The Real Breakdown: Wholesaling, Fix & Flips, and Deal Risk

In Episode 4 of Coffee Break Real Estate, Adam puts Danny in the hot seat to break down how real estate investors actually make money.

We cover:

• What wholesaling is and how it works
 • How to decide between wholesaling and flipping
 • The real numbers behind fix and flips
 • Holding costs that can kill a deal
 • When it makes sense to hold a property as a rental
 • The risks and lessons that come with doing deals

This episode is designed for anyone curious about getting started in real estate without unrealistic promises or guru hype.

It is a straightforward conversation about how deals work in the real world.

Stay tuned for Part 2 where we dive into rentals, land flipping, and creative financing strategies.

Intro and outro music provided by Mahami Music ‪https://www.youtube.com/@mahamimusic

Connect with the hosts:

Danny Benjamin
@dsbexplores
www.YourAgentDanny.com

Adam Youhanna
@adamyouhanna
www.MortgageAdvisorAdam.com

Coffee Break Real Estate
Hosted by Danny Benjamin, real estate agent and expert, and Adam Youhanna, mortgage advisor

Focused on all things real estate.

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Questions or topic requests welcome.

Transcript

Adam Youhanna (00:10)
Welcome, welcome, welcome. We're here with episode four with Coffee Break Real Estate. And today we're flipping the script a little bit. I'm going to be interviewing Danny. We're breaking down wholesaling, rehabbing, fixing, flipping, and buying rentals. And we're going to sprinkle in a little magic dust of how do you finance these deals. So Danny, I have Rolodex here full of questions. Are you ready for those?

Daniel Benjamin (00:33)
Let's do it. But first, what are you drinking?

Adam Youhanna (00:35)
I'm drinking my home, it's not homemade, but I got Duncan French vanilla here in my mug. If you guys can see it, says you miss a hundred percent of the shots you don't take. Most of you guys know that Wayne Gretzky said it, but actually Michael Scott said it from the office. So that's what I'm drinking. How about you?

Daniel Benjamin (00:53)
I'm boring. I just drink black coffee and that's what I'm drinking today. It's some stump town, but you know, my fiance does have a lot of mugs. So I've got this cool you can clay floral mug. So yeah.

Adam Youhanna (01:04)
That is nice. That seems like

something you drink like on a nice snowy day in front of the fireplace.

Daniel Benjamin (01:09)
It's definitely not snowy here, but

yeah. This is, yeah. Let's get kind of Hawaii too, you know?

Adam Youhanna (01:13)
Not in the right state.

It does with the flower stuff for sure. Nice. All right. Well, some of you are joining us now for the first time. So Danny and I usually when we talk about things, we kind of talk about it just to, you know, whoever's out there that's listening that's interested in probably purchasing a home, maybe selling their home, maybe investing in some properties. So we break down things, you know, without the heavy jargon.

Daniel Benjamin (01:17)
Yeah, so.

Adam Youhanna (01:37)
⁓ something for everybody to kind of understand and help educate people. So that way when you do kind of jump into the water, you're going to have some confidence with it. the first segment we're going to jump into is literally wholesaling. Okay. And I'm going to be interviewing Danny and these are questions that I actually have myself. So it's, I know it's going to be typical questions. We're going to start off easy.

and then kind of build up off of them. And we're going to go over two questions that people requested for Danny to answer. So Danny, let's start with first question. What is wholesaling?

Daniel Benjamin (02:09)
Yeah. So, ⁓ wholesaling is essentially it's a marketing business. but wholesaling is when you get a property under contract and instead of buying the property, assign your right to buy it to an end buyer. so the, you know, the business model is you source deals normally direct from a seller or agents, but you source a deal and then you get it under contract. And then instead of.

buying the property yourself, actually assign it to an end buyer and you kind of keep a fee, which is normally the difference of whatever you got it for from the seller and then how much you sold it to for that buyer. So like I said, it's you know, it's, it's, it's real estate because you're dealing with real estate, but the core of a wholesaling business is really marketing. Cause you're spending money or time marketing to find properties and then you're spending money or time to

marketing to sell properties as well. And that's kind of where I got ⁓ my start in the real estate game. So a lot of people don't know that, but you know, I just became an agent recently, but for the past five years I've been doing real estate deals and wholesaling was my first, you know, my first step into real estate.

Adam Youhanna (03:05)
Okay.

Okay, so I mean, well let's back up then. So give us a little breakdown. Take us back to the beginning, like of when you started. So you said wholesaling was the first thing you got into?

Daniel Benjamin (03:30)
Yeah, I guess sourcing deals is the first thing I got into and you know, my first few exits were assigning those deals instead of taking them down, you know, because I wasn't experienced. I didn't have, you know, a ton of capital. didn't know about hard money loans, blah, blah, blah. You know, there's a lot to it. So instead of buying those deals that I sourced myself, I assigned them and, you know, I partnered up with our friend John and we've done hundreds of deals. ⁓

you wholesaling and assigning and flipping and, but yeah, that's, that's how got my start was, was actually assigning deals and keeping, keeping a spread essentially.

Adam Youhanna (04:04)
Okay, so take

us through like a timeline of, you you start in wholesaling and just kind of tell us how you got into it. How did that lead for you to go into like fixing flips and owning rental properties and notes and stuff like that?

Daniel Benjamin (04:19)
Yeah, so, so yeah, I started in, let's see here. We started talking about wholesaling in 2020. Actually, John, my business partner, he got a job with a local wholesaler in Phoenix and, you know, real estate was kind of always this, not elusive, but this thing that you wanted to get into, right? We've always talked about, I want to get into real estate. I want to buy real estate. But it was, kind of seemed like you couldn't do it. Like you need money to do it, right?

But then once he got that job with that wholesaler was kind of like I remember the phone call he called me and our Buddy Osh and he's like hey you guys got to come over because we used to always kind of meet up and talk business and John and I have owned a ton of business together we've owned hookah lounges and supplement stores and bought and sold stuff on eBay and Amazon there's a lot of a lot of different things we've done and But yeah, John called us over and said hey you guys got to come come over and see what these guys are doing and we were like wait What you know like

Adam Youhanna (04:56)
Mm-hmm.

Daniel Benjamin (05:11)
How are they doing that? Like, why would anyone want to do that? Why, you know, how are they not even buying the property and making money on it? And then we started doing, going to YouTube University, you know, I started watching a ton of YouTube and yeah, exactly. So watching YouTube, starting following people on Instagram and then realizing like, this is a big thing. And it's not super hard to jump into. It's actually...

Adam Youhanna (05:18)
Mm-hmm.

The best.

Daniel Benjamin (05:34)
probably the easiest thing to jump into, especially when you're first getting started, least risky, least amount of capital needed, stuff like that. So we just kind of masterminded for a while, you know, like few months. And then at some point we all decided like, Hey, we need to, we need to jump in and then do this. So I think I had sent, did SMS marketing at first, then I sent my first text message and I built a CRM and sent my first text message out at the end of 2020 and got my first deal.

John and I got it together actually on that one and got it in I think January. So it was pretty quick.

Adam Youhanna (06:05)
Okay, so just for the listeners out there, so SMS is actually a text messaging and CRM is your client or customer relationship manager. So it's like a platform where it helps you stay organized for your daily tasks and keeping up with your clients and in Danny's case, you know, certain properties and stuff like that. Okay. So then after that, keep going.

Daniel Benjamin (06:08)
Mm-hmm.

Yeah.

Yep. But yeah,

Yeah, so, you know, 2021 was, you know, obviously a very crazy market. We had a lot of wind in our back and we were locking up a lot of deals like there was a lot going on. We, you know, we started. So when you're when you're wholesaling, you're sourcing deals, right? And what I like is you find the deal and then you can kind of figure out what you want to do with it. So a lot of people just stick with wholesaling. But when I was getting these deals, I was like, hey,

Adam Youhanna (06:28)
Ahem.

Daniel Benjamin (06:49)
You know, and all three of us were still kind of mastermind. He was like, Hey, what else could we be doing with these? Like, you know, we're selling these to flippers and on some of them, you don't want it. So we just kept assigning them, but, some, some of them were like, Hey, I, like, I want to flip this thing. So, you know, I joined a program with Zach keeps, he's a local, ⁓ a really big flipper and, and, landlord in Arizona. ⁓ and he does really well. Yeah. And, he taught me a ton. Yep.

Adam Youhanna (07:10)
He does really well. I watched one of your podcasts with him. Yeah.

Daniel Benjamin (07:15)
Yeah, so I joined his program

Adam Youhanna (07:16)
Yeah, he seems awesome.

Daniel Benjamin (07:18)
to learn flipping and then so you know, didn't really become a like full-time flipper or anything. But what I was doing was, you know, as I was getting properties, if I wanted to flip them, I would, I would just flip them myself and instead of assigning them, but the whole time I was still wholesaling, like that was still an exit just because, you know, we were doing other markets. So, you know, I wasn't going to flip a house in Florida. We were just assigned that, but

Definitely got into flipping and did did a decent amount of those and then also like kept some houses because then you you know, you would come across a deal and you would say hey, this is cheap enough where I could potentially, you know rent it out and then refinance it and keep it and I did keep you know, I think it was like four or five not not too many I didn't do too many rentals and I eventually sold them down the road, but yeah through 2021 was

wholesaling, flipping and keeping rentals. And then 2022 is kind of when things started slowing down, the market took a hit with the interest rate hikes and holes, you know, like things just slowed down on the investment side a lot. So we weren't getting as many deals. Still still wholesale now, still, you know, still flipping when we could. And then in 2023, I think was the big pivot when John and I got into flipping land.

Adam Youhanna (08:21)
Okay.

Daniel Benjamin (08:34)
where we would buy and sell parcels. Um, and I'm sure we'll talk more about that. Uh, but yeah. Um, yep. Uh, that was the big pivot for sure. Um, and then kind of exclusively did that for a couple of years until John and I decided to kind of part ways on day to day stuff. And, um, you know, started, uh, you know, revamping what I was doing. And that's kind of when I decided to get my license and then get back into flipping.

Adam Youhanna (08:34)
Yeah.

Yeah, got questions on those.

Daniel Benjamin (09:00)
houses. And yeah, that's kind where we're at today. Yeah. ⁓

Adam Youhanna (09:03)
Okay, so you did

wholesaling and then fix and flips and rentals, but those were kind of all intermingling with one another, right? So if you saw something that you can make quick money on that was worth it, you would flip it. And then if you saw something that you can make a nice cash flow on monthly, then you would keep it as a rental.

Daniel Benjamin (09:13)
Exactly.

Exactly,

Adam Youhanna (09:23)
Okay, all right, cool. All right, sweet. let's break it down for like each type, know? So wholesaling, you explained it to us what that is. So is it hard to get wholesaling deals? Like I know you said you market them, right? Like without going into too much detail on how to market them, like tell me how you're able to get them by like...

communications with the listing agent.

Daniel Benjamin (09:49)
Yeah. it's, mean, getting the deals, is it hard? would say it is hard. It's, simple, but it's hard. It takes work for sure. But the, the, the process is simple. The concept is simple, but you have a lot of competition and ⁓ you have to do a lot of sales really. You're, you know, convincing people to sell you their house. There's a multitude of ways. I don't want to get too deep into it, but there's

Adam Youhanna (09:57)
Simple but difficult.

Mm-hmm.

Daniel Benjamin (10:14)
You could go do direct to seller marketing, is what the majority of people do where they reach out to sellers. find the main thing you're trying to find is distress, right? if someone doesn't have distress, like their house is in good condition, it's kept up really well and they just want to sell it. Like that's going to go to an agent and go on market. Right. So you're trying to find a house that's messed up, a situation that's messed up like probate.

or divorce where someone wants to sell their house really quickly and throwing it on the market isn't feasible or they just don't want to do it. So that's kind of where buying it off market is, that's where it comes into play. But yeah, you could do, like you said, listing agents. So I did a lot of marketing to agents asking them for deals like these. And then that's where I was getting my deals.

So there's direct to seller, there's from agents. You could get deals from other wholesalers. But is it hard? Yes, it takes a lot of work, but I would say it's not hard from like, it's a very simple thing to do.

Adam Youhanna (11:11)
Okay, so...

Just to unpack, right?

When I started thinking about homes that would be in distress in Illinois, Illinois is now number one for property taxes. So I'm thinking tax liens, people struggling to pay their tax, property taxes, that's a big issue here. I know in Arizona, it's very cheap to the rest of the country. I think you guys have in Arizona or maybe even Phoenix is the fifth largest city, but they have like,

the fifth lowest property taxes, which is amazing. so do you see like when you're talking about distressed properties, is it mostly, you know, people that are getting a divorce? Is it maybe foundation messing up or is there something where maybe their credit's bad and they can't take equity out of the home and maybe they just want to, you know, unload it? What do you see in your experience that's like sticks out like the most out of the distressed homes?

Daniel Benjamin (11:39)
Yeah, it's really low.

All the above, really.

⁓ man. All of it really. you know, the big ones are going to be. So taxes, like you said, are cheap in Arizona. However, if someone's behind, that's an indicator of some distress. So it's that foreclosure is a big one. So, you know, pre foreclosures, what we call it, where once the bank sets an auction date, we you can try going after those homes and getting it before it goes to auction.

directly from the seller. used to do that. But you know, like, like it's, don't know which one sticks out the most. I don't have the data for like, which one is the most, but there's, like I said, the, two big distinguishing things are like property distress or situation distress, right? Like, like I know people that pull lists from pro or probate lists to find out who might be trying to sell because they had a death in the family and need to sell.

Adam Youhanna (12:35)
Okay.

Okay.

Daniel Benjamin (12:51)
There's other people that work with divorce attorneys to try to get deals from people that are looking to sell their house because of divorce. There's people that drive around and will look at houses. And if you see like overgrown weeds or a house that's just like in shambles, like it just needs repair. They call that driving for dollars. You're you're literally driving around trying to find a house that needs repair because more than likely that seller or the owner is not.

Adam Youhanna (13:03)
Mm-hmm.

Daniel Benjamin (13:18)
maintaining it because they can't. if you can buy it from them, then that might be their best option. So that's another thing to look for. But there's a multitude. mean, there's a lot of, and people normally use those data points to pull lists to figure out who to target.

Adam Youhanna (13:35)
Let me ask you, do you guys, because I see signs all the time, a lot by highways, like little signs that they put in the ground that says, we'll buy your house for cash. that, is that wholesaling?

Daniel Benjamin (13:44)
That's it.

I mean, that's yeah, mostly it's buying a house off market. could be like a flipper that is going to actually buy the house themselves, but more than likely it's a wholesaler that's going to assign it. Even like we buy ugly homes and all those that they're They're also there. They're marketing to find off market properties that they can sell.

Adam Youhanna (13:47)
Okay.

Mm-hmm.

Yeah.

Okay, so can you quickly walk us through like a scenario where you're the wholesaler and how you kind of, how you make your money, right? Going from the time where you're agreeing on a price to buy it and be able to offload it to somebody else and make a profit. Give me a scenario and if you can, use some numbers too.

Daniel Benjamin (14:22)
Yeah, so let's say you find a house that is worth $500,000 fixed up, right? So now what you that's the first number you normally try to find is what is it worth fixed up? So if a flipper buys this, what are they going to be able to sell it for? And then you do some ARV after repair value. Yep. And that none are you're good. And then you kind of do backwards math from that.

Adam Youhanna (14:38)
Is that the ARV? After repair. Okay, sorry to interrupt. ahead.

Daniel Benjamin (14:46)
So you decide, your best guesstimate on, what's the remodel gonna cost? Okay, cool, back that up. What are holding costs gonna cost? Which, you we could talk a little bit more about that, but those are costs that it costs to own the property while the flipper owns it. What are closing costs gonna cost? Remember, you have two different deals. You have to buy the property and sell it. You're gonna have two sets of closing costs there. What are commissions gonna cost? So, yeah.

Adam Youhanna (15:00)
Hmm.

⁓ okay.

Daniel Benjamin (15:11)
⁓ So what are commissions gonna cost? So then you pretty much do this backwards math on like hey, this is what the flipper is gonna have to pay This is what they're gonna sell it for So and then they're gonna want to make a profit So let's just say I'm just gonna use easy math But let's just say the flipper would want to buy the house for 400,000 So after repair values 500 the flipper wants to buy it for four and Then me as the wholesaler I have to make a little bit of money So what I do is now I offer a little bit less than that for

Adam Youhanna (15:36)
Mm-hmm.

Daniel Benjamin (15:38)
So I would offer, let's say, 390. And then me and the seller, let's say, come to a deal at 390. And I get in a contract for 390. And then I find that flipper for four. I assign it to him for four. I make that $10,000 difference.

Adam Youhanna (15:52)
And then, so do you have to pay closing costs?

Daniel Benjamin (15:54)
As a wholesale, wholesaler, no, but flipper. So that's, that's what no, you don't pay closing costs because you just make you're, not closing on it. You're, you're assigning your right to buy it. You're essentially replacing you as the buyer with this new flipper and you're making that difference. But you do need to know closing costs because the flipper is going to have to pay that. So you want to know that to put it into your calculation.

Adam Youhanna (15:57)
Flippers do, yeah, but if you're the wholesaler...

Yeah.

Okay.

Daniel Benjamin (16:18)
Because what you're trying to guesstimate is what the flipper is going to want to pay for it.

Adam Youhanna (16:18)
So for example... god.

Yeah. Okay, so let's say, are you as a wholesaler, are you coming up with that ARV, the after repair value, are you thinking that in your head? Okay, because then, so then do you reach out to people that you know that are flippers and be like, hey, I got this place for 400, all you need is 40K in it and you have an ARV at 500K. Is that how, yeah, okay.

Daniel Benjamin (16:23)
Does that make sense?

You have to, yeah.

Exactly. Yeah.

Adam Youhanna (16:48)
And then the flipper comes in and then they kind of confirm it based on their experience and stuff and be like, all right, cool. And then they end up taking over as the buyer from you.

Daniel Benjamin (16:58)
Yeah. Yeah. So you, the title, you, you, you assign it to them. ⁓ the title company takes it's an assignment contract. It's a separate contract between me and the flipper and the title company now sells it to that flipper. And the title company pays me the difference of what I contracted it for to what I sold it to him for.

Adam Youhanna (17:02)
Okay.

Okay?

Okay.

Now let me ask you a couple of questions just me thinking as a mortgage advisor. When you're coming up with that agreement with the listing agent, do you have to put earnest money down?

Daniel Benjamin (17:28)
Normally, yeah. But remember, a lot of wholesale deals aren't done with a listing agent. A lot of wholesale deals are done direct to the seller.

Adam Youhanna (17:30)
Okay.

Okay, so do you do any that like through a listing agent too or no?

Daniel Benjamin (17:36)
Yeah, and.

I have yeah and those you you normally need more of a earnest money deposit because the agents can require that but yeah I know wholesalers that don't do earnest money I've come across some I don't like that because it's not it doesn't really like bind your contract as well so even if it's a hundred bucks and that's what a lot of people do with direct-to-seller deals is a hundred dollar earnest ⁓ that's yeah you do it yeah if you're direct-to-seller I mean because earnest can be anything you know ⁓

Adam Youhanna (17:44)
Mm-hmm.

That's it.

Yeah.

Daniel Benjamin (18:07)
It's just when you're dealing with an agent, then now you have to deal with more standards, which are normally like 1%. But yeah, it's yeah. So I do do earnest money. However, you take an earnest money from the the flipper as well. So they put an earnest as well. That's usually more than what you have in there as earnest. So it covers you and there's there's usually non-refundable. But you know, I don't want to get into like too many details, but yeah.

Adam Youhanna (18:11)
Yeah.

okay.

Okay, that's good to know.

Yeah.

So let me ask you, so let's say there is a realtor that's listing it. How would you know to approach that realtor? Like, do you see like, this has been on the market for a long time, or do you just pay attention to the condition of the property? How does that go? How do you approach a specific home that's already listed with an agent?

Daniel Benjamin (18:39)
Yes.

That's a great question. ⁓ So I never really did on market stuff, but so there's two ways of approaching an agent. There's reaching out to agents, which is what I did, where you're proactively reaching out and asking them if they have off market listings. Because a lot of times agents will get listings, these distressed listings, an agent will get it, but the agent doesn't want to put it on the MLS or the seller doesn't want to put on the MLS. So

Adam Youhanna (19:16)
⁓

Daniel Benjamin (19:17)
an agent will have a group of investors or wholesalers that they work with that they send these deals out to. There are people that do on market listings for, for, you know, and wholesale them. Normally with those, I don't know what people do exactly, but yeah, you want to find stuff that's either priced really well, has been on the market a really long time, or maybe just hit the market today and you scoop it up really fast, you know? ⁓

Adam Youhanna (19:41)
Hmm.

Daniel Benjamin (19:43)
But I'm not too versed in that, but that's a great question because there is, like I said, two ways.

Adam Youhanna (19:47)
Okay, so it seems like, so you gave us a scenario where you're making 10,000. Is that average or is that less than average? Tell me, what's the profit margin that you expected to make back when the market was hot, 2020, 2021, part of 2022 versus today if you were wholesaling?

Daniel Benjamin (19:58)
⁓ I would say...

think today like national average is about 12 ish on an assignment fee is what I heard last 12,000. Yeah. Um, I will say back in like 2021, I mean, there was, it was, yes, we were making a lot more than that. Um, I mean, you know, we, we wanted to shoot for 15, but there was times where, mean, yeah, we were doing 30, 40. I mean, we had a couple like a thousand dollar assignments and stuff. Yeah. Yeah. So, so maybe, yeah.

Adam Youhanna (20:15)
12,000? Okay.

Wow.

Daniel Benjamin (20:37)
And that's still doable, back then it was just a lot. Yeah, was a little... For sure. I don't know our average, ⁓ but I would say it was closer to like 30-ish. Maybe 20 to 30, I'd say, if I had to guess.

Adam Youhanna (20:40)
a lot more common back then.

Okay.

Yeah, so of course, you know, when we're talking about anything here, real estate or whatever it may be, you know, we're gonna look at it from all angles, right? So we're looking at some positive ways that you could make money on it. Talk to me about some risks, because what I think right away is, what if you can't find a flipper that wants the property? So tell me some risks on wholesaling.

Daniel Benjamin (21:15)
So wholesaling I would say is a lot less risky because you do have an inspection period and you do normally have contingencies in your contract that let you get out if you can't find a buyer. ⁓ Not ideal and most of the time I wouldn't, you know, we've found buyers for most of our deals but you know, the off chance you don't, usually it was something drastically different like the seller didn't tell you the result.

Adam Youhanna (21:27)
Hmm.

Daniel Benjamin (21:40)
hole in the roof or something crazy, ⁓ But yeah, it's less risky because of that, because there are contingencies. Wholesaling can be an expensive business. know, lot of people don't, and everyone thinks it's like really cheap and it can be. I mean, if you're pounding the phones yourself and, or knocking doors yourself, that's different. But if you're running a legit wholesale operation, I mean, you're spending a lot of money every month on marketing and

Adam Youhanna (21:42)
Okay.

Daniel Benjamin (22:05)
people and there's a lot of systems and processes that go with it. it's an expensive business to run. when deals dry up, can, you have usually a high monthly nut that you're, you're, you know, operating expenses that you're, dealing with.

Adam Youhanna (22:19)
So going back to say 2021, and I'm not expecting you to have exact numbers, but on wholesales, like, do you know how many total wholesale deals you completed or closed on in 2021, or maybe even how many averaged a month?

Daniel Benjamin (22:36)
I don't I could find out really fast actually I want to yeah, I'll let you know in a second

Adam Youhanna (22:40)
Alright.

Okay.

Daniel Benjamin (22:43)
Yeah, but 2021 I would say to all listeners, don't don't really go off of that.

Adam Youhanna (22:51)
No, I just want to know out of curiosity how much that market, how much you were able to take advantage of it and utilize the wholesale industry and be able to make money on it. Because you never know when we might hit that, you know, might hit that scenario again. I mean, not with the rates, but you know, we never know.

Daniel Benjamin (23:09)
Yeah. Let's see here.

there.

I did...

Yeah, 48 deals in 2021, wholesale. Uh-huh.

Adam Youhanna (23:16)
So four a month.

So if you did four a month and you average, what did you say? 15,000 you said?

Daniel Benjamin (23:22)
Well, let me see, now that I have it.

Adam Youhanna (23:24)
oooo

Daniel Benjamin (23:26)
Ooh, let me add all this up. Yeah, it was about 20,000 average. Maybe a little more.

Adam Youhanna (23:30)
Okay, so at that time you were making,

so you were bringing in revenue about 80,000 a month.

Good times, great times. So today, if you were wholesaling, how much do you think compared to 2021 that you would be able to close? Would it be like a half or a quarter?

Daniel Benjamin (23:37)
Three times, yeah.

I mean, you could, it depends, right? You could, you could quadruple that even. mean, it just depends on what you're doing and how good you are. You know, I feel like we were kind of picking up some like low hanging fruit. So it's a lot, it would be a lot harder to do it, to do those numbers by just doing that. But no, I know people that are still wholesaling and making a ton of money. So I don't think it would be apples for apples for me to say.

that like you could still also make more than that even you know it's just our business changed we changed but you know the market did change for sure it's it's harder to get those numbers but it's very doable if not more

Adam Youhanna (24:18)
Okay.

Okay, now let me ask you this. How much money do you need to start wholesaling?

Daniel Benjamin (24:29)
technically zero dollars. mean maybe not zero but pretty close. If you have a cell phone you could just start making calls. Yeah.

Adam Youhanna (24:36)
Okay, now

what would you say is the biggest risk in wholesaling?

Daniel Benjamin (24:39)
not much, just wasted time and potentially money.

Adam Youhanna (24:42)
Now, for example.

Daniel Benjamin (24:43)
And then there is

more laws coming out that either prohibit it or require more disclosure. Now Illinois is a state where there's always been a law there. You can only do one deal a year in Illinois. Or you can only assign one deal a year unless you're an agent.

Adam Youhanna (25:01)
Of ⁓ Illinois is going to hinder you from making money. ⁓

Daniel Benjamin (25:01)
So, yeah.

Yeah, but there's a lot of there's

a lot of other states that that have similar laws or some that have kind of outlawed it completely or, you know, but there's ways around it.

Adam Youhanna (25:15)
So what's most likely way somebody would lose money in wholesaling?

Daniel Benjamin (25:21)
The only time I've lost money in wholesaling was losing earnest money. And that was like a lesson learned where we missed the inspection period by one day. So we just changed our process and yeah, we lost like three or four grand, something like that. yeah, that'd be the biggest way. And then also like, like I said, you have monthly expenses and if you can't convert then, but that's any, that's any business.

Adam Youhanna (25:25)
Okay.

Hmm.

Okay.

Sure.

That's any business. Yeah, that's just, that's literally the cost of doing business. All right. Two more questions on wholesaling and we'll go to the next thing. Is wholesaling ethical?

Daniel Benjamin (25:46)
Exactly.

I would say yes. So a lot of people from the outside look at wholesaling and say, you're taking advantage of people and this is not right. ⁓ But a lot of people don't see the full picture, right? A lot of sellers want to sell to a wholesaler. They want the easy button, right? They don't want to list a property. They don't want showings. They don't want to deal with an agent. So a lot of times people want this. Now, are there unethical wholesalers?

thousand percent. mean, but there's unethical realtors, there's unethical people in every business. Yeah.

Adam Youhanna (26:20)
in any industry in the world there's

ethical unethical people so

Daniel Benjamin (26:24)
Yeah,

exactly. But wholesaling, I would say on its own is not unethical. Flippers don't want a lot of them, their core competency, their core business is flipping houses. They don't want to run a marketing business trying to find these deals. So, you know, wholesalers are almost a service to them because the wholesalers are doing all the work, finding the deals. And now the flipper can focus on what they're good at, which is buying it, buying a house and flipping it.

I've bought from wholesalers and flipped and it's great because I don't have to run a day to day operation where I'm looking for deals because most of the time you're doing a marketing for, you're casting a really wide net and you're only converting on a very small piece of them. So it's not super easy. I think it is ethical, I would say so yes, because wholesalers do a lot. There's a lot of work that goes into it.

Adam Youhanna (27:04)
Yeah.

Okay.

Daniel Benjamin (27:12)
Now, like I said, are there unethical ones? Of course, but as a whole, I'd say no.

Adam Youhanna (27:15)
Okay.

So what's something, cause you know, social media, Instagram, you know, they always hype up everything, right? These, you know, Instagram models and people going on, yeah, going on, you know, private jets and stuff like that. What's something social media doesn't tell people about wholesaling, like the truth behind it.

Daniel Benjamin (27:23)
Yep.

Highlight reel

I think the biggest is probably just what I said right now where it's not, they make it seem easier than it is. But I think a lot of those Instagram type of people with their coaching programs will do that with any industry too. But yes, they make it seem like, this is all you have to do, which I said at the beginning, it's simple and they're right. It's all you have to do, but doing that is harder than it seems, you So yeah.

Adam Youhanna (27:43)
Okay.

Yeah, okay. So

just on a couple of notes that I took, right? So based on wholesaling, know, it seems like wholesaling could be lucrative. You know, again, it's that term, you eat what you kill. The harder you work, the more you do, the more fruitful you're gonna be, the better you're gonna be, and the more you can earn. As far as, for example, you know, what I took from this is like, why would somebody, like a seller, want to, you know,

Daniel Benjamin (28:12)
Yep.

Adam Youhanna (28:25)
want to do this and you explained it. said, okay, it's quicker, it's the convenience. Maybe they don't want people in their home. Maybe they have kids that they're sick or something that they don't want to list it and get all this attention. They want to put it with a wholesaler. Maybe they're in a distress situation they want to get out of and then that comes into hand with speed. And then there's that certainty where you're coming in and you're like, hey, I'm buying this.

And then you get somebody to come and take it over and flip it. Does that seem like the whole gist of it? Okay.

Daniel Benjamin (28:55)
Yeah. Yeah.

I mean, on average we were closing, you know, from when we got it under contract to the flipper buying it, it was less than two weeks. So, you know, that like just that in itself is like that convenience factor we're talking about.

Adam Youhanna (29:03)
Beautiful.

Okay, so just so the audience knows, these questions are pretty much off the fly, right? These are just curiosity questions. So because you just said that, you usually get a flipper in two weeks, have you had scenarios where it was hard to find a flipper? And have you had scenarios where there were multiple flippers trying to get that property that you were wholesaling?

Daniel Benjamin (29:13)
Yeah.

⁓ big time. I mean, yeah, there's both for sure. mean, like I said, there's some where we to, you we canceled because we couldn't find anyone. ⁓ And that could be like most of time, like I said, it was something where we didn't know was actually happening with the house or, yeah, there's no disclosures on stuff like this and no inspection periods, ⁓ you know, or like, you know, no like traditional inspections. it's, it's, ⁓ yeah, usually it's something we didn't know.

Adam Youhanna (29:30)
both.

Okay.

Disclosure. Okay.

Daniel Benjamin (29:53)
we were doing most things virtually so we wouldn't always walk properties so sometimes the sellers weren't truthful or yeah you missed things or sometimes you miscalculate you didn't realize like hey I comped this thing incorrectly my ARV was wrong or my rehab estimate was wrong stuff like that but ⁓ on the other end of that yes we've had a lot of properties where they were just people were itching to get it yeah

Adam Youhanna (29:57)
Yeah, you miss things.

Sure.

And did you

guys kind of do it like how it is in the market today? Highest and best?

Daniel Benjamin (30:21)
Not usually,

I mean if someone gave me good off road, just sell it. Especially if it's someone I've dealt with and you know, yeah.

Adam Youhanna (30:24)
You wouldn't just be like.

Okay.

All right, sweet. All right. So now, you know, it seems like you don't need a lot of capital to be able to do wholesaling, but when you move past that wholesaling, you know, that's where the money starts getting involved, right? Okay. So talk to me about, you know, rehabbing or as they call it a fix and flip, right? So now

Daniel Benjamin (30:43)
Yep.

Adam Youhanna (30:51)
If you're fixing and flipping, you could potentially be the wholesaler and then keep that yourself and then do the rehab and flip it, correct?

Daniel Benjamin (31:01)
Technically, mean, at that point, you're not a wholesaler, but yeah, you know, like, I think you're still buying it off market and you're going direct. So you're getting a really good deal because normally if you're flipping and buying off a wholesaler, you're paying the wholesaler's fee. But yes, if I find it off market myself and then, and then flip it myself, I'm kind of deepening my spread because I'm able to keep, or do it myself.

Adam Youhanna (31:09)
Yeah. Yeah.

Yeah.

Okay.

So by deepening your spread, you mean like increasing like your profit margin?

Daniel Benjamin (31:31)
Yes, exactly. Yep.

Adam Youhanna (31:32)
Okay, so let's

say

Have you had a scenario where you couldn't find a flipper when you were wholesaling and you decided to just take on the project yourself?

Daniel Benjamin (31:41)
Yeah. So yes, yes. So sometimes you look at it up front and you're like, I just want to flip this thing. Like this would be a good flip. I can flip it. I can do it. This is what I want to do. And we've done that. But there was one that I could think of off the top of my head where a lot of flippers try to stay away from certain types of things. And a lot of them stay away from mobile homes, especially if they're built before 1976. Cause as you know, they're not financeable.

Adam Youhanna (31:42)
Did it work out?

1976 I

think it's June 15th or July 15th 1976. Go ahead

Daniel Benjamin (32:11)
Yeah. Yeah. And

then, uh, and then there's, uh, 55 plus, we have a lot of those communities in Arizona. People stay away from those condos town homes. There's busy streets. There's like a multitude of things where, some flippers just don't want to deal with them. We had one 55 plus mobile home built before 1976 where

Adam Youhanna (32:18)
Okay.

Okay.

So you hit all,

you checked all the unwanted boxes with this one. What happened?

Daniel Benjamin (32:35)
Yeah, yeah.

And we were like, John and I, was, when I was partnered up with John, we were looking at it. We're like, this is a deal. Like, this is a deal. you know, like it's 55 plus. So even though it's built before 76, a lot of 55 plus buyers are cash. So that won't be a problem. We knew it was a deal, right? We blasted it out, meaning we sent it out to a bunch of flippers. Nobody wanted it. And

Adam Youhanna (32:51)
Mm-hmm.

Daniel Benjamin (33:00)
you normally we'd walk away from that, we're like, nah, like we're going to risk this and not financeable usually means a hard money lender won't finance it either. So that was when we went in all cash and we ended up making like, I think it was like a hundred grand. We flipped it ourselves and made it. Yeah. So yeah, that was a situation where we couldn't wholesale it. We flipped it, obviously took on a lot of risks, right? We bought it full cash and you know, dumped a ton of money into it. Yep.

Adam Youhanna (33:08)
Yeah.

Wow.

Yeah.

High risk, high reward.

I think I remember this one. Was it a three-bedroom mobile home? I remember you posted it.

Daniel Benjamin (33:25)
So that... Yeah. Yeah. ⁓ no, no, no, no,

it was too better.

Or was it three? No, it was a lot. Yeah. Yeah, yeah, yeah. We did a full, full remodel on it and it came out really nice and the buyer, we sold it really quickly, you know. So. Yeah.

Adam Youhanna (33:32)
Did it need a lot of work in it? I think I remember you were posting about it on Instagram a while ago. Okay.

Alright, cool.

I mean these are going to be common questions you're going to get from people, okay? Like, how much money do you need, realistically, to flip a house?

Daniel Benjamin (33:54)
Man, that's a lot. I there are ways. It's a hard question. need, need. Ideally, or I would say not ideally, but in most situations, a hard money lender is going to want 10 % down. And then normally you have to pay for the rehabs. There are hard money lenders that will pay for the rehab. However, there are ways of doing a flip with none of your own money. If you're good at raising capital, you know, raise private money.

Adam Youhanna (33:55)
It's a hard question to answer, right?

Daniel Benjamin (34:17)
friends and family, like you could definitely get into a flip with zero dollars. Not common, but you could get into a flip for zero dollars. I've never done it, but you can.

Adam Youhanna (34:26)
Okay, so I mean, this is gonna be a topic that we're gonna do a whole episode on, OPM, other people's money. But really quick, when you're using other people's money, right, and let's say you fix it, you flip the home, do you give them their money back plus how much, right? I mean, they gotta be doing it for something, right?

Daniel Benjamin (34:31)
Yeah.

Yeah, and it depends. There's a couple ways to structure it. You either do like straight interest. Most hard money lenders are straight interest. So it's, you know, 12 % interest for however long you own the home or 12%. And if you're raising capital, I mean, it's however you structure it. you know, I've, I've raised private money where it was just interest, just like a hard money lender. I've raised money where they wanted a percentage of the deal.

Adam Youhanna (34:50)
Mm-hmm.

But what if you're raising capital?

Daniel Benjamin (35:08)
So whatever profit we make, just give them an X percentage of it. And then sometimes there's a blend of that where they have a preferred return, which is some interest on their money, but then also a split of the profit. So there's different ways you could do it. Yeah. Yeah. Yeah.

Adam Youhanna (35:21)
Okay. All right. So there's different ways. That's good. That's good to know for future episodes.

So like I know from, you know, fix and flip kind of financing, you know, depending on your experience, right, you can do like 15 % down or even 20 % down. And then the hard money lender

will cover the other, you know, whatever, say 80 % of the loan, plus they'll cover the costs for repairs and renovations too. So that's good to know, or you could use other people's money raising capital. Have you ever done it where you got like, took out like a personal loan or did like a cash advance or balance transfer on a credit card? Is that common?

Daniel Benjamin (36:02)
I mean, people have done it for sure. No, don't, or what have I done? I did some mobile home deals where I bought land and put brand new mobile homes on them. And the, mobile home dealership took credit cards and we applied for a bunch of 0 % interest credit cards and put them on that. So yeah, I've done some, that the financing piece was great, but no, those deals weren't that great at the end of it. So.

Adam Youhanna (36:20)
Nice. That workout for you guys.

Okay.

Daniel Benjamin (36:27)
Couple

times have we've lost money.

Adam Youhanna (36:29)
Okay. So I mean, how does somebody get into it? Right? Like talk to somebody that wants to start doing this. Okay. Let's say they're, they're a contractor, you know, they own their own construction company or they're very handy. How do they get into something like this where to buy something, flip it and make money off of it.

Daniel Benjamin (36:49)
Obviously start doing a lot of research talk to other flippers go on YouTube Learn how to flip as far as the numbers go they might be a contractor and really good at the remodel but Flips have a lot of hidden costs Like I talked about earlier holding costs like a lot of people don't take that into account, but when you have a hard money loan You know your payment could be $2,000 a month on that hard money loan and then you have taxes and insurance and that could be you know

300 bucks a month and then you have utilities and that's another 200 bucks a month. So now you're paying $2,500 a month to own this home you're flipping. Now you have the time to renovate it. It could be two or three months and then the time to get it under contract and sell it. Normally you're in and out in six months, at 2,500 bucks a month, what is that? 15 grand in holding costs. So you've spent $15,000 just to own the home while you're renting it.

right or flipping it sorry so a lot of people don't account for that they just think hey this house is worth 500 I could put 40 grand into it if I buy it for 530 I can make 30 but it's not like that we talked about earlier there's closing costs when you buy the house you have to pay closing costs when you sell the house you have to pay closing costs when you sell the house you normally have to pay commissions even if you're licensed you still have to pay a buyer's agent or you know have to but you

Adam Youhanna (37:46)
Mm-hmm.

Yeah, that's a good point.

Daniel Benjamin (38:14)
usually will pay a buyer's agent commission. all that stuff, like you need to have a good calculator. You need to know all these things. And then the really the hardest part though, cause that stuff's easy to learn. The hardest part is sourcing the deal. And I still struggle with that sometimes. Like, you know, there's a lot of flippers out there and a lot of people that want deals. So finding them is tough. But I think just networking, you know, making offers, you know, figuring out what you want is

Adam Youhanna (38:15)
Yeah.

Okay.

Daniel Benjamin (38:38)
is huge.

Adam Youhanna (38:39)
So is that the biggest mistake you would say that people, like beginners make, is not accounting for the holding costs?

Daniel Benjamin (38:45)
Yeah, I mean just overall not accounting for holding costs I think underestimating renovations underestimating timelines Overestimating what the house is gonna be worth Because holding costs are yeah, I mean they're there but I mean if you a lot of people underestimate their innovations by a lot especially nowadays it's a lot more expensive now than it was a few years ago to to do renovations, so

Adam Youhanna (38:55)
Yeah.

Okay, now...

Let's say you're flipping something right now.

how would you determine whether you want to actually pursue flipping this home and take that cash and the income right away versus being like, hmm, maybe I should hold onto this, rent it out. And of course, you know, get out of your hard money loan into a typical investment loan. But what would make you decide to choose, like choosing between keeping it and continue flipping it?

Daniel Benjamin (39:35)
The main thing with rentals is how much money am I going to have to leave into it? And then what am I going to cash flow? And does it fit like everyone's got different boxes they want, right? Like, you know, some people want really nice houses only. Some people don't mind getting mobile homes as rental. So if as long as it fits like your criteria of what you want and then figuring out, like I said, how much money, how much cash am I going to have to leave into it?

Adam Youhanna (39:42)
Okay.

Daniel Benjamin (40:02)
and what am I going to make and is that worth it? Some people don't mind leaving cash into deals and cash flowing a little bit. Some people, you know, don't want to do that. So it just depends. But I would say those are the two big levers are cash flow and how much money are you giving up? How much cash are you giving up?

Adam Youhanna (40:19)
Okay, that's good to know. Is there like a certain percentage or ratio? Like, what do call it? Is it the cap rate? Or is it cash on cash return?

Daniel Benjamin (40:24)
Yeah.

like cash, I

mean, yeah, cash and cash return is usually like my, what I look at the most cap rate is, is good too, but cash on cash return. mean, I think 10 % is pretty solid. Yeah.

Adam Youhanna (40:37)
Okay, so just

for people that don't know what that is, what does cash on cash return mean?

Daniel Benjamin (40:42)
It's essentially like your return on investment. So if you give up X amount of cash, how much are you actually making on that? So 10 % would be just for easy numbers. Let's say you're spending $20,000 to buy a rental. You're using $20,000 to keep a rental. If you make $2,000 a year off that rental, then

after all fees and everything, whatever, your net is $2,000 a year, that's a 10 % cash in cash return. So essentially it'll take you 10 years to get your cash back.

Adam Youhanna (41:12)
Okay. All right.

Okay. Now is that a good timeframe for people to look at?

Daniel Benjamin (41:19)
10 % or 10 years. It depends on everyone's tolerance. mean, some people don't care because also there's a lot of other advantages to owning rentals, not just cash and cash returns. So some people, you know, there's appreciation. even that's kind of something to like, like I don't bake that into my calculator, but it's something to think about because the longer you're on the home, the more appreciation there is.

Adam Youhanna (41:21)
Yeah.

Okay.

Yeah.

Daniel Benjamin (41:42)
and

the value is going to go up. then also that $200, even though you're, or let's say you're making $2,000 a year, that includes also paying down your principal on your loan. You don't really account for that. And then if you're a real estate professional, now you have depreciation you can take against your taxes, but this is all like pretty in-depth stuff. But there's a lot of other, um, benefits, like I said, to owning real estate. So a lot of people don't just look at the cash on cash return, but I do.

Adam Youhanna (42:11)
So I'm the type of guy where if I buy a car, I like it to be fully loaded, right? So for example, my daily car I have is a Honda Accord. Now, Honda Accord is not a top of the line car, but I have the touring trim. So I like all the safety features.

and like all the features like the V6, bigger engine, stuff like that. That's me personally. Now, if you had my kind of personality, translate it to being a flipper. How do you avoid kind of like over improving a home? You know what I mean? Does that make sense?

Daniel Benjamin (42:48)
Absolutely that happens a lot too but I think you kind of have to like leave the emotion aside ⁓ and What you want and figure out what people want? So you have to look at the neighborhood. What type of neighborhood are you in when you're pulling your ARV? What type of remodel was done there? Was it a basic paint tile and normal cabinets, right or was it high-end so?

Adam Youhanna (42:54)
Okay.

Okay.

Mm-hmm.

Daniel Benjamin (43:10)
You really just have to know your market and know what people want. Talk to agents, figure out what people are wanting and figure out what is going to have actual return on your money. Because a lot of times you'll do stuff that looks nice and sometimes it's worth it but sometimes you're not really going to get any return on that. It could be something that you would want in a house but not everybody else.

Adam Youhanna (43:20)
Okay.

Yeah, like sometimes like, you know, people, you know, when you're flipping, I'm sure unless the windows need it, you're not going to change that out because it's not something that has a nice, you know, return of value or return on your investment. But like I've seen a lot of things that like, you know, changing the garage door, changing the front door, maybe kitchen and bathrooms are

Daniel Benjamin (43:42)
Yeah.

Adam Youhanna (43:51)
the biggest return on investment. Does that seem pretty accurate? Yeah.

Daniel Benjamin (43:54)
Yeah.

Yeah. mean, front door may have been garage door. not. It depends. It depends on the area you're in, right? Like, like windows, like you said, I mean, if I'm selling a $900,000 house, yeah, I'm going to do the windows because those buyers are going to want that. But if I'm selling a $400,000 house and probably not, you know, but yeah, I think like you said, kitchens, baths, flooring, paint, those are, you know, lighting a lot. There's a lot of small stuff you can do in that, you know, there's a thing we call the look for less.

Adam Youhanna (43:59)
Yeah, yeah.

Daniel Benjamin (44:22)
where you can get nicer, you can get doorknobs that are really nice, but you don't have to go get the brand name. You can get stuff that's a little cheaper that looks nice. It's gonna show really nice, but it's not top of the line.

Adam Youhanna (44:32)
Yeah.

Okay. Now sticking with this, you know, when you're flipping a home, of course, like let's say you have something that needs a ton of work. How do you manage like contractors or are you kind of contract being the, you know, GC, a general contractor yourself and getting somebody yourself to bring in for the plumbing, get somebody for electrical, get somebody for flooring? Like how do you manage that?

Daniel Benjamin (44:57)
Yeah, that's a great question. ⁓ So I'm not like a licensed GC, but yeah, you'd act like a project manager. So you got to know that that's kind of what I do. Some people, and depending on the project, if you're doing like a really big luxury build or something, you just hire a GC, right? Because you have enough room in there for it. But we just do like project management. So exactly what you said, like hire a guy for flooring, hire a guy for paint, do some of the work ourselves sometimes even. But most of the time it's that just

Adam Youhanna (45:14)
Mm-hmm.

Daniel Benjamin (45:24)
You know, and we have a list of people we work with. keep track of who was good, who wasn't. ⁓ and then you kind of have to know timelines, right? Like the order of operations, like when can this guy start? So it's all project management really.

Adam Youhanna (45:36)
Do you find that, I know you do that well, but is that something that you've always kind of been good at project managing or is that something that you had to learn?

Daniel Benjamin (45:43)
Definitely learn, but you know I'd say I was decent at it, but and I'm still getting better, but yeah you learn from mistakes you make you know.

Adam Youhanna (45:51)
Okay. So anytime, you know, I'm working with clients, right? And anytime people are going to go see a new construction home or something that's, you know, it's been flipped, right? So like in Chicago, a home is being bought three months later. It's on the market for 200,000 or 150,000 more than the person bought it for. And you know, it's, you know, it's somebody flipping.

I have had bad experiences with seeing them kind of cheap out, cut corners, and just try to save costs as much as possible and kind of, yeah, and like they kind of, what's the word I'm looking for? They kind of overcompensate by like, you know, making the home look good, like the main components look really good, but then.

Daniel Benjamin (46:26)
Very common.

Adam Youhanna (46:37)
when you like look deeper into it, like you start seeing a lot of imperfections that shouldn't have been there. So as a flipper yourself,

Tell me like what people that are buying a flipped home should look for when they're touring a home. A flipped home.

Daniel Benjamin (46:52)
Yeah, that's a great question.

Yeah, that's a great question. Because a lot of flippers do cut corners for sure. I've seen it. And sometimes you don't see stuff, know, because as a flipper, you don't take the whole house apart. you know, ⁓ but I have seen corners get cut and stuff like that. But, you know, you want to look for, like you said, like small imperfections, or maybe not small imperfections, but bigger things where it's like, hey, they didn't match this baseboard together like

Adam Youhanna (47:03)
Yeah.

Daniel Benjamin (47:17)
look for things that indicate hey this flipper is cheap right because because how you do one thing is how you do everything right so like if they didn't do something to a standard that you like there's chances that they probably cut corners on stuff you can't see either but then you know you want to look at hvacs ac and heat you want to look at plumbing and you do all that with an inspection a lot of that will come up but there's things you don't

Adam Youhanna (47:17)
Mm-hmm.

Yeah.

Daniel Benjamin (47:44)
see either even during an inspection. So you want to make sure that like I said like what was their quality of work right like did they take the time to make the baseboards look good with caulking around the edges or did they leave it you know like stuff like that to me is huge.

Adam Youhanna (47:59)
Mm-hmm.

Are you still actively flipping homes?

Daniel Benjamin (48:02)
Yeah, I'm still, me and my partner Paul, who's a really good friend of mine, flipped, shout out Paul. is, yeah. Him and I have been looking for flips. We've done one, it was a condo. We bought from a wholesaler and flipped it. And we keep looking, but it's not like our core business, so we're very picky on what we get, and I kinda like that.

Adam Youhanna (48:06)
Shout out Paul, he's getting married this week.

Daniel Benjamin (48:24)
Because you could get yourself in a lot of trouble flipping. You mean that's where you could actually lose some real money So we're picky on what we buy and how much we pay for it and we'll just do stuff that we're comfortable with I'd rather do for Really good flips a year than you know ten that are mediocre

Adam Youhanna (48:41)
Okay, let me ask you kind of some quick questions here.

How long does a single family home flip that needs a lot of work? Like what kind of timeframe does it take from start when you close on the home to when you have it ready for selling?

Daniel Benjamin (48:56)
it, man, that's a hard question for me. It would be like two months. maybe a little less, for some really good guys like Zach, it'll probably be like three weeks if that. Yeah. So it depends. And then, you know, sometimes it's longer. It depends on exactly what you're doing, but I would say on average for us, I, I bake in like two months in my, ⁓ and you know, that's with us doing other things too. Like it's love to be an agent.

Adam Youhanna (48:59)
I know. Damn. Really?

Wow.

Yeah, okay.

Daniel Benjamin (49:21)
You know, have day

to day life. that's, you know, normally I think if you're like a full time flipper, you're normally getting stuff done in a month. Yeah.

Adam Youhanna (49:29)
Yeah, you're pretty quick with it.

Okay. What's the scariest part to you about about flipping?

Daniel Benjamin (49:37)
I in the house and then finding something that's majorly wrong with it. Cause like I said, most of the time you don't get full inspection period. So, you know, we're, walking the house and kind of trying to figure out like we're not getting up in attics and stuff. And unless we think there might be something wrong, but yeah, there's, know, there's times you miss stuff by just doing a walkthrough.

Adam Youhanna (49:56)
Think about what was the biggest surprise expense you had on a flip, any flip.

Daniel Benjamin (50:02)
Man, just a normal fix and flip. I'm trying to think here. We had to redo the plumbing on that mobile home that I was telling you about earlier. But obviously we still did very well on it. But yeah, that was a fairly big expense. We just redid all the plumbing. That was a surprise. Yeah, exactly. And then on one of those mobile home deals we did, the ones I was telling you about earlier where we bought land and put

Adam Youhanna (50:15)
That was a surprise something that you didn't know about okay

Daniel Benjamin (50:27)
brand new mobile homes on it. The piece of land we bought ended up being more like in a flood zone than we thought. So we had to do a lot of, I think it was like $15,000 worth of dirt work and building like a little, like a retaining, not a retaining wall, but like it was like a mound of rock so that water can get diverted away from the home. yeah, that was a lesson learned.

Adam Youhanna (50:28)
Yeah.

Hmm.

Wow.

I remember that.

Yeah, I remember that. All right, tell me

that's that was a lesson learned. That was the one that you was that a different home or is that the one that you actually still end up making money on?

Daniel Benjamin (50:53)
Big time, yeah.

No, no, this was a, no, we lost one in this one. This was a home we, it wasn't a flip. It was like I said, we bought land, raw land, just dirt, and then put a brand new mobile home on it.

Adam Youhanna (51:03)
Hmm.

Okay.

Okay, now think of something like

What was something that almost killed the deal on one of your flips?

Daniel Benjamin (51:18)
after I bought it or

before.

Adam Youhanna (51:21)
Let's do after you bought it.

You're the owner.

Daniel Benjamin (51:23)
⁓

yeah. I'm trying to think of a flip we've done. ⁓

Adam Youhanna (51:28)
Would it be something like

in the selling process or something that came up unexpected?

Daniel Benjamin (51:34)
Yeah, all over. mean, a lot of it is stuff that comes up while you own it, right? Like you notice, like I said, something you have to redo the plumbing. That's a big one. And then stuff comes up during the selling process, too, because they do an inspection and then you find out stuff that you didn't even know about. So it's like, you you thought you were going to sell it for this price, but now you're having to fix all this other stuff. So usually it's stuff like that. It just repairs.

that come up that you didn't need to be done.

Adam Youhanna (51:59)
Mm-hmm.

Daniel Benjamin (52:02)
Yeah, we had a situation where we found out after we bought a place that there were a ton of bed bugs in it before. Luckily, we were able to track down who treated it and made sure it was treated. But yeah, that was a big one. Or could have been a bigger issue, but yeah.

Adam Youhanna (52:02)
I got you.

Okay.

Okay.

Now let's say you did 10 flips, right? Out of those 10, how many of them are you making money on and how many of them would you lose on?

Daniel Benjamin (52:24)
mean, normally you're making money on all of them. usually now that at this point, like unless something drastic happens, we're probably not going to lose money on it unless something unexpected comes up or, you know, market markets do turn. And that's one of the risks of flipping is you're, know, you're actually owning something that could go down in value a little bit while you own it. So we try to build and buffer for all that, which I'm very conservative when I run my numbers. That's the whole.

Adam Youhanna (52:27)
Okay.

Okay.

Daniel Benjamin (52:51)
being picky thing I was telling you about where, you know, we're picky about what we buy, but we're also very conservative on our numbers. So yeah, we could.

Adam Youhanna (52:57)
I heard a

contractor say that anytime you budget for like a new build, let's say you're tearing down a home building or even doing a fix and flip, they always say whatever you budget for price wise, add 25 % to it. And then also the time wise add 25 % to it. How true is that?

Daniel Benjamin (53:20)
I would say 25 % is a little light.

Adam Youhanna (53:23)
Really?

Daniel Benjamin (53:24)
Yeah, I mean, if you're good, it's probably there. But for most people, it's like I've heard like double it and then double both. But not yet.

Adam Youhanna (53:31)
Yeah. I know I actually had a client

about almost, man, I think two years. They were hoping to get it done in eight months. It's been two years that they finished it. Yeah, that's a good point.

Daniel Benjamin (53:42)
Yeah, it happens.

happens.

Adam Youhanna (53:44)
Wow. Okay. So just for the audience to know that we wanted to get through wholesaling, fix and flipping, rentals, whether they're short term, we will sprinkle in some midterm rentals and then, you know, of course, long-term rentals where you're doing leases for a year or longer. We wanted to get into land flipping, land sub divides, some mobile home deals that Danny's done.

But as you know, it's already been one hour, so we're not going to put it all together. We're going to do a part two where we go over the other things. This stuff is very important and there's hundreds and hundreds of questions I could ask Danny, especially out of my curiosity. But for right now, we're going to keep this segment on wholesaling, fix and flips. But before we wrap it up, Danny, is there something that you want to?

kind of leave the audience with in regards to like any tips, any tricks, any hacks, or just any advice you want to give them when they're wholesaling or fix and flipping or even fix and holding.

Daniel Benjamin (54:44)
I'd say just do a lot of research and I'm open for anyone to reach out if they need help and have questions. Just reach out to me. Have good.

Adam Youhanna (54:51)
What's the

best way to get in touch with you?

Daniel Benjamin (54:54)
Good Instagram is probably the best DSB explores my agent or my website youragentdanny.com has all my info to all my socials and phone numbers. So ⁓ yeah, just pretty easy. Just youragentdanny.com.

Adam Youhanna (55:04)
pretty easy.

Okay. And then you're a repeat your Instagram handle.

Daniel Benjamin (55:09)
Yeah.

DSB Explorers.

Adam Youhanna (55:13)
Okay. So if you follow Danny and myself, you know, we're posting short clips and we're posting, you know, tours, deals, stuff like that. We actually, we just had a deal close together. What was it? Like an hour ago?

Daniel Benjamin (55:25)
Did it actually record?

Adam Youhanna (55:26)
I think so. Well, we'll check it out after the podcast, but we just, we just had a closing. So, congrats, Dan. ⁓ so I mean, ⁓ first one in Arizona. Yep. First of many with us together. So any questions you guys have, you know, the best way is, know, to follow Danny and myself. Mine is just my first and last name, Adam Johanna. But any questions you guys have always reach out DM or comment on any of the poster reels that we do.

Daniel Benjamin (55:27)
Did it? Yeah, we'll check. But yeah, we are gonna have one. Yeah.

Yeah, congrats. First one.

Adam Youhanna (55:52)
because it's easier to do that than DM us because sometimes it goes into the request folder and we don't see it right away. Danny, anything else you want to add on? Any other notes that you want to mention to everybody besides, you know, doing the research and stuff and reaching out for you to questions?

Daniel Benjamin (56:06)
Now that's

probably it. Having a good lender obviously is huge. know Adam does rental loans. You can get construction loans, you can get hard money loans. ⁓ having a good lender is huge. We could have a whole segment on OPM and lenders and seller financing and land. I'm excited about the land one. That was the core of my business for a few years. So I'm excited for that.

Adam Youhanna (56:15)
Yeah.

Definitely. So we'll do that. We appreciate everybody tuning in. You know, as everybody always says, you know, like comment, subscribe. But the main thing is if you know somebody that is interested in any of this, just share this video for them to watch it just so they can kind of learn and, you know, be more confident. But that'll end it here. Danny, thanks for all the advice and, you know, storytelling that you did. And we'll be back with part two on this shortly.

Take care.