#045 World class poker player turned wholesaler Connor Steinbrook.
On this episode of House Flip Masters Holly is joined by guest Connor Steinbrook. Connor is a world class poker player and in 2011 when the government shut down the big poker websites his income was shut down overnight. Connor stumbled into real estate and went $60,000 in debt when he was doing his first deal but has since then become very successful in real estate.
Connor says that he did not intend to be a poker player, he went to school in 2003 where he met Chris Moneymaker playing who introduced him to the online world of poker playing where anyone with money in their pocket could get online and win big. In a short time Connor ranked highly in the world of online poker and was making some serious cash. On Black Friday, as Connor calls it, April 15, 2011 the government stepped in and shut down the websites where the poker playing was going on at. Overnight Connor’s world was shut down. Connor says that he made a lot of money, but he also made a lot of mistakes and was spending his money as quickly as he was making it. When Connor had to face the job market he found that he was having a hard time finding a job because he was labeled as an ex-gambler, when he realized that he wasn’t going to get a conventional job he decided to make one for himself. Connor went into network marketing and didn’t like what he was doing; and insurance where he also didn’t like what he was doing.
Connor says that he was watching the flipping shows and said to himself that was something that he knew he could do. His favorite show and the hosts were in town and Connor decided to take a trip down to where they were to talk to them. While the hosts weren’t there, there was an opportunity to sign up for a bootcamp and a national training company where he racked up a bunch of credit card debt and found himself in a situation where he needed to get out of it. Connor likes to share his story with the world because he went from the top of the world to rock bottom and he likes to let people know that it is possible to get on top of whatever situation you are in to make your life better. Connor credits real estate to saving his life and turning it around.
Connor used Virtual Joint Venture Wholesaling to save his career. Connor advises that if you want to be a wholesaler you need to have a big buyer’s list and you need to let everyone know that you have it because it is easier to find people who need deals than to find that specific one deal that you are hunting for. For his first deal Connor was at an REI club and there was an individual with an ad for a property that was a better deal than Connor had ever been able to find and he knew someone that he thought was looking for a deal; Connor connected the person who was interested in that deal with the person wholesaling it. Connor says that he made only a little bit of money off that deal because he wasn’t as familiar with contracts as he should have been on that time. Connor stresses to listeners that while contracts might be stressful it is vitally important for your income and protection for you to understand the contracts that you are connecting people with.
Connor says that with Virtual Joint Venture Wholesaling he never visits the property, never meets the buyer, does not go to any showings of properties, the buyer does all of these things. Connor says that he puts in 3-5 hours per deal and the deals take 7-14 days to close, he says that he uses virtual assistants to do the work on these deals and from the closing of these deals he is making $2,500 to $25,000 per deal. Connor used Virtual Joint Venture Wholesaling to transition to house flipping he feels that this was the most effective and low risk way to make money so that he could start flipping homes. Connor calls what he is doing as an exit strategy because he is helping take homes that people don’t want or can’t sell and gets them sold.
Connor reminds listeners that as a wholesaler you are not a real estate agent and that you don’t need to be at the property to show it because the investor that is purchasing it probably knows more about the numbers than you do. Connor says the most important part of doing these deals is to do them as quickly and efficiently as possible. As long as you understand what you are doing and have a strategy for your business you can do this job from anywhere in the country.
Holly asks Connor what happens when he goes in on a deal with partners expecting a certain percentage of profit from that deal and something in that deal changes - does Connor spell out from the get-go what he expects to make on each deal or is it case dependent? Connor says that his JV agreements are specific on what percentage is expected before even going in on the deal with someone, while his assignment contracts are half a page long. Connor advises checking in your state and having an attorney help you draw up a document or even a title company that is familiar in drawing up these documents. He stresses that it is vitally important that you have your paperwork right so that you don’t get bypassed entirely and worked around by the buyer. Connor says that he knows that contracts can be scary but having a good one in place really is for your protection.
Holly asks Connor to share some mistakes that he has seen people make to share with the listeners so that they can keep them in mind. Connor’s first deal should have been worth more money than it was because as a first-time investor you doubt yourself and don’t know what is real until you see what has happened. Making your first makes helps to create momentum in your business and will propel you forward to do bigger and better things in your investment career. Connor says that typically it takes 3 to 6 months to get their first deal, people who get their first deal done more quickly really are just getting lucky - most investors have to really fight and work hard to get those deals. Connor reminds us that as long as you have a buyer’s list you have a business no matter how long it takes you to get that deal. Holly agrees that you need to set realistic expectations and understand that deals can often take longer than you want them to.
When asked to share advice for new investors interested in getting into this business Connor echoes Holly’s comment that you need to set realistic expectations. Connor reminds us that there is no such thing as successful people just being lucky, they put the energy and effort into their success the billion dollar company doesn’t just fall into their laps. Wake up every day and work hard until you are successful.