In the episode of the Exactly How Podcast referenced in this article, Sean Young and Paul Lizell discuss how to navigate through selling virtual wholesale properties. Paul Lizell offers his expertise and advice on a number of topics in the real estate investment world in this episode. He draws on his vast experience fixing and flipping, his long career in real estate and his knowledge of business development. In an industry increasingly moving online, understanding how to scrape the web and otherwise apply software in order to find appropriate properties — and buyers — is vital. Follow below to learn more about how to sell virtual REO properties with Sean Young and Paul Lizell.
Background on Paul Lizell
Originally from Philadelphia, Paul Lizell began his real estate career in 2001 when he entered the world of “fix and flips.” Lizell’s first property was an HUD property. For those unfamiliar, HUD properties are those originally purchased with government backed FHA loans that were later foreclosed on. Lizell became involved in every element of fixing and flipping, from “doing contracting work [including] roof siding, windows, doors, plumbing, electric, you name it.” All of this hands-on experience gave Lizell great background for “renovating properties [while] keeping costs down.” Paul Lizell has been President of JP Homes, Inc. since 2001. Not only was Paul Lizell a founder of JP Homes, but he also contributed to the creation of Leasing to Buy, REO Auction Academy and HouseDealsAmerica.com. For more information on REO properties, read our recent article “How to Sell Virtual REO Properties with Benson Juarez.” Lizell has worked in the real estate industry since the late ‘90s, finding success early through various investments. According to the Cashflow Ninja podcast episode “How To Become A Virtual Real Estate Investor,” Lizell has “purchased real estate in 42 out of 50 states virtually.
In 2004, Lizell struck out on his own, working in fix and flips until the 2009 financial crisis. At this point, Lizell turned back towards wholesale deals, converting his business into “90% wholesale and 10% fix and flip.” In 2013, Lizell made his final major shift, moving away from direct mail and focusing on “buying online auctions and off the MLS.” Today, Lizell travels across the US — both virtually and physically — to entertain and educate potential, emerging, and even seasoned investors about the industry. Lizell frequently discusses his personal investment strategies as a podcast guest and has long been a friend of Connected Investors. Over the course of his career, Lizell has attributed much of his success to “joint venturing with other investors,” as Sean Young describes it. To learn more about Lizell’s joint venture experiences, listen to his podcast on Flipping Out.
What Are REO Properties?
For those unfamiliar, REO properties are those owned by a lender — often as the product of a foreclosure. The term REO is an acronym for “real estate-owned.” Though typically owned by a bank, REO properties may also be owned by a government agency, insurer, or another lender. Properties are classified as “real estate-owned” after they fail to sell at a real estate auction or are otherwise defaulted on. Many of these auctions are now conducted online, sight unseen.
An REO property rarely makes money for its lenders. This is because its previous owners have surrendered the property and/or the property failed to sell at auction. As such, banks and other lenders currently in possession of the property are often open to discount sales. Banks are typically willing to finance the property as well as sell under market value, making REO properties potential gold mines for investors. Investors should keep in mind that banks are often also willing to sell their entire list of current REO properties to investors. This offers not only short-term investment opportunities but also potential sources for sustained, long-term deal flow.
How to Sell Virtual REO Properties
#1 Do Your Research
Before diving in headfirst, Paul Lizell recommends using his company’s two-step approach to researching virtual REO and other wholesale properties. This two-prong process first involves using a web scraper or data extraction tool. Employing a targeted web scraper allows you to find upcoming online auctions and sift through until you find “properties that meet [y]our criteria.” You can also use the Connected Investors App, which connects you with investors, notifies you of available properties, and helps you locate cash buyers. The second step is to further research the properties of interest and develop plans surrounding the cultivation of those properties. This cultivation typically includes a fleshed-out marketing plan. Marketing will often focus on your list of cash buyers, notes Lizell. Lizell recommends sending out postcards to past cash buyers and listing these properties on as many sites as possible — from the more high-brow like Zillow to the more mundane like Craigslist.
#2 Find the Buyer
Step two, explains Lizell, is to find the right buyer and “get them to sign that agreement of sale.” Depending on your relationship with the buyer, this process might differ from buyer to buyer. When competing offers are entered, the process might become more complicated — particularly if you work for a bank or agency rather than as an entrepreneur. Lizell explains that “fighting through different layers of management” to achieve an optimal purchase — e.g. one that is completed efficiently, in cash or with profitable financing for the bank and at a desirable price — can be frustrating. Ideally, the agreement of sale is signed quickly — aligned with a cash offer in a perfect world — and “sent over to the title company” after that company is agreed upon.
#3 Close the Sale
Step three is self-explanatory and “our favorite part,” as Lizell describes. Selling the property and absorbing the profit from the deal is the most exciting element of the virtual REO property sales process.
For further information, Paul Lizell suggests reaching out to him via REO Auction Academy or through his podcast on Flipping Out. Learn more about Paul Lizell’s enduring and inspiring career in real estate investment by listening to the full episode of our podcast above.
Transcript
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Speaker 1 (00:00):
On this episode of exactly how podcasts and YouTube show we uncover exactly how to navigate through
selling virtual REO properties. See you,
Speaker 2 (00:10):
You’re listening to the exactly how podcast, where you’ll hear the underground, closely guarded wealth
building secrets of successful people around the globe. Discover exactly how to improve your mental,
physical, and financial health. Feel better, make more money live, give, and prosper in today’s exciting.
Fast-paced world build with opportunity for those who know exactly how welcome
Speaker 1 (00:39):
Exactly how podcasts and YouTube show brought to you by connected investors. Now, during this
episode, you’ll discover exactly how to navigate through selling virtual REO properties. Now, for those of
you who are new, my name is Sean Young, today’s host and proud member of the connected investors
community. Now, before I introduce you to our incredible guest speaker today, I want to make a request
that if at any point in the show you like what you’re hearing, please give us a thumbs up so that you
could subscribe to the show and never miss an episode and make sure to look in the description of this
episode, as we’ve packed it with thousands of dollars in free resources. Now, today we have the
privilege to learn from someone who’s made profits up to 150,000, just from fixing and flipping prior to
his career in real estate, he was a commercial loan underwriter and a BDO, which is a business
development officer, but all that changed while he was working for an uncle doing contract work on a
rental property. I would describe our next guest as focused and driven. I like to introduce you to the
one, the only Paul Ezell. Paul, thanks for being a guest on today’s show today.
Speaker 3 (01:48):
Sean. Thank you very much for having me, my friend. Good talking to you again.
Speaker 1 (01:52):
Great to see you again, my friend now, Paul, can you tell our audience a little bit about where you’re
from? You know, what market you’re in and just a little bit about yourself?
Speaker 3 (02:00):
Sure, sure. So I’m from, uh, all is L from the Philadelphia market and I started investing in real estate
back in about 2001, um, doing fix and flips. Right? I was the first thing I did was buy a HUD property. So
it was a bank REO and that’s pretty much most of what I bought over the years as bank REO properties,
but started doing fix and flip. As you said, after working for miles of doing contracting work, we did roof
siding, windows, doors, plumbing, electric, you name it. We did it. Um, so it really gave me a good
background on how to renovate properties, fix them up and keep costs down and do some of the work
myself at the time while I was working for the bank, doing this on a part-time basis. And eventually with
a whole focus was to put enough money aside so that eventually I can go off on my own, which I gave in
2004 and have done ever since.
Speaker 3 (02:48):
And then I was doing fix and flips all through 2008. Even in early 2009, financial crisis got slammed by a
bunch of them. Then I cited sit back and fear. What did I, right? What did I do wrong? What should I
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change? So I decided, all right, now I did a couple of wholesale deals over the years and it worked out
pretty well. Why don’t I focus on wholesale and shift away from the fix and flip what you did. We
became 90% wholesale and 10% pits of flip. At that point, then still doing a bank owned properties,
doing some direct mail. Uh, we stopped direct mail around 2013 and have focused on buying online
auctions and off the MLS and bank Oreos from that time.
Speaker 1 (03:29):
Awesome. Awesome. Thanks for that information, Paul. Now, before we dive into exactly how to
navigate virtually wholesale bank owned properties, Paul, you contribute a lot of your success to joint
venturing with other investors. Can you explain that to our listeners?
Speaker 3 (03:43):
Yeah. So what I’ve done over the years, and this is important, it’s a good thing to always do, right? So I
have joint venture with people in different markets, kind of learn that market at that point before you
can go off fully on your own, uh, cause they know the market, they have more buyers than you do at
that point in the market. So you just do a whole JV venture, decide what’s fair and equitable for each
person and then move on and either continue in that market. Or like I do as a lot of them, I still joined
venture with a lot of these people in different markets.
Speaker 1 (04:11):
Okay. That makes a lot of sense. Now guys out there who are getting started, um, some folks are saying,
Hey, you know, how can I get into this business? I don’t have a buyers list. I don’t have this. I don’t have
that. Well, Paul just gave you guys an and in entranceway joint venturing. And that means that’s J being
that stands for joint venturing. So that’s just partnering up with another investor that has resources or
has something that you might not have and you have something that they might not have. So you guys
get together and make it work.
Speaker 3 (04:37):
Absolutely. Yeah. You share the inventory as, as you know, it’s where it’s really low. So with that joint
ventures, a great way to go ahead and, and uh, and do that.
Speaker 1 (04:47):
Absolutely guys and you know what they always say, you know, some of something is better than
nothing of nothing, you know? So getting a little something is better than getting nothing guys. Now
what makes the exactly how financial freedom podcast and YouTube show unique is that each and every
show comes with a detailed action plan. We pull the steps out of the show and create a blueprint on
how to implement exactly what we’re uncovering. All you have to do is visit connect and investors.com
forward slash free to get the key takeaways, the resources and the free virtual wholesaling guide that
Paul has generously allowed us to offer our listeners today. Plus you get to see our free training right
now. All you have to do is text the word exactly to (910) 600-0630. To see for yourself. Now, this is
exactly how I make my money. Guys, you can find properties in any town for pennies on the dollar with
this software that I use each and every day as nearly a million people know connected investors as a
social network of real estate investors and a marketplace of investment properties. Now in the
description of this video, I’ve included a link to today’s forum in the discussion. So Paul let’s dive into the
three steps on how to navigate through selling virtual wholesale properties. Now, before the show, we
broke it down into three steps. Can you give us those three steps for,
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Speaker 3 (06:07):
So the first step obviously would be finding that property right, and doing the due diligence work to find
that property. And what we do is we kind of use it as a two-step process. We use our BAS to scrape
upcoming auctions that are coming auctions online auctions, whether it’s auction.com, Hudson, a
Marshall homesick zone. We had them comb scrape, find out which properties are meet our criteria.
Those ones that meet our criteria, then I’ll start fitting on. Right. And whatever one we win, we will then
obviously try to close on, um, if in this case. So basically whatever market it is, and we’re going to send
out cash buyers list, we’re going to send that little postcards to cash buyers, that area, and we’re going
to market it on Craigslist. We’re going to market it on Zillow, marketed on other sources too. I think back
page is one of the sources my disposition manager uses, even though that has been used in forever. Um,
but we use that to try to find buyers and our goal is ultimately to double close on it. So that’s step one.
Speaker 1 (07:04):
Awesome. Awesome. Step two.
Speaker 3 (07:07):
Step two is finding that buyer, getting them to sign that agreement of sale, right? Getting the, getting
the closing all set up and organize and we’ll do use RPA sometimes add to the MLS or with the bring you
sale. Um, sometimes we’ll handle it depending on if we have a relationship with that person or not. We
get the agreement of sale signed, sent over to the title company. After we agree upon which title
company we’re going to use, and then we’ll have to step through shortly.
Speaker 1 (07:32):
Absolutely guys. So that brings us into step three, which, which would be
Speaker 3 (07:36):
The best part. It’s our favorite part, right? We close on it. We sell the property, our profit that’s the best
part is that three is definitely our favorite part. No doubt about it. That is awesome. That is awesome.
Speaker 1 (07:49):
Yeah, guys, that’s what we’re in this for is to make offers, you know, make deals and close them. You
know, we want to get to that closing table without that close. It’s a waste of our time, somewhat excited
from the experience that we gained from, from the situation. So Paul, you know, what do you think your
life would be like if you never started flipping houses and you were still a commercial loan underwriter,
Speaker 3 (08:10):
I would probably be a really, really bad employee, to be honest with you. I’m definitely more of an
entrepreneurial mindset and I have my own belief system, right. And how things should be done. So it
was always a struggle being an employee and fighting through the different layers of management to try
to figure out the best way to do things. So for me, it would be tough to go. Obviously I love being an
entrepreneur. I probably could not work for anybody very well again at this point. And there’s always
other things I can do, but real estate is far and away. My favorite and best thing to do.
Speaker 1 (08:42):
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Got it. Got it. So, Paul, let me ask you this, you know, what are some, what would be a prime situation
where someone could, could contact you, you know, you to possibly JV on a deal.
Speaker 3 (08:53):
So they reach out to us. We do have an educational platform too, and they can reach out to us either
REO auction, academy.com or through my podcast on flipping out. And that’s the virtual investor.com.
They can reach out to us there as well.
Speaker 1 (09:07):
Awesome. Awesome. And guys, we’ll make sure to include that a link to all of those in the description of
this video here and such, you guys can reach out to Paul and take advantage of his great information as
well. So, so guys that brings us to the, what we call the rapid fire session of our podcast today. Now,
Paul, what I’m going to do is ask you a series of questions and you just give me the first answer that
comes to mind. Sure. Let’s do it now on a scale from one to 10, how strict were your parents?
Speaker 3 (09:36):
Um, you know what? I would probably have to put it around the six, not super strict and gave me, you
know, I had guidelines. I had to follow that. They weren’t totally crazy. Okay.
Speaker 1 (09:49):
You get up early or stay up late,
Speaker 3 (09:51):
Stay up late.
Speaker 1 (09:53):
How many hours of sleep do you get each night? Uh, around seven. Okay. Favorite or last book read?
Speaker 3 (10:01):
Uh, you know, my favorite is still rich dad. Such a great book,
Speaker 1 (10:05):
But great book. Absolutely. If you could be any superhero, Paul, who would it be?
Speaker 3 (10:11):
Yeah. First first thought is Spiderman. Spiderman is just
Speaker 1 (10:16):
Cool. Cool. Something. Everyone should do less of
Speaker 3 (10:20):
Complaints.
Speaker 1 (10:22):
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Get that one a lot. Yeah. Something everyone should do more of,
Speaker 3 (10:27):
Uh, you know, what, um, focus, focus and what they’re doing and follow through with what they’re
doing.
Speaker 1 (10:33):
Good, great, great stuff. Bitcoin bang or bus.
Speaker 3 (10:38):
Dang. I love that point.
Speaker 1 (10:41):
Well, people live on Mars in your lifetime, Paul.
Speaker 3 (10:44):
Hmm. Good question. I would probably say now. Okay,
Speaker 1 (10:48):
Well guys, you have made it to the end of the show and most people never finished what they start. So
you’re special. So if you got any value out of today’s show, please share this with a friend or on your
Facebook page, like this video, subscribe to our channel and send us topics that you want to learn more
about. And like I said, guys, nearly a million people use the connect and investors, social network and
marketplace to connect. Now in the description of this episode is included a link to today’s episodes,
forum discussion, tap that link, ask me and other pros questions and see what all the investors are
saying about this episode today. So until the next episode, guys, you can catch me on the inside of
connected investors. Paul, thank you so much for your time. My friend, see you next time.
Speaker 4 (11:36):
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Speaker 5 (12:37):
[inaudible].
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