Putting People Before Property Profits w/Jamil Damji

David Greene:
This is the BiggerPockets Podcast show 593.

Jamil Damji:
If you’re a realtor and your job is to talk to people about value, to talk to people about how much a house is worth and how I came to this price, and what I can possibly get you on the open market, yet I’ve not been taught how to do that in licensing school, that’s a big problem and nobody’s talking about that. Nobody’s talking about the fact that even the education that they’re putting realtors through isn’t standardized.

Jamil Damji:
We don’t have agents learning the adequate things that they need to learn in order to speak intelligently about real estate and real estate value.

David Greene:
What’s going on, everyone? My name is David Greene, and I am your host of the BiggerPockets Real Estate Podcast, the best real estate podcasts in the whole entire world. If you’re looking to gain financial freedom through real estate, you, my friend, are in the right place. BiggerPockets is a community of over two million other people all trying to do the same thing as you, build wealth through real estate, create a better life for themself, and find financial freedom.

David Greene:
We help you do that by bringing in experts in the field to talk about how they do it, creative minds to sort of wake the juices up in your own, and people who have walked this path before you to share how they did it. Today’s guest is fantastic. My co-host Rob and I are interviewing.

Rob:
Jamil Damji.

David Greene:
Thank you.

Rob:
We’re not editing this out. You’ve stalled. I win.

David Greene:
Yeah, I was trying to remember if it was Damji or Damji, but it is Damji. Thank you, Rob. You got that right, who is a wholesaler who gets deals from a variety of sources, but he does it differently than other people. Jamil’s entire philosophy is to do this ethically where everybody wins. He’s actually created a sustainable business model where lead after lead after lead keeps coming back to him, and he doesn’t have to worry about ripping somebody off and then running into them at the grocery store and not wanting to be able to show his face.

David Greene:
Jamil is a new member of the BiggerPockets family, so he’s going to be joining Dave Meyer at the new On The Market Podcast. This was our first time getting to know him, and he is an impressive individual. I think you guys are going to love today’s show. It is equal parts inspiring, practical, informational, educational, eyeopening, and even a visionary element in a sense as we talk about what the world of real estate should look like with mixing the on the market deals you get with the agent on the MLS and off market stuff you find with the wholesaler.

David Greene:
And we made some pretty funny jokes at Rob’s expense. There’s a little bit of the Brandon Turner vibe that shows up again today. Rob, what did you think about this show?

Rob:
I also got the opportunity a to coin a new term called holdsaling. We’ll get into that a little bit later.

David Greene:
You want to make sure you stay all the way to the end because holdsaling is a… You don’t want to miss that.

Rob:
I’m actually writing the book for holdsaling right now for BiggerPockets. We’ve made a lot of progress in the last hour since we recorded this podcast. But yeah, man, this one went off the rails a little bit in the best possible way. And what I mean by that is we always kind of have an idea or like a topic that we’re going to talk about, but I think you asked a really hard question in the world of wholesaling.

Rob:
Honestly, I kind of think that Jamil had a bit of a hot take in that the way to approach wholesaling is kind of working a lot harder than what we’re typically taught wholesalers are doing. He’s taking on a lot of risk. He has a lot of reserves to be able to actually close on any wholesaling contract he goes into. It’s just refreshing, honestly, because he really did change my perspective, I think, throughout the last hour.

David Greene:
You’re going to want to listen to this one because Jamil shares a method that works without spending a ton of money. He’s not committing 10, 20, 30, $40,000 a month to do direct mail. He’s not paying a ton for SEO leads. And because he’s not putting a ton of money in, he doesn’t have the pressure to rips somebody off to get all that money back for the next one.

David Greene:
He’s actually using relationship building and problem solving to create lead flow so he can create a fair deal for everybody. This is a fantastic show. Do we have a quick tip for today?

Rob:
Quick tip: don’t rip off people. No, just kidding.

David Greene:
Today’s quick tip, be a good person and also check out the new BiggerPockets show On The Market hosted by Dave Meyer, as well as a couple different personalities that all bring their perspectives. If you guys watch TV, there’s a few people out there that probably do that. Check out Jamil on his A&E Show.

Rob:
Triple digit flip. Oh man, I’m just bailing you out this whole podcast.

David Greene:
This is why you’re here, Rob. That’s exactly right. I’m the doctor and I just say scalpel, and you put it in my hand and say, “Check.” I appreciate that.

Rob:
I think it’s really crazy. We actually went through this entire podcast. We spoke for 60 minutes and we didn’t even talk about the fact that he had a TV show. Ain’t that kind of crazy? I feel like we didn’t even… We usually lead with that, we have a TV star in our midst. But yeah, that’s a fun fact about Jamil.

David Greene:
You guys are going to love Jamil, so I’m excited for you to get to know him. Please go follow him on social media. Also, give Rob a follow here. He is @Robuilt and I am @DavidGreene24. Without any more of that ado, let’s bring in Jamil. Mr. Jamil Damji, welcome to the BiggerPockets Real Estate Podcast. It is so nice to have you.

Jamil Damji:
Thank you. Thank you. Thank you, David. I’m absolutely excited and honored to be here. I’ve been trying to be on a BiggerPockets Podcast for I think two and a half, three years, but you guys just put me on. Thank you.

David Greene:
Well, welcome to the VIP lounge. You finally made it into the backstage. I suppose now’s a good time while you’re here to announce the world that you’re going to be joining the family. Welcome to the family. You’re going to be on the new podcast with Dave Meyer, On The Market. Tell us a little bit about what you guys are going to be discussing.

Jamil Damji:
Well, it’s an extremely exciting situation for myself, BiggerPockets as well. David Meyer, as you guys know, he’s the vice president of data and analytics at BiggerPockets. What we’re trying to create is an incredible show where we take the mundaneness of data and analytics and we bring it to a digestible and fun way of understanding and really taking those topics in and making them mainstream. The goal is…

David Greene:
I got to say, you sound like the algebra teacher in high school that says, “I’m going to make math fun.” Is this a bait and switch?

Jamil Damji:
Yes. No. How could it be bait…

David Greene:
Yes, because it’s not fun.

Jamil Damji:
Here’s the thing, right? You see and you hear all these numbers. The facts are is that if you go to one website, you can read a report. You can go to another website, you’ll read another report, and another one, and another one, another one, and they’re all going to say different things, and they’re going to have different experts saying it. You still have to make informed decisions about what your investment activity is going to be, what your strategy is going to look like.

Jamil Damji:
It’s very hard to make sense of all the noise and all the chaos. Well, what I think BiggerPockets nailed is it brought some of the industry’s best experts and an incredibly gifted data and analytics individual brought us all together and said, “Figure this out.” And that’s what we’re trying to do. We’re trying to figure it out. We’re really bringing to the conversation our points of view, our histories, as well as intelligently and truthfully looking at the data and trying to make sense of it.

Jamil Damji:
Because if we’re going to look at numbers, a lot of people will say, “These guys are just saying this because they’re real estate people. These guys are only feeling this way because they’re in the business, they’re in the market, and they have an incentive to tell people that real estate isn’t going down, or real estate isn’t super risky, or that we’re not in a bubble, or whatever that might be.” The facts are is we’re all just as interested as the general public or people that are just getting started in the real estate investing careers.

Jamil Damji:
We’re has invested in that information, and we’re trying to make as much sense of it as you are. And that’s what this show is about. Watching us make fools of ourself trying to understand and make sense of this crazy, crazy world of data and analytics when it comes to the space of real estate investing.

David Greene:
You make up a good point that we’re all looking at data and trying to make sense of it. It is easy to critique those of us that are in this space for giving our opinion on things, because we have a vested interest. However, I would say the fact we have a vested interest in it makes us even more vulnerable and more reliable because we’re putting our money in the stuff we’re talking about.ok? To me, it’s easier for the person who’s not investing in real estate to give advice because they have nothing to lose.

David Greene:
It’s easy for them to say don’t do this or do this if they’re not doing it. It’s the people that are actually investing their money tied to this industry that are going to be looking at it from the lens of the listener who’s trying to figure out what to make sense of it. I’m really glad to hear that BiggerPockets, we’re growing, we’re bringing in new perspectives. I think that’s what people are looking for. In general, we all have access to the same data.

David Greene:
We’re trying to figure out, what do I think? What do I make of this data? What lens do I look at this through? I’m excited to get to know you better, Jamil, to hear about your background, to know more or about the lens that we are all going to be looking at things through. Would you mind telling me a little about how you got into real estate investing in the first place?

Jamil Damji:
Man, I’d love to. Let me just start off by I invented wholesaling. I’m kidding. I didn’t. I thought I did though. I truly thought I invented wholesaling, because in 2002, I got my start in real estate investing and it was by complete accident. At the time, I was just coming off this devastating blow of not getting into medical school. I’m East Indian. My parents bred me to be a doctor, right? That’s what I was supposed to do.

Jamil Damji:
I was supposed to become a doctor, make them proud, and join my cousins and the rest of my family in our medical practices in one giant strip mall in Calgary, Alberta. What happened was I didn’t get in, and that was devastating for me because I had a near 4.0 GPA. I volunteered. I had all the extracurriculars. I did everything that you should do to be the pedigree for somebody who gets into medical school. The problem was, is I was so good that when I applied, I was too young and they had told me that.

Jamil Damji:
They said, “You’re just too young. Try applying again,” but that broke my heart. It broke my spirit, and I thought, you know what? I can’t do something where other people get to decide my destiny. I decided to make my step into entrepreneurship. I picked up a book, Rich Dad Poor Dad. I think a lot of people get their start in real estate investing and entrepreneurship from reading a book like that. It got my mind thinking, and I started looking at the world in a different lens.

Jamil Damji:
Well, I had an opportunity to get involved in an entrepreneurial venture where we were selling websites, right? This is 2002 where the internet was still fledgling and people weren’t really adopting it in their businesses. It had been around for a bit, but it was still like pornography and dating sites. What my job was is I was through the yellow pages and I was convincing business owners that they should be advertising and moving their businesses online. My job was cold calling, so I’d cold call all these businesses.

Jamil Damji:
Well, I had a business partner at the time whose father and him were in development of real estate. They were knocking down these old houses and they were building these duplexes. They were talking about this deal they were in where they made $160,000. Now, as a person who was selling these $600 websites, I was literally losing money every time I made a sale. Every time I made a sale for a $600 website, it ultimately cost us $700 to make that website.

Jamil Damji:
I lost a hundred bucks every time I made a sale. I was not in a good place. I listened to these guys talk about a deal where they’re making $160,000 and I’m trying to figure out how I can get involved. They’re telling me there’s nothing I can do. I have no money. I don’t have credit. I’m not a realtor. I’m not a construction worker. There’s nothing that they could see that I could do to add value to their situation. But as I listened further, I heard them griping about needing more building lots.

Jamil Damji:
They were looking for more houses to demolish. I asked, what type of properties are these? They gave me the criteria. They said, “We need something that Zone R2, 50 foot frontage, 120 feet deep minimum. If you can find something like that in one of these neighborhoods here in Calgary, let us know and we might be a buyer for it.” The next day I’m walking my dog, and I actually rent a property. I’m living in a rental in the neighborhood where they’re doing this development.

Jamil Damji:
I’m walking my dog and I passed by a house that I’d actually tried to rent to three months prior, but it was $200 outside of my budget. It was just 200 bucks. $200 was making or breaking me at that time. Well, I called the for rent sign and I asked the lady if she’d be interested in selling her house instead of renting it, because it had been three months since I tried to rent that property and it was still available. Her answer was yes for the right price. I asked what that price was.

Jamil Damji:
She said $350,000. I head back to the office. I see my business partner and I ask him, “How much would you and your dad pay for this house?” He said $400,000. So now I’ve got a 50,000 a problem to solve. I know I can’t buy this property because I have no money, but I know that I can sell this property if I can figure out how to buy it for a $50,000 profit. I do what I know how to do, which is cold call. I get into the phone book.

Jamil Damji:
I start calling real estate lawyers, and I get all the way to S and this man David Steed, I’ll never forget him because he answered his phone, he was so fresh out of law school that he didn’t have a secretary yet. He answered the phone and he very quickly told me how I would do that deal. He said I needed two contracts, one where I was the buyer and I had my name and/or a signee, and then the other contract where I was a seller.

Jamil Damji:
When I brought those contracts filled out to him, he would do the conveyance and my deal would be done. Two weeks later, I had a check for $47,000 and change. That was it.

Rob:
Dang! All right. You kind of went from… Would you consider what you were doing before wholesaling websites, where yore going and buying the domain and then going to businesses and reselling it to them?

Jamil Damji:
What we were doing then is we had developers in India and Pakistan who would actually build these websites for us. We were selling hosting, because hosting was recurring revenue, but we would just sell these small little five page websites, which we would actually pay to have developed. I wasn’t wholesaling them. I was a part of the company that was contracting to have the actual websites built. We just didn’t have an understanding of what our costs were. That’s why I lost money every time I sold a website.

Rob:
Okay, so you kind of go from this digital shop of sorts, all the way to stumbling upon accidentally wholesaling. What was that like? I mean, just for a frame of reference, how much was like $47,000 to you at that time?

Jamil Damji:
I grew up very, very working class. My father, he was very rarely at home. He spent his entire days working at a truck stop shoveling gravel. My mom was a data entry operator, and my sister basically raised me because my parents were at work all the time. We grew up very humbly and $47,000 to me was literally like winning the lottery. I didn’t cash the check for four months. I had the money order that the bank got me. Well, the lawyer got from the bank.

Jamil Damji:
I had that money order folded up in my wallet and I kept it for four months until somebody told me that it was going to expire in six and I had to deposit it. I just was so shocked that I had that money. I didn’t have a life where I wanted to go spend it. I wasn’t trying to go and buy a gold chain and buy a car and do this and that. I really just was shocked that I was able to make that money. But then my thought was, how do I keep doing this? How do I do this again?

Jamil Damji:
It was until I had two or three of those checks and I continued to do these deals. They were very easy for me once I did the first one, because now I knew exactly what I was looking for. I was literally getting a house under contract every seven to 10 days, calling for rents, just the classified section of our newspaper would have all these properties listed for rent. I would call these for rent by owners and I would talk them into accepting an offer or potentially selling their house and get them under contract and I’d sell them to these builders. It was crazy.

Rob:
Was this easier because you had the specific buyers already in place?

Jamil Damji:
Yes.

Rob:
Or at what point were you able to say, “Hey, I really like you guys. I’m going to continue working for you,” but then as I understand it, you need to start building up a buyer’s list when you’re in wholesaling. When did you start kind of moving towards that side of things?

Jamil Damji:
That didn’t happen for a while actually, because in Canada, it’s a little different than it is in the United States. They don’t have access to the same kind of information as we have over here. In Canada, you don’t get access to sold data. You don’t know what things are selling for, so you don’t really know how much stuff is worth. You can’t pull tax record data and skip trace LLCs and get members’ phone numbers.

Jamil Damji:
All of that information that we have the luxury of having access to here in the United States doesn’t exist there. Yes, I had to start with my buyer, but how I evolved from one or two houses a month was from that, I realized that if I found where construction or development projects were happening, then there would be a potential buyer there. If I can go and approach them and see what kind of product they’re looking for and find the person who’s buying them or making the acquisitions for those developers, they may look at my product.

Jamil Damji:
I went from houses to apartment complexes. I saw that these developers were doing condo conversions in my area. I would just call all the sales people on the phone on the big development signs that they’d have posted outside of the project. I would find my way to their acquisitions person. I would drive around and I would find all these old apartment buildings that had handwritten for rent signs that I knew were self-managed because of the way that those rent signs were Sharpie’d in.

Jamil Damji:
I would just ask if they’d be interested in talking to me about potentially the building, and I would wholesale those buildings for $100,000 lift just to these developers that were looking for a new product to turn from apartment buildings into condo conversion. In Canada, for me, I had to start with the buyer because I didn’t have access to the information that I have now. Now in my business, KeyGlee, which is one of the nation largest wholesale operations that I help co-found, we will do anywhere between 60 to 80 transactions a month.

Jamil Damji:
The volume that I was doing back in the day is not even close to what we’re able to do now, but we’re able to do this volume now because we’ve got systems. We have access to information. And because of that, we’re able to scale in a completely different way. The evolution of me being a big wholesaler doesn’t happen for about a decade from my first deal to what it is now.

Rob:
At what point, I’m kind of curious, did you… Because you said jokingly, you invented wholesaling or you thought you did. When did you meet someone else in the game? Was there ever a moment where you’re like, “You do do this too? I thought I was the only one.”

Jamil Damji:
That’s funny. Another funny story, I lose all of my money in 2008. I’m wholesaling what… We call them skip transfers in Canada. It’s not even called wholesaling there. That’s why I thought I invented it, right? It’s just a legal process called a skip transfer. But I got into development in 2007 thinking I want to be like these developers that are building these duplexes and doing these condo conversions. I’m tired of just flipping these contracts.

Jamil Damji:
I took all of the money that I had been making wholesaling and I put it down on four development projects at the worst time that you could ever do that in the history of real estate. I got caught. In 2008, I lost everything. Not only did we lose all the money that we made flipping houses and flipping buildings, but I’d asked my parents to co-sign on those construction loans for me. And within a matter of months, myself, my mom, my dad, my sister, her husband, our 150 pound dog, and my niece were all homeless.

Jamil Damji:
We had to go borrow money to rent a two bedroom apartment because the bank had taken everything from us. I left Canada in 2009, the beginning of 2009, and I moved to Los Angeles to become a standup comedian.

Rob:
Are you going to do your type five for us right now?

Jamil Damji:
Well, no, I didn’t make it as a standup comedian, Rob. I continued in real estate, but what was fun is for about four years between end of ’08 to 2012, I was writing sketch comedy. I was writing sketches for Funny Or Die. I was at the Upright Citizens Brigade training there. Second City, I trained there. I was really pushing. I was doing open mics, doing all the things, but Hollywood just wasn’t ready for me. I realized that I needed to do something else. In 2012, I got back into real estate.

Jamil Damji:
I started noticing in Phoenix, you could buy these apartments that had sold for $400,000 for like 25 grand and they were renting for 800 bucks. Even though I was doing comedy in LA, my thought was why don’t I arbitrage and pay for my life here in Los Angeles by buying rental units in Phoenix and supplementing my life. That’s what I did. I started buying these short sales in Phoenix, Arizona and using the money that I would make in LA and putting a deposit down in a condo in Phoenix.

Jamil Damji:
I just kept doing that. This is how I got introduced to wholesaling and what it was, is I was writing these contracts on these short sales. And if any of you were buying short sales back at that time, you’d know you would write 10 contracts for 10 different short sales and you might get one of them under contract. You would basically throw everything you could at the wall and see what stuck.

Jamil Damji:
Well, it just so happened that two properties that I had written contracts on came to fruit that I couldn’t close, because I had just purchased two other apartments. I did what I knew how to do. I went to Craigslist and I wrote an ad and I said, “I’ve got these two contracts for sale.” This is before the banks were putting on deed restrictions that would actually stop you from being able to assign a short sale contract. They were still letting you do that. I marketed these two contracts on Craigslist.

Jamil Damji:
And within a few minutes, a wholesaler from Phoenix, Arizona named Tim Wynn called me and asked me the addresses of these two properties. He drove by them and about 15 minutes later told me he’d buy them. I made $18,000 off a Craigslist ad from Los Angeles flipping two contracts in Phoenix, Arizona. I thought, what am I doing in this dumb town trying to tell jokes to people who aren’t laughing at me? I have to continue my world in real estate.

Jamil Damji:
This is where I belong. I packed up my bags. It was actually my birthday, 12/12/12, December 12th, 2012, I packed up a U-Haul and I drove from LA to Phoenix to begin my career as a wholesaler.

David Greene:
Wow! All right, I want to ask a question and I don’t want to kill the flow here. I’ve been scared to ask this, but it’s going on in my head all the time. I want to get your opinion on it, but I don’t want to kill your vibe. Have you thought about what you’re going to do if at any point wholesaling becomes illegal? I ask that because so many people are getting into it. We already have a housing shortage.

David Greene:
There’s less homes making it to the MLS because wholesalers are getting in before they go to agents. In many ways, wholesalers sort of act as an agent. I can absolutely see people taking their complaints to politicians and saying, “There’s not enough homes. All these investors are buying them from wholesalers. Make wholesaling illegal.”

Jamil Damji:
I actually love the question, David, and I’m glad that we’re getting to talk about it. What will actually become illegal is not the process of buying and selling real estate as a principal. No one can ever make that illegal. What they will bar you from doing is unlicensed activity or an assignment. Personally, I’m not against that. If you look back at my history, I’ve been advocating since I got in the business for people to get licensed.

Jamil Damji:
I think when you are in the business of underwriting property, of having conversations with homeowners, of acting in a way that you’re advising people or you’re providing information to people about the efficacy of a project, it’s important that you have credentials to do that. I’m not opposed to people being required to hold a real estate license to wholesale.

Jamil Damji:
The other side of that, the assignment, I understand the reason why they want to ban the assignment, because people are out there writing offers for properties that they can’t actually purchase. That’s a problem, right? Because if your intent when you enter into a contract with a homeowner is different from what you can actually do, that’s fraud. That’s a fraudulent contract, right? Let’ s talk about the ethics of that. That’s not ethical.

Jamil Damji:
It’s not ethical to go into a contract with somebody and say, “I’m going to offer you $300,000 for your house,” and not have access to $300,000 or a partner or a situation where you can get $300,000 to actually perform on that contract. I don’t agree with activity that promotes that. How to combat that? Well, first and foremost, I advocate for getting licensed.

Jamil Damji:
And second, I believe that if you are going to write a contract on a property, you should have the financial capacity to close on it, which is why everybody who is a part of my AstroFlipping community, I actually earmark $2 million in cash that I put in an account where I act as a private lender to my students. So that when they’re out there writing contracts, they’re actually backed by real dollars so that they’re not writing contracts that are fake.

Jamil Damji:
They actually have a joint venture partner or a capital partner or a private money lender who’s there their contract so that when they’re actually entering into these agreements, they can perform on them.

David Greene:
I really appreciate you saying that, because I see… I bought a house from a wholesaler six or seven years ago. I bought a lot of homes from wholesalers, but this one in particular, they gave me the information. They said it was like 1,800 square feet. I ran my comps. I came up with an ARV. I hit it exactly on the head. It was like the perfect BRRRR. I got 100% of my money out if it hit that number. But it turned out the house was 1,300 square feet, not 1,800 square feet.

David Greene:
I didn’t have any recourse to go back and say, “Hey, you told me this,” because they’re not licensed. There’s no oversight. There were none of the protections that are normally in place. So while my price per square footage was dead on, I ended up paying exactly what the property was worth. It wasn’t any kind of a deal, and so I left a lot of money in it. I just realized that’s the risk you’re taking or one of the risks you’re taking when you’re dealing with a wholesaler is they are not obligated.

David Greene:
They’re not a fiduciary to you. And now as an agent, man, there is so much oversight. It is like pulling teeth sometimes to get through this business with the continued education and the testing and the licensing and the exposure to lawsuits and all of the things that come with it because there’s regulation. And then wholesalers are kind of like Wild, Wild West.

David Greene:
They’re just running out there slinging stuff around, telling people like you said, “Oh, I’ll buy your house,” and then secretly going to try to assign it to someone. And if they can’t find anyone, “Oh, turns out I’m not going to buy it.” I can see that that may not be the case forever, especially as we see more and more pressure starting to come. I think that’s very wise that you’re saying, “Well, if you just get licensed, then you can avoid that.”

David Greene:
The other part of it is just the assignment issue really needs to be spelled out clearly. If you don’t have the funds to buy a house, you shouldn’t be putting any contract.

Jamil Damji:
Absolutely.

David Greene:
I appreciate you saying that. I do think…

Rob:
I guess I’m curious about this really fast because you’re saying you’re not opposed to people getting licensed for being a wholesaler. Is that something that exists in any capacity right now or is what you’re at advocating for a way…

Jamil Damji:
Oh, real estate license.

Rob:
Oh, okay.

Jamil Damji:
Called a real estate license, yeah.

Rob:
To be a realtor or whatever?

Jamil Damji:
Yeah. Jerry Norton, a friend of mine, has been talking about a wholesalers license and association, all that, and that could be years away. That’s possible that that gets adopted and we can organize n a meaningful way that to create that organization. However, I think that it’s still a couple years down the road and legislation’s fast moving right now to bar assignments, to require people to hold their real estate license. I think, in all honesty, wholesalers are going to become realtors that are investors.

Jamil Damji:
That’s what it is. I don’t have a problem with it. Here’s the thing though, I deal with a lot of real estate agents. I love realtors. In fact, I build my business in collaboration with real estate agents. One thing I’ve learned is that not all real estate agents know what they’re doing either, right? Even though they have to act as fiduciaries, even though it’s their job to have everybody’s best interest at heart. I have asked rooms of hundreds of realtors if they were taught how to comp in licensing school.

Jamil Damji:
By a show of hands, please show me how many of you in the room here that are licensed agents were taught how to run comparables when you were getting a real estate license? I have yet to have one person raise their hand. They’re not taught how to underwrite property. If you’re a realtor and your job is to talk to people about value, to talk to people about how much a house is worth and how I came to at this price and what I can possibly get you on the open market, yet I’ve not been taught how to do that in licensing school, that’s a big problem.

Jamil Damji:
Nobody’s talking about that. Nobody’s talking about the fact that even the education that they’re putting realtors through isn’t standardized. We don’t have agents learning the adequate things that they need to learn in order to speak intelligently about real estate and real estate value. I think that there’s a lot of work to be done. However, let’s not ignore the fact that if you do have a realtor’s license, that you basically carry a badge of credentials with you that will make people feel comfortable and confident to get advice from you.

Jamil Damji:
I think we need to up that game a little bit and teach people how to underwrite.

David Greene:
100%. What real estate licensing is like, it would be if, Jamil, you applied to work for my construction company, and I said, “Okay, I’m going to use you to build decks. You’re going to use a nail gun and a saw and a hammer.” You showed up to take the job. But instead of getting training on how to use a nail gun and how to use a saw and a hammer, I gave you a test on where the parts for the nail gun come from and how they are assembled and what voltage goes through the nail gun and all these things that have nothing to do with actually doing your job.

David Greene:
That if anything went wrong, you would not be the person I would go to fix it. I would take it to a completely different human being to fix the nail gun, so you don’t need to know how it works. It’s archaic, and frankly, it’s why the whole door has been open for wholesalers, because realtors should have been doing this. They’re just sucking at their job, in most cases. They’re also afraid to do what you do, which is to go talk to people. They want to get leads from online sources.

David Greene:
They want someone to come to them. They don’t want to go look for business, and they don’t want to understand the industry themselves. It puts the consumer in a terrible position where I use a licensed professional so I feel safe who knows nothing, or I use a person who understands business, but they’re not licensed and it’s the Wild West and I have no protection. And who knows how ethical they are? You’re sort of trying to navigate this world between the two.

David Greene:
I agree with you. I think the perfect combination is to bring them together and to sort of have agents run their business more like what wholesalers are doing and have wholesalers get licensed. What would probably happen is wholesalers would get licensed. They would come over some more oversight, so the industry in general would be better. And it would push out more of the bad agents who shouldn’t be there anyway.

Jamil Damji:
When you look at what wholesaling really is, you’re selling potential. That’s all wholesaling is. As a wholesaler, your job is to see, is there potential for a value add? Is there a potential to create value in this situation? If there is potential for creation of value, I’m going to forgo going vertical or extracting all that value. I’m going to sell the majority of that value to somebody else for a portion of it.

Jamil Damji:
Our jobs as wholesalers is to spot or create value. And if we’re able to do that, we’ll be successful at it. Agents are not taught that. They’re taught how to stay out of prison. That’s it.

David Greene:
Yeah, that’s right, or how to make someone imagine how their kids are going to be playing in the yard.

Jamil Damji:
Yes. I don’t think that there’s a correlation there. There might be for people who care about what their kids are going to look like playing in the yard. Cool. Kudos to you. I get that. Have fun with that. Yes, you should know the laws, and you should know the codes of ethics, and you should know the things that are going to keep you from getting in prison for trading in real estate. That’s all so real, but let’s talk about the fact that we need to know what things are worth.

Jamil Damji:
Why are there people out there right now paying 40, 50, $100,000 over list, waving appraisal gaps, waving appraisal contingencies, being so dramatically fleeced on the retail market, and yet they’re still being represented by a fiduciary who’s pressuring them, telling them, “If you want to be competitive in this market right now, you are going to throw away all of the protections that are given to you in this contract so that you get the house. I’m going to help you.

Jamil Damji:
I’m going to advise you with the verbiage and the things that you’re going to need to do to put yourself into that situation.” How crazy is that, David, Rob?

David Greene:
Let’s unpack that because it is a very real problem if you are trying to buy… Here’s how I see it. You’ve got less inventory hitting the MLS. Part of that is because wholesalers are grabbing it before it gets there and part of that is because we’re just not making enough homes, but you’ve got several things contributing to the lack of inventory. If there’s a lack of inventory and there’s consistent or growing demand, you’re going to get an imbalance in the force.

David Greene:
There’s too much demand and not enough supply. If someone doesn’t waive their appraisal contingency, somebody else will. With the market increasing like it is, in two or three months, your house is worth more than the 50 grand over asking that you paid. On one hand, you’ve got all of this, a crunch with MLS on market deals where everyone’s going because they want the realtor. They want to take their time knowing what they’re getting.

David Greene:
In the wholesale realm, if you are the person who gets the deal directly from the wholesaler, you’re probably avoiding all of that competition. You’re not having to go in as crazy. The risk is coming from something different where you don’t have a fiduciary looking out for yourself. Is your advice that people looking to buy property shouldn’t be going to the MLS and they shouldn’t be going to agents and they should find a wholesaler? How do you mitigate the risks that are involved on both sides?

Jamil Damji:
I love that question. David, the answer to that question is it’s not any of those things actually. I’m going to give you key KeyGlee’s business model. This is the fun thing. Most people, especially in the wholesale world, they don’t want to give away their secrets, right? They’re like, “Oh, I can’t tell you what we do. We’ll be competed out of business.” I don’t believe in that. KeyGlee, which is my wholesale operation, we’re franchised in 104 markets in the United States. The primary source of our deals are realtors, agents.

Jamil Damji:
We are working with, networking with agents and we get those opportunities that are unfinanceable, that are in too distressed condition to be able to be bought with a loan or on the retail market, and we make that as a pocket listing. The majority of the business that we’re doing are coming from agents. Representation is still in the conversation. I never advise a homeowner to make a deal off market or not have a fiduciary or have their agent involved. We are actually offering 100% of as is value.

Jamil Damji:
I’m not ever offer a seller or taking equity from a seller. I’m just saying that with your house right now in this condition, I need to spend 50, 60, $70,000 to get this retail price. But it will never be worth that until I take a financial risk to get it there. In its condition right now, this house has to be bought with cash. No lender is going to loan on this house. It’s not financable. If you’re going to attract a cash buyer, what will a cash buyer pay? I want to be the highest that a cash buyer will pay. That’s it. That’s it. That’s the difference.

David Greene:
It sounds almost like what you’re saying is you’re looking at… And there’s always subjectivity to this. But if I’m hearing you right, as objective as you can be, what is the house actually worth to the seller? What is it worth in its condition to the seller and what is it worth to a buyer? Let’s just get in the middle so everybody’s getting a good deal instead of, how do we rip off grandma and give her less than the house is worth because she doesn’t know what she’s doing?

David Greene:
Or how do we rip off the new super excited BiggerPockets listener who’s going to go buy this wholesale deal because they’ve been getting skunked on the MLS? They pay too much for the deal. You’re like, let’s just cut it right down the middle and give everybody a fair shot.

Jamil Damji:
100%.

Rob:
I’m kind of curious about this, Jamil, because you’re talking about like, okay, so you want to go to somebody who’s selling their house wholesale. Let’s just putting numbers to this, as is cash value, pre-renovation, everything, $100,000 is what it’s worth. Now, you’re saying to this person, “A cash buyer would be willing to pay you 95 to $105,000.” You want to come in at that $105,000 range so that you’re giving them what you consider a good deal on a cash offer. is that correct?

Jamil Damji:
Correct. It’s interesting that… Because I watch a lot of people who teach wholesale and I’ve consumed the information on YouTube and a lot of it makes me shake my head. When people talk about this formula for WMAO, which is your maximum allowable offer, right? That number is ridiculous. It’s ridiculous and how subjective that is. A lot of people will use this formula. Maximum allowable offer is 82% of ARV minus repair costs minus wholesale fee. First and foremost, who’s calculating repair cost?

Jamil Damji:
Who here in this equation understands how much this house is going to cost to repair? Second, who’s calculating wholesale fee? Because I’ve seen some guys think the wholesale fee should be $100,000, right? I’ve seen people who think that every time they do a transaction, they should make that much money. How will you ever do business like that? And tell me how that’s not predatory. It is. It’s predatory. But when you are looking at it…

David Greene:
If it was being overseen by a regulatory agency, that is how it would be perceived.

Jamil Damji:
100% that’s predatory. That formula is predatory. It is. When you look at it from the point of view of… But let’s look at it from fairness. Let’s look at it like what could I actually pay and still be able to make money if I did a renovation here? What’s the most I can pay? That’s the place that we’re coming from. That’s where I teach. That’s where everybody who comes into my community is learning how to do the business because the facts are is we can pay more.

Jamil Damji:
We can pay more and still make a $10,000 assignment fee and the fix and flipper can still make their 10% profit margin, and we still helped grandma. Nobody got fleeced or taken advantage of in the process. Why can’t we all just have the conversation where everyone wins?

David Greene:
Jamil, I’m so glad. This is such a cool show. People ask me, “Why have you not got into the wholesaling?” What you’re saying is why. Because I in my own conscience and as a businessman cannot rip off grandma to make more money on that deal. I’m going in there saying like, “If I was to list your house, I would be doing every possible thing I could to squeeze every dollar out and get you as much as I could. And then help you reinvest that money.”

David Greene:
I literally study, write books, take negotiating courses, dive into the psychology of buyers, everything I can so that I can get our sellers as much money as possible. When someone says, “Hey, this person has a house to sell,” I know they would sell it to me fast for cash, and I could get it for half of what it’s worth, but that’s because they trust me. This is the hard thing is they’re like, “I was told that you’re David Greene and you have my back. Grandma is trusting me to sell her house.”

David Greene:
I can’t go in there and take that, right? I’m going to of help her fix it up and put it on the market and sell it. What you’re describing is sort of like the conflict in my soul between doing the right move from a business perspective and doing the right move from a human perspective. I always err on the side of taking care of the person and make less money.

David Greene:
If there was a way where we had a market like what you’re describing, again, what we’re talking about is blending the MLS with these off market opportunities and kind of bringing them together, then we could all have a clean conscience and there would be a whole lot less predatory actions going on. Rob, what are you thinking?

Rob:
Man. I do a lot of content on my YouTube channel, but mostly short-term rental related. I had a buddy who came on. He’s a wholesaler. I had them on for a collab and we talked to the whole wholesaling process and everything. I thought it was one of the best videos I’d ever made. It was by far just not even a question. I mean, generally, I would say my comments are like 98% positive. This video was 98% negative.

David Greene:
Wow!

Rob:
Everybody hated it. Everybody liked me a little less. Everybody just completely poo-pooed the art of wholesaling and they’re like, “I can’t believe you would bring this idea onto your channel. We loved you, but you’re just preying on grandma,” basically kind of thing. I was like, well, first of all, I’m just trying to give access to entry points into wholesaling, but I could understand a little bit where people were coming from.

Rob:
Because I was like, yeah, if you only see the extreme side of it, then yes, wholesaling can be looked at very negatively. But for me, I was like, there has to be a happy medium here. I just had never seen it up until talking to you over the last 40 minutes here where I’m like this, this makes a lot of sense. It’s the same thing in my whole career in general talking to realtors.

Rob:
If you ever drop the idea of wholesaling or working with the wholesaler to a realtor, they’re going to be like, “Oh yeah. You don’t want to do that. They’re horrible. That’s so bad. They’re stupid.”

Jamil Damji:
You ever scared a cat?

Rob:
It’s like you never actually have a fruitful conversation.

Jamil Damji:
Right. You ever scare a cat? You ever see what a cat looks like when you scare the out of it? That’s what happens when you say wholesale to a realtor. That’s exactly what happens. Okay?

Rob:
That’s a great analogy. That’s a David Greene analogy right there.

Jamil Damji:
Their spine stands up. They contort. All the things happen. They hiss. That’s how they feel because I get it. And in the past and the way that things have been taught, it’s not been to people’s advantage, because they feel like you’re not even a real buyer. You don’t even have real money. If you’re going to write…

Jamil Damji:
Look, if you’re bringing a solution to my seller, if you’re bringing a solution to my seller, knowing that they’re giving you a deal because they need this closed in seven days and they’re willing to accept that and they’re okay to do it and they’re happy to take it, they just want the convenience, okay, great. Then close. Then freaking close. Honor your word. Honor your contract and close the dang deal. That’s the problem, guys. What’s happening is people are not learning how to underwrite.

Jamil Damji:
People aren’t learning what number they should be actually going into a contract with and for, and then having an honest conversation with the homeowner or the agent or whoever is involved in saying, “Look, at this price, I can still make a profit. I can still go in. I can fix the house. I can spend 40,000, $50,000, and I can walk away with 20 or $30,000 in profit. And I’m going to be happy. Maybe I’ll make a little bit more. Maybe I’ll make a little bit less. Maybe there’s mold here.

Jamil Damji:
I don’t know yet, but these are the things that I’m willing to take on as risks. You’re taking on the risk of knowing that you’re not going vertical and fixing up your property yourself maybe because, A, you don’t have the time, or B, you don’t have the resources to do that. You’re willing to trade a portion of what could be realized and added value to your property to let me take on that responsibility and let me take on that risk.”

Jamil Damji:
We all know that for that there’s going to be a little bit left on the table, and we’re accepting that. We’re all accepting that, and we’re trading that as business. Look, in every business there’s a step up in the wholesale chain. When you look at McDonald’s, you go and eat your Big Mac. You pay $6 for your Big Mac, but the pieces of the Big Mac aren’t six bucks, right? The ground chuck and the cow was probably worth $0.30.

Jamil Damji:
When you got the lettuce and the buns and the cheese and the sauce and you put it all together, it got stepped up in value every way it went. The same thing happens to a house. It gets stepped up in value as we break out the drywall, as we add the addition, as we put on a new roof, when we change the electrical, when we upgrade the plumbing, when we put in the designer faucets. When we do all these things, we’re stepping up the value.

Jamil Damji:
All these people were paid and made money in the process of adding value to the house, which is basic commerce and capitalism.

David Greene:
Yeah, that’s how economies flourish.

Jamil Damji:
That’s how economies flourish and that’s how it works. But what we want to do is we want to do it in a fair way. We want to do it in a way where everybody knows what we’re doing, where everybody understands that this is a business and I have to be incentivized to do business, but I’m not going to be incentivized to screw you in the process.

David Greene:
Well, I think we create this problem by telling… When I say we, I mean the real estate investing community, not necessarily BiggerPockets. We tell people, “Oh, you don’t have any money? You don’t know what you’re doing? You should get into wholesaling.” It’s absolute worst advice ever. They go into this high risk unethical situation where you’re making promises to people that you can’t fulfill, and you’re the least experienced person with the least amount of resources.

David Greene:
Wholesaling is where the big dog should be playing. You’ve made it to the top of the heap and you’ve got some money behind you. And like you said, Jamil, you can keep your word. You know how to comp properties. You have resources like construction people that you just mentioned that you’re going to bring in. Wholesaling, in my opinion, is like the end game. That’s what you’re building towards. It’s not where you should be starting.

David Greene:
The other thing is, if you take unregulated opportunities, like in the financial world, you have to be an accredited investor to participate in them, right? If the SEC’s not overseeing this, they only let people get into it that know what they’re doing, or are presumed to know what they’re doing because they’re accredited investor. It’s kind of the same thing with this. If you’re dealing with unlicensed people, there should be some like…

David Greene:
The only person that could buy from them or sell to them is someone who has shown they are an accredited investor in whatever sense that makes sense. Grandma shouldn’t be able to do this, right? If you’re already worth six million bucks and you know I’m taking a haircut on this thing, I just need the capital quick to give to someone else, those people, that should be fine.

David Greene:
But part of this problem is what you said is you’re dealing with people who don’t know what their house is worth or in such a financial bind that they’re just not thinking clearly. Now they’re trusting a stranger they didn’t know who’s telling them, “I’m going to close,” who probably can’t close. I love what you’re saying. Directly, what is KeyGlee doing to solve… What are you guys doing differently than other people? Is it an ethics you’re promoting? Is the actual system set up differently? How are you approaching this?

Jamil Damji:
From an ethical standpoint, the foundation of our company… I know this is going to sound corny to the people that are listening and I apologize for the corn. Okay?But here’s the fact, we actually build our company on a foundation of love, and I mean that in the real sense. If everybody isn’t being loved on in all ways possible in this transaction, then we don’t want to be a part of it. Is everybody winning? Are we all doing our best to make sure everybody’s got value out of this?

Jamil Damji:
If yes, check. First and foremost. Secondly, everybody in my organization is licensed. I don’t bring people in and say, “Come in. Operate without having your credentials.” No, that doesn’t exist. Everybody that’s in my company is licensed. Third, the majority of the business we do is with real estate agents and wholesalers. The wholesalers that we’re doing business with, we’re, A, checking their contracts, making sure their contracts are ratified. B, making sure the sellers have all the disclosures done.

Jamil Damji:
And then C, we’re actually bringing liquidity to a situation where the wholesaler wasn’t going to be able to make their obligation. Imagine this, David. My company flourished, KeyGlee flourished because we brought to the table buyers, liquidity. When wholesalers were out there writing all these contracts and putting all these deals under contract and they couldn’t sell them, these deals were all falling apart. We bring to the table the investors, the vetted people that will actually close.

Jamil Damji:
If they don’t close, we close. We actually bring a solution to the table. We’ve helped and it’s been over 5,000 deals now since we started. Over 5,000 transactions that wouldn’t have closed if we weren’t at the table because of the business model. That’s it, yeah.

Rob:
That’s a lot, man.

Jamil Damji:
That’s a lot of deals. That’s a lot of deals.

Rob:
I want to clarify on this, because you did mention earlier, you have a $2 million, I guess, fund or set aside to be able to close on this.

Jamil Damji:
That’s just for my students. That’s just for my students. KeyGlee holds millions of dollars in its account to close deals. Me personally as a coach, I hold $2 million of my personal money in a personal account where my students, if they have a deal and they’re… If they’re going out and writing a contract with a real estate agent to buy a house, they need a proof of funds, they need to be backed, I will personally underwrite and back that deal with my own funds. So that when that student is out there writing that contract, they’re not lying.

Rob:
Okay. Now, let me dig into this a little bit. Let’s say they are unable to find that buyer. You’re backing it. In the event that they can’t buy the buyer, you’re then going and actually you’re legitimately closing on the house, and then what do you do? Do you go and rehab it, flip it? What happens at that point?

Jamil Damji:
If we underwrite it and we agree with the value and we agree with the deal, we’ll close the deal and fund it. If there’s no buyer to be found, and we will then rehab out of it and sell the deal. Yes, we’ve bought plenty of houses that didn’t pencil out and didn’t work for us, but we’ve gotten very strict with our underwriting criteria. We’re not typically buying deals that aren’t going to work. But yeah, if there’s no buyer that’s able to be brought to the table, we’ll close it.

Rob:
Okay. I suppose this is a pretty good moment to sort of jump into one of the bigger pillars here, I think of wholesaling, which… Or my assumption here, as someone that hasn’t really done it, but deal flow and actually getting these wholesaling leads through the door, because that’s obviously going to be the foundation and the lifeblood of your business. How do you approach that? Is there a special strategy that you’re pursuing on something like that?

Jamil Damji:
Twofold, right? As I had mentioned, the majority of our business is done from two sources, real estate agents and wholesalers. For agents, we have a process called agent outreach. I do this live on my live streams all the time, where I teach people how to communicate with agents and have them bring you opportunities. We do agent outreach. We communicate with real estate agents and see if they’ve got any nightmare houses. Now, imagine this. David, if I called you, “Hey, David. I noticed you’re a real estate agent here in Phoenix, Arizona.

Jamil Damji:
I was wondering if you have any nightmare houses that you’ve walked in the last couple of weeks where you had to throw your shoes out after you left the listing appointment. Do you have anything that might not be financable or is a complete nightmare that I could take a look at and give you a cash offer on right now?” And nine out of 10 times, the answer’s going to be no. But one out of 10 times someone is going to have a lead or is going to have something that they don’t know how to solve.

Jamil Damji:
And that’s the conversation that we’re having. Those are the deals that we’re looking at. The second type of outreach that we’re doing is to wholesalers. That’s where my company is reaching out to wholesalers and saying, “Are you in contract on a property right now that you’re not going to be able to close, or that you don’t have a buyer for? Can we take a look at it and underwrite it to see if it’s something that we want to commit to or sell for you?”

Jamil Damji:
And that’s what we’ll do. We’ll look at the deal. We’ll underwrite the deal. If we like the deal, we’ll commit to it and we’ll commit our funds to purchasing it.

David Greene:
It almost sounds like you’re hitting up agents to say… What I head when you said that is, “Do you have a listing that you are going to take, but you’re dreading it? You’re like, “Oh God, this is the one I don’t want to sell.” Right?

Jamil Damji:
Yes.

David Greene:
I can be your quick solution. You’re going to wholesalers and you’re saying, “Did you screw up? Do you want to weigh out of your pain? Did you go write a check that you can’t cash? Come to me and I can bill you out.” Is that more or less what the system is?

Jamil Damji:
1,000%. 1,000%. I think because we recognized that there was a major gap, that there was a hole in this business model and we filled it, that was the reason for our success.

David Greene:
It’s very interesting. Do you do anything to spin those connections into getting them to come to you instead of going to the person who screwed it up for them in the first place after you close and you have that relationship?

Jamil Damji:
Unpack that for me. You mean, is there a way that I go direct to seller?

David Greene:
Yeah. Now that you’ve got that seller’s information, do you put them in your database and market to them so that they don’t end up having the same thing happen again?

Jamil Damji:
No, because it’s very rare that a seller has more than one house to sell, right? It’s rare that that’s the case. However, it’s not… And this is what we do and what I teach in AstroFlipping is so different from like your average wholesale real estate course, right? Because a lot of these courses that you’re seeing out there, they’re telling people, “Hey, go text people. Go do ringless voicemail. Go cold call people in the middle of dinner and ask them if they want to sell their house.”

Jamil Damji:
And it’s dreadful, dreadful, dreadful, dreadful work, right? The difference between what we’re doing… Imagine this, every time you talk to a homeowner, you get a homeowner under contract and say you do that deal. That relationship ends. That homeowner sells you their house. They don’t typically have another house to sell you. It’s over. It’s done. They’re gone. You’re gone. Deals done. You made your money. They sold their house.

Jamil Damji:
The way that I look at it is let’s build a relationship with somebody who’s the conduit to that deal and let’s actually perform so that they bring me business over and over and over again. I talk about this all the time, but I’ve got realtors that I’ve done hundreds of deals with. One of the top agents here in Phoenix, Arizona. Her name is Monique Walker. She’s the number five agent in the state. She provides every one of her listing appointments different data points.

Jamil Damji:
This is what I could list your house for in its as is condition right now. This is what your house would be worth if you did a full renovation to it, and this is what my cash investor will pay you for your house right now. You leave all the junk, all the garbage in your home, and he’ll just close. He’ll let you stay here an extra couple of weeks, if you need. But these are the three options. These are what I could do. She says, “I can’t believe, Jamil, how often people are interested in your option.

Jamil Damji:
Even when I say to them, ‘I can sell your house for more money on the MLS, but it’s going to require people to come and walk through and look at the house and all the things. I’m going to have to show it,’ they will more often take your offer than selling their house as is on the MLS, because they don’t want the shame of people walking through their home and judging the way that they’ve lived. They don’t want to go through that process, right?”

Jamil Damji:
That one real estate agent, Monique Walker and I, we’ve made millions of dollars together. And you want to know what her sellers say after we’re done our deal? Thank you. Thank you. Thank you for helping me in my situation. Thank you for bringing this cash buyer to the table. Thank you for giving me the dignity that I needed in this transaction and understanding what my best solution was. That’s not predatory.

Jamil Damji:
When you’re being thanked for people that know that they might have left a couple of dollars on the table for you to make money and they thanked you for it because you brought an honest solution to their problem, that’s beautiful. I don’t have to work over and over and over again to go get that lead. See, Monique, that’s an inbound lead for me now. She calls me when she’s got a house. She asks me for my buy number. Every listing of appointment she goes on, she sends me the address.

Jamil Damji:
I send her what my cash offer will be. And then when she’s in her listing appointment, she makes the presentation.

David Greene:
And then are you just paying her part of the wholesale fee because she’s losing out on the listing?

Jamil Damji:
What happens is she’ll lose out on the listing, but she’ll tell the seller, “My buyer will pay my commission.” If I buy the house and I fix and flip the house, I’ll pay Monique a portion of my profits from the flip. If I wholesale the property, I’ll pay Monique a portion of my wholesale profits. That’s it. She gets paid from me. Now her seller is even happier because they’re not on the hook for having to pay a real estate commission. They’re getting a net offer, net price. I pay all the closing costs and it works.

David Greene:
Monique’s pay is based off of the improved value of the property if you go in and do a good job.

Jamil Damji:
Correct.

David Greene:
As opposed to the condition the property is in in its current condition where it’s not as much. That’s a win for her as well.

Jamil Damji:
Yes.

David Greene:
You’re definitely looking at this and saying, “How do we do this the right way? How do we make a property worth as much as we can and pay people as much as we can in a fair way, rather than the lopsided way, which is some wholesaler comes and rips off grandma. They make an amazing fee that the fix and flipper makes an exorbitant amount of money and grandma just completely pays everybody else’s salary out of the equity they could have have.

Jamil Damji:
Right.

David Greene:
I really like that approach.

Jamil Damji:
I love that you’re saying that.

Rob:
I appreciate it, man.

Jamil Damji:
It works. Everybody is winning now. I don’t know.

Rob:
I think it’s impressive because you’re doing it the hard way. I think the easy way is to go and make whatever offer, try to make as much money as you can and you’re kind of done with it. You are agreeing to make less money and take a bigger risk in case you do have to go and rehab it. What if that rehab goes over budget? You just said a lot of those deals didn’t pencil out for you. Most people don’t want to do that. They really don’t. They just want to make the big…

Rob:
I think wholesaling, the big misconception is you can make tens of thousands of dollars, $50,000, $100,000 dollars and it’s quick, easy money. I just sold the paper. I just made $5,000 selling paper. No one really is willing… That to me is easier than what you’re proposing. I think I have a very new perspective on what wholesaling can be.

Jamil Damji:
I appreciate that. Let me share with the viewers, listeners something really quick. I just did a deal on a multifamily building that had been completely improved. It was a sixplex here in Phoenix. Five of the units were rented. One unit was vacant. The seller thought, “I am selling this for maximum price. I bought the sixplex for $1.2 million.” Now, I would say that the seller had squeezed out every dime of equity that property in its current financial situation.

Jamil Damji:
That one vacant unit, during my escrow period, I was able to find a committed renter who would rent it for $1,700 instead of the $1,200 that the other units had been rented at. I closed on the sixplex, and then I entered into a contract five days later and I sold that sixplex for $450,000 more than I bought it for. Again, I paid top dollar for the building in its current state. I don’t have guilt for making 450 grand because I saw a rent gap that existed that the seller hadn’t found.

David Greene:
And probably didn’t want to find. They were willing to leave that 450 grand on the table because they would’ve had to do the work that you had to do to deal with the tenants and get the rents pushed up. It’s the same as a rehab. You don’t want to fix up your house. I get it. In its current condition, it’s worth this. If you don’t want to fix it up, somebody else will and then they’re going to make the money instead of you.

Jamil Damji:
Correct.

David Greene:
It’s a pretty simple way of looking at it, right?

Jamil Damji:
We’re teaching wholesale from the point of view of how do you find and add value, not rip off grandma.

David Greene:
Which is how money should be made in real estate. That’s exactly right. How do you create something, not how do you take something from somebody else? If it’s worth 400, the answer shouldn’t be, how do you get it for 200. If it’s worth 400, the answer is, can you make it worth 600?

Jamil Damji:
That’s it.

David Greene:
What would that look like? I really like that. It’s a better way of approaching it. I’m hoping that today’s podcast becomes like a futuristic vision for how wholesaling and agents can sort of mesh together and agents can have their skill level, frankly, improved and wholesaling can get into more of an ethical way of doing stuff. And then everybody wins. Real estate investing as a whole gets a better look. You have tons of people trying to prove the values of properties, which just makes the world a better place.

David Greene:
You’re putting handyman to work, contractors, electrical people, roofers, they’re all making money. They’re all paying taxes on that. That would be a wonderful blessing. Jamil, I hope you are the futuristic space alien that’s coming here to fix real estate. I am very glad we have you in the BP family.

Rob:
I was planning on laying into you, Jamil, because you said I look like a mixture of Robert Downey Jr. and Pauly Shore earlier, but you have won my respect.

Jamil Damji:
I appreciate that, Rob. I only said Pauly Shore because I actually really like Pauly Shore.

David Greene:
What happened to Pauly Shore? Where is he?

Jamil Damji:
Nothing’s happened to him. He’s amazing. He owns The Comedy Store in LA.

David Greene:
In LA, right?

Jamil Damji:
Mitzy Shore used to run and own The Comedy Store in LA and she passed away. Pauly Shore has taken over. People don’t realize this, but he’s one of the most powerful men in comedy.

David Greene:
The Comedy Store is like the spot.

Jamil Damji:
That’s where stars are made.

David Greene:
The Garden of Eden.

Jamil Damji:
Stars are born and mine died.

David Greene:
That’s awesome. All right. You said yours died at The Comedy Store?

Jamil Damji:
Mine died at The Comedy Store. Yeah.

David Greene:
If you made it to The Comedy Store, that’s pretty impressive, man.

Jamil Damji:
It’s pretty good.

David Greene:
I’m going to totally go with Teddy Roosevelt’s The Man in the Arena. I got this right here in my office.

Jamil Damji:
Nice. Nice.

David Greene:
You have nice born the blood, sweat, and tears, but I’m glad we got you in real estate instead of comedy.

Jamil Damji:
Yes, sir.

David Greene:
All right, I’m going to move us on to the next segment of our show, the Deal Deep Dive. This is the segment of the show where we dive deep into a deal that you have done. Do you have one in mind that we can dive into?

Jamil Damji:
Yeah, what are we talking? You want to talk multifamily? You want to talk residential? You want to talk land?

David Greene:
What would you prefer to discuss? I mean, we could discuss a wholesale deal you did.

Jamil Damji:
Yeah, let me talk about a wholesale deal that I did.

David Greene:
Rob and I will fire questions at you and we’ll let you answer them through there. The first kind of question is, what kind of property is it?

Jamil Damji:
It was four acres of land in Phoenix, Arizona.

David Greene:
Okay.

Rob:
Second question here, how’d you find it?

Jamil Damji:
Door knocking.

David Greene:
How much was it?

Jamil Damji:
Total acquisition price was $1.6 million.

Rob:
How did you negotiate it?

Jamil Damji:
Individually, I had conversations with the different property owners. After speaking to one, the one gave me the phone number for the next neighbor, which gave me the phone number for the next neighbor, and I actually did a land assembly. I put all these different fourplexes and these little pieces together, and I knocked them down homeowner by homeowner, seller by seller by actually asking the next up how to get a hold of the person that owned the property next door.

David Greene:
I love that. Normally we say, how’d you fund it, but was this a wholesale deal so it wasn’t funded?

Jamil Damji:
I did actually have to close it, and then I resold it. I did fund it with hard money.

Rob:
What did you do with it? Was it a flip, rental, BRRR?

Jamil Damji:
It was a flip. It was a flip. I would call it like a wholesale because we didn’t hold it very long, but I bought it. We took it. Got entitlements made. Got the entitlements done. A lot of work had already been done on the property behind the scenes. We got the entitlements done, and then we flipped that to D.R. Horton and they ultimately built 38 town homes.

David Greene:
Wow! That’s the outcome, 38 town homes.

Jamil Damji:
Yes.

David Greene:
What lesson did you end up learning from the deal?

Jamil Damji:
The lesson I learned from the deal was I could have sold the contract and made more money than having closed it. A, I closed the property because I thought I was going to make more going through the entitlement process and I didn’t, because the entitlement process took me a little bit long and I had to hold it. And because that was in hard money, I had to make payments for that time. I could have wholesaled it to the same buyer and I would’ve made less money off the front.

Jamil Damji:
But after closing it, holding it, and then selling it, I made less money. I would’ve made more money if I had just sold the contract. And then the second thing I learned, I want to add this in here, I actually saw D.R. Horton wholesale a portion of that. I know that publicly traded companies also wholesale.

Rob:
Interesting. There’s a term for that. It’s called holdsaling. It’s whenever you close on… No, I’m just kidding. I just made that up, but consider this my foray into coining new terms.

Jamil Damji:
Awesome.

David Greene:
All right. That’s awesome. We’re going to head to the last segment of the show. It is the world famous.

Audio:
Famous four.

David Greene:
In this segment of the show, we ask the same guest every four questions, every episode, and we are going to start with you, Jamil. What is your favorite real estate book?

Jamil Damji:
I feel so cliche saying it, but it’s Rich Dad Poor Dad.

Rob:
Favorite business book.

Jamil Damji:
My favorite business book will be Think and Grow Rich. Even though I think it’s more of a mindset book, I think for me, it really taught me the concepts of visualization and masterminding as a key to successful business development.

Rob:
What about outside of wholesaling and scaring cats? What are some of your hobbies?

Jamil Damji:
Outside of wholesaling and scaring cats, one of my hobbies is I love going to the movies. I’ll go to the movies by myself. My wife does not like to see as many movies as I do. I’m a fan. I’m a fan of cinema. I can sit and watch movie after movie after movie. It’s my favorite thing to do. That and eating chicken wings.

Rob:
Nice. I just went to the movies by myself last week.

Jamil Damji:
Awesome. It takes a strong man to do that.

David Greene:
That’s funny that Rob said he went to the movies and I said I eat chicken wings. We both did very different things from what you just described here.

Jamil Damji:
I’m a little bit of both of you guys.

David Greene:
There it is. Just like Rob is a little bit of Robert Downey Jr. and Pauly Shore.

Jamil Damji:
He’s going to hate that. He’s like, that’s the worst ever thing anyone ever said to me, but Pauly Shore’s great. You should look into him. He’s an awesome guy.

David Greene:
Are you old enough to remember him, Rob? You could be honest.

Rob:
Yeah, yeah, yeah, of course. He’s Bio-Dome, right?

David Greene:
Bio-Dome. In the Army Now. That was a classic. He’s really good there.

Rob:
Yeah. SNL obviously. I hope. I don’t know. I’m pretty sure he was on SNL, right?

Jamil Damji:
He’s been on SNL.

David Greene:
Everybody’s been on there at some point. SNL is The Comedy Store of TV. A good way to put it. All right. Well, Jamil, thank you very much. I really appreciate your transparency, the candidness that you talked about, the way that you approach things, the ethics that you’re trying to bring into our community. I’m really glad to have you in the family.

David Greene:
Thank you for sharing what you did. I look forward to getting to know you better. Is there anything you’d like to leave our audience with before we get you out of here?

Jamil Damji:
Absolutely. Just keep in mind, guys, that you actually have a connection to every single human being on this planet, whether you know it or not. How you feel and how you think will draw those people to you. Change the way you think, change the way you feel, and the life you live will reflect it. That’s it

David Greene:
Rob, anything for you?

Rob:
Well, I’m processing that and it’s perhaps the greatest ending line we’ve ever had on the podcast. Well, a little known fact here, Jamil, I’m actually a UCB alum myself. Maybe on the next podcast we can have David give us a one word suggestion.

Jamil Damji:
Yay!

Rob:
And do a little improv.

Jamil Damji:
Yes! Yes! Yes and, my friend, yes and.

Rob:
Where can people find you, man?

Jamil Damji:
You can find me on IG, @JDAMJI, and also on YouTube just YouTube.com/jamildamji. That’s J-A-M-I-L-D-A-M-J-I.

David Greene:
Rob, where can people find you?

Rob:
You can also find me on the YouTube. You can find me @Robuilt, on Instagram @Robuilt, on TikTok @Robuilto.

David Greene:
There it is. You can find me on YouTube at David Greene Real Estate. Very boring name. You can also find me all over BiggerPockets YouTube, so make sure you’re subscribing to that. If you’re not, if you’re only listening to the podcast, there’s more stuff on YouTube that you can be checking out, different interviews that we do, more specific content. Some like more fun stuff. If you’re looking for a laugh, you can get some good stuff there. And then I’m @DavidGreene24 on social media.

David Greene:
Please follow me. I normally don’t ask this. Here’s what’s bugging me. Brandon Turner, the former host of this show, has not been on the show and is still destroying me when it comes to follows. Now, I recognize Brandon’s charismatic. Brandon’s fun. Everyone likes him. But still, he’s got double or more than double where I’m at. I’m asking for a pity follow. I’m okay to say that. I just can’t stand this guy rubbing it in my face every time we talk that he’s destroying me.

David Greene:
Please, help me out there and then also follow BiggerPockets. Jamil, thank you very much for your time, man. Looking forward to seeing you. Hopefully I get to go on your show and we can talk more there. This is David Greene for Rob “Pauly Shore” Abasolo signing off.