Pod Insights Wholesale Hotline Wholesaling $0 to $100k Masterclass -- How To Choose Your Market | Flipping Mastery About this episode Welcome to the Wholesale Hotline Podcast Weekend Edition (Flipping Mastery Edition), where Jerry teaches how to master the art of house flipping, wholesaling, and new construction development.
Show notes -- in this episode we'll cover:
Straightforward, step-by-step training on making six and seven figures from real estate deals. Insider tactics for finding motivated sellers, analyzing deals, and raising private money. Learn how to flip houses virtually from anywhere—even with zero experience. Whether you're a beginner or scaling up, Jerry gives you the blueprint to build real wealth through real estate.
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Transcript 0:03 Speaker 00 Hey, it's Jerry Norton. Welcome to the Wholesale Hotline Podcast and the Flipping Mastery Breakout. We want to know how we're doing, so please leave a comment and give us a rating.
0:19 Speaker 01 Don't get so hung up on population. You don't need a million population in your market. You don't need even 100,000. Our biggest deals this last year were in markets under 10,000 population, but they were a half an hour or 45 minutes from a bigger market.
0:36 Speaker 00 You're really coming at this from a scarcity perspective.
0:39 Speaker 01 Yeah.
0:39 Speaker 00 There is so much opportunity in any market you choose, if you believe it's there. Guys, welcome. Tony and I really dug deep into, I don't know, life purpose and all kinds of things. But it was really great because it was you and I sort of warming up, I think, to the series we're doing. And I'm so excited, Tony, because we are going to be breaking down how to literally go from zero, no deals, you're brand new, to $100,000 in revenue. And this is really like what your first year should look like or could look like.
1:11 Speaker 01 Yeah.
1:11 Speaker 00 And this is really exciting because I think what you and I are going to try to do is really show everybody the mechanics from zero to now a six-figure business and what that could look like. And you and I both believe firmly that this can happen in your first year in the business.
1:27 Speaker 01 Absolutely. I mean, it's really simple and we're going to break it down really simple. It's not as complex or as hard as most people think. I think getting started, it can be daunting, right? And you have all these people on social media, you and I included, where it's like, oh, we're doing this amount a month. We're doing millions of dollars. And just getting started, you're like, how the heck can I ever get there, right? It all starts with zero. And me and you started at zero, and now we do millions of dollars in real estate. So if me and Jerry can do it, you guys can do it. And we want to teach from zero to 100 your first year. Very simple to do, not easy. It's going to take some work.
2:07 Speaker 00 It's going to be work.
2:08 Speaker 01 But it's a simple equation. And we want to go over the entire business and how simple it can be so you can get there and eventually get to $100,000 a month, but it starts right here.
2:19 Speaker 00 Yeah. And I think, guys, we're going to do a whole series here, but I think the biggest piece of advice we can give you to start here. Is this is all developmental and the mistake that you may make, a lot of people make this mistake, I think I did in the beginning, is you think you have to understand like all 10 steps before you can do the first step and that's actually not true. You need to just really break this down into bite sized chunks, do the first thing, do it well, then do the second thing, do it well, and stack on that, build on that. And if you follow the process we're going to outline for you, you literally will be going from 0 to 100,000 in that first year. It's the roadmap, it's the blueprint.
2:59 Speaker 01 It's the blueprint to do that. And it is a process and you need a process with anything you do. And this process of, you know, picking a market, what makes a good market, we're going to get into marketing, lead generation, sales, dispo, TC, everything, right? This whole, this whole series is going to talk about every aspect. But if you follow a process, now you know what works and what doesn't. If you go blindly through anything, if you buy a piece of IKEA furniture and you throw away the directions and eventually you get it built.
3:33 Speaker 00 You'll get it built eventually.
3:34 Speaker 01 Good luck doing it again without those instructions. You're going to get it done a lot quicker with instructions and it's repeatable.
3:41 Speaker 00 I love that analogy. Yeah. So guys, we're starting out with picking your market. And Tony, why is this first and foremost, before you do anything else, before you even think about talking to a seller, why do you need to get really clear about your market?
3:54 Speaker 01 Yeah. I mean, you got to know, first of all, what you're going to do, what does your business look like? Because in my office, we're in an office, we're not remote working. We work in an office, but we do this virtually over the phone. So we don't go on appointments, we don't walk houses. I mean, I've flipped 11 or 12 houses and I think I only ever walked inside one of them. So I do everything over the phone virtually. Jerry does in-person appointments in one of your offices. So you can do it either way, you just got to pick what you're going to do.
4:25 Speaker 00 Yeah. So that's our first thing here, guys, is are you going to close deals in person or are you going to close over the phone? And let's talk about some pros and cons, Tony. So because you can certainly do both. There's an argue argument to be made for both. And I'll take the perspective of in person and you take the perspective over the phone. So one of the great benefits of in person, this is where you're going to get a lead from a seller and you're going to tell that seller. Hey, nice to meet you. I'm going to be at your house in an hour. Let's sit down and talk about this. And the idea there is you're not going to try to agree on price or come to terms on the phone. Rather, you're going to meet them in person. What's great about that is I think it's safe to say that you can build a lot more of a connection with somebody.
5:10 Speaker 00 I'm generalizing, but in in general, you can create much more of a connection with somebody when you're eyeball to eyeball.
5:16 Speaker 01 Sure.
5:17 Speaker 00 You're there, they're there. You can kind of, there's body language. You can feel the situation. You can see the property. There's a lot of benefit.
5:25 Speaker 01 It's less scammy, right? We get a lot of that objection over the phone is like, is this real? Is it a scam? I don't even know who you are.
5:32 Speaker 00 You're in some other state.
5:33 Speaker 01 You're in some other state. How do you know what to offer on the house? You're not walking it, you know?
5:37 Speaker 00 So we find a lot of benefit in that. So for example, in one of my markets in Tulsa, Oklahoma. We go on appointment with every single seller. We do not close on the phone. Now, I'm here in my farm in Knoxville, Tennessee. So if you choose that model, you know, the in-person model, it doesn't necessarily mean that you have to do it. However, we're starting at zero. So when you start at zero, you're a one-person show. You don't have a team. You really don't have anything. You don't have systems, processes, nothing's dialed in. You're a one-person show. So I think in time, if you're on appointment, you could get someone else to go on appointment and that kind of frees you from that responsibility.
6:17 Speaker 00 But let's be real, you're in the beginning now. So the question is, is do you want to go on appointment? In person, which makes the next decision for you, which is you're going to probably have to be a backyard.
6:30 Speaker 01 Sure.
6:30 Speaker 00 Have to be where you can drive there in 10 minutes or 20 minutes and be on that appointment. Which is the other consideration, like if you're closing in person, then you're probably going to be a backyard market, local, right where you live. It would be your market to do that in-person thing.
6:44 Speaker 01 Yeah.
6:44 Speaker 00 In time. You could do like me where I'm here in Knoxville and we're doing deals in Tulsa. Cause I have a partner that goes on appointment.
6:51 Speaker 01 Sure. Yeah. And that's a good point. It's like, do you want to do this in your backyard? Is your backyard a good market?
6:57 Speaker 00 We'll cover that in a minute.
6:58 Speaker 01 Which we're going to cover, right? And that's going to be a decision you're going to have to make. I mean, maybe some, somebody is on this, watching this that lives, you know, in the middle of nowhere, Texas. And the, the biggest market is two hours from them. In a case like that, you might not be able to do it in, in person over an appointment. One thing about in person is I kind of agree with a one man band doing it in person if you can. If you're in a good market and you want to go on an appointment, I think you're going to get a higher contract ratio from, from offers.
7:30 Speaker 00 You'll have a better conversion.
7:31 Speaker 01 You're going to have a better conversion if your, you know, plan is to grow a team or you want to have the flexibility to jump into new markets whenever you want. Virtual is the way to go. That's what we do. One thing about virtual too, is it's a, it's a time thing.
7:45 Speaker 00 Scalable.
7:46 Speaker 01 It's scalable. It's, you know, if you're a one man band, how many appointments can you go on?
7:51 Speaker 00 A couple.
7:51 Speaker 01 A couple, right?
7:53 Speaker 00 You can only go on a couple a day.
7:54 Speaker 01 Especially if you have a nine to five. It's like now you're trying to set up appointments. It kind of limits you on time where as over the phone, you can make three or five offers a day if you want. And you can do it from your house and you can do it in slippers and sweatpants.
8:10 Speaker 00 You, you can talk to 30 sellers in a couple of hours, like high quality conversations.
8:14 Speaker 01 So it comes down to like quality over quantity, right? And it's like, you can get a lot more calls, a lot more offers out. But you know, are all those offers going to get accepted? Are you going to get more contracts? It's kind of a, a give and take there. But another thing I like about virtual is when the market does get hot, you can buy the data and jump into that market in one day when you're doing it virtual. If there's heavy regulations in a market, if you're in South Carolina and you were doing this in your backyard and you only did in-person appointments and all of a sudden all these regulations come. It's like, are you just going to pick up and move so you can replicate this somewhere else when regulations come? Or can you just say, I'm gonna buy data in North Carolina and start making calls in North Carolina.
8:58 Speaker 00 Yeah.
8:59 Speaker 01 So, there's a give and take to both. I don't know if there's a right or wrong answer.
9:02 Speaker 00 I don't think there's a right or wrong answer. Yeah, it's just pros and cons.
9:06 Speaker 01 It's pros and cons.
9:06 Speaker 00 Really, the way you want to think about it. Like, you will have a competitive advantage on appointment. We've had times, Tony, where we go on appointment and there's five contracts laid out on the table
9:16 Speaker 01 Oh, wow.
9:16 Speaker 00 from virtual wholesalers. And we're able to walk out of there with a contract because, you know, we can sort of throw them under the bus and we can tell the seller we're the greatest thing ever invented and, you know, because we're there.
9:27 Speaker 01 Yeah, they trust you more, obviously.
9:29 Speaker 00 You can build more trust. However, like we said, you can only go on so many appointments whereas on the phone you can scale a much bigger operation. So I think those are some things. I think the second thing here to think about here is, uh, we didn't put this on the board. I was just thinking this, Tony, but there's also an idea around nationwide versus a specific geographical area.
9:48 Speaker 01 Mm-hmm.
9:49 Speaker 00 And there's pros and cons of that as well.
9:50 Speaker 01 Yeah.
9:51 Speaker 00 You know, and I know some wholesalers that are just nationwide, anywhere and everywhere. You know, they're just gonna do lead gen and wherever the lead is, it could be in the middle of nowhere. It could be in a metro. It could be anywhere. They know how to then try to close that deal.
10:06 Speaker 01 Mm-hmm.
10:07 Speaker 00 Or do you really invest in a specific market, learn it well, and then you have an advantage there? Because now you can identify deals quickly, you can comp better, you got your head around things a little bit more.
10:20 Speaker 01 I'll give some black and white advice. Do not go nationwide, especially in the beginning. Do not go nationwide. I've just never seen anybody go nationwide and have a very efficient, successful business that's repeatable and consistent. It seems high highs, low lows. Like you said, you're never doing the same deal in the same market. So on the dispo side, when you're building a buyer's list, you can't build a really big buyer's list
10:48 Speaker 00 Not if you're nationwide.
10:49 Speaker 01 with repeat buyers to send them deals. Running comps, as we talk about, that's one of the hardest things for people getting started is underwriting deals and running comps. Imagine how much better you're gonna get at running comps if you're in the same market for a year as opposed to doing, you know... 12, 20 deals in 20 different markets in that same year.
11:09 Speaker 00 Seems like the virtual guys, especially in the beginning until they get good, have a very high contract fallout rate. And the reason why, guys, is because you think it's a deal, you lock it up, you find out it's not a deal. Because of the nuance of that market, you don't know.
11:23 Speaker 01 You don't know.
11:24 Speaker 00 You don't understand.
11:24 Speaker 01 And another thing.
11:25 Speaker 00 So that's a challenge.
11:25 Speaker 01 It's a challenge. The other thing we didn't talk about either is when you're walking the property that you're going to put under contract. You're in there, you can see it, you can take pictures while you're there, you can smell it, which is a factor that nobody thinks about. How many properties do I log up where the buyers call and they're like, this place stinks so bad. There's 30 cats in here. You would never know that from photos. Which is a good and a bad thing with going on appointments. You gotta smell the cat urine, but you know it's there. So you know what to lock the property up for. So knowing what the property looks like too is a big thing. Cause we do it virtually. We have to go off what the seller says over the phone. And a lot of times when you get the photos back after you have the contract, it's worse condition than than they left.
12:10 Speaker 00 Which means you have to build in some contingency so that once you do get eyes on it, you have the ability to sit back down with the seller and say, hey, this isn't at all what we talked about. There's this, this, this, and this issue. We need to revisit price.
12:23 Speaker 01 Yeah.
12:24 Speaker 00 And that's a part of that. That's a normal part of that process. You better set clear expectations. We're going to talk about that when it's time. But guys, these are just, we want you to be thinking about, you know, pros and cons here, what resonates with you. But one thing is absolutely certain. You have to get clear on this. The worst thing you could possibly do is market hop. And you and I both know people that market hop.
12:46 Speaker 01 Yeah.
12:46 Speaker 00 Guys, because here's what happens. Once you commit to a market or maybe choose a market, but you're not committed to that market. If you spend six months on that market and then you go, ah, you know what, I'm going to jump over to Houston. And you market hop, you're starting over from zero.
13:02 Speaker 01 Yeah, start from scratch.
13:03 Speaker 00 It's ground zero every time you do that. So this is why this is important that you, you think this through and you get clear about it. And I think like make your choice and own your choice. And if that's the decision you make. Just put your head down and go all in. Don't be wishy washy about this because I see so many people and I tell them the reason why you're not getting traction here is because you haven't committed to the process and you're all over the place.
13:29 Speaker 01 Right.
13:30 Speaker 00 Stop doing that. Get clear and hyper focus.
13:33 Speaker 01 Yeah, I mean, every market is good and every market is bad. However you look at it, right? So just pick a market and stick to it. Give it 90 days. If you find that you gave it your all, which we talked about earlier, and you're not finding success, maybe you would have more success in another market. But usually the case is every market's good, every market's bad, doesn't matter.
13:54 Speaker 00 The grass is not greener. Everyone thinks that. They're thinking, oh, if only I was in a better market, I could do all these deals. Honestly, guys, we're going to talk about a whole bunch of things to consider when choosing a market, but really, you could take a map and a dart and throw the dart and you can make money in wholesale.
14:11 Speaker 01 You can do it.
14:11 Speaker 00 And do have great success anywhere.
14:14 Speaker 01 Anywhere. Yeah, we were talking about, you know, we're right outside of Knoxville, Tennessee, and somebody could go into a market like Knoxville, you could live in Knoxville and just wholesale in Knoxville for the rest of your life and make millions of dollars, never leaving that county. Like, there's deals everywhere.
14:33 Speaker 00 Yeah.
14:33 Speaker 01 You're not the only person doing deals there. If you look at the cash transactions in your market and you see that, you know, there's 500 a month or something, your two deals aren't making a dent. Like, there's more opportunity out there than you can even handle.
14:48 Speaker 00 You only need a tiny sliver of the pie to be doing really well.
14:52 Speaker 01 To make 100 grand.
14:53 Speaker 00 And this is a, this is an abundance versus scarcity. I think, let's talk about that just for a minute here, Tony. Like, when you're all hung up on some of these things like, you know, is the population big enough? How many buyers are in the market? Is there too many wholesalers? To me, if you're really hung up, like, let's look at it, but if you're hung up on it, you're really coming at this from a scarcity perspective.
15:15 Speaker 01 Yeah.
15:16 Speaker 00 There is so much opportunity in any market you choose if you believe it's there and you go for it.
15:23 Speaker 01 Yeah, it's, nothing's oversaturated or everything's oversaturated.
15:26 Speaker 00 There's competition everywhere.
15:27 Speaker 01 It's competition everywhere. I mean, That's the reason Volkswagen opens up a dealership next to BMW. Do they think, oh, there's too much competition there? I'm not going to open there.
15:37 Speaker 00 Burger King's next to McDonald's.
15:39 Speaker 01 There's opportunity there and I want to take a piece of that pie. So, look at, look at real estate the same way. If there's wholesalers, they're good. All you gotta do is be a little bit better than, than the next guy and you can do deals too.
15:51 Speaker 00 You want that. I mean, honestly, when I look at like, I'm going to follow a model. The best thing I could do, I did this when I started doing luxury in Paradise Valley, where you and Eric live, is I found, I'm like, okay, who's the best at this? And I don't even need to be, I don't even need to reinvent the wheel. Just copy them, do it as good, or maybe not even as good, but just copy what's already working. Clearly they're doing it. If I copy what they're doing, I'll have success too.
16:19 Speaker 01 Yeah, exactly.
16:20 Speaker 00 Guys, all you're doing is copying what we've already proven that works.
16:23 Speaker 01 Don't overanalyze anything, just take action. Pick a market, take action.
16:27 Speaker 00 So, what are some things, if you're like, okay, Tony, Jerry, I'm blind to picking a market. Give me some ideas around what I could choose or could look at to choose.
16:37 Speaker 01 Yeah, I think one of the hot topics as we talk right now are regulations. And you've been talking about it forever. You do a great job, great videos. Every time a new regulation comes out, I hear about it from your YouTube videos before I hear it from anybody else. So, you do a great job of that for the community, for the industry. And I think it is a hot topic. I get that question a lot of regulations. Usually it's not as scary as it seems in the beginning, right?
17:03 Speaker 00 Especially lately. Like some of the, some of the most recent ones are less about licensing, which is what the trend was for a little bit. And now it's more about disclosure.
17:12 Speaker 01 Disclosure.
17:13 Speaker 00 And I'm like, easy.
17:14 Speaker 01 Easy, just make, yeah. Put the disclosures on the contract and go over it. Good.
17:18 Speaker 00 I don't hide what we're doing anyway.
17:19 Speaker 01 No, yeah, it's not that big of a deal. So, calm down. Everybody, everybody freaks out, even over the disclosure.
17:25 Speaker 00 I think there's two trains of thoughts with regulations when, when choosing a market. You could lean in or lean out. And lean out might be, let's say it's, you know, West Virginia where they require a license to wholesale, or a lot of states require a license to wholesale. You could look at it and go, if I'm willing to go get my license and now transact there. I now have a leg up because all the flyby nights have left.
17:49 Speaker 01 Right.
17:49 Speaker 00 So there's more opportunity if I'm willing to do the extra work to get my license. Or you could say, I don't want to deal with the license. I'm going to pick a easier market. But just know, guys, if you're chasing easy, then so is everybody else. I kind of look at regulation like, awesome, great, less competition, let's go, I'm all in.
18:08 Speaker 01 Yes.
18:09 Speaker 00 And I know you think about it that way too. You're like, you're in North Carolina. North Carolina right now has a proposed bill, which is horrible. It may die because it passed the House or the Senate, I forget which one, it needs to pass the other one. And it's been sitting forever and the talk on the street is like it's going to die.
18:24 Speaker 01 That seems to be the case.
18:25 Speaker 00 But if that one passed, it would put a whole nother layer of complication.
18:31 Speaker 01 It would.
18:32 Speaker 00 To the process. Now, you're heavy in North Carolina. I imagine that you're going to be like, great, get rid of all the lazy people.
18:40 Speaker 01 Yeah, what do I need to do to keep doing?
18:42 Speaker 00 What do they want me to do? I'll do it. Now I have a leg up.
18:44 Speaker 01 Yeah, exactly. And, you know, when it comes to competition and people in that market and regulations and stuff like that, it's like, we do, like, most of our North Carolina deals are not in the Charlottes and the Rollies. I mean, they're in smaller towns outside of these, these bigger metro areas. The mountain towns.
19:04 Speaker 00 Sleepy towns.
19:05 Speaker 01 Sleepy towns. The mountain towns, which is in western North Carolina, which we do really well, which is why we bled over to Knoxville. We have a couple of properties under contract in Knoxville, Tennessee, and even Chattanooga. To me, it's like the same market. I love these little, you know, ancillary, you know, B markets that not everybody is in and talking about. You just, you just got to learn how to underwrite really well and you can do great deals.
19:29 Speaker 00 It is true though, guys, whatever market you end up picking, it's your responsibility to learn how to legally, morally, ethically transact in that market. And the laws are coming out that where the, it's the Attorney General or it's the Real Estate Commission. It's some, it's some regulatory body which is defining what we can and can't do. Now, you may agree with it or disagree with it. I certainly do. It doesn't matter. If they pass a law. It's your responsibility to follow the law, learn what it is and transact legally, morally and ethically. That's your job. So like you can't be oblivious to this. If you're not paying attention to regulation, then you got your head in the sand.
20:08 Speaker 01 Yeah.
20:08 Speaker 00 So like figure it out, understand what you can do, get the right disclosure or the right requirements and away you go. Don't, I have so many people when I talk about regulation, like when I do YouTube videos about it and they're like, well, I guess, I guess wholesaling is out for me. And I'm like, bye.
20:23 Speaker 01 Yeah, see ya.
20:24 Speaker 00 If that's all it took for you to quit, then you never should have been here in the first place.
20:27 Speaker 01 Well, and those are probably the people that are causing all the regulations because they're not doing things ethically.
20:32 Speaker 00 They're over contracting and all these other things. So, so anyway, guys, I think like embrace it. Don't look at it like this is prohibiting me. Look at it like this is one more opportunity for you to rise above the rest and become one of the good guys at this business that does stand up and represent our industry with integrity.
20:50 Speaker 01 Yeah, yeah. It's not as scary as you think. Sellers aren't going to object to disclosures and things like that. Just do things right. It's not as scary as you think it's going to be. You can still get contracts. You can still transact.
21:03 Speaker 00 If you have to lie, mislead or misinform, then you, you shouldn't be in this business.
21:09 Speaker 01 No, and you're going to have a bigger fallout rate because you're not upfront with your sellers. You're not giving them the truth. You're not being clear. And then with all that, you know, unclear, without clarity with the seller, that's where all the problems come in.
21:22 Speaker 00 I look at it like this, Tony. Um, one of the big hot buttons right now is memorandums. So if you guys don't know, you probably don't, but one thing that we've always done as wholesalers is once we contract with a seller, we can file what's called a affidavit of memorandum. And what it does is it clouds title that we have a contract with the seller. And the idea there is so you don't get backdoored. So buyer and seller, your, your end buyer and the seller don't cut you out of the deal. And what I found, Tony, is people who have a chronic issue of that happening, it's because they're mismanaging their sellers. They're not communicating clearly. They're not building or trust. They're not following up like through the process. They're not, the seller thinks.
22:06 Speaker 00 They don't know where you are or where you're at and they go find another buyer and they close around you.
22:10 Speaker 01 Yeah.
22:11 Speaker 00 But that's not a dishonest seller issue. I mean, sometimes it might be, but by and large, it's because you're doing a bad job as a wholesaler.
22:19 Speaker 01 Yeah.
22:19 Speaker 00 And just tighten that up and that problem will go away.
22:22 Speaker 01 Yeah, it's a lot of people come to me on my coaching calls saying the same thing where it's like, all these sellers are ghosting me. I finally got a buyer for this property and now I can't get ahold of the seller. It's like, well, when's the last time you even talked to them?
22:34 Speaker 00 Yeah.
22:35 Speaker 01 You know, if it's been three weeks.
22:36 Speaker 00 Three weeks ago when we contracted.
22:37 Speaker 01 Good luck. Good luck getting them back on the phone because just because they signed a contract doesn't mean their phone's not ringing and people aren't going on appointments to get them a contract.
22:46 Speaker 00 Yeah.
22:47 Speaker 01 You know, so I think the customer service side is so important. We'll go over that later because I have opinions on that as well and how to keep the momentum going. But when it comes to, you know, what makes a good market, regulations we just talked about, know what your regulations are in your market, how to legally transact. What you'll notice is it's not as scary as you think. Just have the right paperwork. And, you know, another thing that we like to talk about when it comes to what makes a good market. First, I want to talk about like, you know, defining your market, right? Before we go into average days and percent pending. Because this was something that we kind of added as we were talking, define your market.
23:30 Speaker 01 Where, you know, with everything else, until you define your market, none of this other stuff matters. It's like, are you going to be just in the city of Knoxville? Are you going to be around the surrounding area?
23:43 Speaker 00 A couple of counties.
23:44 Speaker 01 The whole county, right? And I look at it as like the bigger the market in one county, like Mecklenburg County in North Carolina, which is where Charlotte is. Charlotte makes up Mecklenburg County. There's some ancillary markets in Mecklenburg. But if you pulled data in all the counties that touch Mecklenburg, you're going to do really good deals in those ancillary markets. And I think you said the same thing with like, you know, I don't want to be in Charlotte. I want to be around Charlotte. I want to be in all the, you know, Gastonia's and Kannapolis and Concord and, you know, all the smaller towns outside of major markets is where we find a ton of our success. If I look at all the deals closed last year.
24:27 Speaker 01 Very rarely is it in like a big city. It's usually in a smaller market. So don't get so hung up on population. You don't need a million population in your market. You don't need even 100,000. Our biggest deals this last year were in markets under 10,000 population, but they were a half an hour or 45 minutes from a bigger market.
24:51 Speaker 00 Yeah, I kind of think about it like this. When we say define your market, you know, it really just means like get clear about what you're calling your market. And so like if this is the metro, you might have these little small towns like this, and those are going to be great deals. They're within somewhat of a distance from a metro. You know, to me, once you start getting outside of an hour, hour and a half away.
25:16 Speaker 01 A little too far.
25:17 Speaker 00 You're getting a little rural. You could still do deals there.
25:19 Speaker 01 Sure.
25:19 Speaker 00 You just better be buying deeper because it's going to be harder on the backside when you get that super rural deal. We do a lot of rural deals, but I buy them at 10 cents.
25:27 Speaker 01 Right, because if a buyer does want to invest out there, whether they're buying hold or a flipper, it's going to cost them more money to drive an hour and a half than it is a half.
25:36 Speaker 00 Here's what you got to think about. Let's say that this is one hour, you know, for this little town right here, and this is maybe a metro market of 500,000. And that's a one hour away. More than likely, your buyer, you're going to pull them from the city. So they're going to be doing deals up here, but they're okay to go an hour away if it's a great deal. Once you start pushing that, it gets a little harder. They're going to be like, eh, hour and a half, two hours. Eh, that's a little too far for me.
26:02 Speaker 01 Well, they'll still offer, but they're going to offer low.
26:04 Speaker 00 That's it.
26:05 Speaker 01 Because they're like, that's an inconvenience, but it's still a good deal.
26:07 Speaker 00 So you have to understand the relationship of your market and the towns around your market and the distances. And it's just getting clear around that. The other part of this, Tony, that's important is if you can define your market, then that's going to give you really good guardrails or parameters on your marketing efforts, which we're going to get to next. But how do you market for leads if you don't know your area that you want to target?
26:35 Speaker 01 Yeah, that's like the first thing you need to understand.
26:37 Speaker 00 Maybe this seems to you like common sense, but I can't tell you how many wholesalers, I'm like, well, where's your market? And they're like, Ohio. Like all of Ohio?
26:46 Speaker 01 Yeah.
26:47 Speaker 00 Well, you know, Columbus, like just the city?
26:51 Speaker 01 Just the city, yeah.
26:53 Speaker 00 And they're looking at me sort of like a deer in headlights. I'm like, dude, you gotta get clear. Like where, where is your market?
26:58 Speaker 01 Yeah.
26:59 Speaker 00 Where are you putting your effort?
27:00 Speaker 01 Yeah, I've never pulled just a city when it comes to data. Like I've always pulled counties at the very least because of all these ancillary, all these smaller towns around these major markets. That's where the, that's where the money's.
27:14 Speaker 00 Yeah, I have a student, Tony, Hugh Boy, maybe you know Hugh. He did 1.7 million in 2025. We just broke down his business model, like his numbers, 1.7. And he calls his market Atlanta, but his, his total market is a 6 million population.
27:32 Speaker 01 Right, yeah.
27:32 Speaker 00 So he's pushed out to these little towns around Atlanta. And just like you said, most of his deals are not in Atlanta city limits.
27:43 Speaker 01 Right.
27:44 Speaker 00 Right? But he's gotten very clear about where he's targeting his lead gen. So he's, he's defined his market as, as specific counties and cities.
27:53 Speaker 01 Yeah.
27:54 Speaker 00 And that allows him to get very clear about his efforts.
27:56 Speaker 01 Yeah.
27:57 Speaker 00 Get clear about your, your market. I used to think population, it was all about population. You gotta be in a certain population. I think I agree with you that it's not so much about population. It's more about just getting clear about how the population you're in is going to impact how you contract.
28:16 Speaker 01 Yeah, yeah. And well, all these other things we're about to go over are going to be more important than population. And we'll explain why.
28:24 Speaker 00 Yeah.
28:24 Speaker 01 Because as long as you can hit all these other factors, population, you're going to realize doesn't matter at all.
28:30 Speaker 00 Okay, so let's break down the next one. Okay, so Tony, let's talk about some of these things that maybe are an indicator. I call this like movement in the market, right? You don't want to be in a market that's, I mean, I guess you could still wholesale in a stale or stagnant market, but ideally you want to feel like there's upward movement.
28:45 Speaker 01 Yeah, yeah. If you can do this anywhere, might as well do it.
28:48 Speaker 00 And if you're picking.
28:49 Speaker 01 Set, set yourself up for success.
28:51 Speaker 00 So why do you look at days on market?
28:53 Speaker 01 Well, if the average days on market, I look at. Average days on market nationwide first. You know, because that's a good indicator of what what real estate is nationwide. Overall, and if that number is, let's just say forty, I want to be in a market that is forty or under.
29:09 Speaker 00 Beating it.
29:10 Speaker 01 Beating it, or at least at the median average days on market nationwide.
29:15 Speaker 00 So you want to beat the national average. And explain to people what days on market means if they don't know.
29:20 Speaker 01 Yeah, that means a property is listed on the MLS like a traditional listing, somebody's going to sell their house. How many days is it sitting on market until it goes pending and sold, right?
29:30 Speaker 00 And this is an indicator of is the market going up, down, buyer's market, seller's market? It's a it's a movement thing of activity.
29:40 Speaker 01 There's an appetite for real estate if you're in a market that's below that national average.
29:45 Speaker 00 And you can Google this and get this information like that.
29:47 Speaker 01 Chat GPT will tell you in two seconds, like what is, what are the best markets that are under the national average days on market? That's a great indicator if you're in a market with an appetite. If the if the average days on market is lower than the national average, there's buyers buying, there's flips going on, there's buying hold guys going, you know, buying properties for their portfolio, there's going to be activity.
30:08 Speaker 00 You want a transient, transactional market. Lots of movement going on. That means we're doing deals, we're doing deals, like there's movement.
30:14 Speaker 01 Yeah, if everybody's moving out of a market, your average days on market is going to be super high. You know, if people are moving in, there's an appetite, like there's, there's a inventory, maybe not shortage, but there's, there's a lack of inventory where like, hey, we need to buy these properties fast because I got to take this opportunity right now. I don't have time to mess around and wait and see if it's going to come down on price. Like there's urgency in these markets.
30:40 Speaker 00 And really, all of this is just information to allow you to adjust your business strategy. So for example, let's say you're in a market and all of a sudden it starts slowing down, days on market starts stretching out. Does that mean you can't do deals? No, it just means you got to buy deeper because your buyers are going to be anticipating longer days on market, they're going to want a better deal to anticipate longer hold times.
31:03 Speaker 01 Well, it all rolls downhill. Like if your flippers, their average days on market are going up just like everybody else's. If that's what's happening in the market and if it's taking 10 days, 20 days longer for them to sell their flips, it's probably going to take them 10 or 20 days longer to buy your deal cash because it all rolls downhill. And it's the same with opportunity and urgency. It's like if things are sitting on the market a long time, maybe you're buying hold investors like I'm going to wait another 30 days. This thing's going to get price reduced and then I can come in even lower. There's, you know, they usually drag their feet about it because they know there's going to be a better opportunity that comes by. So we want a market where there's some urgency, where buyers are ready to buy and they don't want to get beat out.
31:45 Speaker 00 And pendings is another similar indicator.
31:47 Speaker 01 Huge indicator, right? So in a market, I'll filter on Zillow for for sale and I'll just look at homes, you know, instead of land and condos and all that, whatever my product is. And I'll zoom out and get, you know, a good, you know, over a hundred properties for sale, whatever that looks like. And then I want to click on pending and accepting backup offers and see what percentage of the total is actually pending on the market. I say, and we haven't even talked about this, I'd like your opinion on it. But I say in a market where there's at least 30% pending is a healthy market. And, and to your point, it's going to determine how deep you need to get these properties.
32:28 Speaker 01 If I'm in a market in an area and 50% is pending, I'm like, man, maybe I don't need a huge spread in this thing. I could probably make a quick 10 grand with two phone calls if I can just get it at this price. So it really determines how deep you need these. Now, if you're in a market where only 10% of the properties are pending, now I'm like, I need to almost steal this house to get it under contract so it can be the best opportunity for somebody where there it's a no brainer and they'll buy it right away. There's just too much opportunity.
32:59 Speaker 00 So that would be if you find 100 actives, you want to see 30 pending.
33:03 Speaker 01 Yeah.
33:03 Speaker 00 To show that there's really good movement, appetite, demand for properties.
33:08 Speaker 01 I see that like that 30% is really the factor on what makes a healthy market versus, you know, a market where it's just, it's just going to take longer.
33:19 Speaker 00 Yeah.
33:19 Speaker 01 It's not as efficient.
33:20 Speaker 00 Guys, what you have to understand is our business model of wholesaling is what do buyers want?
33:27 Speaker 00 We get that below that number and bring that to them. That's it. I mean, what do buyers want? What are they willing to pay? How do I get it for below that? And the difference is my profit. So if I can figure out the appetite for deals based on market trends, market analysis, that's going to tell me, hey, I'm in a good spot here because there's demand for inventory. There's going to be, people are going to want deals here.
33:49 Speaker 01 Yeah. And on the, on the reverse of that, which we keep talking about, if there's just too much opportunity and too many deals out there that are, you know, people are willing to take reductions on and, and they're going to start reducing on the market. People get desperate. There's just too many choices out there. Your buyers aren't going to feel that urgency to buy your deal because there's just too much out there. So just set yourself up for success, 30% or more on the pending.
34:17 Speaker 00 Why is median home value, first of all, what is that? And why is staying under that a pretty good strategy?
34:24 Speaker 01 Yeah, it's the price, the, the median price of which properties are selling.
34:29 Speaker 00 Nationwide, what is it? 435?
34:31 Speaker 01 Something like that, yeah.
34:32 Speaker 00 You can Google this, but.
34:33 Speaker 01 That's probably dead on, 435.
34:35 Speaker 00 I think it's 435 ish, meaning overall nationwide, the median home sales price of homes is 435.
34:42 Speaker 01 Yeah. So like, I live in Cave Creek, Arizona.
34:45 Speaker 00 Way higher.
34:46 Speaker 01 Way higher. It's probably 900,000 or something. Probably not a great wholesale market to, to jump into, especially at zero, right? I want to be under the national average of median home value.
34:58 Speaker 00 What do you think Knoxville is? 350? I looked it up a little while ago.
35:01 Speaker 01 Yeah, I would say 350. Yeah, it's below that.
35:04 Speaker 00 What's North Carolina? Like, your market's there?
35:07 Speaker 01 Overall, in the state, I don't know. I kind of know market to market. But you know, even a place like, like Charlotte is in, in right around.
35:16 Speaker 00 Right around there, probably.
35:17 Speaker 01 There, right there.
35:19 Speaker 00 But it's your choosing.
35:20 Speaker 01 It's your, yeah. And it's okay if you're in a market like Fayetteville, which is the median home value there is 200 grand. Like, that's a good thing because now you're going to get a lot of buy and hold investors and flippers in that kind of price range. When you get close to this national average of the 435. Like if you're locking up properties in that, you know, 400 now into $500,000, that's mostly going to go to your flippers. It doesn't make sense for a buy and hold investor.
35:46 Speaker 00 Doesn't cash flow as well.
35:47 Speaker 01 If we can be below that 435, you know, at least at it or below it. If you're close to at it, you're going to be selling a lot of your deals to flippers. If you're about half of that, half of the national average, now you got about a 50% buyer box of flippers and 50% buy and hold. Because your buy and hold investors need a certain price point so they can cash flow on it. If they're going to do like a BRRRR method, or if they want a good cash on cash return. So I love markets where the median home value is like 250, 350 grand. Like that's like the sweetest spot for us because your buyer pool, you know,
36:25 Speaker 00 Is diverse.
36:26 Speaker 01 Opens up and not only that, your retail buyers are, they're able to afford it. It's a lot of FHA buyers, conventional, like anybody, VA buyers. Anybody can buy a house around that 250, 300 range. So there usually is more of an appetite there. If you're hitting, you know, the average days on market, the percentage pending, and you're in that 350, 250 range of median home value, man, that's a,
36:53 Speaker 00 That's a fantastic market.
36:54 Speaker 01 That's a great market.
36:55 Speaker 00 Yeah, it's interesting. I think the last two years, 2024 and 2025, the fastest growing market in the US was Buffalo, New York. And their median values there are like 200.
37:07 Speaker 01 Yeah.
37:07 Speaker 00 It's super affordable. The city's growing and like just demand because it's so affordable. The future of real estate, guys, is affordable housing.
37:15 Speaker 01 Yeah.
37:16 Speaker 00 So I like, you and I like luxury and there's a, there's a buyer for that. But honestly, if you're going to bet your money on a strategy, it's going to be anything affordable housing.
37:27 Speaker 01 Yeah.
37:27 Speaker 00 So that's below that national median.
37:29 Speaker 01 Yeah, I've done, I don't know, close to 600 transactions wholesaling in the last few years. And the, the average I'm selling these properties to an investor for is just 170 grand. Something like that. It's under 200 grand. So like that's been our sweet spot. Like have we sold million dollar houses? Yes. But the majority of them are like half of that median home value.
37:55 Speaker 00 Yeah. So we, so we kind of hit on some of this growth patterns. You know, you can look at like, You know, are people moving into that market? Things like we talked about there. I don't know if there's anything you want to add to that?
38:07 Speaker 01 No, because I think if we're hitting this, if we're hitting this, and we're hitting this, it kind of takes care of that. Like, that's just, you know.
38:15 Speaker 00 It means it's happening.
38:15 Speaker 01 It means it's happening.
38:16 Speaker 00 Now, one thought process is to choose the market based on how many cash buyers are transacting in that market. Not a bad idea. Like, you can go on PropWire for free, and you can do the cash buyer search, and it will tell you in an area you select exactly how many cash buyers are in that market. How many have transacted in the past year, or whatever filters you put in. And that, maybe you say, okay, well, there's a lot of cash buyers going on here. That would be a good market to go in. But honestly, if you're checking these other boxes.
38:49 Speaker 01 It's gonna be.
38:50 Speaker 00 There's gonna be demand.
38:51 Speaker 01 Yeah, it's just gonna be there.
38:53 Speaker 00 You don't really need to think too. I think that's overthinking.
38:55 Speaker 01 I think people overthink these things. I know we were talking earlier, which is just an interesting thing to talk about, which is like the U-Haul patterns of all the one-ways. And we were saying that, you were saying Tennessee is one of the top states where one-way U-Hauls are coming, like, the most one-way U-Hauls. So, there is statistics out there that you can look up. But again, don't get too granular with this. If you're hitting, you know, these three main things, you're in a good market.
39:24 Speaker 00 You're gonna be okay.
39:25 Speaker 01 You're gonna be just fine.
39:26 Speaker 00 Yep, you're gonna be great. So, I think we could wrap that up. Is there anything else here, Tony, that would be good tips for somebody choosing a market?
39:34 Speaker 01 Yeah, I think just, you're probably in a good market. You know, your backyard is probably a fine market.
39:41 Speaker 00 Let's talk about that real quick. The one benefit, if you're new to the business, and you do go in your backyard market, is you already have a baseline familiarity to that market. You know where the shopping is, you know, where the...
39:56 Speaker 01 Bad neighborhoods, the good neighborhoods.
39:57 Speaker 00 The good schools, the bad schools. You already know that. Even if you're not in real estate, you just know that because you live there. There's a lot of value to that.
40:03 Speaker 01 And there's a lot of value in being able to relate to the people you're talking to and getting under contract. You can go over there, you're their neighbor, basically.
40:10 Speaker 00 And you can network a little easier with the buyers in the market, the title companies. I think if you're checking these boxes, there's no reason to go to another market if your backyard market meets these requirements.
40:24 Speaker 01 I agree.
40:25 Speaker 00 Stay in your backyard.
40:26 Speaker 01 Agree 100%. When we onboard people for our coaching community, one of the first questions on onboarding is, all right, we need to pick a market for you. And I just go, where do you live? And if it's hitting these things, I'm like, no reason to go anywhere but your backyard. Like, stay close. There's no reason to comp.
40:45 Speaker 00 Yeah, don't overcomplicate it. Well, good. Well, this is some great tips.
40:49 Speaker 02 Thanks for listening to this podcast. To get more free tips, check out my YouTube channel. Just search Flipping Mastery TV on YouTube, where I have over 1,000 videos teaching you how to make more money with real estate. On my channel, I also give away free stuff like my Quick Start Kit with everything you need to flip your first house in the next 30 days. Or my deal finding software called Data Cruncher, which finds discounted houses in any ZIP code in a matter of seconds. You can get those for free at myquickstartkit.com and mydatacrusher.com.
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