Wholesaling Real Estate: What to Do When Cash Buyers Say NO

Chris Deal (00:00)
I did a deal towards the end of last year where a wholesaler here in San Diego was sitting on a a deal for two months and trying to sell it. They had it locked up for $900,000. The highest offer they got was $875 and the seller wasn’t gonna budge.

I came in, I was able to restructure the deal, offer them the same 900 that they wanted originally and were under contract for originally. We went to market with it using the novation strategy, and we had a full asking offer at $1.1 million within four days. And the wholesaler and I split $130,000 fee on that same exact property that they were about to walk away with.

Cody Crabb (02:11)
Hello and welcome back to the Real Estate Pros podcast by Investor Fuel. I’m your host, Cody Crabb, and today I’m talking to Chris Deal. Chris is based in San Diego and helps wholesalers turn dead deals into real opportunities through creative deal structure, negotiation, and better sales. He’s also building this with a personal mission behind it, helping to offset the cost of adoption for families. So today we’re gonna get into the business, the mission, and why some deals are not actually dead, they just need a new approach.

Chris, thanks so much for hanging out with us today. I appreciate it.

Chris Deal (02:40)
Yeah, no worries. Thanks for having me on, Cody.

Cody Crabb (02:42)
Yeah, and as I mentioned, you put have potentially the best real estate name I’ve ever heard. the deal man, Mr. You’re literally Mr. Deal. That’s awesome. so I’d love for you to give us a little intro to yourself and you know how you how you got to be where you are and maybe a little bit about the the business and the mission as well. I guess I just asked you like eight questions, hopefully though. That’s not that’s not too much.

Chris Deal (03:05)
Rapid fire, the old machine gun questioner pro No, I love it. yeah, so you know, I’ll try to keep it short. I have been in sales for about twenty-seven years. my mom was actually a real estate agent, always wanted to get me into real estate, and I just avoided it like the plague. And then I found myself working for one of the largest real estate investing education companies in the country at the time people may have heard of them, FortuneBuilders.

and so I got in with them and got access to their curriculum and noticed that there were a lot of people working there that weren’t actually doing real estate deals, which, you know, kind of I was like, Well, I can’t be that guy. So I basically dug right into the curriculum and then a year later, as I was there, COVID happened. Everybody, the whole thing got torched, about 70% of the staff, myself included, got let go because they were built on live events.

but anyway, so I I went full force into building my business, started out building a text message marketing company for real estate investors and working on wholesaling deals myself, and then grew that, grew that, grew a team. was doing it in about 15 different states, doing wholesaling and then got into creative finance as well, a couple other things, and just continue to grow that. And then fast forward to today.

actually kind of restructuring and and or I have been over the last like year and a half restructuring my approach and you know so now my focus rather than me going out and tracking down wholesale deals myself is I partner with wholesalers on their deals that they can’t get across the finish line and you know help them close those and and make some money that way. but the bigger thing is you know kind of my passion project

So my wife and I adopted our daughter Coda three and a half years ago. And that process was kind of agonizing. we were originally told it was gonna be 25, 40k to do that. And about halfway through, the agency reached out and said, We’re out of money. I was like, Well, it sounds like a problem. They’re like, Yeah, it is for you. Like, okay, well, you can either cancel now and lose the 40 grand that you’ve already invested.

or you can keep going and keep paying. And so we did and it finally cost us about eighty five thousand dollars and you know

Cody Crabb (05:30)
The first amount was like not big enough. Holy cow.

Chris Deal (05:33)
Exactly. And that’s after three failed rounds of IVF that we had to pay for too. So and you know, quite frankly, we almost didn’t make it financially. And that experience completely changed how I think about what I’m building. So now every deal that I close is a percentage of that is going to fund an adoption assistance fund so that no family ever has to say no to a child just simply because of a price tag. so that’s that’s why I get up every day.

Cody Crabb (06:49)
Wow, that is awesome. And I I appreciate you sharing that with our audience because it really does give your business and what you do a totally different context. Like if people are some people are just kind of, you know, piling wealth onto the pile for whatever reason, like they don’t have a reason. but I love that you’ve got a you know, this mission. It’s I I can imagine that really helps drive things. so as far as like the you know, when you when you when you close these deals

Part of that person per purpose is building that adoption assistance fund. Is it are you working with a particular organization or is this just something that you’re building yourself?

Chris Deal (07:23)
Yeah, not currently. We’re kind of in the infancy of of determining whether some of these agencies. Yeah, because you know, unfortunately when you get into an arena where there’s a huge emotional investment, and then there’s a big financial investment, unfortunately there’s just a lot of bad actors, you know, and we experience that firsthand. so there’s a lot that goes into vetting them and making sure that like

Are they actually doing what they say and supporting in the right way? so we’re still kind of going through and navigating that and determining whether we, you know, build our own fund. and that obviously presents its own set of challenges, you know, with 501(c)(3) to all the taxes and stuff like that. So so yeah, so we’re still working through those details.

Cody Crabb (08:09)
Gotcha. Yeah. And I think it that’s great that you’re using your experiences, good and bad, to to make sure people kind of are are safe in that regard. So bringing it back to the actual real estate side for a second, so a wholesaler brings you a deal, they’re like, This is gone. I it might as well be, you know, it might as well be dead. w what does that process look like when they’re working with you? You know, what what did you most commonly see and what do you do next?

Chris Deal (08:33)
Yeah, that’s a great question. So, you know, without getting too technical, you know, the the typical scenarios that I run into is wholesaler locks up a deal with a seller who, you know, they want closer to retail. You know, the property’s not really like a pure fixer, you know, it’s in it’s in financeable condition or maybe it just needs a little bit of work. And so there’s no real cash buyers to take that on. The the gap is not big enough.

For a fix and flip investor to come in and take that off their hands. and so, you know, they end up if they have it under contract, they just can’t move the deal, right? It’s locked up too high, offers are coming in, you know, people are willing to buy it, but those offers are coming in way too low and it’s not going to be feasible. and the numbers that they’re coming in at are too low where the seller might not accept that offer.

And so where I come in is I I come in and I work with the wholesaler and get directly on with the seller. And basically we pivot the entire transaction into a different format. And the the one that we do the most with regards to those is novation. So we flip it to a novation agreement, which just gives us the ability to market it out there to not only cash buyers.

But buyers that are going to be using financing and are going to pay closer to market value. And so we come in, we basically handle all the heavy lifting. So we we get get the contract switch. We get in, we get photos, we work with the agents. If there is work that needs to be done, I can actually fund some of those renovations and some of those repairs on the front end out of pocket. and then we bring it to market as well as to our other investor list.

Right. Because we’ll work with some niche investors. Like I’m working with an assisted living facility investor, sober living. There’s some some investors that do homes for you know women who are walking away from like domestic violence situations. so all these different types of scenarios, these other investors. And so we partner with them as well, but we bring it out to market and we get a high h much higher offer.

It allows us to give the seller typically more than what a a regular cash offer would end up giving. And then we split those proceeds fifty fifty.

Cody Crabb (11:27)
So just to make sure I’m tracking, it’s not even necessarily that a deal is bad. It’s just not good for a cash buyer per se. Yeah. So you’re coming in and being like, let’s change the structure so that to something else so that we can actually still make work.

Chris Deal (11:39)
Exactly. When cash buyers pass, the deal isn’t dead. It just it’s just waiting for the right structure, right? And so like I said, novation is one of them. We do a lot of creative finance, so seller finance subject to wraparounds, lease options. So I can structure a number of different ways that make sense where the cash buyer wouldn’t be willing to come in on.

Cody Crabb (11:57)
So for a newer wholesaler that’s listening, what what’s a mistake that someone would make when they start when they basically write a deal off, it’s gone, it’s done? What what’s where is that gap? Like what do you see there where it’s like maybe they assume something is dead or it’s not gonna happen, but maybe there’s still a chance. What what are some of those scenarios that you’ve seen?

Chris Deal (12:16)
Yeah, so I think, you know, it’s just feeling like they only have one one way to go, right? You know, everybody a lot of people tend to think that wholesaling is just simply, you know, just assigning deals, right? And, you know, the way I try to look at it is you’re just a connector, right? Like you’re connecting the seller with the buyer. And oftentimes the mistake that I think wholesalers make is they think that that buyer has to be a cash buyer.

Right. And so it’s it and if they don’t have a cash buyer or a big cash buyer list, well, they can’t wholesale that deal. And it’s not really about a cash buyer, it’s about the right buyer. Right. And sometimes the right buyer requires the right structure. So that’s really where I come into play as helping to educate those wholesalers on, like, hey, you know, it’s not that this deal doesn’t work. It’s that it just doesn’t work the way that you’ve mathed it out here. Right. And so

We reposition and, you know, again, we can do a number of different things. And, you know, oftentimes, you know, I

I did a deal towards the end of last year where a wholesaler here in San Diego was sitting on a a deal for two months and trying to sell it. They had it locked up for $900,000. The highest offer they got was $875 and the seller wasn’t gonna budge.

I came in, I was able to restructure the deal, offer them the same 900 that they wanted originally and were under contract for originally. We went to market with it using the novation strategy, and we had a full asking offer at $1.1 million within four days. And the wholesaler and I split $130,000 fee on that same exact property that they were about to walk away with.

Cody Crabb (13:58)
Yeah, well and I mean it’s a win win, right? Like it’s seem it seems like you’re like, Well, if you feel like you’re gonna lose it anyway, like what do you have to lose? And so I I like this kind of view because you’re kinda going, Who’s the right buyer for the seller and not is it dead or is it not? Yeah.

Chris Deal (14:13)
For sure, for sure. And even more than a win-win, right? Because I think in the wholesaling space, we tend to think like, okay, what’s win-win for me and me, you know, me and this wholesaler, right? But it’s it’s win-win-win-win-win, right? Because I win, the wholesaler wins, the seller wins, the buyer who never would have seen that property in the first place wins. And now a lot, you know, sometimes it’s a family moving in, sometimes it’s one of these facilities. And then the agents win, right?

~ so you’re you’re involving so many more people and everybody’s making more money along the way.

Cody Crabb (15:28)
Yeah, that’s a killer example. so what should a newer wholesale wholesaler take away from this? Like the price is not necessarily always the problem and it’s it sometimes is just how you’re approaching it.

Chris Deal (15:39)
Yeah, I would say, you know, one, make sure you’re uncovering like what is the real motivation for them selling, right? And I think that’s where a lot of people struggle. You know, they tend to go in very quickly. And this is my sales coaching hat coming on, right? They come in and, you know, they just get to price, price, price. And the problem is when you just focus on the price, you’re product pitching, right? It’s it’s it’s just a widget at that point, right?

And the thing that separates us and really separates the people who are going to be really successful in this industry is that we’re professional problem solvers. And that the the presupposition there is that we understand what the problem is. So really digging deep on the fact finding, not about the condition of the house, like we’ll get to that. But like, why do you want to sell this house? What is it that’s driving you to sell this house? Why don’t you want to list it with a realtor? And, you know.

Quite frankly, that’s a thing that comes up a lot. Like, why would I do a novation? They don’t want to list it with a realtor. Well, watch me get on the phone with them and I’ll show you why they’ll do it this way because we solve the problem, right? And that’s the most important thing. They don’t want to list with a realtor because they have some issues with a realtor or how they do business, whatever it is, right? Whatever those issues are.

But because I get to the root of like why they want to do things a certain way and what the result is they’re looking to accomplish, I can still close a seller on doing novation where we’re going to list it retail with an agent and go through that process and they’re happy with it. You know, I had a seller in Indianapolis who owned a house, and this is a a great example, right? This it’s not just like any deal.

It works really well with like niche deals. So this seller, he previously bought this house. It’s a six thousand square foot house that was formerly owned by the Eli Lilly pharmaceutical family. ~ So massive house, super unique, built in the 1920s. And you know, we told him exactly what we were gonna do. He was totally fine with it. We were able to come up a lot closer to his number. His the cash offer would have been in the sixes.

We were able to offer him, I think it was like seven hundred and fifty thousand dollars. And within four or five days, we had a full asking offer at 960 and closed 27 days later. I walked away with about a hundred and forty-five thousand dollar spread on that deal. And at the end, he was like, he’s like, Man, it looks like you made some good money on this. And he was excited for me and happy. Right. Yeah. And it just goes to show you that it’s not always about.

how much the sell you know, the sellers are not always like, I wanna make as much money as possible. If you can solve their problem, like they’re totally fine with you making money along the way.

Cody Crabb (18:27)
Well, and not only that, you’re you’re basically it’s kind of like those CPAs, right? That take a percentage of the money they save you on taxes, right? Like w what what are they gonna c complain about that you actually made the deal go through and like they wouldn’t have earned that money otherwise. So yeah, exactly. so I love I like this line of thinking because I think it kind of speaks to your sales ability because it seems like what you’re doing is you’re digging in to find the real reason. And so

What would be some things that you would say to someone who, you know, maybe they’re kind of having a hard time getting to the core, and and you know, what questions can someone ask and and things like that?

Chris Deal (19:06)
Yeah, so a cup that’s a and that’s a great question, right? And I I always tell people that I’m coaching there’s a difference between a reason and a motivation, right? People will give you reasons that they want to sell. That’s not always the motivation, right? And so what’s really important, and I would encourage listeners to go out and just do this with their friends and family, right? It’s something called layering questions, right? So

You know, and detectives are really good at this. And this this is, you know, where I think a lot of it comes from is just being a detective, a deal detective, so to speak. so you know, people will ask very surface level questions, and so then they’ll get surface level answers. And layering questions is when you know you ask one question, and then the answer that they give you tells you what the next question you should ask, right? So as opposed to just asking.

A bunch of unrelated questions. And by the way, I script everything out, right? So everybody thinks that like, ~ scripts sound robotic, but like when it’s done right, like it shouldn’t sound robotic. You should, you know, know your script and know where you’re going and be able to pivot. Right. And by the way, you’re muted, Cody. I think.

Cody Crabb (20:23)
Yeah. No, I appreciate that. I was gonna say and that super threw me off. Well I I was trying to think of what I was gonna say. You’re talking about scripts. Yeah they should Yeah, that’s right, that’s right. and far from being robotic, I think they make you sound like you know what you’re talking about. Even if you do know what you’re talking about, sometimes it’s hard to get that out and and stuff. So that’s yeah, it’s a big deal.

Chris Deal (20:30)
Scroll. Yeah, but lay layering questions, right? So as opposed to like, you know, if you were going out on a date with a girl and it’s like, ~ where are you from? I’m from Ohio. Cool. What do you like to do for fun? ~ I golf. Awesome. You know, what kind of food do you like? Right? They’re all unrelated. And so like I’m only gonna get I’m gonna get very shallow information, right? So I’m not gonna create this deep connection. But if I’m like, where are you from? I’m from Ohio. that’s interesting. Where in Ohio? I’m from

You know, Toledo, Ohio. Toledo, Ohio. What brought you all the way out to San Diego? well, you know, like I met this guy and you know, I followed him and didn’t really work out. Like, didn’t work out, you know, and you’re just continuing down that path. Yeah. But with with a seller, it’s all revolving around like the problem. Like, you know, what’s got you thinking about wanting to sell? how long have you been thinking about that?

Right. What sparked that? And just continually digging, digging, digging. And one thing that, you know, like Chris Voss, Never Split the Difference. Love him and his techniques. You know, even just something as simple as if you don’t feel like you’ve gotten a sufficient answer, right? You ask a question and it feels surface level. If you just simply say this one thing, that’s interesting. Tell me more about that.

They will naturally expand on whatever they just said and the next answer you get will have so much more context to it. And then it’ll oftentimes lead you a lot closer to like what the problem is.

Cody Crabb (22:21)
Yeah, I love this ’cause I feel like we focus so much on the real estate side that like sometimes people forget that it’s it this it really is like it’s all about the relationships and the sales and and things. And so the dating example’s perfect. Anybody can relate to that. Like if they’ve been on a bad date or they’ve been on a you know, the the dating apps. I remember I was on I was on those dating apps right as they were coming out and I remember being like, They’re giving me nothing, man. I’m like I’m asking all these questions. But like you said, as soon as as soon as you start kind of

they fill in the gaps for you if you start doing that. You don’t even have to start asking. so I love that. as far as you know as far as someone using sales effectively

What would you say to someone who s feels like sales is kind of icky, for lack of a better word? Like they’re making somebody get into something that they don’t want to like I I’m thinking about those times where I go to Best Buy, right? And the guy’s like, I clearly just want to sell you the most expensive thing and make my commission and but like how how what would you say to people that are kind of concerned about coming across that way?

Chris Deal (23:20)
Yeah, that’s a that’s a great question and something that I’ve interacted with for the last twenty-seven years. and interestingly enough, I can’t tell you how many people over the years have told me, like, I could never do sales, I could never do sales or persuade people, blah, blah, blah. And then like a year later, I see them post on on social media, like, hey guys, I’m a I I just got my license as a real estate agent and blah, blah, blah. Like, do you realize that like

the role that you’re in as a sales role, like you

Cody Crabb (23:49)
Very much so. Very much so. Yeah.

Chris Deal (23:52)
It’s hilarious actually. but I digress. So the for people that have that feeling, and I’ve felt that way as well. And here’s what I found, and it’s really interesting actually, is if you’re selling something or you know, in this case in real estate, we’re buying something that you know the person doesn’t want or need, then yeah, it’s totally appropriate for you to feel that way, right? but within

This space, that is almost never the case, right? You know, regardless of how you get your leads, right? So, of course, inbound leads, they’re coming to you, right? But even outbound leads, if we’re cold texting or cold calling sellers, they’re getting on the phone with somebody, which half the time it’s somebody in Egypt or Pakistan. They’re gonna spend three to five minutes telling them about their largest, most valuable asset that they own, right?

So they’re going take time out of their day to have that conversation. And then at the end of that call, that person’s going to say, Cool. So when can one of our reps call you? tomorrow or the next day. And then they get on the phone with you. And then you’re going to have a sales conversation with them. These people have a desire to sell. Right. And so, and the same thing with a lot of products that you’re going to sell, if they’re meeting with you and they’re taking time out of your

out of their day to meet with you. Again, as long as you’re not doing some bait and switch tactics of like, Hey, let’s go grab lunch and catch up, like a lot of the MLM guys do. And then next thing you know, they’ve got like a they got an easel out and they’ll be like vitamins and you already sp I’m like Exactly lunch. You know?

Cody Crabb (25:33)
Yeah. Well and I think y you’re hitting the nail in the head, which is sometimes it is kind of icky. Like w like it that there there is plenty of that. I think the difference is, like you said, when you actually are doing something that in a way that is like I’m not necessarily trying to sell you something or or convince you of something. I’m like just here to facilitate that transition or to figure out what’s best for you. You know, I mentioned before the podcast that mechanic that isn’t trying to

fix every little thing in your car and you trust him, you know, it’s you’re not worried about just saying, yeah, fix whatever you need to and that level of trust is what you need.

Chris Deal (26:06)
a hundred percent. Yep. And one thing that I learned early on is yeah, one of my mentors 20 almost 30 years ago taught me this is like sales is just simply an exchange of beliefs, right? You have a belief in something, whether it’s a product, service, charity, maybe it’s your your religion, right? Like I’m a Christian, right? And so I believe, you know, I have a set of beliefs and I believe in it so much.

All I’m trying to do is exchange that belief onto the other party, right? And if I can do that in a compelling way, then they should buy into whatever that is, whether it’s a product, service, religion, doesn’t matter, right? or the idea that I will be a great father to their future children, right? Like if I’m dating, right? So it’s so we all do sales in some capacity, but we just need to reframe the way we view sales. Sales has been made to to look icky.

because of used car salesmen and people that are selling something they don’t believe in, that it’s made a lot of people afraid of getting into sales.

Cody Crabb (27:17)
Yeah, I I absolutely agree with that. And I’ve seen and like you said, I’ve seen plenty of the opposite of that where you feel really well taken care of and you truly feel like thank you for selling me this thing, you know. Yeah. And so I I love that. You have to kinda earn the right to to be able to to do that.

Chris Deal (27:32)
If you don’t believe in what you’re selling, like you probably shouldn’t sell it or figure out how you can believe in it. Like find a way to believe in it.

Cody Crabb (27:38)
Yeah, yeah, that’s a great way to put it for sure. so what’s what are you working on next? What is it that you have coming up that’s that’s exciting to you or do you have anything in the pipeline that’s gonna come out soon? Yeah.

Chris Deal (27:49)
Yeah, yeah. So you know, the big thing that I’m working on is is obviously, you know, turning dead deals into dollars, right? And so, you know, if if somebody is a wholesaler, you know, or they’re just getting into wholesaling and they’ve got a deal that’s sitting on their desk, that’s dead, they’ve killed it, you know, they’ve tried everything and they can’t get it across the finish line, definitely go to deaddeals2dollars.com submit it. I personally review every one and I’ll respond within 24 hours. so again it’s deaddeals2dollars.com. the other big thing that I’m working on right now behind the scenes is a sales coaching academy. It’s called the Black Belt Closer Academy. so I’ve been doing jujitsu for 13 years competitively and so obviously there’s a tie in there. you know but I I’m building out a structured

curriculum where, you know, there’s there’s belt levels and there’s tiers where you can go through and you can see how you’re progressing through the process. so, you know, if you want to keep an eye on that, you know, definitely follow me on social media at on Instagram at @chrisclosesyourdeal, as well as Instagram @deaddeals2dollars. and you can learn more about that.

Cody Crabb (28:59)
Awesome. Well, thank you so much. This was really awesome. I really appreciate you sharing the business side, the sales side, and the mission behind all of this. I think our audience is really gonna get a lot out of this one. Everybody make sure you follow Chris. I think everybody that heard some things like about sales the specifically that’s like

Maybe I could use a little work in that department. This is this sounds like a great way to do that. so for anybody everybody listening, we’ll have all that info included in the show notes as well. And thank you so much for tuning in and we’ll see you on the next episode. Chris, thank you so much for joining us and we’ll catch you next time.