Robert Leonard (02:22):

I appreciate the kind words, you guys are all very young. You just mentioned two of your 19. One of you is 22. So I want to learn a bit about your background with money and how it was handled in your family. Was money a taboo subject in your family, or was it something that you guys all openly talked about with your parents and friends, family? What was the relationship with money like as you guys were younger and growing up?

Kenneth Donis (02:46):

So we actually come from a single mother household. So my mom raised us four, we have an older sister. So she raised us by herself. So money was very scarce growing up. We weren’t necessarily dirt poor. We always had a roof over our head and food on the table, but we didn’t necessarily always get what we wanted but at the same time, my mom just showed us love and always definitely gave us what we needed. So we never were without anything that we necessarily needed to survive, I’d say.

Kerwin Donis (03:19):

We did grow up in a low-income household, but like Kenneth said, we had everything we needed, but money itself my mom, she always says things like, “Money doesn’t grow on trees,” and things like that, and definitely came from a mentality of working for money. So the entrepreneurial mindset was something that we had never actually been exposed to or the concept that we are now in which is you have your money work for you, that was kind of a foreign concept.

Jeffrey Donis (03:42):

We were raised to conserve everything, almost with the opposite of an abundance mindset. My mom always told us to turn the TV off as soon as you’re done with it, never leave a light on when you walk out and it’s just kind of trying to save as much money as possible. We are big on the Rich Dad Poor Dad mindset and book and we actually started a cash flow club in our local area, but what we really were lacking was financial education. I think that’s something that we learned as soon as we got into the entrepreneurship space, which I think is the biggest difference between people that are in poverty versus people that are able to obtain some sort of wealth.

Robert Leonard (04:19):

So no one in your family, not necessarily your mom, but even extended family. Was anyone in real estate?

Jeffrey Donis (04:25):

No. So my mom, she came here from Guatemala. She was an immigrant and she actually was one of two of her sisters, two of the first people to come to America. Guatemala is a third-world country. It’s very impoverished. So they really don’t have many resources. The water there, it’s hard for them to find clean water, let alone get into real estate right. So when we got here, my mom obviously just wanted to get a job and then be able to afford to pay … Once she had kids, she wanted to be able to afford to sustain us. Just do what she could in regards to working which was cleaning houses.

Jeffrey Donis (05:00):

That’s kind of the rat race she got into. It never was an option for her to get out. She still to this day, we’re still working on trying to get her financially literate, but it’s not her fault. It’s just her, in raising [us]. She didn’t even graduate middle school. It’s just where the people come from and a lot of people here in America take that for granted. We take that for granted.

Jeffrey Donis (05:16):

We took it for granted, until we actually went to Guatemala for the first time in December, of 2019. We saw how close we’re in regards to the generations. We were literally one generation away from being born in another country. Growing up here, we’ve obviously always had everything we needed. So as soon as we got back from that trip, and I’ll let my brother’s touch on this, we immediately started taking action and that’s exactly when we started real estate, but it was because we noticed how many resources and opportunities we had at our fingertips that they didn’t and it really just took us seeing that.

Kerwin Donis (05:45):

We always say that we feel like we won the lottery for being born here, especially because we were first-generation. So it would have been so easy for us to have been born there and living in extreme poverty, and technically we did grow up low income in America but that’s nothing compared to the poverty that a lot of Guatemalan youth grow up in.

Robert Leonard (06:01):

Warren Buffett actually has a quote where he says that he won the ovarian lottery because he was born here in the US. Sounds like you guys either have heard of his philosophy around that or feel the same way just intuitively.

Kerwin Donis (06:14):

Yeah, absolutely.

Robert Leonard (06:16):

When you guys got back from that trip, you knew you wanted to make a change, you knew you wanted to build some sort of wealth. Why real estate? There are so many different things you could do to build wealth. You could invest in the stock market. There are so many things. I could listen to an unlimited number of things. Why specifically real estate?

Kenneth Donis (06:34):

Honestly, we were all in college at the time. So I was sitting in my apartment, and I was watching The Breakfast Club and a guy named Mark Whitten came on and started speaking about wholesaling real estate. I personally always knew I maybe wanted to do something eventually with houses. I didn’t know what exactly real estate was. I just knew the fact that when you rent a house, you get income and I knew this growing up because I had people that would buy a house, they would move, friends that would move and then they would rent that house and I was like, okay, they’re making income off of that house.

Kenneth Donis (07:09):

So it made sense to me. I just didn’t know, I thought it would be something I have to wait to get into, but then we found wholesaling real estate and like I said, this guy came on, said he came from the hood. He came from a very low-income background, and he had made a multi-million dollar company and was able to retire his mom, was able to live a lifestyle of his choosing, have financial freedom. That is when it clicked that we had a route to actually get into real estate that just kind of showed up right in our lap. Then we read Rich Dad Poor Dad and that is exactly the moment that we knew that it was what we had to do really.

Kerwin Donis (07:47):

In Rich Dad Poor Dad, Robert Kiyosaki talks about the importance of investing in income-producing assets, in hard assets. That’s why we knew that we wanted something that we could touch and Robert Kiyosaki, he still invests in real estate. So that’s really when we learned the power of real estate and of just investing and having financial education.

Robert Leonard (08:06):

When you guys decided to get into the world of real estate, other than just Rich Dad Poor Dad, where did you turn for educational resources? What have been some of your favorite resources that have taught you guys the most?

Kerwin Donis (08:19):

So I read Rich Dad Poor Dad the summer before I went to college, and then I actually interned for a local fixing flipper, and I was cold calling for him. I think, me, I can only speak for myself. I learned by doing for the most part. So I spent the first semester of college freshman year cold calling homeowners, asking them if they wanted to sell and I was working for this guy. I wasn’t being paid. I only maybe 20 bucks throughout that semester but that was my first experience of not working for money.

Kerwin Donis (08:42):

It was rather working for education and that’s kind of like what that mindset shift that I underwent. So I think that was what we turned to. We also turned to YouTube. There are a lot of good YouTubers and a lot of the content, especially to break into the real estate industry, is free. You don’t need to pay.

Jeffrey Donis (08:55):

Yeah, and for me, obviously, just having two brothers to mastermind with, we became obsessed with learning everything we could about wholesaling. So we’d listen to podcasts, I’d read books on mindset, just in general and then also just YouTube, following people on Instagram, following different YouTube channels and just binging everything. Over time, while you’re cold calling, taking action, you’re learning something, you’re implementing it immediately. That’s like a snowball effect and that’s really how I got into it, in regards to where I went for my education.

Robert Leonard (09:23):

I think it’s pretty cool that you have all three of you guys that are interested in the same thing. I only have one brother, and we’re not interested in the same thing and I can only imagine that if I had two brothers, all three of us would probably be interested in different things. So I think it’s pretty cool that you guys have this dynamic where all three of you are actually interested in the same thing. I just think that provides so much value.

Robert Leonard (09:41):

You guys can network together, you can learn together, you can build a business together. You guys just have … Like you said, I love that word you said. You have your own little mastermind between the three of you and I think that’s awesome. I want to touch on working for free. I think that’s really important and I actually didn’t know that about your guys’ story.

Robert Leonard (09:57):

When you did that and now you’re looking back on it, how did you feel going in? Did you feel like, I don’t know if I really want to do this because I’m not going to get paid? Did you see the light at the end of the tunnel? What were your thoughts going into it, and then how do you feel about it afterwards? Do you feel like working for free is something that you would do again and do you think a lot of people listening to the show should consider some sort of opportunity where you can learn, even if you’re not getting paid?

Kerwin Donis (10:21):

I’ll kind of touch on that quickly. So when we first started our wholesaling business, we worked for six months without getting any fruit for our labor. We made no money and I would say throughout that six-month period, we learned everything we needed to do. We actually almost closed our first deal. We were not getting any income at the time. So throughout that time period, it really just teaches you that as an entrepreneur, you have to understand that one, it’s not going to be easy, but two, you’re building relationships.

Kerwin Donis (10:48):

We were networking, we were also really just understanding how to build something and how much work it actually takes. We were following up with leads. So the importance of having different types of sales skills, follow-up systems, actually doing certain things in that specific business. So I’ll let my brother touch on that, but in regards to not working for money, it’s really a mindset shift, because most people obviously go and they expect to just get paid. I feel like that puts a limit on what you think you need to put into something to get it out or get what you’re looking to get out of it.

Jeffrey Donis (11:14):

I think that’s the first step of breaking the mold and breaking the mindset that a lot of other people have is just you don’t have to work for money. There’s a lot of skills that you can obtain. I think investing in yourself is the number one use of your time is to invest in yourself. A lot of times you can do activities that are for free that maybe get paid, but have other types of ROI. So something that we do for free, or even we pay for is networking. We believe that investing in relationships and spending time building relationships has an infinite ROI, whereas making $10 an hour is going to have a lot lower ROI.

Kenneth Donis (11:44):

And also, I kind of wanted to touch on what you had said, having people to mastermind with, especially when they’re your brothers. It definitely makes that part of it a lot easier because we get to push each other. So we like to see growth. I mean, personally, and I know that my brothers are really big on growth, not just business making money.

Kenneth Donis (12:01):

We know that that comes regardless. You have to grow into the person that you expect to be making the amount of money that you want to be making. So that’s kind of what we focus on because we know that’s just the byproduct, but it definitely does make it a lot easier working with people who are not just your brothers, but also your business partners and the mastermind.

Kenneth Donis (12:22):

To touch on the aspect of working for six months, not getting paid, of course, that is very difficult to do. A lot of people might work for a month and not see any payment, and at first, we were working maybe two, three, four hours a day, but then for a good almost four months, it became nine to eight, or nine to nine.

Kenneth Donis (12:42):

So literally calling all day every day working. The proof of concept had come, but we didn’t know … We knew it was real because people were doing it, but we hadn’t actually done it. So there was always maybe that kind of negative thought saying, oh, maybe it’s not real, or maybe we can’t do it, but kind of touches having two other people that are also on that same path just makes it a lot easier just to go for it, regardless of what happens.

Robert Leonard (13:09):

There are a lot of super-successful businessmen and women who have said that cold calling, and door knocking, things like that just real hard, nose-to-the-ground type sales is so difficult and it really takes a lot of character, it builds a lot of character and it teaches you a lot. I’m sure with you guys cold calling all day nine to eight, nine to nine, I’m sure you guys had a similar experience. I’m sure you guys had a lot, a lot, a lot of rejection. I’m sure you guys had a lot of people that weren’t necessarily super nice to you.

Robert Leonard (13:37):

Talk to us a little bit about what that was like and what you took from that. Because one of my favorite books I’ve ever read is called Rejection Proof. If you guys haven’t read it yet, I highly recommend you do both for the three guests and anybody that’s listening. But what did you guys learn about rejection and how you can use rejection to get better going forward from that job?

Kenneth Donis (13:56):

I definitely love that question. I think that’s a very good question. So honestly, I would say I think my brothers and I have always been very confident, but there’s a certain aspect of just … Even the most confident person before cold calling random people, asking if they want to sell, even the most confident person is going to find that very, very uncomfortable.

Kenneth Donis (14:18):

So once we started doing that, it really made me personally and I think my brothers can agree on it, just become very comfortable with being uncomfortable. At first, it was very uncomfortable, and then it started becoming very easy. It actually boosted my confidence. I would say, you know if I can go speak to a random person or go in person and meet these random people that have never before ever seen an offer to buy their house, I can speak to anybody about anything. So it really built that thick layer of skin, I would say and it’s definitely a part of the journey because it’s built my character in a way that’s priceless.

Jeffrey Donis (14:53):

So I’ll go into a story. I started cold calling when I was in college like Kenneth said and then eventually we got sent home because of the COVID-19 pandemic and then I started cold calling a lot more because I had more time. I just didn’t have as much time and distractions when I was at home versus when I was at school. So what Kerwin and I would do is wake up in the morning, and we would look up, okay, are we legally allowed to start cold calling, because we had our own dialers.

Jeffrey Donis (15:14):

So at nine o’clock, we found that at nine to 8 PM, 9 AM to 8 PM, every single day, on the weekdays, you’re not allowed to call, but it makes more sense. You’re going to have more success rate. So I would wake up at around eight, and then dial back before we start waking up earlier, but we would just wake up around eight, eat and then start cold calling from nine to eight.

Jeffrey Donis (15:32):

I literally hated it every single day. I’d wake up, and I just would get so nervous. I’d wanted to stay back in bed, and it was the thing I hated doing. I did not look forward to getting up. Like Kenneth said, slowly, you just start getting used to it. Then eventually, I actually was able to be reading while I was cold calling and I’d be on like a course call, just watching a video or a YouTube video or listening to a podcast and multitasking.

Jeffrey Donis (15:53):

I could do it like he was really, really easy at that point. That’s why he was saying just about being able to take rejection because that’s what we were facing 99% of the time. You’re either getting cursed out, someone’s telling you like, “Who are you?” They’re trying to ask you all these questions. They’re not serious. You just learn to really face that rejection head-on and if anything, it just becomes normal. So being uncomfortable becomes comfortable and then you apply that to all aspects of life and business. It’s the same concept.

Kerwin Donis (16:17):

Yeah, and to follow up with that. I think just being in that state of discomfort, and discomfort for long periods of time, you kind of numb yourself. I think it also taught us a lot of themes and lessons of entrepreneurship, like being persistent because we would hear no, almost all the time. So we really had to stay focused on our vision and it really tested our own faith in ourselves and in our mission and what we were doing.

Kerwin Donis (16:36):

Obviously, we had ups and downs. And we were motivated some days and we weren’t other days, but just the challenge of showing up every day. I think that also not only just the rejection but the consequences of that rejection and building the mindset of having to trick yourself into thinking, “Yeah, this is going to work because you don’t have the fact yet.“

Kerwin Donis (16:51):

It’s faith before fact because we haven’t done a deal yet. So I think that that alone … Once we proved ourselves right, it kind of just built a lot of confidence within us and showed us that it really just start with just a dream and believing it’s possible.

Robert Leonard (17:02):

Jeffrey, you mentioned something interesting that not a lot of people have talked about yet on the show. So I want to touch on it for a second. You mentioned that there are hours in which you’re allowed to call people. Talk to us a little bit about that. I don’t know how many people in the audience are actually doing cold calling, but I know a lot of guests have talked about that and reaching out to owners of the property. So talk to us a little bit about the hours and how you’re allowed to call people and when you are and aren’t.

Jeffrey Donis (17:26):

So the reason that we did this was because we were like, “Well, we’ve learned that the more time that we put on cold calling, the more leads we’ll get, which means that we’re going to increase your chances of getting deals.” So we took the approach of how long can we possibly call every single day [wherein we’re] mitigating the risk of us perhaps getting in trouble legally. So we looked up Monday to Friday, how long can we call, when can we start? When are people going to answer? When would it be considered too early?

Jeffrey Donis (17:50):

So I found at 9 AM on Monday through Friday to 8 PM and after that people are usually going to bed on the East Coast. We were only actually targeting people in the PST time. So that’s really why we had nine to 8 PM and then on Saturday, it was 10 to seven and then Sunday it was … You could start at 10, but sometimes we started at 11 and we’d go to about six and that would be for us too.

Jeffrey Donis (18:09):

That would be like our work schedule in regards to cold calling because like I said this was nonstop. We would not stop for anything. We would go to the bathroom, I would eat. I would literally not get off the dialer just because I have headphones in. So I have wireless headphones. So I could just walk around my house. If I get a call and put in my laptop, I have the information of the dialers. Works that way where the information gets pulled up on your laptop.

Jeffrey Donis (18:30):

At first, you have a script. You get nervous and you have to read it off, read off the script, but just doing it that amount of time it’s just subconscious. At that point. You’re just talking and I’m memorizing not only the script, but I memorized my line, which has the most success rate because I was testing it consistently. So we got pretty good at cold calling and eventually, it was time for us to delegate that, but a lot of people aren’t willing to take that step.

Jeffrey Donis (18:49):

We all learned that we’re willing to do anything because cold calling is probably the hardest thing I’ve ever had to do for that long. It was just all day, and I, it’s not like I have anything else nine to eight. Our day’s over when I start and when I finish. So that actually forced us to wake up earlier and it just forced us to make the most of our time, which meant going to bed early.

Jeffrey Donis (19:05):

As soon as you’re done calling, just eat and then go to bed so you can wake up early, go to the gym and do something about self-development, because we want to make time for that. It really just helped us structure our day. [inaudible 00:19:15] your point, it was just to get the most out of the day.

Robert Leonard (19:18):

What would you guys say your general success rate is? It doesn’t have to be specific like one to 3%, but just in general, if you called 100 people, how many people do you think you actually had success with or 1,000 people? What was your general success rate looking like?

Jeffrey Donis (19:32):

Out of 100 people, we might get one or two leads but a lead, you need a lot of those to even get a deal or for the numbers to even come close. So we’d go [for] weeks.

Kerwin Donis (19:42):

Yeah, and in our business, the money was really in the follow-up. So you would get one or two leads for every 100 calls you made, but then you’d have to follow up with them and you wouldn’t close the deal realistically, within maybe two to six months maybe. That’s what wholesaling is, is building up a pipeline, a sales pipeline, and then you just follow up with them, nurture the leads, build the trust, because those people … Like you get a deal that wants to sell within the next 30 days. That’s considered a unicorn lead and those are rare. So that’s pretty much it. You really have to have good sales skills.

Robert Leonard (20:08):

So were you guys doing this cold calling for the flipper, and then basically did you realize like, hey, we don’t need to do it for this flipper anymore. We can do this for ourselves and then when we get a lead, we don’t have to actually do the flipping. We can just wholesale that lead or contract to somebody else and still make some money without actually having to do the flip. Is that how that progression took place?

Kerwin Donis (20:27):

So actually, I was calling for the flipper my freshman year, because I knew I wanted to get into real estate, but I didn’t know what to do. So I thought that would be a good way to learn, but when we went to Guatemala, we actually had a conversation and we decided we were wasting time. We realized we were in analysis paralysis, where we were too focused on learning and we could start our own venture and do it ourselves.

Kerwin Donis (20:44):

So on January 2, 2020, I believe Kenneth pulled the first list and we started calling, I think the next day. So pretty much like six months of me just cold calling for the flipper. Kenneth and Jeffrey actually never did that. But we all started cold calling once that new year started.

Robert Leonard (20:59):

So once you started cold calling for yourself, if you found a lead, and you’re actually going to close the deal, what did you do from there?

Kenneth Donis (21:06):

So once the lead came in, I was pretty much the acquisitions guy for a while, and I would follow up with the people, just see what their motivation was, why they were looking to sell, how we can help them, see if we can either push them in another direction, maybe you’ve listed with a realtor or things of that nature. To see if we were a good fit for each other, I would go out to the properties, see how much repairs it would need, and then see if the numbers make sense. I’d give them an offer and if they were to accept, we would, of course, be able to close on it. So that’s kind of how it went with us.

Kerwin Donis (21:38):

Yeah, and just keep in mind, I was in Chapel Hill, North Carolina. Jeffrey was in Wilmington, North Carolina, and Kenneth was in Greensboro because we each had our own respective colleges. So we were doing this all virtually, not really seeing each other in person but that’s why we knew that Kenneth was going to be our boots on the ground, which means he was going to be the one traveling to meet with sellers for properties, due diligence on the property.

Kerwin Donis (21:56):

So we were cold calling, Jeff and I, we’re cold calling. We were generating the leads for Kenneth to pretty much be the one to follow up with those leads and go out and see those properties. So we were calling in his market, and then, that’s kind of how our structure worked.

Robert Leonard (22:08):

Kenneth, when you said that you would close on the properties, what do you mean by that?

Kenneth Donis (22:12):

So we had a list of buyers, partners, you could say that we worked with, basically. So we would just assign them the contract and these guys that we worked with were our partners. They would on the back end, flip the property, and then make their profit on the back end. So we were kind of the middleman, basically putting the property under contract, and then assigning that contract to a buyer who will then still have some wiggle room to go in and flip the property and make their profits. So we were just making a spread in between. So we wouldn’t actually take ownership of the property, we would just get an assignment fee and they would close on it. They would wire the funds, they would pay for the whole transaction. We would just get a fee for putting the two together.

Robert Leonard (22:54):

How did you guys build that buyer’s list?

Jeffrey Donis (22:56):

Yeah, that was me and I had another friend who was just helping me but we pretty much went to Facebook, and looked up different Facebook groups. You can just type in wholesale real estate and in North Carolina, there will be different fix and flipping groups, wholesaling groups. What people will do is they’ll make posts about different properties in different areas and cash buyers will comment [on] their email addresses because they want to receive the information.

Jeffrey Donis (23:19):

So what I really did was, I just went, created an Excel spreadsheet, and then found every single email address I could, put them all in the spreadsheet by different areas, and then I email blasted all of them, asking them what their criteria was. Then most of them didn’t respond, but eventually just got some responses and then I assumed that I would just … Once we found a deal, I could just send it to everyone that was in the area and that’s pretty much how we built that. It was not hard at all. Actually, people overthink it.

Robert Leonard (23:47):

What was the average fee that you guys were able to get on a property? I know it varies depending on how much of a discount you got on the property, how good of a deal you’re able to find, how expensive the property is, of course. A $50,000 property is going to have a different feed than a $250,000 property, most likely. So just generally speaking, what were you guys seeing for a fee when you’re able to assign that contract?

Kenneth Donis (24:07):

So out of the 16 deals that we did, I think [the] average was between 12 to 15,000. So that was kind of average. There were some that were a lot smaller, and some of that that were a lot bigger, but if you put them all together and then average them, I’d say it’s roughly in that ballpark.

Robert Leonard (24:24):

Were there any cases where you guys couldn’t find a buyer? You had a property, everything seemed like a good deal. The numbers look good to you, made sense, then you went to your buyers’ list, and there was just nobody willing to buy that deal for whatever reason. Did that happen and if so, how did you guys handle it?

Jeffrey Donis (24:39):

I’ll let Kenny touch on it, but I’ll touch on it very quickly. The first time that we actually got a property under contract, we didn’t really know exactly how to run the numbers, and we got it under contract at too high of a price. The market will tell you that once you go to your cash buyers and ask them like, “Can you reassign this for this amount?” You’ll give them your asking price and they’ll say I need it at this price.

Jeffrey Donis (24:59):

So you simply go back to the seller, try and renegotiate, explain why. A lot of people might lie, but we really were just telling the truth. It needs too much work. I want to sell it for this price, you kind of give them a formula that you’re using, and sometimes they’ll work with you. Sometimes they won’t. Usually, they don’t, but sometimes you’re able to renegotiate and get it under contract at a better price.

Robert Leonard (25:18):

How did you guys learn to run the numbers? You just said that first one, you didn’t really know how to run the numbers. So first, tell me how were you running the numbers on that first deal? What did you do wrong? Then second, tell me how you actually learned to do it right.

Kenneth Donis (25:33):

So, we were studying, of course, looking for comps on Zillow, and using the MLS and stuff and we would watch videos on it. So we got a good idea. We were just a little aggressive or not as good with the repair numbers. That’s where we kind of went wrong. We’ve never done real estate before. So we were thinking it needed a lot less work but whenever somebody sees it, and they know what they’re talking about, they can easily tell this house is going to need either a full gut job, or we definitely need to do the flooring. Things like that.

Kenneth Donis (26:04):

So it’s fairly simple to run the numbers. We just tried to pick similar properties, similar square footage, similar bed, bath numbers within that same area within a mile that have sold recently, [and] have been flipped. Then 70% of that minus the repairs needed, our buyers would buy it out. So that’s kind of where we were at, but after seeing properties multiple times, studying on YouTube and stuff, we started to get what things cost in order to repair and replace them, and that’s how we started learning accurately how to run numbers.

Kerwin Donis (26:39):

Just like anything, when we got into multifamily syndication, it all just comes by doing. I’ve learned that I can watch as many videos as I’d like, I can read as many books, talk to as many people and that’s all great, and it’s taking action one way but the best way that … Kenny can also talk on this because he’s underwriting deals for our team when it comes to multifamily, but the best way I’ve learned is by actually looking at deals, underwriting them yourself, asking questions to someone that knows the concept better than you, but you have to know what questions to ask and the way that you figure that out is by taking action.

Robert Leonard (27:09):

So what happened on that deal when you couldn’t find a buyer? You went back and you tried to negotiate? They weren’t willing to do it. What happened?

Kenneth Donis (27:17):

So I would say that was our first loss. Two months into the journey, we had put $500 EMB, non-refundable and we couldn’t find a buyer. So we lost half a grand that we didn’t … Well, we had it but we were all three very broke college kids that didn’t know what the heck they were doing at the time. We had an idea of course, but I would say we just lost money, unfortunately. Typically, you can put refundable earnest money, but the seller insisted that if she were to sign a contract that she wanted it to be non-refundable and we were eager. We thought we were correct on the numbers, and we were wrong.

Robert Leonard (27:51):

Can you guys only sell your deals to flippers or could you sell your deals to rental property owners, maybe people who were interested in doing the BRRRR strategy, or do your deals that you’re looking for only make sense for flippers?

Kenneth Donis (28:03):

No, we can sell them to flippers, we can sell them to rental owners. Sometimes if it’s a good deal, [it] doesn’t need that much work and then it cash flows, you run the numbers that way, and you present it to a buyer who might be looking for a rental. We’ve even actually sold our deals on the MLS to a conventional buyer, someone who’s actually looking to live in the property. So you can sell it. There are ways to sell it anyway or to whoever as long as the numbers make sense for your buyer, which is why it’s really important to have a strong buyers list. Because the more buyers that see it, the more likelihood that someone will like it regardless of the price.

Robert Leonard (28:40):

I want to walk through your best and your worst wholesale deals so far. Let’s start with the worst one. What would you guys classify as your worst deal, and walk us through the process and what happened on that one?

Kenneth Donis (28:51):

I wouldn’t say there was ever a worst one. All of them came with their own hoops that we have to jump through, but I would say the worst one was maybe the one that we made the least amount of money on and the best one was the one that we made the most amount of money on, and those actually happened on the same day. So we closed two deals, our first deals, they both closed on the same day.

Kenneth Donis (29:14):

So we actually closed two deals for our first time ever on the same day. So one of them, we had assigned for … We got the property under contract at 60. We assigned it for 93. So we made about a $33,000 spread and then one of them, it was, we made like a $500 spread. So I would say maybe those two [are] probably the worst or the best and the worst.

Robert Leonard (29:35):

When you were going into that deal where you made 33,000, was that your expected profit or was there a catalyst that may be made the underwriting better than you expected? Did your buyers maybe get into a bidding war? Walk us through a little bit on how that came to be.

Kerwin Donis (29:52):

That one was a follow-up deal. Kenneth and I had just come back from property to work on another property in the same city and we got a call back from the seller we had tried to get under contract a week before, but she wasn’t okay with the price. So she just said she was going to keep it as a rental and we said, “Okay, we’ll follow up with you.” She actually called us back and said she was ready to sell at that price. We were not expecting to make anywhere near 33.

Kerwin Donis (30:13):

I don’t remember exactly how much we were expecting to make, but I think it was maybe like 5,000. We just put it out to our buyer’s list and as you mentioned, we did create a bidding war in a way. We had so many people that wanted to go see it. So we just booked a tour the next day, and the day after, and we committed to waiting two days, and we were going to wait till 5 PM on the second day to get all offers.

Kerwin Donis (30:35):

Then that was when we received all the offers. Kenneth had 93,000, and something was the highest offer that we had before 5 PM., but it was like 5:30 when we received one with…. I don’t know. He’ll kind of touch on the exact number, but it was a couple grand higher. We had about 101,000. So we missed out on a few grand, but we kept our word with our buyers and I think we gained a lot of respect with them because I’m still business partners with a lot of them. We told them the guy who submitted it late that he missed out but we really created that bidding war. We had no idea we were going to make that, but it just comes to show the power of following up and building a pipeline.

Robert Leonard (31:14):

I love that you guys stuck to your deadline. I think that, sure, you could have made, what? $8,000 more from 93 to 101. Sure, but what is sticking to your word worth? I guess I would bet it’s probably worth more than $8,000 to your list of buyers. So I love that you guys did that. One of the questions that I think a lot of people probably have is, why would these homeowners sell to you guys at such a discount?

Robert Leonard (31:38):

Let’s just take that lady. You said you scheduled two tours. Sounds like you probably had a lot of people. So you’re bringing two tours of a lot of people through her house. If I was the homeowner, I’d be like okay, well, clearly there’s some interest in this property. I could probably sell it more than I’m selling it to these guys for. So where’s that disconnect and how is this even possible?

Jeffrey Donis (31:58):

One reason is that they might just not want to deal with a realtor. A lot of times they don’t want to go through the process of having people go into their house. That was something that we saw a spike during COVID. A lot of homeowners just didn’t want to have property tours. Also, a lot of times the property isn’t in great condition. If it needs a lot of work, they don’t want to come out of pocket to fix it and a lot of retail buyers or realtors won’t list a property without it being renovated and updated.

Kenneth Donis (32:23):

Others, they just … Realistically some people just need a fast close. They’re going through foreclosure, they’re about to move. They’re just completely done and don’t care about the property, and this property, for example, it was just vacant. It was actually a daycare and she didn’t really care for the property. It was vacant and she just didn’t want it. She just wanted some money, cash. She wanted to close quickly. She didn’t want to go through the headache of waiting a long time and listing the property and all that. So we just made it convenient for a lot of the sellers that we worked with.

Robert Leonard (32:55):

Throughout the conversation so far, you guys have made a couple [of] comments that you’ve delegated or that have made it seem like you’re not maybe doing as much wholesaling today. So what is your future with wholesaling? Is it a strategy you plan on continuing? Is it something you guys are just had enough with? What does the future hold in terms of wholesaling?

Kerwin Donis (33:13):

We actually left wholesaling in the single-family real estate space. We decided that commercial real estate was more aligned with our long-term goals. With wholesaling we felt like … I didn’t realize it at first, but we just created a job for ourselves. We were tied to the business. Then after talking to some mentors and doing some self-analysis, we really just felt like multifamily real estate and investing in passive income-producing assets is why we got into the game and commercial real estate was going to help us reach our long term goals the fastest. So that’s one of the reasons why we left wholesaling.

Kenneth Donis (33:44):

The goal was pretty much always to go after passive income, and we’ve always had the dreams of getting into commercial, and we kind of just asked ourselves, well, why don’t we do it now? We started listening to the multifamily podcast after we got introduced to multifamily syndication and we heard people just starting in multifamily, skipping single-family altogether. So we just asked ourselves, well, why are we waiting, and we realized that it was really fear and then we just decided to just cut our wholesaling operations completely and start in multifamily.

Robert Leonard (34:22):

What types of properties are you guys looking to acquire as part of your syndications and where are you guys looking?

Kenneth Donis (34:28):

I’m still the acquisitions guy for our team. We’re a part of a group that currently hold 8,000 units closer to roughly $400 million assets under management, but we target primarily 100 to 200 unit apartment complexes. Multifamilies are our niche, especially apartment complexes, and we look in North Carolina, South Carolina, and Georgia. Our group is based out of Texas but we’re looking to help the group expand here in the Carolinas as well as Georgia markets.

Robert Leonard (34:58):

As such young investors trying to take down large multifamily deals and raise money from investors, I can only imagine that you guys face a ton of pushback and headwinds purely just because of your age. I know it because I’m only 26 myself. I faced it when I was … Five years ago, when I got into real estate, I was 21. So I faced it myself. I know exactly what you guys are going through, what challenges have been young caused and how are you guys all overcoming those challenges?

Kenneth Donis (35:26):

I definitely love that question because it is something that I think a lot of people let get in the way of them either starting real estate, or doing multifamily, or even chasing their dreams because they think that they’re too young. I think one thing that we’ve very much benefited from is the fact that we know, to an extent we know what we’re doing. We haven’t done it long, we have great mentors. So when we have conversations with older people, I think that they respect us a lot, because we actually know what we’re talking about.

Kenneth Donis (35:54):

So just having the confidence going into a conversation, knowing that we can actually go out and buy this asset that we’re speaking to the broker with or talking to passive investors about. Just knowing what we’re talking about and being confident in that.

Jeffrey Donis (36:07):

An obstacle we’ve, I think, not necessarily be aware of all the time, but imposter syndrome is something that I think we had at first where we just thought that we didn’t belong because we were too young and didn’t have the experience but I think a remedy for that was just to get educated. We invested about a month of time to learn everything we could about multifamily. Then we found the right mentorship, and we got into the right networks and we’ve been focusing on building relationships with just mentors. So we are able to leverage people who aren’t necessarily as young as we are and have more experience than we are. So we have a great team, and we have a different value that we can bring. I think that’s how we sort of approached it.

Kerwin Donis (36:44):

We go to a lot of networking events, and we’ve noticed that a lot of people wish they would have started at our age. So I think my experience, I’ve seen that by actually putting in the time and effort like Kenneth said, we’re not just here saying we’re going to do it and then we don’t know what we’re talking about. No, we spent hours, like all day, every day, learning the content, actually doing it, looking at deals, talking to investors, making content.

Kerwin Donis (37:07):

All of this behind just being able to talk to people and actually have the confidence to walk up to people and shake their hand, they’re going to look at you and say, “Wow, you’re young, but I wish I was in your place,” rather than saying this guy’s young and he doesn’t know what he’s talking about. So I think it’s preparation and also, just like Kenneth said, you have the confidence because you know what type of work it took for you to even get into the room.

Kerwin Donis (37:26):

Because a lot of people like you said, I don’t know many people but I try to make friends with people that are at the events, but most people aren’t my age, and that’s okay, again, I’m with all types of people. Of course, I don’t expect them to be my age but that’s the thing that it takes is really just everyone is here for a reason and it’s really because of the time that we actually put in to get there.

Robert Leonard (37:44):

I haven’t personally been to a ton of in-person networking events. I am thankful and blessed enough to be able to get all of my networking through the podcast that I need, but before I had the podcast, I did go to a couple in-person network events and this is back when I was a little bit younger than I am now. What I found was, at least for me, that a lot of times, at first people were a little abrasive, or that they didn’t necessarily want to talk to me because I was young.

Robert Leonard (38:10):

Not everybody, but for the most part that was a lot of people but then what would happen is we’d talk a little bit, they’d give me a little, like a couple [of] minutes just to see, and then we’d talk and they could tell that I actually knew what I was talking about and then totally walls just went down. They didn’t care about my age anymore and they were actually super excited to help me and teach me. They wanted to take me under their wing and like you said they wish they had started when they were my age.

Robert Leonard (38:32):

So they were happy to help. So I think what you find a lot of times is that these older, more successful investors, they’re more than happy to help but they don’t want to waste their time. They know that their time is so valuable that they don’t want to invest their time in helping somebody that’s not going to put in the work. So by being able to prove upfront that you know at least a little bit and can have a little bit of an intelligent conversation, because that’s free. You can learn that knowledge without having any deals, they’re going to be a lot more willing to invest their time into you.

Kenneth Donis (38:59):

We actually just came back from an event in Belize. So we were hanging out with Robert Helms, Russell Gray, Ken McElroy, Robert Kiyosaki, Michael Blank, Brad Sumrok, like some really, really wealthy, big people in the real estate space alone, and not just real estate. They all have their other businesses, but like you said, some people, they don’t necessarily always come up to you and talk to you, but it’s about you going up to them and having the confidence to just strike that conversation.

Kenneth Donis (39:26):

I feel like they may be a little impressed that someone as young, maybe, as us, or anyone really goes up to speak to them because they’re really big, but we treat everyone not necessarily the same, but we’re not necessarily scared to kind of go up and just start a conversation. There were times where after dinner, we would all disperse and there’d be people in a group already having a conversation, and myself or my brothers would just walk up and just sit down and just start speaking to everyone at the table. I think that that’s something that was built through our entrepreneurship journey.

Kerwin Donis (39:59):

When you said you were walking up to these people and you’re putting in the time beforehand, so that you can actually carry on a conversation and ask good questions, I also think what I do purposefully is look how I can add value, whether that’s spiritually. Maybe they need a connection, we’re really good at networking. It’s one of my strengths. So if I know someone is looking for some type of person, well, I met this guy over here, I’m going to introduce you to and I actually did that. The Belize event I introduced to individuals and the other individual later, we were able to start another conversation, and now I’m getting him on my podcast. I didn’t go in expecting anything, I was actually just looking to build a relationship and see if I can bring value. So I just think by having a different approach to certain things, they’re not going to care if you’re young if you’re looking to bring value.

Robert Leonard (40:40):

Kenneth, I would be willing to bet that you guys wouldn’t be able to walk up to that group of people if you hadn’t done the cold calling. I’d be willing to bet that that cold calling is what helped build your guys’ confidence to be able to do that and you might not think of it. You might not make that connection in the moment, but I bet now looking back, you guys are like, yeah, that is what allows us to do that.

Kenneth Donis (40:59):

Yeah, and I would 100% definitely say the cold calling like I said, it built character. I think wholesaling and single-family real estate really built us as individuals in order to be able to be where we’re at today. I speak to brokers that I’ve never spoken to about 20, 30, $40 million deals and I’m 22 years old. And I have to be confident and know what I’m talking about when I’m speaking to these brokers because they have people that can buy those assets [with] cash. They don’t have time to just mess around, but I’m starting to build relationships with them and just get to know them. So it’s definitely a good skill to have I’d say.

Robert Leonard (41:32):

You guys have mentioned mentors a couple of times. What role have mentors played in your journey so far, and how are you building and finding those mentors? Were there some people maybe from your buyer’s list? A lot of times, if people are on buyer’s lists, they probably have cash. Maybe they could be potentially good mentors, or maybe that flipper you worked for, Kerwin ended up being a mentor. I don’t know what he was like. He wasn’t paying you guys. So it sounds like he might not have been the best mentor, but it’s possible. So where are you guys finding these mentors and what role have they played for you?

Kerwin Donis (42:00):

I would say networking is the number one way that we’ve found the best mentors, but also entrepreneurs are out there and they’re actively looking. I would say that one thing is we’ve gone, not necessarily like outgrown mentors, but as we’ve changed our approach to real estate in our industry, so we started out with one mentor. We wanted to do something different. We had to move on. We kind of see these people as like, we want long-term relationships, but they’re a stepping stone on our journey.

Jeffrey Donis (42:24):

We’re really active on social media and I can kind of touch on being young and how that adds to our credibility, but it’s opened doors in regards to us finding who’s doing what in certain spaces, who’s a leader, and who we can benefit from the most if we build a relationship with them. Sometimes you actually have to get some type of value, whether that’s money or time towards that mentor just to have access to them because they’re busy people and their time is valuable. So you have to give them something of value in order to get their time.

Robert Leonard (42:50):

A lot of people, almost everyone that’s in this space that we’re in on the podcast, whether it be real estate, I have another podcast about stock investing, entrepreneurship, anybody that’s in this space pretty much wants a mentor. I think it’s very common. Almost everybody does, but I think what’s missing is that not a lot of people understand or know what exactly that relationship is going to look like. What does having a mentor entail? What does the mentor supposed to do for you, especially if they’ve never had one? Let’s add some color. What are your mentoring relationships look like? What do your mentors do for you? How does that kind of work?

Jeffrey Donis (43:23):

I actually get that question a lot and my advice to people, when they want to know where to find a mentor, I tell them to first write down what they want from a mentor, because different mentors are going to offer different things and each person is going to have different needs that they want met. Some people are going to want a mentor who holds their hand, gives them a blueprint, a roadmap to where they want to get to and a lot of times that’s a course with a teacher, but there’s a lot of other times when you find a friend and who’s older and has done what you want to do. You agree to meet up with coffee every other month and just chat and pick their brain or [inaudible 00:43:54] call. Kenneth can probably touch a little more on our current mentor.

Jeffrey Donis (43:57):

He’s Mark Kenny. He’s also our partner, but we have direct access to him. We get on calls with him and he’s very accessible, always responsive. He’ll also a partner with us on deals and just kind of helps us learn the ropes.

Kerwin Donis (44:09):

In regards to my ideal mentor, and I don’t know if I can speak for my brothers, but when it comes to my ideal mentor, I take action regardless of who I’m with. Now, what I want is when I have a question throughout my journey, because I’m going to come up with things that I’ve never encountered, I want someone that’s already where I’m going and I want them to be able to give me the answer to my question as soon as possible and that’s what we get out of our mentor.

Kerwin Donis (44:33):

I’m not looking for someone to hold my hand. I just think if anything that would just limit myself, because then I’d get dependent on that. What I want is someone that’s a resource and I can use when I’d like. I think for a lot of people if they are treated in that way, they’d get a lot farther than just having someone hold their hand. Because once that mentor’s gone, for whatever reason, how are you going to be able to accomplish anything?

Robert Leonard (44:53):

One of the things I ask almost every guest that comes on the show is to give everyone listening to this specific episode an actionable step that they should take after listening to the show. Before the listeners turn on the next episode of their favorite podcast or get sidetracked with something else that they have to do, what is one action they should take after listening to this episode?

Jeffrey Donis (45:16):

I can go first. I would write down the five people I hang out with the most, and then whatever your goal is, whether that’s to increase your income. Let’s use that for this example. You can maybe give them a ballpark range as to how much money they’re making. That’ll give you a resemblance as to where you’re going. If you’re not hanging out with people that are either better than you in whatever way or that are bringing you up or giving you some type of positive impact on your life, then I highly recommend you looking to find new friends or a peer group, just because when I left high school and then got out of college, I cut off everyone. It just happened naturally. I didn’t do it intentionally. Sometimes it would be like they’d reach out and I just wouldn’t really be able to hang out with them because I would be doing other things.

Jeffrey Donis (45:57):

But luckily, like I’ve mentioned earlier, I have a mastermind with my two brothers and I don’t let many people in my circle now. It’s really only certain people that are doing certain things that I like and I think it’s very, very important for you to surround yourself with people, whether that’s literally listening to podcasts throughout this time period. We have [the] technology. So if you can hang out with people in person, you can hang out with them on podcasts. Listen to what they have to say.

Jeffrey Donis (46:18):

You can get on YouTube, videos, and all that stuff. Audiobooks, that can be your peer group. That’s what I treat it as. I hang out with a lot of people through technology versus in-person. So I highly recommend just being careful with who you surround yourself with.

Kerwin Donis (46:30):

I would recommend they read two books. Rich Dad Poor Dad by Robert Kiyosaki and Think and Grow Rich by Napoleon Hill. Those are two books that changed our lives. We say it broke us from the matrix and we just couldn’t see the normal nine to five paths. That didn’t fit us anymore. We weren’t congruent to that path anymore.

Kenneth Donis (46:47):

Whether they’re looking to get into wholesaling or if they’re looking to get into multifamily, or if they’re just listening to this and they’re not looking to get into real estate, maybe into some other thing, definitely learn. I think of course education is important, but also apply what you learned regardless. I just think massive action. Just take massive action and just go out and do it. Whether you know what you’re doing or not, you’re going to learn what not to do the next time, if you do it wrong the first time, and things of that nature. So definitely just take massive action and I think that’s one of the best tips that we abided by and it’s definitely paid in a good way, I’d say.

Robert Leonard (47:22):

As we wrap up this episode, I want to give you guys a chance to tell the audience where they can go to connect with you guys. Where’s the best place to find you?

Kerwin Donis (47:31):

We’re on pretty much every social media platform. We’re big on BiggerPockets, which is a real estate networking site. We’re also on Instagram. All of our handles is @donisbrothers. That’s D-O-N-I-S brothers on pretty much every platform. Our website is Donis Investment Group. So D-O-N-I-Sinvestmentgroup.com, and if you guys want to learn about passive investing in real estate, we have a great Top 5 Mistakes Passive Investors Make free e-book that they can download and we just like to leave with value. So check us out.

Jeffrey Donis (48:00):

We also have a podcast called The Real Estate Monopoly Podcast where we bring on people in the multifamily space, also just real estate in general. So just check that out if you’re interested in real estate.

Robert Leonard (48:11):

I’ll be sure to put a link to all those different resources in the show notes below for anyone that’s interested in checking you guys out further. Guys, thanks so much for joining me.

Kenneth Donis (48:19):

Thank you for having us.

Kerwin Donis (48:22):

Thanks for having us, Robert.

Jeffrey Donis (48:23):

Thanks for having us. We appreciate it.

Robert Leonard (48:24):

All right, guys. That’s all I had for this week’s episode of Real Estate Investing. I’ll see you again next week.

Outro (48:29):

Thank you for listening to TIP. Make sure to subscribe to We Study Billionaires by The Investor’s Podcast Network. Every Wednesday, we teach you about Bitcoin and every Saturday, we study billionaires and the financial markets. To access our show notes, transcripts, or courses go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision, consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.