Stop Wholesaling Every Deal: Jacob Bopst’s Wholetail Strategy for Higher Real Estate Profits

Jacob Bopst (00:00)
First, it was out of necessity when I tried to wholesale and it didn’t work. And I was really confused. I had buyers come into the property and they said, no, it needs to be lower. And I’m like, I don’t believe you. Again, I said, I don’t think so. I think this is a deal. And so I was like, I’ll just buy it. Maybe it was being stubborn. I bought it myself and put the property on the market, cleaned it up and ended up making 40K on it.

Dylan Silver (01:57)
Hey folks, welcome back to the show. Today we’re joined by Jacob Bopst, real estate investor and operator behind the capital formula, focused on whole tail strategies and building lean high margin deal flow. He specializes in generating strong profits, often 40 K plus per deal while keeping marketing spend lean mean typically under 2000 per month. And his approach centers on efficient systems, disciplined operations and maximizing value through whole tail.

Jacob, thanks for joining us today.

Jacob Bopst (02:28)
Hey, thanks for that introduction, Bill knows I really appreciate that spot on what exactly what I do. So thank you very much for that. And I’m glad to be here.

Dylan Silver (02:36)
Great to have you on here. Whole Tails specifically is interesting. What led you into that as a primary strategy?

Jacob Bopst (02:45)
Yes.

First, it was out of necessity when I tried to wholesale and it didn’t work. And I was really confused. I had buyers come into the property and they said, no, it needs to be lower. And I’m like, I don’t believe you. Again, I said, I don’t think so. I think this is a deal. And so I was like, I’ll just buy it. Maybe it was being stubborn. I bought it myself and put the property on the market, cleaned it up and ended up making 40K on

when I was trying to

meagerly squeeze 5 or 10k

Jacob Bopst (03:16)
From an buyer when I realized, you know, I took it down myself stubbornly and made 40 K and I said, Hmm, there might be something to this. So that was kind of the starts of it. Dylan.

Dylan Silver (03:27)
Now, WholeTail, I think, has a number of different connotations. And I’ve also heard people use WholeTail interchangeably with Novation. ⁓ What is WholeTail?

Jacob Bopst (03:39)
Yeah. So there’s a difference between a whole tail and novation’s big, big difference. And I do novation’s as well. I just recently closed innovation, um, in Florida and got a nice 35 grand gross profit off that. So novation’s an awesome strategy. do essentially three things. do a whole tail novation’s and wholesale, um, whole tail. Think about it like fix and flip, but you don’t fix it. You just buy it.

put it on the market, put in less than five grand if you can, that’s like the best ones. And it doesn’t matter if it’s nasty falling down, it doesn’t matter. The point is to put it on the open market instead of just select end buyers that you know of and you can see from like tax records, put it out there and market it just like a real estate agent would market it. And I do use a real estate agent. So that’s whole tail. Buy it, control it yourself, listen to the market, sell it. That’s whole tail. Novations, completely different. Love novations because there’s like zero risk involved.

Whole tail there’s a lot of money risk involved because you’re buying it yourself. You’re assuming that risk. You got the closing costs. You got to put money out front to buy it. Renovations, holding costs, all that stuff. But for novations, I love novations because it’s like zero risk. You’re risking nothing because you have in the contract where you can get out. However, explaining what a novation is, Dylan, is simply telling the seller that, I’m going to market and sell the property for you. It stays in your name.

I’m kind of your liaison, we’re partnering up. I’m going to listed using my team, my resources, and I’m going to sell the property. You just sit back, worry about what you’re doing, next steps for you and I’ll handle everything else. So it’s still.

Dylan Silver (06:06)
Now,

what condition does a property need to be in to confidently hotel it without a full rehab? Can it be in a distress state or are most hotels closer to something that’s rental grade or even flipped?

Jacob Bopst (06:24)
You get the most when it’s when it’s able and at the biggest things not it’s not rental grade or flip grade. It’s really ⁓ FHA FHA qualified grade. So it’s if the the loan if somebody can get a loan on that property. It could be like really outdated ugly, but it’s clean and it would qualify for an FHA loan. That’s when you’re going to get the most. That’s when you get the most. That’s like the biggest ones because you can buy it a large discount because you’re going to have to do upgrades. But

FHA financing an end buyer who wants to do the work themselves, but likes the neighborhood, they’re going to be able to pay the most. And that’s who you want to target. But it doesn’t mean you can’t do it with a tear down. It’s just, it’s a different, it’s all about where you buy it. If you buy it deep enough. But for me, it’s, it’s either way. It doesn’t matter.

Dylan Silver (07:13)
Now, without giving away all the gold here, because this is really the secret sauce here.

Jacob Bopst (07:16)
I’ll give away the

gold. Also, I don’t care. I’ll give it away. Like you ask a question, I’ll answer honestly. Yeah.

Dylan Silver (07:22)
When

folks are going direct to seller with the whole-tail strategy, if that property is able to be listed, right, in the condition that it’s in, what’s the conversation like with the seller, why they should sell to you versus list it themselves?

Jacob Bopst (07:42)
Exactly. And I love this question because you always, and this is my biggest hang up when I first got started. Cause I asked that same question. Like, why would someone do this when maybe they could do it themselves? The problem is people, everybody has a different goal. Everyone has a different thing. Some, some people might be fed up and want nothing to do with it. Some people might be out of the country. Some people just maybe don’t even want to try to learn how to do it. Or maybe somebody had that experience and they want you to do it for you. Never know.

And so that’s really important. Like in my sales conversation, I always ask the questions of that, that exact question to say, Hey, you know, this seems like a pretty nice property. You’re probably, is there a reason you’re not, you don’t just list it with a real estate agent. You ask that question and then they’ll tell you, they’ll say why. And it’s typically because, ah, you know, I had a bad experience one time. I just don’t trust them or I want to be, you know, if I can, I want to be discreet and I just want to get this done. I don’t want to have to interview agents.

I don’t want to have a bunch of people coming through my house, whatever it is, they’ll tell you, but you need to ask the question. So that to answer your question, everybody’s different.

Dylan Silver (08:49)
Now, how long are you typically holding a whole tail deal before resale? What’s that time period like? you know, once it’s listed, are these deals moving quickly?

Jacob Bopst (09:03)
Yeah, and this is all a lawyer answer on this. depends. ⁓ So I, the way I structure it, the way I do it is you want to buy deep enough where when you market it, you don’t want to try to market it where it’s at full retail value. You want to market it at a super deal. So people in the market see it and say, this is a screaming deal. Like, what is this? Almost all my whole tails that I’ve done.

the price gets bid up. And I actually end up getting more than I would have thought I would have. So I list low. So number one, you have a lot of activity. Number two, it goes quick. Number three, you can probably get over your asking price anyways, and the market will always bring it to where it is. But when people get into bidding war, sometimes you even sell it for more than if you had it up there and it gets stale and then you’re sitting and you have holding costs, holding costs, holding costs. So for me, the average is about from start to finish, like three months

average.

Dylan Silver (10:37)
Now you’re closing on these deals yourself or with partners. So this does require cash. When folks are looking at exactly how they’re going to get off the ground, getting into that on-ramp of real estate investing, where does wholesale fit in versus wholesale?

Jacob Bopst (10:45)
It requires capital.

Yeah. Yeah. Great question. And you can do whole tail. It does require money. So for, for my deals, like I would, I use a hard money lender for majority of my deals and I found one and there’s, there’s, there’s some out a lot out there that to choose from, but they do a hundred percent on the purchase price and a hundred percent on the renovation cost. All you have to pay is the closing costs. So typically I’ll be like 20, $30,000 total in a deal per deal. Now,

Dylan Silver (11:27)
Hmm.

Jacob Bopst (11:28)
that people say, don’t have 30 grand. Well, you at one point, neither did I. You can also find other people’s money or you could get a heat lock loan on a property or you know, you could max out a credit card if you really want to take a risk. I did that one time. Don’t recommend that, but you could do it. You know, if you’re hungry and you know you have a good deal and you know you can sell it, but you can find the money or you can go to your uncle, your aunt and you can get the money. So you can do it. I will say you can definitely do it without money. ⁓ You just need other people’s money, not your money, somebody else’s money.

Wholesale is a great entry point. So renovations ⁓ Because you don’t need any money. You don’t need any money wholesale you Bring in somebody who has the money they’re buying it. You just connect to you’re selling the contract, right? ⁓ So that’s a really wholesaling has always been a nice entry for people But your spreads are gonna be a lot lower Because that end buyer needs to make the profit and you don’t have control you got to count on them to close But if you don’t have any money like like you just said in the difference between them to the two of them

Wholesale is a great starting point.

Dylan Silver (12:30)
I never thought about using hard money for whole tail, but what a great idea. mean, if this doesn’t require substantial rehab or sometimes any rehab and you take out 100 % financing, including rehab, but there’s no rehab and you know, hey, this is a scream and deal. That’s a win win.

Jacob Bopst (12:50)
Yep, exactly. they’re so quick, like the holding cost isn’t really a big deal. So that’s the biggest thing with hard money. Now the best scenario if you’re doing this is if you can find a private money lender. somebody who can just do kind of a straight, like 12, 13, 14 % without extra fees, because hard money lenders, tip for anyone listening, they always charge like upfront fees, like loan origination fees, underwriting fees, like big ones upfront.

And sometimes someone in the backend too, plus they have the super high interest. It’d be better to just borrow from a family member, of course, or, you know, another private money investor where you just get like straight interest. Um, and they’d be happy with like 14%, but it’d be way cheaper than a hard money lender and you have more control.

Dylan Silver (13:35)
Now, light rehab situations in a whole tail deal, what minimal work do you decide to do in certain situations versus listing it as is?

Jacob Bopst (13:47)
Another great question, Dylan. Great question. It just shows like you know your stuff because you’re asking like really smart question. Yes. So for me, I always clean out the junk, make sure it’s empty. Number one. And that’s not expensive to do to pay someone to do that. ⁓ And make sure there’s no active leaks. That’s pretty much it.

Dylan Silver (14:08)
How important is staging in these situations?

Jacob Bopst (14:11)
Not important at all.

Dylan Silver (14:13)
Hmm. People are walking through. it investors looking for these deals? Or is it a mix? You’ll get investors and folks looking for their homestead.

Jacob Bopst (14:22)
Yes. Correct. Both of them. when you say staging, I’m not saying don’t get professional photography. I’m saying like, don’t spend money to put like couches and make these like these houses are going to need work. That’s why, you know, you got a discount. You know, they’re going to be needs of love, but definitely always get the best professional photography that you can do as that sells houses nowadays.

Dylan Silver (14:29)
Yeah.

I’m also imagining the relationship with the realtor or broker is important as well, because if you have a scream and deal and you know that there could potentially be a bidding war, you want someone who’s going to be versed in that versus someone who might not be as strong, it could actually trigger the opposite.

Why is this property listed so low and suspicious, right?

Jacob Bopst (15:53)
And I’ll add onto that question too, to put in another unknown with realtors is you want to make sure I always, I, cause I do deals in like areas I don’t even know about. Like I’ll do this virtually. Like I have no clue. You always want to try to find a real estate agent when you’re doing your research that has some investment experience and understands the costs of things. Cause I always have a realtor go out there to check the value of it before I close on it to make sure.

that when I do close on it, can list it where I think I am so I can have a profit. So you want to have an agent that you picked that is experienced, been doing it for a while, knows the area like the back of their hand. You don’t want to hire someone that lives in New Jersey for Pennsylvania. You don’t want to do that. You want someone that’s in that market, lives down the street, because they’re also kind of your boots on the ground. Realtors are great like that because they will go to work for you because they want their commission.

Which unfortunately, a lot of people take advantage of that with realtors. And I can say that because I was a real estate agent when I was, when I first got started, I had a license. ⁓ however, picking the right agent is extremely important and you want someone with investment experience for sure.

Dylan Silver (17:03)
Now, what is the biggest risk in wholesaling? Because I’m imagining if you’re acquiring these deals at the right price, and you’re seeing what’s out there on market, and you can list that at the right price, it seems low risk. But what maybe are some unforeseen risks that people wouldn’t anticipate?

Jacob Bopst (17:08)
Mm-hmm.

The big risk is you’re putting a lot of money up front. Even if it’s not your money, there’s still a lot of money on the line. And what if ⁓ something went wrong, like the house is like falling down for something or like the foundation, maybe you missed it ⁓ and the house doesn’t sell for what the biggest risk is the house not selling for what you think it’s gonna sell. Even with getting the real estate agent’s opinion, even with doing it all, like it could be there. And so you gotta make sure you buy really, really deep on these to make sure if it is

Unforeseen things pop up. Like for example, I had a deal that came up where, ⁓ you know, this is a learning lesson for me and anyone else always double check. The driveway is actually on your property. And if it’s not on your property, make sure there is an easement in the deed. bought a property once where the driveway was not on, it was like grandfathered in I thought, but I didn’t verify and it was on someone else’s property. So I had to put in a whole new driveway. Luckily there was.

enough room because it could have been landlocked and then I really would have been screwed. That would have been a scenario where I’m done. But luckily it had access to the road. I had to spend extra money on that deal to put a driveway in it to get it sold. those are those are the risks.

Dylan Silver (18:36)
Now we are coming up on time here, Jacob, any new projects that you’re working on and then as well, what’s the best way for folks to reach out to you?

Jacob Bopst (18:45)
Yeah, so what I’ve been focusing on really just honing my craft, ⁓ essentially what I do is I pay for leads to be sent to me. I close on those deals and I do one of those three strategies, PPL ⁓ leads coming in, pay per lead, whole tail, innovation, wholesale, like we mentioned. And I use go high level with a lot of my automations for my CRM.

And I really just try to hone that process because I do my business myself. So it’s like I’m everywhere, but I’m not sending texts, uh, being a one man operation. Um, go high level was really cool for making those things. And I spent years kind of developing that for my systems. So I’m really just honing in that locking that my goal this year is to get to about 350,000, um, in revenue so far. I’m at like 180, 180,000 so far this year. So I think I’m going to do it. Uh,

So I’m just really locking that in. And then in the future, I’m building a team and I’m going to teach people how to do this and actually build a business right now. This is a job. I’m doing it. Um, but in the future, I’m going to build a business and for anybody that wants to reach out and get a hold of me, uh, they can go to my Instagram at Jacob Bopst. Um, or you can try to look me up on Facebook, send me a message. Hopefully if you get value out of this, let me know. Also, if you want to learn what I’m doing, how I’m doing it, I also offer a course that I developed.

call it. You can find that at thecapitalformula.com and that’s thecapitalformula.com.