Ed Kowalski - From REO to a Top Tier Realtor


Ed Kowalski felt the crash of the real estate market back in 2008 as a real estate investor. After filing for Chapter 7 bankruptcy, he didn't just bounce back, he soared to new heights. Through determination and resilience, Ed became one of the top REO agents in the Northwest region, selling $10 million annually for the next 5 years. Ed has completed over 20,000 BPOs (Broker Price Opinions) and sold over 1,000 homes as an agent for investors, hedge funds, banks, and government institutions. He's now working to help agents find success through various marketing platforms through his company Top Tier Realtor.

In this episode, you will be able to:

  • Discover the essential tips for navigating your real estate investing journey with confidence and success.
  • Uncover effective strategies for maximizing your returns with REO property investments, which was one of Ed's successful areas of expertise.
  • Learn proven lead generation techniques specifically tailored for real estate agents to boost your business.
  • Unlock the secrets to maximizing your profits through Broker Price Opinions (BPO) in real estate.
  • Explore how to build long-term wealth through shrewd real estate investing strategies.

The key moments in this episode are:
00:00:00 - Overcoming adversity and pivoting in real estate
00:07:22 - Ramping up REO properties
00:09:23 - Adapting and helping others
00:11:47 - Investing in knowledge and relationships
00:14:35 - Real Estate Investing Tribe Launch
00:15:20 - Involvement in REO Space
00:20:20 - Cost-Effective Online Leads
00:23:24 - Diversifying Lead Generation 

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Ed Kowalski
When the whole bottom fell out, then they startEd sending me lots of listings. And so I went from, I guess, my first year doing reo 2008. I did maybe, I don't know, probably like 48 units, something like that. But then the next year was like, 140. And then I just kept building on that and building on that.

Mike Swenson
Welcome to the REL Freedom show, where we inspire you to pursue your passion to gain time and financial freEdom through opportunities and real estate. I'm your host, Mike Swenson. Let's get some REL Freedom together. Hello, everybody. Welcome to another episode of REL Freedom, real estate leverage freEdom, where we talk about people building time and financial opportunities through real estate. I'm your host, Mike Swenson. If you want to get startEd on your real estate investing journey, check out our website, that's dot. We've got a lot of great content on there to help you, Educate you, and maybe find something you like. That's what it's all about is as we get into real estate, as we do more in real estate, we find out that our path twists and turns and changes, and that is a great example of our guest today. So we've got Ed Kowalski here. Ed has done a lot of things during his time in real estate, was a part of the market crash back in 2008, did a lot of reo properties. We're gonna talk about that a little bit. What it is. Did some investment properties, did a lot of sales, helpEd a lot of folks. And then now I'm shifting gears a little bit more towards lead generation and helping agents with leads. So we're going to highlight Ed's journey here today. So, Ed, welcome to the show.

Ed Kowalski
Thanks a lot, Mike. Thank you for having me. You know, it's a pleasure being here, and, you know, I'm just excitEd to be on the show.

Mike Swenson
Awesome. Well, yeah, why don't you tell us a little bit about your journey, how it startEd, and we'll take it from there.

Ed Kowalski
Sure, sure. So back in 2001 or so, I was working at a tech company callEd Sienna Corporation, and I was a fiber optic amplifier technician. I went to school for electronics engineering, and I was working at that company. And we all know the tech boom and the tech bust. 1999, they were talking telecommunications company from 1999. I was there until late 2001 or so, and the bubble kind of burst on that and I was laid off. So I was unemployEd. And in the meantime, I was getting involvEd with real estate. Like I was interestEd in it. I was reading books, I was listening to audios. I startEd that journey. It was like a Carlton sheets thing, I think late night tv. So I startEd of that journey. And then, you know, I was, I startEd working with a mentor just on the real estate investing side. His name is Steve Cook and I was, I was working with him in the, in the local Baltimore area. And then I was laid off and he kind of said, he said they did you a favor. And I was like, what does that mean? Because I just bought, I had just bought in a house, just had my first child was getting marriEd and here I was unemployEd. So it was quite a shock. But my wife at the time, she said, you're really interestEd and passionate about this real estate thing, so why don't you get into real estate? So I did, I startEd, and I startEd on the investing side. I was mainly doing wholesaling. That's basically what Steve taught me was wholesaling. And most of them were reo properties or HUD properties or listEd properties, and I would put them under contract and assign the contract for a fee. Did a whole bunch of those, probably did 80 of those in between 2001 and 2005 or so. But in the meantime I got my real estate license so I could have access to the MLS and everything like that. And the one thing about the wholesaling deals, there was always this time in between, you know, when I put something under contract and then when I closEd it, you know, 30 days or whatever. So I had a couple other local veterans in the reo business and they told me about bpos. So those are broker price opinions. Basically. Like many appraisals on properties, you get paid, you know, anywhere from $30 to, you know, $100 to go out, take pictures, pull comps, do the form, submit them to the banks. And so I startEd doing those because they would give me weekly checks, bi weekly checks. And so. But meanwhile im churning along with this, with this investing thing. And then I startEd getting into fixing and flipping, obviously for bigger profit margins. And from 2005 until, you know, 2007, late 2007 into 2008, I was fixing and flipping properties, you know, doing, startEd out one at a time, two at a time, four at a time, you know, all the way up to like twelve, you know, twelve or 15 at a time. And what happenEd was, we all know I got caught with about twelve properties and the market just completely crashEd the subprime debacle. And I basically was holding these properties and renovating them. Some were done, some were halfway done, some were just being demoEd. And I had no equity left and was struggling to make the payments. So I workEd things out. The lenders gave some back and I had lines of crEdit with banks to kind of facilitate this whole machine that I was trying to run. And, you know, basically, basically lost everything. Went through a bankruptcy, went through a bankruptcy and everything. But I still had those bpos. So I went back to doing the bpos full time. And along the way, from about 2000, I would say 2000, you know, 2004 to 2007, I had a lot of banks because I was doing all these bpos, I had a lot of banks asking me, hey, can you list this property? And I said, I don't do that. I'm a real estate investor. I don't list houses. I don't do reo properties. I only buy reo properties. So I was like, oh, crap. So I went back to all those contacts and I said, hey, I'm interestEd in working for you now. I didn't mention all this other stuff, but I said, I'm interestEd in working with you now. And they startEd sending me listings. And when the whole bottom fell out, then they startEd sending me lots of listings. And so I went from, I guess my first year doing Reo, 2008, I did maybe, I don't know, probably like 48 units, something like that. But then the next year was like 140, and then I just kept building on that and building on that. So for, for a good run there, from about 2007 to 2017, I was cranking a lot of Reo, I mean, myself and on different teams and just homes wholesalEd and everything. I mean, I've sold over 1000 homes. So basically with the reo piece, it was a real blessing because everything just, you know, fell apart. But then, of course, later down the line with Reo, things have been, things just kind of tricklEd down with regulation, with hEdge funds buying a lot of the stuff that's out there buying directly from Fannie and FrEddie. I mean, my biggest clients back in the day were Fannie Mae and Hud, and I would have 60 assignments each from each of them at any given time. They would just load me up. So that kind of slowEd down. So I startEd to get into, and then I went through another trial and just with business and personally in 2017, and I steppEd away from the real estate business for a little bit. I startEd selling for a solar solar panel company. I startEd doing sales for them. So I kind of switchEd gears there. But then in about 2019, I decidEd to come back into real estate, startEd my BPO thing back up again, startEd the REO thing up again. And really what I've been focusing on lately is just helping agents, helping agents generate leads, whether that's through REO, BPO, anything that I'm experiencEd with through investors like yourself, working with investors, I'm basically really focusEd on helping agents build their businesses and build wealth over time. Just like what your podcast is all about. Because we don't know, we talkEd a little bit before this and you mentionEd when you start this real estate journey, you're just not sure where it's going to go. You know, there's a lot of twists and turns and, you know, people, especially when they get, you just get involvEd in real estate, you're like, I'm going to do lease options. I'm going to do Reo, I'm going to do, you know, you have all these different things and the key is just, you know, honing in and focusing on something, on focusing on a niche and really leveraging it, you know, as much as you can. And, you know, back when I got involvEd in Reo, the first reo conference I went to, I mean, I just, my bankruptcy was just as dischargEd. And I went to my first reo conference, which happenEd to be in DC, so I could drive to it from Baltimore. And my first reo conference, I slept in my car and I had a couple friends that were like, you're sleeping in your car. We're going to get you a hotel room. So they got me a hotel room for like the next few nights. But in being a real estate entrepreneur or a real estate person, you have to have that grit. Like, you have to be willing to really put your head down and focus and just hone in on it and go for it.

Mike Swenson
Yeah. One of the things that I think is interesting that you sharEd was just thinking about the common thread as you're building and growing is opportunities are changing, but you're still going back to relationships and knowlEdge. Right. So, you know, while the market changes and fluctuates, you're learning more, you're networking more, and, yeah, you, you kind of pullEd back to those relationships you previously had and said, okay, I'm going to fire this up, or figuring out using the knowlEdge you had, cutting and altering in a different direction. And so that's the thing that's really important for people in the real estate space is I tell people, like, you just got to find a way to get in and kind of get your foot in the door and you're going to build, you're going to evolve, you're going to change. And so, yeah, your business has changEd, but you've been able to build on the knowlEdge you previously had, add to it, and then build on the relationships you've had and add to that over time and find a direction that's a good fit for you moving forward.

Ed Kowalski
Yeah, and that's the thing, you know, you just change and adapt. But the one thing no one can ever take away from you is your knowlEdge base, your experience, and your knowlEdge base. Once you have that and you have that inside of you, nobody can take that away. The market changes. The market goes up, the market goes down. Interest rates go up, interest rates go down. But no matter what, if you have a skill set and a knowlEdge set, you can make money with real estate. You know, it's like if I relocatEd to another state, I could, you know, I mean, I would have to get licensEd there, of course, but I could, I could boot up and, and I could plug in, you know, and that's something that's just fantastic about real estate. Nobody can take that away from you.

Mike Swenson
And one of the things that I point out to folks, too, to kind of help them think about doing decisions and investing in various things or whatever path they're taking in real estate is to think about some of this stuff as an Educational expense as well. Right. We go to college, you know, for people that do, and they're paying hundrEds of thousands of dollars to get a piece of paper. That's a degree.

Ed Kowalski
That's right.

Mike Swenson
In real estate. I just had a conversation with somebody yesterday where they were analyzing a deal and deciding to move forward. And I was saying, like, here's what you're kind of on a spreadsheet calculatEd to make. But the intangibles are the experience, the relationship with the investor. And what if you broke even? Or what if you made a little bit of money on this deal, gave the investor a good experience? Well, then they're going to want to work with you again. And so what is the second experience, the third experience with that investor? And so in some ways, you're, you're trying to manufacture wins and gain experience and gain knowlEdge to be able to use in the future. And so sometimes people aren't willing to kind of go through that, or they think, oh, I didn't make as much money as I thought on this deal, or a, it didn't come back as well as I thought, but you got knowlEdge out of it and you got experience and you got relationships. And those, those are the intangibles that are going to help you be able to do more, more quickly or more smoothly in the future.

Ed Kowalski
Right. Right. Exactly. I mean, you have to, you have to dare to suck first, right? Like, so, you know, you have to, you have to get in there and try and fail and try and fail. Just, just get moving, you know, some, so many people are paralyzEd to take that, even take a step, you know? Yeah. And it's funny, one of my friends, Vernon, says, you know, you know, if I'm struggling with something and I'm thinking, well, I might do this, I might do that, I might do this. He's like, look, they all work. The thing about it is, is they all work. If we do, you know, if we, if we put in the after effort, you know, those things do work.

Ed Kowalski
Yeah, so, as I mentionEd before, you know, I'm still heavily involvEd in the REO space. I'm part of a group at Exp realty callEd Reo alliance. And we have, we have agents, we have over a thousand agents all across the country in different markets that specialize in REO, that are interestEd in getting into REO as listing agents. We have certifications, we have trainings. All those are free. We have an incrEdible transaction coordinator, we have admin support from her, we have admin support from others, and we have about 19 coaches as part of the group, anywhere from lead gen to the reo side to luxury. So that's a great group. But also on a side, on a side note, I startEd a group callEd Top Tier Realtor, and basically it's set up as a marketing platform for realtors. And this is realtors or brokers. And it's completely, is completely brokerage independent. So, you know, a lot of people are about the exp thing. Everybody's, you know, recruiting recruiting. Recruiting. This platform is, you know, completely brokerage independent. We have, we have about 70 agents right now. I just launchEd it back in August. We have 70 agents all in different parts of the country. Right now. We're active in about 28 different markets. And these are all, these are all different states. There's some overlap, but there's different states. And basically what it is, is, like I said, it's a marketing platform. People can go to or our Facebook group, which I'm sure you'll share, but basically it's free to sign up right now. And our first lead vector is local service ads from Google. And basically they differ from Google regular Google Ads and from Facebook ads, whereas these are Google screens. So if you type in Realtor Baltimore, these are the first things that show up at the very top of the page. And we help agents get there on that first part of the page. And it's all through. Basically, we help the agents set up the ads, optimize the ads. We handle all the calls, we handle all the disputing of bad leads. So if you're only interestEd in working with sellers and buyers, you know, if you get a rental call, we dispute that. So you get a crEdit back onto your, onto your account for that. But it's really great. And basically, like I said, it's a free, it's free to join. There's a marketing agreement and agents come on and they pick, you know, two or three counties in the state that they want to cover. We help them set the whole, the whole, the whole ad up. We help them with their license, their insurance. We help them to even get reviews if they don't have any reviews on a Google Business profile, we can merge from Google Business profile to the local service, ad review links so they can get their ad approvEd. We handle all the back end. We handle, you know, we answer the call. We answer the calls 24 hours a day. But like I said, they pick two or three counties. And then we, in our marketing agreement, they allow us to take the leads outside of there. So it's really a win win. There's no, right now there's no subscription fee. They just pay directly to Google. We never touch their payment information. They pay directly to Google whatever ad spend they want to spend. So they come in, they want to, they want to start off at 90, $90 a week. $90 a week. They put that in. And generally our lead costs, they vary. Right. But again, we're paying per lead, not per click or impression. So across the 28 markets, we're averaging about $32 per lead. These are a lot higher intent leads than like, for example, the average conversion rate right on an Internet lead, which is Facebook or whatever it is, is very low for real estate. It's like 3% or something around there with local service ads. Our conversion rates are in the teams or higher because what it is is it's not Facebook ads. I think of it as interruption marketing. Someone's going along or cold calling or you're door knocking or whatever you're doing. You're doing interruption marketing. You're not doing attraction marketing. What I mean by that is somebody's actually going in and searching for a realtor and they see you and they call you versus you're running ads on Facebook and they're doing something else and they really don't want to see that and you're putting it right in front of them. So that's what we're focusEd on with this group. And we're going to be adding a YouTube vector as well. And then we are going to do Facebook, but we're going to do it a little bit differently with that. I mean, I'm finding that just getting those leads to come to you versus you going after them is so much better, so much less stressful. You don't have to deal with all the rejection that you have to deal with normally with cold calling or any other methods. It's a great group. And we're closing deals, California to Pennsylvania to Florida, I mean, all over the place, so. And the Facebook group, of course, is free to join as well. People can come in and, you know, ask questions, you know, whether it's, hey, I neEd some reviews for my account to go live, help me out, or, you know, just asking questions about the system. It's just kind of a free community where people can engage in everything.

Mike Swenson
Yeah, you know, it's always interesting being on these discussions about leads and cost per leads and that sort of thing. And, you know, a lot of agents think, well, let me try to get the lowest cost per lead as possible. Well, you also have to take into consideration, how long does it take to convert those leads or how interestEd are they? And so you've kind of got top of the funnel leads versus bottom of the funnel leads. You've got super cheap leads that, yeah, technically it's a name and an email address or a name and a phone number. But if they have no interest in working with you, what's your cost to convert that? And so you're trying to balance the ability to convert into close with how much you're paying. And, yeah, your, your really expensive leads, like a zillow or something like that, are good if you can convert them or if you can afford them, but you're finding that balance. And, yeah, where you're at is kind of finding that. Hey, how, how do we actually get to close these folks and can we get a closing out of them? Versus, I just bought a bunch of names and email addresses for super cheap, and now I can't ever get ahold of them. And so for people that haven't explore the world of online leads, you really have to think about those things.

Ed Kowalski
Sure. Yeah, absolutely. And I mean, what we're seeing, what I like to say is our cost per lead is like anywhere from like $18 to, you know, $65. If you're in California, it's going to be, you know, if you're in the Los Angeles area, it's going to be a lot higher. Right. But if you're in a rural area, it's going to be a lot lower. If you're in Alabama, you know, it might be 18. If you're in, you know, California, it might be 45, 50. But I mean, I have, I have a friend that's in our exp group, Jeff Russell. And he said that, you know, Zillow leads in his area, which is Newport Beach. I mean, they're like a $1,000 apiece. I mean, it's just, it's just crazy. So, I mean, you know, with this, and of course, you can test, you can test it, you know, see what, see what works, you know, varying the budget and so forth. But we're getting some good results for agents and, you know, just, just looking to grow the network, well, yeah, it's good.

Mike Swenson
And for agents out there listening, if you haven't lookEd into online leads as an option or you've just been working your sphere, I mean, I see, you know, agents posting of, I've had a business for five or ten years. It's been very successful, and now everything's changEd. Things are drying up. What do I neEd to do? And so knowing how to pivot and, and looking at, and exploring some different options is really important. So if you're an agent out there and, yeah, your business is drying up or you're looking to go to the next level and you want to add another piece of your business, you know, we, we always kind of told folks, try to think of your lead generation as a three leggEd stool. You don't want to have all your eggs in one basket. You want to have multiple baskets. And if you're looking to add another leg to that stool, you know what you guys are doing. Ed is is certainly helpful. So thank you so much for coming on and sharing your story and how it's changEd and evolvEd over time and you're pursuing your passions and doing different things and leveraging your knowlEdge and growing your relationships. It's a cool story. So for people that want to reach out to you and learn more or get a hold of you, how can they do that?

Ed Kowalski
Okay, they can go to or they can search the Facebook group top tier Realtor. I'll send you a link here too, Mike, that you can put out there, but that's basically the best way. The best way is through those moves.

Mike Swenson
Well, thank you so much for coming on and sharing your experience and sharing your knowlEdge with others and best of luck as you continue to grow in the future.



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