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Podcast

Episode #37: Real Estate Wholesaling with Cody Sperber of The Clever Investor

How did Cody Sperber turn one deal into a real estate empire? In this episode Deidre Woollard sits down with Cody Sperber of the Clever Investor to talk wholesaling, why an investor needs to be a brand, and how to compete against iBuyers.

You might know Cody Sperber of the Clever Investor from his popular videos on YouTube or from his educational series. He has flipped over 1,000 houses and now focuses on real estate education. You may have heard his story before but today we are going to dig beyond the rags to riches story and get into how he builds wealth and more importantly how you can too (spoiler alert: there are lots of phone calls involved).

Learn more at https://cleverinvestor.com.

Share your thoughts with us: media@millionacres.com or call: 844-615-2201.

Timestamps

0:00 Introduction

1:15 Pros and cons of wholesaling

5:20 Do people underestimate the difficulty of wholesaling?

9:30 How Cody got his first deal

12:30 Real estate influencer culture and brand building

16:30 Doing deals on Clubhouse

20:15 Using virtual assistants

23:05 Why investors may need a CRM

25:00 Learning to negotiate

29:25 How investors can get started in financing

37:45 The very hot Phoenix market

44:11 How investors can compete against iBuyers

46:50 How to hire the right people

50:19 Cody's thoughts on crypto

Transcript

Deidre Woollard: Hello, I'm Deidre Woollard, an Editor at Millionacres and thank you so much for tuning into Millionacres Podcast. Today with me is Cody Sperber of the Clever Investor. You might know him from his popular videos on YouTube, his massive Instagram following, or from his educational series. He's flipped over 1,000 houses, and now he really focuses on real estate education, one of my favorite topics. You may have heard this story before, but today we're going to dig really deep into the rags to riches story and how he builds wealth, so welcome Cody.

Cody Sperber: Thanks for having me.

Deidre Woollard: Well, let's get right into it because I want to talk about wholesaling because that's one of the things you teach. It gets such a bad rap in the real estate industry. What are the pros and cons of wholesaling?

Cody Sperber: I hear people give it a little bit of a bad rap. I actually fell in love with wholesaling from the moment that I heard about it because to me, getting into real estate or becoming a real estate investor, I always thought you needed deep pockets and great connections and a real estate license. When somebody explained, I actually penciled it out on a napkin for me. This concept of no money down real estate investing, which is wholesaling, it just blew my socks off. I couldn't believe that I'd never heard of this before. With me being a young guy that didn't have deep pockets, any connections, no real estate license to be able to get into real estate and make some quick cash was just very exciting for me and I love the wholesaling business because it teaches you how to be a creative real estate investor. In order to be a successful wholesaler, you got to know how to do marketing, you got to know how to talk to people, you got to know how to build rapport, you got to learn a little bit about negotiation, you got to learn your paperwork and master your paperwork, and you got to build connections and relationships in the community because wholesaling essentially at its core, is just finding sellers that are looking for an alternate solution than selling traditionally. They need cash, they need it quickly, maybe the house is really beat up and it won't qualify for a traditional loan, maybe they are in some form of distress where they just need money quickly and when you go and you put out marketing or you get a hold of them and you work out a deal to buy their property, and a lot of times when you pay cash, you get a cash discount, and that's the value of paying cash, and when you put their house under contract, even though you haven't purchased it yet, you gain what's called equitable interest in the property, and so you have control of somebody else's real estate even though you don't own it yet. That concept blew my mind that I don't need a real estate license because as long as I have equitable interest in a property, the way the law works is you get control over it, and the way the contracts are written, I have the right to re-market that property and assign it to somebody else. Those somebody elses are typically are landlords or rehabbers, and so being a real estate matchmaker, being able to get in the game and find sellers that need a solution and they don't want to sell traditionally, work out a deal, put their house under contract, find a landlord looking for a good deal or a rehabber looking for a good deal, I'm like, "It's a win win win." I'm helping everybody in the transaction when I'm providing a great value for the people involved in the transaction, and I get to make what they call a wholesale fee or a matchmaker fee for putting the deal together. What other business can you do where you can work for 2, 3, 4 hours on a deal and make 10 grand, 12 grand 30 grand in a couple of hours? It changed my life, and yeah, it gets a bad rap because people don't understand it, or they think it's illegal, or they think it must be a scam. They're just not educated. I think the more you learn, wholesaling got my foot in the game, then eventually I wholesaled some deals that I regretted selling. I'd say, "Oh, I wish I could have kept those. I wish I would have had the courage or the team to buy them and actually take them down and renovate them and then sell them for a bigger profit or I wish I would have kept them and put that in my rental portfolio." I think of wholesaling for people that don't have a lot of resources as the gateway to getting into real estate investing. You can make some quick cash which then will empower you to maybe keep some or buy them and then renovate them and keep a bigger profit on the deal. I'm a huge fan of wholesaling. You'll never hear me talk bad about it, I teach my students wholesaling. Without it, I wouldn't be here talking to you today.

Deidre Woollard: Do you feel though, that some people underestimate the amount of effort it takes to get started because they see that idea of, "Oh, I could just put it off for a house and flip it really quickly"?

Cody Sperber: Yeah. It really comes down to anything that you're putting time and energy, and two, you got to learn the language of real estate in order to be effective at it. Can you get lucky and get a deal right out of the gates on your first few phone calls? Yeah. But that's not the norm, and if you study and you increase your skills and capabilities and you practice your craft, wholesaling is in my opinion, one of the fastest ways to make money in the real estate business. I tell people this all the time, if we teach you a skill on how to set your business up and find the deals, then analyze the deals, then negotiate the deals, then fill out the paperwork, and then find the buyers, and play matchmaker, and put everything together, and if that takes you one week, one month or like me, it took me 10 months of trying, I didn't get a single deal, over complicating everything, my brain is so analytical, I would just screwing everything up, I was going in the wrong direction, every person I talked to had a new opinion of what I should do, and so I was constantly changing directions, got so fatigued that I quit the business, then four months later, I got a job as a bookkeeper, I was just, got a 9:00 to 5:00 type of job and I got really lucky. I got encouraged to go to another seminar. I was so burning out of seminars, but "Come on man, go to this one more seminar, I promise it will be different", and I went to that seminar and thank God, I went because it changed my life and I found the missing piece for me, which the reason I wasn't getting deals is because I was out there on my own winging it. The missing piece for me is I met a guy named Lyle and Lyle became my first real estate mentor, and he took me trying to do 30 things and narrowed it down to the two or three things that actually move the needle, and he kept me on track and he was my accountability partner and he was there whenever I had questions so I didn't get stuck, he answered the question, he taught me things I couldn't learn in books, and I started getting some traction, and then also, and I got my first deal. For me personally, and this is not normal, I made more on my very first big deal in real estate than I was as a full-time bookkeeper.

Deidre Woollard: Wow. How long ago was this?

Cody Sperber: This was like 2002, 2003ish and it changed my life because all of that hope, all of that struggle, all of those courses, and books and tapes and missing pieces and frustration and quitting, and then getting back, it all just gelled. Finally, I was like, "Oh, thank God." I knew it went from hope to knowing I could do this again and again. Even though it took me all of those months, over a year, to put the whole thing together, the distance between Deal 2 and 3 was only two months, and then three and four was only two weeks. Then I started building a pipeline, then I started getting consistency and now, when I say, "Literally, it can happen in hours", I woke up yesterday, not having a deal, calling old leads, me and my team were calling old leads that they told us no, because really the fortune is in the follow-up and we called the old leads and one of them picked up and they said, "You know what? I'm ready now." That was in the morning. By the time we were done that night, we already had a buyer for, we locked that deal up, we had found a buyer for it and we're going to make 33 grand if everything goes as planned. It hasn't closed yet, but that's on the books. Where else can you do that? How many T-shirts do you got to sell on Shopify or how many stocks you got to invest in to get 33 grand just out of hustling? Is it going to happen like that for everybody? No, but I do believe that it will not happen at all if you don't get yourself in the game.

Deidre Woollard: You have to be willing to pick up the phone, which I think is something that a lot of people maybe don't feel comfortable with at first.

Cody Sperber: I didn't. You want to hear a crazy story? This is Cody Sperber analytical. My biggest self-limiting believes was I looked young, I looked like I was 10 years old, trying to go flip a house like, who is going to take me seriously? I have no money. I drive a piece of crap Nissan pickup truck, who's going to think that I'm going to pay cash for their house? That translated to everything I did. I believed that internally that I sounded young, I looked young, that was my fear. I hesitated getting on the phones and Lyle, my mentor, knew that I was lying to him, telling him that I was making my calls when I wasn't making my calls. Finally, one day he said, "You know what, Cody? Enough is enough." We had this three-strike rule with me. He took me on as a student, as long as it was like baseball, I had three strikes once the third strike happen, I'm done, so I already had one strike against me and I was working on my second, and so he was like, "I know your line about your calls. Here's an address meet me here at midnight tonight." I was like, "What are you crazy?" and he goes, "Bring your call scripts, meet me here at midnight tonight. I'm like, "So you're going to be there at midnight?" He goes, "Just meet me there at midnight." I show up at this address at midnight and it's a cemetery, and it's the middle of the night, and guess who doesn't come? Lyle doesn't show. Thirty minutes later, he calls me. He goes, "Are you there." I said, "Yeah I'm here." I said, "Are you coming? I'm sitting here waiting for you. What are you doing?" He goes, "Get out your call scripts, walk into the middle of the cemetery, we're going to role-play." He role-played with me for about 35 minutes in the middle of the cemetery, and at the end of it, I finally just started shaking my head. I was like, "I understand what you're doing now, Lyle," and he goes, "Cody, listen to me. You're the only thing in your way. You will be super successful if you can just knock that bs self-limiting belief right out of your head that people aren't going to take you seriously. If you can do this in the scariest place in the middle of the night, you could do this in your dress pajamas in the comfort of your own home. Stop getting in your own way and start making your dang calls." I was like, "I get it. He's right. I can't believe I've been over complicating this." As I was leaving there, he said, "By the way, look at all those people there. They've all slid into their graves. Some of them lived life to the fullest and some of them lived life with regrets. You've got to pick and choose which way you're going to live." I went home that day and I woke up the next morning. I said, "you know what? I will never not pick up the phone again and make my calls." I started getting really good at the calls and now it's my favorite thing to do in the business. I love talking to people. I love working the leads. I share that with you because it seems complicated. It felt like that phone was 10,000 pounds, when people would call or answer, I would hang up quickly because of my fear but once you get through it, it's game on and that's how you do deals. You need to do two things in this business to make it rain. One, get on the phone and talk to people. Two, get out and actually go to the real estate and make some dang offers. You do those two things and you have a very good chance of becoming very successful in the real estate business.

Deidre Woollard: Awesome. I love that story. You're also now part of this whole real estate influencer culture thing which is growing by leaps and bounds. Do you feel that every investor who wants to make a name for themselves has to build a personal brand or a real estate brand? Is that part of the world we live in now?

Cody Sperber: I feel like it'll help. Yeah, I feel like we no longer give out business cards. I think Instagram's your business card, Facebook's your business card. Fortunately, we live in a world where clout and your following and your brand and your impact makes a big difference in the way people view you especially when they're first meeting you. It's worth the investment. I do think that people that build a strong personal brand make more money. I think people with a strong personal brand have more doors open for them. I think people that take the time to learn to build their brand have a better chance of getting to a yes. So I encourage it. Guess what? Here's the good news. I don't have any background in building a brand. I just took a platform, like Instagram, and I studied it and I realized Instagram's a hackable platform, there's a process for growing a following on there. Once I realized the process, I just rinse and repeat it. Like all marketing channels, you got to lean in on it. I didn't do 10 platforms at one time. I did Instagram and I put all my love and energy in Instagram and I grew that platform first and I spent 90 days just putting lots of love and energy into the post that I was putting. I would write these really long detailed captions and I became a content curator and I would find and follow accounts that I really admired. I would take the best post that had the most engagement. Why did that one get a ton of engagement, but the next three didn't? I would take the ones that had a lot of engagement, I would spin that messaging and make it my own, and put it onto my page and guess what? It worked. I was allowing other pages to do all the research and development for me and then I would take their best post, spin it, and make it my own. I did that for 90 days straight. I posted 6, 7 times a day. It was a ton of work, but all of a sudden I started getting traction. Until you get your actual page cleaned up, nobody is going to follow you, nobody is going to engage with you if you don't have anything good to say or to share. Then once I had that dialed in, I realized that there's a whole world of people out there that have big pages that will post your content on their page and send you traffic. Building a personal brand is not very difficult, it's just a system, is what I'm trying to share with you guys. Once I did that, it was just rinse and repeat over a long period of time. The challenge with most entrepreneurs is they are not consistent enough. I stayed consistent and all of a sudden, I went from no followers to 1,000, to 5,000, to 10,000. Now I got 1.2 million followers on Instagram and I got the blue check mark out of nowhere one day. Next thing you know, the doors started opening and people started treating me like, "Hey, will you come on my podcast? Will you come speak at my event?" Even though I was scared and I was hesitant and I didn't know everything, it was new to me, I put myself out there and I started showing up. I started getting pretty good at sharing the message and now here we are, a decade later, people know me as the Clever Investor. But nobody would've known my name if I wouldn't build the personal brand to start.

Deidre Woollard: Really good point. I think that consistency thing is interesting. I used to teach social media to real estate agents and getting them to be consistent about it was job 1 and the ones that did are some of the most successful real estate agents ever just because they got into doing it every day, which actually brings me to the next point. I want to talk a little bit about Clubhouse, because Clubhouse has come out of nowhere. One of the things I've noticed in social media and real estate is that real estate agents, real estate investors, everyone, when there's a new platform, they all jump in. But I'm starting to hear that deals are being done on Clubhouse. Are you seeing that?

Cody Sperber: Yeah. The challenge with Clubhouse specifically, is it takes a considerable amount of your time and it's very difficult to be productive throughout your day if you're spending 6-8 hours on Clubhouse. That's the trade-off. I love the platform, I love audio-only, I love seeing all my real estate friends on there, and I think it's really helping a lot of people. It's becoming almost a coaching platform more than anything else. I think some great networking is going on there. There's a guy named William that's really using it. He's a real estate agent. He does the Real Estate Networking Happy Hour everyday and he normally has a 100-200 people on. I love his consistency, they're all agents, they're all hanging out. I think that if you are worried about COVID or going out, it's a great alternative to not being able to network in-person. I was on there quite a bit in the beginning, I've slowly stepped back just because the benefit and the time involved wasn't there for me, other than for my coaching business. It worked really well for my coaching business, but generating real estate leads themselves, it wasn't there. But I will say this, because of Clubhouse I met a lady named Vina on Clubhouse who ended up speaking at one of my live events and then did a tour to all my rehabs. I got 10-15 rehabs going at any one time. She did a tour of my rehab, she's exiting a bunch of big multi-family, she's sitting on a ton of capital, and she is now injecting a lot of money into the business as a lender. The connections are out there. It really doesn't matter what the platform is, it's what you do with it and how much love and energy you put into those relationships that really makes the biggest difference.

Deidre Woollard: Interesting. I guess it's really about that consistency. I think you made a really good point too. I think a lot of people think they have to be on all the platforms at once where, what you talked about earlier, with Instagram is that idea of diving in and really making the connections in one place.

Cody Sperber: Entrepreneurs, we have a curse, it's dying a death by a thousand cuts. We think we can do it all, we're super humans, we're going to dominate all the platforms. If I was to put them in order, I would say podcast or YouTube would be at the front of my funnel. Meaning those are the best engaged followers to have and at the back would be Instagram or something like that. Because Instagram people like, unlike, follow, unfollow, they're in and out of your world constantly. But you get a YouTube subscriber, you get a podcast subscriber, and they are in it to win. They very rarely unsubscribe and they go down the rabbit hole, they fall in love with you. If I was in the real estate space to do it all over again, I think guys like Chris Crone and some of those guys that are really just comping out video after video after video on YouTube and then making video core competency and then taking that video content using VAs to cut and slice and dice it and syndicate that content to all the other platform. He really only focuses on one, his team pushes the content out to everything else, and it's like a little automated process and he uses all VAs and I think he, out of everybody, is doing it the best.

Deidre Woollard: Interesting. VA is virtual assistants, how important are they for you in your business and do you think that's something that real estate investors should take advantage of?

Cody Sperber: I think we use them quite often for all kinds of different roles. I think anything like data or anything that needs to be repeated over and over and over again, VAs are great depending on how deep you [LAUGHTER] want to go in this conversation. I tried using VAs for all kinds of aspects of the business. The ones that I've found the most success is admin and social media and content syndication and that thing. I also use really good English speaking VAs for processing our first round of phone calls. We use a lot of call center VAs to basically take our calls, pre-screen them, and then put them into our CRM, and then TS app, and set the appointments for us. If I was new, I think I would focus on mastering the craft first myself so I could create the standard operating procedures and understand the business well enough. Because the number one failure most investors make with the VA, is they say to themselves, "I have a job, or I'm very busy, I don't have time to deal with that, so I'm just going to hire somebody and they're going to deal with it." But because they've never done it, they don't know how to manage them properly so there's a big disconnect between the investor's expectations and what the VA is capable of doing. Just like any team member, unless you train them really well or empower them with standard operating procedures and say, "All right VA, here's a document, at the top is a little screencast video that I made of me doing the activity then below it is the written out step-by-step process of the activity. I'm handing you this SOP, this document. Go through it, do it, we're going to review it together and then if you have any questions, we'll of course adjust and then from that point forward, you are now responsible for this activity within my business. You're going to report, we are going to meet every day on Zoom for five or 10 minutes, and you're going to give me a report of what you are doing that day and I'm going to manage you correctly." You do that, I love VAs. You're not willing to do that, I think you're going to find that you're going to be let down, the VAs won't do what they're supposed to do because they can't, they're not empowered, and you're going to lose a bunch of money.

Deidre Woollard: I really like what you said there. I think it's an analogy like when you're painting, you have to tape everything up and it takes a long time and it's really annoying to do that before you paint a room. But the same thing, you get a better result if you put in that time in the preparation, and that's really what you're talking about here.

Cody Sperber: Exactly.

Deidre Woollard: You also mentioned another important thing is the CRM. I think a lot of real estate investors don't really know why they need a CRM if they don't really consider themselves to be a salesperson. But having a CRM, having a database I think is very important and it sounds like that's been your experience too.

Cody Sperber: Yeah. I mean, 15 percent of your deals you're going to get immediately, 85 percent of your deals are going to get done through follow-up. A good CRM to me is all about speed, and automation, and organization. For me, one year by yourself, can you run off of a yellow legal pad and a bunch of file folders all over your desk? Maybe. Is that the most effective and efficient? Absolutely not. As you start adding team members or you are working with real estate agents, or lenders, or vendors, or if you're trying to grow your team and have multiple team members in working on deals together, you have to have a CRM. They're so cheap nowadays and so effective. I used to have two back in the day, have one system for email, it was over here, it has a user name and log in, and one system for this, for the organization and that had a username and log in, I had 13 systems all patchworked together. Now, they're all-in-one. Most CRMs have everything all in one. What it does is it allows me to create some automated follow-up campaigns, whether it's email drip sequences or direct mail sequences. When a lead comes in and I put it in the CRM, I can just create a tag and tag it and say "Go", and the system will send out three emails over a certain period of time and two postcards. Now I'm done, I'm mentally checked out. Now if I know most of my deals are going to happen through follow-up, I either need to be really good at follow up and really organized, or I need to automate it. As long as you do that and use the tool effectively, I think, why would you not want a CRM? Now it's virtual, I can run it from anywhere, from my cell phone or laptop and a Wi-Fi signal. I could do deals on the beach, I can do deals in the boardroom.

Deidre Woollard: [LAUGHTER] I think everybody loves that. Let's talk a little bit about negotiation because I know that's a class you teach. I feel like it's a core skill that a lot of investors don't really focus on, they don't know that they need it and it's something that's a little bit, I think hard to teach because the only way you can really do it is through role-playing, which you mentioned earlier. How are you teaching negotiation?

Cody Sperber: Well, first off, I don't teach negotiation when you first start. Because I think what happens is everybody wants to get real technical and they want to be a negotiation ninja and it takes them out of their authentic true self. I tell everybody who's new, in the beginning, you only have to do two things to be successful in this business when it comes to influential, getting sellers, buyers, or somebody to say yes to you. You've got to be authentic and you got to be enthusiastic. As long as you show up with those two things, it helps to know the language. You can't show up with no clue on what's going on, so study. But do you need to know how to have the perfect objection blocking strategy? Do you need to have the perfect phrase, or language pattern, neuro-linguistic programming strategy? No. You don't. You show up with too much. This is like, if you do a study on, like take used car salesmen, their first month or two, they normally do really good and then they fall off the sales cliff, because they start, "Oh, I'm good, I got to have some skills now," and when they roll up, they don't roll up as authentic, they roll up with strategy and the next thing people's guard goes up and they feel, "Man, this person is trying to sell me something." That doesn't feel good. I want you to enroll me into the deal. I want you to influence me because of collaboration in bridging the gap and making me feel like I'm heard through active listening and stuff. Just be authentic and enthusiastic. Once they get past a few deals though, now it's time to start to sharpen their skills a little bit and just say, "Okay, here's some core things that we have to get down. Number 1, nobody is going to do a deal with you if they don't know I can trust you so it's all about rapport building." Rapport building is all about asking the right questions, it's not about dominating the conversation or leading them some place. It's just pulling the information out in a way where you do less talking, they do way more talking. I almost want to pull the camera and go show you. We actually have on the other side of my studio right now, 20 students going through an influence negotiation class. It's a two-day class where we take them through rapport building, objection blocking, we help them master their phones skills, their in-person negotiation skills, like how to use their physiology. Every single person, when we teach them, they have to put a mirror next to their phones so when they're doing their phone calls, they can see what they look like. Only seven percent of communications through words, 55 percent through physiology. A lot of people are hunched over their computer typing in, making their calls, or they are on-the-go and they're trying to do phone calls while they're going through the grocery checkout line. How can I be present in a conversation and hear you and feel your emotions? It's not about what you are saying, it's about what emotion you're feeling. How do I identify your love language? How do I identify your personality type? I can't do that unless I'm present in a conversation and I'm paying attention to those things. We teach them personality types, we go over love languages, we go over what and how questions, we go over where they sit, how they sit, what they need to look like, how they smile to their eyes and their teeth, and have conversations powerfully, and also posturing. We talk about, "Look, you're not desperate for a deal." That's not how this thing works. Does the bank want to lend you money when you're desperate for money? No. They want to give you money when you don't need the money. That's just the way the world works. Take those lessons. It takes a long time to get good at influencing negotiation, but take some core fundamental things, internalize them, make them your own. I don't know if that's the answer you're looking for, but I think it goes back to one of the core skills you need as a real estate investor or agent. You need to know how to talk to people, you need to know how to make offers. Both of those involve influence, persuasion, and negotiation.

Deidre Woollard: I love that. You just mentioned financing, which is interesting to me because I feel like that's a place where beginning investors get really stuck about raising money either from friends and family or going to a bank. How do you teach beginning investors to get started in financing?

Cody Sperber: Well, this goes back to wholesaling. For me, if you don't have the resources or the connections or the financial friends, and you don't come from money, a great gateway to get in the business is wholesaling. It'll get you some dough, some money coming your way, it'll get you some quick wins, it'll teach you the language. It will get you in the game. As you're going through it, you want to start to identify people that you're networking with, or friends or family or financial friends that have the potential to potentially invest, that have money, we call it lazy money, that's not being used correctly. It's just sitting, mattress money, it's sitting in a CD, it's not earning good interest rates. Because the way we teach it is look, you're not going to go around all your friends and family and ask to borrow money. You're also not going to roll up to a bank and say just give me money. Because especially with the way the financial markets are right now, it's very difficult for an entrepreneur to get along under any situation and it's getting tougher by the day so we got to go away from the banks and go back to our financial friends. But nobody is going to lend you money if you're desperate, nobody is going to lend you money if you go borrow, or ask to borrow, or beg for money. The posturing is get some credibility, get some wins, start identifying those financial friends around and start talking to them and say, "Look, what I'm doing over here. I'm marketing like a champion. I'm studying my craft. I'm mastering, I'm becoming really great and all these amazing off-market opportunities are coming my way. Right now, I'm not empowered to actually take them down and do them, but I want to. The reason people sell me houses at a discount is because I move quickly and so speed is really important. Right now, you have your money over here. Well, let me show you two ways that bring you an opportunity to invest in one of these two programs. If I give you this opportunity and you like one of the two, I just need to know that if in the future when one of those situations arises and I come to you and present you the opportunity of either, hey, you can lend me a 100,000 or 200,000 that's secured by real estate. It's going to be secured by a first trustee position. You're going to get 12 percent on your money. It's guaranteed. Whatever that conversation is, that's Program 1 and/or we'll do a partnership program where you put the money into the deal, I find the deal, I'll give you 60 percent of the profits, I'll keep 40, I'll do 100 percent of the work, your money is secured by the real estate, I never touch it, it just goes right into the deal through escrow. But we're partners in the deal and if I bring you a property that I'm buying at a big discount, and I'd say, which of these opportunities works best for you and you pick one, I just need a firm yes or a firm no quickly because that's how I'm able to get these quick at such a discount." You go around and you plant that seed with five or six or 10 people. Now when you get that home-run, now you're going to cherry pick it out and you're going to go, your financial friend, you're going to say, "I got it. Here it is." They say yes, now you've got the money. The financing, good deals sell themselves, good deals finance themselves. It's up to you as the creative real estate investor to have all the business pieces around it because you should treat their money way more important than you treat your own. I don't know if I'm saying that right. But you need to respect their money more than you would respect it if it was your own. That means your contractors have to be on-point, they have to be vetted, they have to be good. Your team members, your closing agents, your real estate agent, everything has to be dialed in and on point. If you're not there yet and you're listening to this, you got some work to do. Start putting the pieces of the puzzle together so that way when you go to your financial friend and say, "I got this opportunity, it's go-time," and you get the yes, now you could take full advantage of it and once you get some case studies, you're never going to have a problem raising money again. People now throw money at me. I have more money than I have deal flow. Back in the day, I had more deals than money. Last little hack, by the way, what I did for me personally while I was trying to get credibility, I started building a credibility book. That credibility book had my wholesale deals in it, but let's say, I want to do deals in 85018, the zip code in Phoenix, Arizona, that's the hottest zip code. I'm like, "I want to do deals in 85018." I'm going to go onto the MLS, I'm going to find deals that have recently sold that are fully renovated. I'm going to print out that MLS listing and I'm going to go into the tax records and research what it was purchased for. It was purchased for 500 and it sold for 1.3, fully renovated. I'm going to start to build a little case study. Even if it wasn't my deal, I'm going to be able to show examples, "Look, this is where I'm marketing. These are the types of deals that I want to do. When I find one, I need a firm yes or a firm no from you." So even though they weren't my deals, they were example deals and that helped me sell the vision of what I was trying to do. The last hack I'll give you is leverage your mentor's credibility. I leveraged Lyle's credibility because I didn't have any. My mentor has done hundreds and hundreds of deals. My mentor is a real estate millionaire, my mentor is involved in this deal with me. "Okay. Well, if Lyle's is involved, I'll do it." Until I got my own creditability and my own brag book finalized, that's what I did.

Deidre Woollard: I love it. That's so great. Respecting people's money is crucial. Well, that's a great place to take a short break.

Deidre Woollard: All right. I am back with Cody Sperber of Clever Investor and we're talking real estate, we're talking brand building, empire building. I saw you sold a luxury property early last year. What is happening in Phoenix right now?

Cody Sperber: Super low inventory, outrageous demand. Lot of people from California are moving over here. It is the hottest market in the United States and the luxury market, believe it or not, is booming because there is just no inventory. I think we have less than a month's worth of inventory on the market right now. Very low active listings. Properties are selling before they're finished being built or remodeled. There are crazy stuff going on. Every offer we have on one of our completed rehabs has appraisal waivers, has multiple offers, no contingencies, earnest deposits go hard immediately, they're I'll pay a guaranteed 25,000 above list. It's nuts. I haven't seen it like this since 2005, '06, and '07, which probably isn't a good thing.

Deidre Woollard: [LAUGHTER] But yeah, makes me a little worried when you say that.

Cody Sperber: [LAUGHTER] Yeah. But I don't think it's going to fall off a cliff like it did. I just don't see that happening. None of us have a crystal ball, but the foundation is different. It's not the same over-leveraged people that couldn't afford a mortgage, but they did a no doc type of loan. There's a tremendous amount of equity trapped into the real estate right now, and it's just a supply and demand imbalance. We're building a lot of right now, my bread and butter focus is that not super high-end luxury, but that mid-range where I buy for 600,000, I tear the house down, I build between a 3,800 or a 4,200 square foot house and at the back end is anywhere between 1.3-1.6, maybe 1.7. That's the model that's just crushing right now. We have a couple of them going. We're bringing in about 400K when it's all said and done and those houses sell before they're done.

Deidre Woollard: Well, that's really interesting because it's a different world from doing your mid-market flip to doing a luxury flip, even if it's not at the highest end. I know sometimes you see in the media stories about luxury flips gone wrong and things like that. What things do you keep in mind when you're doing these types of renovations?

Cody Sperber: Well, we're licensed contractors. We own a development company and so we really focus on specific zip codes. For those types of deals, we're only playing in like two or three zip codes. They have less than one week days on market in most cases. Like I said, they fly off the shelf as soon as they're built. The neighborhood's a little bit older, built in the '50s and '60s. As you drive down the neighborhood, there's a beautiful new house, beautiful new house, ugly old house, ugly old house, beautiful new house, beautiful new house, ugly old. It's really over the last few years, a lot of developers have gone in and remodeled it. It's called Arcadia, if you guys want to look it up, but it's the border of Phoenix and Scottsdale, which are two very high demand areas for young families on the come up. We have an in-house designer, we have architect we worked with, and it's really just more about finding the right house at the right price. Everybody wants to try and sell your property at 800, 900,000. We really need to be around the 600-700 at the max by price in order to make it work. My guys are out there door-knocking every single day. We're sending postcards every single day. We're texting and calling every single day, just trying to get out and meet those homeowners, and we offer them one of two things. We say, "Look, we can buy your property and just cash it out or we could do what's called a price lift, which is basically you donate the house, we'll build it or renovate it or build the house depending on what we're going to do with it," and it's almost like a partnership program with the homeowner. We've been pretty successful with getting people to buy into that. Now that Green Elephant Development has done dozens of these, we have a great brag book that we show up with and just say, "Hey, look, this is our development company and this is what we can do, this is what the end product looks like. Do you want to partner or do you want to sell?" That's our pitch to the seller. We're vendors, so we went upstream to get better pricing on flooring, on cabinetry, on stone. Whenever you're building, it's all about saving money on the materials. That's the biggest thing that's ballooning out of control right now. Price of lumber has skyrocketed. Everything's just out of control. We asked ourselves a question one day like, who provides the materials to Home Depot? I can go to Home Depot and buy or I can go to the people that supply to Home Depot. We started moving up the stream and became vendors for a couple of different companies and while it costs us a little bit to get some of the stuff because we buy in bulk, we use it in a lot of our properties because as we started to scale, we can use the same fans, we can use the same cabinetry, we can use the same doors and hardware and stuff like that, which brings the costs down.

Deidre Woollard: Right, you've developed a template for success of what the end user, the buyer, is going to be looking for too, I'm sure.

Cody Sperber: The in-house designer keeps us on point. That really was a big investment for us, but it paid off because now us, as builders and developers, we're not out picking tile colors and [LAUGHTER] flooring and trying to match everything. We allow the designers to do the design work and we're more focused on just the building process.

Deidre Woollard: Well, it's interesting to me too, because do you feel that you're in competition with some of the iBuyers out there? I know Zillow and Opendoor have been big in Phoenix. Is that something that worries you? That they are just the people are just going to take that quick money?

Cody Sperber: They definitely made a dent and actually shifted the way we do business. There are certain criteria that the iBuyers will buy and certain ones that they won't. If you're worried about the competition, just research what they do and don't, and do what they don't. That's one strategy and that's what we started. Honestly, we're at a point now where we're one of the larger wholesale operations in the valley, we're also one of the larger developers in the valley. At any one point in time, we got between 10 and 20 rehabs going and we're spec building all these luxury houses. So we have become an iBuyer from the aspect of there's companies like HomeLight that come to us and we buy leads off a home, we're one of their largest iBuyers. We sell to the iBuyers. We source so many deals that when we pass, we actually connect with our friends over at Offerpad or Opendoor, and we passed the deals onto them, and we're able to sell through the iBuyers. It is what it is. You can't stop it. You got to work with it. Now, my pitch is different than the iBuyers, and that's really as a marketer, I had to understand their model so I know how to present mine differently as an alternative, "Hey, you can go to the iBuyer and you can sell to them and they're going to take this approach or you can come with us and with me, I'm way more creative. I'm more way more flexible. They can give you a cash offer, they could buy your property, they can put a moving van out front and you're off down the road. I could take over your payments. I could put cash in your pocket immediately. We can work out a deal where you become my partner. I can give you cash." I show up and there's four or five options for the homeowner. They show up, there's one. I tell people all the time, "You'll never have a money problem in this business, you'll have a creativity problem." That's really what it comes down to. My mentor, Lyle, taught me to be a creative real estate investor. Wrap-around mortgages, subject-to, seller carrybacks, all-inclusive contract for deeds, lease option, sandwich lease options. When I show up, there's nothing the seller is going to tell me that I don't have a solution for. I have 10 tools, the iBuyer has one. I guess now it's just a game of who can get there first.

Deidre Woollard: That is a brilliant pivot. That is just fantastic. You've built this team now. You started off by yourself, as you explained in the beginning, and now you've got this big team. What do you look for in an employee? How do you find out who's going to be the right partner long-term?

Cody Sperber: I think it depends on the position. Most businesses know what they do, most know how they do it, most know why they do it. The thing that I focus on and as I scale high-performing teams and put them together and get them to really kick butt is the, "What's in it for the team member if they do it alongside with me?". I think that's the piece that I nerd out on the most because I can take an average person and put them in a position and they can light up and become superhuman if we're in alignment because alignment equals velocity, and if I can't get in alignment with the person, and I haven't taken the time to get to know their wants, their needs, their fears, their hopes, their dreams, all of that stuff, then we can't get an alignment and I'm never going to get the most out of them and vice versa. They are not going to ever feel like they're getting the most out of the company. That's where I spend the most, how do I take an entrepreneur, which most of us are, I'm the entrepreneur, I got this huge vision of where we're going. You are an entrepreneur, you've got a vision of where you're going. Can I fit your vision within mine? If I can get that alignment and I feel like you have heart and integrity, I can train you technically to do anything. I can make you a beast on the phones, I can make you great at the rehabbing process or the build process. You could become a great negotiator, all that is just technical skills. That's the easy part of the real estate business, I can't change whether you're a bad person, a hard worker, whether you have good intentions, whether you do the right thing, even when nobody else's looking. Those are all skills that you come to the table with, you either have or you don't. I found that you can take somebody that has lots of great things about them, put them in the wrong seat and they're going to fail miserably, they're going to suck and that relationship is never going to work. You can also just move them over to the right seat, get in alignment with them, they light up and you think, "How will I ever do it without them now? I have to have them in my world." I don't know if that answers your question, but people see me now with the millions of followers and I have over a hundred team members between my businesses and my brands and I would never in a million years be here, I'm not here because I'm this great entrepreneur that has everything figured out, I'm here because all these amazing people locked arms with me and helped me become the person that I am. I'm like the swan on the top of the water looking all majestic and they're down, they're paddling like maniacs. I'm just like, "Oh, thank God, I have this amazing team of people supporting me and this vision that we have together." It really is changing all of our lives. There's so much money in the real estate business, we're all sharing in it. My favorite part is that I went from being a broke bookkeeper, going down that path to becoming this person that's in this power position to change lives generationally for all of us. It's the greatest feeling in the world.

Deidre Woollard: That's just brilliant, I love it. One last question for you. I noticed that you had a book on crypto way back in 2018, so congratulations on being ahead of the curve. Now, we've got Bitcoin all over the place, we've got NFTs, we keep hearing about how Blockchain is going to change its title, what are you thinking about all of that right now?

Cody Sperber: Buy more crypto, well, buy more Bitcoin [LAUGHTER] , that's what I think about that. Look, I think a certain amount of your money needs to be very conservative. I think some of your investments need to be a swing for the fence. Go for it. Bitcoin is one of those things that in my opinion, because of its scarcity and because of the youthful energy that's around it, I think that it's going to continue to grow. It's one of those things that would I put my life savings into it and just pray? No. But would I put a portion of my money into it and do a swing for the fence type of thing? I think it's going to go up considerably personally. I think the more the government just prints money and devalues our dollar, more people are going to look for alternatives like cryptocurrency and Bitcoin. It's fun, it's new, it's cool. What else do you have to say? It's weird. Go for it. Now, NFTs and all that stuff, I have a little bit of a different feeling. I have a bunch of artist brands that are stopping painting and stopping doing art and shifting to NFTs and I'm just like, "Wow, that's wild." To wrap your head around that freaks me out because our whole world is going to get digitized. Where does it end? I don't know. It gives me heartburn. But I will say I jumped on BitClout recently. You've heard of BitClout? On BitClout, the idea of tokenizing your clout and allowing you, personally, to have your own coin is a really cool concept. I am a big fan of BitClout. If you're listening to this, go get your profile on BitClout. Grab your name, secure it now, whether you use it or not, just do it. There's a lot of big heavy hitters that are jumping in on the BitClout game and going to pump money into it, the same supporters that put money into Clubhouse. Clubhouse blew up, I have a feeling BitClout is next.

Deidre Woollard: Wow, that is really interesting. It's a fun place to end things. Cody, thanks so much for your time, this was awesome.[MUSIC] Reminder to listeners, you can learn more about Cody and his classes and everything he does at cleverinvestor.com and definitely follow him on Instagram and YouTube. Reminder, you can always email us at media@millionacres.com to share your thoughts and stay well and stay invested.

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