How to Find Distressed Off-Market Properties With AI | Dr. Toby Potter

Toby Potter (00:00)
Negotiation is solving a problem.

And most people when they get into negotiations, they’re only presenting their side of the of the situation. I’m only gonna present to you what I’m willing to do, and I have no clue what you want. What we teach is I need to go to Joseph and say, Joseph, you got a property here, it’s vacant, it’s you know, it’s it’s distressed, it’s run down. What are you wanting to do with this property, Joseph? And what are you trying to achieve?

Joseph Crooms (01:59)
Hey everyone, welcome to Investor Fuel Real Estate Pros Podcast. I’m your host, Joseph Crooms. Today I’m joined by someone I’ve been looking forward to chatting with out of respect for him and my daughter also I’m calling him doctor, so but he will explain his name a little further. So he’s been making some serious

moves in the real estate industry, he’s gonna share that niche as well. So hey doc, say hello to everyone.

Toby Potter (02:30)
Hey everybody, Dr. Toby Potter here. How are you, buddy?

Joseph Crooms (02:33)
Okay,

so you don’t mind if I call you Doc

Toby Potter (02:37)
Go right here, Joseph. Go right here.

Joseph Crooms (02:39)
Thank you. So I think our listeners are really going to take something away from how you are approaching business. And so let’s dive into it. First of all, so for people who are not familiar with your world today, give us the short version of what’s your main focus these days and which markets are you operating.

Toby Potter (03:03)
Absolutely, Joseph, and appreciate the opportunity to be here today to work with your audience to really build this platform and support what you’re doing. what you do is amazing. So our what we focus on is real estate investing. we know that there’s about a six point five to six point seven housing shortage nationwide, meaning that there’s that many people needing and looking for housing. And when you have that big of a demand, there needs to be a supply.

But the margins are tight, finding the right good deals is tighter, and so we focus on showing individuals how to grow, establish, grow, and build a generational wealth through real estate investing. it’s it’s it’s a it’s a unique opportunity that allows anybody at any level to get in and know that within a year they can have financial wealth and in ten years have generational legacies.

Joseph Crooms (04:00)
Let me ask you this question, Doc. How do you capture the interests of I I guess pre-homeowners or pre-investors? what are some of the methods that you use?

Toby Potter (04:12)
So one of things we talk about is everybody knows about real estate. Everybody’s seen and heard and watched YouTube’s autobiographies on people, the wealthy at the wealthiest, that say I own real estate, you talk Warren Buffett, 87% of his wealth is in real estate. Bill Gates, ninety-two percent of his wealth is in real estate. So when you know the wealthy of the wealthiest are putting their money into real estate and not stocks.

which is very eye-opening, then you have to understand that must be the most lucrative thing there is to put your money into and invest in.

And we can look back at the two thousand and eight financial crisis when the real estate industry tanked, it immediately bounced back. We look at COVID when the nation was shut down, but real estate took back off. In fact, in twenty twenty one, real estate was the biggest asset that everybody was pouring money into. Even the government lowered interest rates so that people could buy houses and be more affordable to help stimulate the economy. So when you know that real estate is a founding anchor

for financial wealth and you’re looking for financial wealth, financial security, retirement, all that, then this is the industry that you need to be looking into and getting educated about. We attract them by giving them that hope that their 401k, their IRA, their mutual funds have not even come close to holding a candle to

Joseph Crooms (06:24)
How do you overcome skepticism or some fears to transition to your your and when do you know that, okay, I’m ready to transition this customer, got Give us some real life experiences.

Toby Potter (06:36)
Yeah.

You bet. Every person we talked to, and we talked to about two hundred people a week that are looking to get into real estate investing. And they’ve all bought courses, they’ve all been on YouTube, and some of them have done deals and lost money.

The skepticism isn’t whether this will work or not. The skepticism is will this work for me as an individual? It’s not that that there’s not a proven history of real estate investors making millions and millions of dollars. The skepticism is will it work for me if I only have ten thousand dollars or fifty or whatever and I invested into real estate, what’s the guarantee I won’t lose it? Because there’s just as many horror stories of people who have lost money. And so the the way we overcome that is is every one of those individuals who have lost money in real estate tried to go it alone. They tried to go it through a course, through a YouTube, through an HGTV program, and didn’t know what they didn’t know until it was too late. So to overcome that, we work with you hand in hand. We basically coach, mentor, and partner with you until you can drive that boat yourself.

it’s no different than when someone’s learned how to drive a car. They don’t know what they don’t know. They’ve seen mom and dad drive that car for sixteen, eighteen years. They see how simple and easy it is for them, but the minute you put a teenager behind a car, an automobile, now they’re scared. And they might wreck until they’re guided and directed on what to do, what not to do. And the more times they drive it, the easier it becomes until they become an expert. Real estate investing is the same exact way.

But you need a coach, you need a mentor, you need somebody who knows what they’re doing to protect you from crashing. And so we share that. We show those success stories. We show my success story. I bought almost three hundred units last year when everybody was saying real estate was dead. And we bought those at 40 cents on the dollar. So you know, we acquired seventeen million dollars in an asset with a ten million dollar debt.

Meaning we made seven million dollars in twelve months on deals that everybody said the real estate industry is dead simply because we’ve been there, done that, and we know what to do. We can guide you accordingly. And we share those those success stories.

Joseph Crooms (09:01)
Thank you for sharing that doc. Doc, what do you let’s let’s go to your your coaching methodology. Okay. let’s take it step by step. So you I I’m new, I I got ten, twenty thousand dollars and but I failed the first time. And I’ve come to you. W how would you address me?

Toby Potter (09:57)
So that’s great. And that is a probably one out of four clients that we talked to. First thing I want to do is I want to find out what you did, what steps you took, and why it failed. And I guarantee you, when you walk me through that live example of I bought a property, a wholesaler gave it to me, or a Realtor gave it to me, I hired a contractor, I didn’t know them from Adam, but but they came highly recommended. They gave me a bid. We get into the house.

And then we ran out of money. The contractor needed more money to finish the job. I didn’t have the money. So we had to piecemeal it in. And then I couldn’t sell it. And I had to dump it. You know, I had to get rid of it because I had a mortgage due and all this. 99% of the time that is the same story with just different characters. And I say, you know, Joseph, I hear that every day. Joseph, here’s what we’re going to do first and foremost. You don’t know what you don’t know. So there’s no way I’m going to let you jump back into that ocean.

The first thing I’m going to do, Joseph, is I’m going to build you a step-by-step 45-day playbook. And in that playbook, you’re going to go through two courses. One is my onboarding course and what and number two is my real estate course. And I’m not going to allow you to do anything until you’ve gone through those courses that’ll take you about three to five days. And then we’re going to get on a call and we’re going to start looking at what you know, what you learned. Because once you start learning information in education, now we’ve got to make it

action actionable. And once we take action, then you grow. And so then the next step, Joseph, is you’re going to start looking at properties that we present to you and you’re going to start learning how to underwrite them to know whether they’re a go or a no-go property. Once we establish four to six of those go properties, we then make offers and you have no emotion. You have certain buy prices that you’re going to buy this house at. We already estimated what the rehab is going to be

And we already know what it’s going to sell for. You cannot deviate from that no matter how bad you want this. We remove all emotion from real estate. When you buy it at this price and you rehab it at this price, it’s absolutely guaranteed to profit this. And so we walk you through that. Once we get a property under contract, we then interview your contractors. You may not have a contractor, I may not have one in that area. If I have one in that area, we’re going to bring them to the table.

But if I don’t, then I’m going to interview him with you to make sure he can answer all my questions. If he can’t, we ain’t hiring him until we find the right contractor. Because the right contractor makes or breaks every deal. I don’t care if you buy it right or wrong, the contractor will make or break the deal. So we have to have the right contractor. And then as they’re doing work, I inspect every draw to make sure the work is being done correct.

Under budget and on time. So that when it goes to market, it’s on market on time. When a buyer comes and they do a home inspection, you’re not gonna have a punch list of two pages, three pages, four pages long of work that has to be redone because it was done right the first time, and then you’re going to sell and you’re gonna then rinse and repeat, and we’re gonna do that to where you’re doing it eight, ten, twelve, fifteen times a year. That’s what we would bring to the table for you.

Joseph Crooms (13:21)
That’s interesting. You’re talking about relationship building. Yes. But I I like the techniques and your your your aptitude about how you approach that. Can you tell me the mechanics? Because when you said take the emotions out, you know that’s that’s rich because sometimes people do things out of emotions, but take me through the mechanics on teaching someone in real estate

Why you need to build relationships.

Toby Potter (13:51)
You have to build relationships ’cause everything hinges on everybody be invested in your success.

When you hire a third party contractor and they only care about their paycheck and not yours, they’re gonna do crappy work, they’re gonna do shoddy work, they’re going to they’re gonna complain about everything. But if you find somebody that is vested in look at Joseph, let’s say you’re my contractor that we’ve interviewed on this project, and I say, Joseph, how many deals did you do last year as a contractor? And you say, Well, we did six deals last year, and they were you know fifty, sixty thousand dollar projects. Great. Joseph, if I could

work with you and now you’re doing 20 deals a year, 25 deals a year to where you never have to hunt another job. You do a good job here. I’m gonna buy a property and have properties lined up to where you move your staff from this property to this property and you never have to worry about being without work. Would that be something of interest to you?

And normally the contractors are like, yes, great. I need you to understand this is a volume deal. We have to be partners and I need you to trust and believe me so I can trust and believe in you. And we grow this together. Title companies are the same way. Our Realtors are the same way. We build that network because as you know, Joe, your net worth is equally proportionate to your network.

And the more powerful and growth your network is, the more powerful and growth your net worth is. And so we have to have those relationships so that everybody’s willing to sacrifice for the big picture down the road, not make all the money up front, but make it over a repeat amount of times.

Joseph Crooms (16:13)
Well, this is interesting. Tell me of a a success story of of one of your just pick outs off off your off your head, Doc. A success story. Yeah, we have How long did it take to get there?

Toby Potter (16:28)
Yeah, perfect. So we had a gentleman who was disabled marine vet out of Louisiana. His name was Late Wilson. He came in who wrought. Exactly. He was a Marine. Who wrote you? Yeah. And so he said, Man, I’m I’m on disability. And this was right before the government shut down. So this is what was so powerful about this story. Right before the government shut down earlier this year, and or I guess it was last year.

Joseph Crooms (16:38)
me too. So

Toby Potter (16:54)
And he said, I I I’ve been wanting into real estate. I don’t know anything about it. Can you help me? So we and brought him in. He went through our program. He sifted through four hundred and ninety-eight opportunities, properties that were listed. We narrowed it down to about fifty-seven properties. He submitted seven contracts. He we got the first one under contract. We did the rehab. He followed my my my rule a hundred percent.

And he sold it and made twenty-seven thousand dollars inside four months. So through the training, through the sifting through, landing a contract, getting a contractor, doing the work, getting it listed, getting it sold, took less than four months, 120 days, and he netted twenty-seven thousand seven hundred dollars, which at that time, during that time the government had shut down, so he wasn’t getting any money, and this saved

his life. He’s now a rock star. those other five contracts came into play and now he’s churning and burning and he’s making roughly about twenty thousand dollars a month net each deal.

That’s amazing. Now this is a guy that was making like twenty seven hundred dollars a month on government disability.

Joseph Crooms (18:17)
caught my attention. that’s not easy, especially in this climate. So let’s do a shift now. What’s been the key to keeping your machine running smoothly?

Toby Potter (18:31)
think the key is the people. We have amazing people in our in our program. We have people that are serious. they fully understand what the future holds. They have hope now. They have Spark. we get into—we have two community calls each week that they all get into and they share and they all feed off of each other. So I think that is the fuel that’s growing this is because lives are being transformed. And and

We don’t charge hardly anything for the course. We don’t we charge nickels and dimes for it. The big deal for me is the transformation of lives and the hope that we’re putting back into people who are beat down. We’ve got one gentleman, he’s probably in his late 70s, that has lost his whole retirement and says, I can’t live like this anymore, I need help. And we’ve got this guy cranking out. He’s reviewing about six to seven properties a day right now. And so the light is on, the hope is there.

And now it’s just a matter of time of execution for the results to start paying off. And we know this. We’ve been doing this for thirty two years.

Joseph Crooms (19:38)
Hmm. Now I know every operator has a moment when things just get real. Maybe the deal that went sideways or time that depend in your case, the timing was this is my idea, this will work. Can you share one or two of those moments with us?

Toby Potter (19:58)
So, you know, I think the biggest timing thing for for us, Joseph, was the was two thousand or twenty twenty-four. as a as a direct hard money lender, as I shared, we work with about thirteen, fourteen thousand clients. And and our business was not growing, it was tanking and and and I was reaching out to all our clients saying, Where’s the business? Where’s business? And they were like, There’s no good deals out there, Toby, there’s no good deals. And I said, That’s that’s not the case. And so I then went back to the streets

in October of twenty twenty four and said, in twenty twenty five I want to buy a thousand doors. I want to buy a thousand units. I’m gonna show my clients that there are good deals out there. And we took off and we started acquiring units. And we acquired almost three hundred units for over seventeen million dollars in assets in twelve months, which then said, Now I know the problem. It’s not that there’s not good deals out there

People don’t know where to find them because they’re going old school ways of doing it. They’re doing it the way they did it pre-COVID and after COVID everything changed. And so with that was an aha moment of we have to create a better system that enables our clients to have better success.

Joseph Crooms (21:20)
Toby, Doc, if I if I may ask. Share when you when you when that when that light bulb came on, tell me the three things that stuck out to you that’s old school and what do we have to make this shift to make this more relevant in today’s society.

Toby Potter (21:39)
Old school was online, going through Zillow, going through Realtor, going through wholesalers, going through Facebook real estate groups, trying to find stuff online was old school. And pre-COVID you had some success, but post-COVID it dried up. And so the problem was that everybody was number one trying to find properties online or through subscription programs.

And by the time they would find a deal that looked good, it would take them days or weeks to underwrite it. And by the time they made an offer to the seller, the deal was already under contract. So because it was taking them a long time to sift through, a long time to underwrite and evaluate, by the time they finally made an offer, somebody else had already gotten it. And so those were the the the bottlenecks that we were seeing our clients doing. And we said you can’t do that, that you have to go different.

And so we created an AI program. It’s called the Legacy Elite AI Operating System that we can go into an area, say Dallas, Tampa, doesn’t matter, and we can give to you over sixty thousand properties that are number one, off market, number two, they’re non-owner occupied, number three, they are vacant, and then number four, which is more important.

They’re distressed, meaning they’re pre-foreclosure, the probate, there’s tax liens. That seller, that investor has a property that’s not generating any money and it’s about to be lost through a distress situation, short sale, whatever. We present to our clients those properties, then all they gotta do is negotiate and purchase. And so we saw this transformation from doing three to five deals a year, working their tail end off to make

fifty, sixty thousand to now they’re doing three to five deals a month and they’re banking fifteen to twenty five thousand a month.

Joseph Crooms (23:46)
Doc, we’re coming, you know, to a close, but I have to ask this question.

Negotiation. Is that a major part of your course? Because people think they know what what negotiation is. Yeah. But give us your definition of negotiation. How do you try and put it into your course?

Toby Potter (24:08)
It’s that’s a great question, Joseph, and I’m glad you asked it.

Negotiation is solving a problem.

And most people when they get into negotiations, they’re only presenting their side of the of the situation. I’m only gonna present to you what I’m willing to do, and I have no clue what you want. What we teach is I need to go to Joseph and say, Joseph, you got a property here, it’s vacant, it’s you know, it’s it’s distressed, it’s run down. What are you wanting to do with this property, Joseph? And what are you trying to achieve?

And when I ask those three letter words why, why, why, I get to the root of what you’re trying to do.

then I can present to you a solution that I’m comfortable with that you may enjoy. But if I only come to you with, hey, I’ll buy your property for X, Y, Z amount of money, and you tell me to fly a kite, well, that’s not negotiating.

What we coach, what we teach is let’s find out why this property is vacant, why it’s going up for foreclosure, and why something hasn’t been done prior to it. Once we have an understanding of the seller or the property owner’s position, we can now make an offer that would solve their problem and give them resolution. That’s negotiating.

Joseph Crooms (25:28)
That’s transforming. If you get a student that grasps that you’re transforming their way of thinking. That’s the kind of stuff people don’t talk about enough, and honestly, is what separates folks from just the dabble from the ones who stay in the game a long term. So let me ask you this. What are you focused on solving or scaling next? What’s the next real goal?

Toby Potter (25:53)
Our next goal is to get our students prepared. This bubble is gonna burst bigger than it ever has, bigger than the 2011 financial crisis, bigger than the 2021 financial real estate crisis. When when our government slows down and settles down, when the economy levels off, the real estate bubble is getting ready to bust wide open, and opportunities are gonna be by the millions.

Our biggest mountain right now that we’re trying to climb is get everybody mentally prepared to tackle this opportunity of wealth beyond their wildest dreams.

Joseph Crooms (26:33)
Hmm. That’s big, especially when you’ve already got your school in place. that next move can either compound things or create chaos, depending on how you play it. Now, I know a lot of people listening are are either early in this journey or looking to level up. And I think they’ll benefit from hearing this. When it comes to building relationships and growing your network.

What’s the biggest difference to you?

Toby Potter (27:06)
So the biggest difference for us is we’re not about the money. I don’t I don’t coach, I don’t teach about the money, I coach and teach about the legacy.

And the most important thing is is that you cannot chase money. You have to chase memories, you have to chase the journey, and the money will come. And so the one thing that we work with is making sure that you fully understand it’s not about getting wealthy, it’s about obtaining fulfillment and a way of life that you deserve that God gave you, God bless you with, and and being able to understand and respect and be grateful for it. The money is a byproduct of all those results.

Joseph Crooms (27:49)
This is rich. You can’t fake that. Relationships are everything in this space. Alright, before we wrap, if someone wanted to reach out to you, connect with you, or maybe collaborate, or learn more about Doc, who I’m that’s I I that’s my friend now, so I’m calling him Doc. And what you’re doing. What’s the best way to reach them? And you can say it two times. We got a little time to repeat that for those fumbling to try to get things now.

Toby Potter (28:08)
Yeah.

So the website to go to is TheUnshakableInvestor.com. Real simple. TheUnshakableInvestor.com is our website. You can contact me there. Or you can call me directly. My direct line is 469 659 0131 469 659

0131

Joseph Crooms (28:49)
One more time now, give it to him again. Well the fumble.

Toby Potter (28:53)
Yeah, TheUnshakableInvestor.com. That’s our website. Tells you everything we do, who we are, all about me, and or call me directly. Text me or call me 469 659 0131

Joseph Crooms (29:10)
Guys, you just heard from Dr. Toby Potter. I this was unique, his perspective was unique, and we were very fortunate. Perfect. Well listen, I appreciate your time, Doc, your story, your philosophy, your perspective and how you put it into action. We really appreciate that. We need more people in this space who are doing the right thing and thanks again for being here.

And for tuning in. If you got value from this, make sure you surprise subscribe subscribers that have not subscribed. We got more conversations like operators like Dr. Toby Potter you need to get on who are out there building real businesses. we’ll see you in our next episode, which is Investor Fuel Real Estate Pros Podcast.