137: Buying More Than 500 Properties in Five Years with Tom Cafarella

On today’s episode of the InvestFourMore Real Estate Podcast, I speak with Tom Cafarella. Tom has been a real estate investor for a long time, but in the last five years, he has done some amazing things. He has bought over 500 properties to flip, wholesale, or hold as rentals. He has also started a real estate brokerage that has added over 20 agents in 2 years! On this show, I talk with Tom about how he has been able to buy so many houses and add so many agents. I will give you a hint: the two go hand in hand.

How did Tom get started in real estate?

Tom’s grandfather was a landlord, and while Tom was growing up, he one of the only successful people Tom knew. Tom wanted to get into real estate but instead went the safe route. He got an accounting degree and joined a large accounting company. He was less than thrilled with his job, and it showed. He started spending more time learning about real estate than he did his job, and eventually he was let go. Tom did not have a lot of money, so he chose to start out by wholesaling properties. He did well, and on his fourth deal, he decided to try a flip. The flip was a home run, and he did his best to flip every deal he found. After two or three years, Tom was able to buy his first rental properties.

How was Tom able to scale his business?

Tom was getting most of his deals from direct marketing. He was using a number of sources to set up appointments with people who may be interested in selling their house to him. When Tom was meeting with people, he realized that many people wanted to sell their house but not at the price Tom was wiling to pay. He knew he was leaving a lot of money on the table. If he became a real estate agent, he could be listing these houses for sellers and not wasting the leads. Eventually, Tom hired an agent who helped take appointments, and that agent told Tom they needed to be listing the leads that they did not buy. Tom agreed, and the business changed completely.

By allowing agents to list houses that Tom did not buy, he was able to recoup all of his marketing dollars…and then some. He could basically spend as much money on marketing as possible and still make a profit just on the commissions from listing properties. He was able to buy many more deals for himself because he ramped up his marketing so much.

How did Tom build a brokerage with 200 real estate agents?

Tom found that real estate agents loved working for him because they get paid in multiple ways. They can get paid when they list a house and sell it. They can get paid when they find a motivated seller who wants to sell their house directly to Tom. Tom is also able to give his agents a ton of leads because he is marketing so much. On the show, Tom and I talk about whether he likes new or old agents better. We also talk about the training he offers his agents to make sure they succeed.

How does Tom find enough leads to feed the agents in his brokerage?

Tom gets leads to his agents in a number of ways. His favorite ways to find motivated sellers and listings are:

  • Facebook: He runs ad campaigns targeting specific users on Facebook.
  • Google Pay Per Click: This source of leads has gotten much more expensive, but the leads are very high quality.
  • Direct mailing: Tom uses a lot of direct mailing, but there is a lot of competition.
  • Cold calling: Having an army of real estate agents means you have a lot of people ready to call leads!

Tom is able to get so many leads because he can monetize them in so many ways.

How can you contact Tom to learn more?

Tom has set up training for his agents that he shares with other brokerages as well. He also helps investors set up marketing systems to get the leads to fuel their business. You can reach Tom by checking out Buildateamthatbringsyoudeals.com. Sign up for the webinar, and even if you don’t watch it, Tom will send you some great information.