Wholesaling Across the USA: Paul Lizell's Secrets Revealed!
Yo, today we’re diving into the world of wholesaling real estate, and trust me, it’s gonna be a ride! We’ve got the awesome Paul Lizell with us, who’s been hustling in over 45 states—yeah, you heard that right! He’s spilling the beans on how to make wholesaling smooth and painless, so you don’t end up pulling your hair out like I almost did. We talk strategies for finding deals, avoiding the dreaded Dakotas (sorry, not sorry), and how to make cash flow work for you, even if you're starting with zero bucks. So stick around, ‘cause you’re about to get some real talk on leveling up your real estate game!
Virtually wholesaling all across the country with Paul Lizell - Payneless Wholesaling Podcast
Visit https://www.paynelessflipping.com to learn how to do real estate deals the payneless way!
Wholesaling across the U.S. can be a wild ride, and today, we’re diving into the nitty-gritty with Paul Lizell, a pro who’s been in the game for over 22 years. From his first bank-owned property back in 2001 to wholesaling in 44 states, his journey is anything but typical. We chat about the importance of understanding markets, and how choosing the right states can mean the difference between cashing in big or, well, not. Paul shares his decision to shift from the risky fix-and-flip model to a safer, more profitable wholesale strategy, especially during the 2008 crisis. He emphasizes how finding the right deals in the right markets is key, and how sometimes, you just gotta go where the money is. Plus, we get into some real talk about the best areas to target—hint: think Midwest for some sweet deals!
Takeaways:
- Wholesaling real estate across the US can be a wild ride, but it's doable if you know the game.
- Paul shared he wholesaled in 44 states, so there's definitely a method to the madness for nationwide success.
- Starting with 18 months of savings is key before diving into full-time real estate investing, trust me on this one.
- Don't underestimate the power of networking in real estate; it's how deals get done, period!
- Using online auctions for sourcing deals is a game-changer, especially if you want to avoid traditional marketing costs.
- It's essential to know your market and where to find the best deals—sometimes the hot spots aren’t where you think!
Links referenced in this episode:
Companies mentioned in this episode:
- Citizens Bank
- Auction.com
- Hubzu
- Hudson and Marshall Realty
- Bid
- Auction Network
- Williams and Williams
- Kiavi
- Dominion Financial Lending 1
- Lima One Capital
- Coco Capital
- Lee Arnold's group
Transcript
We are live with the Painless Wholesaling podcast.
Speaker A:I'm here with Paul Lizell.
Speaker A:Is that right, Paul?
Speaker A:Is that right?
Speaker A:Good, good to have you on here, everybody.
Speaker A:Today, stay tuned because we're going to be talking about how to wholesale across the United States, across the nation.
Speaker A:We got Paul, I think you were saying you've done over 45 states wholesaled in over 45 states.
Speaker B:So 44 to 50 states have wholesale.
Speaker B:Yep.
Speaker A:Man, what about those ones you haven't?
Speaker A:Are those ones still like keep you up at night or are you going for those?
Speaker B:Not really.
Speaker B:If something happens, great.
Speaker B:There's certain states I avoid and they, a lot of them fall into certain states.
Speaker B:The only one I would probably do additionally would be actually to Hawaii and the three.
Speaker B:The Dakotas and Hawaii Bother.
Speaker A:Yeah, yeah.
Speaker A:I know that when I was doing a lot of marketing and nationwide for pay per click leads, they would tell us to not even turn on the Dakotas.
Speaker A:They're like, don't even worry about it.
Speaker A:Yeah, well, that's really interesting.
Speaker A:So let's dive right in.
Speaker A:If, if this is your first time tuning into the Painless Wholesaling podcast, what our goal is is to make wholesaling and real estate investing painless for you.
Speaker A:Because everyone knows it takes time, it takes effort, and if you do this on your own, you feel like you have to do on your own, you're going to make a lot of mistakes.
Speaker A:So we try to make take away those mistakes by bringing on experts.
Speaker A:So we have Paul here to tell us a little bit about his business, his life and provide as much value as we can in the short time.
Speaker A:So Paul, take it away.
Speaker A:Tell us a little bit about yourself and what got you into real estate.
Speaker B:Sure.
Speaker B:So I'll go back to where I started.
Speaker B: is when I very end of: Speaker B:Owned property off the HUD home store and I partnered with a guy on it.
Speaker B:We picked it up for 29,5.
Speaker B:We put four grand into it, we sold it for 69.
Speaker B:We each walked away with 15,000.
Speaker B:So a 30,000 net profit in a few months.
Speaker B:It was great.
Speaker B:And then I rinsed and repeat.
Speaker B:But I was doing this while I was working full time for a bank.
Speaker B:I was a commercial loan underwriter for a small community bank for a year.
Speaker B:Then it became a business business development officer for a couple years thereafter.
Speaker B:And then I went to Citizens Bank, a bigger bank, bigger regional bank there.
Speaker B: Went for a few years till: Speaker A:Wow.
Speaker A:Sounds like you went through quite a bit in that that time.
Speaker B:Oh yeah, absolutely.
Speaker B:And my.
Speaker B:And one of my keys was like.
Speaker B:And I had to do this, convince my wife potentially as well.
Speaker B:But for definitely for myself, I had to save up 18 months worth of bill paying ability, in other words, a year and a half a bill paying ability before I would eventually just jump on, go on my own.
Speaker B:That's what I did got.
Speaker B: f November, early December of: Speaker B:And it did it.
Speaker B: through that financial crisis: Speaker B:That's where I was doing a lot of fix and flips.
Speaker B:And I was buying almost exclusively off HUD and bank reos, off the MLS in the suburbs of Philadelphia at that point.
Speaker A:Okay.
Speaker B: And then I kind of shift: Speaker B:I'm like, I did a couple wholesale deals and they were easy money and I didn't have any risk.
Speaker B:Why don't I go back to doing that?
Speaker B:So I flipped my model from 90% fix and flip and 10% wholesale to 90% wholesale and 10% fix and flip.
Speaker B: for a while, you know, until: Speaker B: country and um, really ended: Speaker B:Before you know it, I bought 44 out of 50 states.
Speaker A:Wow, that's amazing.
Speaker A:And if you had to go back, would you have changed anything on the model of going to more towards wholesale?
Speaker A:Would you wish you would have kept more?
Speaker B:Oh, definitely wish I would have kept more.
Speaker B:I think we all say that we've been around for a long enough time, 22 years doing this business now, right.
Speaker B:Always wish I would have kept more.
Speaker B:But I've also done really well in building up some rentals, selling them when the market's gone up and then building up getting some more and sell them when.
Speaker B:I didn't expect the market to go parabolic air after Covid.
Speaker B:But it did and I sold some more and made some more.
Speaker B:Now I'm building again and we'll see where that leads.
Speaker B:But now what I'm building is I got some like 12 unit building, 5 unit building in Wyoming.
Speaker B:I'm going to probably just refinance, keep those things long term and they'll, they'll be in my, you know, just stick it, set it and forget it because they cash flow very well and then I'll add more as, as I need to at that point.
Speaker B:You know, pick and choose which markets I want to be in for the buy and holds.
Speaker A:Yeah.
Speaker A:Are you continually, continuously looking for more deals, like multifamily deals right now or not so much?
Speaker B:Yeah, we do.
Speaker B:But not the big moldies right now.
Speaker B:The big moldies, we look at them but when you do the underwriting on them, they just don't make sense right now.
Speaker B:And especially with the cost of capital right now on a refinance side now the smaller ones to say, you know, 20 and under or 30 and under units, that's, that's a largely ignored class.
Speaker B:So you can go in there and get some pretty good bargain basement pricing.
Speaker B:You can even get some owner financing on occasion.
Speaker A:Right.
Speaker B:And those are good ones getting in so you could really do some value add with them.
Speaker B:Like the one I picked up at Casper, Wyoming, I picked it up for 430,000.
Speaker B:I put 500k into it, but it just appraised at 1.3 and I'm roughly about a million into it and I'm refinancing it right now and I should be able to pull almost all of my cash out.
Speaker A:That's awesome.
Speaker A:Yeah.
Speaker A:So the reason I'm asking you is because today one of my family members has a website where he traff generates traffic to I guess leads from multi family and sometimes he gets them outside of Tempe out of Arizona.
Speaker A:And we got, he got one in Selena, Colorado which is like close to Pueblo and it's a 12 unit and I don't have any buyers there.
Speaker B:I'm interested.
Speaker A:Yeah, yeah, I'll have to, I'll have to send you the information my way.
Speaker A:Yeah, it's under, it's under rented.
Speaker A:It's like each unit's between 500 to 700 and way, way under rent.
Speaker A:But again, I don't really know that area and I don't really mess with, you know, outside of Utah when it comes to multifamily.
Speaker A:Look at that.
Speaker A:I'll send you that.
Speaker B:Interested.
Speaker B:Those are like that 12 units.
Speaker B:He's been my specialty number.
Speaker A:Okay, well There you go.
Speaker A:12 units right there outside of Pueblo and like south of Denver.
Speaker A:So that'll be cool.
Speaker B:Awesome.
Speaker B:Awesome.
Speaker A:All right, well tell, tell me A little bit about what you do to help new investors get into wholesaling.
Speaker A:Because you said you do virtual real estate wholesaling.
Speaker A:So do you teach it?
Speaker A:Do you?
Speaker A:What do you do?
Speaker B:We do.
Speaker B:We do.
Speaker B:So we have REO Auction Academy.
Speaker B:You see it right here behind me.
Speaker B:And what we do is we do something totally different than everybody else out there.
Speaker B:And it's kind of how I got in.
Speaker B:Right.
Speaker B:We teach people how to buy bank reos, but mostly on online auctions, whether it's Auction.com, hubzu Zone, Hudson and Marshall Realty, Bid, Auction Network, Williams and Williams, any of these platforms.
Speaker B:And even every once a blue moon there used to be stuff on ebay that you can get and there's some smaller little auction houses that are more local in different markets that you can also sign up for and potentially pick up stuff.
Speaker B:So that's what we specialize in buying in.
Speaker B:We have an educational platform, teach people how to do that.
Speaker B:And a lot of people are leery of buying outside of their area where they are.
Speaker B:And we kind of take the headaches away from you there.
Speaker B:It's not as daunting as it seems.
Speaker B:Systems and how we go about doing it.
Speaker B: and we've been doing it since: Speaker B:Like an example of a property we just are about to close.
Speaker B:And I think on a 23rd of this month here in June in Hubbard, Ohio, we picked it up for 177,000.
Speaker B:It's a big, big house.
Speaker B:Six, 6,088 square feet, I believe.
Speaker B:And like a three or four car garage, big, huge finished basement.
Speaker B:We picked up for 177.
Speaker B:We put almost 40, just under 40 into it.
Speaker B:We're selling it for 345.
Speaker B:We had six offers in or six offers over.
Speaker B:Asking price.
Speaker B:We went highest and best.
Speaker B:And that's gonna be 105k payout.
Speaker B:It's a rarity.
Speaker B:Right.
Speaker B:They get one that makes a great one.
Speaker A:Yeah, that's amazing.
Speaker B:But they do happen.
Speaker B:And we have another one in Cuero, Texas, which is south of Houston.
Speaker B:We picked it up for 53, put just about eight or nine grand into it, and we're selling it for 128.
Speaker A:Wow.
Speaker A:And.
Speaker A:And on these auctions you need to come up with the cash.
Speaker A:Correct.
Speaker A:Like you gotta buy it all out.
Speaker A:So how do you, how does that work for, you know, someone that probably has $0?
Speaker B:So some of our students will joint venture with them.
Speaker B:Right.
Speaker B:If they've got no money if it's a deal we're gonna do it, we'll JV with of course.
Speaker B:Yep.
Speaker B:JV is always a great one for them.
Speaker B:We have private lenders on our platform believe it or not that will fund a lot of deals as well.
Speaker B:Other people, other students will sometimes join venture with each other on different deals and one person comes in as a capital partner the other person is one that finds the deal.
Speaker B:So we got that.
Speaker B:We also connect them with companies lasted based lenders like Kiavi, Dominion Financial Lending 1, Lima One Capital and others, Coco Capital, Lee Arnold's group out there and we're working on a few different other ones as well.
Speaker B:That way they can get in there with.
Speaker B:Without having to worry about coming up with money.
Speaker B:Right.
Speaker B:And the funds themselves because that is you do when you buy these bank owned properties you've got to come with the cash.
Speaker B:Cash.
Speaker B:Right.
Speaker B:It's not assignable contract.
Speaker B:They don't let you in general.
Speaker B:Yeah.
Speaker B:So you've got to do a back to back closing.
Speaker B:However there are states if you work with the right title company.
Speaker B:There's wet fund states and dry fund states.
Speaker B:If you're in a dry fund state you can use your buyers cash to pay for you on the A to B side and you're just collecting the difference there which we do as well.
Speaker B:So that's a way to do it basically with almost no money down.
Speaker A:Because those are the best.
Speaker B:Those are the best.
Speaker B:I love when we get those.
Speaker B:And you can focus on those markets if you wanted to do you know.
Speaker A:A couple mark of those markets off the top of your head that you.
Speaker B:Can say we do Texas with that a lot.
Speaker A:I believe Mississippi is one too.
Speaker B:Mississippi is.
Speaker B:I'm trying to remember.
Speaker B:I don't think Alabama was.
Speaker B:I believe we did New Mexico.
Speaker B:I'm sure Missouri, Nevada.
Speaker B:I think there's either eight or nine of them somewhere in there.
Speaker B:I have a list somewhere.
Speaker A:Yeah, those are seriously the best.
Speaker A:We did one of those where we had the.
Speaker A:We used the, the.
Speaker A:The end buyer's money.
Speaker A:Yeah, that's great.
Speaker B:Those are the best when you could do that and again you need it.
Speaker B:You need a title company to be on board with you to be able to do that.
Speaker B:Because not all of them will do it because they want to make sure none of them get cause any issues.
Speaker A:So that's the main marketing strategy you teach in reo auction is how to find these sources deals.
Speaker A:Is there.
Speaker A:Would you say there's a limit or is it because it's the whole United States that you can open this up to is.
Speaker A:Is there no limit?
Speaker B:There is no.
Speaker A:There's limit.
Speaker B:And I used to do the direct mail marketing, right.
Speaker B: Which I cut off in: Speaker B:I didn't need to do any direct.
Speaker A:I was doing it super expensive too.
Speaker A:I'm sure this your strategy is inexpensive, costs nothing, right?
Speaker B:So there's zero marketing costs.
Speaker B:That's a big bonus that when you think about getting in about that do you want to spend three or ten grand a month marketing when you could just do it now?
Speaker B:It's your time and your time is a value, right?
Speaker B:You and I, we have value on our time, right?
Speaker B:So if you're putting in 15 hours a week, there's no reason you can't find a deal maybe two or three a month putting in that.
Speaker B:Once you get good at it, right.
Speaker B:Once you get good at comping properties and know how to contact the agents and what questions ask them and get the information that you need, it becomes more simplified.
Speaker A:So these, these bank owned properties are represented by real estate agents still.
Speaker B:It's not, not all of them.
Speaker B:There are some that aren't.
Speaker B:There's a program out there called the HUD CWCOT program which they created a few years back where instead of throwing them on a HUD home store because they're trying to get away from the HUD home store.
Speaker B:So if you go on there and look at it, you'll find very limited inventory in most of them they throw in the online auctions but with the HUD CW cot they'll foreclose on them and then just list them with an auction company.
Speaker B:And they're not list on the mls.
Speaker B:They're like off market properties, right?
Speaker B:They're off market technically and don't really have a price on them unless they feel like throwing something on Zillow, which they will at times put it on Zillow to put a number on it.
Speaker B:And then, and then basically we're trying to find an agent in that area who's somebody who's an expert in that area.
Speaker B:He's been there for a while.
Speaker B:To give us an idea what they think it would be worth.
Speaker B:Go out there, take a look at it.
Speaker B:A lot of them, they don't let you in even if they are vacant.
Speaker B:And we try to get our students focused on the vacant ones not occupied because of course with ejecting or evicting anybody focus on those.
Speaker B:If they could peek into windows, they'll generally the agents get a pretty especially experienced Agents could go there, peek through the windows, get an idea what they think it's worth and what kind of repairs they think it needs, and then just give you a ballpark estimate.
Speaker B:And then you can assume, you know, there's 15 or $35 per square foot to renovate the property.
Speaker B:You, you put those factors in, you come up with your MA lab will offer.
Speaker A:Man, I really like this strategy.
Speaker A:I haven't really heard of it too much.
Speaker A:That's very interesting.
Speaker A:I've been in the game for a long, like five years.
Speaker A:I'd say that's a long time.
Speaker A:But no, I haven't really heard that people using this marketing strategy very much.
Speaker A:Do you know why that is?
Speaker B:I don't know why.
Speaker B:And we're the only ones in the game.
Speaker B:I think people are creatures of habit and they're used to your traditional.
Speaker B:If you think of it this way, it's.
Speaker B:It's riskless if you're doing your traditional wholesaling method direct to seller.
Speaker B:Except you are risking your marketing money, right?
Speaker B:You are, you are risking that with ours.
Speaker B:You actually have to close on a property.
Speaker B:So people feel maybe it's a little riskier.
Speaker B:But for we did.
Speaker B:A lot of our students, believe it or not, are experienced investors that do a ton of deals in certain markets and they feel like they're missing out on the REO inventory and they just buy.
Speaker B:In our program, they usually assign somebody to just deal with the REOs and then they realize, shoot, I can go in other markets too.
Speaker B:And it's another segue for them to start another market to invest in.
Speaker A:I love that.
Speaker A:I think that's amazing.
Speaker A:Do you.
Speaker A:Are there some states that just because it's a hot area, hot state, I guess, market there's less REOs or is there always opportunities?
Speaker B:There is always opportunities, but there are areas where there's just such a little bit of inventory.
Speaker B:It'll go like that regardless.
Speaker B:Like a lot of these properties will move really, really quickly or the asset managers or banks will recognize that instead of putting it on the auction platform, they'll throw it on the MLS figure and they can get more of that.
Speaker B:We can't blame them, right?
Speaker B:I can't blame them.
Speaker B:No, of course.
Speaker B:Especially.
Speaker B:What's your market again?
Speaker B:I forget.
Speaker A:Salt Lake City.
Speaker A:Yeah, it's pretty hot.
Speaker B:It's a hot market.
Speaker B:Being a big time hot market for a while now.
Speaker B:So it's hard to find inventory, at least fairly priced inventory.
Speaker A:But I'm assuming the Midwest probably has tons of opportunities like Ohio, like you.
Speaker B:Said Ohio, Indiana, Michigan, Missouri, Kansas, Oklahoma, Texas, the Carolinas, Maryland, Pennsylvania.
Speaker B:Yeah, a lot of we focus just.
Speaker A:Knowing where to look.
Speaker A:You just got to know where to look.
Speaker B:You just got to know where to look.
Speaker B:Right.
Speaker B:And if you follow demographics, where people are leaving the cities that people are vacating, the states people are vacating like Illino way.
Speaker B:Right.
Speaker B:That's that market is really falling.
Speaker B:New York, crazy parts of New Jersey.
Speaker B:New Jersey's weird because people are leaving maybe more towards the city and they're shifting downward within the state.
Speaker B:So they're going more towards the shore points where they're going to Delaware or Pennsylvania.
Speaker B:So that market has become red hot.
Speaker B:But other markets people are shifting out of, they're going out of Minnesota.
Speaker B:Minnesota is losing a little bit of its luster in around minute, what do you call it, Minneapolis, all the issues they've had there, other parts of it.
Speaker B:The suburbs are doing great, they're flourishing still.
Speaker A:So if, if they are losing the zeal or like we're talking about some of these markets, those are where you would target or you wouldn't target.
Speaker B:I wouldn't target if I'm looking to hold long term.
Speaker B:But you can target to find bargains occasionally.
Speaker B:If you.
Speaker B:And I won't, I won't do cash flow rentals in those markets because I don't trust the, the government, the local governments and miss Valleys there.
Speaker B:They'll let the, the tenants stay in for forever.
Speaker B:So I tend to go just zero income tax for my rentals.
Speaker B:But some people do it right.
Speaker B:It's their market.
Speaker B:They don't mind doing it and dealing with that.
Speaker B:So you can occasionally find some really good deals because there is a little bit more inventory, especially outside of Chicago proper.
Speaker B:Right.
Speaker B:The suburbs of Chicago are still very hot.
Speaker B:But you outside of that and more rural areas and you'll find really good deals in those markets.
Speaker B:Same with Kansas, the same with Oklahoma, in Tulsa, different markets.
Speaker B:So there's some really good, really good opportunities.
Speaker B:You kind of want to focus and stuff.
Speaker B:You're looking at Missouri, St. Louis, focus necessarily on St. Louis itself because you got so much competition there.
Speaker B:But if you go 30 minutes, 60 minutes out to floss more, say or even a little further out, you'll find really, really good deals in that market.
Speaker A:Sounds like somebody need to check out.
Speaker A:Paul, I didn't know about this.
Speaker A:So Paul, for my listeners on here, since we're going to wrap up, what would their this call to action?
Speaker A:What would you have them do if they want to learn more about what.
Speaker B:You'Re talking about so if they want to learn more about this like if they want to reach out to us, that's great.
Speaker B:They can reach out to us@reo auction academy.com and we have a couple platforms they could if they feel like they can do it themselves.
Speaker B:We have a do it yourself program for like 497.
Speaker B: e a full fledged coaching for: Speaker A:Wow.
Speaker B:But if they want to do it on their own, start with your local reos on on MLS.
Speaker B:Look@auction.com Hubzu those two platforms have a ton of inventory, your two best biggest sources for looking at properties and then start contact the agents and try to feel like what, what is the value of this particular property?
Speaker B:Right.
Speaker B:Start targeting properties and testing it and seeing if you can come up with a good comping like if you figure out what the value of the property is as opposed to what the realtor gives you, it's good way to test yourself.
Speaker A:Of course.
Speaker A:And so if they come, if one of the listeners today finds something but they don't know what to do with it, could they also reach out to.
Speaker B:You and say hey absolutely, we've done that with people.
Speaker B:People have reached out to us.
Speaker B:They found deal.
Speaker B:They can't fund it, they don't know what to do.
Speaker B:We look at it, we analyze hey yeah, this is deal.
Speaker B:We'll go, we'll join join together with you.
Speaker B:Or we say this isn't a deal.
Speaker B:The reason you're not finding lenders for is because you're overpaying.
Speaker B:Here's what the comps are and here's what you're paying.
Speaker B:Here's kind of repairs and you'd sell.
Speaker A:Gotcha.
Speaker B:Do that and then maybe help them get out of that deal so they don't lose their earnest money deposit.
Speaker A:Well Paul, it's been a pleasure speaking with you and I actually I'm going to send you that deal that I have the 12 Plex in Selena, Colorado and also they are willing to do terms.
Speaker A:They I talked to him about it.
Speaker A:He said he'd be open to doing 10 years, 10 to 15 down 10 year balloon amortize over 30 years.
Speaker A:So we'll see.
Speaker A:Again I come to the point where this is kind of a newer territory for me in a different market but I have all the per the performer and all that information.
Speaker A:I'll send it to you and you can.
Speaker B:Yeah, I'm extremely interested.
Speaker B:This is right up my alley, this type of property.
Speaker A:All right.
Speaker A:Hey, we.
Speaker A:Hey, everybody is listening.
Speaker A:Network, network, network.
Speaker A:That's how you do deals.
Speaker A:All right.
Speaker A:Thanks, Paul.
Speaker B:Thank you.
Speaker B:Appreciate it, Sam.
