How To Find Hedge Fund Buyers In Your Market feat. Vic Heredia
Vic: My advice is like, I like the B markets, because they’re much easier to get deals in. And now a days…
Justin: The tertiary market. So instead of Oklahoma City, you go to Tulsa. (Vic: Correct) Yep.
Vic: Yeah. So the B markets, so just less competitive, it’s easier to get deals. Maybe a little bit harder to sell them. But if you find a fund, you’re golden.
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Yo, yo, what is up? Welcome back to the science flipping podcast. I am here with a good friend. And just amazing investor Vic Heredia. I even just had to ask him if I was going to pronounce his last name, right. Because as a as someone who has a Latin wife, very important, and I didn’t, because it’s really Heredia, correct? love it. (Vic: Well, close enough).
Justin: Close enough. I appreciate you coming on to the podcast, brother. Again, we are here and incredible event here in Scottsdale. And so we’re just giving back. I want everyone to understand the power of buyers, specifically the hedge funds. You’ve been, you’ve created an incredible name as someone who really knows how to find them, target them, and move deals to them. And so I want people to know, this is real. This isn’t just, you know, for the people who’ve been around a long time. Let’s talk about this. You know, let’s talk about where to find them. What you’re doing in the secret to your success with these hedge fund buyers?
Vic: Yeah, well, really. I mean, for us, that’s really where it’s at, you know, we’re able to sell deals at depending on the property, 90, 95% of ARV. (Justin: That’s this), just as good.
Justin: And as ain’t in are you doing all wholetail? Are you wholesaling, too? Or are you flipping like?
Vic: So what we do? We try to be strategic. So we’ll submit the offer to the fund. (Justin: Yep). If it’s a really good offer, then we’ll take it. Yeah. If it’s not what we like, then we’ll we’ll just try to wholetail it. (Justin: That’s right). Now if it needs like, if it’s considered a do not buy by the hedge fund, and it just needs way too much work. Then we’ll just we’ll just wholesale it to a cash buyer. (Justin: Yep). But normally, I’d say 90% of everything we do is is hedge fund and wholetail.
Justin: What are some of the bigger hedge funds and I’ll name the ones that I’ve worked with pretty heavily across the nation because there’s different hedge funds in different cities now like, I remember when SFR3 was heavy, heavy in Phoenix, in Atlanta. And now like I’m selling deals to them in like Savannah, Georgia in these like off markets where they’re not in the big markets, but they’re an off markets. But who are you working with? Is it like Amherst, SFR3?
Vic: Amherst, Amherst is really good. Because they buy based off of cap rate, which is the kind of guys you want. SFR3 is great. The thing with them, they do pay a little bit less because they they’re fix and flip, guys. (Justin: Yeah), Wedgwood homes is really good as well. (Justin: They’re huge). They’re huge eight, and I thought they were just in California, but now they’re like in 26 states.
Justin: Those are the big fix. They only fix and flip. They don’t hold any of their stuff (Vic: correct. Yeah, correct. Yeah).
Vic: But it’s funny. I’ve talked to some friends that they’re like, Yeah, I sold it to Wedgwood, and they, they listed it as is. So a lot of times, like I mentioned to, depending on the offer we get from the funds will actually just you know what, we’re better off just wholetailing it. That’s right. Because we’ll make more money. (Justin: Yeah), it just depends on on the property.
Justin: Do you have direct contacts with all these funds, where you call them say, hey, we just locked up a contract? What do you guys do?
Vic: Yeah, so they like really none of them do phone calls? It’s all email, (Justin: email. Yeah). But initially, usually you get on the phone and try to reach out to them.
Justin: So if you were, if you were going to advise maybe someone who has not gotten to this game, right? They’ve been listening to me watching my stuff on YouTube. By the way, if you’re not watching this on YouTube, YouTube, you need to Vic’s a good looking gentleman. We, what would you tell them to do? Right? If they’re just used to the, you know, find cash buyers, which is what all gurus talk about, whatever, what would you tell them first to do is their first strategic point.
Vic: So really, I mean, if you want to find a hedge fund, so there’s the ones we talked about, right? You could Google them, and just find a website and submit your deals or call them right. But the quick and easy for your market. When I tell everybody just go to propstream (Justin Yeah) and you locate the cash buyers that paid cash in the last year. And then there’s an option to it says how many properties they own? (Justin: Yeah), so just enter a thousand properties plus. (Justin: that’s it). So then you’re gonna get a list of all the buyers that pay cash in the last year, they have a thousand properties or more, they got a thousand properties as a hedge fund. (Justin: Yeah), that’s really that’s really it. And then another little secret that I usually don’t give away. (Justin: Oh okay), if you don’t, a lot of times, the LLC isn’t the isn’t the actual buying the company, (Justin: right) It is the buying entity was not the company. (Justin: That’s right). So what you do you google the mailing address, and that’ll give you the result of the actual buyer (Justin: the mailing address) that’ll give you the result of the actual buyer. (Justin: Interesting). So that’s like, that’s like a it’s like a pretty heavy hack.
Justin: A 100%. I think it’s, um, what here’s what I actually am excited about you and I just talked about you actually teaching this more in depth of my event. Very excited about that. More information on that to come but you know, one of the things that I think is really important that you understand that you can echo and I can echo is, this is about an opportunity business. (Vic: Yeah). When you have hedge funds, you have opportunities. (Vic: Correct) You can wholesale it to them. You can wholetail it to them, because they’ll still buy it (Vic:Yeah), as long as numbers make sense. You can rehab flip it to them, because as long as you have a deep enough discount, (Vic: yeah), you’re gonna make way more margin. But now it’s just about how many opportunities can you maximize? Right?, (Vic: exactly). And if you have these hedge funds the way you do, you don’t have to rely on Justin Colby being your buyer. (Vic: Yeah), I’m a great buyer. But I’m not going to pay what Wedgwood will. (Vic: Yeah, yeah, exactly). So, you know, opening people’s eyes up to buyers are the most important part, even if you’re gonna flip it. (Vic: Yeah). Think about that for a second. Everyone talks about cash buyers. But if you’re going to be a flipper, I flipped you flip. (Vic: Yeah). It’s the buyer that we’re banking our paycheck off. (Vic: Yeah, exactly). Make sure you’re in a good market. Make sure there’s good buyers in these markets. (Vic: Yeah). And no better market to be in than where these billion dollar funds are playing. Right?
Vic: Exactly. 100%. And it’s interesting. I actually came across them by accident. (Justin: Yeah), I bought a property in Austin. And then I just I looked for buyers in the area. And then I found one that had 23,000 properties. (Justin: Who was that?) Amherst. (Justin: It wasn’t) Wow, I’m like, so I called them consistently for three months straight. And they finally said, Okay, reach out to this guy. And that’s how it kind of got started. And then as I developed a relationship with them, they will talk about other funds. And I, okay, write that one down. So it’s just it’s kind of being strategic, you know, and always it kind of having critical thinking is a big factor to. (Justin: 100%). So that really helped.
Justin: I love it, dude. Well, listen, I think what people all need to realize is follow the money. I mean, what markets are you in?
Vic: So we like California. Not a lot of hedge funds there. But we’d like the market because the (Justin: big spreads?) Yeah. Arizona, Georgia, Florida, Missouri, Ohio. I mean, (Justin: shocker. Where the hedge funds are). Yeah, they’re like in 26 states. And nowadays, there’s hedge funds now and pretty much every market, (Justin: That’s right) So you don’t have to be in one of those markets to sell them. And honestly, those markets are very competitive. (Justin: Yep). So my advice is like, I like the B markets, because they’re much easier to get deals in. (Justin: The tertiary market so intestead of Oklahoma City, you go to Tulsa), Correct.
Vic: Yeah. So the B markets, so just less competitive, it’s easier to get deals, maybe a little bit harder to sell them. But if you find a fund, you’re golden,(Justin: that’s it). So sometimes the B markets are actually better than the A markets.
Justin: And then the the best part of that is go find where these funds are and choose the ones that are B markets versus the A market, right? (Vic: Yeah), choose the Tulsa or the Tucson versus Phoenix or Oklahoma City. (Vic: Correct). Right. Exactly. In reverse engineer that, guys. I mean, you have you jumped on privy yet? (Vic: No.) Okay. So privy, that is not new. But it really is an impact, because you can just go look where these people are actually buying, how much they’re making on the profit of flips. And just go reverse engineer it, do it on Prop stream, do it on privy, do it on batch, it’s all the same stuff. Just find the buyers and where they’re buying first. (Vic: Yeah) You put in a thousandI I usually put five 500. Right, (Vic: That works too. That works too. For sure). Just a volume you’re just looking for the volume of buying because these guys by volume, they run on really thin margins, margins you and I can’t buying on now, they will lose a lot more money than you and I can afford to lose. But I mean, that’s really the game guys is hedge fund buyers. The y’re not going anywhere. I remember you’ve been in the game long enough. I remember where everyone thought like, back in 2012 that this isn’t real. They’re not here to make this a real asset class for their hedge fund and blah blah blah. Yeah, they are. (Vic: Yeah), because we’re 10 years in and they’re not slowing down.
Vic: Yeah, they’re not gonna slow down they think the markets gonna there’s it’ll balance out in 2023 (Justin: Yeah), but I’m like, are you gonna stop buying they’re like, No, we’re still gonna buy.
Justin: Yeah, just might be a little different price, but we’re gonna buy (Vic: Yeah). It’s amazing, guys. Let’s let’s have everyone follow you. Where can they find you?
Vic: At my Instagram it’s Vic.Heredia, H E R E D I A. (Justin: Heredia or) Eredia is correct. But it says that Heredia. So. Listen, make it easy for the english speakers.
Justin: Yes, right. Yeah, make sure to find him he is going to be speaking at my event, June 24th, 25th. Here in Scottsdale. I’m blessed to have you speak on stage man. It’s gonna be exciting, it’ll be awesome. Well, we’re gonna go on a much deeper dive about hedge fund buyers where to find them how to get to him. What do you say how to get the deals there. So it’s gonna be good stuff, dude. (Vic: Yeah, for sure). I appreciate you (Vic: Thank you, brother). Alright guys see on the next podcast.