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- William Brown, a 20-year-old real-estate investor, started to sharpen his acumen of the industry while he was in high-school.
- He realized early on that deal-flow - the ability to consistently source discounted properties - was one of the most important aspects of the business.
- Through his investing strategy, Brown finds himself in a position of leverage between buyer and seller when conducting a deal.
- In under two-year's time, Brown completed 75 deals and amassed $770,041.06 in collected assignment fees.
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When most high schoolers were busy studying for the SATs, thinking about prom, and preparing for college, William Brown was spending his time building a robust knowledge of real-estate investing.
"I was listening to real estate podcasts in high school," he said on the "BiggerPockets" podcast. "That's how I got started, and learned about real estate and started the education."
He continued: "My friends thought I was totally weird."
Brown, who's all of 20 years old, became hyper-focused on real estate after he read "The One Thing," by Gary Keller, a story that touts - you guessed it - laser-like concentration on what matters most. Prior to his encounter with the book, Brown spread his time across four different startups.
"I realized that I had to focus on the one thing that I had had in my mind for the last year and a half, which was real estate," he said. "This is the thing I'm going to do - and I'm not going to give another option because I know what can be done. I've heard it on 250 podcasts, why shouldn't I be able to do it?"
From that point forward, Brown put his knowledge into action.
Brown's strategy
In under two year's time, Brown completed 75 deals and collected $770,401.06 in assignment fees through wholesaling real-estate.
Allow him to explain the art of wholesaling deals:
"It's contracting a property with a purchase and sale agreement, and then either assigning it to an end buyer - who's going to be a flipper, who's going to be a buy-and-holder, who's going to be one of maybe some more of the sophisticated people in the market who has their own cash - or closing on it yourself and then turning around and reselling it," he said.
He continued: "The theory of it is that someone has a property that whether they inherited it, or it needs a ton of work, or there's some emotional dis-attachment to it; someone died - they just don't want to deal with it ... that they are willing to trade a slice of their equity in that property for the speed and convenience of being able to sell it quickly and hassle free."
The goal of the strategy is simple: Find a buyer who is willing to pay more for the property than what was contractually agreed upon with the seller. The difference in price is Brown's profit.
Here's an example of a wholesale deal he provided of a distressed four bedroom, three bath, 3,000 square foot single family home in Virginia Beach. He says that homes in the neighborhood were selling in the $350,000 to $400,000 range.
After vetting the property, Brown thought the deal was worth somewhere in the range of $250,000, and was ready to make an offer.
The seller currently had an active offer of $195,000, but wasn't ready to spring on the deal.
After some quick negotiations, Brown was able to put the deal under contract with the seller for $225,000.
A week later, Brown showed the property to a plethora of potential buyers - and nabbed a $277,000 offer. A difference of $52,000.
After divvying up the deal with his marketing team, Brown says he walked away from the deal with a check for $26,500.
"That was completely game changing," he said.
Sourcing deals and marketing
"I listened to 150 podcasts, and I was taking notes on each one," he said. "I was writing down the things that everyone had, and what they were still looking for. They had money; they had network; they had connections; they had track records - they had all that stuff - they weathered the '08 recession. And there was one thing that was still the bottleneck for every single guest you guys had on here - and it was their deal-flow."
According to Brown, deal flow - the ability to consistently source discounted properties - is arguably the most important aspect of business. He realized early on that this is exactly where he could add value.
"It's not a function of having money, it's not a function of having a network and it's not a function of having a track record, because those guys have those things, and they still need this," he said.
Today, Brown utilizes ring-less voicemails, text messages, and targeted mail to source deals. To organize his leads and follow-up with connections, he leverages InvestorFuse and Sherpa.
"I don't think a lead has slipped through our cracks in the last 12 months, since we got these systems up and running," he concluded. "The key to this business is building a system."