Want to see step-by-step how to get your first deal?
Get Updates!

2: Is Wholesaling Illegal?

Home » Blog » Real Estate Investing Podcast » 2: Is Wholesaling Illegal?

Brandon Turner

play podcast icon Listen / Watch

play podcast icon Show Notes

Brandon, house flipper, landlord, senior editor at Bigger Pockets, all around real estate investor shares what he feels is the best way to get started in house flipping.

He recommends people start with a live-in flip.

The strategy involves buying a house that needs work and living in it while you fix it up and then selling it, either right away or several years later.

I completely agree with Brandon that this is an awesome way to get in the business and learn the ropes.

The benefits he describes makes this insanely obvious.  Those benefits include:

  • Getting a much cheaper loan than hard money
  • Learning how to properly fix up houses
  • Avoiding capital gains taxes when you sell the house (if you live in it for more than 2 out of the last five years)

You can also get first dibs on HUD foreclosures as they usually give a 10+ day window where only homeowners can buy their houses.  During that period, investors cannot bid on them.  How awesome is that?!

You can find available HUD homes at

He feels there is a right and a wrong way to wholesale houses.

His two strategies for avoiding trouble are:

  1. become a licensed agent
  2. double close – buy the house and then sell it to an investor

Find out more by listening to this incredible episode.

play podcast icon Recommended Books

The One Thing: The Surprisingly Simple Truth Behind Extraordinary Results

The Success Principles(TM) - 10th Anniversary Edition: How to Get from Where You Are to Where You Want to Be

The Secret

play podcast icon links

HUD Home Store Website

play podcast icon Please Rate and Review

star rating icon star rating icon star rating icon star rating icon star rating icon

This is my simple request: If you enjoy the podcast and look forward to hearing a lot more episodes, I would be very grateful, happy, beholden and otherwise indebted to you to rate and review the podcast on iTunes.

It’s your choice and I do not want you to feel at all obligated. But I’d love it if you would subscribe and leave a rating and review.

Ratings and reviews allow the podcast to be seen by more people, which will help me achieve my goal of helping as many others as we can to get started in the house flipping business and change their lives.

Click here to rate and review our podcast! :)

Not sure how to leave a rating and review? Click here to view the instructions (it only takes 2 minutes)

How to Subscribe to the Podcast

There will be a brand new episode every single week, so be sure to subscribe and receive each episode as it’s released.

subscribe to the podcast
subscribe on itunes graphic Subscribe on iTunes subscribe on stitcher graphic Subscribe on Stitcher

show transcription icon Episode Transcription

Danny Johnson: This is Flipping Junkie Podcast, episode 2. Welcome to the Flipping Junkie Podcast. My name is Danny Johnson, former software developer turned house flipper, flipping hundreds of houses. Each week we bring you interviews, strategies, stories, and motivation to help you get started flipping houses, and on your way to becoming your own boss and achieving financial freedom. Thanks for spending time with me today. Now let’s get to it.
I’ve got a good friend of mine on the show. Truth be told I thought I’d take more work to get him to agree to be on the show as he’s so busy with being the senior editor at Bigger Pockets. But he said absolutely and scheduled the interview immediately.
Brandon’s a very down-to-earth guy. He knows a lot about flipping houses and real estate investing in general. We had a lot of fun with this episode and a lot of great ideas were shared. Among them Brandon shares the benefits of starting flipping houses with a house that you’re going to live in. Don’t have a lot of money to get started? You’ll want to listen to this.
Among the things that were shared in this episode also is the 10-day window where owner-occupants can bid on HUD foreclosures before investors can. Talk about eliminating the competition. We also talk about the right and wrong way to wholesale houses, and Brandon shares his two strategies for avoiding trouble. Listen up. Take notes. And enjoy the show.
Hello and welcome to the Flipping Junkie Podcast. I’m your host Danny Johnson. I’m super excited today to have Brandon Turner from Bigger Pockets on the show. Thanks for being on the show Brandon. How are you?

Brandon Turner: I am doing well. Thank you so much for having me.

Danny Johnson: Thank you for being on. I know you’re pretty busy. To get started… just a little bit.

Brandon Turner: Yeah, just a little bit busy. It’s not too bad. I make times for my buddies and you’re my buddy so we got this.

Danny Johnson: I appreciate it. We were just talking about, because I was on the Bigger Pocket’s podcast and I know it’s been a while back. And you just looked it up and it was number 18.

Brandon Turner: Yeah, number 18, way back, That was May of 2013. You’re like one of the original BP Podcast guest so we’re going to get you back soon.

Danny Johnson: Thank you very much. That’ll be great. And what episode are you guys on now?

Brandon Turner: Oh man, 140 I think, something like that, 139-140, somewhere in there, forever ago. It’s a long time. The world of podcasting we’re like grandpas.

Danny Johnson: I know I was really nervous back then. But like I was saying, you guys are probably even nervous still at that point. But after 18 you guys have done a ton now. And I really enjoy you guys’ show. You and Josh are great together on that show. You want to tell everybody the format of the show?

Brandon Turner: Of the Bigger Pockets Show?

Danny Johnson: Yeah.

Brandon Turner: Sure. I was thinking I’ll tell them about your show but I don’t know what your show is about. Bigger Pockets Show, it’s me and Josh together. It’s pretty much him making fun of me and him making fun of him. Sometimes we get some real estate education out of it.

Danny Johnson: I know there’s a ton of information you guys share.

Brandon Turner: It’s a good time. We try to have a good time and try to keep it light and fun, bring on some amazing guests. Every single episode I learn cool stuff. And I look forward to your podcast for the same thing. I’m excited to hear your guests and learn new stuff.

Danny Johnson: Awesome. And a lot of people might not know a lot about your story and how you got started in flipping houses and then becoming a part of Bigger Pockets. Do you want to share a quick why got interested in flipping and how you got started?

Brandon Turner: Sure. I got started, my very first deal ever was a live and flip. I didn’t know anything about real estate. I didn’t even care about it. I didn’t want to get into it, nothing. But about this single family house because it was cheaper than renting, I just wanted to save some money. I rented out the bedroom to some buddies and I fixed the house up for about nine months while lived there.
I went and got a book from Home Depot called 123 Home Improvement. I learned how to do pretty much everything you need to to kind of rehab a house, like a light, cosmetic rehab. I bought it for 80. I sold it for 130 nine months later.
At the end of the day after paying all of the fees and expenses and everything I probably cleared about 20-25 grand. It was amazing. That kind of what started me off my path. I thought I’m going to be a real estate investor.

Danny Johnson: Wow, that’s pretty cool. So when you started you actually did the rehab yourself and learned from a book how to do it.

Brandon Turner: Yeah, everything.

Danny Johnson: I thought that was interesting.

Brandon Turner: I still remember sitting outside one day in my garage and there’s a water heater out there, and there’s a leak in the pipe. I’m on the phone with one of my best friends from high school, his dad’s a plumber and I’m like, “It’s not stopping. I don’t know why.”

Danny Johnson: I know where this is going.

Brandon Turner: I spent hours on a single solder trying to figure out how to stop this thing. But today I can solder a copper pipe like any professional plumber out there. That’s actually a whole different topic that we can maybe get into later if you want to but the idea of that.
I think my ability to learn how to do those things actually hurts me in my flipping. I actually regret learning how to solder a copper pipe, how to lay carpet, and how to paint. But just because it’s there I do it. It’s hard for me to get out of mode now because everything’s easier for me to just go do myself than rely on systems and other people.
Anyway, that was my first deal. And then I thought I’m going to go be a full-time investor. So I jumped in with both feet, bought a house to flip. That’s 2007 and we all remember what happened back then. The market tanked while I was flipping this house.
And so I bought it, put a bunch of money into it. I spent nine months on that project fixing it up. Me, my wife, a couple of friends doing all our own work. And then when it came time to sell we couldn’t sell it. The market was too bad.
And so we turned it into a rental, which got me kind of excited about the idea of rentals. And then I just kind of flipped and bought rentals, occasionally a few every year for the next… eight years later. Today I still do a little bit of flipping. I hold a lot of rentals now and I do probably a flip or two every year.  I’m not a massive flipper. But I just do them to keep me entertained. I don’t do the work anymore though myself but it’s tough.

Danny Johnson: Yeah, it’s best not to do that. I am glad I never really did much of the work. I think I started to my very first home that I bought. I bought a HUD home for myself to live in. And so sometimes I’ll say that’s my first deal and sometimes I’ll say another house that we wholesale is our first deal. But I ended up working on the HUD home that we lived in.
That just took forever and I found myself getting frustrated over really stupid things like hanging light fixture and having that take three hours, bloody knuckles, and all kinds of things where I ended up cutting bolts off with a hacksaw. How did that even happen? It’s always best to hire the professionals to get all that stuff done.

Brandon Turner: Yeah. If you’re not finding deals good enough to hire other people then you’re not finding deals good enough. You have to do your own work in order to make a profit on a property, you’re just buying yourself a job. Which maybe there are people out there that do that and they succeed at it, but all they’re doing is buying themselves a job. Maybe that’s a better job than what they have, but still it’s a job.

Danny Johnson: Alright, and sometimes the holding cost and the time it takes you to get it done, outstrip, it takes away all the benefit of saving the money in the contract.

Brandon Turner: Yes. You flipped the first house and made a profit. And then the second one, the market turned on you and you ended up rented out, became a landlord. You started in that way. For the listeners out there what would you say would be the best route to start flipping houses?

Danny Johnson: I like the idea a lot of starting with either the house you live in. I’m a huge fan of live and flips, where you buy a house, fix it up, live in it, and then sell it. I like those for a couple of reasons. One, the financing can be amazing, especially if you can get into what’s called a 203k loan, which is a homeowner only loan. You have to actually live there supposedly for a year.
But you can get the entire thing. Let’s say the house itself cost 100,000 and then the rehab cost 50,000, you’re in the whole thing for 150. You can get these things with just three and a half percent down of the entire amount, that entire 150, which is five grand or so give or take a grand or two, but significantly cheaper than you’re ever going to get from hard money or whatever else.
I’m a huge fan of that idea, of doing a live and flip. Obviously not everybody’s lifestyle can make that happen. Not everyone’s spouses or kids want to live in a rehab project. But I think that’s a terrific way to start. I’ve done it. I’m actually doing it right now. I’m closing on a house on Friday of this week. That’s going to be a new, primary residence for me. I’m buying it and then I’m going to be fixing the whole thing up before I move into it, and I’m going to move into it for a few years and kind of treat it like a live and flip.

Danny Johnson: Cool. Is that a HUD home?

Brandon Turner: It is not a HUD home but I’m using an FHA loan on it. It’s actually a friend went through a divorce a few years ago and it was really messy. And so he’s had this house for a couple years now and so I put it up in the market, “Just list it up with the realtor.” And I went and talked to him. “Hey, I like this house. It’s a great neighborhood, great house, great potential in it. What do you think about just selling it to me?”
So he gave me a good deal on it and I’m pretty excited. We’re getting it from 280,000 so it’s a little bit higher end of where I live. It’s the nicest area in my town, which in my area 280 is really nice. But I think the thing’s going to be worth for 450 when it’s finished.

Danny Johnson: Nice.

Brandon Turner: And so we’ll probably be able to live in this nice house for a few years and then we’ll sell it and make a nice profit.

Danny Johnson: Yeah. One thing for people that to do consider doing that is one of their first flips or even after doing 10 or 20 flips the nice thing about buying for yourself to live in is you can have first dibs on HUD homes.

Brandon Turner: Yes. It’s huge, that benefit.

Danny Johnson: And HUD homes are FHA foreclosures, right?

Brandon Turner: Correct.

Danny Johnson: And so what they do is whenever they sell HUD homes basically there’s the initial time period. It’s been so long, 10 days or something.

Brandon Turner: Yeah. I think it’s more usually ten days. I’ve seen leaving up to like 29 days or something like that which was crazy. But you give that homeowner only exclusion. I hate it.

Danny Johnson: Investors can’t buy it unless they’re going to live in it. You have that chance of getting that great deal before all the investors have a chance to. That’s like one of the first places I would say to look for the deal, are the HUD homes. And they have a website, right? Do you know if they have… Was it HUD Homes Store, something like that.

Brandon Turner: Yeah, I think it’s

Danny Johnson: Right. That’s one to check out for anybody interested in that kind of thing. Now, what about time period and holding that, isn’t there benefits of holding it for more than a couple of years?

Brandon Turner: There is, yeah. The idea is you live in the property for more than two years. Of course, I’m not a CPA. Danny’s not a CPA, doctor, lawyer, or whatever. But this idea that if you live in the house for more than two years the IRS says, don’t worry about the taxes when you sell it.
Normally if I go buy a house and then I sell it next month, and I make $30,000 I’m going to pay 10 of that in taxes and that sucks. But if I live in the house for two years and I sell it and I make 30,000, I get to keep that whole thing. It’s mine.
There’s a lot of details that go with it like you have to… it’s $250,000 per person or something like that. And there’s a bunch of things. But overall most people can take advantage of that, which is also a huge benefit of living in a property.
You asked what’s a good way to start out, the reason I like this so much is if you do it right you can maybe make $50,000, $75,000, $100,000 on your very first deal. And you get to learn the entire process in and out while you’re living there with low down financing with the best chance for getting a good deal. There’s all these benefits. And at the end of the day you make this big profit that you can then pour into your next invests and then can it go forward from there.

Danny Johnson: You do not have to pay a ton of capital gains, taxes only profit.

Brandon Turner: Yeah. All around it’s cool. It’s a fun way to start.

Danny Johnson: That’s awesome because most people when you ask them, “What’s the best way to start?” Typically it’s partner with somebody and flip. Or a lot of times, mainly, and one that I even recommend a lot of times is wholesaling houses.
And so that’s awesome to hear a different strategy and that’s one that’s not really talked about that often. We appreciate you bringing that up, because, man, there are a lot of things. It makes me kind of want to start going to look for my next house to move into.

Brandon Turner: That’s the other cool thing. The house I’m buying, it’s like I said, the nicest area of my entire town, it overlooks. I can see about 50 miles in every direction because of the top of a hill. I’ve got a hot tub. I’ve got this massive fireplace and like a three-story living room. It’s really a cool house.
I would never normally live in a house like that. However, because I know that it’s an investment and a single family home… Let’s say I sell it three years from now and I make no money on it other than what I put into the property, I still got to live in an incredible house for essentially free or for cheap. That’s another reason why I think it’s kind of a cool idea is you get to enjoy life in an amazing house as long as you get to rehab done quick. Don’t make the mistake of waiting until the day you move out to do the rehab like I’m doing on my current house.

Danny Johnson: I have to fly up there and check it out.

Brandon Turner: You definitely should. That’s right, you fly, right?

Danny Johnson: Yeah, but that’s quite a distance. I’d probably do commercial with… I don’t know if Melissa would be interested in being in a small plane for that amount of time. But it would be cool flying over the mountains and everything.

Brandon Turner: I think that would be a long ways to fly. But I’m super interested in flying. I put it on my goal for the next five years is to get my license and start flying. So I’m going to have come down there and come flying with you somebody.

Danny Johnson: Yeah, awesome. Just be sure whenever you check out flight instructors that you at least go up with maybe three to find one that you feel best with because you’re going to be spending a lot of time with them. That’s my biggest piece of advice for that.

Brandon Turner: That’s great to know.

Danny Johnson: And that could go also with finding a mentor for house flipping, real estate investing, you never want to just go with someone that’s really saying that they’re going to help you. You got to make sure that they’re the real deal.

Brandon Turner: That was a fantastic transition by the way. You are a born podcaster. That was great. But I totally agree.

Danny Johnson: I’m just trying to make it so we’re not going off or talking about interests. People are like, “I don’t want to find out about that.” I don’t know, we’ll start an aviation podcast.

Brandon Turner: There you go. You mentioned a second ago the idea of wholesaling. A lot of people recommend that. I used to always recommend people start wholesaling. Lately I’ve been shifting away from that and I tell people more of the idea of the live-in house.
And the reason I do that, and again, everyone’s got their own thing and I know a lot of wholesalers who succeeded right off the bat. There’s so many people who get this idea that wholesaling is super easy, and that anybody can do it with no money. And you can sit in your pajamas and watch TV, just wish you had it and you start making money wholesaling.
There’s so much of this culture behind wholesaling that just bothers me. I know guys like you and others, we’re trying to make the problem better. But there’s this culture of that wholesaling that it takes no work no effort. But wholesaling is hard. It’s not an easy task until you get systems down or whatever else.
That’s why I usually say if you want to be good at wholesaling you got to be good at the rehabbing, the estimate the rehab cost. You got to be good at networking, good at finding deals, good at selling deals, good at marketing, you got to be good at a ton of stuff. And the average newbie I see is good at one thing and that’s lying about not having enough money.
Not to be mean but most people that’s the only problem they have, “I have no money. I need more money.” They don’t have skills on all those other areas. And so if you can try to build those skills… If people are going to start with wholesaling I think it’s fantastic. But what I would do is I would find a flipper in that area and say, “What kind of property do you need? Teach me how to get you that property and I will do the leg work and get you that property.” If you’re going to wholesale that’s the way to wholesale personally.

Danny Johnson: Absolutely. I agree 100%. Because then you’re building the relationship. You’re getting the mentor that will help you through every step of the way with other things, so as things come up you have somebody to contact, and you’re not making bad decisions because you didn’t have any knowledge or experience with it. You have somebody there.
And that is one of the reasons why I tell people to start with wholesaling. A lot of the hard part of flipping is finding the deals, and you have to become an expert at that for wholesaling because you’re making smaller amounts on the deals. You need the money to do some marketing if you’re not going to be at the street and spend a lot of time with it.
I think maybe for people that aren’t as familiar with all of it some of the bashing comes from maybe people that get out there and put houses under contract, they had no business putting house under contract. And then not informing the seller of what they were doing, and not being able to close on the house. And it gives everybody a bad name.

Brandon Turner: Yeah, very much so. And the other reason, wholesalers tend to jump into the game of wholesaling without doing their homework. And a lot of them end up actually breaking the law while they’re wholesaling. There’s a right way to wholesale and there’s a bad way to wholesale. And a lot of them just jump into the bad way of wholesaling, both illegal and unethical I think in ways.
I hear this common story all the time of somebody who’s trying to sell a property and then some wholesaler comes to them and tries to sell that person their own property. Because it’s passed around from one to another and everyone lies and says it’s their deal. It just becomes a mess. And so if you’re going to wholesale learn how to do it right. Learn how to do it ethically and legally, and go forward from there.

Danny Johnson: And so how can people do that? What are the ethical and legal ways of doing it?

Brandon Turner: Sure. The main problem surrounding the legalities of wholesaling, it comes down to the idea of not having a licensed to practice real estate. And so there’s a lot of laws out there that say… Every state’s different obviously but…
For example I actually have Washington law here. I saw it earlier on a blog post. Alright, Washington State where I live, the law says that you cannot be a broker without a license. And then it says the definition of broker is the listing, selling, purchasing, exchanging, optioning, leasing, renting of real estate or any real properties therein. Or to negotiate to offer or directly purchase sale…
Pretty much, if you look at a piece of real estate, if you’re driving by a house and you open your eyes you’re pretty much breaking the law that you’re brokering. Because you’re thinking about doing it… It’s ridiculous. But the fact is it does say if you are negotiating to put under contract a property you could be considered to be practicing without a license.
There’s two really easy ways to potentially avoid that. Again, we’re not lawyers. We’re not giving legal advice here. This is just entertainment purposes or whatever. The two ways that I always hear that generally people say is either go get your license, go become a real estate agent, then you don’t even have to worry about that whole issue. Or two, do a double closing rather than an assignment.
Again, every state’s different. Whether or not you’re breaking the law is going to depend on your state. But if you do an assignment it means you never actually own the property. You simply put it under contract and then flipped it to another investor. If you double close you actually buy the property and then sell it. Now, you’re not practicing real estate, you’re not being a broker. You’re not the in-between guy, you physically bought a property and sold it just like millions of people do every year. Those are just the ways to stay safe.

Danny Johnson: I’m of the opinion of for the assignment part of things when you have a contract to buy a house, and then you assign it to another investor. Basically with the way I do it I’ve got several key people in town that I know buy a lot of houses, pay cash, they close quickly, they make decisions quickly.
If I get a property and a contract I contact one of them and say, and I pretty much know that they’re going to buy it. And I say, “I’ll sell you this property for this much and they say yeah. What I’m doing is I’m actually selling the contract. I’m assigning the contract. They’re paying me for the contract, not for the house.

Brandon Turner: Exactly.

Danny Johnson: I’m not selling the house and I’m not marketing it to sell the house, I’m marketing to sell the… That’s how I look at that. And I think what a lot of this boils down to with a lot of gray issues with legal matters is always doing the ethical thing.
If you’re always honest with everybody, you’re not pulling the wool over anybody’s eyes. And like Brandon said, you’re not telling people… like if you’re wholesaling other wholesalers deal, you don’t act like you’re the one that has it under contract unless you have an assignment signed from them.

Brandon Turner: Yeah.

Danny Johnson: Always being open, upfront, and honest with everybody, that is going to do wonders for keeping you out of trouble more than anything else.

Brandon Turner: Yeah, definitely. And again, some states are worst. I know Ohio, if you’re whole center Ohio… Ohio’s the first I’ve heard of that they’re trying to actually crack down on it more intently. Largely because it’s going to hurt everybody, even though it’s probably there just doing it because of the unscrupulous ones, the ones that are doing it really shady. They’re cracking down on everyone because of that. Just be careful, be honest lie you said, and don’t get yourself in trouble.

Danny Johnson: Right. With wholesaling, we talked about the right ways, and you’re talking about getting your license or buying the property then selling, which is a great recommendation. That’s the whole wholesaling part of it. What other advise do you have for somebody starting out with regards to, not necessarily like a strategy to start with. But if they’re on a shoestring budget and looking for deals do you have any marketing advice?

Brandon Turner: Sure. I’m a huge fan of driving for dollars. I’m a huge fan of that. Just getting in your car or walking. Honestly, come on, this is America. We could all use a little more steps in our day. Go out there. Walk. Look for properties that look potentially neglected or nobody’s been there. If you think about it the average person in America moves every seven years I think is what they say, which means that they’re buying and/or selling.
At any given point, and people probably know for six months before they’re going to actually move that they’re going to move. Figure probably an average then, one out of every 14 houses you look at is probably ready to move. When you think about that, you walk by a lot of houses, 1/14th of them are interested in moving potentially very soon. How many of those are going to sell you a good deal? Who knows.
At any moment the market is crazy in flux at all points in time. If you can get in there and just find the ones that look like they might be most motivated, yeah, I love the idea of driving for dollars. I love the idea, even bigger picture than that. I’ve been really big lately on to the idea of a funnel. Businesses use funnels all the time. I don’t know why real estate investors don’t use it as much but maybe that’s changing.
This idea that think of a funnel like you’re pouring oil into a car or whatever. At the very top it’s wide, at the bottom it’s small. So the goal of any business is to get as many leads in at the top of the funnel, filter them down the funnel until you have a few that you actually buy.
Really, whatever strategy you want to do, flipping, wholesaling, land lording, you have a funnel for buying the property. You got to get as many leads across your desk as possible. You can go to analyze those deals quickly to be able to decide which ones are worth looking at more in depth. Then you got to actually do a real analysis on the ones that you care about, then you got to make an offer on the ones that are potential good deals. And then you got to actually get through the negotiation on the ones that you got accepted. And then you got to close on the ones that you got through the negotiation.
You’re taking this big funnel with thousands of potential deals, winding that down to a few, one, two, five, ten a month that you’re actually going to buy. I encourage people to focus on that funnel and track it very closely. How many deals came across your desk this week?
When people complain to me, “I can’t find any good deals.” I always say, “How many did you offer on this week?” “I don’t know.” “How many did you analyze this week?” If you’re not working your funnel, your funnel’s not going to produce results, just as simple as that. Start at the funnel. Start getting leads. Again, driving for dollars, there’s direct mail, there’s just the MLS.
If nothing else start making some offers on the MLS. You’ll probably won’t get any but at least your funnel’s working then and you can start tracking those numbers to be able to improve on it.

Danny Johnson: Tracking those numbers is huge. I think the common idea of numbers like ratio wise for how many leads come into a funnel versus how many end up becoming deals. I think what’s accepted as common ratio is like 100 leads will generate 10 worth going to and making offers on, and then landing one of those as a deal. In my experience, in the beginning that’s sort of what it is. But those numbers improve as you become more experienced.

Brandon Turner: They do. And then you can track those and say, “From this month to this month I improved from 10%-11%, or from 11%-15%.” It makes a huge difference in your bottom line when you just track those things slowly and start edging them on board.

Danny Johnson: Absolutely. It seems like lately I don’t know if it’s maybe I’ve just become really good at screening which ones to go and see. I probably hover somewhere around 40%-50% of the ones I go to see I end up getting. You can end up being to where you kind of know whenever you’re talking to them on the phone, “This is when I need to be at right away. Make an offer and follow up.”
The funnel, absolutely that’s the key part and the initial part of it. But I think a lot of people, probably the vast majority of people don’t follow up even after they make an offer. Or before they even make an offer they think maybe they’re unmotivated and they don’t follow up. In this day and age with all the competition the people landing a lot of deals are the ones that are following up. Do you think that that’s…

Brandon Turner: Like you said, there’s a lot of competition right now. Especially with wholesaling’s becoming more and more popular all the time. Flipping’s becoming more popular all the time. Everybody and their grandma thinks they can be an investor. And so they’re going out there. It’s the people who are willing to do the extra work that are seeing the results today.
I see that over and over, the market’s heating up. And the way that you succeed in today’s market is you got to do what everyone else isn’t doing. Like you said, following up is huge, the idea of going where other people won’t go, the idea of building relationships slowly even.
I’ve been talking to guys lately about apartment complexes. And they’re using the exact same strategy, is to buy a 500-unit apartment complex. They’re building relationships. They’re following up. They’re doing even direct mail marketing. And they’re doing these massive projects. And it just really emphasizes this idea of the funnel and perfecting each part of it. And it’s all just business. This is a business in any regard, just like selling Tupperware or whatever.

Danny Johnson: It’s crazy because I’m always trying to think of an out of the box way. I can’t believe I just said that. I hate it when people say out of the box. But anyway, think of a way to market or find a list that’s not well known. Like finding some other source of deals that nobody’s thought about. Because what do people do when they try to find ways to find deals? They go online and everything, and they do what everybody else does. Finding a different way. And even maybe taking an existing strategy and tweaking it somehow.
And I’d love to just tell you on this podcast, tweak this one and do this. But then again, you’re still not coming up with your own that no one else has thought about, because then if I say it everyone else is going to start doing it, and it just gets out there. So you sort of try to come up with your own way of doing things.
And sometimes you try to think, why, I have no idea. One way to do that is look at other industries, right? Another area like a car industry or something. Somebody else that’s marketing for leads, what are they doing? Is there some way you can tie that into real estate? Sorry, I just ran off with that.

Brandon Turner: I think that’s great. But once a month or so I get this envelope in the mail. And it has a plastic key attached to the front of it like a physical key. I look at that. Of course I read it and it says, “You won.” And I’m like, “I own.” There’s a big picture of a convertible with a bikini girl on the front. And I’m like, “I won a bikini girl,” and I’m really excited. And then I look down and I realize I may have also won a cup of coffee but I won’t know which unless I go in to test drive this new car.
It’s just direct mail marketing. It works because I read it. I don’t read most junk mail that comes in. But you put a girl in a bikini, and a sports car, and a key on the front of a thing and apparently I’m going to read it. The idea that clearly some intelligent person out there realized by a lot of split testing that by doing these certain things on this thing they get an increased response rate.
Could you take that and take it over to real estate? You’re not going to put a girl in a bikini and a car in the front. But the idea of being out of the box as they say, and thinking that key is a physical object, do you send a physical object to a motivated seller? You send them a dollar bill and write on a dollar a bill. Don’t do that. That’s illegal. I didn’t recommend that. You could do something that is out of the box. I think that’s fantastic.

Danny Johnson: Having that in mind while you’re… You might not actively be looking for it but if you always have that in the back of your mind whenever you see things then you look at things in a different way. So I think that’s more of the take away.
But I think where I was going with that though I was coming all the way back around. As I talked to more and more people that do do a lot of deals it’s amazing because you think they’ve got some special secret tactic. And it boils down to them doing the same old tried and true stuff. It’s just that they’re consistent with it, right?

Brandon Turner: Yeah. Real estate’s actually a fairly boring activity. The people that do the best with it, especially flippers, I hear that all the time, flippers and wholesalers, they’re bored to death half the time because it’s so mundane because they just keep doing the same thing over, and over, and over because it works, consistency.

Danny Johnson: I’m just blown away. Because I’ve talked to a lot of people lately and really all this driving for dollars. You would think that’s the first thing people hear about and start doing other than bayonet signs. Even my father to this day still says that that’s the absolute best way to get great deals.

Brandon Turner: I love it. I’m a huge fan. Lately I’ve been walking for dollars, but driving for dollars I think is fantastic. In fact I’ve got a high school kid working for me this summer. I just do an odds and ends. I haven’t had her start yet but I’m going to have her start here next week or the week after.
It’s just like three to four hours a week. It cost me $30-$40 a week. I’m going to have her go out and drive for dollars for me. It’ll cost me a couple hundred dollars a month maybe, but she’ll just get all these leads, put them into a spreadsheet, bring them to me, and then I can make the phone calls. Or I can do whatever needs to be done further. But I just want to create a system that does that consistently, and just always knocks it down.
As we get more deals I’ll increase the amount of driving for dollars she does. Maybe I’ll have ten people doing that for me eventually. But just being consistent… I’m the first to admit, I have not been consistent with my deal finding. Like I’ll do driving for dollars for a while, and I’m like, “Yeah, I got a deal.” And then I’ll do MLS for a while. And then I just kind of stop. I have not been very consistent.
This is good for me to think I got to get more consistency. I always want to be creative, have fun. I think it’s important. But I think consistency is key if you need to hit your goals.

Danny Johnson: I think you hit the nail in the head with the reason why a lot of investors, including myself, I’m with you on that, aren’t consistent is because we do get bored. It’s like we want to try something else. Let’s see if this will work. Let’s try this. It’s a new shiny thing that we see and run after.

Brandon Turner: Yeah, and that’s why I think it’s probably better to think if you’re getting bored find ways to make your system work even better and more smoothly without you. And then go get unbored with more fun projects that are aren’t going to interact with your business. But if you’re going to kill with doing well just because you’re bored I think that’s dangerous.

Danny Johnson: Oh yeah. Especially with your podcast, the forums, and the website and everything, you’ve seen a lot of investors and you’ve probably seen the progress of a lot investors. Is there some common trait that you’ve noticed in the really successful investors apart from a lot of new people that fail quickly and just kind of are out of the business?

Brandon Turner: Yeah. Real estate is kind of like, I think it’s called Plinko. What’s that one show with Bob Barker? The Price is Right. They had a game on there, I think it was called Plinko or something like that where like they drop this coin, this large, round disk or whatever. And it drops down this board that’s covered in little pegs, and there’s thousands of pegs on this board. At the very bottom there’s a bunch of rows of numbers or something like that.
Anyway, they drop this coin in the top, and it comes down, and it bounces. At the very bottom it ends up in one of these slots. I don’t know what the point of the game is. TV is stupid. But the idea that that’s kind of like real estate. And when you get into it you constantly bump into things. You run into problems. You get stopped. You hear that wholesaling is the best way. And then you hear flipping. Then you bump into this and you bump into that.
The ones that seem more successful they fight through that and they just keep pushing forward despite that. All the million messages that they’re hearing and everything like that, they just don’t give up they just keep working. Because clearly people are making money in real estate. Millions of people in the world are making money through real estate every year. So it obviously works.
Millions more are not making money through real estate despite trying. What makes the difference? I think it’s just the people that are persistent and they just keep going forward. That’s what I see over and over and over. They try, try, try, it didn’t really work. And they just kept improving, not just trying the same thing and hoping for better results, but actually improving, figuring out why it didn’t work, and just keep bouncing and keep going forward.

Danny Johnson: Absolutely. It’s like you’re not going to give up. You know there’s going to be issues. I guess maybe that’s a big part of it. As I look more into this, everybody’s out there selling products and they want to make it seem so easy. And so it’s like a promise of an awesome life real easily. You just have to decide that you want to do it.
You go in and then they find out there’s all these things that could come up, things I have to deal with. And you didn’t think it was going to be that way. And then you’re out quickly because you thought it was just an easy thing to do. As long as you go into it knowing that there’s going to be stuff to work through, just like everything else. The chances of making big money on each deal are there and it’s worth it, but you’ve got to be willing to deal with whatever comes your way.

Brandon Turner: Yeah, very much so.

Danny Johnson: What are your current goals for your business? I know you talked about building up sort of an army of people driving for dollars for you. Do you have any other goals for your business?

Brandon Turner: Right now I want to shift a little bit. For a while we’re at that point in my business where I have to either grow bitter or smaller. And I’ve been saying that for a while because I’m at 42 units of my own and I don’t have any full-time employees.
I’m at that weird place where I need to either go bigger or smaller because I can’t really sustain it right now without having to work a whole lot. And I don’t like working a whole lot unless I’m making a lot more money. Anyway, I’m at this point now where I need to go bigger and I’m going to go bigger.
My next goal is I want to double the number of units I have. I want to pick up from doing a couple of flips a year, one, two, three, up to maybe four, five, six flips a year. I want to get a few full-time employees working for me. And I want to build up my property management business because I want to get into property management as well. It’s just another avenue for making more… another system that managed my properties and has employees that work for us. That’s kind of where I’m going next I think for my business.

Danny Johnson: Cool. You’re going to bring in people to do driving for dollars? Or anything else that you’ve taken steps towards reaching those goals?

Brandon Turner: Yeah, I think so. I’m big into the idea of systems, like things that I do really well or that I figured out how to do and I don’t like doing or I don’t want to do anymore, packaged them up into a single job description, like driving for dollars. You do this, A, B, C, and D, and then outsource it to somebody else.
And so the same with bookkeeping. I’m going to outsource bookkeeping. That’ll probably be the first thing I’ll outsource now. There’s a lot of these things that I need to do. Even the fact that I’m still updating my website every couple of days with new listings for rental properties, those things. Why do I do that? Why don’t I outsource that? Why don’t I create a system to handle that.
I’m really going to start to systematize every piece of my business, not just because I don’t want to work. I still will work the same amount of hours as I always work. I just like doing this. I’m obsessed with real estate. But I want to go bigger with that. If I’m no longer worried about entering data into a spreadsheet I can go out there and find the next 50-100 unit apartment complex that I want to buy and put together.

Danny Johnson: Isn’t it amazing when you stop at the end of the day and look back at all the things that you did that day and think I didn’t feel like I got anything done.

Brandon Turner: I know.

Danny Johnson: And you did a million little things that maybe other people should be doing for you. It’s so hard it’s just crazy.

Brandon Turner: Have you read The ONE Thing by Gary Keller and Jay Papasan?

Danny Johnson: Yes. Awesome book.

Brandon Turner: I love that book and I read that all the time. I’ve read it so many times now it’s crazy. Now I read it every morning. I read 10 pages every morning just to start my day because it makes me remember, don’t focus on everything. Just focus on what matters. What’s the one thing that I actually have to accomplish today, that’s what I’m going to go accomplish. Ever since reading that book I totally changed, almost everything about my business, everything about my life. It’s been pretty awesome.

Danny Johnson: I printed out a bunch of full page-sized things that say until my one thing is done I’m not doing anything else. Everything else is a distraction.

Brandon Turner: Yup, I have a reminder that goes off every day. I think it’s at 11 in the morning that says until your one thing is done. Everything else is a distraction. Same thing, it goes off every day on my phone and reminds me of that.

Danny Johnson: How do you keep track of what your one thing is?

Brandon Turner: I think you have different one things. Your one thing in different areas, like one thing with my wife, and the one thing in my house, or the one thing for bigger pockets that I’m working on, the one thing for my real estate.
Right now the one thing for my real estate I kind of said it a minute ago is that idea of I’m the bookkeeper. That’s the one thing for my real estate right now is that’s taken out most of my wife’s time. She spends a lot of time bookkeeping. And so if I can get her out of that then I can freeze up a whole lot of her time to be able to help with more stuff and to do all the random things that we’re doing.
And so I always think in terms of… there’s this message in the one thing called goal setting to the now. You look at your future five years or ten years from now and say what is the one thing I have to do this year to accomplish my five year goal.
And then what is the one thing I have to do this month to be on track to hit my one year goal, and what is the one thing I have to do this week to hit my one month goal. What’s the one thing I have to do this day to be on track to get my one week goal and then what’s one thing right now at this very moment I need to do to hit my one day goal.
And if you just work backwards like that it actually prioritizes your day very, very well. And I can kind of see, “Here’s what I need to do in this area. There’s what I need to do at this area.” And you have benchmarks as well. “Here’s my goal for the one month, one year, one week, whatever.” That’s how I kind of prioritize and figure out what my one thing is.

Danny Johnson: That’s so awesome. For whatever you do in life like having something like that to where you’re shooting for something, you’re not just blindly saying I just want to make a ton of money. I don’t know how I’m going to do it. I’ll try this today or tomorrow. It’s the people that have that goal that shoot for it that make it, and so everybody hears about that or success and thinks they just got lucky they did it overnight. It’s never that way.

Brandon Turner: Yeah, I’ve been huge into this idea of goal setting lately. And the idea that in my life every single time I think I’ve set a goal, no matter how big the goal is I’ve hit like faster than I ever thought possible. And that’s not just because I’m special. That’s just how human nature works. When you have a goal and you go after it, it happens so much better than if you didn’t have that goal to begin with.
I’ve been thinking lately, what is that goal, what do I want to achieve next, what’s it going to be? Lately I’ve been thinking about Tesla. I really want a Tesla. But it’s like a thousand dollar a month for a payment for a Tesla minimum. So then I’m like, what if I just set a goal and said, “My goal is to buy enough rental properties or flip enough houses to buy a Tesla for free for the next six months. That’s what I’m going to do.”
And I’m going to say, “I need either 100,000 in cash from flips or I need a thousand a month in cash flow from properties.” How do I do that? To hit my one year goal what do I need to be on track for this month, what do I need to be on track this week? And so I haven’t actually physically said that my goal because I don’t know if I actually want to be the guy with the Tesla in my town. I don’t know. I’m working through those [Unintelligible 00:42:15] right now.

Danny Johnson: Do you have a vision board?

Brandon Turner: I don’t. I know what they are. I love the concept. I’m listening to The Success Principles by Jack Canfield right now on Audible, and he talks a lot about the vision board. And I probably should have one. I got a picture of Italy sitting next to me that I look at a lot because I love Italy, but that’s about the consistency of my vision board. Do you have one?

Danny Johnson: I don’t know. It’s amazing. That’s a story I always tell about my getting a pilot’s license because whenever I put that board together years ago and I cut out the picture of the airplane in flight and put it on there on the vision board along with a bunch of other things, I honestly didn’t really feel like I’d ever do it. It’s like I’m putting this here and I didn’t say or really stop and think much about it, but I didn’t really know that it would ever happen. I just didn’t think much about it.
And honestly I never really look at that vision board much. It was up on the wall where I could see it but I was so busy with everything, with the family, with business and everything. I never really stopped to look at it much. And the next thing I knew I had already been flying for a little bit, and I went and looked at it and I said, “Oh my gosh, I did and didn’t even think about it.” And some of the other things that were on there were completed.
I guess because you have it in your mind, like when you put it there and you’re kind of committed to it a little bit without thinking much about it. Even if you don’t plan it’s sort of like you…

Brandon Turner: I think there’s something subconsciously that just goes in your head and just works on it when you’re sleeping and when you’re eating and whatever, you’re not even thinking about it. It’s working.

Danny Johnson: It’s like the law of attraction I guess is what a lot of people call. That’s really awesome. If you’ve ever seen The Secret DVD that’s something to watch too.

Brandon Turner: I haven’t actually watched it yet but I feel like I’ve read every book about it. I’ve never actually watched the movie or read the book The Secret, but I’ll have to do it one of these days.

Danny Johnson: And some people think it’s kind of hokey but…

Brandon Turner: Yeah, I don’t care why it works, like whether or not it works for the reasons. Like The Success Principles talks a lot about it. And I don’t care why it works but it does seem to work. And so for whatever reason, whether it’s spiritual, physiological I don’t really care the fact that it does seem to work for people who use it so I like it.

Danny Johnson: I guess it has something to do with maybe firming up exactly what you want, right? For you to create it you have to figure out what you want. And there’s probably only so much space to put things on there, you just sort of determine what you want most. And maybe that’s a big part of it. Hey, have you ever used Trello?

Brandon Turner: We actually use that at Bigger Pockets all the time. I don’t use it for my real estate. I guess I actually should use it for real estate. I just use it for Bigger Pockets and I love it.

Danny Johnson: I was going to say, after I read about The ONE Thing I had already been using Trello for a lot of the software stuff that we do. But I thought this is the way to plan out all these things I need to do that I want to do to reach my goals. And then organize them so that the one thing is at the top of the list.
I have a to-do list of cards. And I went and I didn’t think about order. I just thought about all the things I needed to do in order to achieve a certain goal. And I put them there just like real quick brainstorming. And then after I have everything I could think of on there then I went and organized them, just drag and drop to where the most priority one was at the top. And then lower priority down.
And then I just move that over to a doing column so that I’m always just focused on the one thing because it’s the only thing in the doing column. It’s just an awesome way to remember all those things. Because you can write them out but if you put that piece of paper somewhere that’s like in a stack of papers or in a drawer somewhere you won’t keep to it.

Brandon Turner: I love that. I’m going to steal that from you and start doing it.

Danny Johnson: No, you can’t steal it.

Brandon Turner: Too bad. I’m taking it.

Danny Johnson: It’s free too.

Brandon Turner: Yeah, it is free. It’s a great tool. You mentioned the idea, you were talking about you put the plan on your vision board. A week ago or two weeks ago, when I first said, “You know what, I’m going to get my pilot’s license.” I told myself that. That’s what I’m going to do. I’m going to have a goal for that.
And it was like three days later I’m talking to this old guy who’s actually a real estate investor that I’ve known in my area. We’re not close but we talk occasionally. I ran into him. I’m talking to him and he’s like, “Whenever I go out to the field and clean up my plane…” I was like, “Wait, you fly?” He said, “Oh yeah, I got a couple of planes out there.” And he’s like a 75-year old guy. He’s not really doing a lot of investing. Well, I didn’t think he was doing investing, now he’s building 180-houses or something crazy like that.
He’s like, “Yeah, let me take you up. I’ll teach you how it’s all done.” Again, out of nowhere I just decided I want to get my license and this guy randomly tells me that he’s a pilot and he wants to take me flying and teach me how to do all this stuff. It’s cool.

Danny Johnson: It’s amazing. You open yourself for it. Sort of whenever we have lulls in our house flipping business my wife and I will get to talking about it and we’ll say, “Let’s make some changes to get things going again.” It’s almost like immediately after that, even before we make any changes awesome leads start coming in. It’s just amazing. And especially if more than person, so you and your wife or a significant other, whenever you have the same things, I think it amplifies it. It’s a weird thing.
One example too that I experienced recently was I was testing out some software that we’re making. And I was calling up other investors in town and I was sort of giving them a run through of it. And I was plugging in this address for this property. And it’s an address that I’ve used for years just because it’s the first one that ever comes to mind for me for some reason.
It’s a house in town that about eight years ago I had driven by driving for dollars and saw it’s a historic big house and it was really rundown and thought maybe it was vacant. I mailed a letter to them, and probably four or five letters over a period of several months. And  talked to the guy that owned it and he was saying that he would be okay with selling it but his kids don’t want him to sell it.
And so I followed up with him maybe a letter per year for a couple of years. And that was the address of that house that I was using a couple of months ago when I was talking to these other investors. Mind you it’s been four or five years since I’ve contacted him. And so when I’m telling people, “Let’s go in here. We’ll act like we’re adding this lead. Use this address.” I did that probably four or five times with other investors and I used that address as a sample lead. And low and behold I got a phone call out of the blue and it’s this guy who owns this house. He says, “Hey, I’m ready to sell.”

Brandon Turner: That’s awesome.

Danny Johnson: I said, “You got to be kidding me.” I went out there and I looked at it. I had to reevaluate what to offer him. It’s been so long. And then I ended up buying it. We wholesaled it. We bought it, closed on it, and then sold it to another investor and made a great profit on it.

Brandon Turner: That’s awesome.

Danny Johnson: And I hadn’t even contacted him in years. Anyway, that’s the sort of the power of attraction too. A lot of great information in this and I feel like I started rambling on here. Is there a way for all the people listening out there to find you?

Brandon Turner: Sure. I’m obviously on all the social media things. I’m big into Instagram these days. I love Instagram. I don’t even know my username. You can find me there. But Twitter is @BrandonAtBP. And then obviously on Bigger Pockets you can find me there. I’m pretty much always on Bigger Pockets. So you can find me there.

Danny Johnson: Brandon, also, you’ve checked out the blog on bigger pockets, in other articles and everything. He’s just awesome, full of information, super nice guy. He’s always looking out for everybody. Thanks again for being on the show Brandon.

Brandon Turner: I appreciate it.

Danny Johnson: We will have the show notes on Just go to

Brandon Turner: I thought you’re going to do like /sexy or /talldarkandhandsome or something. But I guess /brandonturner works, whatever.

Danny Johnson: We can look into doing that. If anything try the brandonturner, that’ll for sure work. We might stick some things on the end just for him. I’ll send him a link with that on there just as a thing that’ll forward over to that same page. But on that show notes page we’ll include all the awesome things, the key points Brandon shared with us, as well as links to, we talk about and then some of those books, The ONE Thing, Success Principles, and all that. So we’ll have links to those things as well as a way for you to find Brandon on the show notes page.
I think we’re about done here. Thanks again Brandon. I appreciate it.

Brandon Turner: Have a good day.

Danny Johnson: Thank you so much for listening to the Flipping Junkie Podcast. Next week I’m interviewing my good friend that moved here from Australia and has rehabbed over 150 houses in Texas. I can’t wait to share that interview with you, so make sure that you subscribe and visit for more awesome house flipping education.


Comments (2)

  • James

    Hi Danny Great Podcasts I think I’m finally caught up on all of them since finding them 2 weeks ago via another podcast.

    I found Trello recently and was think of ways to implement in my life(which is crazy with 5 kids) and use it to simplify stages of processes.

    I’m interested in how you setup and using as a Scrum for the One Thing? Could you explain or share. Thank you so very much for all you have shared on you podcasts so far.



    • Danny Johnson

      Hey James.

      I explain exactly how I use Trello here:

      Scroll down to the box that says, ‘Bonus: Click here get my FREE guide that shows the exact system I use that allows me to focus on the 20% of tasks that produce 80% of my results (and get exactly what I want out of life).’

Speak Your Mind