negotiators, who then negotiate the deals, we contract the deals, we inspect the deals, we do due diligence on the deals and then once we feel the deals, I do a split of profits with that guy.
You know, we got really innovative ways that we market, internally and externally through programs like that.
Interesting. Now, when you're doing that, are you using your marketing materials? They’re just kind of fronting the marketing fees?
That’s exactly right. We just get them plugged in directly to our mail house and off they go.
It’s kind of like a way to invest in the wholesaling business without having to come up with the entire system yourself?
I call it arm chair investing.
Okay, very interesting. That helps you too because obviously you have more marketing money coming in where you can just expand your business.
It’s a win/win model you know? We have tons of people that we do that with. By the way, if somebody’s interested in doing that with me possibly or all they’ve got to do is just text the word “marketing” directly to my cellphone at 404-915-9685 and we can get a little bit more details of it.
Very cool, how many different areas are you marketing in right now? I know Atlanta’s kind of your home base, but are you in other markets buying properties?
Yeah, I’m in Georgia, I’m in Florida and I’m in California, those are kind of my main stays in terms of marketing right now.
At this point in your business, obviously you’ve built up a pretty massive wholesaling machine, are you buying rentals? Are you holding anything for the long term, or are you just kind of focusing on the whole sale business?
Yeah, we do buy, fix, and sells, you know, not for sale. You know, I used to have over 400 doors in terms of long term holds. It just really wasn’t my style so now what I do is I cherry pick the best deals that come in for myself and we buy, fix, and sell. We do something with those and sell them off and the rest we wholesale out.
Okay, very cool. What do you think are the biggest challenges for you? I know there’s a lot of wholesalers out there, a lot of — are you seeing more competition in the business right now?
Yeah, I think there’s always people coming in to the business. Let’s face it, there’s not too many people especially if somebody had some any kind of money could put it in to right now other than real estate. So there’s always people coming and that’s a positive and it’s also a challenge and I’m in very competitive markets. Markets like Atlanta, Georgia extremely competitive. I’m in Jacksonville, Florida. Obviously we all know how competitive California is but that’s why you always have to innovate.
My philosophy is, instead of trying to beat everyone, I try to create different playing fields where there is no competition and I feel like when you are in a field where there is no competition, you’re always going to be winning. whereas if you’re in a field where a million other people are then you’d better hope you’re the best and sometimes it’s hard to be the best or even near the top.
Right, what are some of the ways you’re doing that in trying to get around the competition?
Well we go to the market in a very usual way. You mentioned, I’m an investor plus I run an agency with a regular real estate team too. So now what’s happens actually in our model is that when sellers are calling us our callers instead of just trying to tell them what a good realtor state agency we are, which is everyone else telling them or trying to grab their property at 50% below asking price we use what we call a consultive approach.
We tell our sellers there’s options with us that we can actually come in and buy their property in the right circumstance. But if we can’t do that, we can do a number of other options with them all the way to help them sell it and list it and so what I do is then they set an appointment for our realtors to go into the houses and our realtors on my behalf make a cash offer and we’ll buy one out of ten or 15 times they get accepted but if it doesn’t get accepted then we go in and convert it to regular listing presentation.
So the uniqueness is now we’re adding value to the seller, to the consumer by giving them options that no one else gives them and we’re also giving value to the real estate broker because now he can recruit top notch agents by just simply telling them, “Hey we have seller leads for you here.” So it’s like we’re creating value with this model on both ends, at the consumer end and at the agent broker end.
No that’s awesome, and I actually do the same thing myself because I am an agent. I don’t do direct marketing indefinitely as you but the same way where we can offer two options, “Hey we can buy it or we can help you list it,” and it just opens up so many more ways to help the seller and create more revenue for yourself as well.
Very common sense model, very common sense.
Do you ever have concerns? I guess if the agent presents a cash offer and it’s accepted, do you give that agent a bonus for getting those deals done?
Yeah, that’s right. We pay them quick commissions just about right there on the spot.
Okay, I’m just curious. Do you ever have the question about is there motivation to get me to buy it or do they want to list it? How do I really know where they’re really trying to push this property?
Yep, exactly how we do it.
Okay, very cool. Now with your offices, are they also doing traditional? Are you trying to build it up to a traditional retail or you are just focusing on these leads for your agents?
Yeah, I mean we have a real retail business but I am an investor. All my money is made on the investing side, you know what I mean? So I do care about the retail side and I do want it to be successful. We have a number of very successful agents. Obviously from a financial perspective that my money is made on the investor side. The investment deals they are helping me find and then I do a referral fee from them back to me on any retail listing that they get and that they sell off.
Okay, that makes sense. Are you looking to expand still? You are in three pretty major markets like you said, are you happy with those markets? Are you looking to keep growing?
Yeah, we’re happy but we’re always open to growing. Again, the way we’re growing right now is through that marketing program I explained to where people are actually coming to our markets and we help them and we market that way utilizing their funds. So right now, not necessarily looking to open up a new market as we speak, but we’re heavily entrenched into Florida, to Georgia and California.
Right, Jacksonville is a massive city. I think, if I am not mistaken, it’s the biggest land mass city in the country and I’ve heard stories about going from block to block, it changes so dramatically. Was it tough to get a handle on that market?
Any market you go into is going to take you time, you know what I mean? Usually if you go into a market and you want to go at a level I go at to where you develop consistency and predictability in the model, you’re really running probably you’ve got to be prepared for about a four to six month ramp up time.
Right, no that makes sense and how many people do you have locally in Jacksonville that help you?
We’ve got a team of about 12 people on the ground there. That includes agents and also support staff for our investment deals. I am doing about 20 to 30 investment deals a month there.
Okay, well that’s a lot of information on the marketing side and of course, I’d love to hear some thoughts too on the selling side because that is the other part of wholesaling. Have you found buyers and how does your buyer network work for selling these properties?
I actually have a team of two in house sales guys, that’s all they do. They develop a relationship because, you know, obviously the wholesale side, you are wholesaling to investors over the world and actually the further away the investor, the more they tend to pay for this deals. I have two in house sales guys, they’d been with me forever, they’re super guys and that’s what they’re doing. They’re finding investors that want to invest into the markets that I’m in. They’re building relationships with them and when the properties come on board all they’r doing at that point is hopefully matching up the right property to the right investor.
Do you think most of your investors are flipper or long term hold guys? What’s their makeup look like?
Right now we’re in a long term play. Most money coming into real estate are from a perspective of getting a return. So that’s probably where the majority of the money is, long term holds or long term cash flow. But when you get a good equity deal those things fly off the shelf very, very quickly because there’s always people looking to make a quick buck on equity play, buy, fix, and sell.
Is that why you chose those markets? Jacksonville, I know Atlanta is probably close to you, because of their long term returns?
Yeah, the numbers will add up very well there for the ROI but I also found the right partners on those markets. That’s a big part, working with the right people on the local level is totally critical in this business.
Yes and you mentioned California as well, which I imagine is a little tougher for the long term hold. Is that still your play there? Maybe not Southern California, if that is the play.
No, California I am not wholesaling anything in California. Everything there we’re buying and fixing and selling. That’s where the action is for us there: buy, fix, and sell, buy, fix, and sell, buy, fix, and sell.
Okay, that makes sense.
Yep, that’s why we love that market.
Are you in the high end? I mean anything in California is expensive but what kind of price ranges are you at with those properties?
No, we’re under $200 end there in the pockets we’re in. So again, that might be a little higher for some markets but for California that’s definitely not necessarily on the high end there.
Right, very true and I mean Colorado in our market is not as crazy as parts of California but it’s been just insane lately with our prices and no houses to sell.
Yeah, very familiar.
Yeah, our city has a 100,000 people and we have 80 houses for sale in the entire town right now so.
Yeah. Awesome, so you’ve got your buyer side set up, your seller side set up, your fix and flip business, do you have pretty much everything running on its own? Or what’s your main job or aspect in the business right now?
Yeah, I mean everything totally runs and sustains itself. It’s a machine, so now as the owner, I do a number of things. I paint the visions for my people in terms of the direction we’re going into. I’m looking out for cash flow, which is absolutely critical, and I’m always recruiting good talent to attract to my operation, that’s what I do. That’s where I spend almost all of my days on.
Nice and it’s tough to get to that point, but if you can do it, it sure is nice and also when you have a business that’s marketable not just something that’s your job.
Absolutely, and that’s where a lot of people lose faith in this business or lose grip. They get in a business from a deal chasing perspective and they never ever get out of it. They’re always chasing the next deal and it never looks or feels like a business and they create jobs for themselves even the ones that make money.
Yep, exactly. All right, so tell me one thing here, if someone wants to become a new wholesaler, let’s say they really want to be in the business they’re not just looking to invest money, what are some tips you can give them to find success and hopefully be one of those 5% that actually makes money in the business?
I’d stay focus on the investor side, identifying investors to move deals to. I’d almost connect with some couple local wholesalers and cut deals with them. Let them go out there and chase deals, you just cut some kind of a profit share deal with them that if you move their deals that they’ll pay you a portion of the profit and I’d spend 95% of my time developing investors and relationships and building those out.
You don’t even have to worry about marketing, you don’t have to worry about inventory. You develop a relationship with two to three other big wholesalers, you’ll get all the inventory if you want and there where you stay very singled focus and just moving it to investors. That’s how I did it, that’s what I would encouraged.
Okay and you mentioned too, a lot of your investors it sounds like, are from out of the country or farther away. How did you find investors out of the country to invest with you?
Well the good thing is investors are not hiding. They want to be, you know somebody is looking for deals or good deals, they will raise their hand all over the place. They’re at meetings, they’re at events and most importantly, they’re on the internet. They’re on Facebook pages, they’re in meet up groups, you name it. So investors are actually just Google real estate investors across the world and you’d be shock at how many results you’re going to get.
So it’s a matter of just joining groups and networking and talking to people. Again, good, strong, solid investors and we do not hide. We’re always looking for deals. We want to be known.
Right, I would agree with that. Awesome, well Peter lots of great information here. We got some tips, learned how your business is running, do you have any goals for the future just to grow where you’re at? Do you have anything big coming up that’s completely different from what you have done in the past?
No, I think our model is already different. So the goal is to just grow, grow and expand. I have a great coaching program too that people are able to hire me to work with them directly. If they are interested, you could find more information out about that at www.coachingbypeter.com
and I work with investors one-on-one up to 12 months and get them profitable quickly, replace their job income very quickly thereafter, help them build business that are financially and lifestyle focused and even partner with many of my clients. So always looking for potential coaching clients myself.
Nice and I was going to ask you too, you beat me to it but the best way to contact you, is that the best site to go to if people want to reach out to you?
Yeah and on the coaching side there. If people are interested in doing some marketing with me, they could just text the word “marketing” directly to my cellphone at 404-915-9685.
Very cool. All right, well Peter I think that’s all I have for you, great job. Anything else you want to add before we leave?
All good, it’s a great business. It’s a business worthy investing your time and effort into. Just make sure you do it the right way and again, I can help people become very successful in this if that’s what they are looking to do.
Yeah, I would second that. There’s a lot of people get into it thinking it’s going to be quick and easy and it is not. It takes a lot of work, a lot of time, but it can be very rewarding if you’re willing to put in the work.
You got it, 100%.
All right, thank you Peter, great having you on and yeah, hopefully we can keep in touch.
Awesome, looking forward to it.