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REI Mastermind Network | Real Estate Investing Strategies & Mindset
27 minutes | Jul 25, 2021
How Busy Professional Can Invest in Real Estate with Prashant Kumar #254
As the owner of MyRealtyGains, Prashant Kumar's passionate to assist ultra-busy professionals to identify Grade A investment opportunities and provide stable cash flow returns and long-term capital appreciation by buying those assets. Prashant has acquired and managed over $32-million in real estate.We chat about:Begin evaluating the myriad benefits of Investing Passively, today!What Wall Street is not telling you, how to use your IRA to invest in real estate.How exactly real estate is the easiest way to create generational wealth."Attitude is Everything" - How your mindset has far-reaching repercussions in shaping up your future.1001 things that can go haywire during the process of closingConnect with Prashant!Website: https://myrealtygains.com/LinkedIn: https://www.linkedin.com/in/prashant-at-myrealtygains/Facebook: https://www.facebook.com/myrealtygains1Instagram: https://www.instagram.com/myrealtygains/As you can already tell we have made some changes and a few more are on the way. If you are interested in what we have planned, head over to Patreon.com/REImastermind, and support the show today. Financial contributions are always appreciated along with a LIKE, SHARE, and REVIEW. It really helps us grow and reach more people with this valuable information. See you next time and tell a friend!LIKE • SHARE • JOIN • REVIEWWebsitePatreonApple PodcastsGoogle PodcastsYouTubeSpotifyStitcherDeezerFacebookTwitterInstagramSUPPORT THE SHOW!You can get RentRedi’s annual plan for only $54 when you use our special code MASTERMINDGet Exclusive Content on Patreon! • https://www.patreon.com/reimastermindGet $10 and Reduce Your Business Costs by Shopping at AppSumo • https://bit.ly/reiappsumoGet $10 Towards Your First Purchase at Drop • https://drop.com/?referer=3DC729"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - JD
31 minutes | Jul 22, 2021
Helping Real Estate Investors Plan for the Future with Daniel Johnson #253
With over a decade of experience as a real estate investor and financial planner, today’s guest found that there was very little unbiased financial planning advice for real estate investors and business owners. Daniel Johnson’s answer to this need was starting RE|Focus Financial Planning. Daniel is passionate about helping individuals that have grown wealth through alternative assets like small businesses, real estate, and cryptocurrency plan for the future, and as an owner and manager of several rental properties, he knows the challenges real estate investors face.We chat about: The financial planning industry and its history of working with real estate investorsWhy fee-only/fixed-fee planning is beneficial to real estate investorsFinancial planning blindspots that real estate investors need to look out forShort Term Rentals/Nurse Housing as an investing strategyConnect with Daniel!Website: https://www.refocusfp.comLinkedIn: https://www.linkedin.com/in/danieljohnsoniiiLinkedIn: https://www.linkedin.com/company/refocusfpFacebook: https://www.facebook.com/REFocusFPAs you can already tell we have made some changes and a few more are on the way. If you are interested in what we have planned, head over to Patreon.com/REImastermind, and support the show today. Financial contributions are always appreciated along with a LIKE, SHARE, and REVIEW. It really helps us grow and reach more people with this valuable information. See you next time and tell a friend!LIKE • SHARE • JOIN • REVIEWWebsitePatreonApple PodcastsGoogle PodcastsYouTubeSpotifyStitcherDeezerFacebookTwitterInstagramSUPPORT THE SHOW!You can get RentRedi’s annual plan for only $54 when you use our special code MASTERMINDGet Exclusive Content on Patreon! • https://www.patreon.com/reimastermindGet $10 and Reduce Your Business Costs by Shopping at AppSumo • https://bit.ly/reiappsumoGet $10 Towards Your First Purchase at Drop • https://drop.com/?referer=3DC729"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - JD
25 minutes | Jul 18, 2021
The Good Your Money Can Do with Eva Yazhari #252
Stories about the perils of money are a dime a dozen. Every culture and religion tells parable after parable warning people of the force for evil money can be.But there aren’t near enough stories about the insanely positive impact money can have, especially in the investment world. Eva Yazhari, the founder of the Beyond Capital Fund, is changing that with her best-selling book "The Good Your Money Can Do". And people are starting to pay attention. This morning on Cheddar Eva discussed the positive impact money has on the world when people invest according to their values instead of the projected bottom line.Eva Yazhari is a seasoned investor, author, and entrepreneur that brings key business skills, in addition to meaning, purpose, and consciousness to her career. She thrives on growth, curiosity, and solving problems with creative solutions, from being a part of the founding team that raised and invested over $5-billion into Wall Street's top hedge funds, to building an impact investment fund impacting the lives of 8.3 million low-income individuals through market-based solutions. Eva has 16 years of experience working in the venture capital and asset management industries. The deal process is exciting to her and fun to navigate! She is currently the Co-Founder and CEO of Beyond Capital Fund an early-stage investment fund that improves lives with its early investments. She has worked hands-on with over 20 entrepreneurs in the start-up stage. Beyond Capital has grown to be a recognized global brand. Beyond Capital was named by Ventureburn as one of 12 venture investors to know in Africa. In addition to Beyond Capital’s core venture investment skills, Beyond Capital has pioneered a unique communications strategy to reach a wider audience regarding impact investing. In her role, she is a member of the Beyond Capital Board of Directors. She also serves on corporate boards, including Frontier Markets, and an observer seat at Karma Healthcare. In addition to The Barnard College Athena Leadership Council and the Young Presidents’ Organization Personal Investing Network Executive Committee.In managing her own values-aligned investment portfolio, she has produced results. Connect with Eva!Website: https://www.thegoodyourmoneycando.com/Website: https://www.evayazhari.com/LinkedIn: https://www.linkedin.com/in/eva-yazhari/Podcast: https://podcasts.apple.com/us/podcast/the-beyond-capital-podcast/id1484298118As you can already tell we have made some changes and a few more are on the way. If you are interested in what we have planned, head over to Patreon.com/REImastermind, and support the show today. Financial contributions are always appreciated along with a LIKE, SHARE, and REVIEW. It really helps us grow and reach more people with this valuable information. See you next time and tell a friend!LIKE • SHARE • JOIN • REVIEWWebsitePatreonApple PodcastsGoogle PodcastsYouTubeSpotifyStitcherDeezerFacebookTwitterInstagramSUPPORT THE SHOW!You can get RentRedi’s annual plan for only $54 when you use our special code MASTERMINDGet Exclusive Content on Patreon! • https://www.patreon.com/reimastermindGet $10 and Reduce Your Business Costs by Shopping at AppSumo • https://bit.ly/reiappsumoGet $10 Towards Your First Purchase at Drop • https://drop.com/?referer=3DC729"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - JD---
50 minutes | Jul 15, 2021
Create Wealth Using the Velocity of Money with Curtis May #251
Today’s guest, Curtis May, is the host of The Practical Wealth Show Podcast and the creator and owner of Practical Wealth Advisors. Curtis has been planning for individuals for more than 35 years, and he is passionate about helping his clients save money and live the very best life they can right now. The primary focus of his financial planning firm is to help individuals and families become financially free by following the principles of wealth creation that have endured for centuries around the world.We chat about:The difference between the accumulation theory and the velocity of money strategyThe 5 Principles of Personal FinanceHow privatized banking can create more velocityWhat is a wealth coordination account?The 4 components of the ideal financial planThe 4 rules of traditional banks and Wallstreet and why they work against youConnect with Curtis!Website: PracticalWealthAdvisors.comPodcast: https://www.podpage.com/the-practical-wealth-show/LinkedIn: https://www.linkedin.com/in/curtismay/As you can already tell we have made some changes and a few more are on the way. If you are interested in what we have planned, head over to Patreon.com/REImastermind, and support the show today. Financial contributions are always appreciated along with a LIKE, SHARE, and REVIEW. It really helps us grow and reach more people with this valuable information. See you next time and tell a friend!LIKE • SHARE • JOIN • REVIEWWebsitePatreonApple PodcastsGoogle PodcastsYouTubeSpotifyStitcherDeezerFacebookTwitterInstagramSUPPORT THE SHOW!You can get RentRedi’s annual plan for only $54 when you use our special code MASTERMINDGet Exclusive Content on Patreon! • https://www.patreon.com/reimastermindGet $10 and Reduce Your Business Costs by Shopping at AppSumo • https://bit.ly/reiappsumoGet $10 Towards Your First Purchase at Drop • https://drop.com/?referer=3DC729"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - JD
34 minutes | Jul 11, 2021
The Most Exciting and Interesting Tax Conversation You'll Hear Today with Bobby Thames #250
Bobby Thames spent nearly the first decade of his career at PricewaterhouseCoopers becoming a subject matter expert in tax credits and cost recovery solutions. Bobby’s expertise all fall under the umbrella of fixed assets, specifically related to tax incentives tools for developers and owners of properties. Cost Segregation is the most common tax incentive project Bobby has done through the years, having performed numerous cost segregation and depreciation studies ranging in scale from professional sports stadiums (e.g., Mercedes-Benz Stadium, Bank of America Stadium, etc.) to bank branches, restaurants, and distribution centers. In addition to Cost Segregation, Bobby works in the Green Energy Tax Credit space maximizing credits related to energy-efficient homes, solar energy, and alternative fuel stations.Centiv is a tax advisory firm specializing in tax credits and cost-recovery solutions to reduce federal and state tax liability. The practice is comprised of tax professionals and engineers with decades of experience in fixed assets and real property tax issues. Centiv’s specialists have accumulated the technical expertise to comprehend, interpret, and navigate the complex rules and regulations which govern tax credits and optimized cost recovery. We chat about:Cost Segregation ServicesPurchase Price Allocation ServicesEngineering analysis of MEPsGreen Energy Tax CreditsAudit PreparednessConnect with Bobby!Website: https://www.centiv.tax/LinkedIn: https://www.linkedin.com/company/centiv-llc/As you can already tell we have made some changes and a few more are on the way. If you are interested in what we have planned, head over to Patreon.com/REImastermind, and support the show today. Financial contributions are always appreciated along with a LIKE, SHARE, and REVIEW. It really helps us grow and reach more people with this valuable information. See you next time and tell a friend!LIKE • SHARE • JOIN • REVIEWWebsitePatreonApple PodcastsGoogle PodcastsYouTubeSpotifyStitcherDeezerFacebookTwitterInstagramSUPPORT THE SHOW!You can get RentRedi’s annual plan for only $54 when you use our special code MASTERMINDGet Exclusive Content on Patreon! • https://www.patreon.com/reimastermindGet $10 and Reduce Your Business Costs by Shopping at AppSumo • https://bit.ly/reiappsumoGet $10 Towards Your First Purchase at Drop • https://drop.com/?referer=3DC729"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - JD---Transcript 00:00:01 JD Hoss Well, we have Bobby Timbs just before tax season right. Bobby talking about taxes, and I know that this is something that we can go a little into the weeds on and it's an exciting topic. You were talking before you even join me here that people's eyes can gloss over so we're going to try to keep this. 00:00:21 JD As exciting as possible, but I know of a great way to keep everybody's attention it's how to keep more money in your pocket right. 00:00:29 Bobby Thames That's the goal that's what we're here for. 00:00:30 JD And if that doesn't keep your attention. I don't know what will, people. 00:00:34 JD So, Bobby Timms I'm going to make sure we have the links in the show notes. But the company is Centiv as like as in incentive and in its centiv.tax credits and cost recovery solutions. 00:00:53 JD And I know there's quite a bit of information on you on your website. So, I'm going to make sure to link put that link in the show. Notes as well. But we're going to cover quite a bit of ground here today and I appreciate your time. 00:01:07 Bobby No, I. I appreciate you having me and yeah, like you, said with tax it can get a little complicated. 00:01:14 Bobby It can get you know to some people it's boring well. One thing we're definitely not talking about here today is tax compliance. 00:01:21 Bobby We're talking about tax optimization, and you know, saving you money keeping that tax liability as low as. 00:01:28 Bobby Right. 00:01:29 JD So we're going to kind of do something different than I normally do. We're going to kind of go down a list of topics here and trying to define a couple of things so that we have uh like a grounded understanding of what we're even talking about is as I mentioned to you. Bobby, a lot of people that listen to our show are relatively. 00:01:50 JD New to real estate investing and Inter. 00:01:52 JD Earn frankly taxes, we don't think about taxes until it's that time of year right, so these concepts are going to be relatively new so one of the? 00:01:59 Yeah, absolutely. 00:02:04 JD Things that you specialize in are something called cost segregation services so let's talk about cost segregation and what does that mean? 00:02:12 Bobby Yeah, absolutely. 00:02:14 Bobby Cost segregation is A depreciation optimization tool and the entire basis or the entire goal of a cost segregation study is to accelerate as much depreciation as possible. 00:02:32 Bobby When you're purchasing these buildings. You know for the commercial and investment properties as you spend that money it doesn't all fall out of your taxable income. 00:02:42 Bobby It's slowly recovered through depreciation that's at the simplest way to describe how you'd appreciate a building what will happen when you don't do a cost segregation. 00:02:53 Bobby Is that building gets looked at as a single asset that depreciates slowly over 27 and a half years if it's residential property, you're renting out or other. 00:03:04 Bobby Was or 39 years if it's a piece of commercial property, you own so either way. A really long time for you to recoup that investment and lower your taxable income by the amount that you paid for the building. What a cost segregation study does is looks at that building, not as one single. 00:03:24 Bobby Asset but a series of smaller assets, you know that make up your building. 00:03:29 Bobby So, there's going to be a lot of 5-year assets in there, 7-year assets 15-year assets. We could dig into what some of those are. 00:03:38 JD Yeah, I think we better. 00:03:39 Bobby Yeah, absolutely. 00:03:42 Bobby I will say that 5-year, 7-year, and 15-year is a little misleading at the current time and that's because of the tax cuts and JOBS Act of 2017 top Trump's tax plan. 00:03:57 Bobby Actually, allows for 100% bonus, meaning anything moved into those 3 buckets 15, 7, and 5 is actually expensed in the first year. 00:04:07 Bobby So, it's actually as. 00:04:09 Bobby Powerful as the tools it's ever been. 00:04:13 Bobby But back to you know you kind of mentioned there. The 5-year, 7-year, 15-year. Kind of like your land improvement stuff that's outside you've got to bifurcate that from. 00:04:22 Bobby Your actual land costs. 00:04:24 Bobby 5-year you know that's just that's different things. Throughout you know the building and again. It's kind of We don't want to go too far into that. Because these are long lists of pieces of property and they're different by different types of buildings. 00:04:38 Bobby So, if we're looking at A house. You know your 5-year property is going to be one thing if we're looking at. 00:04:44 Bobby An office or you know an entertainment arena you. 00:04:48 Bobby Know we, we dump some football fields with. 00:04:50 Bobby On we do a lot of hotels those types of things. It's different. But the general idea is the same across all commercial property, and that is, you're not looking at 1:39 year asset. You're looking at a bunch of assets. And if you're treating them all as 39-year, you're going to find yourself paying a lot more in tax. 00:05:11 Bobby Then you would otherwise be again because you want that depreciation as quickly as possible. 00:05:18 JD So, some of these things that you're talking about regarding different depreciation schedules. Can you give us an example like if we have a single-family house that's where a lot of people start their rental journey as they buy a single-family house? 00:05:33 JD You talked about the 27 and a half years, which would encompass the property in the building. But what are examples in that scenario where? 00:05:42 JD They could you could have different items within that property on different schedules. 00:05:47 Bobby Yeah, absolutely so there's kind of a few different buckets. There's what we'll call the low-hanging fruit, which is you know your carpet certain types of flooring if you have wall covering. 00:05:47 Right. 00:06:00 Bobby Decorative pieces throughout the house if you go outside of the house. There's a lot. There, too, your driveway or sidewalk your mailbox you're landscaping all these costs that go into the building. 00:06:15 Bobby You also have some, so those are kind of some of the easier things that we can grab. 00:06:20 Bobby And then there's also some engineering that some engineering processes we can do to grab even more, and that would be, you know, the best example of that is the electrical system that runs through your house. 00:06:34 Bobby So, the electrical system is actually depreciated over what it supports, if that makes sense. So, if you think about the electricity in your house, what's lighting your house? You know your lighting throughout. That's a long-life property that's by the IRS considered part. 00:06:52 Bobby The building, but the electricity going to your refrigerator. Or if you have an electric stove that is short life property so we can actually go in and look at the electrical system, what it supports, and take portions of the electrical system as well. That's obviously, you know, a little bit bigger of a dig than. 00:07:12 Bobby Going in and grabbing your carpet and you know your flooring. 00:07:17 Bobby A lot of this comes back to just kind of knowing the rules. You know if you walk through a house, you're not going to know what's short life or what's long life, 'cause there's times where your drywall can be short or there's times where your drywall can be long. It just depends on a lot of factors. 00:07:34 Bobby The best thing you can do is. 00:07:37 Bobby Have somebody give you a quick estimate. Take a look at it, see what's there and get an idea if there's. 00:07:44 Bobby Enough layer in your property. 00:07:45 Bobby To take that next step, which would be having somebody actually do an analysis on the prop. 00:07:52 JD Sure, no those are that's a especially a good example like in the part of the country that I am you know when we buy properties. I would say quite a few of them. We have to convert from fuse boxes to Breakers. We have to touch that electrical panel. 00:08:09 Bobby Yeah, and so that spin is on the table for something that could be benefit. 00:08:13 Bobby Yeah, everything comes back with when we're talking about cost savings of benefit hiding in your home or your investment property. 00:08:21 Bobby Rather, you know how much you spend in a certain area can really, really have a very positive effect on your tax liability for that certain year, and you know. 00:08:34 Bobby You mentioned that we're talking with. You know, some people that are new to the investing world and I'll be very honest. 00:08:41 Bobby Not enough people in the investing world, even those who have been around it for a long time. Know about these tools, especially costs aggregate. 00:08:50 Bobby Patient because it's something that was kind of lobbied for and you know it, it's a corporate tax break. 00:08:59 Right. 00:08:59 Bobby 99 out of 100 costs going on at any given time or it is something for a corporation or company. 00:09:07 Bobby This area with people there. You know small businesses or small investments are super under, you know, covered because that's not where people are trying to sell this work. 00:09:19 Bobby So, it's going to be a new concept to a lot of real estate investors in general, but it's something that's. 00:09:26 Bobby There when you kind of hear about, you know these companies. 00:09:29 Bobby Not paying their fair share of taxes. 00:09:32 Bobby There's some. 00:09:34 Bobby Bad ways they go about doing that, you know, and that's to each their own. But they're also taking advantage of all these. 00:09:39 Bobby Tools these are. 00:09:40 Bobby Great tools for lowering that tax liability. 00:09:43 JD Right now, this is a great example of a concept that we visit on occasion. You know that that the government and our tax system. 00:09:53 JD Actually, encourages certain investment investments and this isn't exactly. 00:10:02 JD What a great example of that I mean? We're incentivized to invest in real estate in real estate in particular because of these types of rules and taking advantage of them. 00:10:13 Bobby That's exactly what they're there for, and I know on that list of things we're going to go down. We'll touch green energy here in a moment and it's just more of the same. You know, these are. 00:10:23 Bobby These get a lot of bipartisan support because they really help push people to build here to build, you know, energy-conscious here, but that that's exactly right. 00:10:35 Bobby I mean, you hit the nail on the head. These are tax incentives that are there to get you to perform. 00:10:42 Bobby In a certain way and a lot of people don't realize they're performing in that way, but not taking advantage of the incentives that are already there. 00:10:51 JD You know what? What does strike me is that you're absolutely right. I don't think a lot of real estate investors seasoned or otherwise will be aware of these different tax schedules if you will. 00:11:05 JD For an individual property have you found that would also lead to the fact that you probably need to be asking your tax? 00:11:15 JD Whether they're familiar with these types of things. 00:11:19 Bobby Absolutely, absolutely, and where that disconnect happens, is your generalist CPAs don't do cost segregation studies the CPA that you know your investors your listeners meet with or just speak to on the phone. You know they're not. 00:11:39 Bobby Having cost segregation pushed at them because that's not really something they provide. 00:11:44 Bobby Some CPAs, will, you know, see that you have a lot of property. Maybe you have a large tax liability that year and they may seek someone like myself out to help you, but a lot of times that's not what they're paid for. I mean, they're there to file your returns. Take what you give them. Ask questions. 00:12:04 Bobby Now, not all CPAs are the same. Some are going to really advocate for you to be as optimized as possible, but. 00:12:14 Bobby That's the rare side of things. A lot of CPAs are pushing this just because it's they're very busy people, and this is outside of their wheelhouse, so to speak. It's the tax world, but this is more of an engineering process than you know, a tax process. 00:12:33 JD No, I was just going to go there. I would say that in more cases than not a lot of the people that you would talk to regarding your taxes. It's a bandwidth thing I mean, they're trying to churn through as many taxes. 00:12:46 JD Tax filings as they possibly can in a limited usually limited amount of time. 00:12:52 Bobby Very limited amount of time? Yeah, they have a tough job. They had a very tough job. I mean my roots go back to Price Waterhouse Cooper Coopers you know I was in this specialty tax practice. 00:13:03 Bobby Uh, more people there are, and I mean they have a tough job and they're busy folks. And they're just they're not thinking about this, but if you ask them about it. 00:13:14 Bobby They certainly will. And then they'll at least know you know enough about it to point you in the right direction. 00:13:22 Bobby Of course, I'd love for anyone to reach out to me, and I can certainly help. But also yeah, your CPAs could be, you know, a good starting point. But yeah, they're really just they're not dug in. 00:13:35 Bobby On this, it's not the most important thing to them. 00:13:38 JD So, talking about reaching out. I'm going to remind everybody head over to the website. We're going to spell it because I know it can be a little tricky. 00:13:46 JD CN TV dot tax that's a different domain name. Everybody used to dot com. So, I want to point that out incentive dot tax and we'll make sure to have those links. 00:13:58 JD In the show notes. 00:14:01 JD Moving on to the next topic purchase price allocation service. 00:14:06 Bobby Yes, so purchase price allocations are actually probably gonna hit more of your listeners than the cost segregation study, but I want to pause right there and say that they are essentially the same thing. A cost segregation study is the same process when you have the construction. 00:14:26 Bobby Documents when you have all the cost detail. Usually, to have that you were somewhat involved in the development purchase price allocation is when you've purchased a piece of property and maybe all that documentation has disappeared. It's long gone. 00:14:44 Bobby We have a way. 00:14:46 Bobby Using Marshall Valuation Services, which some people some of your listeners have probably heard of it. 00:14:52 Bobby It's what an appraiser would use, right? When an appraiser comes to your property, and they figure out you know how much it is worth. 00:15:01 Bobby I do that exact same thing and then do a cost-saving on it, so I'm using more. I use Marshall Valuation, there are some other services. Rs means is a really popular I use Marshall. 00:15:12 Bobby And essentially look at your purchase price. 00:15:16 Bobby Just do the Marshall Valuation piece and then costs aggregating that. So again, we're coming to the same. Let's accelerate depreciation relative to this property as quickly as possible. 00:15:29 JD Would you say that there isn't an opportunity there for some people then you talked about an appraisal and most banks are going to require an appraisal that we could possibly reuse that appraisal for what you're saying. 00:15:42 Bobby Yeah, absolutely. So, what I always want an appraisal for these types of projects. Just because the level of detail that an appraisal goes into is very extreme. 00:15:55 Bobby And it's, you know they are. They're digging in really deep on every piece of the building. Now I'm not able to go back and. 00:16:02 Bobby Use what they did, but essentially, I use that as a great benchmark for where my numbers should shake out, right? 00:16:10 Bobby So, when the IRS looks at a purchase price allocation that I did, let's say they did, these are not heavily audited. 00:16:19 Bobby A tax credit is way more likely to be audited than any sort of acceleration or deduction, but if the IRS were to look, they would really want to see my valuation and the appraisers be in a very, very close. You know dollar amount to one another, some people. 00:16:39 Bobby Say they can be up to 20% different. I like them to be within 5% and what that basically says is I'm not pulling numbers out of thin air. I've gone through and done. 00:16:49 Bobby You know my work to price this building out appropriately and then do my cost segregation, so I still have to do it separately, but the appraisal is such a good tool to have at least to be able to bounce my numbers up against to make sure we're getting a good product. 00:17:05 JD Sure, well since you brought it up, you know you mentioned that this strategy is likely going to be hit. 00:17:12 JD Newer investors sooner than the other. Is there any of the other strategies that we were going to cover here today that would impact? 00:17:21 JD Newer investors or investors that would be investing in single-family homes or small multifamily? 00:17:28 Bobby Yeah, everything here is kind of for that. Everything I've put on our, you know kind of list of topics is for that. 00:17:37 Bobby You know real estate investor. We offer a few other things that sent if we do fixed asset depreciation outsourcing for big corporations. 00:17:50 Bobby I house all weather channels, fixed assets, or here at my company. I run their reports. 00:17:56 Bobby But that is to say that everything that we've we're planning on talking about here today is absolutely for a real estate investor. 00:18:05 Bobby These are all tools from. 00:18:06 Bobby You know the cost segregation to. 00:18:08 The you know. 00:18:10 Bobby The green energy stuff that we can dig into and then you know I mentioned before we started. We've got that new tool. 00:18:16 Bobby We're working on that. I'd absolutely, you know, love to tell your listeners about. 00:18:20 JD Yeah, so well, let's jump into the green energy tax. I know that there's some of us, you know I. 00:18:27 JD I live in Minnesota for example, and I know I definitely. I'm not taking advantage of some green energy stuff that I could probably take advantage of here. 00:18:37 Bobby Yeah, absolutely well to maybe. 00:18:40 Bobby Go back on what I just said. 00:18:43 Bobby Our most powerful green energy tool is not going to do that much for a new investor who's just got one or two homes and. 00:18:57 Bobby And I'll dig into exactly why that is. 00:19:01 Bobby 45 L is the fan referring to and it is the energy-efficient home credit and what it provides for the developer or the owner of the building is $2000 per door and I really emphasize that per door there because. 00:19:07 OK. 00:19:20 Bobby You know that means that some acts like I can do a cores study on any house and it. 00:19:28 JD It could give you a. 00:19:29 Bobby Lot of accelerated depreciation value if I do it on your single-family home, we're getting $2000 or we're getting nothing and it's just for a single-family home. 00:19:42 Bobby You know someone has to travel there. We have to come out and after our fees, no, no one benefited. 00:19:48 Bobby That much, however, let's say you've got maybe some townhomes, or some condos tract homes can do really well here, but the real goldmine for these are our apartments because you know if you have. 00:19:49 Right. 00:20:03 Bobby An apartment building with. 00:20:05 Bobby You know 160 doors in it. You're talking about $320,000 and this is a tax credit. 00:20:13 Bobby So yeah, not to go back on what I just said, but this would probably be something where if you're just getting going it, it's not going to be that beneficial for you if you've only got a few properties. 00:20:26 Bobby Uhm and then. 00:20:29 Bobby But it is a really good question to be asking your developer or your sponsor if you're getting involved in larger you know. 00:20:37 Bobby So, if you're invested in multifamily housing, you should be asking your sponsor, hey, are we taking advantage of potential green energy tax credits? 00:20:48 Bobby But maybe for your home for your single-family home. 00:20:51 Bobby It might not be worth it now. 00:20:54 Bobby Just to give a little bit more background on that, in case somebody isn't, and any of your listeners are interested in that. 00:21:01 Bobby So, it's $2000 per door and you have to beat the 2006 heating and cooling standards by 50% or more. So, whatever the baseline was in 2006, we got to beat that by 50. 00:21:15 Bobby Percent certain states in California being the biggest one, their standards have already surpassed that. So, if you're building in California, you are already. 00:21:28 Bobby Meeting the standards. 00:21:30 Bobby To get this credit and you should absolutely be making sure you are its possibility quantified. 00:21:36 Bobby And engineers to certify it. 00:21:39 Bobby But if you're building up. 00:21:40 Bobby To code you are meeting these standards and that's you for a few other states as well. 00:21:45 JD This goes back to having a tax professional who's familiar with real estate investing and being able to take advantage of these. 00:21:54 Bobby Yeah, and that's kind of what I'm hoping to be. Right? Like I said, my background Price Waterhouse we did nothing, but you know large corporations, their headquarters. 00:22:05 Bobby Did you know professional stadiums and those are the people who are taking advantage of these tools and there's just this huge. 00:22:14 Bobby Underserved market where or I mean it all scales right. You know you're not going to get the cash tax savings that the Falcons did for the Mercedes-Benz Stadium, but you're going to get a return on investment in the same range. 00:22:29 JD Right? 00:22:31 JD So, another option that or another activity that you provide is audit preparedness. 00:22:38 JD The dreaded audit. 00:22:38 Bobby Yes, the dreaded audit. The dreaded audit, yeah. And that's actually kind of an add-on to really everything we've talked about today. 00:22:48 Bobby So, whether I do a green energy credit for you or a cost segregation or purchase price, it's going to come with. 00:22:57 Bobby And audit-ready deliverable and what that means is let's just go back to the example of a house because that's I think what most of your listeners are probably going to be working with. 00:23:09 Bobby We're you're not going to do a cost segregation with me, and you know me. Send over an email to your CPA with hey, this is what they should deduct this year. 00:23:18 Bobby This is, you know what's been moved to these buckets. Now you're going to get a full deliverable, B PDF bookmarked and it'll have all you know the summary schedules down into the detailed schedules, but then on top that also it's kind of on top of the collected detail. 00:23:36 Bobby Uhm, it's all It's referenced through, so if there was cost detail, you know my analysis sits on top of the cost detail which sits, you know, under a memo, a technical memo and all this sits on tops of photos of the bill. 00:23:51 Bobby Thing essentially, if an IRS auditor does ever want to kick the tires on any of these studies, you give them the PDF and they go away. 00:24:00 Bobby It has from, you know, the smallest invoice that was moved all the way up to the summary schedules that will tie to your 4562, which is something your CPA will deal with. 00:24:11 Bobby Right, it's just everything is going to be audit-ready when it's delivered to you. 00:24:18 JD Sure, so you mentioned. Hopefully, when this show goes live you might have a tool available for people as kind of a DIY. 00:24:30 JD To help them out, what could you talk a? 00:24:32 JD Little bit about that. 00:24:33 Bobby Yeah, yeah, I'm really excited about this tool and I think you know as we're as. 00:24:39 Bobby As we're talking, and as we were talking earlier about who your listeners typically are, it was just, you know. 00:24:46 Bobby I was really excited to hear that 'cause this is. 00:24:48 Bobby A tool built for them. 00:24:52 JD So wanna when you? 00:24:54 Bobby You know we talked about earlier we just mentioned it right when you do a big stadium there's a ton of tax benefit and the fees related are just so drowned by that. 00:25:03 Bobby I mean, on a large project like that, the return on investment can easily be 100 to one. When you look at fees compared to your cash tax. 00:25:13 Bobby Savings that scales down drastically when you get into, you know single-family investment properties and the biggest barrier to entry on doing a cost segregation on these smaller properties are the professional fees associated with it. I mean, the people who do these cost sides are. 00:25:34 Bobby You know? 00:25:36 Bobby Educate, you know they. They've come up through the wringer, and they have pretty good fees. 00:25:41 Bobby That go along with their services, right? 00:25:44 Bobby So, the idea is to kind of get that barrier to entry completely wiped out by making a tool that will allow these. 00:25:56 Bobby Allow investors to take a proactive role in the cost segregation study. 00:26:02 Bobby All the technical is still dealt with on our end, but what we're allowing, what we're kind of doing is splitting some of the bill and having the investor collect some of the data. 00:26:15 Bobby And this can. 00:26:16 Bobby This can be done in several different ways. There's going to be different tiers if you are prepared to, you know, go through your house and measure. Some areas. Make some estimates. 00:26:28 Bobby Count some you know. Count your cabinets, count, you know. 00:26:33 Bobby All these different aspects of the House. It'll all be laid out very well for you of what you need to collect you collect that. 00:26:40 Bobby We work that through our systems, do a cost sag. We'll ask you to take some photos of some larger things that we. 00:26:47 Bobby Just need to see again. 00:26:49 Bobby Basically, so everything shows up nice and clean for us. We can. 00:26:53 Bobby Do the analysis on it. Do the create the deliverable and send back that product at a price point. That is, you know. 00:27:01 JD We're trying to. 00:27:04 Bobby To get down to not even just half of what a small cost side like that would cost. 00:27:09 Bobby But below. 00:27:10 Bobby So, if you go to, you know a firm. 00:27:13 Bobby Now for costs. Egg on a house. 00:27:16 Bobby You know most firms. 00:27:17 Bobby Won't do anything for less than $2000, which isn't a great deal, but it's also you know it's $2000. 00:27:24 Bobby It could be more 25. 00:27:25 Bobby 33 grand 00:27:27 Bobby And we're trying to get that price point down to $1000 or below for the same product, but in just allowing, you know, Proactive Investors to go and do a little bit of a work to keep those fees low. 00:27:42 Bobby And that's just one tool. If you want us to do the full cost segregation, study super happy to do it for you. 00:27:49 Bobby This is just for people who would. 00:27:51 Bobby Hate rather to roll up their sleeves. Do a little bit of it and you know save a grand, say $1500, and still have that. You know great tax benefit. 00:28:01 JD So yeah, and you know, especially for those who are getting into real estate investing, $1000 might sound like a lot upfront. 00:28:08 JD But when you think about what Bobby is talking about here, I mean it can add up these. These deductions can add up really quick. 00:28:19 Bobby Yeah, maybe we could. I can put some numbers to that, I'll just. I'll use a real-world example. The most recent cost segregation study I did. 00:28:28 Bobby Just finished it up. It was a $750,000 build. 00:28:34 Bobby We had to charge 4K for it because we're still doing everything. You know that you know, fly over there, do everything myself. 00:28:42 Bobby So, 750K, $4000 in fees and their cash tax saving in the first year was 100 and 14,000, so that should give you some idea. And then. 00:28:54 Bobby You know that 100 and 13,000 of cash tax savings won't change with our new tool. What will change is the $4000 going. Hopefully down to you know 1000 or so. 00:29:07 JD So, so if that isn't incentive enough to give this a shot, I don't know what is. I mean, that's a that's a pretty significant. 00:29:15 JD Opportunity there. 00:29:16 Bobby Yeah, and just to you know, as you said, give it a shot. This is not something that you know is ascensive. We're the only people who do this. This is pretty common in the industry, but. 00:29:30 Bobby We'll take a look at anything for you. You know if you if. 00:29:33 Bobby You've got a house and you're curious what the. 00:29:37 Bobby When the tax cut cash tax savings could just reach out to me. Happy to look at anything. I mean we do you know high-level essence first. There will be a few questions to find out, you know. 00:29:50 Bobby Are you eligible for costs like DD? Are you in the right taxable space to do a cost seg? We'll help you with those questions. 00:29:57 Bobby Then we'll take a look at the property, give you an estimate. It's going to be a pretty conservative estimate. 00:30:03 Bobby Yeah, just 'cause you never know, but there's ways to do good estimates and then and then we'll go from there and that'll be before any pen has touched paper or any. You know you know checks will have been written. 00:30:16 Bobby We'll give you that estimate. Make sure that you know. And when I say eligible for cost segregation, say that has more to do with your current tax liability. You really want to have some tax liability before you go down these routes, but. 00:30:30 Bobby Always happy to dig into any part of it. Have a conversation and see if it's right so I will help you make that decision. 00:30:42 JD Yeah no, this has been great Bobby, I'm going to send everybody over to your website again centive.tax. We'll make sure to have those links in the show notes. 00:30:52 JD Are you are? 00:30:52 JD Are you pretty involved on any of the social networks? Like if somebody had a question, they could ping you through LinkedIn or. 00:30:59 Bobby LinkedIn would be the only one for me. So yeah, you can find me on LinkedIn pretty easily. I do a good job about, you know being active on there and trying to get you know if you have a question that would be a great place to find me or my email. 00:31:15 JD So well, you're welcome to give that out. Otherwise, I can put it in the show notes. I'll warn you now that that can be a little dangerous. 00:31:25 Bobby On the website I'm like, it's just Bobby Thames. Again, that Bobby.Thames@centiv.tax and. 00:31:28 OK. 00:31:37 Bobby Yeah, we'll see. I will be prepared for the flood. 00:31:41 JD Well, well, I appreciate your time today. This is really an eye-opener. There's a lot of content that we covered that I think is new to a lot of people. 00:31:49 JD I don't think that a lot of people realize the incentives the deductions and the schedules that they could take in advance. 00:31:56 JD Hey Jeff, I really appreciate your time. This is great. 00:32:00 Bobby Oh, I appreciate you having me, and I know I know we. We went through a lot there so everything we talked about there is on the website there's a services tab and it kind of goes through. 00:32:13 Bobby Has some real examples and kind of hits the highlights of everything we spoke about. Again, if any of that. 00:32:19 Bobby Got lost in the fray. It's all available there. 00:32:22 JD Yeah, so if you were feverishly trying to keep up, make sure you head over to that website again. Centive dot tax C. 00:32:30 JD And TV so well appreciate it. Bobby, talk to you soon. 00:32:35 Bobby Thank you, Sir.
44 minutes | Jul 8, 2021
You Are Talking to Motivated Sellers Wrong with John Martinez #249
John Martinez has developed the REI Sales Program and is widely regarded as the most effective REI sales training program in the country by investors, acquisition agents, top mastermind groups, and educators.This isn't old-school, ineffective, pushy, and manipulative sales tactics... The REI Sales Academy promotes a simple & repeatable step-by-step sales process paired with incredibly effective and ethical sales tactics. If you want to close every closable lead, then you're in the right place.Connect with John!Website: https://midwestrev.com/YouTube: https://www.youtube.com/channel/UCA9LI53eq0ddpHFhh3E1AuAFacebook: https://www.facebook.com/MidwestRevenueGroupAs you can already tell we have made some changes and a few more are on the way. If you are interested in what we have planned, head over to Patreon.com/REImastermind, and support the show today. Financial contributions are always appreciated along with a LIKE, SHARE, and REVIEW. It really helps us grow and reach more people with this valuable information. See you next time and tell a friend!LIKE • SHARE • JOIN • REVIEWWebsitePatreonApple PodcastsGoogle PodcastsYouTubeSpotifyStitcherDeezerFacebookTwitterInstagramSUPPORT THE SHOW!You can get RentRedi’s annual plan for only $54 when you use our special code MASTERMINDGet Exclusive Content on Patreon! • https://www.patreon.com/reimastermindGet $10 and Reduce Your Business Costs by Shopping at AppSumo • https://bit.ly/reiappsumoGet $10 Towards Your First Purchase at Drop • https://drop.com/?referer=3DC729"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - JD---Transcript 00:00:01 JD Hoss We have a treat for everybody here today. John Martinez has joined and if you haven't followed John, you're really missing out. 00:00:09 JD Because John, I follow you on Facebook, your YouTube channel, the amount of free content that you give out is. 00:00:18 JD Absolutely awesome. In fact, it seems like you're posting on a daily basis. 00:00:25 JD But what John does is that first of all, if you haven't listened to John, I'm going to tell you right now. You're talking to motivated sellers. You're probably doing it wrong. 00:00:36 JD And John is the process that we leverage, and I really appreciate your time, John. I can't say enough about some of the sales strategies and tactics that you give out to people. 00:00:49 John Martinez Yeah, likewise thanks for having me on happy to be. 00:00:53 JD So, John, I was hoping that we were going to do something a little different today and we're going to possibly start from like at the very beginning as people are considering even doing some marketing when it comes to real estate investing. And then how they talk to those the first person to. 00:01:13 JD You know, we, we learned from time and time again. You can't make a brown apple green, you know you can't makeup, it's it. You know we don't want to try to convince anybody of anything. 00:01:22 JD Thing, but we also are getting a lot of tire kickers and everything too. How do you weed some of those people out? How, how? How much time do you spend with some of these people? 00:01:33 JD But I've always been perplexed a little bit myself as is, and I've tried a little strategy of my own. 00:01:39 JD I trying to use some of your strategy in some of my mail marketing to see if some of that type of stuff would work and have you found any strategies or tactics associated with. 00:01:53 JD Yellow letters and everything that. 00:01:56 JD That is being sent out. 00:01:57 John Yeah, good question. So you know, I think when it comes to marketing and sales and how they kind of dovetail together, it is just important to realize I, I think this is really the biggest mistake some people make with the marketing. I think it's important to realize you don't just. 00:02:16 John Want responses you want the right responses because you can make your phone ring right. You can make your email blow up if you want to. 00:02:24 John New, but if that puts you into a position where you are just wading through endless amounts of unqualified sellers unqualified prospects, you're not doing yourself any good, so you know, I, I think when it does come to marketing, the messaging has to be right. You have to be speaking to the pain points of your ideal. 00:02:45 John Client, right, the ideal motivated seller you're looking for. 00:02:48 John If you don't do that, for example, if you use strategies, you know kind of scare tactics or things like that just get the phone to ring. 00:02:56 John You're just going to end up talking to a lot of people. You shouldn't be talking to upsetting a lot of people you shouldn't, you know, should never be upsetting people. 00:03:04 John Wasting time and probably missing out on the deals that you could have had because you're so wrapped up into activity, an activity that you forget to realize there's good activity and bad activity. 00:03:17 John And I'm not sure if that answers your question, but that was the first thing that really came to mind. 00:03:21 JD No, that does answer their questions in fact. 00:03:24 JD Part of me wants to think that I'll kind of give you the breakdown of what I did here, and I expected a better response than I did. 00:03:33 JD But before we do that, this is just a taste of what John can provide, and I want to point everybody to your upcoming boot camp, which is on June 7th and 8th. 00:03:45 JD And where can they find more information regarding that specific boot camp general? 00:03:49 John Yeah, the REI sales academy.com is a website alsomidwestrev.com say takes you the same place but all the. 00:03:57 John Information is there. 00:03:58 JD Yeah, and that's a great place in a resource for because I know that you have links to all of that content. 00:04:05 JD That you give out on a regular basis as well. So, the mailing I sent out was actually saying you don't be. 00:04:14 JD Basically, you know what we do. We buy distressed properties. We're not a good fit if you don't fit into these categories. I got one phone call. 00:04:24 JD From that mailing and it was a marketer telling me they liked my mailing. 00:04:32 JD So, I think I went too far in that regard. 00:04:34 John You might have got a little too far. I think you know when it comes to messaging. 00:04:40 John With the marketing, I think there's just a couple things that are really important. Number one is just letting people know what you do. 00:04:45 John I don't think you have to overthink it, 'cause it's really a top-of-the-funnel activity. You're just trying to bring in some leads that that could be qualified, and then they'll get him out later. 00:04:55 John You know, if you take a call or start speaking with someone, so just we buy houses, right? I think. 00:05:00 John We buy houses. We pay cash, that type of stuff is really, really effective now. Most people do that. I think what a lot of people miss and that you know, you know, as far as you know where training could kind of come into play. I think what a lot of people miss is. 00:05:17 John They might know you buy houses, but if they don't know what the process looks like and what the commitment level is if they call and in what to expect, that's going to keep a lot of people from taking that first step. 00:05:31 John So I think when it comes to marketing just that very simple, we buy houses. Type of messaging is extremely. 00:05:39 John But if you add something like, hey, you know if you give us a quick call or shoot us an email, takes all of five minutes to get the process started and just let you know what we might be able to do for you doesn't mean we'll buy your house. 00:05:53 John Doesn't mean you have to sell your house, but we should be able to have a conversation and figure out if this is potentially a fit. 00:05:59 John Right? Just kind of relieving some of that stress of have like the call, but are they going to keep me on the phone an hour? 00:06:05 John Do I have enough time set aside what happens next? So just kind of relieving those anxieties and fears and saying, hey, if you reach out, it's really simple and easy. Takes 5 to 10 minutes to kind of work through the initial conversation and figure out. 00:06:17 John Have is this potentially a good way for you to sell or not? If it is great, we'll talk about next steps, and if not, no biggie. 00:06:24 John You know we knocked it out in 5 minutes, so I think that is the missing component. I see in a lot of marketing is that taking down that wall, so people feel more comfortable reaching out. 00:06:35 JD Yeah, you bring up that quite often the concept of setting the stage, letting them know that it's going to be X amount of time and even when you start to hand it off to whether you're going to go to meet, meet them in person. It's this that constant reminder of how long is it going to take just setting those expectations. 00:06:55 JD How important? 00:06:56 JD Is that? 00:06:57 John It's extremely important because if we just, you know you don't have to be in sales to just look at your own life and realize if you don't know how long something is going to take or what's going to happen. 00:07:07 John We get scared and we don't take action, right? It's like I give you 1000 examples. Haunted houses. We all know haunted houses are fake, right? We all know there's not. 00:07:17 John Really, ghosts and goblins and monsters around the corner. We know it's people dressed up and we know there's no danger we're not going to get. 00:07:23 John It hurt, but because we don't know what exactly is around the next corner and when someone going to pop out, it scares us to death, right when we don't know what's going to happen even when we know we're in no danger. It's really, really scary. 00:07:39 John Another example, right? If someone if a friend was to text you or call you and say hey can you do me a favor? 00:07:46 John Most people wouldn't immediately go. Yeah, absolutely anything. Just name it. You know I don't care when it is what it is, how much it's going to cost me. Just go. 00:07:54 John There the next question is going to be, what would you like me to do? What's going on? 00:07:59 John Right so the key here is if we just look at our own lives. People just don't move forward. 00:08:04 John We don't take a next step. We don't feel comfortable unless we know what to expect. I think the ultimate example of this is because this is my personal pet peeve, so it's the best. 00:08:14 John Example I can think of. 00:08:17 John You know, my wife doesn't do this anymore, but you know I used to get, you know, the random text message that's like hey, we need to talk and when you don't know what we need to talk about, that can be just like soul crushing like did something going on is this serious? 00:08:32 John Is somebody hurt? Is there trouble in the relationship? It could just be like, hey, do you want grilled cheese? 00:08:37 John Your Mac and cheese for dinner. As simple as that, but when you don't know what to expect, the point is people get filled with anxiety and fear. 00:08:44 John We get scared to do anything so setting the stage is critically important. Just always let people know what to expect. 00:08:53 JD So, you know a lot of the people that we talked to are dealing. They're likely dealing with something you know, some sort of, some sort of pressure somewhere else. Are there? Is this like the one of the keys you know? 00:09:10 JD You know setting the stage like this is that some of the reason you know some of these people might finally come out of their borough. 00:09:17 JD You know they typically want to bury their heads in the sand, and they want to try to avoid anything and everything associated. 00:09:25 JD With their problems. 00:09:27 John Yeah, absolutely a good investor or acquisition agent or salesperson job is really to do one thing and one thing only and it is to facilitate the most open and the most honest conversation possible. Now there's a couple things you want to talk about in that conversation, but that's it. 00:09:47 John If if you're really good at allowing it kind of setting up an environment where people feel comfortable just telling you everything that's going on, guess what they're going to tell you. 00:09:57 John They're going to tell you exactly how to sell them. They're going to say here is what I need. Here is what I'm dealing with that I don't want to deal with anymore. 00:10:04 John Here is where I want to go and what I want that to look and feel like. 00:10:07 John And they're also going. 00:10:08 John To tell you, hey, obviously I'm motivated. 00:10:12 John But here's all the things that have been keeping me from taking action when we talk to motivated sellers. 00:10:17 John It's not like they've been motivated for one day. Usually, they have just like you mentioned, they've been dealing with something for a long time, but for one reason or the other. 00:10:24 John They're they haven't taken action, so when you have that extreme open and honest conversation, you can determine quickly everything someone needs to hear and all the ways you need to structure a deal or share. 00:10:36 John You know about what you do in order to make them feel comfortable with moving forward and then also uncover any concerns they have. 00:10:44 John Any roadblocks, any speed bumps, anything that'll keep them from moving forward, and that really, really increases your odds of closing deals. 00:10:54 JD And so, you know, one of the things that I have learned pretty quickly. John is that since implementing some of the strategies that you've talking about. 00:11:02 JD Not only many times I've found that the sellers are verbalizing their troubles to me for the first time, they've never faced it head-on or they've never admitted. 00:11:16 JD It out loud. 00:11:18 John Yeah, that that's a. 00:11:19 John That's a great point, you know, and I think that is. 00:11:24 John It's a very important point because lots of times people know they have issues. But like you said, until they start to unpack them until they start to verbalize them until they start to put it all out on the table and really see the size and scope of their problem and the impact of their problem, how it's affecting them. 00:11:45 John Or family members or whatever, depending on the situation until they. 00:11:49 John They realize that, of course we want to understand as investors or acquisition agents or salespeople. But until they understand. 00:11:57 John And they really don't feel the full force of their motivation. They really don't feel the urgency to take action, and it's normal, right? If we're ever in stressful situations. 00:12:08 John Which most people try to escape. We just try not to think about it until we have to think about it. 00:12:13 John And that's why most people just kind of sweep it under the rug. And when they verbalize it for the first time a lot of times Jack this is the first time that they are really seeing the true size and scope of their problem. And then they feel this incredible urgency to do something about it. 00:12:29 JD So you know, I. I was hoping we could start at the very beginning here when it when the person is calling in for the first time, whether they're kicking the tires or not. 00:12:39 JD Because, you know, we have a lot of newer to real estate investing listeners and frankly some of the basic questions that I get asked are is. 00:12:49 JD Like what do I say like? So, I was hoping we could maybe spend a little time giving them like a little script if you will as to how to deal with these people. 00:13:01 John Yeah, I mean out to exactly what to say and kind of some KP's or things kind of parameter to try to stay in #1. 00:13:09 John Uh, leading take call that's it's not a sales call, right? It? It's meant to do one thing. So, you gotta have the mindset of I'm really just separating qualified from unqualified prospects. So just. 00:13:21 John Keep that in mind. We don't have to convince anyone of anything. We are just looking to see is this person worth spending my time on? Is this person worth taking through the rest of the sales process? 00:13:32 John So that's the goal. So, we have to understand the goal number 1. #2 a quick KP the best teams I work with, so you know teams that are just really systematized. 00:13:42 John You know that do anywhere from 50 to 60 to 70 deals on a monthly basis, which means you've got to be dialed in tight, right? You got a lot of people sitting in different seats training. 00:13:52 John Is extremely standardized, it's tight, it's a tight ship, right? Those calls. Usually, their goal is I want you on the phone with every lead. 00:14:03 John If there might be halfway qualified, right? Not if you know if you pick up the phone and they say I don't own a house, I have nothing to sell. You're not going to stay on the phone with them. 00:14:11 John But if they could be qualified, the goal for all my top clients is I want a double-digit phone call. 00:14:19 John I want 10 minutes to really scratch the surface, fully qualify him and just touch a little bit just enough on their situation to. We talked about increasing urgency. 00:14:31 John To take action a second ago. 00:14:32 John Touch just enough on their situation to make them feel, uh. 00:14:39 John Pull a drive to take some type of next step. 00:14:43 John Uhm, So what? 00:14:44 John You do as far as scripting goes. 00:14:47 John Again, setting the stages is super important. You can take these words and use them if you want to. If I was taking a lead calling, you obviously modify this however you want. 00:14:57 John It probably sounds like this. Hey, thanks for calling in to we buy houses you know, usually people who call in want to know what we do, how we do it. 00:15:06 John How much we pay for houses or their house and that type of thing. If you have those same types of. 00:15:10 John Questions hey awesome listen this is gonna take 5 or 10 minutes just to run through some basic questions. Love to just find out a little bit about your property and then we could start getting an idea. 00:15:21 John Of what we could possibly pay for your house. 00:15:23 John Do you have 5 or 10 minutes available to just shoot through some quick questions? Great listen at the end if we think we might have a fit, we'll go over potential next steps. 00:15:32 John If not, hey, it's 5 minutes down at least. We figured this out together and that's a really good start right to set the stage so you can make that 30 seconds 15 seconds. You can modify it, but. 00:15:42 John I really just wanted to tell him what to expect. Now, if you don't do that. 00:15:46 John And you'll see this if you don't do it, you're going to start asking three or four questions and get shut down. 00:15:52 John Hey, how long is this gonna take hey why so many questions? I just wanted an offer, right? 00:15:57 John So, you've got to set that expectation. If you don't, you'll feel that pushback. It will happen if you take enough calls, it'll happen consistently. 00:16:05 John So set that stage. 00:16:06 John And then your only real goal is to qualify the lead number one and then #2 just dive a little bit just touch on their motivation to try to increase the odds of them moving to a next step. So as far as qualifications go really simple, do you have a property? 00:16:25 John Are you looking to sell and there's you know probably 5 or 10 different checkboxes and motivation? You can look for want to move quickly. 00:16:33 John Don't want to deal with the realtor? Financially distressed hire landlord? You're looking for any of those kind of telltale signs that you might have a motivated seller. So, if you have any of those, usually for me. 00:16:46 John I'm taking that appointment right. I don't need them to tell me on the phone. I think this is a huge mistake, so this is a great tip for new investors. 00:16:55 John Don't look for someone to tell you on the phone. I want 50% of a RV within 3 minutes. 00:17:02 John Everybody wants the most they can for their house. Everyone's fingers are crossed that hey, maybe my house is worth 100, but maybe this is a perfect house for this guy, and he'll pay 120 'cause he wants it right? Nobody is going to say to you. 00:17:15 John Hey, the house is worth 100, I'll take 30, right? So, I see a lot of newer investors and they're looking for that type of motivation on the phone. 00:17:24 John And if people don't say hey, I'll take 50% or 60% of an RV, they just go automatically. 00:17:29 John I'm not. They're not qualified, not true. All those conversations typically start. Everyone wants 100% or more of an RV. Normal natural. Do not let that disqualify people. You're just looking for motivation, right? 00:17:44 John And there's some other you know, ways you can qualify if you're if you have too many appointments and things like that, you can look for equity and all those types of things, but usually, for 80% of investors out there, just some source of motivation is enough for them to go to the next step. 00:17:58 John Uhm, after that just diving into their situation a little bit. Something like hey listen, what prompted you to reach out today? 00:18:06 John Know that I know that neighborhood. It's a great neighborhood. Why are you thinking about selling and just tiptoe into their motivation? 00:18:13 John Just get some type of an idea, even if they just talk about it for 60 seconds 90 seconds. 00:18:19 John The way the human mind works, they will be more motivated to take. 00:18:22 John Action we won't dive too deep into that, but that's it. So set the stage. Hey, here's what to expect on this call. 00:18:29 John We just run through some quick stuff, see how it ends. No, no pressure any either way you know tell me about your situation. 00:18:36 John What's going on? Why are you considering selling if you hear one or two signs of motivation, even just one? 00:18:42 John I would go ahead and set the appointment right, and that appointment might be. 00:18:47 John Extending the phone call, having a longer phone call, another time, a face-to-face visit doesn't matter. But what you would do at that point is set those expectations. 00:18:56 John Again, usually sounds like this. Hey, listen, sounds like we might have a fit here. That is a house I'm definitely interested in. I don't know yet exactly down to the penny. 00:19:06 John What we can offer on it, typically with the next step is a longer conversation so I can get to know more about the condition and the layout of the house and things like that so I can get my offer dialed in. 00:19:20 John Usually, I'm going to pretend it's an on-site visit. We come out; you give me a quick tour. I'll ask you a little bit about your situation, so I know how to put the numbers together. 00:19:29 John Just for you. 00:19:30 John And at the end of that thing, I'll give you an offer. It usually takes about 3045 minutes. If you love the offer, fantastic, we can talk about next steps. 00:19:39 John Hey, and it's not going to work for any reason. No sweat. At least we. 00:19:42 John Gave this thing our best shot. 00:19:43 John So that's kind of beginning to end of a lead intake call. 00:19:48 JD No, and that's especially. 00:19:52 JD We've definitely found some success with that, especially when you know I'm. I'm typically the one who takes the phone calls and then my business partner goes on-site and essentially reiterates that timeframe that you were talking about too. You know, when I'm setting that those type of appointments, so it's just kind of. 00:20:03 JD He is. 00:20:12 JD Re anchors them into OK, you're in. We're in this process. 00:20:17 John Yeah, yeah. And people feel comforted with that. You know, if you say one thing on the phone and then your partner reiterates it, or if you go out there and you reiterate the exact same thing, there's a comfort, right? 00:20:28 John There's consistency. People crave consistency, and it's systematized and that makes people comfortable when they know what to expect, they're comfortable. 00:20:38 John And just doing that two or three times builds a tremendous amount of trust and rapport. 'cause guess what you're doing? 00:20:43 John You're saying you're going to do something, and. 00:20:45 John Then you actually do it so it's. 00:20:47 John Just it's great to. 00:20:48 John Continually set that stage all the way through a sales call. Every portion of it. 00:20:52 JD Sure, and just remind everybody. Uh, John has a. 00:20:56 JD A boot camp coming up June 7th and 8th. You can find that at midwestrev.com. I'll make sure to have that in the show notes, but definitely worth the with worth the time and I can't recommend it enough so. 00:21:12 JD One thing that I noticed that you said and based on just the experience I've had with some of your strategies, I find that I say this quite a bit as well, but you use the phrase we'll figure this out together. 00:21:27 JD And it's really a great way to position yourself so that it's not. 00:21:34 JD Combative I guess would be a good way because otherwise, you become it could quickly become confrontational. 00:21:41 John Yes, he, I think you nailed it. You don't want confrontation; you don't want in US versus them mentality and it. 00:21:48 John And that's really common in sales, right? Because that's really what this is, is a form of sales. But it's really common sales, where salespeople feel like. 00:21:59 John In order for me to win, you have to lose or if you win it means I lose the right mentality is we're on the same team. 00:22:09 John Let's just lay this all out and see where the cards you know lie, so you see where the pieces fall and that's the right strategy to have, because, again, that's going to support that. 00:22:19 John Open and honest communication. You're going to learn exactly what these people need to hear to feel comfortable going forward. You're going to learn what their motivations are and why they want to take action. 00:22:28 John Then you can explain how you help do that will help them do that. We're also going to find out all their concerns and things that might hold them back so you can go through and figure out if you can help them feel more comfortable with those things. 00:22:38 John Or maybe have solutions for those we call him deal killers those concerns or deal killers or objections or whatever you want to call them. So yeah, I think that that being on their side. 00:22:48 John Being on their team is where you want to. 00:22:50 It's very. 00:22:51 John Be at the end of the day. 00:22:53 John With your marketing and with a league qualification call, most of the people you're talking to are going to be a good fit. 00:23:01 John So then on a sales call, your only job is to help them self-realize not, not convince them, not shove anything down their throats, but help them realize this is a really good opportunity. This is a good way for me to get what I want. 00:23:16 JD Yeah, no, that that's an excellent point. You know you. It's almost impossible to convince somebody to take some sort of action. They have to come to that realization themselves, and it really take. 00:23:17 Right? 00:23:29 JD It's those specific questions and getting them to open up to really get them to guide them to their own realization. 00:23:39 John It's almost like a counselor or a psychologist, right? If you know lots of people go to counseling now. 00:23:46 John I've been to counseling for various things throughout my life and what you realize, and it's been very effective for me and what you realize is they don't tell you anything. 00:23:55 John They don't tell you what to do or how to do it, but through a series of questions they help you self-realize. 00:24:01 John Oh, here's what's going on, and here's what I need to do, and that's why the best investors in an acquisition agents. 00:24:09 John They don't tell people what to do or what they should do. They just ask the right questions, so people self-realize you know what. 00:24:16 John This is a big issue. I need to do something about it and because of XY and Z think this is the best way for me to do something about it. So, questions and helping your seller self-realize what's best for them. 00:24:29 John Is the key to all of this, and if you do it right, most sellers will realize this is the right solution. 00:24:34 John Now you might get some who realize this isn't the right solution. That just means they're not your perfect client. 00:24:40 John You don't have to do business with everyone if you run a sales call right, then acquisitions call right. You will have plenty of business and you don't want to. 00:24:48 John Sell people that aren't a good fit because that's not helping them. That's counting them, right? So, you don't want to do that anyways. 00:24:56 John So yeah, along the way you're going to find that a lot or that are actually a good fit. They'll self-realize it. You'll close a good percentage of deals, the closable ones. 00:25:05 John And you'll also find some that you shouldn't do business with if you did, but maybe it could, and if you did, it was going to be a huge headache or blow up on you down the line. 00:25:14 John It's OK to realize through this process that hey you are not the right fit as well, so I think that's another point that people have to realize that you don't want to close every seller because that means you're probably doing business. 00:25:26 John With the wrong people, you just want to be able to identify those that are going to be a good client of yours that you're a good fit for, and make sure that they realize you're a good fit. The problem is many investors go and talk to sellers who are a perfect fit. 00:25:42 John But they don't do a good enough job helping them realize that their perfect fit in all those deals just kind of wash out the door. 00:25:49 JD Right, and then you what I also notice is that your strategies. 00:25:56 JD Have you positioned yourself so you're no longer chasing? 00:26:00 Right? 00:26:00 JD And I think I think that's another great example is that. 00:26:05 JD Chasing usually is a form of trying to convince and we don't want to be in the position of chasing, and I see that early on, especially with newer investors they get it. Somebody calling in and they're constantly chasing. 00:26:19 JD Chasing the shiny object and that's actually a kind of a mindset change that you gotta learn to step away a little bit. 00:26:29 John Yeah, and it's hard to do because sometimes you really want to convince them, right? You really want the deal. 00:26:35 John You might be able to see that this is perfect for you and perfect for them, and it's hard to have the mindset of I don't need this, and I don't want to push too hard, but you know, one of the first negotiation books. 00:26:48 John I ever read. 00:26:49 John Back when I read books and didn't just listen to him on Audible was Roger Dawson. I can't remember the name of the book, but he's probably one of the best negotiators of his time. He was the Chris Voss of 20 years ago, right. Most people know Chris Voss now with negotiation. 00:27:06 But in one. 00:27:07 John In Roger Dawson's most famous book about negotiation 00:27:10 John One of the lines that always stuck with me in there is whoever wants it more loses. 00:27:17 John And there's a lot of psychology and science that goes behind that, but it's absolutely true. Whoever wants it more loses the negotiation, and in this case usually loses the deal when you push people you push them away, right? 00:27:32 John What you want to do is kind of take a step back so they're drawn to you so they start to tell you all the reasons why it makes sense. 00:27:39 John To do business with you, the more you push them, the more you try to convince them. The more you want it and you need that deal really, the less likely you are to get it. 00:27:47 John And again, there's a dozen different reasons why that is. When you go into the science of it and the psychology and how this all works. 00:27:54 John But to just kind of sum it up, you gotta chill. You gotta relax. You don't want to convince people you want to. 00:28:01 John Just let them discover this on their own and the way to do that is not pressuring them. Pulling back even just saying something a little teeny tiny, something every now and then like hey, listen. 00:28:12 John Hey, listen, if it's a good fit, fantastic. If it's not no big deal. I like to take it a step further and go hey, here's how this works. We're just looking for a perfect fit. 00:28:12 John If it's a good fit, fantastic. If it's, no big deal. I like to take it a step further and go, hey, here's how this works. We're just looking for a perfect fit. 00:28:21 John Out of every five people I talked to, maybe one is a perfect fit and we end up buying their house. 00:28:28 John So, if you're one of those one out of five, that's a perfect fit, and we figure that out together. 00:28:32 John Fantastic if you're one of the four that is just not perfect for no worries at all, right? Just letting people know that hey, I'm not going to try to pressure you. 00:28:42 John I'm not going to try to make this happen if it shouldn't happen. 00:28:47 JD No, and another way that you've pointed out a few times to release that pressure, and you've brought it up in a couple of years. Scripts so far is giving them an option of always saying no. Yeah. 00:28:59 John Yeah, they have that option. We know it and they know it. Most salespeople don't accept knows though. 00:29:05 John They're taught that you know always be closing type of mentality which is now scientifically proven to be detrimental to close rates. 00:29:14 John The more times you attempt to close, the less likely you are to close a deal, and it's because of what we've been talking about, the pressure and all that. 00:29:20 John This stuff so. So yeah, you always want to relieve that pressure and they are in control, right? You're not going to force them into signing anything, so just verbalizing that and say, hey, listen, you're the boss if you want to sell, you know if you want to sell your house, my job is to make you the best offer possible and structured in just a way that it works for you. And it works for me. 00:29:41 John If it works for me and you don't like my offer, you're just going to say no. Thank you, and I don't buy a house. My business doesn't move forward. You don't solve your problem, so. 00:29:50 John You're in control. You're going to make the decision at the end of this. Hopefully, we can just work through this together, and you know if it works, it works. 00:29:56 John If not, well, that's going to be 100% up to you. So just giving people that you know feeling of freedom goes a really long way. 00:30:06 JD Sure, you know one of the things that you pointed out early in our conversation is that. 00:30:12 JD You know most people know what we do, and I don't want to just discount the fact that what you had said earlier is that most people have some sort of motivation, otherwise they wouldn't have called you. I mean that is the 1st. 00:30:28 JD The first concept there, that and I think we lose track of that. You know, we talk about people kicking the tires and they and they called us out of curiosity. 00:30:37 JD But more times than not, they know that you would be buying their properties at a discount, and there's likely an underwriting underlying reason why they're even called. 00:30:47 Right? 00:30:48 John Yeah, I think you're right. I mean, of course there are going to be tire kickers. Of course, there's some people every once in a while, who just are lonely and want to chat, but the vast majority you know they know you buy houses for one reason or the other. 00:31:02 John They want to get rid of theirs for one reason or the other. They picked up the phone or clicked on the Internet or shot off an email. 00:31:08 John Or whatever instead of calling a realtor. So, for most of inbound most inbound contacts. 00:31:15 John There's some underlying motivation now. I don't know if that's enough if that motivation is going to be a compelling enough reason yet for them to do business with you. But you're right there, there is something worth exploring. 00:31:29 JD Right? 00:31:30 JD You know, and another question that I've learned, and I ask quite often, is simply, why don't you list it with a realtor? 00:31:38 JD And I think what's interesting about that is that a lot of people I've talked to will never bring that up as if they're trying to hide the fact that that's even an option. 00:31:50 John Yeah, but that goes. So, I mean that that's just proof right of what we were just talking about. 00:31:55 John You know not being afraid to lose the deal, just bringing up their other options. A lot of salespeople I. I don't want to say amateurs, but maybe people that don't have a clearly defined effective sales process. 00:32:09 John They'll just try to avoid all the reasons why someone might not do business with them, like listing it with the realtor or something like that. 00:32:18 John And the truth of the matter is, is if you have things that can routinely stall or derail your deals, you don't want to avoid them. You want to bring them up to see if you can work through them. 00:32:29 John You want to bring them up to see if you can eliminate them or to see hey. Is this something that we cannot beat? 00:32:35 John Is this something that's going to stop the deal? Because if you do lose a deal, you want to know why, right? 00:32:40 John If you do lose a deal you don't want to be in, you know if I lost a deal, I'd want to know I lost it because I uncovered this obstacle to steal kill. 00:32:49 John And there's just nothing we can do about it unless that situation changes. It's no deal. I'd rather know that, so I know what to do with the lead then not knowing and then calling every two days for the rest of my life going. 00:33:02 John Hey, you want to talk again? You know I want to know where people are. I want to know if the deal is not moving forward. 00:33:08 John Why but again, I think it does go back to the fact that most salespeople 00:33:16 John Weaker ones at least. 00:33:19 John They're so scared of no, they avoid anything that might lead to a no. They avoid anything that might get in the way of the deal, and I think the really good investors people have been doing it for a long time. 00:33:29 John Like yourself, realizing if something is getting in the way, let's get it out into the open and just deal with it. 00:33:36 JD Yeah no, and you know I'm going to change the subject just slightly because when I first learned of some of your strategies. 00:33:37 Right? 00:33:46 JD I was using them in any opportunity I could, just trying to get in the habit and working that muscle and as much as it. Let's face it, we all hate role-playing and going through all of that stuff. 00:34:01 JD There's a lot of benefits associated with that, but I found that I was trying to even when I was talking to other salespeople in other India. 00:34:09 JD Trees I didn't have any desire to or the ability to. I'm going to use this example. I went to a car dealership, and I was looking at just looking at cars so. 00:34:23 JD And I wasn't really, uh, you know, you're there for a reason. You're probably looking at cars, but when we went for a test drive, I started essentially. 00:34:35 JD Using some of your strategies I towards him, and by the time we got back I knew how he was incentivized. 00:34:42 JD I knew how important it was to for him to sell this car to me. I knew, you know. 00:34:49 JD By the time we got it I was likely it could. It could have gotten the best price possible. 00:34:54 JD I mean it was. It was, uh, it was interesting that this can be applied in so many different scenarios. 00:35:02 John Yeah, because at the end of the day it's just communication. You know, if you could just what we wish we could do with salespeople is just go into and talk to a seller and. 00:35:13 John Say OK, I've got this sheet of paper. Tell me every reason why you would consider doing business with me and do one column and then say column #2. 00:35:22 John Tell me everything you're uncomfortable with. Scared about that might get in the way, and if you were able to do that and people just know you, you didn't have to have good communication skills and they would just yeah tell you everything. 00:35:33 John And it was. It was 100% truth. If you could do that, then you could just look at that sheet of paper and go, well, let's go through these together. 00:35:41 John This is what you want done. Here's how I'm going to help you get there. Here's all of your concerns. 00:35:45 John Here's how we're going to address those and then at the end, you'd say, here's my offer. What do you think right? It would be super easy, the problem is. 00:35:53 John This is humans are complex, especially with strangers, especially with salespeople, especially if they're in distressed situations. So, you just have to know how to communicate with people, so they feel comfortable telling you the complete open and honest truth and that's it. So, whether it's a spouse, kids. 00:36:13 John Waiter or waitress the car dealer. When you know what's going on in their head, when you can take a sneak peek and almost mind read. 00:36:22 John It gives you a lot of power and I'm not saying power like you're misusing it or manipulate people. But the more facts you have and the more you know what's going on, the more powerful you are. 00:36:31 John The more you can use those facts to make a case and to you know, use them in your favor, however. 00:36:38 John You see fit. 00:36:39 JD Right, so to wrap this up, I was wondering if we could chat a little bit about what we're dealing with right now with the pandemic and COVID and. 00:36:49 JD Have you seen some of the strategies or the way people are acquiring properties? How they've changed over the past year? 00:36:57 John Surprisingly very little. Now there has been a shift to more virtual, but that chip started long before the pandemic, right? As people will try to, you know, ramp up marketing. 00:37:14 John And have more people, more appointments to run. We started shifting to some virtual appointments as investors started to have some success in their markets. 00:37:22 John They started to explore other markets and it didn't make sense to set up a physical shop there, so they started to explore, you know, virtual. I think the pandemic accelerated that, but. 00:37:34 John You know, with our clients who are probably 75%, I think we've got about 500 clients currently. Investment companies and I think I would say roughly 75%. 00:37:44 John Rent or have some virtual component to their business. They're either doing it all virtually, or a portion of their acquisitions is done virtually and with all of them. 00:37:55 John It's the exact same conversation. There's some new launches, right? It's a little easier face to face than you know, having the conversation over the phone. 00:38:05 John Some parts are easier over the phone, like the tough questions you got to ask because there is a little separation. 00:38:10 John The conversation moves a little quicker over the phone. You got to get a little bit creative when you're doing your tour. 00:38:16 John You got to do a virtual tour of having kind of walk you through the house and explain things to you as if you were there. So, there's some minute differences, but surprisingly enough, 98% of what? 00:38:30 John We see especially now we just use our most successful customers. So, we stay in touch with them. 00:38:35 John Say it's the same conversation if we're there versus on the phone, even through text message or email, he saying we hit the same steps. 00:38:44 John We asked the same questions. It's the same thing of course of dynamics a little different here and there, and there's some unique challenges. But by and large it's the same. 00:38:54 JD Yeah, so well I want to remind everybody again the new the next boot camp is June 7th and 8th. 00:39:02 JD You can go to midwestrev.com. I'll make sure to have those links in the show notes. 00:39:07 JD And the one last question I try to end with is, is there a question you wished I would have asked you today? 00:39:13 John Oh Sarah, that's a great question. 00:39:16 John Let me see yes. 00:39:19 John There is, UM, what I always like to share people, so I wish what I wish you had asked was. 00:39:28 John Do you have to have a special gift to be a salesperson, especially in? In RE we work in a lot of industries but in real estate investment, a lot of people get into the business not because they want to be in sales, but they want to be in the real estate business, right? There's something about the business and the opportunity and everything that goes with it. 00:39:48 John That is very appealing. 00:39:49 John Thing, and just like any business, you'll realize sales is a big piece of it and a lot of people get into it and then realize wow, there's this incredibly uncomfortable thing or thing I'm not used to doing or don't know how to do. Am I just not cut out for it? Do I not have what it takes? 00:40:10 John But the truth of the matter is. 00:40:13 John And some people are maybe a little more. 00:40:17 John Or maybe they're a little better at sales naturally, but you don't have to be a natural. You have to just have a process. 00:40:24 John It's just like accounting, right? There's no natural accountants. There's accounts that follow good processes and procedures, right? Even builders, right? People aren't just in in architects. People aren't just born a natural. 00:40:37 John Architect, they have formulas and procedures and processes they follow and the more they stick to those and refine them, the better they get at their craft. Sales is the exact same, so for all the investors which I usually find out are quite uh. 00:40:51 John It that acquisitions is their least favorite part of the job. It's not because you're not cut out for it, it's just usually because the right process isn't in place so that that's what I want to share. First and foremost is. 00:41:06 John Don't let it discourage you. Don't let it push you out of the game. 00:41:11 John Look for a better process. 00:41:14 JD Now that that's a great way to end this, I really appreciate your time again John, and again, make sure you head over to midwestrev.com and sign up for the next boot camp. 00:41:27 John Jackie was a pleasure. 00:41:29 JD Thank you, Sir.
30 minutes | Jul 4, 2021
This 18-Year Old Has Done More Investing Than You with Jack Rosenthal #248
Jack Rosenthal is an 18-year-old investor, entrepreneur, and author. One year ago he wrote the book "Teen Investing" which has now become the #2 best-selling book on Teenage Investing on Amazon. I also started the Young Investors Club, LLC (younginvestorsclub.org) which grew from 0 members to over 90 members today and over $120,000 in assets. Lastly, he manages his own investment portfolio as well as the portfolios of a few other investors. Here's the link to my books: https://bit.ly/JackRosenthal1We chat about:What it's like being an 18-year-old entrepreneur/investorHis Investment portfolio and what I'm currently investing inHis latest book "Teen Entrepreneurship" a sequel to my teen investing book Starting the Young Investors Club, LLCAs you can already tell we have made some changes and a few more are on the way. If you are interested in what we have planned, head over to Patreon.com/REImastermind, and support the show today. Financial contributions are always appreciated along with a LIKE, SHARE, and REVIEW. It really helps us grow and reach more people with this valuable information. See you next time and tell a friend!LIKE • SHARE • JOIN • REVIEWWebsitePatreonApple PodcastsGoogle PodcastsYouTubeSpotifyStitcherDeezerFacebookTwitterInstagramSUPPORT THE SHOW!Get Exclusive Content on Patreon! • https://www.patreon.com/reimastermindGet $10 and Reduce Your Business Costs by Shopping at AppSumo • https://bit.ly/reiappsumoGet $10 Towards Your First Purchase at Drop • https://drop.com/?referer=3DC729"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - JD---Transcript 00:00:01 JD Hoss Well, we have Jack Rosenthal on the call here tonight. Jack, I really appreciate your time and first of all, Jack is a young investor. 00:00:11 JD In fact, he's probably done more in his 18 years than some of the real estate investors I've had on the show. 00:00:21 JD I really appreciate your time Jack for joining me and I think we're going to have an interesting conversation here tonight. 00:00:27 Jack Rosenthal Thank you so much. Thank you for having me on, UM, the story. Just survival of how I'm on the podcasts. 00:00:32 Jack I reached out to him over email and he was nice enough to have me on, so I'm really appreciative that I'm here tonight. 00:00:39 JD Yeah, so uh, I appreciate you reaching out. You know I get a lot of people that asked to be on the show, but I mean, let's face it, I mean, you're a unique one. 00:00:50 JD 18 years old and not only do you have an investment portfolio, but you even started a young investors club. You can head over to YoungInvestorsClub.org 00:01:01 JD And then you can also Jack has written a few books and the latest 1/2 for teen entrepreneurship. But you can go to bit dot LY slash Jack Rosenthal one and I'll make sure to have those links in the show notes as well, but. 00:01:20 JD First of all, how I know you're 18 now, but based on writing three books and starting a young investors club, something tells me you even started a little sooner than that. 00:01:33 Jack Yeah, I mean like I'm 18 now, but I like it's almost as if I've been in the game now for like 10 years like I'm not even like used to be. 00:01:42 Jack I'm like so used to being the younger one in the room, and the younger one in terms business. Now I feel like I'm older and it's something that actually an older friend of mine recently mentioned to me. He's like 22 or something. Now. He's like, you know, you only got a. 00:01:52 Jack Few more years left of like what you do, being impressive when you're young, like by the time you reach 22, you know you've written a book. 00:01:59 Jack There's a ton of authors that are 2530 thirty-five ton of real estate investors. 2530 thirty-five stock portfolio owners, et cetera so. 00:02:07 Jack Oh, so I still got that like few years left in the golden zone where you know what I do is is more impressive because I'm younger, but because I've been doing it for so long that I've been. 00:02:17 Jack I've been trading stocks since I was eight years old. I started the young Investors Club in my freshman year of high school when I was 14. I've done a ton of other entrepreneurship activities. 00:02:27 Jack All throughout my life I'm just. I'm just sort of used to it at this point. 00:02:31 JD Sure, so you know you. You say you started even trading stocks at 8 years old like what got you interested in this? 00:02:39 Jack Yes, so I mean 10 years now. Looking back, it's hard to. It's hard to believe that I've been doing this for a decade, but what originally got me interested is my grand Father. 00:02:49 Jack Set up my first stock market portfolio for me. He gave me a small investment and said alright, Jack, here's some. 00:02:56 Jack Honey, it's your stock account. Do whatever you want with it. You get letting 8-year-old, you know. Pick his picking stocks and I learned a lot of lessons from that first year. 00:03:05 Jack I actually made a lot of mistakes and but those mistakes helped me with a lot of lessons for the future, which end up making me a lot of money in the future. 00:03:12 Jack Uh, so yeah. So my grandfather set me up with my first talk before when I was eight years old. 00:03:18 JD Sure, so uhm with that being said, do you? Are you strictly stock? Is that type of investing or do you do any real estate? 00:03:27 Jack Yes, so for the time being it's only been stock. I've recently turned 18. I only turned 18 in July, so I've only been an 18-year-old for six months now and you know, as I'm sure you're a real. 00:03:39 Jack Estate investor I assume right? 00:03:40 JD Yep yeah. 00:03:41 Jack So, as I'm sure you're familiar, like lot of this stuff that's required in real estate, you have to be 18 like typically for a loan just to start there. 00:03:47 Jack You need to be 18. 00:03:48 Jack Among many other things, so I've only gotten the real opportunity to be able to do real estate for the past six months. 00:03:54 Jack I haven't got a chance to do anything yet, but I'd like to do something in the future. Definitely. So for the time being it's all been stock market portfolio though. 00:04:02 JD Oh yeah, you bet. 00:04:04 JD So with that being said, like, uh, talk a little bit about. 00:04:09 JD What you've been doing to, uh, learn some of these lessons. I mean, it. Gotta be, I gotta be frank. 00:04:16 JD I mean, a lot of kids your age, unless they have something like the young investorsclub.org I don't see a lot of this type of stuff being taught in school. 00:04:29 Jack Well, that was a lot of the big reason for me actually creating the on the message called in the 1st place when I was 14 years old. 00:04:35 Jack My freshman year of high school, he mine when I was 14 I started with eight, so I'd already been trading stocks for six years. 00:04:41 Jack And I was freshman year of high school and I was like hey I want to find some other kids that would be interested in investing alongside me in the stock market. 00:04:48 Jack You know we could both learn from each other. You know, I'm gonna be great chance to meet some other young ambassadors would be great. 00:04:55 Jack Great thing for everybody and I went out and I looked for a group that already had that 'cause I figured there had to be one that existed. 00:05:01 Jack Ready, but I really couldn't find a single group that actually nested real money. There're tons of groups that invested fake money. Everyone gets a fake 100,000. 00:05:09 Jack Hours and they throw it in stock. Since you asked most at the end of the year, but whatever. Typically happening in those groups is people just throw them in. 00:05:15 Jack Risky penny stocks are very risky. Stocks where it's a big chance they can go up or a big chance they go down. 00:05:20 Jack Either way, a ton of risk, and there's really no loss, so might as well take on as much risk as possible, but I didn't really feel that that simulated real-world investing really well. 00:05:29 Jack So, I decided when I was 14 to create this century a club with the first member just me where we would all invest $1000 each in the stock market and best it collectively up that freshman year of high school. 00:05:43 Jack Cool, I I went out all outside of my school. I didn't really recruit kids from my school 'cause I kind of wanted to do it outside of school. 00:05:49 Jack And if you, do it through the school, there's a ton of regulations. Anytime there's money involved; the school is going to want to stick their nose into it. So, I did it totally outside of the school that first year, I got twenty members to sign up $20,000 portfolio. 00:06:03 Jack And then kept managing that kept going. I think it grew to and added on some members plus investment growth. 00:06:09 Jack It grew to like about 40,000 by 10th grade and then 11th grade was the year that I decided, you know, I'm like. 00:06:15 Jack I have something cool here. I like what I'm doing. We're doing this good so far, but I really want to take this to as big as I possibly can, so I said I want to build the largest teen investing club that mess real money in the country and I went out and recruited very, very hard that year. 00:06:31 Jack My junior year of high school, which are any of you that have teenagers or have recently been a teenager? 00:06:35 Jack You'll know that your junior year of high school is also your hardest year academically, but nonetheless I decided to go out and try and build this club to as large as I possibly could, and after sending out hundreds of emails, dozens and dozens of phone calls, pitching one after another after another meetings with parents. 00:06:52 Jack Etc. By the end of that year, I had over 80 members in the club and over 100 and 15,000 in assets in the club, making it the largest king investing club that I'm aware of today. 00:07:06 JD Well, Megan said you know guy, everybody, Jacks has probably done more before 18 years old and some of us have done in our investment careers. 00:07:19 JD The reason that you particularly are of interest to me is that you know we have a lot of real estate investors who study this type of investing inside and out, and we have analysis paralysis where you know these people. You know people just don't want to take that initial action and then at such a young age. 00:07:40 JD Do you feel that it's from your you're just fearless and you're just kind of bold for? 00:07:46 JD Word or what? What caused you to just take the bull by the horns here? 00:07:52 Jack Yeah, I mean it's definitely fearlessness and really just wanting to go out and achieve something that was really what drove me forward. 00:08:01 JD So you said you're trying to make the largest young or teen investment. 00:08:07 JD Club in the country. So have you been able to grow up beyond your initial club? 00:08:14 Jack Yes, so then I think we took that from 115 kept growing and I think it's around 130,000 or something in assets at the moment and that was really a high school club. 00:08:22 Jack So, I'm a freshman in college, now 18 at the end of my Senior High School, I decided to pass off the day-to-day operations of the club to a high school, 'cause the whole idea was. 00:08:34 Jack I wanted a high school or run in the. 00:08:36 Jack Bob, you know more familiar with other high schoolers, and I just felt that should be something that's run by teenagers. 00:08:42 Jack Now that I'm in college, it really wouldn't make sense for me to be that close to it to the club anymore. 00:08:46 Jack So I decided to pass it off to a kid who had been working with me very closely. You know, I I recruited him early on. 00:08:53 Jack I said I had a lot of potential. I brought him in. He helped me with a lot of the day-to-day work. 00:08:56 Jack He did an excellent job and at the end of that year you didn't even know I was gonna offer him. 00:09:01 Jack I said hey, would you, would you like to run the club and he's very happy to accept the offer? 00:09:08 Jack And today he went on and ran the club so that that's pretty much what I did throughout high school in terms of investing. 00:09:14 Jack Now we're on that. Today is I run my own stock market portfolio, so I mean, you know I, I don't really like to say numbers a lot of time because I feel that it's like bragging. However, I think that you know stock market portfolio could really mean a lot of things. 00:09:27 Jack If you have $1000, you technically have a stock portfolio. They have $1,000,000 technically have a stock market for oil, so I'm going to give out the number anyway today based on previous entrepreneurship work and my own investment gains, I built a portfolio worth over $100,000. Personally, at 18 years old and nest in this, uh. 00:09:45 Jack Market and that's a lot of what I do today as well. As I recently wrote some books last year, I wrote the team investing book, which has become one of the top-selling books for teen investing on Amazon. 00:09:56 Jack And just recently I wrote these other two books, teen entrepreneurship and T Investing 101, which I hope will do very strong in sales as well. Already are starting to do well. 00:10:05 JD Yeah, so if you want to check out Jacks book again, make sure you head over to bit dot LY slash Jack and then Rosenthal is spelled Rosenthal and the number one, so make sure you head over there, and I'll make sure those that link is in the show notes. 00:10:22 JD And so are you looking to, I suppose? Or you're out of the day-to-day operations, but are you on the board or something to help guide the club here at this point? 00:10:33 Jack Yeah, so I'm still involved with the club. I mean really the hardest part about the club was making it. You know, running the club is much, much easier. It's. 00:10:43 Jack Quarterly calls that we have, so not a huge commitment to run the club. We have board members of parents that are very experienced investing, some of whom run large investment companies and they've really done an excellent job of helping to guide the board. 00:10:56 Jack But you know, like I like to say, there's was probably only one kid who could have started and gone through all the hurdles in order to create a club like that. 00:11:04 Jack And it's me and maybe a few other kids could have done it, but very few people could have gone through and. 00:11:09 Jack Could have had all the hustle and the great in order to. 00:11:12 Jack Really pushed through. 00:11:13 Jack A wall and recruit that many members in the 1st place. Now that it's in operation, it's much more. 00:11:18 Jack It's much easier to run, so yeah, I'm still an advisor to the current people who are running it, but they really handle a lot of the day today now. 00:11:25 JD Sure, so if somebody was across the country from you here now and they wanted to start up an offshoot like how would they start or go about getting some more? 00:11:36 JD Turn on that. 00:11:36 Jack Yeah, you know it's funny. You mentioned that I included my email at the end of my first book teen investing and a kid actually read my book. 00:11:44 Jack I think from California across the country, and he wanted to know how he could go about starting his own investment clubs. 00:11:50 Jack I'll tell you right now, the same thing I told him. So, the key is the crew members. Typically, you can start with your friends. 00:11:57 Jack And you can most importantly do what I did, which is partner with an organization. 00:12:02 Jack That's the fastest way to get out members. You only know so many people. Your personal network, especially when you're 14 years old, is only going to be so big of kids that can actually put $1000 in the stock market. 00:12:12 Jack However, what I did was like partnered with a much larger organization who I knew had a ton of parents in it, and I said, hey, we would you mind if we use your email list to basically? 00:12:22 Jack Put out this message and see if people would be interested in joining. It was a great win for them because this was like a new kind of benefit. 00:12:28 Jack They could offer their members, and there's obviously a great win for me. 'cause I got a lot of exposure from it, so the number one thing I would say is go partner with a parent network of some sort, whether. 00:12:37 Jack It's like maybe it's a Chamber of Commerce and there's a ton of business owners slash parents in it. Maybe it's a some kind of thing that's related to the school, but not directly dealing with this school anytime. 00:12:47 Jack There's like a big parent network and you get access to their email list. That's the best way to create the club. 00:12:52 JD Sure, well let's change focus on this just to hear you know we're talking to, essentially parents. Right now. You're talking to people that are in the investment game. 00:13:05 JD I mean on some level, but they are likely a lot of us have kids. 00:13:11 JD So if they would hand this video or audio podcast over to their kid, like what are some of the advice that you would give them? 00:13:20 JD Starting off like you, you're what? What would you wish you would have known at the very beginning? 00:13:28 Jack The OK this is it I. 00:13:30 Jack Is an interesting piece of existing question and I'll say the number one thing that I recommend for kids is you wanna try and earn as much money as possible? 00:13:40 Jack I know it sounds very obvious; however, a lot of kids try and start a stock market portfolio with two little money. Say you have $100. 00:13:48 Jack Even if you make a 10% return on that, you're only making $10, and even if you're a kid that's not going to get anybody excited. $10 is the cost of lunch, so the biggest thing I'd say when you're a teenager. 00:14:01 Jack As you really need to focus on earning the money first, whether it's working at our local restaurant of some sort or starting your own kind of business and just starting to build up a few $1000, I recommend you to try and get the $5000 saved up, which is not that actually hard. 00:14:15 Jack You can go work a summer job. You can be a caddy. You can work in a restaurant if you're willing to put in the time. There's plenty of jobs. 00:14:21 Jack Or if you work long enough, you can earn that amount of money, especially throughout four years of high school. 00:14:25 Jack Or if you're starting middle school even earlier, so the number one thing I recommend is you first have to earn the money and then you can, you know, breed people like mind books and check out a bunch of online information about how to invest. 00:14:36 Jack Then you can go out and actually invest the money in the stock market or one day in real estate. 00:14:40 JD Sure, do you recommend that they use uh, phone apps like Robin Hood and we bowl and a few of those type of things. Is that, uh, uh, easy way for kids to kind of get started. 00:14:53 Jack Yeah, so I mean I'll tell you from college. A lot of kids in college it didn't happen so much in high school, but now a lot of kids in college, specially 'cause I go to business college. 00:15:01 Jack A lot of them use those training apps like Robin Hood and many others to trade. I personally use fidelity. 00:15:07 Jack No particular reason why I chose that one other than my grandpa chose that one for me when I was eight years old. 00:15:12 Jack They've been flawless. I haven't had any problems with them. Definitely not like the most like visually appealing platform like it doesn't make it all fun and exciting like Robin Hood. 00:15:21 Jack Apparently, with Robin Hood you click a trade. It like sends up some balloons. 00:15:24 Jack Or something right after you. 00:15:25 Jack Trade up, so try to like. 00:15:26 JD Right, it's almost gamified to a certain extent. 00:15:29 Jack Exactly so, so those apps are good if you're kind of making trying to make it a little more of a game, but it really doesn't matter the app, it just really matters the underlying investment that. 00:15:37 Jack You're making and. 00:15:38 Jack How much money you're putting into? 00:15:39 JD It so like you mentioned. 00:15:41 JD You know reading your book and maybe doing getting some information online, but. 00:15:47 JD Uhm, talk a little bit about like that initial investment. You know they got the let's say they work all summer and they do collect the $5000. 00:15:56 JD What do they do with it? 00:15:58 Jack Alright, so perfect, now you got your 5K, you're all set. Here's how you here's how I would recommend it. 00:16:03 Jack Lasting it so. 00:16:05 Jack If you don't want to, if you don't want to take the time to really look at stocks, which I'd say is. 00:16:10 Jack At least half of kids, instead of putting in a bank account where you're going to earn basically nothing. You know, as all the real estate investors are taking advantage of that with the low-interest rates they're getting on their loans. 00:16:20 Jack But the negative the con side to that is you leave money in the bank. You get paid basically nothing on it is just take it and throw it in the S&P 500 index. Earn your steady 8 to 10%. 00:16:30 Jack Return a year passively invest. You literally don't even have to look at the investment account and you're on average going to make about 8:00 or 10%, or that's what it's made over the past 50 years, which by the way, is a better return than some investors make in real estate. 00:16:43 Jack And they have to do a ton of work in order to do that. And this you don't have to do. 00:16:46 Jack Right, so the very first thing I'd say is if you're not, if you. If you're not interested in like really picking stocks and we're putting a lot of work into it. 00:16:54 Jack Throw it all the in the S&P. If you're looking to do some work on some research, I would definitely follow the news. 00:17:00 Jack Look at, you know active stocks like if for example if you got in early on that whole GameStop then you could have made a killing. I personally didn't but. 00:17:07 Jack But that's like one example. Follow along in the news. See if there's like quick little arbitrage you can do to make some quick money here and there. 00:17:14 Jack Look for long-term stocks that you believe in. So, like for example, one of my favorite stocks. I'll throw out a little stock back here. 00:17:20 Jack One of my favorite stocks has always been Berkshire Hathaway. Big fan of the company. It's one of the few stocks that's actually performed. 00:17:27 Jack Better than the S&P 500 on average for over 50 years, year-over-year returns have been higher. 00:17:33 Jack Uhm, so I think it's pretty reasonable to assume that they can also be higher for the next 50 years. 00:17:38 Jack So, because you're a young investor, you're such a long-time horizon. Look for companies that you think are most likely to be around in the next 20-30 years. 00:17:44 Jack There's just buy and hold those companies. Don't try and date trade. If you want to learn day trading, you. 00:17:50 Jack Know I'm not. 00:17:51 Jack I'm not your guy, but I know about passive long-term investing and I'd say one either throwing the S&P if you're just not really looking to do a lot of research, or if you're all looking to do some research by companies that you think are for sure going to. 00:18:03 Jack Be here in 20 thirty 40 years. 00:18:05 JD Yeah, so you know I think it's interesting that you point out that the day trading, you know, I, I think a lot of people when they get into investing the stock market. 00:18:17 JD It's, uh, they jump in, they get excited, you know the GameStop thing. For example, that was the most recent situation where a lot of people jumped in. And then there's a lot of panic selling and a lot of. 00:18:33 JD It's driven by emotion more than anything else. 00:18:38 Jack Yeah, it it's really interesting how assets are now valued like. 00:18:42 Jack We're living in this whole new world. 00:18:44 Jack Where partially because of inflation where it makes more sense for people to just own assets, period at any price than to just keep their money in cash, but also partly because it's like it's been gamified. You know apps like. 00:18:58 Jack Robin Hood and the younger generation now starting to get involved investing. I don't think there was levels ever this high of young people getting involved in investing ever. 00:19:06 Jack And especially as those young people get older, start to accumulate more wealth and they have more money to invest. 00:19:11 Jack It just gets more and more gamified, and you see some of these companies where there's no like real. There's no real basis that these investors have for investing in these stocks. 00:19:20 Jack Something then all the stock will just keep going. 00:19:22 Jack Up because it's been kept going up, but they're not looking at key ages and not look at the earnings. They do not really care about anything. 00:19:28 Jack Tesla, that's a cool car. I think I should buy their stock. 00:19:30 Jack Uhm, so yeah, you definitely do see a lot of it. I think that's going to continue for. 00:19:34 Jack The future. 00:19:35 JD Definitely sure so you know you. You kind of took a small jab at real estate investors there so you know, I my listen is. 00:19:42 Jack I know I knew I. 00:19:43 Jack I saw your facial expression there. 00:19:46 JD You know, my listeners aren't going to let me just let that go. 00:19:51 JD So, so for those young people that are listening. The reason that they're you'd consider real estate investing is something that Jack you know, and maybe you don't know that you know we have four profit centers compared to the stock market. 00:20:05 JD So you would get into real estate investing and 5000 actually could start a rental portfolio or something depending on the situation there, but anyway. 00:20:18 JD You would have appreciation associated with the property depreciation schedule that can be applied to your taxes. 00:20:27 JD As long as well as the returns on the investment. 00:20:31 JD And then you also have the amortization, which is another aspect of the bank loan that's on your side. So, you can. You can look into my past episodes to dig into that a little deeper. 00:20:45 JD Figure out. 00:20:45 Jack I knew I knew you weren't gonna be happy about the real estate comment. Well, first of all, I would say listen to reasonable minds can differ. 00:20:52 Jack However, I could do things one for younger people very difficult to get involved in real estate if they don't have a parent helping in a lot of work and a lot of times the parents are like, hey, I got a job. 00:20:58 JD Yeah, that's very true. 00:21:03 Jack I I can't, I can't do everything for you and it really requires the parents to do a lot. That's the first thing. 00:21:08 Jack And then the second thing is in places where I live like New York. Like if you try and buy real estate there, the cap rates are so low and so ridiculous. 00:21:17 Jack Even getting good debt on it, you still might not be able to clear a higher return than you can make in the S&P so. 00:21:23 Jack For those two reasons, for some investors. 00:21:25 Jack Depending on where you live and how old you are, it might make more sense to put the money in the stock market for the time being and then later once you build up more wealth and have more money to invest total or want to go somewhere else to buy real estate, then it can make sense. 00:21:37 JD Nope, that's a very valid point. 00:21:39 Jack Thank you. 00:21:42 JD So you what I think is one of the more interesting aspects of your story. You know, I really it's impressive that you've built your investment portfolio well twice over now. 00:21:54 JD You did it once with your teenage group in your club and now you're doing it again in college. 00:22:03 JD But the mindset associated with this it I keep coming back to this concept to you, being frankly fearless, and figuring this out. 00:22:14 JD Uhm, was this is just a natural thing for you, or is this something that you have to constantly work on? 00:22:22 Jack Can you define the question a little more clearly? Like when you say fearless like how? How would you define that? Like maybe make it more specific just like an answer. 00:22:29 JD Well, you know the my It's there's a deliberate like in my case and why I'm so fascinated about this is that I really have to work and keep my motivation up and keep my mindset in the right place. 00:22:45 JD So, I'm constantly listening to audiobooks. I'm constantly listening to podcasts. 00:22:50 JD But I've run into these rare people that just seem to naturally have that level of motivation without that exterior motivation if you will. 00:23:02 Jack Yeah, uhm, I would say the biggest thing is. 00:23:08 Jack Really, that goal? I mean you set the goal and then you just do everything in your power in order to try and get to that goal. 00:23:16 Jack And I'd say you know, like yeah, I think it maybe works. Different people's brains work differently if other people need, like motivation every single day. I'm not saying I don't need a little motivation here and there, but I would say that. 00:23:28 Jack Like for example, the young restaurant. Once I set the goal that I wanted to make that club the largest key investing. 00:23:33 Jack But I was just wanted to make sure that I did everything possible in order to try and. 00:23:38 Jack Achieve that goal. 00:23:38 Jack I might have failed. I understood that that year when I went out to try and do it, there was a chance I could do all this and it might fail, but I just wanted to make sure that I turned over every rock. 00:23:47 Jack And if for example, there's 100 people that were possible decision makers, I wanted to make sure I emailed every single one of them and tried to call every single one of them. 00:23:54 Jack Or there's 1000 people I want to do the exact. 00:23:56 Jack Same thing with all those people. It's really just about. 00:24:00 Jack Making a hidden goal and then figuring out everything you need to do everything possible. You could try and do to try and achieve that goal and then doing every single one of those things 'cause. 00:24:08 Jack Either way, whether you hit the goal or don't, at least at least you tried everything that you know every you at least turned over every rock. 00:24:14 JD Yeah, So what Jack is talking about here. You know, I just recently released an episode 124 with. 00:24:23 JD Rod or 224 with Rod Khleif. Then Rod Khleif is an expert when it comes to multifamily investing, but we spent the entire episode talking about goal setting and how to essentially motivate yourself to take this level of action so I'd encourage people to check. 00:24:43 JD That episode out. It was fantastic. 00:24:47 JD But you know, I, I believe it or not, you know, in a blink of an eye we've spent 30 minutes. 00:24:52 JD I feel like we could just keep going, but that being said, I usually try to end the episode with. One quick question. Was there a question you wished I would have asked you here today? 00:25:05 Jack Uh, you know you can't. 00:25:08 JD And I usually get that expression actually like oh God, I can't believe he's asking me this. Yeah, yeah. 00:25:15 Jack I guess I guess it's all queued up. 00:25:18 Jack Ah, I like I'm trying to think if I don't know one up. 00:25:24 Jack I guess that's like another way of asking people, hey, what's one more thing you want to talk about indirectly, but they want to be? 00:25:30 Jack Active in something they won't talk about. 00:25:30 JD Then it in in a way, yeah. 00:25:33 Jack Uhm, no. I would just say that. 00:25:38 Jack I guess what inspired you to write the book? That's definitely a question I've been asked on podcasts before. Uhm, what inspired me to write the book is just as I was. Kind of wrapping up the young Investors Club, wrapping up that venture. 00:25:49 Jack Yeah, uh, that club at the end of my senior year of high school, I decided to write this book. 00:25:56 Jack Basically, kind of going over all my teachings of what I've taught, hold on 'cause I basically became like a mentor to 80 different kids. 00:26:03 Jack Most of them didn't know as much about stock market investing as I did, so I was teaching them continuously on all these calls and I decided to compile a book. 00:26:11 Jack Of information, uh, just kind of like. 00:26:13 Jack It was originally not even gonna be a book. This one would be like a booklet. 00:26:16 Jack Like oh, here's them all. 00:26:17 Jack The top lessons I've learned from the youngest color that I pass on to you guys and I was going to hand it out to basically everyone in the club is like a goodbye present like hey thanks for signing up for the club. 00:26:26 Jack Really appreciate you having you. Here's, you know. Here's a book to remember it all, and that's really what inspired me to write the book. And then all of a sudden I realized. 00:26:34 Jack Hey, wait a minute this information wouldn't just apply to people in the club, but it would also apply to really any young teenager interested in getting involved. 00:26:41 Jack The last thing, so I decided to make the book available on Amazon, and surprisingly, I didn't. 00:26:46 Jack Think I think we should. 00:26:47 Jack Do well surprisingly did very well. 00:26:50 Jack I think that the idea of it, written by being written by a teenager, there's tons of team lesson books, but many of them are written by teenagers themselves. And a teenager who's ran a club with actually investing wheeled over $100,000. 00:27:02 Jack With your money, I think even before I credibility, I think that contributed to his success. 00:27:07 JD So no, that's just awesome. Like I said, early on, you've done more in your 18 years than a lot of us have done, and I, I really appreciate your time. 00:27:19 JD Again, now more information. Just as a template, if you Will Young Investors Club, LLC that's at younginvestorsclub.org. 00:27:29 JD But more importantly, if you have a teenager, I would definitely in strongly recommend you check out Jack's book. 00:27:35 JD Head over to bit dot LY slash Jack Rosenthal one and I'll make sure to include those that link in the show notes now, because I know Bitly links sometimes can get a little tricky, you gotta make sure you capitalize the J and capitalize the R. 00:27:51 JD But we'll make sure those links are there. 00:27:54 JD Really appreciate your time. Thanks for reaching out. 00:27:57 Jack Yeah, thank you so much for having me on. Hope this gave a lot of value to your listeners. 00:28:02 JD Yeah, I think it was great to have a, uh, unique conversation like this. It's good to. 00:28:07 JD You know one of those things that I think is really especially important is that we get so. 00:28:14 JD Focused on real estate investing, we need to have this other. We have to consider other options so I appreciate it and I think we have to as older invest. 00:28:26 JD Here's you know I'm trying to build something for my kids and trying to get them involved in some way and this is that this isn't prime opportunity to do that. 00:28:36 Jack Thank you so much. 00:28:38 Right?
31 minutes | Jul 1, 2021
Return on Investment with Systems and Processes with Brandon Cobb #247
Brandon Cobb is the CEO & Chief Dream Builder At The HouseBuyinGuys based out of Nashville, TN, and does about 40+ transactions a year, mostly rehab with some wholesaling mixed in.We chat about:Rehab systems and processes - The HouseBuyinGuys did a $72,000 renovation in 10 days and filmed the whole thing. See link here: https://vimeo.com/481905701Raising private money - Brandon has raised over $3.5 million in private capital and he shows people how to structure this so they never need any more money again.Sales process - Brandon's background is in medical device sales and we chat about how he was able to leverage that raining and crush it in Real Estate Investing.Download Brandon's Calculator at https://www.patreon.com/reimastermindConnect with BrandonWebsite: https://sellmyhomenashville.com/LinkedIn: https://www.linkedin.com/in/brandon-cobb-83524a54/As you can already tell we have made some changes and a few more are on the way. If you are interested in what we have planned, head over to Patreon.com/REImastermind, and support the show today. Financial contributions are always appreciated along with a LIKE, SHARE, and REVIEW. It really helps us grow and reach more people with this valuable information. See you next time and tell a friend!LIKE • SHARE • JOIN • REVIEWWebsitePatreonApple PodcastsGoogle PodcastsYouTubeSpotifyStitcherDeezerFacebookTwitterInstagramSUPPORT THE SHOW!Get Exclusive Content on Patreon! • https://www.patreon.com/reimastermindGet $10 and Reduce Your Business Costs by Shopping at AppSumo • https://bit.ly/reiappsumoGet $10 Towards Your First Purchase at Drop • https://drop.com/?referer=3DC729"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - JD---Transcript 00:00:01 JD Hoss Well, we have Brandon Cobb on the program here tonight. Brandon, I really appreciate your time and if you want to take a look at what Brandon does is head over to the HouseBuyinGuys.com That's a BUYIN guys.com. 00:00:20 JD For more information, but you can find Brandon on all the social media. 00:00:25 JD The networks as well. It seems like a lot of people, especially real estate investors, seem to settle on LinkedIn lately. 00:00:33 JD I don't know if you're if you've been on there a lot, but we're seeing I'm sure seeing a lot of people shifting over to LinkedIn all of a sudden. 00:00:40 Brandon Cobb Yeah, it's huge. I went to an event I think two years ago and Gary Vaynerchuk was. 00:00:45 Brandon And he was like LinkedIn is going to be the next Facebook. It is where Facebook was like 8 years ago. 00:00:51 Brandon You know, like now is the opportunity to jump in. I've got a profile like way back when I was first job searching and I think it's still on there. I might have updated a little bit, but yeah, I think there's huge opportunities and. 00:01:03 JD Yeah, and in fact I there was an announcement for LinkedIn just this week where there's even like you can now upload a intro video of yourself, like a little intro card. I mean, they're really, really sliding into things pretty heavy. And then with Microsoft acquiring them. 00:01:20 JD Uhm, yeah, it's pretty crazy. How advance how the advancements didn't LinkedIn right now, but everybody make sure you check that out. 00:01:28 JD And again, it's the house buying guys and we're going to cover quite a few different things, but I always like to. 00:01:35 JD I like to have an idea of like where you started off, because I know that you've done over 40 transactions. 00:01:42 JD Which is pretty advanced compared to a lot of people. Most people are inching by maybe one or two a year. 00:01:49 JD You've exceeded 40. A lot of those are fixed and flips, so we're going to get into some of that, but. 00:01:54 JD How did you get into real estate investing? 00:01:58 Brandon Yeah, I mean, we're, you know now we've scaled up to about 40 to 50 transactions a year. 00:02:02 Brandon But yeah, we there was a long way until up to that point. We've done well over 100 plus deals. And the way I got started was in medical device sales, so I was orthopedic guys. 00:02:12 Brandon Selling knees and shoulders I was in and out of hospitals and surgeries all day and working, you know, insane hours. 00:02:19 Brandon But I was young, I didn't have any kids. I didn't have any wife. I could do that and afford to do that. And one day it was a Friday. 00:02:26 Brandon Mid-June in the summer. 00:02:28 Brandon And coming off of a. 00:02:28 Brandon And coming. 00:02:29 Brandon Off of a what I thought was a pretty good day. Almost had a new surgeon on board and my boss wanted to meet for coffee and I sat and we met at Starbucks and that's when he let me go. 00:02:40 Brandon I was completely thrown off course 'cause you know, I just got this like reward the previous years for doing an awesome job in sales. 00:02:48 Brandon They hired me, an associate to help out with the business. 00:02:51 Brandon And so I was kind of blindsided by it. 00:02:53 Brandon And luckily you know my income was decent and I'd live below my means. I saved my money and so when I got let go. 00:03:01 Brandon It wasn't like I was in an immediate position to go out and get another job, and I said, well. 00:03:07 Brandon You know, let me give myself an ultimatum if I don't make any money by December, about six months. 00:03:14 Brandon Doing some kind of. 00:03:15 Brandon Entrepreneur thing. I don't know what it's going to be yet. I'll go back and. 00:03:19 Brandon I'll get a job. 00:03:20 Brandon So I started doing tons of things. I started going to real estate events. I think I started like at home blog. 00:03:26 Brandon Tried to start like a course on how to break into medical device sales so it's all over the place, but. 00:03:31 Brandon A new real estate had something that always kind of had, like an itch, and I wanted to scratch it so it's sort of networking. 00:03:37 Brandon I knew that I didn't know what I didn't know and I needed a partner or find somebody a mentor to help me out. 00:03:45 Brandon And Lord and behold, I met this guy and you know, he taught me a couple things and we partnered on one deal. 00:03:51 Brandon And that income from that deal that person flip it was I would never forget. It was like an hour and a half away. 00:03:57 Brandon I was waking up at 5:30 AM to drop down there and manage it. Had no clue what I was doing. Getting contractors off Craigslist didn't know what a good tile job looks like. 00:04:05 Brandon But ended up pocketing a pretty good return after that and it was like 3 weeks left before my old man when I looked. 00:04:13 Brandon Well crap, I ended up making some money and I hit my goal and we just reinvested all the profits back into business and just kept scaling it and that's how we got to where we are today. 00:04:24 JD Wow, that's interesting. So, uh. 00:04:29 JD It that's really calls out the importance of finding somebody you know you went through that networking process and finding that mentor, I mean that that had to have been a pretty drastic change like that talking about. That's a great way to accelerate your business is finding somebody local that knows the business. 00:04:47 Brandon Yeah, it's who not. Hell, it's completely changed my whole mentality. You know, we're looking at doing some larger development stuff like building 5 story buildings. 00:04:56 Brandon I have no clue how. 00:04:57 Brandon To do it like we're getting the deal, but I'm not going to figure that out. 00:05:01 Brandon I'm going to go partner with somebody who's figured it out and then learn from them. It's just copy and paste repeat. The bigger it gets. 00:05:07 Brandon The more you need to go find your who not your how. 00:05:11 JD Yeah, no, it's. It goes back. We got kind of a I have a mantra on this show. 00:05:16 JD It's either you can either put in that 10,000 hours and become that expert, or find somebody who's already made that investment and learn from them. I mean, it's really. 00:05:27 JD Uh, a great way to not only scale your business, but your network and everything. It's there's something really true about who you hang out with you. You start to. 00:05:39 Brandon No, it really is wild. One thing that I learned when I was sitting down and just thinking of all the things that I was grateful for after 2020, I realized that networking provided so much value to my life, not just financially and in the business world. We tend to think of networking and all these opportunities we come across as bettering us. 00:05:59 Brandon Financially, but in your other areas of your life as well. You know I met my, you know, hopefully soon to be fiance through networking, you know. 00:06:08 Brandon And I looked at all these things I was like. Gosh, you know, for the little amount of networking that I currently do. 00:06:13 Brandon So I've gotten so much value from it in the past, and so one of my goals this year is to have one lunch a week. 00:06:19 Brandon With somebody I mean someone I know, or a new person, and I've hit that goal so far this year I'm still on track and the opportunities and that have come to me have just been it. It's blown me away. 00:06:33 Brandon It's crazy what your ROI is when you start putting time and effort into networking. 00:06:39 JD That's really interesting that two things that you've said there is one thing is that you took a moment and reflected on 2020. Is that something that you picked up recently, or is that something that? 00:06:51 JD You've done for a while, as reflected on the actual the previous year. 00:06:56 Brandon Probably started it. 00:06:57 Brandon 3-4 years ago and it's a tradition. At this point, you know, I just turned 30 years old in July, and so I tend to sit down and go alright. 00:07:04 Brandon Well, what did I learn in my 20s? What were the biggest takeaways? And so you know I'll do that every five years or still sit down on my birthday. But yeah, every year I look back and I analyze things. 00:07:16 Brandon Through my body being balanced and business, those four categories and how am I doing in each of those four and which one needs work and I'll try to lay out a game plan to take each one to the next level. 00:07:27 JD Wow, that that is a lesson right there. So if you guys picked up any hint or clue on what to do, I mean you should really take Brandon's vice on that. 00:07:37 JD But the other thing that I notice that you said too is I found that it's interesting that you selected having a lunch with somebody different. 00:07:47 JD Every day, like once a week, a lot of people. 00:07:51 JD See goals as something that is measurable, whether like in dollars or deals done or something like that. 00:07:59 JD But that's really something to be said for putting that down as a goal. I don't. I think that's something that a lot of people would miss. 00:08:09 Brandon Yeah, it in. I see why. 00:08:13 Brandon Nobody connects the dots. It's not. We live in a world where there's so much stuff bombarding our brain every day. 00:08:19 Brandon We've got email text messages. 00:08:21 Brandon TV screens every we go, billboards, radio. 00:08:24 Brandon I mean it until you stop down and think all right. 00:08:27 Brandon What are the great things that have entered my life and how did they get there and really think about it and trace it? 00:08:33 Brandon It's not until you connect the dots that you make the connection and then you've got the next step which is actually doing it right. 00:08:40 Brandon Bill Gates can give you all the plan to becoming a billionaire, right? He can give you the secret formula, not everybody. 00:08:47 Brandon Wants to do that right? So it all comes down to first being able to identify what was the reason for all these great things that I have and you can't do that unless you sit down and think about it. 00:08:58 Brandon And then how do I go about bringing more of that in my life? And that's where the discipline comes into play. 00:09:06 JD Well, let's move into some of your real estate investing. Then I know you a lot of it is rehabbing and fixing flips like how did you decide on that? That niche writing most people kind of start in real estate investing in wholesaling frankly. 00:09:24 Brandon Yeah, when we first started the first deal, ever did. 00:09:26 Brandon Was a flip and I didn't know what I was doing. 00:09:29 Brandon I didn't know through all these different avenues, but I like to say that I learned from the school of Hard Knocks. 00:09:34 Brandon You know, I did have a mentor, but I definitely bit off way more than I can chew. 00:09:38 Brandon My second. 00:09:40 Brandon Deleveraging was a new construction project, and I mean it was just a crash course in freaking. 00:09:45 JD Oh wow, that is a big project that would be. 00:09:48 Brandon Yeah, that that's good management. Flip an hour and 15 minutes away. Our second third deal was like a wholesale deal. 00:09:48 JD The second one. 00:09:54 Brandon Then it was a new construction deal we did. We were doing whole selling in different markets. We were all over the place. There are all these shiny objects we're going after. 00:10:02 Brandon All of them, and then you know, I think the second year in business for like we're just gonna focus on this one thing. 00:10:08 Brandon We're gonna remove all the shiny objects we're going to focus on just what we're good at, and that's how flipping came. We knew that we weren't going to have like this big loop or like. 00:10:19 Brandon We wanted a lucrative business we. 00:10:21 Brandon Didn't just want to be making passive money and the whole selling was Gray. You know we could do it. 00:10:26 Brandon But there just wasn't as much margins in it as there were flipping. You know, we could sit there and make at least three times as much gross in the same market, flipping versus wholesaling, and we had had some vision to develop neighborhoods. 00:10:39 Brandon I want to build neighborhoods. I wanted to do big commercial developments and you've got to get into the money raising game and. 00:10:46 Brandon In the construction game, in order to do that, so we knew that that aligned with our vision, and that's how we decide. 00:10:52 Brandon Got it. 00:10:53 JD Well, just talking to you in this little amount of time, I can already tell that processes and having things documented is probably a fairly big thing for you. 00:11:04 JD So let's start talking a little bit about those processes. How did you figure this all out? And let's even go back. 00:11:12 JD Is to do? Could we even maybe follow an example through like how you found a property and then what you decided to do from there? 00:11:22 Brandon Yeah, so as far as marketing goes, I'll tell you when I first started out the way I got my first deal and this continues to be the best list for us. 00:11:30 Brandon And you know, it's kind of like beating a dead horse, but we know we do the driving for dollars thing, but we've systemized it. So we use an app called SP Audio and think of it as your Apple maps. 00:11:42 Brandon When you pull up your Apple maps or Google Maps, you can see your little blue dot right there, and as we're cruising down the street, you pass houses. 00:11:49 Brandon The houses are on the map. Well, you can just touch each house and it'll market. So as you're driving, there's no need to write anything down. You're just touching these houses as you're driving through these neighborhoods. 00:11:58 Brandon That's you know obviously pinpointed and decided which neighborhoods we were going after. We weren't going to go after the multi $1,000,000 homes, right? 00:12:05 Brandon We know that in our market, most of the financial motivation was in properties that were worth $200,000 or left. 00:12:12 Brandon So we picked out those neighborhoods. We drove them. We analyzed an app. Now that app would compile an Excel list. 00:12:19 Brandon And all we did was we found a virtual assistant in Bangladesh. You know she works for like $3 an hour and we sent her this list of speed up being about 5500 properties I spent. 00:12:32 Brandon 4 hours a day for about six weeks, drove every street in Middle Tennessee and she would get this Excel list. 00:12:39 Brandon Well, you have a list of properties, but you don't know if the owner lives there or not, so she would then go and plug each one of those property addresses into the property assessor's website that had the mailing address and she would put the mailing address. 00:12:52 Brandon Formatted correctly into Excel, so now we have a marketable list. We would then send that list off to a third-party company and that third-party company would then cinnamon Mailer to it and we use a. 00:13:05 Brandon Program called Caldwell that in intercepts all the calls. So each Mailer I mean we're only talking about one specific one, but we meld to a bunch of different motivational lists. 00:13:14 Brandon Right now each one has a phone number where we can track it so we can track where we get our deals from. We can track the spend that we're spending per deal, and that's how we know six months later. 00:13:25 Brandon Or meld something hey, if this list. 00:13:28 Brandon Working, but this one is. Let's take the dollars we were spending on this list, remove it and plug it into this and double down on it. 00:13:34 Brandon So that would be an example of a system, how I'm not having to do all the work, but there's some front end work involved, but everything else is automated once it's done, and that's how I recommend people get started. Quite frankly it by far has continued to be the best. 00:13:48 Brandon It's for us. 00:13:49 JD Yeah, yeah, we actually had a Mr. Leko on a I don't know if you know deal machine that has a they kind of streamlined that process a little bit for some people. 00:14:01 Brandon Yeah, I've seen deal Machine we've tried it. 00:14:02 JD I'm sorry. 00:14:03 Brandon Before and you know it's a good product. 00:14:07 JD Yeah, so, uh, so you find a deal. And what's your process then? For you? You decide you're going to. 00:14:16 JD You're going to fix and flip it, right? So is there a threshold on margin that you need to get? Typically get it for or how do you come about your numbers? 00:14:27 Brandon So for us, it's all about a risk standpoint. We like staying in that under 300 hundred and three $350,000 price point because that's affordable housing. 00:14:37 Brandon In my market it's extremely low supply and it's flying off the market, so there's a lot of risk mitigation there. 00:14:45 Brandon We select that price point because when COVID happened we didn't feel anything. The higher-priced stuff started cooking, so we want to make a minimum. 00:14:54 Brandon I mean, this is minimum 10% or retail, so if it's 300,000 in our home, we need to make 30 grand off of it. 00:14:59 Brandon So we want to. 00:15:00 Brandon Have factor in a 10%. 00:15:01 Brandon Market depth, if it happens, you know so we just lose a little bit not. 00:15:05 Brandon You know, lose our shirt, well, because our margins are super low. 00:15:08 Brandon So uhm, as far as how we systemize it, you know we've got a rehab calculator. So all my sales Rep does is he just goes down. Just plugs in numbers and it spits out all the repair numbers. 00:15:20 Brandon He needs and at the end of it, it automatically calculates the interest rate. 00:15:24 Brandon Uhm, everything. I mean, it's really simple. Just go and build out your own. God, you know I could even post mine on your website. 00:15:31 Brandon If you want to so people have access to it, but it basically gives my rap a quick maximum. 00:15:37 Brandon Will offer with the sellers to go to a man and that's basically how it works. That's how we come up to it. It's pretty easy. 00:15:44 JD Sure, no, that's really generous of you. If you wouldn't mind sharing that, I'd love to share that with. 00:15:51 JD Uh, the listeners come and in fact my the website itself. Because it's, uh, podcasting host that wouldn't be there, so. 00:15:59 JD But if everybody finds me on the Patreon page, I'll try to get it over there and then. But again, I'd wanted to remind everybody to find Brandon Cobb on all of these social media networks. 00:16:11 JD Don't be surprised if people hit you up through Facebook Messenger or something now, but uh. Also, the house buy in guys.com. 00:16:22 JD So with all of that. 00:16:26 JD So you're finding your the properties you're going through the rehab is there typically a window that you try to get everything rehabbed within, 'cause I know you've even had extremes, right? 00:16:37 JD I saw at one point you had a 70,000 plus rehab and you pulled it off in 10 days. 00:16:43 Brandon Yeah, that one was crazy. It's not typical, but I really wanted to challenge my team and show them what was possible, right? 00:16:50 Brandon 'cause they didn't think it was possible until they actually see it. So we stacked all the contractors on top of each other and I'll kind of go into a little bit how we did that. So I think that would be something that your listeners really. 00:17:03 Brandon Really might like. So the way we planned the 10-day flip was when we had everybody scheduled and. 00:17:10 Brandon And 80% of his successful flip is all about being able to plan it out. It's all about planning. 00:17:17 Brandon You plan it right, the flips actually a lot easier. People have these nightmare stories and I'm no exception of managing these flips and just never wanting to do it again. And that's due to poor planning quite frankly. So we won we had. 00:17:30 Brandon All these steps lined up and we had the contractor stack and we use a Gantt chart and anybody can go look at a Gantt chart, but imagine you've got all your trades laid out in an Excel sheet from top them. 00:17:42 Brandon And each trade has a designated number of days they're working, and as you go down the list, you make sure you order the trades from start to finish. 00:17:49 Brandon So if the drywall is ending this day, you know that your painter needs to start this day. We've been on the scan chart so we can actually see everything, and we communicate that with the contractors, and we show him like, hey, here's the expectation. 00:18:02 Brandon If you're late, you're going to push everybody else back. And here's what we're trying to do, and we're trying to get him hyped up about it. 00:18:07 Brandon We brought some cameras out and did some fun stuff, fed him every day, did meetings but the next thing we did is. 00:18:13 Brandon We have a print out that shows it's a pack. 00:18:17 Brandon And that packet has every single fixture in the house. It has every single color and where it's going, so the trim color, the wall color, the exterior color it's got, you know the shingle type on there it has, you know the layout, so we use CU. 00:18:33 Brandon Casa is the app that we use and you literally can just go in and scan every wall in the room. 00:18:38 Brandon And it builds out a floor plan so. 00:18:40 Brandon Literally I can give this this. 00:18:43 Brandon Floor plan this guide. This packet to 1/3 grader and the 3rd grader would be able to oh OK. 00:18:51 Brandon The walls are going to be this color. OK, we're going to use this type of spindle on the deck. 00:18:55 Brandon Oh OK, the light in this room is going to look like this so it has everything. It takes time to build these things out, but it's going to save you. 00:19:04 Brandon So much headache when you do because your phone is not going to be ringing every day with the contractor asking you what to do. 00:19:09 Brandon You've communicated it to them in a packet, so between the Gantt chart and scheduling, and having that that design packet built for the contract. 00:19:20 Brandon And then having clear scope of work built out, you know we use an app called FLIP or force that automatically. 00:19:28 Brandon Templates out the scope of work so I don't have to go in when I'm doing a roof and rewrite every single roofing job. 00:19:36 Brandon The scope of work. It's templated out in flip or force, so you literally just delete the lines that you don't want and you go and it's already templated out for every single trade, so you just go in and make the edits. 00:19:48 Brandon And you're, you're pretty much good to go. 00:19:50 Brandon So, so that's. 00:19:51 Brandon That's huge right there. Having a clear scope of work. 00:19:54 Brandon Before you start having your schedule and your Gantt chart, built your contractors contract signed and then having a design packet you can give them. If you do those things and you're currently not, it's going to completely change how you flip houses. 00:20:12 JD So you know that on the surface that sounds a bit daunting, but frankly, with as many flips you've done here now. 00:20:22 JD With your experience, since you've moved to this type of process, how much time do you believe that that that alone has saved you? 00:20:31 JD Doing going through that planning stage before the before the flip. 00:20:36 Brandon I don't even see the houses anymore. 00:20:40 Brandon Yeah, I mean I don't. 00:20:42 Brandon Times relative my time spent using, you know, doing other stuff. You know I'm still busy, but doing other things, bringing value, added stuff into the company. 00:20:49 Brandon You know we're trying to, you know, go into apartment syndication. Do some bigger developments. We're doing a ton of new construction this year. I'm not involved at all in that planning process anymore, because. 00:20:59 Brandon I you know created it, but then I systemized it so that my team can follow it. Every position I've worked, every position in my company, I've answered phones. 00:21:09 Brandon I've managed projects and as I'm doing that position I'm building a guide and I'm documenting out every single task that I do and I'm giving a tutorial on it. 00:21:20 Brandon So when I hire that person for that role, I can then plug them into that guide and they know exactly what to do, and I've done that with every position and I do it with my current position. You know, I'm hopefully going to be hiring a CEO in the near future. 00:21:36 Brandon You know, run most of the operations, and I've got a guide. Every single thing I do is documented and processed and so if you're currently not doing that you need to start doing that because you want to replace yourself and you can't replace yourself until you've systemized what you're currently doing. 00:21:52 JD Wow, that is a lesson right there. I am. 00:21:58 Right? 00:21:59 JD You designing it and going through this process and systemizing it and putting it into some sort of process-oriented. 00:22:07 JD I've been through a. 00:22:09 JD Uh, a number of fix and flips, and if we would have taken the time as you're suggesting early on. 00:22:18 JD Uh, we also have a lot of these systems in places now, but I can't even tell you the amount of time and headaches I would have saved if I would have started right and tried to at least start to establish some sort of framework early on. 00:22:35 JD Because you end up when you find out is when you're getting into fix and flipping that first time you're revisiting the same topics over and over and over with different specialists, you know whether it's the drywall people, the painters, the plumbers, I mean, you're. You might be talking to different people, but you're talking about the same stuff. 00:22:55 JD Over and over and over again. 00:22:57 JD And to have a packet like you're saying is that that is a game-changer in itself, because, like you said, frankly, my expertise is going to be talking to potential sellers trying to find the next opportunity. 00:23:15 JD Spending 30 minutes talking to the painter that they need to use. 00:23:19 JD Agreeable Gray again. 00:23:25 JD No, that that's awesome. So when you're talking to the, do you talk to the sellers directly or do you have a sales team now that does that for you? 00:23:36 Brandon I have a sales. 00:23:37 Brandon Team, but that's what I was do. 00:23:39 Brandon Doing you know a? 00:23:40 Brandon Tip I'd give people often ask. 00:23:43 Brandon Who hire first? 00:23:45 Brandon And I think the correct answers. Who do you hire last? And the people you hire, the person you hired last is whoever is in your position. 00:23:53 Brandon So figure out what you're best at. For me, I was best it sells, so that was the last position. A higher floor 'cause I was really good at it. 00:24:01 Brandon So that's what I recommend people do if you're at the point we need to start hiring. 00:24:06 Brandon Figure out you know who you're most in need of, but make sure you don't hire the. 00:24:09 Brandon Position that's your best dad or the one you enjoy most. Hire that last. 00:24:13 JD Yeah, no, that's a. That's a great lesson to come. In fact, I'd go as far as saying higher up the things you don't like to do first. 00:24:21 JD I mean, it's if you find something miserable. Usually, those are the things that are usually procrastinating on and you keep pushing back to do stuff that you actually do enjoy doing it. 00:24:33 JD But that's that other stuff always eventually catches up to you. Yep. 00:24:38 JD Yeah so. 00:24:41 JD With everything you've learned, now you're doing 40 transactions a year. You pretty much have the same partners as you had from the beginning. Or are you a lone wolf on this? 00:24:54 Brandon Yes, it's same partner from the beginning just worked out really well. I personally hate construction I don't like anything about managing contractors or shopping at Lowe's or into any of that stuff. 00:25:05 Brandon He's really good at it. You know he's he. You know he's helped systemize and scale the construction services. I'm a sales and marketing guy. I enjoy going out finding the deals. 00:25:14 Brandon Managing the sales team and. 00:25:16 Brandon Keeping everybody accountable and creating KPS key performance indicators and holding people accountable to those. I enjoy doing that so we have our strengths and our weaknesses and he's really good at what I'm not and I'm really good at. 00:25:28 Brandon What he's not, so it's been a really good symbiotic relationship. It's kind of crazy. I know how rare that is being in this. 00:25:36 Brandon It isn't so long I see so many partnerships follow up, but it's just been. It's been a huge blessing. I'm so thankful to have him in my life and I'm sure he feels the same way. 00:25:44 JD You know, I, I think one of those things that I've really noticed just in our time together here tonight too is that early on you treated this as a business? 00:25:54 JD Which I think is frankly sadly rare. A lot of people would they? They see this as maybe a side hustle or something that almost a hobby like versus you're talking about processes and systems making everything systematic. 00:26:14 JD And in systems and project management and everything that I think a lot of people don't take a moment to actually treat it as the business that it is. 00:26:27 Brandon Yeah, you have to. You have to. If you don't, it's going to be really tough to make money. Quite frankly, 'cause it's very competitive. You gotta think. 00:26:37 Brandon If you think this is just a hobby and you're competing against people like me, you know people like you. 00:26:43 Brandon You know this is your livelihood, right? You feed your family through this and you take it very seriously. 00:26:49 Brandon So go into something thinking it's just going to be kind of like a side hustle. It's going to be very difficult for you to make it, quite frankly. Can you do it? Yes, absolutely, you know it is. 00:26:58 Brandon Possible, but you're not going to have any kind of consistency. 00:27:01 JD Right? 00:27:01 JD Right, and unfortunately you know you're talking about fix and flipping, and before we started hit the record button. 00:27:08 JD Now I run into a lot of people who have who see, fix and flipping, and it's romanticized through HDTV and the DIY Network and it they do things. It looks like they do it in a weekend in 30 minutes. 00:27:23 JD It's I, I think there's just a lot of misunderstanding. 00:27:28 JD When people jump into this type of thing. 00:27:31 Brandon Yeah, well it's TV, right? So it's that it's designed to entertain you, not give you the facts and the facts or that those people in the TV show or not actually doing the work. 00:27:41 Brandon They get out and they put the hard hat and goggles on and slam a hammer in a wall a couple times and make some holes and make it look like they're doing the work. But you've got a whole crew of contractors behind him. 00:27:51 Brandon That are doing the. 00:27:53 Brandon Work and yeah, a lot of people think it. It's really easy, they can do it. Then they get into work. 00:27:59 Brandon I mean, I don't know which way to swing a hammer. Quite frankly, I'm not very good at construction. That was probably to my advantage because I it forced me to not do the work myself. I was required to go find The Who in order to accomplish that. 00:28:12 JD And it sounds like you majority found those who through that networking. 00:28:17 JD Like you had mentioned before. 00:28:18 Brandon Networking yes. 00:28:23 JD So one last time everybody makes sure you head over to the house by and guys, I look for Brandon Cobb on all the social networks and I warned you what's coming. Was there a question you wished I would have asked you tonight? 00:28:39 Brandon You know what do I wish I had known when I was first starting out? 00:28:44 Brandon Not a bum. 00:28:47 Brandon One into the one. Good thing I did correctly was I went and found a mentor, right? A partner, somebody who already had the knowledge that I was looking for. 00:28:56 Brandon I did that. That was really smart, but I would also warn people you know, I burned through a decent amount of savings while I was doing this in the beginning. Don't use your own money, there are. 00:29:08 Brandon Tons of ways to go raise money for real. 00:29:11 Brandon They start from the very get go with the rule that do not use your own money when starting out you know I use my funds for, you know, like my first flip and you know those can get tide up for a while. 00:29:22 Brandon You need them, then you have unexpected repairs. Go raise the money and the rule is do not use any of your own money in your projects. Make sure you go raise it somewhere else. 00:29:32 Brandon 'cause it's going to save you a lot of time and headache and it's going to teach you how to scale 'cause if you try to use your own funds, you're only going to be able to do so many projects. 00:29:38 Brandon But if you learn how to leverage other peoples money, that's when your business can really take off. When combined with the right systems. 00:29:46 JD Well, I really appreciate your time here tonight and thank you so much again, it's the house buying guys Brandon Cobb. Thank you for being here. 00:29:56 Brandon K, Thanks for having me great talking with you.
33 minutes | Jun 27, 2021
Positive Social Impact to Multifamily Investing with Kent Ritter #246
Kent Ritter is Managing Director with Birge & Held Asset Management, a multifamily private equity firm with over $1.4 billion in asset under management. Kent's skillset as a multifamily operator draws from a successful career as a management consultant and startup owner. Now, he applies this skill set to transform apartment buildings and create modern, affordable housing for America's workforce.Kent's career pivot was driven by a desire to free his time and focus on being a great husband and father to his three kids. Now having found financial freedom through real estate investing, Kent wants to help others do the same. He serves as a thought leader and educator through his podcast, Ritter on Real Estate; monthly networking event, Indianapolis Multifamily Investing Meetup; and his website, kentritter.com, which acts as an informational hub for other investors.We chat about:The positive social impact of multifamily property investingHow to passively invest like a proAchieving financial freedom through alternative investingLeveraging technology to add value in multifamilyThe advantage of buying smaller propertiesThe most effective ways to raise capitalConnect with Kent:Website: https://www.kentritter.com/Instagram: https://www.instagram.com/ritteronrealestate/LinkedIn: https://www.linkedin.com/in/kentritterFacebook: https://www.facebook.com/RitteronRealEstate/As you can already tell we have made some changes and a few more are on the way. If you are interested in what we have planned, head over to Patreon.com/REImastermind, and support the show today. Financial contributions are always appreciated along with a LIKE, SHARE, and REVIEW. It really helps us grow and reach more people with this valuable information. See you next time and tell a friend!LIKE • SHARE • JOIN • REVIEWWebsitePatreonApple PodcastsGoogle PodcastsYouTubeSpotifyStitcherDeezerFacebookTwitterInstagramSUPPORT THE SHOW!Get Exclusive Content on Patreon! • https://www.patreon.com/reimastermindGet $10 and Reduce Your Business Costs by Shopping at AppSumo • https://bit.ly/reiappsumoGet $10 Towards Your First Purchase at Drop • https://drop.com/?referer=3DC729"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - JD---Transcript 00:00:01 JD Hoss We have Kent Ritter on the call. Kent really appreciate your time here today and Kent. We don't really get a lot of opportunity to talk to multifamily investors because a lot of the people that listen to my show are getting into real estate investing for that first time and we spend. 00:00:20 JD A lot of time regarding wholesaling and buying single-family houses and finding those discounted deals, but we need multifamily. Investing is always an aspirational step for a lot of investors that I found. 00:00:35 JD And I really wanted to spend some time on this topic here today. But before we do, Kent has a podcast of his own and I really want everybody to check it out. 00:00:44 JD So definitely check out Ritter on Real Estate and you all can also find him on the web at KentRitter.com. Well, I. 00:00:55 JD Really appreciate your time here, Kent. 00:00:58 Kent Ritter Yeah, no thanks for having me on Jack this is this is awesome. I'm glad to be here today and yeah, you mentioned the podcast and so folks that are aspirational multifamily investors. 00:01:11 Kent I mean, that's really what my podcast is. Is trying to be a resource that I didn't have when I was coming up in multifamily. 00:01:17 Kent To it's all about helping people make better investing decisions so hopefully it can help some people move from aspirational and move into reality, that's. 00:01:27 Kent That's the goal. 00:01:28 JD So how did you get into real estate investing? I know you've landed in multifamily, but usually that's not where people typically start off, so. 00:01:40 JD Where did you start? 00:01:42 Kent Yeah, same with me. I didn't start in multifamily, just real quick background. So I sold a business at the end of 2015 and that really kicked off my real estate journey as I. 00:01:56 Kent And I'm saying OK, what next and where do I? How do I want to come? 00:02:02 Kent You know, continue to build, build wealth and I didn't want to put all the money that I gained into the stock market and have all my eggs sitting in one basket. 00:02:11 Kent So I really looked at different avenues and started out looking at a lot of different investment strategies and really landed on real estate. Saw a lot of value there. 00:02:20 Kent And the first thing I did was I actually started selling houses on contract and you know, creating a note portfolio. 00:02:28 Kent And so I did that because I had a family friend who was executing that strategy. So it's kind of like, you know, I want to learn about real estate. It was, you know. 00:02:40 Kent Hey, well I know this guy is doing something so start talking with him and. 00:02:44 Kent And so that was really the 1st 4A. And you know having a debt portfolio is all well and good and there's a lot of pros to it that the con that I realized was well about a year later. One of those houses that I had the financing on sold and because I had the financing. 00:03:04 Kent So you get the HUD statement, took a look at it that house had doubled in value and I said wow, so this guy just doubled his value. 00:03:13 Kent But all I'm doing is getting my loan paid back. So I said man I want to be on the other side of that. 00:03:17 Kent I want to own these assets and that's when I started looking at. You know instead of debt focusing on equity. 00:03:25 JD Sure, you know one of the things that I think is interesting is that, and I'm going to almost predict what you might answer here, but looking back on it now, do you wish you would have gotten into multifamily sooner? 00:03:39 Kent 100% a 100% yeah I mean I, I fell in love with multifamily when I really started to understand multifamily. 00:03:48 Kent You know, when I so when I was thinking about OK, I want to invest in real estate because I want to diversify right? I don't want all my eggs in one basket. 00:03:58 Kent You know, really. When I first thought, uh, real estate all I had ever been exposed to was kind of the single-family rental landlord that anyone I know that invests in real estate. 00:04:08 Kent That's how they invested in real estate. They owned a single-family or two and they were landlords. So that was all I really knew. So that's what I thought of. 00:04:17 Kent Real estate investing was and then then I learned about, you know, noted note investing and OK. That was a new piece of it, but I still at that point didn't know really about multifamily. I guess I really thought. 00:04:28 Kent That you know who wants these big apartments. Probably big corporations, right? I didn't realize that that you could that a lot of these apartments are owned by individuals or by groups of individuals that pull their money together. 00:04:41 Kent And so when I learned that that was just eye-opening for me, I said, wow, I can go out and purchase these large assets. These what I view on this. 00:04:49 Kent With cash, flowing businesses and there's a lot of reasons in my eyes, why? Why that's better than a single-family approach. 00:04:58 Kent Now don't get me wrong, I have some single families as well. I have some duplexes and things 'cause there's. There's nothing wrong with multiple streams of income, but I just really feel like you can't beat multifamily. 00:05:08 JD What are some of those like misconceptions then? If people are getting into real estate investing that they might. 00:05:17 JD Yeah, I call them misconceptions because I think sometimes people are the under the wrong impression that it takes more to get into real to a multifamily than a single-family home. 00:05:31 Kent Yeah, yeah, I think that you know. I think it just seems more complicated, right? It everything is bigger, right? 00:05:38 Kent And that can be intimidating, I think people are comfortable with a single-family home because a lot of people they live in single-family homes. They've purchased the single-family home they. 00:05:49 Kent Know how the process works. 00:05:51 Kent Right and in reality purchasing a I mean purchasing a 400-unit multifamily property is not all that different than purchasing a single-family home from the fact that you get debt, you know you get debt. You put 20% down or maybe 25 or 30%. 00:06:07 Kent Uhm, you go through a title company for the purchase. You know the actual purchase of signing the paperwork feels very similar. I just think it's probably like me. 00:06:18 Kent There is just kind of this initial intimidation or what I would call limiting beliefs. Perhaps you know I had to overcome a lot of limiting beliefs that I had to be able to think that man who am I to do this right? Who am I? 00:06:33 Kent In two, especially when I started actively syndicating my own deals, which is which means pooling investor money together to go buy something bigger and better than I could individually. 00:06:43 Kent A lot of limiting beliefs like who am I to do this right or can I even achieve this and but I think all those things are. 00:06:52 Kent Are made up. They're all in our mind, right? There's no reason why you can't go out and do what I've done or what others have done and you know, a great steppingstone. 00:07:02 Kent Is exactly what I did. So the way that I got introduced to multifamily investing was as a passive investor. So I started investing in other syndications. 00:07:13 Kent 21 as it as just an investment strategy 'cause they're solid returns, but two really with an eye of knowing I wanted to be an active apartment owner one day, and I think this that would be a great way to kind of understand how the investment works and how the process works. So I went out and I invested in 10 syndications. 00:07:33 Kent With several different operators. 00:07:35 Kent And in 2016, before you know, with an eye that one day I would do it on my own, but really using it, that is kind of my next level of education. 00:07:44 JD How did you go about selecting those syndications? Are there some like lessons learned there, like questions you probably should ask? 00:07:53 Kent Oh yeah, Oh yeah, quite a bit. So it I began with just a crowdfunding just on the Internet and I made my first investments on a crowdfunding. 00:08:05 Kent And one of them went fine and it was 21 went fine. The other one I lost all my money. 00:08:12 Kent It's still my money is still in limbo somewhere because these the sponsor committed fraud and defaulted on his loan. And so the my money is just it's in limbo somewhere as all this still gets sorted out. 00:08:27 Kent Years later, so. 00:08:29 Kent Uh, questions to ask or approaches to take? 00:08:34 Kent I the problem with just going on the Internet and scrolling through deals to find one is that you can't do the due diligence that you really need to do to understand not only the deal, but I think more importantly, the sponsor and who the sponsor is and actually speak with them and understand them and. 00:08:53 Kent And rate them on things like. 00:08:56 Kent You know integrity and values and business savvy and experience. And just so I think I would. I would not invest again and I have not without actually speaking to the sponsor and at least getting to talk with them. At least seeing if we have a rapport. 00:09:16 Kent You know, getting that gut feel. 00:09:19 Kent Uh so, so I think that's that was a big lesson learned for me. So the way that I found that the next group of sponsors was largely through podcasts. 00:09:28 Kent I started listening into a lot of real estate podcasts. I would hear people on the podcast if if I heard something that resonated with me, I'd reach out to him and that was how I found most of them. 00:09:39 JD Sure, sure. 00:09:41 JD So you know one of the things that stood out to me I it's no clue. You know it's no secret here that more times than not when people come on my show the marketing people that are associated with you, they send me over A1 sheet, uh, kind of a little brief description of what we what, what you what. 00:10:01 Use me. 00:10:03 JD Hear about in the podcast and a few other things, but one of the things. It's very rare that something like really stands out and one of the lines from your one-sheet says the passive social impact of multifamily investing. 00:10:19 JD And I wanted to the positive social impact of multifamily investment and that that really stood out to me because I I've rarely seen that type of phrasing in any of this material that sends that sent over. What do you, what is meant by that? 00:10:37 Kent Well, I I think that what we do really does have a positive social impact and what we do is we invest. 00:10:45 Kent So we're investing in workforce housing, which is, you know, B&C class multifamily properties, folks with an income. 00:10:56 Kent And this is typical. There are outliers, but typically I'd say folks with an income in anywhere from 40 to 60,000 a household income right of 40 to 60,000 a year. 00:11:08 Kent So, so typically you know, typically very blue-collar, right, and what we do is we purchase these properties. 00:11:16 Kent And we're fixing them up. 00:11:17 Kent With the goal of really. 00:11:20 Kent Like clean modern, affordable housing and then taking that a step beyond to be able to create communities in these apartments, right? 00:11:29 Kent And turn these into communities and create pride of ownership and just create a place that people really want to live, and that I mean a lot of the problems that that folks have. 00:11:40 Kent Their folks can have the kind of in those demographics, or they just. It's tough to find a good place to live. 00:11:46 Kent You know, it's tough to find a clean place to live. It's tough to find a safe place to live, so I take a lot of pride in being able to create those kinds of communities and give people access to that. 00:11:57 Kent Then and it. You know it's not completely altruistic, we are, you know, seeking a profit and we're seeking return for our investors. 00:12:04 Kent But I think it can be a win because we're coming in. We're improving people apartments, you know we're putting in new appliances. We're creating new amenities. One thing that we do on our properties is we. 00:12:17 Kent Bring in fiber optic Internet to all of our properties across our entire portfolio. We're wiring the property with fiber optic into. 00:12:19 Kent Yes please. 00:12:24 Kent That, and we do that for cheaper than any of the current providers in the market, and I know that because we do market surveys and we. 00:12:33 Kent Uh, we very mindfully undercut the market, you know, so we come in, provide a better product for Internet, let them not have to do with deal with the cable company and we reduce their overall financial burden by lowering their. 00:12:50 Kent Their Internet fees, their monthly Internet charges, but it's a win for us because, you know they were already paying someone for Internet. 00:12:58 Kent Now they're just paying us for Internet, so we shift that revenue to the property. But overall, the financial burden of the resident is lower. 00:13:08 Kent And then. 00:13:09 JD No, I was going to say do you? Do you build them separately then for their Internet or is it something it's just part of their? 00:13:10 Kent How's it going? Yeah, go ahead. 00:13:16 Kent Uh, depending on the location you know there's different. There can be some different rules, but mostly we're billing them separately. Sometimes we do bundle it into the rent and do it all as a package. 00:13:32 Kent But yeah, yeah, I was going to mention I was going to continue to expand on some of the things that we're doing that are cool and some of our more affordable properties were like we've put in community gardens. 00:13:34 JD No, it's what you can do. 00:13:46 Kent We have a residence assistance program where we offer language assistance for folks that have English as a second language. 00:13:54 Kent We have like financial literacy programs that we've offered. We have a BH kids program BHS Birge and held, which is the firm BH Kids program, which. 00:14:05 Kent Gives kids backpacks loaded with school supplies, so just cool things that we can do to give back and it. 00:14:17 Kent It's great because it. I mean it's good. It's good for those people and you know it's good for the overall community. But it's also good for our investors because what we're trying to do. 00:14:27 Kent Is help those people, but in doing that we're creating a more stable tenant base, right? If we can help people with financial literacy and language programs, then we're helping people like, hopefully find and maintain jobs. 00:14:40 Kent Right and also with the gardens. Or creating a sense of community. You know people don't want to. You don't want to trash a community if you like it right. 00:14:49 Kent If you feel a pride of ownership in it, so you know, I think these things could all be win-wins, but I do really think that there is a positive social impact to just creating. 00:15:00 Kent What I call is like clean, affordable housing for America's workforce. 00:15:06 JD So how do you go? 00:15:07 JD About this today. Like when you identify properties, what are your some of your requirements there? 00:15:15 Kent As far as what whatever. 00:15:16 Kent We look for in properties. 00:15:17 JD Yeah, what you look for in properties and how you run those numbers. 00:15:21 Kent Yeah, so we pretty much our bread and butter is going to be class guard like suburban garden-style multifamily properties typically built up. 00:15:38 Kent Typically built-in kind of mid-70s or newer for the most part. You know if we have our preference, we're buying 80s or newer because there was. 00:15:48 Kent You know the those mid-70s were a you know tough, tough time in the US or in recession. 00:15:55 Kent There's some you know building practices kind of slid in some ways I think, and then even into the 80s some of the construction requirements. 00:16:04 Kent And practice this change. Change one of the biggest things being just like PVC pipe for example. You know and implementing that which saves a lot from a drainage standpoint. 00:16:13 Kent Drainage issues, so try to look at 80s and newer from a unit standpoint. We have a 30-unit property. We have a 900 and I think 40 unit. 00:16:24 Kent Property so you know, we're really looking at the full gamut, but kind of that solid workforce housing like I described. Typical incomes in that kind of 40 to $60,000 range, and we focused a lot on. 00:16:39 Kent On that I mean one of the key pieces of our portfolio is looking at the affordability of our rents. 00:16:45 Kent And really, as we're looking at a property looking at what that rent to income ratio is, so it's a critical thing to look at right now. 00:16:53 Kent I mean especially I think in this code environment more than any but looking at. 00:16:58 Kent How much of? 00:16:59 Kent Someone income. Are they paying each month in rent, right? And so HUD tells us that anybody that's paying more than 30% of their income. 00:17:10 Kent Tored rent is rent burdened meaning it's really not sustainable and so we try to buy properties that are in the teens or low 20s and even after improving the property and therefore in increasing rent still being well below that 30% mark to make sure that it's still affordable. 00:17:30 Kent For the folks. 00:17:33 JD So, you know you keep talking about improving these properties like what are some of those outside of adding the Internet? 00:17:39 JD What are some of the other things have you seen that you've been adding or changing? I know you've talked about the community gardens and helping. 00:17:47 JD In doing that, social impact, but it sounds like there must be some actual physical improvements you've found that are pretty common as well. 00:17:56 Kent Absolutely yeah. And that's kind of the bread and butter, but you know the interior and exterior improvements. So, on the interior we are almost universally replacing carpet, at least in the main living areas. With, you know vinyl planks. 00:18:12 Kent Boring, so we're putting in. You know, it kind of looks and feels like a wood product in there. You know, replacing countertops, we will replace cabinets. 00:18:24 Kent Cabinets are the most expensive thing that you can replace, so we like to you know, like to salvage those if they're in good shape. 00:18:31 Kent But you know, lighting, modernizing, lighting, come fall, you know. Faucets and fixtures, hardware on cabinets and things like that, so just making. 00:18:43 Kent Making the apartment more modern, right, bringing it up to modern-day standards. So whether it's a 2-tone paint scheme of Gray walls with white trim versus like a beige kind of cream from, you know the 90s and things like that, but our state standard, really, I mean, flooring almost everywhere. 00:18:46 Right? 00:19:03 Kent And then modernizing light fixtures, painting and things like that go a long way, sure, and then another big thing that we're doing across our portfolio is really to focus on smart technology. 00:19:14 Kent So we're putting smart locks in that folks, you know they can act, they can use their phone to access their lock and their unit. People have really liked that. 00:19:24 Kent And it also helps us with management efficiencies. Be able to control access remotely in the properties so that that's another kind of win. 00:19:32 Kent But this smart technology in some of our higher-end properties. We're also taking it beyond locks and doing smart thermostats lighting. 00:19:41 Kent Blinds all kinds of things really give, uh, a smart home feel sure. 00:19:48 JD No, you know that remote capabilities is something. 00:19:51 JD I mean, we've even started to explore a little bit because I, I mean, I've been even showing properties remotely. Now you know, I don't even have to send anybody. 00:19:59 Kent Yeah, yeah. 00:20:02 JD Anymore food, so when you think some of this stuff that you're talking about, I'm just pointing out that it might sound a little cost prohibitive to some. 00:20:12 JD But when you think about the man-hours and sending somebody there for showings and other things that's there, there's really a savings there. Now, 100% agree. 00:20:22 Kent And smart locks are not that expensive. I mean, they're they can be they range the whole gamut, but the one. 00:20:29 Kent Like the like, the workhorse that we put in in a lot of our properties is about a 200 to $250 lock. 00:20:38 Kent That's Bluetooth enabled, so it communicates to with your phone via Bluetooth. You walk up, put your phone in next to it opens. You can send people one-time codes. 00:20:49 Kent For showings and examples like that, we actually have a full software we use called Tour 24, which is a full self-guided tour. 00:20:57 Kent Uhm, but there's other. I mean, I know there's other tour models where you don't even need a smart lock. You can just have a lockbox that you give people a code to and they go and access the lockbox, get the key and go in so it doesn't have to be cost prohibitive at all. 00:21:17 JD So you know you're talking about the importance of. 00:21:20 JD Uh, creating that that community or that environment. But before we go down that road, I wanted to remind everybody again to head over to your website, Ken Kent Ritter. Com that is RI TT r.com or definitely subscribe to the podcast. 00:21:40 JD Ritter on real estate. 00:21:43 JD With that being said, that one of those things that really intrigues me is creating that community. Do you find that doing that? It's like a long term? Or can you do that in a relatively quick amount of time? 00:21:58 Kent You know, I think it. It's something that you're never finished with, but I think it's something that starts relatively simply and then you can get really creative. 00:22:08 Kent But you can make a huge impact as a new owner by just coming in and starting with outstanding maintenance tickets. So on our properties. 00:22:19 Kent That we take over. I mean, there's always a backlog of maintenance stuff because the owner is selling it and they're like you know what? 00:22:25 Kent So just showing the tenants that we're going to come in, we're going to knock those out. We're gonna get him taken care of. 00:22:30 Kent We're going to take care of you like there's a new sheriff in town, right? Like when or if you put a maintenance ticket in, we're going to get it done and we're going to do it right? We're going to be responsive like that changes the whole environment, and I think like. 00:22:45 Kent Like and it's also just smart business too, because the problem is like if you have folks if your residents are trained. 00:22:53 Kent That, oh if I put a ticket in for a maintenance request like they'll get. They're never going to get to it. 00:23:00 Kent They don't respond, then they're going to stop reporting things, and that's when you're going to end up with issues like a drip under the sink that turns into a giant problem because the resident didn't report it for three months. So I think that. 00:23:14 Kent It's again, it's really important. I think getting in setting that precedent. I think coming in and making some immediate improvements to the property, especially exterior improvements, that everyone can see the new signage. 00:23:27 Kent New landscaping like we just closed on a property like a couple weeks three weeks ago. As of this so early March and you know one of the first things we're doing is we're we had a landscaping crew come out and do all the Bush. 00:23:42 Kent It's a lot of Bush is a lot of trees, very wooded property. Do all the trees, do all the bushes we're bringing in, you know. 00:23:48 Kent Sod and things for to replace grass parts and do all this. So just get the landscaping improved to just show people that we're putting. 00:23:57 Kent Money into the property that we care about the property. I think that that's like step one. That's kind of like you know, that's like baseline. 00:24:04 Kent You've got to do that stuff, and then from there you can start doing, you know events or programs and things offering services. One thing, one thing that we do is we've negotiated a. 00:24:16 Kent A cell phone deal with AT&T to give our residents reduced. 00:24:21 Kent Uh cell phone bills, so it's not something that we like directly profit from, but it's something that we're able to offer and it's just kind of like bulk purchasing, right? But it's just little things that we. 00:24:35 JD No, that's especially interesting that you've. 00:24:39 JD Uhm, those are little incentives that I guess a lot of us probably have never considered negotiating with the cell phone provider just to offer a discount. 00:24:50 JD I mean that there's no cost to you other than, uh, probably a call or two to see if you can arrange something like that, but it could make a pretty significant impact to one of your rent. 00:25:01 Kent Yeah, absolutely. So I think those are things that could differentiate you and it can help you know again, like lower turnover, maintain occupancy, make sure people have pride of ownership and are taking care of the property which ultimately puts more money back. You know in your pocket or your investors pockets as well. 00:25:20 Kent Because although all those things helped the deal work, so yeah, these win-wins, right? I think we keep coming back to that theme or and I think that's what we're trying to create. You know, trying to get creative with it beyond just. 00:25:36 Kent Just rehabbing the interior right 'cause? 00:25:39 Kent Right? 'cause from our business standpoint, that's also one of the riskiest things to do, because the most expensive. 00:25:45 Kent You know, so you're putting this money in hoping for a return. Some of these other things that we're doing. They don't require much money at all. 00:25:53 JD Sure, so you know, going back to something you know, I always like to wrap things up a little bit with like some actionable things that people could actually do. 00:26:04 JD You know, if they're getting into multifamily investing for the first time, whether it's an exercise or some best practices. 00:26:11 JD If they're considering doing real estate investing for that first time and you know syndication, you know getting involved, there is always a great passive option, and I'm sure that you have those options available through your site. Again, again, it's Kent ritter.com, but if they were looking at multifamily. 00:26:31 JD Property today, like what are some of those things that you would suggest or recommend that they? What type of action should they take? 00:26:41 Kent Yeah, that that's really good. So I would say if they if folks are kind of just getting started or interested in it. 00:26:50 Kent Uhm, well you should be just digesting as many books and podcasts on the subject as you can, that that's where I started, and that's kind of the first level. 00:27:01 Kent You know from there if you. If you're like I really want to do this and you're getting a little more serious, well it becomes a lot about networking. At that point it's about building relationships. 00:27:11 Kent With brokers, they're building relationships with property management companies who you want to have help you through the due diligence process. You don't. 00:27:20 Kent You want to know who your property manager is going to be before you buy the property and you want them along with you through the process and then networking it. 00:27:30 Kent If you're not buying on your own, if you're going to pull money together, then networking with other people that you might invest or partner with so that networking is critical and. 00:27:40 Kent And then the other thing I would say is it's really easy nowadays to just get on the brokers lists like go on qq.com or Cushman Wakefield. 00:27:49 Kent You know all the big ones get on their deal lists to get deals sent to you and just practice underwriting and just practice the process of underwriting deals. 00:27:59 Kent Understanding you know what works, what doesn't. Doing you know market rent surveys to know what the competition is doing? 00:28:06 Kent Just practicing all those things because you've got to do it a lot before you get really good at it. 00:28:12 Kent So I think those are some. 00:28:15 Kent Some mediative's. 00:28:15 JD Yeah, no, and those are very important tips and in fact you know if you want to learn how to do some of that stuff. 00:28:23 JD I'm going to direct you direct them all to your podcast and website again because I know you have. 00:28:29 JD You've covered a lot of this far more in detail, and I mean, you're, you're closing in on an probably a year or more of content now on your podcast and there's I think, I think we host when we host these real estate investing podcasts. We have kind of a unique group of listeners because. 00:28:49 JD We do have people that once they find a good podcast in a good fit, they go back and consume all of that other the old content because. 00:28:58 JD It's training material and that's freely available. So again Ritter on real estate and for the podcast or Ken Ritter Kent Ritter com. 00:29:11 JD And I warned you, I was going to end with one glass question. Was there a question you wished I would have asked you today? 00:29:19 Kent Yeah, you know the only other thing that I feel like I wanted to say as you were as we were talking about things that people should be doing or just like maybe things that people should watch out for if it is their first time and they're looking at deals. 00:29:32 Kent Then I mean the two biggest things that are going to burn you from an underwriting standpoint are going to be taxes and insurance because they're both going to be higher than you expect they are, and they're both going to be probably way higher than the brokers telling you they're going to be, so just make sure that as you're looking. 00:29:52 Kent If you're looking to do it yourself, and you're looking at deal. 00:29:55 Kent Rules that yeah, that's networking again. You need a multifamily insurance broker who can give you real quotes. Don't rely on what's in the offering packages and then understanding you know the tax environment you're in. It differs by county, so you've got to do the research to know what how. 00:30:15 Kent You purchasing that property is going to impact the taxes 'cause in some places it means taxes go up right away. 00:30:21 Kent In other places it may not happen for three or four years, so I, but those are the two things I think that'll really get. 00:30:28 JD You know that that last one in particular was a hard lesson learned because. 00:30:33 JD You're absolutely right. You know when that when you're. If you have, uh, if you're buying one of those multi families from an owner who's owned it for. 00:30:41 JD Uh, a generation or more. 00:30:44 JD Right? 00:30:44 JD They're probably paying on the property tax of when they acquired it. 00:30:49 JD And when you. 00:30:49 JD That's right. 00:30:50 JD When you change those hands in depending on the county it, it can change those property tax numbers significantly. 00:30:59 Kent Yeah, I mean it, it can realistically double or tip double or triple the amount that you're going to owe in taxes. 00:31:06 JD So well, I hope people listen to the end on this one because I mean if any lesson was learned, it was probably that that was a pretty significant one. 00:31:16 JD I really appreciate your time. Kent and I hope that maybe you can begin to come back on again and we could actually do like a. 00:31:27 JD Underwriting 101 where we kind of take, a multifamily and just run through the numbers once and so people have a clear understanding of how this is done. 00:31:39 JD Yeah Jack, that's a great idea. I'd be happy to do that. We could walk through one of the deals that we've done. Oh, that would be awesome. So well, I appreciate it again. And we'll talk. 00:31:50 JD To you soon. 00:31:51 Kent Great well thanks for having me on and have a good rest of the day. Yeah you too.
26 minutes | Jun 24, 2021
Every Seller Must Benefit with Darren Smith #245
After serving years in the Army, Darren Smith has spent the last eighteen years as a successful professional real estate investor. He has flipped, rented, and wholesaled hundreds of residential properties, and in recent years has purchased several million dollars’ worth of light industrial properties as long term holds. Darren’s greatest achievement has been to surround himself with an incredible team of industry and military veterans who are every bit as passionate about helping people as he is. His biggest supporters are his wife Lauren and his son Henry.One of the three core values in Darren’s business, Sell My House To Smith, is to act with integrity. One of the ways he does this is to always tell his clients what they truly feel is their best option, even when that option is not working with his team. This applies to people selling properties, investors buying our properties, and their lending partners who earn a return on their money secured by properties.We chat about:Why would someone want to work with your company to sell or buy a home, or to invest their money?What made you choose to purchase light industrial commercial properties instead of multi-family?You told us you have some special ways of making sure your private lender’s money is protected. What is it that you do? How much do your lending partners earn on their money?Connect with Darren:Website: https://www.sellmyhousetosmith.com/Facebook: https://www.facebook.com/SellMyHouseToSmith/reviews/LinkedIn: https://www.linkedin.com/in/darren-smith-73b31016/As you can already tell we have made some changes and a few more are on the way. If you are interested in what we have planned, head over to Patreon.com/REImastermind, and support the show today. Financial contributions are always appreciated along with a LIKE, SHARE, and REVIEW. It really helps us grow and reach more people with this valuable information. See you next time and tell a friend!LIKE • SHARE • JOIN • REVIEWWebsitePatreonApple PodcastsGoogle PodcastsYouTubeSpotifyStitcherDeezerFacebookTwitterInstagramSUPPORT THE SHOW!Get Exclusive Content on Patreon! • https://www.patreon.com/reimastermindGet $10 and Reduce Your Business Costs by Shopping at AppSumo • https://bit.ly/reiappsumoGet $10 Towards Your First Purchase at Drop • https://drop.com/?referer=3DC729"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - JD---Transcript 00:00:00 JD Hoss We have Darren Smith with us here today. Darren is with sellmyhousetosmith.com so make sure you head over to his website and I believe that's also your Facebook handle. 00:00:12 JD But definitely check out. There's a lot of. There's some resources there for people, and I know that you and your team. 00:00:20 JD Put out some pretty entertaining videos out on out on your Facebook here and there. 00:00:27 Darren Smith We try and keep it fun. A little bit of mix of things that are helpful and useful. Information and other. Just fun stuff like me riding on my onewheel or something like that. 00:00:37 JD So you know, I we're going to jump into like quite a few topics here, but I kind of wanted to start with how you started into real estate investing because I know you have a military background and a lot of the people that work with you also are veterans. 00:00:52 Darren Yeah, great question Judy. So I wasn't military back 2007. I'm sorry 1997 to 2003 and when I got out I was working as a government contractor doing the computer field and one of my coworkers who sat next to me was a small-time real estate investor, so he flipped a couple houses, had a couple little 00:01:11 Darren Rentals and that kind of just spawned it right there. I read a couple of books he recommended and shattered him a little bit and that took it from there. 00:01:21 JD Sure, So what did you? What did you jump into first? 00:01:25 Darren The first real estate investment I ever made was a live-in flip, so that was back in 2000. 00:01:30 Darren Three pretty much very soon after I got out of the military, bought it from a bank sale from a real estate broker who was another coworker of mine. 00:01:38 Darren Lived in it for two years and I did quite well as everybody did back then from 2007. 00:01:45 Darren You know roughly 2000, 2003, or 2007. Eight 'cause the market. 00:01:49 Darren Not only what I've done well without it, but probably went up another forty 50,000 on that first flip just from crazy prices. 00:01:55 JD Sure, and then now you seem to go more and more for your rental properties. Anyway. You talk about light industrial? What do you mean by light industrial rentals? 00:02:09 Darren I love the industrial space as a whole, but especially the light industrial and really I specify that because I'm not buying. 00:02:17 Darren If you think of industrial like major like factories, you know lots of people that are doing massive like chemicals or things like that. Really, it's a lot of warehouse space, a lot of light manufacturing. 00:02:29 Darren Maybe they're making furniture. I've 11 building where they used to make plastic parts for automobiles, but again, it's not this heavy. 00:02:40 Darren The you know intensive things where there could be environmental's and other types of assets going on and I love the light industrial sector. 00:02:47 Darren Just your I'm able to scale up significantly and the price and the income of the property with. Also, it's easier to manage so at the same time not only I'm making more money from them, but it's less work once you're into the property. 00:03:00 Darren Now getting into them, it's a heck of a lot harder, and it's a very long process and then kind of another. 00:03:05 Darren You have to almost learn a little bit of another language when you get into the commercial space, but once you have that down, not that I do. You can start picking up things and scale up from there. 00:03:15 JD Sure, well, I probably could be a whole episode in itself talking about light industrial because I you know, that's a topic we haven't really touched on yet, and it's always been pretty intriguing, especially when you mentioned it's not as. 00:03:31 JD Property management heavy. I suppose when you get somebody in there who's making a business out of it, they can they have a longevity. They stick around a lot longer. 00:03:43 Darren They definitely they. You know the turnover is much less frequent. It can be at least five of some of my tenants have been in for 10-15 years. 00:03:52 Darren Not that I've only building, but have been there that long and then the property management on them is significantly easier as well. 00:03:59 Darren You know, once you get somebody in, you have a good property management in place. A lot of times they take care of all the small maintenance. 00:04:04 Darren Items themselves and the other ones you know the main properties will take care of it. I haven't been to some of my buildings in over a year and a half. 00:04:13 JD Sure, well let's go back to sell my house to Smith. Com, one of the things that really stood out to me and that I think is a really a refreshing message that I got right off the bat was that you kind of have a team that lives by a mantra that I think is really interesting and that I think everybody probably should. 00:04:35 JD Take to heart. Every seller must benefit. 00:04:39 Darren That's absolutely right we. 00:04:40 Darren We love that. That was on the back of our business cards for a long time. 00:04:45 Darren And what that really means is that we will absolutely not buy a property if the seller, if we're not putting them in a better place. 00:04:54 Darren You know we always have to make sure that we're looking out for them and their interests and. 00:04:59 Darren We have lost deals because of that. Where we've made less money because we do. We tell every cell. Hey, why don't you listen with a realtor? 00:05:06 Darren Well, if you just did these couple of things you know put a little bit of money in sell it. 00:05:09 Darren You could make more money and one of two things happens. Either they go off and they do that thing we recommend because it is a better option or they'll tell us why that's not a good option for them. 00:05:19 Darren Hey, yes I know I could make more money by doing this way or waiting, but I really need to solve this problem or I need to get to this place and in this amount of time and so I'm willing to give up a little bit of equity in order to make that. 00:05:31 Darren Happened and why? I love that. That whole process and why our team uses that culture is that in the long run I think not only do we help more people with better reputation, but as a byproduct, we make more money because sellers will feel that if you're talking to them and they truly know you have their best interests at heart. 00:05:52 Darren That comes through the conversation and there's a bit more of a trust that you can build at that level so you are able to help them get to that better place. 00:06:00 Darren 'cause that's our job as homebuyers is to help these people and if you can't earn their trust in this very sensitive time and in this complicated decision. 00:06:09 Darren You're never going to be able to get them to our place, and they're going to be. They're going to stay in that house, which is not their best option. And you're doing them a disservice. So that's why we always say every seller must benefit. 00:06:20 JD You're probably spending quite a bit of time with these people to them. 00:06:25 JD It the process of. 00:06:27 Darren Purchasing the property and getting to closing the timeline on that is so much dependent. 00:06:32 Darren On the needs of the seller and then the property itself. We've closed properties in a matter of a couple of days when everything allows it, and then and that is what the seller wants. 00:06:42 Darren And that's from first phone call to by the end of the week. You know we're at the title company changing over, and then they get their check in hand. We've had several properties, in fact, we just closed one. 00:06:53 Darren Last week where it was. 00:06:55 Darren 5-6 months in the close. 00:06:57 Darren And that wasn't 'cause they didn't want to sell quickly, it was because it hadn't. It was in half and half of an inherited property hadn't gone through probate yet. 00:07:05 Darren We've had other ones where you know, liens tracking down the lien holders and all these things, and these are problems that the seller would have to deal with. No matter what. Whoever they're selling to, we just have a lot of experience and we. 00:07:17 Darren More importantly, we have the connections with the attorneys and the title companies that know how to kind of handle all those little niche problems that can really delay things and mess things up. So yeah, the time that we spend with these sellers can be very significant. 00:07:31 Darren Again, depending on what the needs of. 00:07:33 Darren The house are if it's easy. 00:07:35 Darren Yeah, we can get it done very quickly. 00:07:38 JD So you know you were talking about building that trust, then are there any because a lot of the people that you're talking to. 00:07:44 JD They're usually in a rough situation, and many times when you're having these conversations with them, it might be the first time that they've verbalized or vocalized what their problems are. 00:07:57 JD Have you found any? 00:07:59 JD I don't want to call him necessarily strategies, but it ways in which to get earn their trust in it quickly. 00:08:09 Darren The best way that I know how to earn someone trust and we follow our sales training method is with John Martinez. 00:08:17 Darren That's who we use, and it's really to just to make sure you're asking the right questions about their situation and to truly listen to them. You want to learn. 00:08:28 Darren Everything you can about them and their situation and honestly the house and you know the money and like if you're thinking about Oh my gosh I need to buy this house for X number of dollars and you're walking in the door thinking that you're off to a bad start. You need to go in with this open mindness. 00:08:47 Darren Just this ability to listen to someone and truly find out what is their pain and how do I get them to a better place? 00:08:54 Darren And you know what, what's their picture? Perfect look like and just ask those types of questions. It's pain and picture perfect. And then when they answer you. 00:09:04 Darren They don't take that answer and be thinking of your next question or thinking of oh, I know I know how to solve that problem because if they tell you the first time and you're already thinking, oh, I've dealt with that problem on another house. 00:09:14 Darren I know how to fix this and you tell them how to fix it. You're solving the wrong problem. You're not truly listening to them. You need to ask them. 00:09:23 Darren I think I forget what they're called, but they're like sympathetic statements where, just like really, you know, could you tell me a little bit more about that? 00:09:29 Darren Or, you know that that's really interesting that that must be difficult. You know what? What are you really looking to get out of that? 00:09:34 Darren And if you say those kind of things enough times, people will truly start to open up to you. And now you can solve their real problem and get them into the best place. 00:09:42 JD Possible sure, yeah, and if anybody is interested, John has been on our show and. 00:09:50 JD The most recent one was probably it's been a while. I probably better reach out to John again, but episode 87 if you want to check that out. John is a wealth of knowledge when it comes to talking to sellers and in handling situations. 00:10:07 JD And again, just to remind everybody, definitely head over and I. I'm going to push people to your YouTube channel. Is it to sell? 00:10:17 JD Sell my house to Smith on YouTube as well. 00:10:19 Darren That's correct, that's on YouTube, and I haven't been as active out there as I'd like to were a little bit more on Facebook, but I definitely have some good. 00:10:27 Darren Videos out there as well. 00:10:28 JD Sure, so you were you were talking about. 00:10:33 JD Different ways that you handle your private lenders? Like how do you? How do you work with private lenders? When it comes to your real estate investing? 00:10:43 Darren That's a that's a great question, and the reason I say that is I get a lot of people that they asked me like boy, how do you get so many private lenders? 00:10:52 Darren Or how do you have so many people want to lend to you on your properties? Like man, I'd love to get those rates. 00:10:57 Darren How do you get those rates? And it's if you again just like with the seller. If you're going in. 00:11:03 Darren With your thought process is boy, I'm trying to get this much money or I'm trying to get this borrow money at this rate. 00:11:09 Darren You're doing it. You're doing it wrong. You need to go in with that open mind of talking to that person, finding out what their situation is, finding out what their hopes and dreams are for their finances. 00:11:20 Darren Find out you know what. What are they doing with their money now that they like or don't like you know from a risk perspective from a growth perspective from a timeline person. 00:11:29 Darren Active like how long? If they lend you money do they want it back in three months a year when they retire? 00:11:37 Darren Are they looking to keep it out all the time and stay very active or they want to like know what's going on in the project? 00:11:42 Darren You know, maybe they watched a bunch of HDTV and they love to shadow you and see the flip that their money is funding or maybe. 00:11:49 Darren They don't want to when they wire that money over, they don't want to talk to you ever again. They just want to see the financial statements once a year. 00:11:56 Darren And I have both so. 00:11:58 Darren That's the first thing you need to think of when you're trying to raise private capital is. 00:12:02 Darren Think of it from the other person's perspective and again, just like with the seller of the House. 00:12:06 Darren Yes, same thing with the lender. What problem are you solving? How are you helping them get their hopes and dreams? 00:12:12 Darren And then it's building trust in you. So how do you get that person to trust you with their money? 00:12:18 Darren Track records and references are obviously a great thing if you don't have that, then what you need to emphasize is anything you've done in real estate. 00:12:26 Darren At all, you know, just talk about, hey, I've flipped a couple of houses. You know I used my parents money and I paid him back or whatever that may be and then show him how you're going to secure the. 00:12:35 Darren Our money and that could be if you're buying properties at a discount you know. Hey Mr you know Mr Linder, Mrs. Lender, I'm borrowing this money but look how much equity we're gonna have left in this house. 00:12:45 Darren And if something went wrong, you know you have a deed of trust secured to that property. There's this much leftover that if something went wrong, and you know if I got hit by a bus, I always use the hit by another bus. 00:12:55 Darren Analogy, what happens to my money? You're still protected when that house sells. You get paid off and you get that money. I take it a step further as well and I tell. 00:13:04 Darren How all the payments are made? So if I have somebody where it's a flip that's kind of nice and easy, you can walk them through it, secure the deed of trust. 00:13:12 Darren I take them through how that works at the at the first closing and then we sell how they wire in the payoff amounts, and then they get that money wired back if they want it. I have a lot of lenders who lend to me on long-term rentals. 00:13:25 Darren Properties I'm holding for a while and I love that setup because they're getting money all the time. It's not this back and forth. 00:13:33 Darren It's way less work for everybody involved, but they're getting a constant rate of return. You know, month after month, year after year, and they don't do. 00:13:40 Darren Anything and those I set up as automated as possible. All of the payments are done automatically. It's all automatic transfers of the rent money coming in from the property. 00:13:49 Darren The payments going out to their bank account. It automatically goes in if they are somebody who wants to receive payments and then when they get those annual statements where I touch base touch pay them. 00:14:00 Darren No, it's. 00:14:00 Darren Going on, and even if I was to get hit by a bus that will automatically happen and I have all of my systems on I do little loom videos so it's like a screen capture video and that allows me to walk through like logging into my bank account. 00:14:15 Darren How I make how the payments remain, how it's all set up and my wife knows where all of that is. So she's watched them all. She's seen it. 00:14:21 Darren Also, she kinda has that idea so she could even take care of that. You know, should I get hit by that proverbial bus and something happened? 00:14:28 Darren So let's your investors know they're secured. They're taking care of from beginning to end, and that you've done this, and you know you got. You got their back, and their money is. 00:14:38 JD Well, since you brought up your wife like how involved is she in this endeavor? 00:14:44 Darren She is a great counsel to me, but she is not involved in real estate in any way. 00:14:50 JD Sure, no, it's always interesting to talk about the spouse and what did she think of it? When you initially broached the subject. 00:14:58 Darren She thought I was, uh, a bit crazy, not so much for wanting to do real estate, but just the way I went about it. 00:15:07 Darren I think I not think I know I have a bit of a higher risk tolerance than she does. 00:15:11 Darren So I was in computers for about 1718 years at a pretty high level and I overlapped a lot of that with doing real estate as well and coming up on five years ago I got downsized from my last computer job was a remote consultant and I had been in real estate a couple of years. 00:15:31 Darren Kind of back in it after a furlong from getting hurt pretty bad in the last. 00:15:36 Darren Cash and I was making some money. I was doing OK. In fact there was a few months there where I've replaced my computer income. 00:15:43 Darren You know, technically, and I thought I can do this. I don't really need to get another job, and I let's just say I haven't gone back. I haven't got another job, but it took not in a couple months to replace my salary. 00:15:56 Darren And get to a better place, but it took me a couple of years to reach that point, so we're five years in now. 00:16:00 Darren And you know, life is a lot better, but let's just say the way I handled that transition. You want to make sure you have your spouse on board a lot better and I could have been better in communicating with her. 00:16:11 Darren And so anybody out there that's thinking of like quitting their job and saying man, I'm going all into? 00:16:15 Darren This I would say get to a point where you've consistently done that for a year where you've, you know, have that type of income expense. 00:16:23 Darren If you have rentals, that's the best way to do it, because if you're flipping, that's a little hit or miss. 00:16:27 Darren I even if you replace your income, but if you have a rental income coming in now you're at a point where you can safely do that and then also just have that real conversation with your spouse. 00:16:37 Darren Who may or may not be as involved as you to make sure that they're fully on board. 00:16:41 JD Yeah, no, that's great advice and uh. 00:16:45 JD You should learn from Darren experience here if you're. If you're thinking about this, it's that consistency. That is a really big indicator. 00:16:56 JD If you had to get into started all over again, are there anything that you would have done differently? 00:17:04 Darren There is I, besides being a better communicator with my spouse with Lauren, what I would have done was I would have gone. 00:17:14 Darren Uh, I would. 00:17:15 Darren Have gotten more focused to be honest I started flipping, realized buying houses was the tough part in that market and so that was when I transitioned a lot over to wholesaling. 00:17:25 Darren So even still we do about probably 9010 on the wholesaling side versus flipping, but what I would have done was I I tried marketing to the city. 00:17:34 Darren I did every marketing channel. You know, Facebook ads, postcards, band and signs you know, website I. I spent money everywhere you could think of and that that's just a couple and I went wide to I was in two different markets at that time. I was in Pueblo, Co and Colorado Springs, Co. And you know? 00:17:52 Darren Just I, I was all over the place and then I hired really quickly within a year getting started. I hired like three people, which was, you know, good and bad. 00:18:01 Darren I learned a lot through that process and they were good people, but I didn't have my stuff together enough to be able to guide them and run the company. And so if I was giving advice to somebody starting off with, I would say pick. 00:18:12 Darren One you know, focus at least one thing. Either focus in a very small maybe like you like a certain zip code. 00:18:19 Darren Maybe you have an area of a couple thousand houses, you know neighborhood that you really you want to mask. 00:18:24 Darren Sure, and maybe take that step further. I narrow on one marketing channel. I'm going to get really good at direct mail. 00:18:31 Darren I'm going to get my data management down. We use REI sift for our data management and we love it. 00:18:36 Darren And you know, really, just master my data and then that one marking source where I'm hitting the prime targets. Or maybe I'm only going to be. It's going to take a little longer. 00:18:45 Darren I'm going to build my website up and go and get leads that way or Google ads or whatever. 00:18:49 Darren Where it is, and then once you've once you're making money out of that narrow focus, then add one more thing in at a time, add that next marketing channel, or maybe expand your territory a bit more and go from there. 00:19:01 Darren So if I was going to start out to keep my costs down and get become the best I can at one thing, that's what I would do. 00:19:08 JD Sure, let's say you are in a situation where. 00:19:13 JD You're starting out for the first time, you know, wholesaling is, it seems like that's where everybody targets when they first get into real estate investing. What is the most effective way that you've found to market to potential sellers? 00:19:27 Darren Ah, that's a. 00:19:29 JD It's a pretty loaded question, isn't it? 00:19:31 Darren Well, it's a question that every six months I'm I would probably give you a different answer. That's what makes that talk. So we have found at any given time, success in any one of those segments. 00:19:44 Darren I would have to go back to. 00:19:48 Darren Stealing a little bit from my previous answer, where if you could really find those niche people that you want to target. 00:19:55 Darren So instead of sending thousands of postcards of the month, maybe your whole area is 5000, so you want to mail 5000. 00:20:02 Darren Well, some people just say OK, I want to. 00:20:04 Darren Mail ones that. 00:20:05 Darren Have 60% equity or more 40% equity. 00:20:09 Darren Well, you can do that, but that's still a really big number. Take it even further. The best the results you're going to get. 00:20:15 Darren Our people that truly have motivation so dig into like Prop stream where you can find out if they have liens on their property. 00:20:22 Darren Our guys sift tells you if it's a vacant property, absentee owner, and then take those and you can. 00:20:29 Darren You can set the number like whatever your budget is that you want to mail to based on how many things you want to stack. 00:20:35 Darren So you're like, hey, I can afford to send, you know, 300 letters per month there. Or maybe I'm going to hand write them or whatever. 00:20:42 Darren Then just stack a couple more things on so you're getting the most niche and the most targeted you possibly can. That's we're going to find the most motivation. 00:20:50 Darren You know your budget grows a little bit. Maybe adding one more thing that you can do now instead of maybe just doing liens and tax liens and federal liens. 00:20:59 Darren Now you're adding in divorce properties or vacant or whatever, whatever the scenario might be, so that's where you're really going to find the best bang for your buck. And honestly, we've in our company. 00:21:10 Darren We have narrowed down to that in some way where we have we're not doing as wide. We're doing a little bit more targeted marketing for some of our more expensive forms of marketing. 00:21:19 JD Sure, have you found any way to stand out? Like if you're doing direct mail like you're in a market Colorado Springs, I'm sure it's pretty competitive. 00:21:29 JD Have you found a way to stand out from all the other postcards people are getting? 00:21:36 Darren It's also a tricky question answer because you can really stand out if you know bold colors, neon pink and things like that. 00:21:42 Darren People are going to see you and you may get your phone ringing off the hook. If you say like third notice and something a little more flagrant so you get calls and you notice, but that may not be what you're looking for. 00:21:54 Darren It's a little bit of a tradeoff in whether you want to go as cheap as possible, so you're hitting the people when they the most frequency of time which we have found to be a little bit to be more effective. 00:22:07 Darren Or you can go more expensive, but now you're hitting with something a little more custom. There's mailers out there. 00:22:14 Darren They'll have like handwritten addresses on them, and an actual stamp on it, not like a not the bulk mail type stuff. It can cost, you know, considerably more to do those types of things. 00:22:24 Darren So if you're saying, hey, I'm going super niche. I mean maybe a little bit bigger budget, but you have, let's say 10% of your mail you do that month. 00:22:32 Darren Is this very niche thing? Maybe those you step up to a hand addressed envelope with a stamp and then the 90% your mailing you do the 35%. You know 40 sent postcards that look like everybody else is? 00:22:44 Darren That way you're getting both the bulk as well as the targeted as well. 00:22:47 Darren But you can stand out. You just gotta make sure you stand out for the right thing and I'll, I'll add one more thing on there. 00:22:53 Darren I mailed to light industrial properties or industrial properties in my area, but it's a very small list, at least small. From my standards it's a couple 1000 in South Central and southeastern Pennsylvania. I actually I have. 00:23:07 Darren It's hand-addressed stamp on it handwritten letter. They use an actual pen to do it and then we get a mail to my house and I put my business card in them so my business card costs $0.40 even in bulk. It's you know, so it's a very expensive mailing to do. 00:23:22 Darren This but the call rate is phenomenal. I literally have a lot of people that call me to say, hey, you know, thank you for your letter. 00:23:29 Darren I got your letter. You know we're actually not selling at this time, but you know, appreciate your interest. So it's to that point where people think, like, think. 00:23:35 Darren You're actually just writing them, which is exactly what I want. I want that personal touch, but for houses I wouldn't go that far. I think for most. 00:23:42 Darren Of them that I would say cheaper and hit them more frequently would be the side that I would air on for somebody starting out. 00:23:48 JD Sure so well I like. I said it looks like you and I could probably chat more and more and I if you're open to it I'd like to have you back on just to talk about the light industrial. 00:24:01 JD Uh, and how you run those numbers and I'm sure there's a lot of detail that we could really go down regarding that type of an investment. 00:24:11 JD But if you're looking For more information from Darren, head over to sell my house to smith.com and. 00:24:18 JD Before we wrap up my last question is, is there a question you wished I would have asked you today? 00:24:27 Darren You know I'm drawing blanket. You caught me on that one. So I think we had a great conversation. Thanks for your time, Judy. 00:24:33 JD I really appreciate your time and this has been a great conversation and I hope we can chat about that light industrial. 00:24:41 JD Investing some time. 00:24:42 Would love to.
28 minutes | Jun 20, 2021
How To Establish Business Credit with Mike Banks #244
Mike Banks joins JD to chat about how Fund&Grow could possibly help you fund your next deal through the use of unsecured business credit. Since 2007, Fund&Grow has helped tens of thousands of business owners and real estate investors across America get access to the funding they need and deserve.They have helped their clients quickly get access to $30,000… $50,000… $100,000… even up to $250,000 in 0% interest unsecured business credit, allowing them to achieve their goals – whether it be through investing in real estate or starting and growing their business.They have acquired over $1 Billion in Business funding — with clients ranging in all types of industries -- from Real Estate Investors, ecommerce Store Owners, Doctors, Lawyers, Truck Drivers, Online Marketers, Local Businesses, Gyms, and the list goes on.Some accolades we’ve earned along the way include a A+ Rating from BBB, being featured in Business Insider, landing on the Inc 5000 for 5 years in a row, growing an incredible team 50+ strong, and having over 2,200+ 5-star reviews.They’re on a mission to empower entrepreneurs and Real Estate investors by helping them utilize the smartest form of funding — low-interest, unsecured business credit.Connect with the Fun&Grow team:Website: https://www.fundandgrow.com/jdhossFacebook: https://www.facebook.com/FundAndGrowTwitter: https://twitter.com/fundandgrowAs you can already tell we have made some changes and a few more are on the way. If you are interested in what we have planned, head over to Patreon.com/REImastermind, and support the show today. Financial contributions are always appreciated along with a LIKE, SHARE, and REVIEW. It really helps us grow and reach more people with this valuable information. See you next time and tell a friend!LIKE • SHARE • JOIN • REVIEWWebsitePatreonApple PodcastsGoogle PodcastsYouTubeSpotifyStitcherDeezerFacebookTwitterInstagramSUPPORT THE SHOW!Get Exclusive Content on Patreon! • https://www.patreon.com/reimastermindGet $10 and Reduce Your Business Costs by Shopping at AppSumo • https://bit.ly/reiappsumoGet $10 Towards Your First Purchase at Drop • https://drop.com/?referer=3DC729"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - JD---Transcript00:00:01 JD Hoss We have Mike Banks on the call Mike. Appreciate your time and Mike is worth a company called Fund&Grow. 00:00:07 JD If you haven't heard of Fund&Grow yet, you're probably living under a rock because Fund&Grow. Been around for quite a while. I want to see till since 2007, but you can find them at https://www.fundandgrow.com/jdhoss00:00:23 JD But in a nutshell, Fund&Grow helps entrepreneurs and real estate investment investors find unsecured credit so they can do anything from rehabbing houses to buying rental property and I know Mike's gonna share some of those stories with us today because they also have a YouTube channel. 00:00:44 JD Is that it's called just Fund&Grow as. 00:00:47 Mike Banks Yep, yeah I wanted to mention if people want to check us out, they can of course go to our regular website, but if they go through your link, they'll be able to lock in a $500 discount that they won't see at our website, so I don't know if you want to include that link in the description, but. 00:01:03 Mike We can set that up even. 00:01:04 JD Yeah, that'd be great. So what? What do you think that link will be? 00:01:08 Mike Well, we can make it your URL and have it forward to the opt in form on our website. 00:01:15 JD Sure I'll, I'll put those links in the show notes after the fact, but yeah, make sure you take advantage of that. $500 discount is pretty sizable. 00:01:26 JD So let's start things off. I know you just started this YouTube channel and it sounds pretty interesting because you're interviewing some of the people that you're helping. 00:01:36 Mike Yeah, absolutely yeah, we actually grown already to 11,000 subscribers and we really just started putting the magnifying glass on it and focusing on it over the last year and a half. 00:01:47 Mike We're also doing a monthly giveaway, which is pretty cool. We're giving away two of our memberships, so that's over $8000 and free service. 00:01:56 Mike We're doing that every month, this year, randomly picking the winner. So if you guys are interested in that, you should definitely check out the channel and figure out you know. Watch the video and understand how to enter the giveaway. 00:02:08 Mike OK, but yeah, we're growing steadily. We've got a team of 60 employees here in Spring Hill, FL, and we've established over a billion dollars in funding. 00:02:18 Mike We've got over 2400 positive reviews and we do about 12 to 15 million every month in the funding that we originate for our clients. 00:02:28 JD Sure, so for those people that aren't familiar with your service, could you kind of explain to us a little bit about how this this all work? 00:02:38 Mike Yeah, absolutely. So we're done for you service. We have a 12-month membership and in that membership we will apply and establish business credit for our clients. 00:02:48 Mike We do it three different times and build you up to a quarter $1,000,000. The way that works is we submit all the applications we submit about 2000 applications every. 00:02:57 Mike Every month and then we follow up. We make sure that you're getting approved for the maximum amount possible, because a lot of times the computer will just systematically deny you or you'll get some response that really isn't relevant because it's all done through the algorithm and a human being hasn't reviewed it. So that's where we come in. We make sure that the decision maker. 00:03:17 Mike The underwriter at the bank is actually reviewing your application. 00:03:21 Mike Because a lot of times you could have a 750 credit score and you go and apply for business credit on your own and you'll get shot down. 00:03:28 Mike So we've learned over the years over 12 years of doing this that we have to have it root. Each application has to be reviewed by a human being, and that usually brings in 70% more funding. So basically you guys. 00:03:40 Mike We'll work with us and then we'll go, and we'll set up the accounts. The business credit account. 00:03:46 Mike It's on your behalf and within the first three to four weeks. Clients are usually getting up to $100,000 depending on where they're at, 'cause if it is all based on your credit score and your credit history. 00:03:57 Mike Even though the business credit doesn't show up on your personal credit report, that's a big benefit, because when you spend money on your personal credit, your scores are going to fluctuate. 00:04:06 Mike Up and down you pay them off. They go back up, you put debt on your personal cards, the scores go back down that's why it's so important to use business credit because business credit does not appear on your personal credit report. 00:04:18 Mike So if you're doing a flip, or you're buying a rental property and you bought it for, let's say it's $70,000. 00:04:24 Mike That debt will not be appearing on your personal credit report. So now you've got that property. You can get it rehabbed. 00:04:30 Mike You can place a tenant and once you do that you get it appraised and now you go back to the bank and you do a cash out refinance and get a mortgage on that property. 00:04:38 Mike They're looking at your personal credit. Your personal credit is going to look great. There's going to be no debt on it, so you're going to get that cash out refinance. 00:04:44 Mike So much more easily, and I've interviewed countless clients on our channel, there's a whole playlist of those interv. 00:04:50 Mike You know one guy bought his first six investment properties and they're all buying holds and he's already cashed out. 00:04:57 Mike Refinanced on those properties, bought them all as a cash buyer because with these credit accounts you can use them and send a wire from the account to the title company and now you're closing as an actual cash buyer and that's. 00:05:10 Mike That's by using our partner, who will basically charge the card and then send the wire for you. They charge 2.85%, so it's a great and affordable resource. 00:05:22 Mike It's, you know, it costs you. What $2800 if you're doing $100,000 deal, but that's just to send the money. 00:05:29 Mike As far as interest goes, there's zero interest. All of the accounts we apply for 0 interest for an average of 12 months, so you can get a lot done in that time, and I've had clients tell me they bought 3 properties. 00:05:40 Mike One guy told me about six another guy I interviewed told me he renovated 8 properties with the funding. We got them, so that's what a lot of our clients. 00:05:49 Mike Doing some clients are using it for marketing, but a lot of our clients are using it to help fund the entire deal or just fund part of the deal. 00:05:56 JD Sure, so you mentioned cards. Are these primarily credit cards or are there lines of credit available as well? 00:06:03 Mike Yeah, so these are business credit cards. They come with zero interest for after 12 months and they don't show up on your personal report. 00:06:10 Mike There's no line of credit that we can get at 0 interest and with a line of credit there's a lot more hoops to jump through. 00:06:17 Mike It's not as easy to get approved for. You're going to have to provide financials with business credit cards. You don't have to provide financials. 00:06:24 Mike There's no tax returns or proof of income required. Its stated income, and it's all really the main qualifier. 00:06:30 Mike Is your credit score so if you've got about a 720 credit score, you've got a couple of major bank credit cards that are open that aren't maxed out. You want to be around 30% of the debt to credit ratio. 00:06:41 Mike If that's where you're at, you're going to be qualifying for anywhere from like 30,000 all the way to 100,000. 00:06:48 Mike It depends on how strong your credit. So for example, if you've only got $1000 credit card right now, that's not a strong foundation. But if you have two credit cards and one of them 10,001 runs 20,000. 00:07:00 Mike That's a stronger profile, and that profile will produce the higher end results. So yeah, a lot of people are like, wait, this is just credit cards. 00:07:09 Mike And if that's true, but there are business credit cards, and if you don't have business credit cards, you should. 00:07:14 Mike You should look into it if you, especially if you're doing real estate deals. I know personally when I was doing my first couple deals I was using my personal credit and I was watching it go up and down and I was feeling that pain knowing that I was kind of overextending myself and now I have business. 00:07:29 Mike Credit, and now I have way more confidence, way more comfort when I'm spending money in my business because I know that it's not going to bring my personal scores down. So when I go and do a cash out refinance, I won't have an issue whatsoever. 00:07:42 JD Here, so in the end you are an advocate on the on your members benefit talking to these financial institutions to get the best deal for them. 00:07:53 Mike Yeah, 'cause a lot of times they'll shoot you down even with 750 credit scores. The matter of fact I just had a YouTube comment the other day I screenshotted it 'cause I talked about this on the web and all the time that people with seven 50s or even really strong credit they aren't getting approved and if they are getting approved they're only getting like 2005 thousand deaths. 00:08:13 Mike Start because that's just the way it works. They don't review it, and a human being doesn't review it, and it's really not until you push and request them to review it and request for an increase. 00:08:24 Mike For example, if you have a 10 or $20,000 personal card, you should be getting that on your business credit as well, but a lot of times you won't. Even if you have strong credit. 00:08:33 Mike They will shoot you down. They make it really difficult right? They don't just want, they don't make it as easy with business credit as they do with personal. 00:08:40 Mike So yeah, we are like an advocate. We speak directly every single day we're speaking with the under writers at all the banks that we work with and our team here is incentivized to get our clients approved and to get them increases. 00:08:53 Mike So you know you've got a team of people in your corner that are pushing to get you approved for the maximum amount possible, and that really goes a long way. 00:09:01 Mike Having our team incentivized based on the each every $1000 that they get increased, they get a Commission based on that and they also get Commission or bonus points. 00:09:13 Mike If they get positive reviews from. 00:09:15 Mike Clients, so everything here is geared towards incentivizing immediate service and incentivizing quality and efficient service. That's why we have the reputation we have. 00:09:26 Mike That's why you know our clients are happy with us because everything that we do here is geared around integrity and delivering service as we. 00:09:35 Mike Set the expectation upfront. 00:09:37 JD Sure, so just to remind everybody, definitely check out the YouTube channel. Look for funding. Grow 11,000 in a short time. That's pretty impressive. So you better. I'm sure there's some great stories and information there. 00:09:53 JD And then we'll have some links in the show notes to direct you to that $500 off of the membership offer. So let's talk about the membership, the outside of the helping them helping you advocate. 00:10:07 JD For the for the applicants behalf, are there some additional member benefits with that membership? You already talked about webinar are there is some. 00:10:18 Mike Yeah, so the webinar is like our educational upfront tool that we would use to to get people informed about the service and informed about how great business credit is. 00:10:29 Mike So in the web and R we break all that stuff down and then we can. Even if you want we can add a link for the webinar if people want more information after they watch this. 00:10:36 JD Oh sure. 00:10:38 Mike And but through the membership, here's how it works. It's a 12 month membership. They get a 60 day refund period, so we're getting people credit within 30 days, so you get 60 days to make sure that it's all good and you're comfortable. 00:10:55 Mike Uh, we do three rounds of funding throughout the 12 months. We also set up an entity for people if they don't have an entity that's included in our fee, there's no back end fee. 00:11:06 Mike We have a one time, either an upfront payment or you can split it up into two payments or three payments and then through the membership. We're also going to help you. 00:11:16 Mike Remove the inquiries. So sometimes people get hung up about the inquiries right? So when you go and apply for me, I'm going to get inquiries on my credit report, right? That's going to affect my crap. 00:11:25 Mike Right, not really. There are two points each, and in order to get approved for business credit you have to apply. 00:11:31 Mike So you're going to have to get that inquiry, and those inquiries don't even come close to comparing to 50,000 or 100,000 in business credit. So we also show our clients how to remove those inquiries. So after we do our round. 00:11:46 Mike The funding then we show you how to remove those inquiries and we can also do it for you as well. 00:11:51 Mike We charge like $250 to have our partner, Kaden credit help do the inquiry. Removal side of it 'cause a lot of people don't want to be bothered with that and you know they just got like 50 grand so they're like alright yeah, let's just have Kaden do it so I don't have to waste my time with. 00:12:06 Mike But the cool thing is, is that those inquiries won't even hold much weight after 120 days. 00:12:11 Mike So we set up an entity we apply, we negotiate, and we make sure you get approved the maximum amount possible, and then we do the ink removal process and then about five to six months after the first round of funding is done. Six months into the membership, we're going to do the 2nd. 00:12:26 Mike Round of funding and then repeat that same process and then towards the end of the membership around month 12. 00:12:31 Mike We're going to do the last the third round of funding. Our goal is to build you up to and over a quarter $1,000,000. 00:12:38 Mike In 0 interest business credit we also show you and we don't show you. We tell you and we teach you exactly what you need to do in order to qualify. 00:12:47 Mike So you're going to know exactly what you need to do before we apply what we do. What you need to do while we're applying and you're going to learn what to do after we apply so that you can continue to maximize. 00:12:58 Mike The amount you get and so that you can carry it on for many years to come. A lot of clients want to sign up with us for a second or third year of service. 00:13:06 Mike But through working with us, you kind of get the idea of what we're doing and a lot of people kind of just run with it after that first 12 months. Because what's cool is you can continue this process. 00:13:16 Mike You can, you know you can always close down an old account or you can merge the old account with the new account so that you can continue to get 0 interest for many years. 00:13:26 Mike And it doesn't just have to be that first initial round. You can continue to repeat the process. Matter of fact, one of my clients, who I've interviewed some people listening, might have heard of him 'cause he's starting to get more exposure 'cause he's putting out a. 00:13:39 Mike Course Nick Perry. I don't know if you've known nick at all, but he went through our process. He went to our program his first year. 00:13:46 Mike He had like 270,000. Now he's over 500,000. He's been working with us for probably 2 1/2 years now and he I interviewed him and he told me point blank Mike, if it wasn't for Fund&Grow I wouldn't have been able to 10X. 00:13:59 Mike My business he went from doing 40,000 a month and now doing 400,000 a month. 00:14:04 Mike And he's using the credit to primarily cover his pay per click marketing budget every month, and it's allowed him to continue to grow. 00:14:12 Mike And I'm sure he's using it for other real estate related items as well, but you know, there's a lot of interviews like that on our funding growth channel of people basically telling me that they're very grateful and how it's you know, changed there. 00:14:24 Mike Business, so yeah, there's a lot of good free information on the channel. I kind of lost track of where I was going with that. 00:14:33 JD But no, that that that that was all great. 00:14:38 JD With that being said, you mentioned that you'll even help them. People establish an entity, so this can even be for people who are just starting out, getting a new business under started. 00:14:51 Mike Yeah, exactly because it's all really credit based, like the main qualifier is your credit and let's just say I'm working at. 00:14:59 Mike You know McDonald's right now and I don't have any other business going on, but I decide you know what I want to get a side also going. 00:15:07 Mike I I want to maybe I want to start buying cars and flipping them or whatever the side hustle is. 00:15:12 Mike There's no where, there's no way that says I can't get business credit even though I don't have an existing business with 510 years of history, because business credit is 4 people with side hustles, it's four people that are entrepreneurs. It's four season. 00:15:27 Mike Investors and business owners. So if you don't have a business yet, it doesn't matter. The only thing that matters is your credit. 00:15:33 Mike So if you qualify now, you can get credit and then you can start doing real estate deals or you can you know you could start wholesaling and have a marketing budget now because you have. 00:15:42 Mike Credit the only thing you would need to do is set up a sole proprietorship. That's the easiest way for someone who doesn't already have an LLC or a business that's operating. 00:15:52 Mike That's the easiest way to go about it. And when you use a sole proprietorship, there's actually less hoops to jump through. There's less verification documentation required because it's a simpler form. 00:16:03 Mike Of an entity, it's it's just your base form of getting a tax ID. That's all you need. Is the tax ID. 00:16:08 Mike Once you have that now the business credit will report to the tax ID and it will not show up on your credit report and it won't show on your on your Social Security number. 00:16:19 Mike So startups and seasoned investors can benefit for sure. 00:16:22 JD So it sounds like, especially at first it's very personal. 00:16:29 JD Credit based so who is, uh, who is a good candidate for this and who might need a little help or a little work before they come to you? 00:16:40 Mike Yeah, so it is credit based, so 720 scores are not. 00:16:45 Mike You want to have a couple major bank credit cards open, not just store credit when we're looking at major banks like Bank of America, Chase, etc. 00:16:52 Mike So you want to have a couple major bank cards open that you didn't just open. You know two months ago you don't want to have. So two years roughly or more of credit history, you want your debt to be around. 00:17:05 Mike 30% on those major cards on all your cards. Really. You want to be at about 30%. You don't want to have one card maxed out and then have three other cards with no balance. You'd rather balance transfer that out. Keep it balance of 30%. 00:17:20 Mike And then as far as new accounts go, if somebody you know has one new account, new credit card account in the last six months, that's not that big of a deal. 00:17:27 Mike But if you got like two or three that you just opened in the last, you know two to six months, then we would want to let those season for six months before going and applying again, because you can't just. 00:17:39 Mike Apply every month and keep applying you've got to give time in between for those accounts to season so that the banks can see positive payment history and then after that seasoning time is done then you can apply for. 00:17:51 Mike More credit, so that's where we're talking. We say new accounts. No, we don't want too many new accounts. One new account? That's fine. 00:17:57 Mike In the last six months now then, there's also derogatory or delinquent accounts. We don't really want any of those on your report. 00:18:03 Mike We don't want charge offs. We don't want late payments collections if there's just like one late payment from like six years ago, something super minor. 00:18:11 Mike Not a big deal, but if you've got a bankruptcy on your report, we're going to want our partner, Kaden credit help to get that stuff removed before we apply. 00:18:19 Mike Because we're not just trying to push people through and you know not pay attention to what we're doing, so we're looking at everything with a fine tooth comb. We're looking at your credit report line by line before we move you forward. 00:18:29 Mike Applications and we're not scared to tell our clients. Hey look, we really think you need. We need to do credit repair or hey, we need to get these cards paid down. 00:18:37 Mike You're at 70% on two of your cards. Let's bring it down to 30. Can we do that before we apply? 00:18:42 Mike Because if we apply and we don't get you good results, we're going to look like the idiots and we don't want to do that. So we are always very upfront with people. 00:18:50 Mike And that's why we give that 60 day refund period. So that, yeah, that's pretty much that's pretty much the qualification in a nutshell. And so if you're if you're around like. 00:19:03 Mike And if you've got ten $20,000 personal credit cards, you'll be on the higher end of the amounts you receive. 00:19:09 Mike But if you've only got like a $1000 and a $5000 card, then you have a limited credit profile. 00:19:15 Mike So if you've only got like a a limited credit profile, and in some cases we would even want to apply for personal for you. 00:19:23 Mike Because you might not have a strong enough foundation to get substantial approvals with business. 00:19:28 Mike Credit, so we're very upfront. We talk all about that on our educational webinar and then as soon as people call in or they speak with someone here, they will hear the exact same things from everybody because we're all you know on the same page when it comes to qualifying. So our sales team to our processing team, you know they're all giving those same exact qualifications out. 00:19:49 Mike And that's just the way it is. You know, we know the banks criteria. We submit 2000 applications a month. 00:19:54 Mike We know exactly what they're looking for, so we don't want to waste anyone's time and just push them through and see what sticks. 00:20:01 Mike You know we want to know you know what they're going to get before we apply. We actually have a whole pre-qualification system to where you can fill out the form and then immediately it'll respond and tell you what you pre-qualify for and we usually do that. 00:20:14 Mike After someone becomes a client and we we're reviewing the report, we'll do that. Soft credit pull will analyze the report and then we'll let them know where they stand before we apply so that they can say, hey, I don't really want to do this if I'm going to get 20,000. 00:20:28 Mike You know and then we'll say alright, then we should apply it. Let's wait till you do those pay downs or whatever. So that's just kind of how, how the qualification side of things works. 00:20:38 JD Sure, so you mentioned having some partners. It's it sounds like even if they don't qualify now, you can probably point them in the right direction to get them there. 00:20:49 Mike Yeah, we have a partner who's Kaden. Credit help. We've been working with them for like 10 years now. It's actually our company, separate companies, same owners, but we have to have separate because they're doing credit repair and we're doing, you know, credit service credit consulting. So yeah they do. They do a great job. I'll just give you the disclaimer. 00:21:09 Mike Right now credit repair does not happen overnight, and if anyone promising you 3045 day guarantee removals somethings up with that. So I I would be, you know, a little sketchy about that but. 00:21:21 Mike Yeah, I've seen Kate in the new bankruptcies and everything under the sun. It just takes time. Sometimes it takes multiple disputes cycles, which means multiple months of credit repair. 00:21:32 Mike So we have Kaden, who's that partner. And then we also work with the partner who helps us send a wire transfer. 00:21:40 Mike Those partners are plastic with aq.com and melio. What they'll do is they'll charge your credit card. You'll then add a paid to account within. 00:21:51 Mike The the registration and within your plastic account. 00:21:55 Mike You'll add the pay to account that, and then you tell them how much you want to send to that that contractor, and then they will send the wire to the contractor or to the title company or to the place of business, and then they'll charge you 2.85% for let's say 100 Grand 100 grand. That's 2800 bucks. 00:22:16 Mike But if you use, if you use this credit to buy a house or something like that, something big or like Nick Perry every month he's spending like 50 grand a month in marketing. 00:22:24 Mike Guess what you're getting back? Rewards points. Free cash back so every month, every couple months you're getting a couple grand back. 00:22:31 Mike If you're spending big like that, so even though it's going to cost you $2800 to send the wire, you're going to get that money back in the cash back rewards because you're spending such a big amount. So I and I've had that feedback from clients. 00:22:44 Mike Like if you guys go, you'll see everything I'm saying you'll line up with what my clients say on the interviews and you know it basically pays for itself the service kind of pays for itself through those rewards. 00:22:55 JD So you mentioned being able to. 00:23:00 JD Make these payments with these credit cards, but is there like typically what is the payment cycle? I mean, even though it's 0% interest, some of these would have like still have a minimum payment on a monthly basis, right? 00:23:14 JD I don't want people to think that they can just cash out and ride it until their project is done. 00:23:20 Mike Right, yeah, they still have to make at least a minimum monthly payment of 1% of the balance. So let's say you just bought a house and you're 50 grand right now in debt, you have 50 grand in balances on the business credit cards, even though it doesn't show up on your personal credit report, you got to make the payment and that payment is 1%. 00:23:40 Mike That would be 500 bucks towards that $50,000 balance. But guess what, every month the balance goes down because there's no interest for 12 months. So ideally we want to get them paid off within, you know 12 months for sure. So if you're doing a. 00:23:56 Mike Flip that won't be a problem at all, right? But if you're doing a a buy and hold like a rental property turnkey, whatever it is, you'll buy the property with the credit. 00:24:06 Mike Now, let's say you've got 60 grand or whatever it is sitting on the business credit make that minimum monthly payment of 1% of the balance. But you're not going to do that forever. The idea here is short term. 00:24:17 Mike Cash type financing. That's what this is all about. So once you got the property you bought it as a cash buyer. 00:24:22 Mike You negotiated the best deals a cash buyer. Now, if you're doing a buy and hold, get it renovated, place a tenant, get it appraised and get it cashed out. Get your roof. I get your mortgage on the property. Get that money back. Pay the cards off. 00:24:36 Mike Do it again now. If you're doing a flip, you just, you know. Obviously, that's you. Just buy it as a cash buyer. 00:24:42 Mike You can let the property sit for a few months while you're getting the project done, paying your minimum monthly payment on the business credit, and then once the renovations done, get it listed. 00:24:52 Mike It will be sold in a day right now at this market, so you won't have much time to wait. 00:24:56 Mike And you get. Then you can pay your cards off and then do another one. 00:24:59 JD Sure, yeah, no. I we talk repeatedly about knowing your numbers and this is going to be part of, you know, holding this property during the rehab period or what have you. 00:25:11 JD So just make sure that you have those numbers in place, but I guess we're kind of coming to the end of our time here together, but I always. 00:25:19 JD End with if there was a question you wished, I would have asked you here today is. 00:25:23 JD There anything else we might we might have missed? 00:25:29 Mike No, I don't think so. I think we covered oh, one thing I haven't mentioned. One of the bonuses that we give away when we do like a webinar or podcast is we allow people to add their spouse, business partner, family members, someone that they know that they're close with. So if they did sign up with us, they'll get a 5. 00:25:50 Mike Our discount and they'll be able to add another member on for free, and we'll apply for both members and get them double the amount of funding. So it's basically a buy one. Get one free. 00:26:00 Mike That's one of the bonuses that we that we give out, so it allows you to get double the amount of funding, but other than that. 00:26:09 Mike I don't think. 00:26:11 Mike We missed anything. Yeah, I think we covered pretty much pretty much everything. 00:26:14 JD OK, well I really appreciate your time today again, just definitely check out the YouTube channel our Fund&Grow https://www.fundandgrow.com/jdhoss, but I'll also have a referral link in the show notes so you can take advantage of the $500 off and getting the second person. 00:26:34 JD Mike, this has been a great conversation. I hope we can chat again sometime. 00:26:38 Mike Absolutely thank you so much for having me today appreciate it.
37 minutes | Jun 17, 2021
The Truth About Wholesaling with Jamil Damji #243
Jamil Damji has been in real estate since 2002, since then he mastered the art of Wholesaling Real Estate. He successfully built KeyGlee, which is now a National Franchise with over 100+ employees, spanning 180 US markets. Jamil also runs a mentorship called Astro Flipping where he mentors and educates hundreds of entrepreneurs on how they can be successful in their own Wholesaling business.Jamil also runs a mentorship called Astro Flipping where he mentors and educates hundreds of entrepreneurs on how they can be successful in their own Wholesaling business. Jamil is also the co-host of the fastest growing podcast on Wholesale Real estate called “Wholesale Hotline.” Additionally, he started his own podcast called “To the Moon” where he highlights student success. Above all things listed about Jamil, his mission in life is to impact as many lives as possible and share the knowledge he has with those that have a desire to learn. Connect with Jamil:Instagram: https://www.instagram.com/jdamji/YouTube: https://www.youtube.com/channel/UCDqJP0mZNOSR9JiIRE02NxQWebsite: https://www.astroflipping.com/Facebook: https://www.facebook.com/DamjiJamilAs you can already tell we have made some changes and a few more are on the way. If you are interested in what we have planned, head over to Patreon.com/REImastermind, and support the show today. Financial contributions are always appreciated along with a LIKE, SHARE, and REVIEW. It really helps us grow and reach more people with this valuable information. See you next time and tell a friend!LIKE • SHARE • JOIN • REVIEWWebsitePatreonApple PodcastsGoogle PodcastsYouTubeSpotifyStitcherDeezerFacebookTwitterInstagramSUPPORT THE SHOW!Get Exclusive Content on Patreon! • https://www.patreon.com/reimastermindGet $10 and Reduce Your Business Costs by Shopping at AppSumo • https://bit.ly/reiappsumoGet $10 Towards Your First Purchase at Drop • https://drop.com/?referer=3DC729"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - JD---Transcript 00:00:01 JD Hoss We have Jamil Damji on the call and we're going to really do some interesting conversations, but I really want to make sure that we have your account, your information, and contact information. 00:00:13 JD Everything right upfront because you have a podcast that I think a lot of people, especially starting in real estate investing should. 00:00:20 JD Really consider checking out because it's called Wholesale Hotline and you really focus on that wholesaling. 00:00:28 JD And I know everybody who gets started in real estate investing, they get starry-eyed and they that's the first thing they tackle is wholesaling. 00:00:37 JD So I really appreciate your time, but you also have a lot of other things going on, including masterminds and everything else. So is there anything anywhere else that they can kind of find? 00:00:50 JD All of your links and where they can connect with you the best. 00:00:56 Jamil Damji Absolutely thank you Jason for that. I appreciate it so you can find me at my Instagram. It's at JDAMJi so it's at Jade. 00:01:07 Jamil Angie also go to youtube.com/jamildamji that's spelled JAMIL DAMJi. 00:01:16 Jamil And, uh, pretty much my you. My link tree on my Instagram will have links to my coaching platform, which is called Astro clipping. 00:01:25 Jamil You can also check us out on our podcast wholesale hotline which is a podcast I do with Brent Daniels and Pace Morby and myself. 00:01:33 Jamil We do it every Monday night at 5:00 PM Arizona time, 4:00 PM Pacific. 6:00 PM Central 7 if you're on the east and it is an amazing show. 00:01:45 Jamil Fastest growing podcast on wholesale real estate and we give as much value as we can on a weekly basis on that show. 00:01:53 Jamil So I'd love for anyone who's watching. 00:01:55 Jamil This to check us out. 00:01:57 JD While you're pretty daring to do it live like that, I haven't had the. 00:02:01 JD I haven't had the courage to do that yet. 00:02:05 Jamil It's a, it's a lot of fun. I'll tell you the joy of Wholesale Hotline is the interaction with the audience and so we take questions out of the comment section and then answer them. 00:02:16 Jamil Live on the call and really, because all three of us have been in the business so long and we've got a lot of experience to share, it's a it allows for a dynamic. 00:02:25 Jamil Opportunity to engage and it gives access, right? I mean The thing is. 00:02:31 Jamil All of us know that you know coaching if you're, especially if you do it on A at a high level, it. 00:02:37 Jamil It's not free, but we want to be able to deliver to the community an opportunity to connect with us to engage with us and have access to us and ask any question they could possibly want in a free form. And so you can imagine we have. 00:02:51 Jamil Uh, a tremendous audience. The numbers are staggering. You know, we get on average 20,000 views every week on each episode. 00:02:59 Jamil And so we see that there's a lot of value. There's a lot of people gaining a lot of value from it, and because of that, and because of that interactive and the dynamic aspect of the show, it's become popular and successful, and we've only been added a year. 00:03:12 Jamil Actually just did our 52nd episode last week. 00:03:15 JD Sure, no, you know. And I'm going to spill the beans here, but you just brought up excuse me, the. 00:03:22 JD Part of what we I mentioned early on that we kind of went through a branding change here for this podcast and this is kind of a sneak peek of something that is going to be coming for this show is that the mastermind part of this of this show is going to be hopefully having people on like you, and one of those. 00:03:42 JD People that are listening to my show and we can have a mini mastermind with them and help them improve their business. 00:03:49 Jamil Beautiful, that's a fantastic. 00:03:51 Jamil Idea, and I think it's definitely needed in the industry, so I congratulate you on that. JD that's great, great idea. 00:03:58 JD So, uhm, let's start at the beginning. Like how did you get into this? Let's I mean everybody. Story is different, and it's always fascinating to hear. 00:04:08 Jamil So, uh, mine is an interesting one. I got involved in wholesale real estate in 2002, and, uh, I learned it from no one, so I actually thought Invented it. 00:04:18 Jamil I I truly did, I thought Invented the model in 2002 I was living in Canada, Calgary, AB, Canada to be exact and. 00:04:27 Jamil I was in the Internet space so I was in the early stages of the Internet. We were are the business I was in at the time. 00:04:36 Jamil We'd call people in the Yellow Pages, and we convinced them that the world was moving away from print advertising and moving on to the Internet, and if they were smart, they would build a website with us that. 00:04:46 Jamil About $600 and they would go online and their businesses would explode and life would be great. Problem was is in that business. 00:04:55 Jamil Every one of those websites that I sold for $600 ultimately cost us $700.00 to make. 00:04:59 Jamil So every time I made a sale I lost 100 bucks. Didn't realize that until we were out of business. 00:05:04 Jamil But that's what a cash flow and the whole cup game will do to you when you're an entrepreneur. So know your numbers First off secondly. 00:05:12 Jamil What it did do is give me an opportunity to learn about or to embark on this path or journey of wholesale. 00:05:20 Jamil I was at my business office and walking by my business partner's office over here overheard a conversation he was having with his dad and his dad has a home. 00:05:29 Jamil Builder and he's talking about this deal. They're working on where they knocked down this old house and they built a duplex and after selling the duplex they made $160,000. 00:05:40 Jamil Now you can imagine I'm losing $100 every time I have a sale and so I listen I'm really interested in hearing what these guys are talking about. And they're not having they don't want me involved in the conversation. 00:05:50 Jamil 'cause I don't bring any money to the table. I don't bring anything. 00:05:53 Jamil Really, a value to the table in their eyes at the moment. 00:05:56 Jamil But I hear that there's this need. There's this need for this type of property. They're looking for a house that's on a 50 by 120-foot square, 120-foot lot zoned R2 in the inner city of Calgary, AB. 00:06:07 Jamil And they want to know, you know, they want to buy them. They need that in order to do another project, they need more of these infill lots. 00:06:14 Jamil The next day I'm walking my dog. 00:06:17 Jamil And I live in the inner city and I actually live in a bungalow and I live near these all every house on my street is one of these 50 by 120 foot are two lots and I had actually tried to rent one of these three houses down from the one I was currently living in. So when I'm walking my dog I walked by this for rent sign. 00:06:37 Jamil This House I actually had tried to rent three months prior, but it was $200 out of my budget so I couldn't afford it. 00:06:44 Jamil House is still for rent three months later, so I call and I and I ask if the person on the other line would be interested in selling instead of rent. 00:06:55 Jamil And the answer was, yeah, the number was right. And then I asked her OK, well, what's that number? What's the right number for you? She said 350,000. 00:07:03 Jamil And so Immediately go back to my business partner and I ask him, what is your dad gonna pay for one of these lots is in this area. 00:07:13 Jamil 400 all day. 00:07:16 Jamil So now I have a $50,000 problem to solve right? I have no money. I have no capacity to buy this House. 00:07:23 Jamil I don't know how this man can buy it from me. I don't know what to do. I really don't know how to make this transaction happen. 00:07:28 Jamil And so I do what I know how to do. I pick up the phone book and I start calling lawyers, and that's how property is conveyed in Canada through real estate attorneys. 00:07:38 Jamil And I go all the way down the list and I get to ask and not just ask the beginning of ask, but St. 'cause that the attorney who answered the phone was David Steed STD. 00:07:50 Jamil He was so new that he didn't have a secretary answering his phone, yet just passed the bar first year in the Yellow Pages. 00:07:58 Jamil Happy that his phone was ringing and I call and I just lay into it. I say here's my problem. 00:08:05 Jamil I have a property that I can sell for $400,000 that I can buy for $350,000. 00:08:10 Jamil And I have no money to acquire. Is there anything I can? 00:08:14 Jamil And he explains this process to me of what I now where we all call wholesaling, and it's essentially selling potential, selling my control of that potential, the net. 00:08:28 Jamil And it doesn't require me to buy the house, take title to the house. I'm all I'm doing is selling the opportunity. 00:08:33 Jamil Through the means of. 00:08:37 Jamil And it shows me exactly what I do. He says I'm gonna email you a contract. You're gonna print that out and you're gonna print it out twice. 00:08:44 Jamil And one of them you're gonna be the buyer. And on the other one you're gonna be the seller. And when you're the buyer, just make sure you write your name and or assignee. 00:08:52 Jamil Bring those contracts to me once they're fully executed. 00:08:55 Jamil And in a few weeks I'll have a check for you. 00:08:59 Jamil And that's what happened. 00:09:01 Jamil So my first deal happened on accident. I make $50,000 minus legal costs and I'm floored, right? 'cause I come from a very limited background. 00:09:12 Jamil My parents were both blue-collar workers. You know my mom. She was data entry and then worked in a meatpacking factory. My dad. 00:09:21 Jamil Truck stop, you know we definitely struggled and but I have a you know, amazing. I had an amazing childhood. 00:09:30 Jamil I'm this kind of money is brand new to me, right? I never made anything like that and I'm hooked. 00:09:35 Jamil I'm hooked from that point forward and I decide to do this all day every day. So I leave the Internet company behind. 00:09:43 Jamil And, uh, I start driving around. I start looking for rent signs. I pick up the newspaper every day and I look in the classified section and I'm calling for rents and lo and behold, I'm able to do more, more and more of these transactions and then all of a sudden I see that they that these developers are taking these apartment buildings and they're flipping them from. 00:10:03 Jamil Apartment buildings into condominiums. 00:10:06 Jamil I realize that in order for these projects to happen, they need raw materials. They need these old houses. They need these old apartment buildings, so I start driving around to apartment buildings. 00:10:15 Jamil That have handwritten for rent signs on him. I know there's self-management. That's the case and I start calling these landlords and ask him if they'd be interested in selling their buildings. And you know one of every 50 of them would say yes. 00:10:31 Jamil Oddly enough, when I flipped in the apartment building, I made 100 grand and so I'm asked to a good a good war chest. 00:10:38 Jamil That ultimately became my demise because like every wholesaler, you think that wholesaling is your starting. It's where you go, but it's not where you want to live. 00:10:48 Jamil It's not where you want to stay. I wanted I had other dreams. I wanted to be a developer. I wanted to. I wanted to have a title that was. 00:10:56 Jamil That had some, you know, pride behind it. I, you know, I didn't even know what a wholesaler was. 00:11:01 Jamil It didn't and it had no name I. I thought it was a prospector. I didn't even know I was in real estate. 00:11:06 Jamil That's you know in Canada especially, especially in 2002, they didn't. They. There was no such thing as wholesaling. I've never heard of it. 00:11:13 Jamil And so, I wanted to be a developer, so I took all of the cash we made and I went and closed on four of these apartment buildings that I had prospected on. 00:11:26 Jamil Excuse me 00:11:28 Jamil Went from flipping the contracts to taking him down and ultimately 2008 happened, and, uh, I lose my shirt and not only that, but I had my parents cosign on those construction loans with me and I ended up not only making myself homeless but also my mum and dad. 00:11:51 Jamil Sorry about that. 00:11:57 Jamil That was really tough. That was a real tough time in my life and we all ended up moving into a two-bedroom apartment. 00:12:04 Jamil My mom, my dad, my sister and my niece 150-pound dog, her husband the cat and In two bedroom 1 bath and I couldn't believe that we had gotten to the heights we had gotten to and I was sitting there in that. 00:12:16 Jamil Situation and I devastated my family like that and so that was my first rodeo. 00:12:22 JD Wow, a lot of lessons learned, huh? 00:12:25 Jamil Yes, Sir. 00:12:27 JD So you know, I one of the things that I think is really interesting is that and, uh. 00:12:35 JD You talked about? 00:12:38 JD Kind of trying to turn this into something else like I think it's interesting how we see wholesaling as like the beginning of real estate investing, but I mean if you're good at it. 00:12:52 JD I mean, why wouldn't you stay there? I mean, that's what you know that's what you like. That's what you're good. 00:12:55 JD Right? 00:12:59 JD Uhm, if so, why? Why delve into too much else? I mean, there's a lot to be said for focus. 00:13:09 Jamil I 100% agree. This time around I did it differently so I got you know, I'll Fast forward through, you know 2008 to 2012, but the long and short of it is I moved to Hollywood trying to become a stand-up comedian. 00:13:22 Jamil Didn't work out and that's why I'm not on the podcast right now talking about comedy. I'm here talking about real estate, but what ends up happening? 00:13:29 Jamil As I get drawn back into real estate in 2000 and. 00:13:33 Jamil Uh, because the market is where it is, right? There's so much opportunity and I'm in LA looking at Phoenix. 00:13:42 Jamil And I see that you can buy a condominium in Phoenix for 30,000 bucks and it rents for 8. 00:13:47 Jamil $150. 00:13:48 Jamil You know that kind of returns doesn't exist. 00:13:51 Jamil If I went on if I ever advertised. 00:13:54 Jamil Give me 30 grand I'll give you $850 a month. The SEC would be at. 00:13:58 Jamil My door calling me. 00:13:58 Jamil A Ponzi scheme that back because that kind of return doesn't exist. 00:14:03 Jamil Or easily right here it is guaranteed through rents and secured by a deed. 00:14:11 Jamil A $30,000 investment can get me $850 a month in rent. I'm I. I can't believe it. I'm mesmerized. And so I turned my focus back. 00:14:22 Jamil And this time I begin with the end in mind, and this time the end is not becoming a hotshot real estate developer. 00:14:27 Jamil It's building a national wholesaling operation that is allows me to do a deal in every major city across the United States. That was my goal and I started with the end in. 00:14:39 Jamil Fine, when I started Keigley, which is the wholesale business that I now run. We began in Phoenix, AZ. We very quickly scaled we, you know, on average, our corporate store does anywhere between 60 to 80 transactions a month. That's a month. 00:14:54 Jamil And uh, when I say that to people their heads explode. How do you do that many deals? What's your marketing expense? And I'll tell you what it is 0. 00:15:02 Jamil I don't spend any money on marketing. We're a business-to-business wholesaler. 00:15:06 Jamil Now what happened is I saw there was a need in the business model. 00:15:10 Jamil You see what was happening is a lot of educators were teaching people how to lock up deals, but they weren't showing them how to comp those deals. How to understand where they need to be? 00:15:19 Jamil Value that and they also weren't showing them how to sell them. 00:15:23 Jamil And So what would ultimately be happening? And I think why wholesaling has had a little bit of a the black eye that it's had in the in in the last, you know, few years is because sellers are so disappointed when they get strung along when they get cancelled on when deals don't come to fruit or clothes as promised, right, that's. 00:15:44 Jamil That's the issue. 00:15:46 Jamil And when you see that that wholesaling is truly just speculation and wildcatting at its finest, it's hustle. It's a hustle. 00:15:52 Jamil It's truly awesome. 00:15:53 Jamil Right, you're hustling out there. You're, you're trying to find motivated sellers you're trying to find cash buyers you're trying to connect the two and you're and you're. 00:16:01 Jamil Wanting to make a profit for the effort. 00:16:03 Jamil And I think it's beautiful, but it's also dangerous, because when you're writing a contract to purchase a property and you don't have the means to actually close, that puts you in a pickle. 00:16:14 Jamil Right, what's your typical? 00:16:17 Jamil So what we do here at KeyGlee is we provide disposition services to wholesalers. 00:16:22 Jamil And so when you are a wholesaler and you have a contract and you have no buyer, you bring that contract to KeyGlee and one, either my corporate store or one of the 180 franchises that we have across the. 00:16:34 Jamil United States will help you out. 00:16:37 JD Sure, wow. 00:16:39 JD So you know you talked about doing the hustle, but I mean. 00:16:44 JD Even early on you were even you talked about. 00:16:48 JD It takes a lot. 00:16:50 JD Of internal fortitude, if you will, to do what you were doing and I really wanted to call out and slow things down here for a second because you talked about making 50 calls to find that one deal. 00:17:03 JD Deal early on and I don't really think that a lot of people who have been sold the concept of wholesaling. 00:17:11 JD Because whether it's through some fly-by-night group that comes in into their town and does the weekend spiel right? 00:17:19 JD Or they see get-rich-quick schemes on Facebook or scrolling through ads. I don't I really wanted to take a second and call that out because what you're talking about is a lot of work, but the reward is also there and I, I really I don't like to. 00:17:37 JD I don't want to paint it to be as rosy as some people think it is. 00:17:42 Right? 00:17:43 JD There's a lot of work to be had, and if you're willing to do the work, the reward is there, but there's a lot of work. 00:17:49 Jamil Absolutely, absolutely. I mean, you know if you could see my background or what I can see not like you know what my eyes can see right now my team is all out there hustling, they're all out there on the phones making calls, talking to sellers, talking to buyers, talking to wholesalers, talking to Realtors, building buyers list, transaction coordinating. It's a. 00:18:09 Jamil It is a lot, you know nothing is easy. Nothing is easy, right? And I and I and I truly believe that everything you do in life is a product of your effort, right? You get what you give. 00:18:22 Jamil Always so if you. If you think that coming into wholesaling is going to be this walk in the park, this magical money printing machine that's gonna be automated for you. 00:18:23 JD Right, right? 00:18:34 Jamil Like some guys like to say you can do or you know set it and forget it kind of thing. I'm sorry it's not the case. 00:18:41 Jamil You have to. 00:18:42 Jamil Work and if you tune into Wholesale Hotline, that's the show we talked about earlier on in the episode here. 00:18:48 Jamil Yeah, the that. That podcast that I do with Brent Daniels and face more be every Monday we talk about the realities of the business, what it is, how do you lead generate? 00:18:57 Jamil How do you convert sellers into contracts? And then how do you disposition those deals? And that's the three elements that we bring every week to that show. Is talking about. 00:19:08 Jamil The minutiae of lead generation. Converting sellers in the contracts and then dispositioning those deals for a check. 00:19:16 JD Right now, so one thing that I wanted to chat a little bit about with you is the you said it's business-to-business wholesaling. What do you mean by that? 00:19:28 Jamil Great question. So the prospect or the typical wholesaler that a lot of people will envision when we say wholesaler is the wolf of Wall Street, belly to belly. With a seller you know going in and you know wholesaling is also had this interesting. 00:19:48 Jamil Dilemma where people are like it's stealing equity. 00:19:52 Jamil I don't. I don't buy that. OK. First things first, every one of these houses that we go after is in terrible shape. 00:20:01 Jamil Terrible shape non-financeable only person who could buy this to the cash buyer. It needs to be somebody that with the financial means to take a risk on this situation and the value of this property is not realized until a financial risk is taken. 00:20:20 Jamil And so. 00:20:22 Jamil What we do in wholesaling is typically or what your idea what? Maybe some of your viewers idea is is that you're out there sending mail, putting out bounded signs, cold calling or texting, or doing whatever the lead generation technique you're doing to get in front of motivated sellers to then negotiate a deal. Put the deal under contract. 00:20:42 Jamil And then sell the contract through cash, fire. The myth that's been spouted by many gurus is that. 00:20:49 Jamil If you contract it, they'll come. 00:20:52 Jamil That is a lot. 00:20:53 Jamil Right, that is a bold-faced lie. 'cause I've seen dozens and dozens, hundreds, thousands of sellers get let down, thousands of wholesalers quit the business because they felt let down because they spent money on a course that told them that and then they go talk to a seller and they get something under contract and they and they and then they. 00:21:13 Jamil You have to cancel that contract and everybody is angry or they lose money in earnest deposit. Something bad happens and they say I'm not doing this. I'm not cut out for this. This is just too much emotion for me. 00:21:25 Jamil So what I mean when we say a business, the business wholesaler is so, say you're that guy say you're that person that's doing the cold calling that's doing the mail or doing whatever it is that you're doing to get the deal in the contract. First things first, how do you know you've got the number right? 00:21:40 Jamil I walked into a room the other day and there was a mastermind full of real estate investors and I asked them all how many of you are licensed real estate agents and the majority of them put their hand up. 00:21:50 Jamil And then I said how many of you were taught how to comp. 00:21:55 Jamil In licensing school. 00:21:57 Jamil And every one of those agents put their hand out. 00:22:01 Jamil Every one of them. So if we're giving the title to an agent as a fiduciary. 00:22:08 Jamil You give the title, you put the label on an agent Europe fiduciary and they don't understand how to understand value then how are they supposed to be liable for what happens in a transaction? 00:22:24 Jamil When they don't even know what it's supposed to be worth, they don't even know how to figure that out. 00:22:28 Jamil And So what we've done? 00:22:30 Jamil Is we help these wholesalers first understand value. 00:22:34 Jamil Right really understand what houses are worth and what it's going to take to get this raw material from here to there. 00:22:41 Jamil And then we bring to the table. So the reason why we're business to business is these are businesses. These wildcatters these birddogs. These wholesalers are businesses. 00:22:52 Jamil That need another business, and so we bring to the table a rehabber a buying hold investor portfolio owner, a hedge fund, whatever it is, the exit will be in that deal. 00:23:03 Jamil We bring them to the table and we pair the two together for our feet. So we're business-to-business wholesaling, meaning I don't spend any money for my marketing 'cause I don't have to get belly to belly. 00:23:12 Jamil For the seller I'm working with wholesalers and Realtors. For the most part and on the other side of the equation where my buyer is. 00:23:18 Jamil Those are all-cash investors looking for a curated, aggregated place. They can come and look for opportunities that make sense for them. 00:23:28 JD Right? 00:23:30 JD You know, that's something that I think is really interesting and you're one of the first people, frankly, that have been on the show to be upfront about that, because we have. I actually have been pushing for a long time. The concept that. 00:23:48 JD As much as you work to find that lead and opportunity, you almost have to put an equivalent amount of work in defining where you're going to sell it. 00:24:00 JD That concept, like you said that you find the deal and the money will come. 00:24:00 Jamil 100%. 00:24:07 JD Is is is a myth, and in fact I think that some like you said gurus, quote-unquote gurus will use it as an excuse because I've actually heard some gurus say, well, if you didn't find a buyer for that, you didn't get it at the right price. 00:24:26 JD You know to push it back on the student as if it was the students fault. 00:24:32 Jamil So unfair, so wrong. 00:24:34 Jamil UA should have been teaching the student how to get it at the right price. 00:24:38 Jamil And so how to understand what the price was right? Or to walk away from the situation? 'cause don't go contracting a house that doesn't make sense. 00:24:46 Jamil Right, yeah, and he you should be honest with them and say to them now the second part of the job is coming. 00:24:52 Jamil You gotta find the money right? And I have seen so many great wholesale deals cancelled because of no buyer. 00:25:01 Jamil It's the truth, and because of that, because of that reality, what we did was we created this company where our fortitude is on building buyers list. 00:25:10 Jamil So if you ever came to see my office here in Tempe, AZ, you'd see that I've got 100 person staff and half of them are building buyers lists. 00:25:21 Jamil 1/4 of them are in systems and operations and a quarter of them are buyer specialists working with my buyers so that we can match the appropriate property to the appropriate buyer. 00:25:35 Jamil That's it. 00:25:35 JD Yeah, no, that's really telling. I mean, that's that shows how important it is to establish that buyers list. 00:25:44 Jamil 100%. 00:25:46 JD You mentioned the concept of, you know, uh, that's another misconception, especially, and I think this is something that I'm hoping you can chat about a little bit is you mentioned the phrase stealing or equity. 00:26:01 JD And that, uh, and I've even heard that you know, some wholesalers are seen as predatory. But frankly, I think that it's something that, uh, mindset. 00:26:10 JD If somebody is getting into wholesaling for the first time, they really have to get right with themselves on the fact that you're not stealing out. 00:26:20 JD Equity you're providing a solution and that you and you need to see it as such. 00:26:25 JD Talk a little bit about how to get the people mindset right so you don't feel. 00:26:32 JD Apologetic for what you're trying to do? 00:26:35 JD I mean, you're usually helping somebody out of a pretty bad situation and one-way shape and form. 00:26:40 Jamil Oh, wait. 00:26:42 Jamil Always look, I was in this situation myself. I had my house foreclosed on. I had my mom and dad's house foreclosed on. 00:26:50 Jamil We went through that and had a wholesaler come by and said they don't allow the bank to take it. 00:26:55 Jamil Let me give you an opportunity to walk with some cash that would have been so thankful for that, but nobody came. 00:27:03 Jamil No one came and the bank took both properties and they never sent me a check. 00:27:09 Jamil They never sent us a check, no. 00:27:11 Jamil They kept it. They took the house back, they resold it. They did what they did and they kept the money. 00:27:17 Jamil And So what are we doing as wholesalers? We are absolutely providing a solution and guys, here's the thing. 00:27:24 Jamil I'm not going after a pretty house. I look behind you and I can tell you live in a beautiful home. 00:27:29 Jamil You've got your guitars up on the wall. You've got your headphones up on the wall you have a beautiful paint there. I'm sure the rest of your house is gorgeous. I would never buy your home. 00:27:40 Jamil This isn't your home is not a deal for me, right? What am I looking for? I'm looking for situations where there's distress, deferred maintenance, hoarder houses, you know, probate situations where somebody died in it and the inheritors don't want the property any longer. There's just too much-deferred maintenance there or tax violent type, tax liens, and code violations, and fire damage and you know flood and this is mold. 00:28:07 Jamil This is what I want. These are the deals I want and if you come to me with a house that's gorgeous that just needs to be listed on the MOS. I'm not going to give you a lowball offer. Why? Because the value has been realized. 00:28:17 Jamil Right, right, the value has been realized. You now need to trade on the open market. 00:28:23 Jamil There you go. Fair enough. However, when I'm going to a homeowner, that situation where this House is in terrible shape and this seller has no money to fix it and they have a situation in life that requires them to have some cats. 00:28:40 Jamil I can provide an opportunity to them. I can provide an opportunity by bringing a cache solution to the table, right? 00:28:46 Jamil And that's all I'm doing. I'm bringing a cache solution to the table look. Writing a check is taking a risk, and I shouldn't have to take a risk for nothing, and that's why if you're a wholesaler and you're thinking I'm lowballing people, always remember. 00:29:00 Jamil That what you're doing, and when we're when we talk about the concept RV, it's after repair value after repair requires financial investment and risk. 00:29:12 Jamil And that's how you realize the value, so that equity doesn't happen until the financial risk is done. And what we do as wholesalers is we sell a portion of that potential to somebody else to realize that's it. I see I see potential in this property right now. It's a pilot turn, but with investment. 00:29:33 Jamil With risk it can be something different. 00:29:36 Jamil I see there's this much potential in the House and I will sell that potential for this much. That's what wholesaling is. 00:29:46 Jamil So if you have a problem with that then you don't understand how business is done. Let me give this to you in an even easier way to think about. 00:29:55 Jamil The hamburger Patty that McDonald's sold me for lunch. 00:29:58 Jamil Cost them $0.10. 00:30:01 Jamil Yep, I paid 5 bucks for my Big Mac. It went through multiple channels where value was added to the hamburger Patty before it went into my belly, right? 00:30:12 Jamil Is it predatory that McDonald's charges me $5 for a Big Mac? No. It's business why? Because that's their risk. 00:30:22 Jamil They have to buy they have to raise the cow. They gotta butcher the cow. They gotta grind them. 00:30:26 Jamil Meet, they've got a package, it they've got a store, it? They've got a transport, they gotta transport it. They gotta build these stores. 00:30:33 Jamil They got a house, those stores, they've gotta cook the meat. They've gotta take all of this risk and do all of this workbook work. Before that, $5 Big Mac is realized. 00:30:43 Jamil So don't lose sleep over the fact that the burger Patty costs $0.10 and at one point value was added along the way. 00:30:51 Jamil So any wholesaler out there right now that's having an issue thinking they're lowballing people UA don't understand what you should actually be offering 'cause you should be offering 100% of as this value should never be lowballing. 00:31:03 Jamil Anybody give 100% of as his value? But as this value is as is, this is what this house is worth in the piece of turd situation. It's in. 00:31:12 Jamil And once I make a financial list. 00:31:15 Jamil And once I do that. 00:31:17 Jamil New real new value is realized, but that's not here. That's not at this point of the conveyor belt. 00:31:23 JD Right? 00:31:23 That's it. 00:31:26 JD Well, I this is this has been an awesome conversation. Uhm I really enjoyed this uhm but before I my before I let you go you know and I realize that we're inching over the time I told. 00:31:40 JD You it was going to. 00:31:41 JD Be and I have a feeling we could go for that amount of time again. 00:31:42 Jamil Oh no worries. 00:31:46 Right? 00:31:47 JD Could you give our listeners three actionable items that they can incorporate today to get started in wholesaling? 00:31:56 Jamil 100% again. First things first, you need to find a motivated seller, right? So where are you going to look at places for motivated sellers? 00:32:04 Jamil If you have no money, what are some amazing lead lists to look at? Well, I would start with landlords 'cause that's where I got my first deal from. So go to yourzillow.com rental section and start looking at listings for rentals. 00:32:17 Jamil See what is self-managed and you'll know it's self-managed because it's managed by a guy named Doug or a lady named Amy. 00:32:23 Jamil It's not a real estate company, it's a dude or a lady you call him up and you say are you interested in selling this property that you have for rent, and nine times out of 10, they're gonna say no. 00:32:33 Jamil But the next thing you say is no problem and I understand you don't want to sell this one, but do you have any headaches? 00:32:38 Jamil Do you have any headache properties that I could take off your hands? Any tenants that are damaging your properties or not paying you rent I? 00:32:44 Jamil Love to buy the headaches. 00:32:47 Jamil What will happen is you'll start seeing opportunities there, so that's where you can find your leads. Alright, so I just told you exactly what you can do to go find a deal. I'm not going to just leave it there. 00:32:56 JD That's cold people. 00:32:58 Jamil I'm gonna tell you where you can sell your deal now. Alright, how do you find a buyer that's gonna take your deal right now? 00:33:04 Jamil How do you do that? Well, what I like to do is I comb the every single day and you don't have access to MLS, 'cause you're not a realtor. Go to realtor.com. It's live feed. 00:33:13 Jamil You go to realtor.com and you see what houses have been listed today that appear to be a. 00:33:19 Jamil OK, what do I mean by appear to be a flip? Well, you look at the pictures. Is it a brand new beautiful house and does the closet have clothes in it? 00:33:27 Jamil If the closet has no clothes in it, I get to you. I bet you it's a flip property. What you do is you call the realtor who listed it because that realtor represents rehabbers you call that realtor, you say. 00:33:40 Jamil Mr Miss agent. I have an opportunity that your seller that you just listed a property for wants to buy. 00:33:47 Jamil Here's the deal. Here's the numbers. This is my price. Where would you like the contract? 00:33:53 Jamil Not kidding you guys, I just taught you exactly how to connect the dots between finding a deal and finding a buyer, and it didn't charge you $40,000 to do it. 00:34:05 JD Well, this has been a fantastic. 00:34:09 JD Conversation and I hope we can do this again. I think we could go down many roads here and, uh. 00:34:17 JD Again, just to remind everybody, wholesaling hotline is the podcast if if we haven't sold you on joining you and your team on that podcast by the end of this show, I don't know what's going to do it. I mean, I head over there to that. 00:34:34 JD Keigley is the business opportunity. I mean you it sounds like you have. You could definitely help people get rid of some of those contracts if they have a few. I mean so don't sit on something if you feel like. 00:34:50 JD And I'm sure you need some runway there, so make sure you call them early and often. And then I will make sure to include all of these links in the show notes. But I can't thank you enough. This has been a great conversation. 00:35:07 Jamil Thank you Jenny. I appreciate it, but you did ask for three, so I'm going to leave you with one more. 00:35:11 JD OK. 00:35:13 Jamil The last actionable item guys that I want to leave you with is that your life right now is a reflection of how you think and how you feel. 00:35:21 Jamil So if your life right now isn't what you want it to be, then I would say that you need to start checking what's going on in your thoughts and what's in your heart. 00:35:29 Jamil And I mean that from the bottom of my heart, because we're all divine, every one of us has this beautiful gift of what we provide this world and what we can do for ourselves. And everybody is entitled to a magical life. 00:35:40 Jamil A lot of us. 00:35:41 Jamil Don't get it because we think like. 00:35:43 Jamil Wrong and we feel wrong, right? And so if you can, if you can just figure that out. And if you can figure out how to master that, everything else will follow. 00:35:54 JD And I don't think I can add anything better to that, so I'm going to leave it there. Thank you again so much.
30 minutes | Jun 13, 2021
Automate Lead Generation Using TV Advertising with Tony Javier #242
Tony Javier is the owner of an INC 5000 rated Real Estate Investment Company. He has been investing in Real Estate since 2001 and has done close to 1,000 flips. Since Tony has automated his Real Estate Investing business, he concentrates his time on helping Real Estate Investors through his Masterminds, Gap Funding, and TV Program that shows Real Estate investors how to grow their business through TV commercials.We chat about:How to use TV to get motivated sellers to call youWhat shows to target that reach your ideal demographicsHow to get returns on auto-pilotBest ways to scale your businessConnect with Tony:Website: https://realestatemasterstv.com/LinkedIn: https://www.linkedin.com/in/tonyjavier/Facebook: https://www.facebook.com/tonyejavierTwitter: https://twitter.com/realtonyjavierAs you can already tell we have made some changes and a few more are on the way. If you are interested in what we have planned, head over to Patreon.com/REImastermind, and support the show today. Financial contributions are always appreciated along with a LIKE, SHARE, and REVIEW. It really helps us grow and reach more people with this valuable information. See you next time and tell a friend!LIKE • SHARE • JOIN • REVIEWWebsitePatreonApple PodcastsGoogle PodcastsYouTubeSpotifyStitcherDeezerFacebookTwitterInstagramSUPPORT THE SHOW!Get Exclusive Content on Patreon! • https://www.patreon.com/reimastermindGet $10 and Reduce Your Business Costs by Shopping at AppSumo • https://bit.ly/reiappsumoGet $10 Towards Your First Purchase at Drop • https://drop.com/?referer=3DC729"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - JD--- Transcript 00:00:01 JD Hoss We have Tony Javier on the line tonight and Tony I've been looking forward to this conversation because you're going to be bringing what I would consider an old-school concept to marketing and finding these discounted properties. But before we start I really want to make sure that everybody heads over to. 00:00:21 JD Real estate masterstv.com For more information because. 00:00:29 JD There's even a video on there that's a brief video that kind of summarizes what you're doing there, and it's frankly I'm just finding it quite fascinating. 00:00:38 JD And I'm going to start things off by asking you the big question you're talking about advertising in real estate in advertising on television to find these discounted properties, how did you come around to this niche? Because I know you've been. 00:00:55 JD In real estate investing, now for like 20 years. 00:01:00 Tony Javier Yeah, great question. So yeah, I've been in the business 20 years, actually 2005. I had that vision of doing TV commercials so I did TV commercials for a few months. 00:01:10 Tony Had no idea what I was doing, did it on my own and after about three months I was getting some leads and I'm like you know what $3000 a month was a lot to me at the time, so I'm like. 00:01:21 Tony You know I'm going to shut it off. Well, right when I told my Rep to shut it off, we ended up getting a nice profitable deal and I still got cold feet on it and I and I stopped doing it. 00:01:29 Tony TV, so that was 2005. So Fast forward seven years later. A buddy of mine who I just met my probably know him for six months, invited me to come play poker. 00:01:40 Tony And so I went when I went to go play, I noticed a guy that I'd seen on TV and he had a construction company and that's. 00:01:49 Tony That's what he did and he and so I you know I had that kind of celebrity kind of like oh I'm playing poker with this guy on TV kind of thing. 00:01:58 Tony And so I just started picking his brain and asking him like how did you get on TV like is that doing good for you and he's like man, we get so much business off of that it's in. 00:02:05 Tony Saying and he's like I have a guy that helps me do that. He's a media buyer. Why don't you get in contact with him and he'll take you through the whole thing and you know, maybe it's for you. 00:02:15 Tony Maybe it's not, but I think that might be cool for your house buying business. So Long story short, getting contact with them within. I don't know. Maybe 60 days might have been 30 days. I don't. I can't remember the timeframe. 00:02:26 Tony Had a TV commercial on the air my media buyer found the right stations. He negotiated really good rates for me. 00:02:32 Tony Produced the commercial, it looked 100 times better than my previous commercial that I did on my. 00:02:37 Tony Done and within the first month I you know $3000 again spent. I spent the first month popped a $35,000 deal and the rest is history. 00:02:47 Tony Nine years it's been the most consistent form of leads. It's something that not very many people are doing it. I mean, I, I've got a. I've got all these things that I can go through and I'll. 00:02:58 Tony I'll try and touch on some of them here in a little bit, but yeah, TV just been great to me. You know everybody doing direct mail and cold calling and texting and. 00:03:07 Tony And all of that, but really, nobody is doing TV, so that's why I like to talk about TV. That's why I like to help Realtors and investors get on TV because it's a blue ocean. 00:03:17 Tony Not many people know about it, and if they do know about it, they don't know how to do it. 00:03:22 Tony And I feel like over the last nine years I've been able to, I don't want to say perfect it. 00:03:28 Tony But you know, I know what works. What doesn't? I know? You know? What TV shows have worked really well for me? 00:03:34 Tony I mean, I pretty much over the last nine years testing attracted attract a lot of different things and I feel like I've kind of got it down to a science. 00:03:44 JD So you you've already touched on it a little bit now, but. 00:03:49 JD It sounds you've mentioned that it's the most consistent form of lead generation. Is that one of the benefits of? 00:03:58 JD Doing TV commercials. 00:04:01 Tony Yeah, so I have many benefits but for the lack of time when someone asked me about the benefits I narrowed down to five so I'll just give you 5 real quick benefits about TV. 00:04:10 Tony Uhm, so the first one is credibility first and foremost. If you think about all of the big brands that you know, a lot of them you've seen on TV and a lot more big brands because of TV, right? 00:04:23 Tony You know, I I compare it to like Frosted Flakes Tony to tiger, you're great, you know, Lucky Charms magically delicious like. 00:04:31 Tony They have slogans. They have brands and you wouldn't know about him if it wasn't for TV. So now you walk down the aisle. 00:04:37 Tony And you look and you see the cereals? You're probably going to buy one of the name brands. You can see you've seen on TV and those name brands are no different than the ones at the bottom that are generic. 00:04:46 Tony But people pay more farm because they feel like they know and trust them, right? So it's the same thing with real estate. It just builds so much credibility. In fact, we have people that get our postcards. 00:04:57 Tony That say we got four or five other postcards or whatever the number is, but we called you first because we've seen your commercial. 00:05:04 Tony We know you guys are a legit company. We don't know these other guys right? So there's just that credibility that that that that TV gives you in the celebrity status. So that's number one so so #2 little to no competition. I kind of mentioned that. 00:05:18 Tony Already, not many people are doing it so so that's something you can get in front of your be the first over your competition to some of those deals as opposed to fighting over those same deals that people are on. I mean everybody lists, right? 00:05:35 Tony Yeah three, it's high ROI, right? So you know last year we got a 10X return on our money and when I say high ROI I always like to touch on what I call wrote which is return on time. 00:05:50 Tony Because like last year we spent, I spent myself 3 hours Max on my TV. Last year it was basically shooting 2 new commercials. 00:06:00 Tony And meeting with my media buyer a couple times just to go over our schedules and things like that. 00:06:05 Tony Other than that, it's set and forget it so very high ROI but very high return on time as well. 00:06:11 Tony So #4 is it's very automated. So like I kind of already touched on that. But you know, once you get, you know, once you do the work upfront. 00:06:20 Tony To shoot the commercial and you air. 00:06:22 Tony It once it starts. 00:06:24 Tony Working you don't really have to worry about it. You know you look at. I look at my number. 00:06:28 Tony Every month every quarter, just depending and you know, as long as the numbers are staying consistent over a three-month period, then I don't worry about it. 00:06:38 Tony I don't, I don't do anything unless I just feel like I want to test like this year's our 20th year in business. So I shot a new commercial for being in business. 00:06:48 Tony 20 years, but other than that I could air the same commercial. I think I've heard the same commercial for about two or three out of the nine years that I've had that I've been doing TV and it still. 00:07:00 Tony Produces so very automated. 00:07:02 Tony And then #5 is it helps you with other forms of marketing and has other benefits outside of just direct return. 00:07:12 Tony So I mentioned direct mail, another one is private money. If you raise private money, that's something that will be much easier for you to do. 00:07:23 Tony I've actually had someone come contact me and actually walk into our office and say, hey, I want to invest in real estate. I see your commercial. 00:07:29 Tony Those I want to invest in real estate, but I really don't want to fix and flip like what are the other options? 00:07:34 Tony So within about a 12-month period, I our excuse me, I turned him on to private money right away within a 12-month period him and his family had about $1,000,000 invested with me within about a 12-month period and they still continue five years later to invest in. 00:07:48 Tony My deals today. 00:07:49 Tony And so there are many other benefits that I could go on and on about, but I like to talk about those top five 'cause I think those really touch the surface on how TV can help real estate investors in their game and it just totally sets you apart from your company. 00:08:05 JD Yeah, you know it's funny. You brought up the credibility because I Gee it, it was probably a year ago. I had read somewhere about there's something psychologically that you being on a screen. 00:08:21 JD There it adds credibility like to the average person. There's something about seeing you on a screen. 00:08:28 JD I I would even imagine that you probably get recognized in your local market if you're even in the grocery store. 00:08:35 Tony That's interesting, that's where I get recognized the most. And the interesting thing is I live in San Diego, CA now and the market I invest in is Wichita, KS, which was born and raised. 00:08:45 Tony So I was able to luckily get my team built out where they do all the hard work for me. 00:08:50 Tony So I just work a few hours a week in that business now and I live in San Diego. 00:08:54 Tony So when I fly into Wichita and I go to the grocery store, I mean, I have people all the time. 00:08:59 Tony You're the TV guy, or you look familiar or you know, they just strike up conversations like they know me and it. 00:09:04 Tony Like who, who you know? Would you randomly talk to a person in the market? I mean some people do, but most people don't randomly just go up and talk to someone in the grocery store, but that happens all the time. 00:09:16 Tony When I'm in which it's on, it's you know it. You know I pay to be on TV and they act like people pay me to be on TV, right? You know, that's how that's kind of the celebrity. 00:09:24 Tony Status that you get whether you pay to be on TV or not. 00:09:28 JD Yeah, just to remind everybody, if you want more information on this, make sure you head over to realestatemasterstv.com. 00:09:36 JD And I know that you also have a podcast, right? 00:09:40 Tony Yeah, yeah. Real Estate Masters podcast names are very similar. 00:09:43 Tony Uhm, so yeah, I've been running a podcast for not quite a year yet. Quite a year now, but yeah, just like I think we've had some of the same guests on our shows and have a lot of the same networks so. 00:09:57 JD Yeah, no. You definitely subscribe to that. And if you do me a favor. 00:10:01 JD While you're there looking for his podcast, give me five stars so that it helps. It helps both of us a little bit. 00:10:10 JD So you were saying that this is automated? Are you when you start putting out the this ad, do you find that? 00:10:22 JD Do you find that there's any ebbs and valleys even seasonally? When you're producing these commercials? 00:10:30 Tony It's not really seasonal. Uhm, you know, like for instance, you know we did. We were filming this in February, January. 00:10:38 Tony We did 4 deals off of TV so $5000 ad spend will bring back over 100 grand in return. 00:10:46 Tony Right, February. I don't think we've done any quite this year. We're not quite at the end of February, so I don't think it's necessarily seasons. 00:10:55 Tony It's, you know we may pop four or five deals in one month off TV and then next month one next month three. I mean, it's not really. I don't think it's it's, it's seasonal. 00:11:06 Tony But just like any marketing method, it's ebbs and flows, so I can't see sit here and say I do 3 deals. 00:11:11 Tony 4 deals consistently every single month. If anybody said that about any marketing method, there might be one or two that are a little more consistent, like cold calling and texting that are very laberint. 00:11:23 Tony Offensive, but for the most part when you're doing any mass marketing, I mean it's hard to predict what month you're going to get deals and what. 00:11:29 Tony What month you're not going to? 00:11:30 JD Sure, you know what you and I before we hit record, I was asking you about like some of the online video services and like do some of these advertisements hit that. 00:11:43 JD But now that I start to think about that, that's likely not the audience you're after. I mean, a lot of the people that we're talking to are still watching broadcast television, and in the local markets and listening to the radio. 00:12:00 Tony Yeah, all the shows we hit our local stations that are going to be local stations in every single market and most likely be on most networks so you know Cox Communications. 00:12:11 Tony I think Spectrum has one locally here in California YouTube TV. I think Hulu even has local stations. Now if I'm not mistaken. 00:12:20 Tony On their service, so is it as long as it's a local station, will I mean we're there so so you know? 00:12:28 Tony Obviously Netflix doesn't have commercials and things like that, but anything that has local networks were there, sure. 00:12:39 JD You know one of the things that I think is would be the one of the harder things is that if I if I was somebody that came off the street because in another life I used to sell radio advertising and if somebody came knocking on my door looking for radio time, they're always going to get the highest rate. 00:12:55 JD You know, because I was, you know, instantly going. OK, that's I got. I got a fish I'm I'm ready to to to have a big sale here. 00:13:05 JD How do you prevent that from him? 00:13:08 JD Like what should be what should be? 00:13:10 JD How do you pursue this type of thing? 00:13:13 Tony Yeah, that's a great question, so when I when I first did in 2005, I didn't know what a good rate was so I'm pretty darn sure I didn't get near as many commercials in 2005 as I got in 2012 'cause my media buyer is the one that negotiated all the rates for me. So just like you said, if I went into the station 00:13:32 Tony They would give me their, you know their highest rate. And then maybe I can negotiate from there, whereas a media buyer goes in and he goes gunslinging and says hey what kind of rate can you get my client 'cause I need to get him good rates so he gets. 00:13:45 Tony Good results so that it keeps buying 'cause the media buyer gets paid from the station and so the last nine years my media buyer has been instrumental in making sure that I'm getting the best rates that I know about any kind of specials that are going on. 00:13:59 Tony And so when I teach my students how to do it, not only do I teach them everything I know about TV. 00:14:06 Tony And give them all of the background and all of the behind the scenes. 00:14:10 Tony Stuff, but I have my media buyer work with them as well, which streamlines the process dramatically and gets them better rates. 00:14:18 Tony So if someone were to go do it on their own, they'd probably spend weeks, if not months, going to different stations getting different rates. And you know how it is if you go to, uh, you know all four stations, 5 stations or whatever you go to. 00:14:30 Tony They're all going to tell you they're the best. They're all going to tell you what you know, what they want, what they want you to do where. 00:14:36 Tony 'cause if you have a media buyer on your side, it's kind of like the difference between representing yourself in court as opposed to having an attorney, right? 00:14:43 Tony You can get away with it, but chances are you're gonna have better results if you have someone on your side. So the media buyer has been instrumental, and in doing that and for all of my students, sure. 00:14:54 JD So as you. 00:14:56 JD Mentioned that this really kind of supports your other marketing efforts like. 00:15:01 JD In this case you sent out yellow letters as well. Is there anything else that you typically do in conjunction with the TV ads? 00:15:09 Tony Yeah, we do a lot of things. TV is the where we spend the most money by far. We spend just a little bit of money on Facebook. 00:15:16 Tony Retargeting and Facebook ads. That's been hit and miss. We kind of go back and forth on that Google Pay per click. I. That's just consistent. I spend 1000 bucks a month and we get. 00:15:26 Tony You know, two or three deals a year off of that. I'm guessing maybe a little bit more in some years, so so, so that's low cost, decent return. 00:15:36 Tony We were on and off with direct mail, we actually stopped for two years. We just started again and it hasn't been producing very good results so we may end up shutting it off again. 00:15:46 Tony Uhm, we've done some cold calling. Didn't like that, uh, we've done some text texting and it's very labor intensive, but it's been good returns. 00:15:55 Tony We've gotten a few deals over the last, you know, six months or so since we started it, so it hasn't been. 00:16:00 Tony Horrible so. So yeah, we sprinkle a lot of things that you know, get us onesie twosies here and there. 00:16:05 Tony But you know, I love TV 'cause it's. It's much more consistent. And I didn't even mention this, but it kind of has to go with high ROI. But when you look at TV leads there. 00:16:18 Tony They're more. First of all, they're higher-quality leads. 00:16:22 Tony And then there's less competition, so you should be able to negotiate better deals. So we find that our best ROI and the best profit margins are off of TV leads. 00:16:34 Tony Because again, like if you go on direct mail leads, chances are someone else hit that list and you're maybe competing. If they go on Google Pay, you know Google. 00:16:42 Tony Google may find your paper click add. Chances are they're interviewing three to four other people, but whereas when you hit him on TV before they're thinking about selling and this is what I say on my commercials is if you've been thinking about selling your home, give us a call and that kind of triggers in their mind. 00:16:57 Tony Well, you know I was thinking about selling six months from now, but I you know I'm thinking about it. 00:17:00 Tony Me and people have said that before. Well, you said I'm you know I'm thinking about selling them. It's going to be six months from now, and either we've gotten deals way earlier than when they were looking to sell, or they at least call us first. 00:17:13 Tony So that when they're looking to sell three to six months down the road, my people can follow up with them and hopefully be on their radar. 00:17:21 Tony Before they contact anybody else. 00:17:24 JD So when somebody starts this type of marketing campaign like I can see a lot of people trying it like you even said initially you tried it and then just kind of let it. 00:17:36 JD You stopped and then and then saw somebody else being successful at it, like what, how? How long do people have to typically let something like this run to see some reaction or some behavior? 00:17:52 JD From this, because I'd have to say that you know this is likely something you'd have to be pretty consistent with. 00:18:00 Tony Yeah, so it, it all depends on there's so many different factors, right? It's you know, I encourage everybody to be in the commercials or some people that don't want to be. 00:18:09 Tony And that's fine. There's the message. There's the branding. There's the feel of the person. There's the size of the market. 00:18:14 Tony There's the budget compared to the size of the market that someone has, so there's so many different factors. 00:18:20 Tony But you know, I've got. You know I've got student. I just did a testimonial with a student today. He's he's. He's only been doing it for 30 days now he's gotten 51 leads. 00:18:32 Tony He's got two deals under contract that are going to net him at least 50,000 or right around now, just under 50,000, and he's got one other deal he put on her contract that he could potentially make another 40,000 on, so he's got 40. Excuse me 48,000. I think the number was in his first. 00:18:52 Tony Month and then another 40,000 from another deal that he's potentially going to close. 00:18:56 Tony Those and he's got other deals he's following up with that he said five of them could potentially pan out, and that's in the 1st 30 days. 00:19:02 Tony So, so that's a very good success story, right? I've got another guy in Lexington, Ky. He's done in his first two weeks. Actually, he got two deals under contract made 30 grand. 00:19:17 Tony And I haven't even talked to him the last two weeks, so he could have gotten another deal too since then. 00:19:21 Tony But you know, the first two weeks right out of the gate made 30 grand off of his car. 00:19:26 Tony So those are fast success stories and I myself popped a $35,000 deal in the first month. 00:19:32 Tony They gave me 10 times my money back just in the first month so it can work very fast. But what I do is I like to under-promise and over-deliver. 00:19:41 Tony So what I tell people is if you can get your money back within a three-to-six-month period. 00:19:46 Tony That's a total win because you've hit a ton of people in that period of time, and if they're not selling now, they may sell down the road. So if you could even break. 00:19:55 Tony Even within the first three to six months, I don't want you to. I don't want that to happen. I want you to have a three to five to maybe 10X return in a short period of time. 00:20:03 Tony But like I said, I like to under-promise and over-deliver. So even if someone doesn't get result in three months, that fourth month, it might start popping just like I told you in 2005. You know, I stopped after three months, the 4th and 5th month. I could have gotten. 00:20:15 Tony Maybe 2 deals a month moving forward from that marketing but to your point, yeah, it's a patience game so you know, even if you do have a great first month, the second month may be slow the third month, but then the 4th month may pop again, so it's definitely a long term play. 00:20:31 Tony It does ebb and flow, but I like I love seeing my students get success in the first month. It's really exciting to me. 00:20:37 JD Sure, well, so I know this is a pretty loaded question because I'm sure it depends on the market, but like, what would somebody typically have to budget for something like this? 00:20:48 Tony But I told you first two weeks he only spent 1850 in the first month and he got two deals that they made him 30 grand and the other gentleman that I told you about that will have a $48,000 month potentially even more based on the other deals he's going to follow up with. He spent around 7000 some between 7:00 and 8000 in the. 00:21:08 Tony Month, but he's in two markets. He's in two markets that are right next to each other. So on the low end, if you're in a small market, you can get away with two to $3000 in a month. 00:21:21 Tony So if somebody new in there in a smaller market, we can get them on the air and start getting them results. And then if you're looking at a bigger market. 00:21:29 Tony I mean, you know there's some markets we recommend not spending less than $10,000 a month, just 'cause you can't get. 00:21:35 Tony You can't get the frequency you need in a big market with less than 10,000. So yeah, you're right. 00:21:40 Tony It's market-specific, but I would say you know if you look in that 3 to $10,000 range. That's typically where most mark. 00:21:47 Tony It's arm. 00:21:49 JD You know, I I. 00:21:52 JD I mentioned when we started that a lot of the people that listen to our show my show is very new to real estate investing, so they're always trying to ring every last penny out of their marketing dollar. So if you had to do this all over again, would TV be the first place you'd start? 00:22:12 Tony Depends on my market. I mean, the short answer would be yes, because I've done well. Actually, I take so when I got in the business was 2001. 00:22:22 Tony So phone book was big for me back then, right? So that was my big first marketing place. So if you asked me back then phone book was the highest I think. 00:22:25 JD No, yeah. 00:22:31 Tony I was getting 20 times return on my money until you know, obviously, it started phasing off. 00:22:36 Tony But right now I would say absolutely, and there are people. Like for instance, I had a student yesterday shot at a her TV commercial. 00:22:46 Tony She's investing in Milwaukee, WI because she can get more ad spend for her money and do more deals than she has. 00:22:56 Tony Boots on the ground there, but she lives in California. 00:22:58 Tony I've got a gentleman that lives in Miami, but he's marketing in Cleveland, OH, Tampa, FL, and Orlando so I guess what I'm getting to is, even if someone lives in a big market like wholesaling, you can do anywhere in the USI talk to people all the time that are doing. 00:23:19 Tony Deals in other markets and this is something that is so scalable in other markets 'cause all you have to do. 00:23:25 Tony Is change the phone number and the domain on the commercial? Plug it into that market and with the help of my media buyer he can. 00:23:32 Tony He can get rates for you within about a week in that market and have a schedule together and have you on the market, within or on the air within a couple of weeks. So short answer to your question, yes, if you're in a big market. 00:23:45 Tony I would say find a smaller market to maybe do TV in. If you're in a small market then you can get away with two to $3000 a month and you know if you get one deal within the first three months. To me it's worth it. 00:23:58 JD So you know I always like to leave people with a couple actionable items like something that they can. They can implement and make some changes like right away. 00:24:07 JD So if you had to get into real estate investing fresh for the first time, is there anything you would have done different? 00:24:14 JD That you know, hindsight is 2020, right? 00:24:19 Tony Yeah, so I'll give two different answers to that. I'll give the answer to what I see most people doing, and I see a lot of people spending a crapload of money on education like I'm talking about. 00:24:31 Tony You know, anywhere from $10,000 to 72 I'm. I've no one person to spend $100,000 on. 00:24:38 Tony Their education and coaching and. 00:24:41 Tony Setting up their LLC's and all this stuff, and they've never done a deal before. I mean, if I could have taken that 100,000 and put it in TV for them, I mean they could have been getting deals and leads right away, and, you know, been coached through the process of, you know, converting those leads, right? So for someone that has money and they're looking to invest it. 00:25:02 Tony In a bunch of money into education, I think TV. I mean obviously, I'm biased, but I think TV is the way to invest it as long as you have either someone that can help you do the deals, or you can know how to do the deals yourself, right? 00:25:18 Tony So that's what I recommend for other people. So for me, starting out not only TV would have been a great thing, but just getting mentorship, getting guidance right. 00:25:29 Tony So you know, JD I? I believe you have a mastermind, so being in masterminds is is incredible. I run masterminds I buy into masterminds. 00:25:40 Tony Like I think that is one of the best things you can do because masterminds are not. 00:25:45 Tony But only as good as investing in coaching. But it's almost like you get the advice and the experience of dozens of people in the mastermind, right? 00:25:58 Tony So it's not just one person you're hiring to get their perspective surrounding yourself with the best people, so really. 00:26:06 Tony Just people in general, it's getting the right masterminds. It's getting the right coach. If you hire A coach, it's hiring the right employees. 00:26:12 Tony And just get you know the right contractors just the right people. You just have to have the right people that you surround yourself with and that you trust in and that that bring you up to a higher level. 00:26:23 Tony Because if you have the wrong people they can bring you down. If you have the right people they can take you to the moon. 00:26:28 JD So well, with that being said, make sure you check out. 00:26:33 JD Tony Mastermind, if you go to rmmastermind.com you'll find that information. I know that you. 00:26:44 JD There's an application process to join that group, right? 00:26:47 Tony There is I'm right now I'm doing something very special, but yeah they can. They can go and apply and take a look at it. 00:26:55 Tony So a lot of it. What I've done in the past is experiencing investors. So I have guys in it. They're doing thirty 5000 hundred plus even up to 500 deals, uh? 00:27:04 Tony Here, so it's a very high-level group and recently I opened it up to newer investors that can actually listen in on those masterminds and still be a part of it. 00:27:14 Tony Because what we do is we collaborate. It's like hey guys, you're doing a ton of deals. We're all doing a ton of deals. What's working for everybody. What's not working? Who needs a device? 00:27:25 Tony So it's almost better than coaching. Like I said, because you get to get this, get to see what everybody is doing and just take those Nuggets away and implement your business. 00:27:36 Tony And I love running the masterminds you know, and I get so much every time we have a mastermind call and there's always things that I'm implementing from those calls so. 00:27:44 JD Right? 00:27:45 JD And then again, remember to head over to real Estate Masters TV com if you'd like more information regarding running TV commercials and I know that your team will almost do everything and anything and everything for them, including creating scripts and buying, buying those slots and establishing the schedule and. 00:28:07 JD You know if you really want to, you could just hand it over to Tony's team and for complete automation, right? 00:28:15 Tony Absolutely, that's almost turnkey, Yep. 00:28:17 JD Almost turnkey. 00:28:19 JD Well, I really appreciate your time and this was very insightful. I hope we can chat again sometime. I'd love to pick your brain around your mastermind sometime. 00:28:30 Tony Sounds great JD. I appreciate your time and thanks for having me on. 00:28:34 JD Well, thank you.
22 minutes | Jun 10, 2021
Adapting to a Digital World with Brad Van De Walle #241
Brad Van De Walle followed his passion in 2009 when he became a Realtor®. Since then, Brad has brought together several teams of successful, reliable Realtors and talented staff, dedicated to creating the very best real estate experience for their clients. His ability to connect with people combines with his infectious energy and unique sales approach to make Brad one of the most well connected and well-liked people in the real estate industry. Brad’s belief in working hard, taking risks, and trying the untried makes him relentless in the pursuit of growth and success for his clients, his business partners, and himself. The motto of Brad’s first real estate team “we sell a house every 3 days, we want yours to be next”, remains true many years later as Brad and his team launch the Infill Hub Group.How he learned to walk again in 2018 after landing in the hospital in an accident - and he closed two deals in my hospital bed!He runs the Greater YYC Group which through 2020 has been the #1 team in the #1 RE/MAX office in the worldHis team has closed over 500 transactions in 2020, with him personally doing over 100 sidesThe average agent on his team closed 20-30 transactions, almost 5x what the typical agent doesHe made $250K in 2020 alone from first-time homebuyer seminars over Zoom!He's an expert when it comes to marketing and selling new construction listingsHis team sold out a 168 unit apartment within 30 days after the builders had tried to sell it on their own for months We chat about: How to help Real Estate agents be super productiveHow to survive and thrive during the COVID PandemicHow to build a massive Internet lead-based businessHow to handle any objection a lead can come up withHow to add new construction to your book of businessWhy online leads DON'T suck - we convert them at a super high levelConnect with Brad:Website: http://coachingwithbrad.com/Facebook: https://www.facebook.com/doubleyourincomecoaching/ As you can already tell we have made some changes and a few more are on the way. If you are interested in what we have planned, head over to Patreon.com/REImastermind, and support the show today. Financial contributions are always appreciated along with a LIKE, SHARE, and REVIEW. It really helps us grow and reach more people with this valuable information. See you next time and tell a friend!LIKE • SHARE • JOIN • REVIEWWebsitePatreonApple PodcastsGoogle PodcastsYouTubeSpotifyStitcherDeezerFacebookTwitterInstagramSUPPORT THE SHOW!Get Exclusive Content on Patreon! • https://www.patreon.com/reimastermindGet $10 and Reduce Your Business Costs by Shopping at AppSumo • https://bit.ly/reiappsumoGet $10 Towards Your First Purchase at Drop • https://drop.com/?referer=3DC729"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - JD--- Transcript 00:00:00 JD Hoss Well, we have Brad Van De Walle is did I pronounce that right? 00:00:05 Brad Van De Walle Close Brad Van De Walle. My friends of 30 years, can't even say it properly so I don't. It's a tough one. 00:00:13 JD Well, it's well if anything, if you want to see his full spelling and go to his website coaching with Brad Com, especially if you're a realtor, that's what he specializes in, but he also has quite a bit of experience with real estate investing, and I really appreciate you coming on the show and providing some of that experience to our listeners today. 00:00:34 Brad Yeah, I appreciate you. Having me means a lot. Thanks so much. 00:00:38 JD So I know you're up in Canada like I, I'm just curious with our Canadian neighbors like how is the COVID been treating you up there? 00:00:49 Brad I it's definitely more locked down in the United States. I find you guys are a little bit of a free for all times, but you know we've had to be locked down. 00:00:57 Brad That being said, you know last year was the best year. In 11 years I've ever had in real estate. 00:01:02 Brad So I think you just gotta learn to adapt. I do a lot of stuff more, virtually like first-time homebuyers, seminars via zoom now. 00:01:10 Brad We actually do. 00:01:12 Brad Projects like investment projects that we have that we do five-year rental guarantees, so it's pretty rare to find a five-year rental guarantee, so we do stuff that you can put. 00:01:21 Brad You know 5% down now 5% down in 45 days. Possessions in two years and then you have a five-year rental guarantee after that. So I've been doing zoom seminars for investors. 00:01:31 Brad And selling those two, so that's been a big part of my business. Last year is just learning to adapt and help the world's going on. 00:01:39 JD Well, that's a big lesson, right? There is how you've learned to adapt. I mean, how did you come across and how has the like doing some of these zoom calls? How have they been received pretty well? 00:01:52 Brad Yeah, it's honestly. It's a major part of my business. Like for the Realtors that are possibly listening like first-time homebuyer seminars. 00:01:59 Brad I'm getting upwards of 100 to 120 people per webinar. Zoom that insane and then the investor webinars that I'm doing with my marketing team, I'd say. 00:02:03 JD Oh wow. 00:02:11 Brad See the most we have on is 130 up, so it's like. Yeah, of course, people looking for investment opportunities, especially whenever people see you know. In Canada we have some stuff you know we market to Toronto, who's obviously a massive city and then their prices are crazy in Toronto. Or sorry in Calgary. Our markets great, you know our prices. 00:02:30 Brad We're still at an all-time low. They're starting to go up. 00:02:32 Brad Now and when you can offer an investor a five-year rental guarantee like let's think about this, it's a five-year rental guarantee. 00:02:39 Brad Even if the place is vacant for five years, you're still guaranteed 6 1/2% of the purchase price yearly. 00:02:46 Brad Then obviously divided by monthly. So somebody looking for a great investment opportunity. It's huge and the projects. 00:02:53 Brad Ready for two years? So you want to think about this thing for seven years total? So there's a lot of people that have been interested in something. 00:02:59 Brad We got. 00:03:00 JD Can you compare that? Like what kind of turnouts would you have typically seen if you would have done all of this in person? 00:03:06 Brad I'll be honest with you, I never did, it's. It's a concept that I that we came up with. 00:03:11 Brad We were doing first-time homebuyers seminars live right. We do them in brick-and-mortar COVID hit. We tried zoom and then we were getting tons of action from zoom and then I thought like I'll be honest with you. 00:03:23 Brad I'm like can I sell a $350,000 condo or 400 via zoom to somebody who's never been to my city? 00:03:24 Brad Can I? 00:03:30 Brad I'm like, man, I don't know but we did it. We sold the time so it actually it was just flying by the seat of my pants to be completely honest. 00:03:38 Brad It was so successful with the first-time homebuyer seminars and like, well it's just tried to see if investors. 00:03:43 Brad Want to come on board and we were fortunate enough that we crushed a bunch of units that way too. 00:03:48 JD Yeah wow. 00:03:49 JD So can you talk now? You've really piqued my interest here on this whole the way this zoom thing works. 00:03:56 Brad I know. 00:03:56 JD So because I think a lot of people are struggling with what you're what, you've just. 00:04:02 JD Solved here to a certain extent, so when you. 00:04:05 JD When you are selling properties to these audiences, how do you present these properties via zoom? Are they photos and videos? Do you? Are you actually at the places like? 00:04:10 Brad Right? 00:04:18 Brad I know, so like it, you know it's I'm pretty comfortable on zoom. I've done a ton of these in these webinars, so if somebody looking to do it obviously make sure you practice, but you know, we have a whole pitch deck, a slide deck. We show the numbers we show the units. There are videos of the renderings that look. 00:04:33 Brad Basically like it's real and just talk about the project and the investment opportunity and how you know we had a limited amount of units for for a five year rental guarantee we had. 00:04:44 Brad You know, probably three or four different projects just depended what people threshold was. And yeah, it's a concept that, like honestly, you know your numbers. 00:04:53 Brad Aren't super great. I'm not going to sit here and say that there's 100 people on in 10 bot that's really not the case. It's probably still the one or 2% being realistic. 00:05:03 Brad But that being said, it's an hour and a half zoom. If you're getting paid as a realtor. 4 to 6% Commission, and your double ending it, it can be very, very lucrative. 00:05:12 Brad And it's away. But then what we've had so many that now we have a following. So now we've like 3 or 4000 people that are in our database 'cause we've been doing it for a year that when we launch a project, it's like here's our next project. People like Kate call me. 00:05:24 Brad I'm ready now and people are doing it at different times, so. 00:05:28 Brad You just. 00:05:28 Brad You just gotta get creative. Uhm, you gotta get creative in your market without doing different things. 00:05:34 JD So when you kicked this off, how did you promote it, mostly social or? 00:05:38 Brad All Facebook yeah, and I'm not attacked person so I have a marketing team that did it for me. They went and launched and it's being strategic in how you're launching it. 'cause Toronto market is doubled to triple what we are here and a lot of investors. 00:05:39 JD OK. 00:05:54 Brad Can't afford to invest in Toronto so but they want investment properties so we got with a couple of developers and said hey our costs are less than half. They're not ready for two years. Plus the five-year rental guarantee and people from Toronto or like. 00:06:06 Brad Oh my gosh, this is nothing and everything cash flows, so it's finding an audience that would be interested. I think is a big part of the marketing strategy for it is, you know, if you live in Orlando and you have some really great places. 00:06:18 Brad And let's say you know that, and I'm making this up for the record, let's say you know that. 00:06:23 Brad 30% of your clients are coming from New York 'cause people are fleeing New York. What you want to do is market bear. 00:06:28 Brad Don't necessarily market your own backyard market, where it seems inexpensive and like you have that strategy, and that mentality is don't necessarily go in your backyard. 00:06:30 JD Oh sure. 00:06:37 Brad Is where are people coming from? Find that demographic and go market there so you're the go to expert for the people in your city. 00:06:46 JD So is you know up in Canada is this? Is that something new regarding the five year lease guarantee? I mean you you? 00:06:54 JD I haven't heard people using that before. 00:06:55 Brad But never skin. 00:06:57 Brad I've never seen it. We kind of created it, uh, my business partner. Mark was the concept behind this idea that we had. 00:07:05 Brad And I launched about a year and a half ago. We actually sold 187 units to investors in Ontario in two weeks, so nobody even in my own city. 00:07:14 Brad So they came in that everybody like hit the papers everybody like oh, it's a fluke. And then he did it again for 87 units just this October. So it's not a fluke. I just got to know the right people and provide the right. 00:07:26 Brad Recipe as we call it has to be. There has to be a certain way for people to get on board, but it's definitely possible. 00:07:34 JD Huh, so during your let's talk about your real estate investor meetups via zoom, what? What kind of content do you typically cover? 00:07:43 Brad Most of the time it's project-based, so if I have, it just depends. It's going to be different project by different project. 00:07:49 Brad You know, sometimes we go back like at first we had a three-year rental guarantee, sold out a bunch, then we had a five-year rental guarantee to push us to the finish line to sell out some of. 00:07:57 Brad Rest so I talk about Calgary. Why invest in Calgary? Calgary is one of the top cities in North America. 00:08:05 Brad It's got top rating on the top in the world. We've been a little bit suppressed. I think we're the I think truthfully, we're the only market in North America that's been going down for six or seven years since 2014. We've been tanking. 00:08:18 Brad And then now we're kind of at the bottom. And now there's bidding wars like just the last couple months people are starting bidding wars. We're having 810 eleven offers like we hear all we've heard for years to our American friend. 00:08:30 Brad Ends and to the people out east. Now we're starting to get a taste of it too as well. So I just talk about how you know we're at the bottom invested now. Which you are. 00:08:38 Brad Do you want invest here or do you want to invest here? Because at one point in Toronto and I and Calgary were neck and neck for pricing. 00:08:44 Brad And then you know one went up and the other one went down. So we're on the mend. So just basically about the demographics. 00:08:47 JD Right? 00:08:51 Brad In my city. 00:08:53 JD No, this is is interesting. How you've adapted to this, and I I. Unfortunately, I don't think there's been a lot of people who have adapted to this online world. And, I'm actually pretty impressed with the numbers you're pulling. 00:09:08 JD For uh, for some of these zoom sessions. 00:09:12 Brad Yeah, it's all in the 99.99% of people that would try and fail. Just being honest I would fail myself if I didn't have the marketing person that I. 00:09:20 Brad I have I don't know how to set up Facebook. I don't know any do that. Then there's like text notifications that have to grow up strategically. 00:09:27 Brad There's emails that have to grow strategically. There's call to actions that have to grow strategically to up your attendance rates. 00:09:34 Brad Plus then, once they're there, you have to engage and make sure that they stay there. So there's a strategy behind that. 00:09:41 Brad Do is you know, engaging with your audience at the beginning, asking them where they're from so they feel like they're a part of it? 00:09:46 Brad Then you keep going down, and then you kind of stop. It's like hey guys, what do you think of this? 00:09:49 Brad And they get back engaged again. So there's actually a method behind the madness 'cause I've done. You know, 40 or 50 of them between the first-time homebuyers, seminars and the investment ones that we really have it down to an art form. 00:10:01 Brad So for anybody that's starting, it can be challenging if you don't, because you might get four or five people, and they're like this is a waste. 00:10:07 Brad It's not the waste you just didn't have the right tools to make it successful. 00:10:11 JD And you know, there's always some value in doing the pitch anyway, because the more you do it, the more you're going to get good at it so. 00:10:19 Brad Absolutely, even if there's four people on you know we haven't had, though I think the least we had for first-time homebuyer was eight, and we still went through it because you just go with the motions. 00:10:28 Brad It's like you know, it's like training a muscle. You just keep going and just get better and better and better. 00:10:32 Brad That and more comfortable. 00:10:34 JD Is there anything that you do to incentivize them to to show up other than the reminders? 00:10:39 Brad No, it's your call to action, like a first-time home buyers one. It's like you're going to make $50,000 worth of mistakes if you buy and people like holy crap like I'm like I don't want to make $50,000, so that's enough to engage people to come in. 00:10:54 Brad And we talk about how they could do that, and then the other one is finding our lowest price. 00:10:59 Brad The unit that we have in marketing it. 00:11:01 Brad To you know different areas of the country. It's like get a unit for 199 and they're like I can't even get a tree for it for 199 in my city. 00:11:09 Brad So that called the action 'cause you have three or four units at that price point brings, draws a lot of people in. 00:11:15 Brad Most of those get scooped up pretty quick, but some people won't want. We'll want other stuff as you show your presentation, so it's really your call to action. 00:11:22 Brad That is a big part of what will make you successful. 00:11:26 JD I really like the concept of you you're going to make $50,000 in mistakes. I mean that that gets people's attention. That's a great line. 00:11:37 Brad For sure, and even if you were, you know if you aren't investor looking for investors, it's pretty incredible. 00:11:42 Brad Like you know, just thinking right now off the top of my head 'cause you're like well, my mind always racing once you get to know me, it's like well what else could we do? 00:11:48 Brad It's like, well, I just bought a 24 unit project. We're in the middle of an offer for one in Saskatoon, and we'll need investors so you know you can even do that. 00:11:56 Brad You could, you could, if you're an investor, you could use it via zoom. 00:12:00 Brad Do social media be like are you tired of getting 3 to 5% market volatility like get there hit the pain points of people? 00:12:07 Brad It's like, yeah, you know, I'm tired of the markets and I, you know, they're up. They're down as soon as you know Trump tweets or Elon Musk tweets and skyrockets. It goes down. So a lot of people looking for something more secure so you can even. 00:12:20 Brad Find a building. If you're looking for investors. If you have, you know you have a pretty guaranteed return. 00:12:25 Brad Post it, say guaranteed returns for, you know as little as a $10,000 investment or what you want to do. 00:12:30 Brad I have never seen anybody do that, but for people that are on here that are looking to raise capital, there's nothing saying you can't have a small ad budget on Facebook. 00:12:38 Brad Go to the places that you know that have really good equity. Like Cali has amazing equity. You know what I mean? 00:12:45 Brad Find these people that have great equity that want to invest in other properties and make it completely hands-off so I don't know if. 00:12:51 Brad There's there's an opportunity, I guarantee you there for that too. I just never seen it. I just thought of that right now to be honest. 00:12:56 JD Do you, do you have? Do you have some pretty regular digital events now? Like where? Where could somebody find that if they wanted to? 00:13:05 JD Join one of them to see what you're up to. 00:13:08 Brad Uh, the truth is you could go again coaching with Brad Com, so whenever you go to coaching with Brad. 00:13:13 Brad Com it'll actually go in and I go into my first-time homebuyers webinar. To be honest, so if you wanted to see how I do them, you can sign up. 00:13:22 Brad The truth is, at the end, you know if anybody wants to call me and add some interest. I can kind of guide you to them. 00:13:27 Brad I can set you to the marketing company that sets it up for me. You know, whatever people are looking for, I don't really. 00:13:33 Brad Teach it or coach it. Being a real estate coach I. 00:13:36 Brad Do Coach how to do it, but the tax side. I have no idea. I just basically hopefully pay somebody to be like. Bring people here and then I'll do my thing. 00:13:39 JD Sure no. 00:13:44 JD So, and I think one of my questions was really too because I. I wouldn't be surprised if a few people that are listening to this might be interested in the investment options that you were talking about. They might want to peek in on the models. 00:13:57 Brad Yeah, we have some pretty crazy investment opportunities, so you know there's some. There's some stuff that you can get right now where, especially with the dollar like your guys, his dollar is still great, right? 00:14:07 Brad So everything can it. It's 30% off right now, so if you're buying 7 to 500, it's not. It's 30% off of that, right? So as the dollar is creeping up. 00:14:16 Brad Your return will get better, but there's some. There's some you know. I just bought one with my father-in-law and he bought another one. 00:14:22 Brad You know you're buying something at 520,000 your mortgage at 20% down. It's maybe 1600 bucks, but these things rent out for $3400 a month. 00:14:31 Brad So by the time you add on your cash flowing eight 900 bucks a month, which is pretty absurd for that price point, for a legally sweeted house. 00:14:39 Brad So there's just all these options. You just gotta look for him. And now with Calgary market being suppressed like I sold five to investors last week because they're like holy crap, that's an amazing cash flow so. 00:14:50 Brad Uhm, you know they're there. You just gotta look for deals. Maybe they're not in your backyard. 00:14:54 JD Right? Are they houses or are they like multi-family condo-type units? 00:14:59 Brad Single-family homes 520,000 seventeen 150 square feet up. Then a legal basement suite in the basement. 00:15:06 Brad Two-bedroom basement suite. You get about 2300 up 22 to 2300 up and 1300 down plus util. 00:15:12 Brad Place and it's in one of our. It's one of the top communities in North America and Calgary called Mahogany. 00:15:17 Brad It's like a massive lake community. It's one of the best. It's one of the best places to live in Calgary, and I didn't even know it existed. 00:15:24 Brad Being in realtor even until two weeks ago, then I told my father in law I'm like, you gotta get one and Full disclosure, I've I have a bunch of rentals I can't get anymore. 00:15:32 Brad Unless it's commercial, I can't get anymore residential mortgages because the banks give me one of those because I just have. 00:15:39 Brad I just have too many, so unfortunately not in a situation where I can buy some. Otherwise I probably about three or four to be honest. 00:15:50 JD When you were running those numbers, I guess it was your business partner regarding this five-year lease guarantee. Like how did he come across that idea? 00:16:01 Brad The honest truth the honest truth. Love him or hate him was Grant Cardone. So we got rid of his training a while ago. 00:16:08 Brad Uhm, and our economy was really bad like this was like a year and a half ago and we had sold a few units and then the developer came to us and said we're going to shut this whole building down 'cause nothing was selling and that's the whole way. 00:16:19 Brad It was in the whole city for a long time and then Grant Cardone said something said, create your own economy and that's something that really stuck with us where all of a sudden we're like. 00:16:28 Brad OK, create your own economy. KF Albertans don't want to go here. Who might? And then we thought? Well, Toronto people have a ton of money 'cause they've got their properties have doubled, so they've insane equity that now they can't reinvest. 00:16:40 Brad So we flew to Toronto, came up the concept and we asked the developer would you take this risk and do a three year? That one was a three-year rental guarantee. 00:16:48 Brad And we crunched the numbers and it all made sense, and we brought the whole building over and sold it all so it was dumb. 00:16:55 Brad It was actually probably one of that for sure. Mark and I was, you know, his business partner on the side it was. 00:17:00 Brad He was the one that was really bringing it forward. It was him when I was on the sideline. It's probably one of my most proud moments, and you'd say the same that we have in our career is being able to make the headlines. 00:17:09 Brad And we're the only building that's sold out. There are still buildings that haven't sold out in Calgary in years, and we did it in two weeks, so. 00:17:15 Brad It was. 00:17:16 JD Cool, so how do you do that? Like in the sale price? Do you set out set aside like put money in escrow and then make the rent payments during that period of time? Is that how it works? 00:17:28 Brad So what it ends up being this way is it's just that rent is guaranteed, so for some reason the way that it was set up is the developer gets a property management company. 00:17:38 Brad They factor in, you know how many the vacant seed so they had to do all those numbers. We just had to sell it. 00:17:43 Brad They came back and said, sell this building so they factored in about a six or six and a half percent of the purchase price that was guaranteed. 00:17:50 Brad So then everything cash flowed. Basically, you just get a check from the developer every month and it happens. So then the developer takes the rents from all the buildings they have it out. If it's money in money out, I don't know how exactly. Maybe they put a 500K. 00:18:03 Brad Buffer in there, in case there's some you know vacancies and all that stuff, but the way it's done is you're paid directly from the developer, so you know it's guarantee. 00:18:12 JD OK, that's a really interesting concept. And like I said, I hadn't heard that before. And, uh, you definitely have created your own economy. I mean, it's. 00:18:24 JD Well, I just want to point everybody to your site again. I think you're going to find that some people are going to jump on a couple of your calls or two just to see what you're up to because. 00:18:36 JD Uh, I think that there is a lot of innovation that you got going on regarding what you're doing and reaching some of your the people that you need to coaching with Brad. Com Before we sign off, is there a question you wish I would have asked you here today? 00:18:53 Brad That's a great question. How old do I look? No, I'm kidding. 00:18:58 JD Younger than me? Let's put it that way. 00:19:01 Brad No, I'm getting no. It's a, you know, it's a great opportunity. And remember guys you know people that are on the fence for investing. 00:19:07 Brad I'll leave you with this. I remember my very first investment that I made whenever I was I was 21 years old. I bought my own house. 00:19:14 Brad And that was a big one that I bought a second one at 23, but I never really had. 00:19:18 Brad It was a vacation home. I never really had anything and I remember I bought my first rental property and I came in and I was super proud of it. 00:19:26 Brad I renovated it and they destroyed it and it was after about a couple weeks and I'm like I'm a realtor and I'm preaching this. I'm like this stuff. 00:19:34 Brad PS I'm the real state. I'm like it's so I'm just going to sell it. Never do investment by a friend of mine. 00:19:40 Brad And said just get a property manager and ever since then now I have about 23 or 24 different places. 00:19:47 Brad So just remember to take the plunge. The best time to buy real estate is yesterday. It can make a financial difference. 00:19:53 Brad Like if I have 24 places now when I retire doesn't matter. I could be flat broke as long as I don't ever sell these places, it's huge. 00:20:00 Brad So just make the first move. Indecision is the worst decision, so just make sure that you hop on the train and try it once, but I'm telling you once you do it once, even if you have a bad experience, it's how you deal with it. You'll want to keep doing it over and over again. 00:20:15 JD Wow, I'm going to steal that line indecision is the worst decision. 00:20:18 Brad Hey kid, I stole it from somebody I don't remember who, but I stole it to R&D, rip off and duplicate. 00:20:23 JD There you go. 00:20:24 JD Well, thank you Brad. This was a great conversation and I hope we can chat again sometime.
43 minutes | Jun 6, 2021
Establish Your Digital Real Estate with Todd Baldwin and Ryan Nielsen #240
Today JD chats with Todd Baldwin and Ryan Nielsen of Investor Nitro. Investor Nitro's lead generation team received the opportunity to help We Buy Houses investors with lead generation in 2016. Since then, they’ve fine-tuned the digital marketing strategies that attract the type of leads specific to America’s real estate investors.Investor Nitro was born after parent company Everyday Media Group found that real estate investors needed a solution for getting online fast. They wanted to provide a place they could focus on real estate investor's unique lead generation needs. Their team is ready to help entrepreneurs even more excited about motivated seller leads than they are!Investor Nitro members can expect the same quality of service that Everyday Media Group embraces: Transparency, ROI, and Best Customer Service on the Planet.Connect with Todd and Ryan at:Website: https://www.investornitro.com/Facebook: https://www.facebook.com/InvestorNitro/YouTube: https://www.youtube.com/channel/UCH7iorISpK5iAStV2t21R0AInstagram: https://www.instagram.com/investornitromarketing/Website: https://webuyhouses.com/As you can already tell we have made some changes and a few more are on the way. If you are interested in what we have planned, head over to Patreon.com/REImastermind, and support the show today. Financial contributions are always appreciated along with a LIKE, SHARE, and REVIEW. It really helps us grow and reach more people with this valuable information. See you next time and tell a friend!LIKE • SHARE • JOIN • REVIEWWebsitePatreonApple PodcastsGoogle PodcastsYouTubeSpotifyStitcherDeezerFacebookTwitterInstagramSUPPORT THE SHOW!Get Exclusive Content on Patreon! • https://www.patreon.com/reimastermindGet $10 and Reduce Your Business Costs by Shopping at AppSumo • https://bit.ly/reiappsumoGet $10 Towards Your First Purchase at Drop • https://drop.com/?referer=3DC729"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - JD---Transcript 00:00:01 JD Hoss Well, we have Todd Baldwin and Ryan Nielsen on the call and they are with InvestorNitro.com. That's a great domain guys. 00:00:11 JD I gotta give you props for that because we're going to spend some time and talk a little bit about real estate investment leads. 00:00:20 JD Made easy and I hope you guys can help us out because you both are a part of a company that helps investors. Find that digital presence. Find those consistent leads online, right? 00:00:36 Todd Baldwin That is correct. 00:00:39 JD So, as we chatted early on, we wanted to make sure that we start at the very beginning and talk a little bit about what people typically do on their own and struggle through some of this versus a value proposition that you bring. You know, a company. 00:00:59 JD Such as yours, so can you. Can you talk a little bit about what you've seen in the past and what type of results? I know that's jumping right in, but I think that's where we need to start. 00:01:12 Todd Yeah we can. I'll let me just talk a little bit about quick back story how we got into the real estate investment space. 00:01:18 JD Sure. 00:01:19 Todd Back in April of 2016 we had an opportunity to present to webuyhouses.com. 00:01:25 Todd Don't confuse them with. We buy ugly houses. Just simply webuyhouses.com a national brand and what webuyhouses.com does they sell counties to real estate investors? And if you purchase a county or the only investor in that county. 00:01:38 Todd And they're very big on Google Ads used to be known as AdWords or pay-per-click advertising and webuyhouses.com. 00:01:47 Todd They will actually build out a campaign for their investor, their licensees. They like to call them, but what they don't do, JD, is they don't actively manage those campaigns for them. 00:01:57 Todd On an ongoing. Daily, weekly, monthly basis so. It's pretty much. Build it out, set it and forget it. So that was our end. That's our opportunity to come in and talk to their licensees on why it is beneficial for an agency like us to actually come in. 00:02:13 Todd It's been trained by Google certified by Google and actually manage those AdWords campaigns or known as Google Ads now manage those campaigns on a daily, weekly, monthly basis. And so you talk about them trying to do it themselves. That's what we experienced out of the gate with a lot of the licensees with we buy houses and I'll give you a quick example 'cause we did an audit on some of those campaigns. 00:02:35 Todd One of the biggest investor at the time is out of Phoenix and we looked at his AdWords campaign. Uhm, we noticed he was spending several 100 bucks a month on the keyword. 00:02:45 Todd We buy bounce houses now. When I say “bounce house”, I'm referring to the kid play kid bounce house and this particular recipe had no idea that he was literally throwing away 00:02:55 Todd $200-$300 away of month just out the window because he was is ads were being served up on that search those keywords and he was getting clicks which obviously if someone looking for a bounce house and lands on a real estate investment landing page, they're going to exit very quickly with no action, no conversion so. 00:03:12 Todd That's how we got into this space and since then, which will be five years disabled, we've been working with real estate investors around the country trying to help not only with their Google ads, but website development, and they're really their overall presence online. In particular, Google and we also do some Facebook paid ads as well. 00:03:30 JD Well before then had you worked with any real estate investors? 00:03:34 Todd Not until not prior to November or excuse me, April of 2016. We had never worked with any real estate investors. We worked with other verticals. 00:03:44 Todd A lot of service-based businesses as well, but real estate investors become one of our main verticals and so I feel like we have a really good experience in that space. 00:03:54 Todd As far as what these guys are looking for, which everybody looking for the motivated seller. 00:03:58 JD Right, so can you talk a little bit about like the research and the work that you went into to figure out this new industry? 00:04:08 Todd Well, we've done a ton of Google ads in the past as far as, so we thought we'd get a feel of how to make Google ads work for a particular business. 00:04:17 Todd So when we jumped into the real estate investment space, we were able to talk a lot with the we buy House team and look at those campaigns and see what the keywords were and look at their listed keywords. 00:04:29 Todd And how they're building out and what the you know, what defines a motivated seller? And so it's really just combination of working with the guys in where we buy houses, the corporate office and US jumping into those campaigns and just doing, you know, following our process of how we manage an AdWords campaign and so. 00:04:47 Todd We when we look at that, I mean we talk about Google ads and there's also the search in search engine optimization side which is Ryan can speak on when you want to talk about that other side of Google as well. 00:04:58 Todd But jumping in AdWords it was really just working with the we buy house guys and getting a real good feel for how their business works because until we jumped in I. 00:05:06 Todd We've never worked in real estate investors. 00:05:08 JD Right now, the reason I ask is you know before the show you and I were chatting a little bit about my experience with an agency such as, you know, I don't want to put say such as yours because frankly, by the sounds of it, it's night and day. 00:05:21 JD I mean the company that I had had no experience with real estate investors and they were large company fairly. 00:05:28 JD Large company and I just felt like I was being put into the whatever box they thought I'd fit in and I wasn't getting anywhere near the results that I felt I should. In fact, I it almost felt like I was developing. 00:05:41 JD The keywords and the campaign anyway. 00:05:45 Todd Right, right you mentioned they kept wanting you to be a realtor and not a real estate investor. 00:05:51 JD Right? 00:05:52 Todd So apples and oranges. 00:05:53 JD So it felt like I was competing against myself or competing against an industry that I really wasn't interested in. 00:06:00 Todd Right, right? So I'm sure that was a pretty frustrating experience, so I think one of the things we talked to new potential clients that they obviously like is the fact that we have been working in this space going on five years. 00:06:13 Todd So if we're running the Google ads campaign for somebody we're actually in, let's say we test some ad copy or test keywords or. 00:06:21 Todd Uhm, whatever it may be converged looking at a site trying to make it convert better. We do come across things that we feel like are working or moving the needle. 00:06:28 Todd Then a lot of times we'll share that across the board with all of our accounts. So if we're testing here, there's a really good chance it could benefit you, even though it could be 2 totally separate sides of the country. So just one of the benefits of working with an agency. 00:06:41 Todd That works with a lot of different real estate investors around the country. 00:06:47 JD Yeah, so the that that agent that company that you helped with and you found that they were advertising for bounce houses? 00:06:53 JD Have you found that that's the case? It almost sounds like they probably copied and pasted a list of keywords from somewhere, someplace and hit and hit pay and off it ran. 00:07:06 Todd That campaign was built by the We buy House. Uh, we buy houses corporate. So what we found with those campaigns, they were built out of the gate properly. But well, Google is really good at. Is giving you suggestions, especially if it. 00:07:18 Todd Your do it yourself when you're trying to manage your own campaign, they give you these suggestions that make it look like. 00:07:25 Todd Click here add these suggestions to your campaign and you'll magically move the needle and a lot of times what we found. 00:07:32 Todd Those are just designed to make Google money and not lead to better conversions or to better optimize. 00:07:38 Todd Or a better-performing campaign. So that's really they're really good at letting waste creep in there. You know, one of the main things you've got to do with an AdWords simple AdWords account. I'm gonna say AdWords and Google ads. I'm gonna get them intertwined all day 'cause I've said. 00:07:52 Todd So AdWords for the last 15 years and they just changed it. So excuse my if I'm saying the wrong terminology. 00:07:58 Todd Anybody out there listening that knows what I'm talking about? But yeah, they're great at giving you those suggestions. Hoping you'll spend more money and like I would say one of the best basic things you've got to do is create a negative keyword list and then constantly be updating that. 00:08:12 Todd List and so it's as simple as making bounce house. You know, putting that on your keyword negative list. So telling Google I do not want to show up for bounce houses, so just simple things like that that if you're doing it yourself. 00:08:22 Uh. 00:08:26 Todd More than likely going to miss a lot of these little things that can really help you. 00:08:29 Todd Campaign. 00:08:30 Todd Perform better. 00:08:31 JD Well, that that was a piece of information there that I think people a lot of people probably aren't familiar with is that there's even a negative keyword list. 00:08:41 JD When it comes to Google ads. 00:08:43 Todd Yes, we have a. We have a very robust keyword, less negative keyword list and anytime we launch a new campaign with a new client there, we're automatically loading that list up to their campaigns as well. 00:08:54 Todd So out of the gate, you're ready, you're really getting the best of our best campaigns to that date, meaning anything we've changed or tested that. 00:09:02 Todd We thought it's working. 00:09:04 Todd We're always incorporating that into a new campaign for a new real estate investor that we may be launching. 00:09:11 JD So how do you manage these? These Google campaigns? Are they like in the individuals Google ads account or do you have some sort of consolidated portal that you manage all of this from? 00:09:25 Todd Well, typically they are in our what's called an MCC account. They're in our Google account and. 00:09:33 Todd Click that out there and so, but we've also managed accounts. People we've talked to, our guys, and they've already had a Google Adwords account set up in their own MCC, and so the glasses. 00:09:43 Todd Can you just build it in my account so we're happy to do that too? We don't. We're not in the business of holding campaigns hostage or. 00:09:52 Todd When we build out a new campaign, we do charge a one-time setup fee. It's our feeling that hey, if you're going to pay us to set it up, it's your campaign. 00:09:58 Todd So if someone were working with us and were to leave, they can take that campaign with them as well. But to answer your. 00:10:04 Todd Question majority of our Google ads campaigns are built in our MCC account and we're managing them because most of the areas we talked to. 00:10:14 Todd Aren't they don't have their own account set up? They don't manage their own account, nor do they want to. 00:10:20 JD Sure, I feel like we've kind of done this a little backwards because I and we're going to have to get to the search engine optimization and stuff here soon. 00:10:28 JD But 00:10:29 JD And usually that you usually have to support what you're talking about with a good website and SEO, but. 00:10:38 JD Could we get a couple ideas as you know, like I told you when we started this recording that a lot of investors are trying to wring out every penny they can in marketing, uh? 00:10:51 JD A great example is what we were chatting about before as well is our postcards and the mailing campaigns. We're just not seeing the return on investment that we have in the past, like what. 00:11:04 JD What ways do you have to keep costs under control and like low-hanging fruit that somebody could possibly implement right now for their Google ad campaign? 00:11:17 Todd Well, that's a great question. We hear questions like that similar to that a bunch. Google does a really good job. 00:11:24 Todd We talked about this earlier, not giving you a formula of 1 + 1 + 1 = 3 and they don't really give you the playbook of how to make it all work. 00:11:32 Todd Obviously, they're a little more helpful with AdWords, 'cause that's their paid elements where they're making all their money. 00:11:37 Todd One of the simple things you can do to really help your campaigns. We just talked about. Make sure you have a robust negative keyword list and you are telling Google what you do not want to show up with and really doing that. 00:11:51 Todd The way to come over that is just to be monitoring your campaign. Looking at it daily, weekly, and making sure seeing what searches. 00:11:58 Todd They're coming in and making sure if you see any. 00:12:01 Todd Thing that you don't want to be showing up for that is that's in your account. Adding that to your negative keyword list it, it just takes it, and I think that's why agencies or I should say why so many people don't want to manage these. 00:12:15 Todd 'cause it does take real work. It does take real effort daily to look at these campaigns and see what is going on. 00:12:21 Todd With those as far as the you mentioned the cost per lead or no the ROI. What were you saying you feel like your motivate their leader down or? 00:12:31 JD Yeah. 00:12:33 JD Yeah, our the ROI on our mail-out campaigns right now is very very poor, you know? 00:12:41 JD Uhm, if you get a 1% response rate you that's amazing. 00:12:43 Todd Trying to put plates up now. 00:12:49 Todd What was that again? 00:12:50 JD If you get a 1% response rate, that's amazing. 00:12:53 Todd Right? We thought with Ad Words there's fluctuation in this so little background. We've been doing AdWords Google ads for. Like I said, 10 years ever since they launched it. 00:13:04 Ryan The Real estate investment vertical in this space for some reason we do see it go up and down and. 00:13:14 Todd If you were looking at our corporate site everyday mediagroup.com, you said three core values on there and one of them #2 is 100% transparent. 00:13:22 Todd So I'm very transparent with all of our potential new REI's and I tell them look, there's we're going to have some really great months and bijen along, and then we may hit a dip or two and go down the key things. 00:13:34 Todd Don't panic, just stay the course, look at the data because we have seen. 00:13:41 Todd Our months go up and down. Great months turn into OK months might have a bad month and all sudden we're trending back upwards and 100% transparency. 00:13:48 Todd Sometimes we're looking at each other saying what is actually causing all this. We have ideas and theories, but Google doesn't tell you they don't. 00:13:55 Todd You know also have a green light popping on. You hit the magic combination and keep doing that so. 00:14:00 Todd They definitely make a challenge in that, and to me it's just 'cause they want to keep getting paid right. They want to keep that advertising medium going and not make it. 00:14:07 Todd Easy for anybody to figure it out. The keywords go up and down to we see costs up and down anywhere from you know. $20 up to 60 seventy $80.00 a click. 00:14:18 Todd We definitely don't want to. We don't want to be paying $80.00 per click if we don't have to at the same time we paid $67 a click and we're getting conversions. 00:14:28 Todd We've never had investor tells that's bad, so it's really what's the data telling us and then try to adjust and keep moving. 00:14:35 JD And I'd guess that those clicks have a lot to do with the market you're targeting as well, like. 00:14:41 JD If you're in Houston, TX because of the size of the market compared to Fargo ND. 00:14:49 JD It's the cost. 00:14:51 JD Per click is going to be pretty different. 00:14:53 Todd It is. It can definitely your geographic area can definitely dictate that more competition. I mean it is a real life. It's a live auction. It's. 00:15:02 Todd Key ones getting bit on throughout the day. Everyday all day long so. 00:15:06 Todd We have a new campaign in Omaha, NE. We've actually never run a campaign there, but we're only a week or so old, but our cost for clicks $56 and I was actually talking to the gentleman who runs our campaigns this morning and say, you know, what can we do to lower that? 00:15:21 Todd And he looked at the data and said, well, Google say we need to raise our clicks. So obviously we'll make some tweaks. 00:15:26 Todd We're trying to get that cost down 'cause we typically don't. Don't run an average of 56 costs per click, but out of the gate. 00:15:32 Todd Great, that's what it is right now, so hopefully we'll be able to get that down a little bit 'cause investors can get a little bit, especially new ones that are getting in into AdWords and seeing that type of a cost just to have a Click to have an opportunity to get a conversion. 00:15:48 JD So with that being said, is there a suggestion like what does what would you typically recommend on the low end? 00:15:55 JD For somebody to budget on a monthly basis for something like this. 00:15:59 Todd Well, that particular investors budgeted too low, so we're getting a click a day and we're off when we look at how we do our management fees and our when we talk about budgets, our smallest budget that will recommend or run is 1500 a month and so that only gives you. 00:16:17 Todd $50 a day 'cause Google if you just do the easy math. 30 days in a month about divided by 15. 00:16:23 Todd It only gives you $50 a day to run, so that could be one click and you're down, meaning your ads are offline for the rest of the day. 00:16:30 Todd So it really just depends on the area and Geo how big it population we're targeting and things of that nature. 00:16:37 Todd For budget recommendation, uhm, looking at say Omaha, NE, he needs to be a minimum, probably 2500 a month to 3000. Just looking at early data coming in. 00:16:48 Todd So. 00:16:49 Todd It's obviously not a. 00:16:52 Todd Uh, achieve this medium out there, but we all know one deal couple deals a month. Could be a great ROI with the Google ads campaign. 00:17:01 JD Yeah, and I don't want to. The reason I asked you is I didn't want to scare people off because frankly. 00:17:07 JD Sure. 00:17:09 JD Some of the yellow letter campaigns that a lot of people are running right now costs far more than 1500 a month. 00:17:14 JD Sure, sure, yeah. 00:17:14 JD Sure, yeah. 00:17:14 JD Sure. 00:17:15 Ryan Yeah, we started. 00:17:15 Todd Now since the back it's, you know, $5 is $5 right? So and we definitely can serve it with people budget. 00:17:23 Todd We take that really seriously. It's everybody works hard, hard to make, make money, and so when we're doing our campaigns on Google, we definitely I always feel like we start off on a more conservative approach. 00:17:34 Todd To really see what the. 00:17:34 Todd Data tells us and make those adjustments based on what the campaign is telling us. Even though like I said, we run them all. 00:17:40 Todd All day every day that of the year we've got a campaign running, but they're all different. They're all unique to that territory and what's going on today? 00:17:48 Todd What what happened today? Obviously in Google ads is different than what happened back in 2016, so it just always changing. 00:17:56 Todd But we're big believers in it. We if it done right, we really think it can have a positive impact and produce a good ROI. 00:18:04 Todd But also tell people, hey, it's just one channel, right? It did, you know, we're working together you said hey, I'm doing Drake now and it's working. 00:18:11 Todd But I'm thinking about moving my budget to AdWords. I'd say no, that Channel is working. Keep doing it, you know. 00:18:17 Todd Don't stop it. 00:18:19 Todd If you want try AdWords, create a new budget right? So because it is it's just one channel of many that you can do in this space as you know. 00:18:22 JD Right, right? 00:18:28 JD So and just to remind everybody, head over to investornitro.com For more information and connect. 00:18:35 JD With Ryan and Todd regarding this option and these what, what options that they have available for you, I think I think you even have a free quick consult or an audit, don't you? 00:18:49 Todd Yes, we do, and you mentioned one of the when you mentioned that a while ago. What are some of the things you can do is to to help your campaign is if you see something like we're offering, take that agency up on it and let them do it. Free analysis on your AdWords account. 00:19:03 Todd And see what they're seeing in in in suggestions and what not. Our consultation is exactly what's designed for. 00:19:11 Todd We're happy to take a look at your Google ads account campaign and tell you what we like and what we don't like. 00:19:17 Todd And a lot of times we look at and we see a lot of things we don't like. But there's also times JD where we see a lot of things we do like. 00:19:23 Todd So at the end of the day, it's free information that to do what you want with it, we hope. Well, obviously we'd love to work with you, but. 00:19:30 Todd But if we feel like you're doing a good job in right hands, will tell you that. So we're big believers that there's plenty of business for everybody, so you'll never hear Sabbatia competitor, and you know it is what it is as far as when we see the data, we'll let you know. 00:19:45 Todd Hey, here's our thoughts. So a lot of good tip. There's a lot of good tips in there, and if not, it's done right. 00:19:50 Todd The. 00:19:51 Todd Help you. 00:19:53 Todd Correct some things that might be costing you money or some reasons why. Maybe you're converting poorly. 00:19:59 JD Right, well one of the things I'm going to head over to Ryan here Ryan. I'm going to put you on the spot on a couple things because you mentioned Todd that you wouldn't stop 11 Avenue if it's working for you. One of the things that I found that has worked for us to a certain extent is. 00:20:19 JD In my direct mail campaign, I ensure that I have a web URL on every piece that goes up, because if they're not going to call me, I can at least drive them to my website where I have the Facebook pixel and the Google Pixel. All of that loaded and ready for them so I can chase them around a little bit, but. 00:20:39 JD Brian, what can you talk a little bit about the importance of a website and. 00:20:44 JD And what some of that low-hanging fruit there that people may be missing? 00:20:50 JD I know some people will go as far as just throw up a WordPress site and hope for the best. 00:20:57 Ryan Yeah, so digitally and this is even true in direct mail campaigns for the most part. Ultimately they a lot of the direct mail campaigns I see you're driving somebody to a website to ultimately convert, and so it's sort of the you know, if you build it, they will come sort of thing in the organic. 00:21:15 Ryan Space, but even in paid and in direct mail there ultimately has to be somewhere for them to land and ultimately provide information if they're not going to call the number directly on the card, and so. 00:21:24 Ryan So I mean. 00:21:26 Ryan What we've really found over the past four or five years of building real estate investor websites is that. 00:21:32 Ryan Uhm? 00:21:34 Ryan It's a little bit of. 00:21:36 Ryan A saturated market is the right word, but there's a lot of players that are out there and there's a lot of people who have thrown up real estate investor websites with pictures of fistfuls of cash on the. 00:21:47 Ryan And what I find in a lot of our marketing efforts is that there's a lot of what I call these sort of drive-by submissions of somebody who will go and submit to 10 different real estate investor websites and then let's just see who can get me closest to market a. 00:22:02 Ryan A big thing that we have tried to drive home with the websites that we've been building is making them. 00:22:07 Ryan Personal making the real estate investor the face of that and focusing really on. 00:22:13 Ryan The. 00:22:14 Ryan The pain that's sort of driving somebody towards a real estate investor. What is the need? Why are they involved in this transaction? 00:22:21 Ryan Because for most of these people, yes, there's relief. If they get rid of their house, but this isn't a problem that they wanted to have to begin with, and so I want to make sure that it's very relationship-focused and very consumer-focused in its orientation. 00:22:36 Ryan Uh, we build in WordPress as well and we did. We did for SDL reasons. We did some piloting in another platform at 1.2, but we've kind of come back to WordPress just because it tends to be very easy for both our staff and for our customers to use. 00:22:52 JD Right? No, and WordPress is a great platform. It's just that you know, like what I mentioned was, is that. 00:22:53 Yeah. 00:22:58 JD But people trying to do some of this on their own, they don't have a lot of website building skills and they jump on five or pay somebody 5 bucks to throw up a template. 00:23:11 Ryan Yeah, and I mean and a lot of it really depends on what it is your ambitions are from a marketing perspective. 00:23:18 Ryan For example, there is a lot that you can get away with in a Google Adwords campaign that you can't get away with so much in the search engine optimization campaign. 00:23:26 Ryan And so well. 00:23:28 Ryan What we try to do, since those are. 00:23:30 Ryan Those two channels are our primary channels for advertising. We're trying to make sure that these two channels can work very synergistically. 00:23:36 Ryan Because the needs of COR now. 00:23:38 Ryan Not opposed to the needs of AdWords that we can get you firing on all cylinders for both of those channels, there's a good chance the AdWords and SEO will both convert really well. 00:23:49 Ryan So I'm I mean the biggest problem that I find when people go and this goes into Google Adwords. 00:23:58 Ryan Advertising too, is that the? 00:24:00 Ryan The. 00:24:02 Ryan The ceiling there, the amount of things that you could know. 00:24:04 Ryan No. 00:24:05 Ryan About doing any of these things is just immense, and for a lot of our real estate investors, that's really not how they want to be. 00:24:12 Ryan Spending the majority of their time is getting into the weeds of AdWords for example. 00:24:19 Ryan Or getting into the weeds of website development. It's really a situation where you can take advantage of all of this wealth. 00:24:26 Ryan Of knowledge that we've collected over the past five years in a very vertical, specific way. Because you brought this up earlier in the call. 00:24:33 Ryan This is a problem in the agency space is you're an agency. You do AdWords, so you could do AdWords in any vertical you could do SCO in any vertical you write, copy in any vertical. 00:24:43 Ryan And. 00:24:44 Ryan That's not really the case in my experience on the level of specialization that we've been able to apply to, this has led to a situation where we've been able to cultivate a few high-performing templates that we have data we know. 00:24:56 Ryan Hey, we don't need to go into a vague process designing some custom website for you. We've got things that work. We've got campaigns that work if. 00:25:04 Ryan We can get an appropriate budget together with very good chance of success in your market without having to spend a lot of time sort of building from the ground up. 00:25:15 JD So you know at one point you know I heard quite for quite a while that content is king and you know it's all about trying to feed the website with value and content. 00:25:28 JD I think that's the one thing that scares a lot of investors off too, because who has time to write all that? 00:25:29 Ryan Yeah. 00:25:36 Ryan No, it's a lot of effort, and there's frankly a lot of things that you need to know to really build, particularly on the SCO side to build content that is going to rank well. 00:25:47 Ryan Uhm, so that's one of the big value ads that we really bring to the table is for all of our sites we do write unique SCO optimized content and that content is informed by the hundreds and hundreds of patients that we've produced in the past few years. In all these different markets and seeing what performs and what doesn't. 00:26:07 Ryan Uhm, so it's. 00:26:10 Ryan Again, it's one of those areas and I would even say in AdWords two things have changed in AdWords too I I don't know if this has been talked about on previous podcasts, but Google last year changed the way that we could bid on real estate related keywords and one of the most substantial was that they got rid of our ability. 00:26:31 Ryan To target based on ZIP code, which was a big deal for real estate investors because we would get guys who call in and be like hey man I keep getting calls in this in this particular zip code and I don't want it. 00:26:42 Ryan And some of that targeting has been taken away for various reasons that we can get into. If you want to, but so it's all the more need at this point in time to have somebody who's really carefully watching that campaign and trying to make sure that we are actually getting motivated sellers from the clicks that we're getting. 00:26:48 Ryan Uh. 00:27:01 JD Wait, yeah, now that you opened the door why did they make that change? 00:27:08 Ryan Uhm, I think that there's some sort of legislative rumblings going on about equal opportunity and people being able to get housing and some perception. 00:27:18 Ryan I think in government that real estate investors make it difficult for low-income people to buy homes. 00:27:25 Ryan And so they got ready. And it wasn't just it wasn't just zip codes. 00:27:30 Ryan They did a bunch of things, uhm? 00:27:33 Ryan Gender, age, parental status, marital status and things that they felt were sensitive categories that might lead to discrimination in the way that we were bidding on their ads. 00:27:44 Ryan So that's something that we've had to adapt to in the past six or seven months. And it's just another challenge that sort of brought to the table, I think. 00:27:53 Ryan For a real estate investor who maybe already doesn't know what they're doing, and on top of that has been given a little bit less targeting than they used to have. 00:28:02 JD Right? 00:28:02 Ryan So. 00:28:03 JD Well, it sounds like a majority of the targeting is gone. Now how do you? How do you target some of these people? 00:28:04 Todd Yeah. 00:28:13 Ryan Well, uhm, there's a lot of different strategies that we can employ, but a lot of it gets back to the negative list and to try. 00:28:22 Ryan And you know, in every market it's a little bit different, and trying to look at it and determine. 00:28:26 Ryan Which of these clicks are actually resulting in qualified leads? Because this can vary from market to market. You can you have this conventional wisdom that sell my house fast or we buy houses that these are just money keywords everywhere, everywhere, everywhere. 00:28:40 Ryan Some markets they don't perform as well as they do in others, and So what we do look at as we gather data and these campaigns. 00:28:47 Ryan Is try to determine. 00:28:48 Ryan Uh, which keywords are performing best and pulling off of keywords that aren't even in the absence of some of these, these nice bid modifiers that we used to have. 00:28:59 JD So you know when people start paying for ads to promote their website, whether them using keywords and a few other things. 00:29:08 JD How does that impact the organic search engine up search engine results? Does that impact it at all just because of the extra? 00:29:18 JD Traffic, or is it? 00:29:20 JD Not even associated. 00:29:21 Ryan Yeah. 00:29:23 Ryan Yeah, so it's. It's been. I'm not sure that this has ever been explicitly said, but it's been suspected for a long time. 00:29:29 Ryan That user engagement signals like time on page for example, and balance rate are being taken into account to determine the quality of the page. 00:29:38 Ryan One of the things that you do have in an organic campaign is that when you're starting from the. 00:29:42 Ryan Bottom up, there's not a lot of traffic that's just flowing to your website. In other words, there's just not a lot of data that's being collected earlier on, and the quality of those pages, and so again, as far as I'm aware, this is not something that Google has shown their hand on. But being able to drive traffic through PPC to your website and to begin. 00:30:02 Ryan We demonstrate through those user engagement metrics that people are actually finding value on that page. I believe increases the likelihood that it will rank organically as well, because organic is definitely driven by those kinds of signals. 00:30:15 JD Sure, how about like video and some other kind of content? How important is that now, as part of that content on a website? 00:30:25 Ryan Uhm, video is crucial. This gets back to some of the personalization that we talked about. I'm a big thing. 00:30:30 Ryan I try to drive our clients to do is to develop a personal relationship with that person on the home page. 00:30:37 Ryan So again, rather than having stock photos of fistfuls of cash, I'd like to have a, you know, maybe a photo of the. 00:30:43 Ryan Of of the investor and his family, right? I build that personal relationship with it with them on the home page and if and if I do have an investor who either has a video or we've even. 00:30:55 Ryan I mean, in the past we've even developed video with our investors, if that opportunity avails itself, I'll put that towards the top of the page. 00:31:03 Ryan Because video gets a lot of engagement, increases the time on-page. Getting back to those user experience signals and it also begins to build that personal relationship between that motivated seller and the investor. 00:31:16 JD Sure. 00:31:17 JD So if somebody was looking to build a new online presence for a website and they're and they're talking to their local. 00:31:27 JD Web developer, what's? What are a couple of the questions they should be asking to ensure that they're going to do a good job and that it's a good fit. 00:31:38 JD I'm always worried that we're getting involved with companies that really don't know what we do as real estate investors. 00:31:39 Ryan Great question. 00:31:46 JD It, uh? 00:31:47 Ryan Yeah, I mean. 00:31:48 JD I've thrown up. 00:31:48 JD I've. 00:31:49 JD A lot of money on myself deal doing that. 00:31:53 Ryan The biggest factors that I'm typically looking for there and these may sound a little bit fuzzy and nontechnical, but I'm mostly looking again, I'm looking for that building a relationship of trust right? Especially in that first sort of 768 pixels on the page like. 00:32:10 Ryan I want them to know who we are, what we do and why they should trust. 00:32:14 Ryan Stuff. 00:32:15 Ryan Because you're there. If you're in a big market, you're there with dozens and dozens and dozens of other real estate investors. 00:32:20 Ryan How are you going to stand out in a big way that you can stand out is by turning your face out there. 00:32:26 Ryan Putting this human element to the pain that's driving somebody to this page and start building that relationship, and then the second component on a technical level is just look. 00:32:36 Ryan Over 60% of search volume is happening on mobile. 00:32:40 Ryan And so if you are talking to a web developer, I want to make sure that mobile. 00:32:47 Ryan Is being treated more or less like your quote-unquote real website? 00:32:51 Ryan Because the orientation for a long time was it look like on desktop right here. Here's the desktop looks awesome, but the reality is that the majority of your customers may never see your desktop website. 00:33:02 Ryan And so there just needs to be a strong emphasis on making mobile, usable and attractive for these motivated sellers. 00:33:10 JD Sure. 00:33:12 JD So so based on what we're talking about here today. 00:33:16 JD You know we're talking about having a search engine optimized website and the Google Adwords and some of these other campaigns. 00:33:23 JD I'm sure we could probably spend an entire episode talking about Facebook and social media for that matter, like how? How do we get this all to work together and coordinate some sort of marketing campaign? 00:33:30 Yeah. 00:33:39 Ryan Uhm, so it depends a little bit on. 00:33:44 Ryan It depends a little bit on the individual investor. A lot of the reason why we'll typically go down and see, oh Road to start out is is if, for example, if you're a real estate investor in a major metro, it's entirely. 00:33:56 Ryan And then you're just starting out. It's entirely possible that you don't really have the budget to keep the lights on for as long as you need to. 00:34:03 Ryan Big day to get enough clicks to start getting those sellers. So we do, at least in our agency we do have price points for SEO campaigns that will allow us to focus on organic search and Google My Business and to start building some presence. 00:34:18 Ryan Your mileage again will vary by the market. If you do have a lot of competition in your market, SCO can be. 00:34:24 Ryan A long play, it's a worthwhile play, but it can be a longer play than it is in areas where you have less competition. 00:34:30 Ryan Then 00:34:31 Ryan Uhm, but when we get a Google when we get an SCO campaign together, first of all, we improve the website as much as we can, both in terms of its conversion rate optimization and in terms of its search engine optimization and what that allows us to do is to have a very well prepared website for when that AdWords campaign gets started. 00:34:52 Ryan The third component here, and the one that we really haven't gone over. I know you mentioned social, but the one that I tend to focus on the most is actually Google My Business itself because some of the data that we get about that suggest that about. 00:35:07 Ryan 46% of those people who are seeing local search results are making decisions based upon what they see in the map pack, which are those in the map and the three search results that appear in local searches. 00:35:19 Ryan So a big part of what we focus on is on trying to help them show up in the map pack for their target market. And unfortunately, Google My Business is pretty counter intuitive. 00:35:34 Ryan When it comes to how you might actually go about doing that, and so we try to help investors position themselves for success in Google My Business as well as with their website itself. 00:35:45 JD No, you just sprung, uh, a small idea that I've had for a while is that it? It seems like at least in my market, it seems like when I'm doing a Google search for, you know, sell house fast or whatever you're getting, I'm getting a ton of national like big chains. 00:35:51 Ryan Yeah. 00:36:06 JD That are popping up in the search and I'm wondering if I need to provide more and more of an emphasis that I'm a local guy. 00:36:17 Ryan Uhm, I think that's part of it. I think a big part of it is trying to cast the net as wide as you can geographically on your website. 00:36:26 Ryan In other words, you know, let's we'll go back to Houston, since that was an example used earlier, right? You may think of Houston proper as the crown jewel. 00:36:37 Ryan But the truth is that there's a whole constellation of cities and areas that you'd probably be more than happy to buy in a way that you could build content out for on your website. For example, that could be one way that you could go about it in. 00:36:50 Ryan In terms of Google My Business itself. 00:36:53 Ryan Uhm? 00:36:55 Ryan The big challenge that we have, and this is true, despite the rollout of, Uhm, Google My Business service areas is that Google tends to preferentially display people who are literally within the city that was searched for. 00:37:11 Ryan And this is a real challenge if you know to take our market locally as an example. 00:37:16 Ryan Like if you're in Dallas and you're a real estate investor, there is a good chance that you might be willing to drive to Plano to buy a home. 00:37:26 Ryan But the reality is the way the Google My Business just treats you like you're a subway location, right? Like everyone is motivated to use the real estate investor who is geographically closest to them. That would be the best. 00:37:37 Ryan Real estate investor for them, and that's not the case and so. 00:37:44 Ryan Part of what I encourage people to do when it's possible is if you can set up other legitimate locations you know. 00:37:50 Ryan I know it's a little bit different in this line of work, but if you can't set up other legitimate locations and areas that you care about, claiming a Google My Business profile for those can be a powerful way to get some presence in those cities. But far and away the biggest problems. 00:38:04 Ryan But I've noticed this, especially in the past six months, come the biggest problems that we've begun to have in the REI space in Google My Business have been saturation and then web spam, and I think that. 00:38:16 Ryan Almost everyone in every market can relate to the fact that there is a. We buy houses something springing up every single night. 00:38:23 Ryan It seems like in your market and it's a challenge. It's almost like digitized bandit signs that are starting to show up in Google My Business and it. 00:38:32 Ryan And it's a challenge and we have. We have ways that we can try to help you overcome that. 00:38:36 Ryan Through reputation through review generation through Google My Business posts. 00:38:40 Ryan Uhm? 00:38:40 Ryan Uhm, but Google My Business is still I would say it's one of the big three in terms of channels. 00:38:47 Ryan So many people are responding to what's going on in maps and to the reputational signals that they get inside of maps. And so we have to pay serious attention to that, especially in the context of an SCO campaign. 00:39:00 JD Well, that is a big tip in. In fact, I don't think a lot of people are likely aware of how important the Google My Business. 00:39:11 JD Aspect actually is. 00:39:14 Ryan It's. It's crucial. Google is a little bit stingy with some of the performance metrics, but there is a good percentage of. 00:39:24 Ryan Phone calls. 00:39:24 Ryan Phone calls that come directly out of Google My Business itself without ever reaching your website, so. 00:39:31 Ryan Of all the publishers, I mean there's a lot of citations that you could do, and obviously, I mean, I'm future thinking I would love for you to pop up on Alexa or Siri or these voice search platforms, but the reality is, is that at this moment in time Google My Business is still. 00:39:48 Ryan Uh, make my opinion. The biggest publisher that there is. I'm in terms of people that you want to be listed with. 00:39:57 JD So well, I see that I've definitely consumed far more time than I think I. I promised you guys I otherwise I can keep going. 00:40:08 JD Or we before? 00:40:08 Yeah. 00:40:09 JD We call it good here today though. Is there anything? Is there a question you wished I would have asked you? 00:40:19 Ryan That's a great question. 00:40:21 Ryan Todd, can you think of anything? 00:40:23 Todd Well, I was thinking that's a good question too, uhm? 00:40:27 Todd No, I don't, uh, I can't the. 00:40:31 Todd I always tell people that we start talking about marketing. It's like a. 00:40:35 Todd Spider web that never ends right. Image that jetty. We could. People that smell all the time. How long do we need to? 00:40:42 Todd To have an introductory call and I always say it depends on how many questions you're going to ask, 'cause we could literally talk all day about digital marketing, but I cannot think of anything I wish you'd ask me. 00:40:53 JD OK well, I appreciate your time. This is this has been a really I appreciate all of the insight and information you gave to me in the crew. 00:40:53 Todd I really can't. 00:41:05 JD Definitely take him up on this. Analyze your current site with free website audit. I mean what like Todd had mentioned, why wouldn't you take somebody up on something like that? 00:41:16 JD Head over to investornitro.com. I hope we can do this again sometime. I think we could really do a deep dive, especially around social media. 00:41:26 Todd Yeah, we'd love to. So, uh, we're happy to help out and, uh. 00:41:31 Todd It's a lot of with investors about how we want to really engage with that site is just helping investors and give up free information. 00:41:37 Todd And like I said, you mentioned, they're happy to AdWords out it, we're happy to website on it, which should also tell SCO so worst-case scenario, you're going to have some idea of what's hurting your campaigns. 00:41:50 Todd If you take us up on that on that offer. 00:41:52 Todd So we'd love to. 00:41:55 Todd To visit with many Realty investors as we can and help as many as we can too. 00:41:59 JD Well, I appreciate it. Again it's investornitro.com. Thanks, guys, thank you. 00:42:04 Ryan Thank you, thanks so much. 00:42:04 Ryan Thanks so much.
30 minutes | Jun 3, 2021
Savvy Mobile Home Park Investing with Eloy Retana #239
Eloy Retana is a passionate real estate investor, author of the book The Top 3 Reasons to Invest in Mobile Home Parks, and the host of The Savvy Mobile Home Park Investor podcast. He is currently invested in 113 apartment and Mobile-Home Units while also investing in his ongoing education both through top-notch courses and through personal mentorship with two of the industry’s leading experts: Bryan Ellis and Adam A. Adams. Eloy educates why currently during this pandemic, mobile home parks have outperformed all other real estate asset classes and why he considers them a safer asset to be invested in as we enter a period of economic uncertainty.We chat about:Investing in real estate syndications is the best alternative to the stock market.Mobile home parks are not only surviving but are thriving during the pandemic.Becoming financially free with real estate investing.Raising capital for real estate deals.Connect with Eloy!Podcast: https://podcasts.apple.com/us/podcast/the-savvy-mobile-home-park-investor-show/id1522403664Facebook: https://www.facebook.com/groups/472974573325726Instagram: https://www.instagram.com/erzamora/LinkedIn: https://www.linkedin.com/in/eloyretana/YouTube: https://www.youtube.com/channel/UCPMQTkALshz1D_gU86Gyv-gAs you can already tell we have made some changes and a few more are on the way. If you are interested in what we have planned, head over to Patreon.com/REImastermind, and support the show today. Financial contributions are always appreciated along with a LIKE, SHARE, and REVIEW. It really helps us grow and reach more people with this valuable information. See you next time and tell a friend!LIKE • SHARE • JOIN • REVIEWWebsitePatreonApple PodcastsGoogle PodcastsYouTubeSpotifyStitcherDeezerFacebookTwitterInstagramSUPPORT THE SHOW!Get Exclusive Content on Patreon! • https://www.patreon.com/reimastermindGet $10 and Reduce Your Business Costs by Shopping at AppSumo • https://bit.ly/reiappsumoGet $10 Towards Your First Purchase at Drop • https://drop.com/?referer=3DC729"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - JD---Transcript 00:00:01 JD Hoss We have Eloy Rattana on the call Eloy. I really appreciate your time and everybody you need to stop what you're doing right now. 00:00:09 JD Hit pause on this episode and find the Savvy Mobile Home Park Investor Show and subscribe to that as well, especially if you're into Real Estate Investing and Mobile Home Parks and I know you do some multi-families as well, but I really appreciate you joining us here today. 00:00:30 Eloy Retana Hey, thank you for inviting me, Jack. It's a pleasure to be here and thanks for the plug on the on the podcast. 00:00:35 JD Absolutely, I can't recommend it enough and people should really check it out. So let's, could we start from the beginning here? How did you get into mobile Home Park real estate? 00:00:40 Eloy Thank you. 00:00:50 Eloy Well, if you go back to the beginning, like most people I started out doing single-family rentals either through lease options and later through doing sub twos and creative finance and. 00:01:04 Eloy So that's kind of how that was my started into real estate, but this was, you know, 20 years ago I, you know, I'm a 19 manager as a full-time job and at that time I had decided that you know, I was trying to bounce. Do I want to do? I want to do? 00:01:22 Eloy More real estate? Or do you want to focus on my career and at that time? 00:01:26 Eloy It was just blowing up so I made the decision to kind of focus on my career and then I would onesie twosie you know, had some acquisitions here and there, but it was more of a long-term play, right? Kind of build-out for retirement that was my thought initially. As time went on. You know, I learned a wholesale. I did a flip here in there but. 00:01:46 Eloy It wasn't really for me. I thought you know those were more transactional and I wasn't really looking for another job and I felt like, well, wholesaling just seems like another job. And flipping feels like another job, so I don't need another job. I already have one, so that's kind of how I started down the road of a real estate as a whole. 00:02:07 JD Sure, and then how did you ended up? Kind of specializing more into the mobile home and the mobile parks, right? 00:02:16 Eloy Yeah, so as time went on, uhm? 00:02:20 Eloy My partner, my now partner, we had become friends and about probably eight or nine years ago and he was he was doing full-time flips and wholesaling and new builds out in Colorado Springs and but he kind of saw the writing on the wall. He didn't want to do that. 00:02:40 Eloy Kind of work anymore, so he asked me. He started going. He started doing a lot of underwriting training through Anthony Charles, their group, and you know, he had asked me about partnering with him on picking up some multifamily. And that was the first time I had ever heard of Apartments or multi-family or anything along those lines. I didn't realize it was a thing, so the first time you brought it up to me I was like. 00:03:05 Eloy Whatever, I don't have millions of dollars to go buy multifamily, right? That was my initial reaction and you know, and he started telling me about. You know why it was a better player than trying to do single-family homes and around that time I started attending a lot of the meetups here in Denver were one of the local syndicators here Adam Adams here in. 00:03:26 Eloy Remember he started talking about basically the same thing, right? Multifamily how you can accomplish? You can reach your goals a lot quicker by teaming up with somebody you know like-minded. 00:03:36 Eloy And going for bigger acquisitions and that that made a lot of sense to me. So when we started down the road of looking for apartments and multifamily, we quickly found out that Denver was overpriced, that I lived here in Denver. Even back then, three or four years ago. 00:03:56 Eloy Everything was just so none of the numbers made sense, so we started looking at other alternative markets. Colorado Springs Pueblo even down into Albuquerque and Phoenix. But we couldn't seem to find anything that made sense and right around that time. Probably this has probably been now two 2 1/2 years ago. 00:04:15 Eloy He came up to me and said, hey, I think I got something down in Florida 'cause we had. Basically, we decided that we were going to focus on Phoenix, KC, and Orlando as our main target markets. So he found he found a trailer park in in Orlando in that area and when he initially brought it up to me, I was like a trailer park. 00:04:38 Eloy No way I'm not. I'm not interested. How do we? How do we go from looking for an apartment complex to finding a trailer park? It just didn't make any sense to me, so I was immediately. 00:04:49 Eloy There was just no way I want. I was interested in that, but he said no look at these. Look at these numbers. 00:04:54 Eloy We're never going to find an apartment complex with these sort of numbers, and I looked at it as I thought, wow, so I took a step back and I I told him I said OK, let's give me a week. 00:05:07 Eloy Give me a week to bury myself in as much education as I can about mobile home parks. I'll so I did. 00:05:12 Eloy I spent the next 7 to 10 days downloading and listening to every audiobook I can get my hands on, and every podcast on the subject. 00:05:21 Eloy And at the end of that seven days I, I thought to myself, not only is this a better. 00:05:27 Eloy On an asset for us, being that we're trying to find our first deal, but I think as the economy turns and it's going to be, it's a better asset class for us to be invested in personally and to be able to share with our friends and potential partners that might want might want to be invest. 00:05:45 Eloy In something like this because. 00:05:47 Eloy Everybody that I know, at least in Denver, everybody pursuing apartments. So how about we? How about we offer some slightly different right than your typical apartment complex. 00:05:58 Eloy Not to say we wouldn't do multi-family, we would. It's just that at that time and still right now it's very difficult to find cash-flowing deals and we find it. 00:06:07 Eloy A little bit easier to find cash-flowing deals if we go with mobile home parks. 00:06:12 JD Sure. 00:06:13 JD Well, can you talk about you mentioned the numbers? Can you talk about the numbers a little bit? How do people run the numbers on a mobile Home Park versus a multi-family? I mean that there are a pretty significant difference between the two, right? 00:06:30 Eloy Well, and the big difference you got to be aware of, I would say is the private utilities 'cause you know you don't have to deal with. 00:06:41 Eloy Septic systems in an apartment complex, right? It's usually all city, water, city, sewage in some. In some instances, not in every instance. 00:06:49 Eloy Every deal is different and every part is different. Some of the older parks you know there's still. There's still some parks out there that have lagoons right, and that pumping stations and that sort of thing I. 00:07:00 Eloy I generally stay away from that stuff, but you know my partner Steve. He had built cabins out in the middle of the forest out in Colorado Springs so he was used to septic systems and. 00:07:13 Eloy Uh, water wells. So it wasn't a big deal for him for me to take a little bit of getting used. 00:07:17 Eloy Feels like why, why do we want to tackle that? If we don't have to write, ideally we would want, uh. 00:07:27 Eloy Public Utilities right city water, city sewage, but that's not every case. There's some. There's some parks and good deals to be had. 00:07:36 Eloy Dad, if you're willing to look at a, you know a septic system. Parker to septic system or park with a water well, you just have to understand that and be. 00:07:49 Eloy Be aware that you are responsible for that maintenance, so those are the sort of things that you have to be aware of that a little bit. 00:07:57 Eloy Different from apartments the other. The other thing that I would say is a little different would be some of the grandfathering issues with the mobile Home Park because the rules keep changing with regards to grandfathering. 00:08:09 Eloy Of sort of units and certain parts. You don't get that with the apartment, so you have to be aware of that, but in terms of underwriting, I would say it's very similar. 00:08:20 Eloy I mean, you still want to be used to or have to consider your expenses and the number of units and that sort of thing. 00:08:27 Ehm 00:08:28 JD So what would be some of those challenges then that you've seen so far when it comes to mobile Home Park investing? 00:08:39 Eloy Well, yeah I would say the biggest thing is to make sure that you are. You know you. You understand if you're going to take on a park with water wells that you understand and make sure that you get those properly maintained. The same thing with the sewage system. 00:08:59 Eloy In a park, the other thing you would have to keep in mind is if you're taking on a mobile Home Park with Park owned homes, you have to decide whether you want to keep those right and keep them. 00:09:12 Eloy Maybe fix them up and rent them out, or whether you intend to sell them right. And for us it. 00:09:18 Eloy Given the choice, we prefer to sell them so we aim to own the land, but not that, not the units themselves, because it's. 00:09:26 Eloy From the insurance perspective, we don't have to tear the insurance on ARM and we don't have to maintain them. 00:09:31 Eloy If the tenants themselves own the units, but that's on a case-by-case basis on a part-by-part basis. 00:09:37 Eloy Sometimes we like to keep the units and fix them up and then rent them out because we can get we can collect more and in rents that way, but sometimes we've. 00:09:46 Eloy What we've done is that if we pick up a unit for say, two or three grand, we'll put another. 00:09:51 Eloy We'll drop another six or seven grand into it to rehab it, and then we'll sell it. Owner financing for 1516, right with collecting 5 or $6000 down and then spread the payments over three or four years for the tenant. And now that works out pretty well. 00:10:05 Eloy Just you gotta know what you want to do with the part going in right. If say the park has half of the units, are park-owned well what are you going to do with them? 00:10:13 Eloy What do you intend to rent them out? Or do you intend to keep them? Fix them up, and then sell them? 00:10:19 JD So you know one of the things that I've heard previously is that when you have vacant lots, it's very hard to convince somebody to bring in a trailer house, so you almost have to do it yourself. How do you manage? 00:10:35 JD Those vacant lots and getting them ready for potential. 00:10:40 JD Resident. 00:10:42 Eloy Yeah, So what we did recently is we purchased new homes. We put in one of our parks in Daytona Beach FL. 00:10:48 Eloy We purchased new homes and then we sell. We sell them again. It comes down to if your grandfathering allows you to put in another. 00:11:00 Eloy Unit in the empty space. Then you can do that and you can choose to put in a used one or a new one. 00:11:06 Eloy But in places like Florida, there's no shortage of people that they're looking for empty spaces. That's what that's one of the reasons we love Florida is that there's such a, uh, a migration. 00:11:18 Eloy It's the number I think they share that they would like the number three. Last year there were the number one migrated to state according to EU haul. 00:11:26 Eloy Statistics, but this year they dropped down in #3, but still that's the growth that Florida as a whole is experiencing. We don't see an issue finding tenants and look into securing our empty spots. 00:11:40 JD Sure, so how do you come up with the funding and how do you manage acquiring these new trailer houses to fill those empty spots? 00:11:50 Eloy Well, this last one I did for that one myself, but usually there's like a synchronous entry turn on. I'm trying to remember the name of the lender that you can lend out on the. 00:11:56 Eloy Right? 00:12:04 Eloy One of the things that we're doing with our new acquisition is we are we're going to pay for those ourselves on two parts. 00:12:12 Eloy I'm buying one and then my partner is buying the other one, and then we're going to use the rents to pay for the mortgage and that sometime in the future when we refine out of it, we'll basically exit. 00:12:24 Eloy All right, that's our Asian strategy for those individual trailers. 00:12:27 JD Sure. 00:12:28 JD So just again, if you like to hear more about what he's talking about, make sure you check out his podcast, The Savvy Mobile Home Park investor show, and I know you're pretty active on LinkedIn and Facebook and a few other places too, so I'll make sure to include those links in the show notes. Then I got to do a self a little self-promotion. 00:12:48 JD Here, if you liked this episode, please go to iTunes and give a quick review because it really helps other investors find this show. 00:12:48 Eloy Richard 00:12:59 JD So with that being said, you know I, I understand. 00:13:03 JD Trailer parks are always kind of a mystery to me, and it's kind of one of those. One of those things that as soon as people hear trailer park, they think of the Trailer Park Boys or some of that type of stuff. How do you? How have you worked past some of that stigma and maybe it's the location? 00:13:22 JD I understand like in Florida it's a lot of like retirement villages more than it is. 00:13:29 JD What we see on TV? 00:13:32 Eloy Yeah, stigma is the right word, and when I first talked to people, potential partners. 00:13:39 Eloy Yeah, that's a that's an issue. Yeah right, you have to you kind of have to talk about some of the realities. 00:13:45 Eloy I think I think a lot of that stuff and the media. A lot of that stuff is overhyped. We haven't seen those. Sort of. 00:13:51 Eloy Issues in our parts. And you're right, there's a lot of parks in Florida that are that cater to the elderly, right? 00:13:58 Eloy That's not to say that some of those problems don't exist. In some parts there are some problematic parks in Florida. 00:14:04 Eloy In particular, I think they topped out at 25,000 parks in the state of Florida, so I'm sure there's some. 00:14:11 Eloy Some bad apples, but we haven't seen that sort of. 00:14:15 Eloy That sort of problem we at the end of the day when we take over a park, we what we want to do is we want to create a clean, safe environment for all of the tenants, right? 00:14:24 Eloy So we do some basic things like you know we asked any of the park or their tenant-owned homes that to paint the exterior of their homes. They have to clean up, you know they clean up there. 00:14:35 Eloy Trash, unfortunately, you know they if they have the big you know dogs at the rotties and Mia and the pit bulls you know they gotta go. We love dogs too, but the insurance doesn't cover those big dogs, right? So by doing some simple thing. 00:14:49 Eloy The tenants know that we're looking to create a set a safe environment for all of our tenants. 00:14:55 Uh-huh 00:14:57 JD So have you ever had any situations then that you've acquired a park and some of these residents? 00:15:03 JD They're not in the financial position to do some of the changes that you're asking for, and if so, how do you handle or manage that? 00:15:11 Eloy Yeah, so we have had some of that. We work with our we work with our tenants. 00:15:19 Eloy We try to create an environment where they'll be able to. 00:15:24 Eloy Come to complete some of that stuff and we'll work with them on that. We haven't had any major issues. 00:15:31 Eloy I can't think of any. 00:15:33 Eloy Anything in particular, but most of our tenants realize that what we're trying to do is we're trying to clean the place upright, and most of them are actually very happy to help out with that. 00:15:45 Eloy So we want to create a clean, safe environment and pretty much everybody on board. We have had somewhat the what the. 00:15:54 Eloy With the tenant owned homes, we haven't had any issues like any environment where we have renters, there's always some bad apples and you know we have to evict them if they don't pay that sort of thing, that's kind of par for the course. 00:16:05 Eloy With mobile home parks, when you take a work part, there's always two or three people that that that refuse to play along. So you know, yeah. 00:16:14 Eloy We if that's the case, in most of our parks, they'll have like a month-to-month rent, so we just won't. We won't renew their leases in some cases. 00:16:24 JD Oh, OK. 00:16:25 JD And in those cases, most of those people just leave the trailer house behind. 00:16:32 JD Yeah, well in Florida. I know this is probably different from state to State 2 then how? How soon after do they vacate that? Can you take possession of the property or the trailer? 00:16:45 Eloy Uhm, you know that's a good question. I off the top of my head I don't remember but. 00:16:54 Eloy Yeah, I don't remember off the top of my head. I had to tell you something to come on. 00:16:56 JD Well, sure, yeah. And I'm sure it varies state by state, so that's something that people have to look into before they get into this, but. 00:16:59 Eloy That's disgusting. 00:17:06 JD Yeah, it's so when you evict somebody and you take over the property, then you essentially assess the trailer and decide whether it's a keeper or it needs to be hauled out of there, huh? 00:17:19 Eloy Yeah, that some of them are so old that you really can't move them. The city won't issue permits and obviously, the insurance won't cover you, so we've had situations where the units are in such bad shape that that really the only thing you can do is demolish it and replace it and other places. 00:17:39 Eloy In other instances, the units are, you know it's got good bones and all we have to do is replace a few panels and some carpet and do some work to it. You know, and maybe $10,000 worth of work and that takes care of that. 00:17:52 JD Right? 00:17:54 JD So in the end you know you mentioned going in and acquiring these properties and making them safer and taking some actions. I would imagine that in the end that likely keeps the turnover down. 00:18:08 Eloy Yeah exactly, and that's one of the beauties of mobile home parks is that the tenant turnover is like virtually I want to say like it's under 5% as a whole for most of the parks around the country because. 00:18:23 Eloy If the tenant owns a home and you can't and they can't move the home because it's so old, well then they're pretty much. 00:18:30 Eloy They're not going to go anywhere, right? So they'll campaign so that that causes a turnover to, you know, to be less than 5%, which is awesome. It's just what that creates is just steady your cash flow for everyone. 00:18:41 JD Sure, so outside of asking the residents to do a few things, what are the other low-hanging fruit that you found that can? 00:18:52 JD Clean up a park or turn it around or find some additional cash flow options. 00:18:59 Eloy Well, the big thing with the parks from the beginning is that there's still a lot of mom and pop shops operations that are out there, right? 00:19:06 Eloy And they won't. Many of them have owned the parks frames there for you know, for 20-30 years right? And in a lot of cases like our first two. 00:19:15 Eloy Marks the owner hadn't raised the rents and forever. In some cases, you know, 20 years. So a lot of the people that were living there you know they were paying. You know, 250 bucks a month. 00:19:27 Eloy And when the lot rents were closer to 600, right? So there's an opportunity there when you land the part like that to be able to. 00:19:35 Eloy To raise the rent slowly right to bring them up the mark up to market over a course of you know three or four years and be able to establish some decent cash flow for everyone. So it's opportunities like that, that that that we're looking for. 00:19:48 JD Sure. 00:19:50 JD So we're outside of some of that. Is there anything else that you've learned quickly that these mom and pops? 00:20:00 JD Uh, they probably have done the same thing the same way for so long that they're just not. They haven't kept up with times and or maybe even rent rates. 00:20:10 Eloy Yeah, one of. 00:20:11 Eloy The things that we're finding today as we're talking to some of these mom and pop operations is, you know, they they're tired, right? The most of them are elderly. They're tired of doing the that, the work. 00:20:26 Eloy Working with the renters, they don't have the money to fix the place up. What I'm finding is that we have an opportunity there to teach them about owner financing right where they can. 00:20:37 Eloy If they want to continue cash flowing, they don't get rid of the park because it's a source of income for them, right? 00:20:42 Eloy They just don't have the money to do anything new or to spruce the place up, or even cover up you know, the potholes and things. 00:20:50 Eloy Just simple things, right? So what we're finding is there isn't a really good opportunity for us to be. 00:20:57 Eloy Able to educate some of these mom and pop operations on. 00:21:00 Eloy On the benefits of owner finance right where they can move themselves from the position of owner to the position of bank right and then we can take over as the ship position of owner and pay them right so they can continue collecting cash flow and then we get and we get excellent rates on a loan directly from the owner themselves. 00:21:20 Eloy Which is awesome, so we're finding more and more about those sort of opportunities. 00:21:24 JD Right, so do you have you found you know you mentioned that? 00:21:28 JD They are having a hard time keeping the property up to date and a few other things because there isn't, uh, money there. 00:21:35 JD So what if that's the case, what makes it appealing to you? Like, do you typically find that they're under? They're not charging enough, or? 00:21:44 JD What other opportunities do you see that they're missing? 00:21:47 Eloy Yeah, I mean a lot of times like these first two parts that I was telling you about. 00:21:51 Eloy They weren't collecting the rents. It should have been right 'cause the market was up near 600. 00:21:56 Eloy So there was an opportunity for them to make a lot more money than it could have over the course of many years, but they simply hadn't raised the. 00:22:03 Eloy Right, right? And well, that's just. I mean, that's the way that business is. And then. So there is an opportunity for us to say, OK, how what's? 00:22:13 Eloy What can we do here with this property? Well, immediately we need to start raising the rents right and bring him up to market over the course of several years, right? We don't want to be jerked landlords either. We're not going to raise. 00:22:23 Eloy The rents 100 bucks has shot it. You know there'll be slow increments over the course of several years, but the people there know that, yeah, the rents are going to start going up to mark to market level. 00:22:34 JD Sure. 00:22:37 JD No, that that's really interesting and you'll have to forgive some of my questions because it is. This is such a newer topic to a lot of our listeners that I and I'm sure that there's a lot of interest. 00:22:41 Eloy No, it's OK. 00:22:49 JD There you know the. 00:22:51 JD Concept of a mobile Home Park is really appealing because you're essentially just. 00:22:56 JD Like you're doing, you're renting a piece of land. I mean, there's not a lot as much to go wrong. 00:23:03 JD You know, every time I turn a unit in an apartment or a house, I'm likely in there painting again or replacing flooring again, or what have you? 00:23:14 JD You really don't have that with a mobile home. 00:23:17 Eloy That's right, that's one of the things that made it so appealing to us is like the amount of work that needed to be done with so much, so, much less right and. 00:23:18 JD Uhm? 00:23:26 JD Right? 00:23:28 Eloy With the comings and goings of apartment tenants you know, yeah every time somebody leaves are going to have to. 00:23:33 Eloy You know, maybe fix some drywall or you know, do some minor paint job. Hopefully nothing big, right? But because? 00:23:41 Eloy It's natural that people don't stay in apartments very long. You have to kind of expect some of that turnover and some of the repairs that come along with that. 00:23:49 Eloy But we don't see any of that with the. With the park on horse or with the tenant-owned homes. 00:23:54 JD Sure. 00:23:56 JD You know, like at the beginning of the episode we were talking a little bit about, you know single-family homes and some of some of that. 00:24:04 JD But we it's easy in a single-family home to see comparables and to understand I mean it, it's a fairly simplistic process to do your due diligence like. 00:24:16 JD What do you do? 00:24:16 JD So when it comes to these mobile homes, I know in Florida there seems to be quite a few. But like you said, unless they're grandfathered in some other states that the inventory is rather limited, uh, I guess you based most of your decisions on a pro forma and some of the historical data. 00:24:38 Eloy Yeah, and then you know in terms of comps for mobile homes and parks, yeah, we rely on our brokers a lot and you know, Zillow. 00:24:41 Eloy Yeah. 00:24:50 Eloy You can pull up information on single London, sorry I'm on units, individual units kind of getting gauge what you know, say that 3/2 might be going for in Daytona or down in Cape Canaveral, so you kind of get a feel for where things are going for. But right now there's such a demand for homes. 00:25:10 Eloy Right, so we're in the process of purchasing new ones and a lot of the local makers are. 00:25:17 Eloy They've gone from 3 to like six or nine months in terms of being able to deliver on a brand-new mobile home. 00:25:24 Eloy So in this, because of demand, right? And the rising prices of a lumber recently in the last six months, the console lumber has gone through the roof. So that's just that's causing everything to go up like. Just like anything else. But still the demand. 00:25:37 Eloy More affordable housing is that the demand for manufacturing homes is steadily increasing. I think it's going to continue to do so because, like you know, in Denver prices are. 00:25:51 Eloy Becoming unaffordable for most people, right? If you're trimming? If you're straight out of college and can you afford a half $1,000,000 home? 00:25:59 Eloy Probably not right, and that's what we're seeing here in Denver. And really, in pretty much every major market. So I think there's going to be a trend over the next few years to downsize. 00:26:11 Eloy And to look for, you know, cheaper alternatives. 00:26:14 JD Sure. 00:26:15 JD Yeah, I you know it talks about cheaper alternatives. I even wondered if somebody could pull off some of those tiny houses in a trailer park. 00:26:25 Eloy It depends on the zoning, we. We were looking at that as an alternative in one of our recent acquisitions because in most parks and a lot of. 00:26:36 Eloy It's got mobile home and RV zoning and in some instances, we can make more money per month if we put an RV versus a mobile home. So it just depends on the area, the demand for that sort of thing. But in. 00:26:57 Eloy In one part, all we could do is mobile homes. It wasn't zoned for tiny homes or RV, so unfortunately but yeah. Well, like most tiny homes are, are classified as an RV. Is that it? 00:27:13 Eloy I think it's got its own. I think it's got its own classification now, but it's not classified as a mobile home. 00:27:16 JD Resignation, sure. 00:27:21 JD Sure, well I told you we in a blink of an eye we've spent 30 minutes chatting about mobile home parks and before we wrap up, I ask one last question is that is there a question you wished I would have asked you here today? 00:27:37 Eloy Question I wish I were armed. Well, one of the things that that that I tend to ask is you know what does the future look like? 00:27:48 Eloy And obviously we don't know, but one of the things that we, one of the reasons that we love the mobile Home Park space in addition to some of the things that we've talked about already, is because it's. We see it as a more recession. 00:28:02 Eloy Resistant asset right? So as you. 00:28:05 Eloy If whether the economy takes a tumble over the next few years or, you know who knows what the economy is going to be doing, but we feel pretty safe and we feel pretty confident that mobile home parks are going to fill the need for affordable housing, and they're going to. They're more likely to survive a big. 00:28:25 Eloy Economic downturn over the next several years. So we like the asset class and we're going to continue to build on our portfolio with them. 00:28:32 JD Sure, no. Well, I appreciate your time again and make sure you head over and find his podcast again. It's called the savvy mobile Home Park investor show. 00:28:43 JD And I definitely, if you're in on YouTube and you check it out, he's got partner with apex.com. 00:28:51 JD Uh, is one of the other sites. Yeah, he's pointing to it and then, uh, but I'll also make sure we have your social media links because I know you also have some YouTube videos as well. 00:29:01 JD It probably teaches quite a bit of this content, but I really appreciate your time again, and you're welcome back anytime. 00:29:09 Eloy Hey, thank you for having me. I really appreciate it. I had a great time. 00:29:13 JD Well, thank you Sir. 00:29:14 Eloy Thank you.
34 minutes | May 30, 2021
Properly Market Your Business in the Digital Age with Krista Mashore #238
Krista Mashore is a digital marketing coach specializing in Real Estate and the author of four best-selling books that teach YOU how to properly market your business in this digital age. As a former teacher, with a Master's Degree in Curriculum and Instruction, Krista loves serving people – and gets fulfillment by sharing the secrets of her success with professionals and businesses. Having taken her new business from zero to 7.4 million dollars in just 25 short months, using online digital strategies, there is a lot to learn from Krista.Krista joins us today to discuss how you can become a local star, by building your digital image and strategy. In the times we live in, this is the only way forward!Krista has her own successful podcast called “F.I.R.E.D UP with Krista Mashore”. Through her coaching, summits, courses, and best-selling books, Krista is changing the way professionals and businesses market themselves in the digital space. Krista's work has already been featured in Yahoo Finance, WSJ, Authority Magazine among other publications.Connect with Krista:Website: https://kristamashore.com/clientconversionPodcast: https://fire.kristamashore.com/podcastTwitter: https://twitter.com/coachingkristaFacebook: https://www.facebook.com/kristamashore/Instagram: https://www.instagram.com/kristamashore/YouTube: https://www.youtube.com/channel/UCRxGI0rigYqkRe27pUVNjQwLinkedIn: https://www.linkedin.com/company/krista-mashore-coaching/As you can already tell we have made some changes and a few more are on the way. If you are interested in what we have planned, head over to Patreon.com/REImastermind, and support the show today. Financial contributions are always appreciated along with a LIKE, SHARE, and REVIEW. It really helps us grow and reach more people with this valuable information. See you next time and tell a friend!LIKE • SHARE • JOIN • REVIEWWebsitePatreonApple PodcastsGoogle PodcastsYouTubeSpotifyStitcherDeezerFacebookTwitterInstagramSUPPORT THE SHOW!Get Exclusive Content on Patreon! • https://www.patreon.com/reimastermindGet $10 and Reduce Your Business Costs by Shopping at AppSumo • https://bit.ly/reiappsumoGet $10 Towards Your First Purchase at Drop • https://drop.com/?referer=3DC729"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - JD---Transcript 00:00:01 JD Hoss We have Krista Mashore on and Chris is going to help us with something that I think we all need a little help with and that is our online digital presence and squeezing every penny out of that marketing dollar Krista. I really appreciate you being on the show and before we started I warned you. 00:00:20 JD We're going to make sure everybody has your contact information right up front, so how would they best find you? 00:00:28 Krista Mashore Yeah, so you. 00:00:29 Krista Can just if you go to I do a free a five-day coaching challenge. It's here's Kristamashore.com/clientconversion 00:00:37 Krista It's christinemashore.com/client conversion. We teach you how to do really ninja marketing tactics to give you exposure to get those great investment deals. 00:00:48 JD Yeah, and make sure you subscribe to her podcast because she has one called fired up. 00:00:54 JD Then I know there's a lot of great content, especially regarding this. So again, I really appreciate your time. 00:01:02 JD And this is something that I think a lot of people, especially people who are getting into real estate investing for the first time. They really struggle with like I mentioned to you before we hit record. 00:01:13 JD That every real estate investor is trying to wring every penny they can out of their marketing dollar. But what you're suggesting is that they could literally become even. Maybe a local celebrity. 00:01:29 Krista Absolutely, absolutely, and Jack. Thank you so much for having me on here. I really appreciate it. I love what you're doing, so thanks for including me on this. 00:01:35 Krista It means a lot, yeah, so I teach people how to utilize content and to properly distribute it locally so that they can find those deals right. We teach people how to become literally the local go-to expert. 00:01:49 Krista In their profession or field and I call it being the Community market leader so anything real estate related or community-related. 00:01:57 Krista They start being the go-to person and creating content around it and properly distributing it so it gets massive amounts of eyes on there so that they can become well known and trusted. 00:02:06 JD Sure, well, a lot of people you know when the first thought when it comes to anything like this is, you know, Facebook. 00:02:12 JD For example, like what other things should people keep in mind, like how did they start? That's probably the best question I could ask. 00:02:21 Krista So and honestly to provide might think oh, this sounds a little too complicated and I'll tell you, it's really not right. 00:02:26 Krista So you want to start creating content and getting it out there so it can be seen and you can have a lot of exposure. So for example if you were to spend $200 on the video ad. 00:02:37 Krista You can get 304 hundred 506 hundred hours of watch time on that one video from a $200 absent right? 00:02:44 Krista UM, this one strategy that I used last year we did. We had 48 listings just from this strategy and we generated over $740,000 in commissions from those 48 listings from utilizing this. 00:02:57 Krista Video strategy, So what happens is most people will create content or they'll create a landing page and they'll say you're thinking about selling your house. 00:03:05 Krista You know, you know you don't want to put on the market or whatever else you click here, but instead what people need to do is they need to develop a relationship with their audience. And So what? I teach people how to do is to create con. 00:03:14 Krista Chat, let's say maybe it is regarding investing or finding flips or whatever it might be right? Finding the prototype house. 00:03:21 Krista If somebody is watching a whole video on that and you can tell they've watched say 75% or more, it's probably they're probably thinking about putting their house on the market and they don't want to have to hassle, right? So maybe they're interested in I buyer or quick cash clothes or whatever it might be. 00:03:36 Krista Maybe they're afraid of the coronavirus and they don't want to be exposed. Whatever that reasoning is, if you can create content and people are watching it, and then you continue to put more Khan. 00:03:44 Krista Intent in front of those exact same people. Then later on you talked to them about maybe doing a consultation about, you know purchasing their home. 00:03:51 Krista It's a totally different story. It's and it converts much more quickly than just sending them straight to the landing page where it says, hey, do you want a consultation? 00:03:58 Krista Does that make sense? And so that's what I teach people how to do and also to develop a relationship with their communities. 00:04:04 Krista That that people feel more comfortable, you know, reaching out to you and they're much more likely to convert because they've made a connection, they've developed trust and position you as the authority so the whole process just becomes so much easier. It's an attraction-based model instead of a instead of a, you know, chasing based model. 00:04:20 JD Right? 00:04:20 Krista Yeah. 00:04:21 JD So you're talking about video, and that's typically scares a lot of people like what kind of I've run into people who think that they need to have high end equipment and get the every bell and whistle. And it has to be perfect. What would they need to just get started? 00:04:39 Krista Well, look at us right now. We're just on zoom right? We don't have anything fancy. There's no words popping up. 00:04:43 Krista On the screen, all you need is a cell phone. Every single person has a cell phone. You see that I haven't have a cell phone and hit record start. 00:04:51 Krista Make sure there's no dirty underwear in the background or no. You know planes driving by or horns going off. 00:04:56 Krista You know, train horns going off and just start hit record right and no one. Let's be clear Jack weird people. 00:05:03 Krista Like to do videos. If you're one of those people that like to do video, you're weird, right? Most people do not like to do video. 00:05:08 Krista They're petrified of what they're gonna look like or sound like or how they're afraid. Their nose looks big or they're going to say the wrong thing or they're gonna look stupid or someone not going to like them. Everyone feels that way, but anything can be can be can be learned. 00:05:21 Krista And there's something called the parasocial relationship, and what that is is since our brains have been programmed to see somebody on the other side of a screen like the video or the TV or the phone and start to think of them as somebody important, they start to literally develop a 1 sided relationship with them. It's just like you do on TV, and when that happens the conversion process and the reaching out. 00:05:42 Krista Process and the attraction process just happens so much more naturally and seamlessly and without the person that's creating videos they don't even know it's even happening. 00:05:52 Krista Until all the sudden, they start hearing, I see you everywhere. 00:05:52 JD So. 00:05:55 JD Yeah, so you know outside of Facebook, do you recommend people posting and utilizing any other services? 00:06:03 Krista Yeah, so I. 00:06:04 Krista So people to do is it's it's very easy to get overwhelmed, right? So I tell people to master one platform. 00:06:09 Krista I personally think Facebook is the absolute best. I've built several multimillion dollar businesses from this exact strategy using Facebook. 00:06:16 Krista Alone, but start with that and you can also put it onto your website if you have one. If you put the video on there and the, uh, a transcription, you'll get SCO if you put the same video on YouTube, you'll get SCO because YouTube is owned by Google and so you start getting organic reach that way. 00:06:32 Krista So since you're doing the video, I highly recommend doing that, but I wouldn't work. I wouldn't be so. 00:06:36 Krista Concern right away of just doing it all because Jack of all trades master of none like pick your platform, learn how to run ads, spending a little bit of marketing dollars to make that marking bar go so much further right? 00:06:47 Krista And then once you've got that master, and I mean mastered it, it takes a couple years sometimes to learn these patterns, 'cause they change so often in Russia. 00:06:54 Krista Super ways, you've got tons of time on your hands and then go ahead and do more. But I'd say pick one and then move to the next. 00:06:59 Krista But yes, that's called video re purposing. 00:07:01 JD And we were purpose our videos everywhere. Sure yeah, you mentioned that that you. 00:07:03 JD Sure. 00:07:07 JD Broadcaster or place it on on every service you can, right? 00:07:13 Krista Yeah, yeah we do. We do. And again it's only 'cause I have a team now. I've helped but I didn't do that originally. 00:07:17 Krista At first, we just started with Facebook and then we put it on our website. And now we've kind of branched off and we were very successful without putting it everywhere. 00:07:26 Krista But if you're taking the. 00:07:27 Krista Time to do the content. 00:07:28 Krista You might as well put it in multiple platforms, right? 00:07:30 Umm? 00:07:32 JD So have you talked to talk a little bit about like what kind of content have you typically seen? You know, I, I think there's a lot of analysis paralysis when people are trying to make this content as to what. 00:07:45 JD What do I have to talk about? 00:07:46 JD Like it needs. 00:07:49 JD To be they feel like then it needs to be planned out or. 00:07:52 JD Or something like what? What are some of those topics that you would recommend? 00:07:56 Krista So what a great thing to do is like even just being going and having a hamburger or eating at a restaurant. 00:08:02 Krista Just, you know, take it. Take a video of you like Oh my gosh, where this hammer it's so good. 00:08:05 Krista I'm here at Chili's right now and they have a special you know, two margaritas for 20 bucks and you've got to come. 00:08:10 Krista Try it and by the way, if you're thinking of selling and you don't want to list your house, you know call me. 00:08:16 Krista We will work out something. We got a great deal, right or not even saying that, but you and it is there is a lot of paralysis around doing video content until you just keep doing it over and over again so you can talk about you can be a reporter. 00:08:29 Krista What I mean? 00:08:30 Krista By being a reporter is you could go read a book, good book or watch a great movie or or, you know take a coaching class or some kind of a class or and then you can just go out and talk about. 00:08:39 Krista Oh my gosh. Today I just learned XY and Z and it was amazing, right? You can interview other local restaurants or local professionals or local businesses. You can just talk about different communities. 00:08:51 Krista Or what's new or what's coming? 00:08:53 Krista You can give tips and tricks regarding your profession right? It might be like, hey, if you are thinking about selling and you want to get the most out of your property 'cause investors you know if they give information about helping people sell but they're also investors and they're giving information about how you you can sell, you know you can sell without having to do it the traditional way. 00:09:13 Krista They they're going to develop more trust, so I would also give tips and tricks on how to sell for top dollar and things like that. 00:09:19 Krista And when you're doing that, people are gonna think you're helping them, but also what they're going to think is, like, oh man, I don't want to have to do all those things. 00:09:25 Krista I don't want to have to put my clean my house and then people come through it. 00:09:27 Krista And blah blah blah right? 00:09:29 Krista And then you might even get some people that you can. You can get some traditional type sellers, which you then can give referrals out to other agents. And if you have a license, you can get paid a Commission doing that. 00:09:38 JD Sure. 00:09:40 JD So as a reminder, everybody I want them to have your contact information again, but definitely check out her podcast fired up with Krista Michelle. 00:09:49 JD Or 00:09:50 JD And what was your yeah? And you probably can find your website pretty easily just typing crystal mesh or in the in the Googles. 00:09:51 Krista Yes, fired up Christy Major. 00:09:58 Yeah. 00:09:59 Krista Christymajor.com it'll show up. 00:10:03 JD But I've seen more and more people having a lot of success with LinkedIn. Have you had any experience with that and is there a different strategy or tactic they should leverage on a professional network like that? 00:10:19 Krista So we use LinkedIn to come in. It's just a matter of making sure that you post content and you get value. 00:10:25 Krista UM, we're not renting any ads on LinkedIn and that you know there's different platforms and software that you can utilize to sort of target people. 00:10:33 Krista Like I said, I mean it's. I mean I have a whole I have a company. I've got a team now and we can't master all the platforms right? It just it is a lot. 00:10:40 Krista Of work, but I do think Lincoln can be very, very useful. I'm not sure for what your listeners are wanting it. 00:10:47 Krista It's quite as good just because I think a lot of people that I think a lot of professional boulder beyond LinkedIn most likely would sell their home in the normal way. They wouldn't be as interested in probably. 00:10:58 Krista You know, offering it for lower than networks, I'm not sure that would be the best area. I think YouTube would be better than Facebook and YouTube with their LinkedIn in my opinion for. 00:11:07 Krista Your audience, but I could be wrong. 00:11:08 JD No, yeah, that's a very good point. I think there's that's something that you you just pointed out that you have different audiences on these different networks. 00:11:19 JD Do you find that you have to alter any of you? 00:11:21 Krista And people are. 00:11:23 JD I was going to say were you going. 00:11:24 Krista So I. 00:11:28 Krista Sorry. 00:11:29 JD No, go ahead. 00:11:32 Krista No, I don't alter it, so I mean there are times I do content specifically for YouTube and YouTube is a little bit longer. 00:11:39 Krista The videos a little bit longer, right, but a lot of it's kind of the same people are going to YouTube to compare and contrast and learn. People are on so they're specifically going there typing in, you know, hey, how to. 00:11:52 Krista Sell my house without putting on the market or whatever it might be, but on Facebook you're kind of. You're kind of interrupting them, so the idea is to get them to stop this. 00:11:54 Krista Huh? 00:12:00 Krista Role and to click on you, but they're there so often and people are always on Facebook. The average person goes spends over 2 1/2 hours a day on social media, so you want to kind of like pattern interrupt kind of start like showing apps they keep seeing you over and over again. 00:12:15 Krista I mean how many times have you seen something? And finally after 12 times you finally clicked on it? That's kind of the idea. 00:12:21 Krista Of it, and if your content is interesting and if it's something that you know, especially if you're if they've already watched content previous and the content is similar to what they already watched, then you'll have a very good chance of putting information in front of that's very useful and valuable to them, so they'll end up watching it. 00:12:37 JD Sure, so you say pattern interrupt? Is there any tips or strategies there to get their attention? Because typically when you're scrolling through it's more of a thumbnail, right? 00:12:48 JD Like there's going to be some. 00:12:49 Krista Yeah, do you have an email or it's a video one of the two writes a thumbnail or video because sometimes we have the videos that just will play. 00:12:56 Krista You wanna you want to make sure it doesn't look like an ad right? The more it looks like an ad. 00:13:02 Krista The less likely it is going to convert, so you want to make it look as less adish as possible, and that's one of the ways. 00:13:08 Krista So you never want to have like a super stock looking photo that you could tell is just a stock photo, because simply stock photos aren't what they use for ads, right? So you want to there's different strategies. Sometimes we find that if you don't put. 00:13:21 Krista Any words on an added convert? It converts better like the initial clickthrough rate is higher, but sometimes if and sometimes people will do a picture that has nothing to do with what it is they're trying to do. The problem with that is is that. 00:13:34 Krista If somebody is clicking on the picture, there might be a high click through rate, but then the conversion rate isn't very high because the picture had nothing to do with what it is the person was thinking that they were going to the ad for or they didn't know what they were going to the ad for. So you gotta think about those kind of things too. 00:13:47 JD Yeah no. We had an example here locally where we had a realtor who made comment that until he'd been posting quite a bit of content on Facebook then it wasn't until he took that. 00:14:02 JD Pepper challenge. You know they were taking the Carolina Reaper. 00:14:07 Krista Oh, really. 00:14:08 JD He failed, he sat down in front of the camera and ate one of those Carolina Reapers and you know, basically lost it because I mean how hot it is. That's when he finally got his. 00:14:20 JD Local celebrity status. You know, that's what got people's attention. I guess people like to see others in pain. 00:14:25 Krista How hot is that face? 00:14:28 Krista Yeah people love that yeah people love that it's true. Negative publicity does better than positive publicity. 00:14:35 Krista For example, if you see a headline, man saves 10 babies like people aren't going to click, but it says 10 babies burn in building everyone reading. 00:14:42 Krista You know it's just so sad, but that that is funny. Yeah, I can imagine that video doing well and see people like to be laugh, right? 00:14:48 Krista For video, you want to be enthusiastic, you want to try to be entertaining. If you can or you just want to be engaging and educating, right? Like people like to learn and you do. 00:14:57 Krista You have to be like I know some people think like, well, I'm not very, you know outgoing, I'm not. 00:15:02 Krista I'm sort of, you know, I'm not really outgoing. Well, you don't have to be outgoing to be enthusiastic about your subject matter or to be engaging about your subject matter. 00:15:11 JD Right? 00:15:12 JD So you were talking about like between YouTube and Facebook, the YouTube videos can be a little longer and maybe a little more educational. 00:15:21 JD Uhm, is that something that you know a lot of? A lot of the marketing that we do is very persistent, consistent, you know it. 00:15:31 JD It's something that we have to send out on a regular basis. Yellow letters, for example. We send out postcards all the time. There's a new campaign going out on a weekly basis. 00:15:41 JD Do you find that there's like some sort of consistency associated with digital marketing too? 00:15:47 Krista Absolutely I can, I tell. 00:15:48 Krista My students, they should do that to aim for three videos a week, and if you can do two, you're awesome. 00:15:55 Krista Where you put a small budget behind it, right? And so you want to do like different objectives, whether it's the REACH objective or the video views objective. 00:16:02 Krista But I would say do one niche video which would be like your real estate investing right? Do one. 00:16:08 Krista Uh. 00:16:08 Krista A personal type of video or tips and tricks. Interviewing local restaurant eating at a local restaurant. Doing the you know, eating the Hot Chili type of thing and then one like market type of an update. 00:16:21 Krista What's happening in the market or real estate real estate type of video, right? So kind of mixing personal interviews, restaurants. 00:16:29 Krista With real estate and with your niece is the trick. So if you could do one real estate, one niche and one community slash tip trick hack video, yeah, like it's golden. 00:16:39 Krista Most people will not do that, but we find if you can at least do two a week. I mean you're going to start doing seeing some results pretty fast. 00:16:45 JD Sure. 00:16:46 JD And you said con the length of the content can vary depending on the on the platform to like how long like could uh should you be like a YouTube video versus a like a Facebook video, it seems like Facebook you'd have a less time. 00:17:02 Krista So they used to say. 00:17:04 Krista Yeah, you're totally right. And so it used to be like the YouTube. They weren't like 612 minutes long. 00:17:10 Krista Right now they're saying like 3 to 6 minutes is fine, or three minutes is just fine. OK, obvious people are getting less and less patient of watching things that people will look to see how long a video is and if it's too long, they just won't watch it. 00:17:22 Krista But top of funnel kids should be sure and as you start bringing people down your funnel, the videos can get a little bit longer. 00:17:28 Krista So if you can show somebody a video for 30 to 60 seconds and it captures their attention, they watch like 75% or 100% of it in the next video you show them can be a little bit longer and go into more detail because it's something you know they're interested in, right? Somebody only watched. 00:17:43 Krista 10 seconds obvious. They're probably not interested in it, so, uh, they're not going to watch the next one, but you want more highly qualified targeted leads, right? 00:17:50 Krista So they'll be more qualified when you start to bring them down the funnel and you start targeting retargeting people that originally watched the first thing and targeting them later to the second thing. 00:17:59 JD You know you you've been talking about the this, this funnel and the targeting. You know being able to like in Facebook if they watch 3/4 of the of the video, you know they're a little bit more. 00:18:11 JD Uh. 00:18:12 JD Engage than somebody else like does your platform or do you show people how to because that that advertising platform on Facebook can get a little complicated like do you show people how to do all this? 00:18:25 Krista Yeah, we show him how to do it step by step. We tell him we given step by step how to do it. We give him campaigns to run which objectives to do. We teach him all of it. 00:18:34 JD Yeah, well, I've just talked about the Facebook Pixel a couple times for example, and I can actually tell when people's eyes just gloss over. 00:18:42 Krista Yeah, I know, yeah they do. 00:18:42 Yeah. 00:18:43 Krista And it's that's not even hard. 00:18:44 Krista Just it's just different, right? So I mean we have to be willing, especially now to adapt, right? 00:18:48 Krista So we have to be willing to adapt to what our environments bringing us, and so the good part about COVID and what's happening with COVID is that people have been forced to learn to be online a little bit more, and quite frankly, in order for you to be known. 00:19:01 Krista You've got to be seen and you've got to be heard, right? Right now you can't be seen or heard in the normal way, so this is forcing you to kind of open up your mind to a new type of marketing. 00:19:10 Krista I mean this marketing is. I mean this has helped me be in the top 1% of Realtors throughout the nation. 00:19:15 Krista I typically sell anywhere from, you know, the year I left real estate to go into coaching. I sold 154 homes that year myself with like a transaction coordinator and a part time Assistant or an assistant, right? 00:19:26 Krista And now I have my brother who's acts as me and now like this year we only sold 90 homes, which for me is like super low. 00:19:33 Krista But I work about five hours a month creating videos, writing the scripts, and I'm just the face of the of the company and my brother now shows up and he's the one that takes the appointments and listen and my process and strategies like I'm coaching. You know 99% of the time so. 00:19:45 Krista So it it's not hard once you learn, it's just different right? It's just different, like when the first time we learn to do it, I think it's 2 1/2 hours. 00:19:53 Krista Now we can teach people. People have told me, Krista, you see Q2 and half hours. I remember wondering why the heck did I do this and now I can create. 00:19:59 Krista You know I can create 15, add in an hour like because it just gets to be so easy. It's not hard like it'll take about 6 minutes. 00:20:06 Krista And add once you get good at. 00:20:08 JD So, well, you know you're making me rethink a couple things myself. Because, you know, I create these videos, but I've noticed that there's quite a few people lately that we'll do a full length podcast like this, a video recording, and then they. They release a bunch of little clips from the show on the same channel, I suppose. 00:20:29 JD It's because of the smaller attention span of those viewers. 00:20:33 Krista Yeah. Take just some Nuggets out of it, right? So do the do the long one, take some Nuggets out of it and put it out there and then. 00:20:42 Krista If you can tell people are watching it, target them the whole one. Let him see the entire the entire piece but don't start with the long ones. 00:20:49 Krista Start off with some really good Nuggets on what they can do to improve their business or their life or whatever it might be. 00:20:53 Krista It grabs their attention and send him another one and then sending the wrong one. 00:20:57 JD Right? 00:20:59 JD So we can talk a little bit about image, how how should somebody appear on this? Because let's let's face fact, you know I'm a I'm a fat bald guy. 00:21:10 JD Sitting here in in near North Dakota. 00:21:15 JD Doing something in a local restaurant compared to you. I mean it's going to be night and day here. 00:21:21 Uh. 00:21:24 Krista That's so funny. So everyone thinks that, right? Uhm, it's not true. We have people of all different shapes, colors, sizes, ages that are doing this from across the country. 00:21:33 Krista And the ones that do it well, or the ones that just do it consistently, doesn't matter what they look like, how old they are. 00:21:40 Krista I mean I have I have extensions I have take care and I gotta say I hadn't had my hearing for a year and I felt so uncomfortable. 00:21:45 Krista 'cause my hair is short and thin and brown and ugly. And I was like Oh my God, it's so ugly. 00:21:49 Krista And I hated doing the. 00:21:50 Krista Videos, but I still did him and it didn't hurt my business that I thought I looked so ugly, right? I just it's just a matter of me doing it so. 00:21:58 Krista Anything can be learned. Anything could be taught, but you really do need the right support system in the right group you get you there. 00:22:03 Krista Otherwise, it's hard because we just go back to doing normal things. There's actually a study. It's called the change or die study, and these doctors told these people, hey, if you don't change what you're doing, you're going to die, meaning they have certain health conditions, like even they're drinking too much. 00:22:17 Krista Or high blood pressure, whatever it might be, after a year. Nine out of 10 people went back to their regular lifestyle, even though it meant they were going to die. 00:22:26 Krista There was another group that had coaching accountability and support. They had help. They had people to help them get through 77% out of 100 so you're 7 times more likely to make it changed even when it. 00:22:37 Krista Means death, right? If you have coaching accountability and support because we're all creatures of habit, so you know, having a strong support system being with like minded individuals that are doing it, seeing their success, seeing how well it's working, it makes it easier. 00:22:50 Krista You know someone said something to me today. I was actually on a different. It was a different podcast. Or what was it? 00:22:55 Krista Don't remember, but he said he said, oh. 00:22:58 Krista It was my coaching call so I had I had a guest speaker. 00:23:00 Krista My coaching calling was talking about marriage. He talked about how one of his coaches one time said to him Bart. Has anybody made $1,000,000 in this profession? 00:23:10 Krista And he goes Oh yeah, lots of people and they said OK then that means it can be done. And if you're not doing it, it's your fault and no one else is because it can be. 00:23:17 Krista Be done. 00:23:18 Krista Right and I was like, Oh my God, that is so powerful, because like, there's plenty of people doing it and that you know that are £400. 00:23:27 Krista Or, you know, maybe they've got a huge nose or they're 95 and they're doing well on it. It's like the only person to blame if you're not doing it as you write no one else. And I always say to people is. 00:23:38 Krista If you like money and you want to make an impact, then start using video because it breaks down barriers. 00:23:44 Krista It positions you as the expert people are much more willing to do business people that they know like and trust, right and so it's like when I go. 00:23:53 Krista When I used to go to a listing appointment, I mean and I've been hearing I love you. I'm almost 50. 00:23:57 Krista OK, Jack, so I think it's funny at your time that I look so much better than you it's. I'm 50 years old. 00:24:02 Krista But I've been hearing stuff like that for when I was 33 and I was young and hot and like smoking hot right here. 00:24:09 Krista I am selling 100 and 5000 sixty homes a year and people would say Christmas just because you're cute. 00:24:14 Krista I have heard that so many damn times in my career and I just go. Yep, you're right, you just keep thinking. 00:24:20 Krista That well, I just keep kicking your *** in business because I'm willing to do what you're not willing to do. 00:24:24 Krista Like that's what my mind is saying is like Oh yeah, you know no, it's because I've been willing for years and years to do things that most people wouldn't, right? 00:24:31 Krista So for example, when people were, you know, putting out black and white Flyers, I was doing 4 page colored brochures on my signs and I was putting the little disc, you know, little. 00:24:40 Krista Discs on there with 50 pictures and I was putting them on the signs and then I was advertising my listings on television and people were like Oh my God, you're spending all that money. 00:24:46 Krista It's like yes, I'm spending that money to make a ton more right. Or, you know, like doing these videos, I've been creating video content and I was scared to death before I had to have videographer's and they had to have two assistants. Is there's three of them watching me. 00:24:59 Krista And now it used to cost me, you know, $500 I can do for five cents right with my cell phone. And so it's just it's amazing at at what. 00:25:08 Krista What the impact? 00:25:09 Krista There's a reason why McDonald's markets on the Super Bowl when it costs them probably 500 times more than a normal day. 00:25:15 Krista It's because McDonald's knows that that kind of marketing works, right, that. That is why McDonald's is. I think McDonald's is like $170 billion company. Something crazy like that. I have a stat somewhere and Burger King is like a $7 billion. 00:25:28 Krista Company, the reason why McDonald's is you know. 00:25:32 Krista 157 billion times more successful than Burger King is because they are better at branding. 00:25:40 Krista They make tough choices, they innovate, they copy right, they see what's like. For example, they copied. They saw that Starbucks was working. 00:25:48 Krista They put coffee Starbucks, they put coffee into their into their restaurants. Now they made a tough choice by doing that because none of the franchises wanted it. It was a tough choice, right? So they copied it. They made a tough choice all in one. 00:26:00 Krista If you think about a burger like you said, I said McDonald's and right to your mind, you know what you think. 00:26:04 Krista The Golden Archers, right? You think of Mr McDonald. When I say Burger King, you don't really, I cannot. I don't even at the Burger King logo is OK and they're innovative, right? 00:26:14 Krista They're much more innovative and they were the first ones to ever utilize the ATM. You know, an ATM machine. Again, tough. 00:26:20 Krista Choice costs a little more money, no one to do it, but that tough choice makes them like over $160 billion more successful. 00:26:28 Krista In Burger King, does that make sense? So we have to be willing to do the tough things. Sometimes we need to be willing to brand ourselves. 00:26:35 Krista We need to be willing to be innovative. We need to be willing to make tough choices. Most people are not willing to do that yet they want to have. 00:26:42 Krista They want all the successes and the riches, but they're not willing to do the things that it takes to get in there. 00:26:48 JD Well, I that that was amazing. 00:26:54 JD I love the rant I really think that if people want to check out more of what you have to say, I I mean I. If based on just that last bit alone. 00:27:08 JD You gotta get over to Krista's podcast. Fire up. Subscribe today. Hit some of those like buttons on some of her videos on YouTube and I just wanted to wrap things up with a with a couple things that you brought up that I really want to make sure that to drive home. 00:27:28 JD And some takeaways for people to take some immediate action. First of all, you said that be aware of those of those social networks you're posting too. You're not going to put an hour long video on Facebook. It's not the same content necessarily. 00:27:46 JD You're trying to do some sort of pattern interrupt when you're on Facebook. Pick one of those social networks and target that initially at least, and then generate those three videos a week and and it sounds like you really need somebody to hold you accountable, or somebody who can be there as your. 00:28:06 JD Partner or somebody to push you along because like you said, it's a change or die situation, and if you're not willing to change because the death is on the horizon, you need somebody there to hold you accountable and support you and get behind you. 00:28:23 Krista Yes, absolutely. Huge huge, huge, huge. 00:28:27 JD So with that one last question, is there a question you wished I would have asked you? 00:28:32 JD Here today. 00:28:33 Krista Now I think you are great I I think I'll just I want to bring it back to you. 00:28:37 Krista Like, think about you, Jackie? First you've done over 200 episodes of your REI podcast right? And the first one. You probably pretty much sucked. I mean how many? How many listeners do you have a month now? 00:28:48 JD I've lost track. Actually depending on the platform. 00:28:51 Krista OK. 00:28:52 Krista OK so but when you first started, did you have a lot? 00:28:56 JD No. 00:28:58 JD And were you good friends and family? Yeah no. 00:29:02 Krista And were you scared? Were you scared? 00:29:04 JD Absolutely, in fact, has it. This is this is a. This is a great example. If I didn't feel some sort of mental obligation to my listeners, this is. 00:29:14 JD This isn't something I would normally do. 00:29:17 JD I I I'm not somebody to this, I'm not somebody to randomly walk up to somebody and start a conversation. 00:29:19 Krista I can tell that about you. 00:29:26 Krista I can tell that about you and look at you doing this like I can tell, you're probably you're a little introvert. Am I wrong? 00:29:31 JD I would say a lot introverted. 00:29:34 Krista I was just gonna say you're a lot introverted. OK, I I would I would. I would say that so seeing the fact that you are doing this now has this made it a positive financial impact on your business. 00:29:43 JD Yeah. 00:29:45 Krista Significantly. 00:29:47 JD Yeah, I I. Well, I think it's my one of the reasons that it's called Rei mastermind is that it's, uh, it's selfish to a certain extent because I find this as an opportunity to learn from industry experts. 00:30:01 JD This is this is almost selfish and I'm basically recording it for people who want to listen to it. 00:30:02 Krista Great. 00:30:09 Krista Yeah yeah, yeah, that that's awesome so. 00:30:11 JD So, so how could it not benefit me in many ways? 00:30:15 Krista Yes. 00:30:16 Krista Yeah, and exactly and look at it now you're you know you're 200 episodes in it's natural you're smiling on here you're better you have way more listeners. You've lost track. 00:30:25 Krista OK, that's how that is. The momentum effect of video and properly distributing it to get in front of people because you have to think about it, it's impossible for someone to see you over and over and over again. 00:30:36 Krista And not all of a sudden think about you when they go to think about it. 00:30:39 Krista You know, they just think about you. So not only they think about you for them, but they think about you for their friends and their family. 00:30:44 Krista It's like oh you, you need you're thinking about buying a house. You want it, you know you don't want to sell your house. 00:30:49 Krista Oh my gosh. Call Jack does these great videos and stuff or it's that person that you met at a party 17 years ago? That's like I remember that person or the first person you ever kissed that would never, ever think. 00:30:59 Krista If you will call you now, they're like. 00:31:01 Krista Yep, I made out with her in kindergarten. I am calling her right like oh, that was that crystal girl. 00:31:05 Krista I remember like we held hands and whatever it might be, that's how it works and it just worked so so well. 00:31:10 Krista So you know, I I was saying this earlier. I can't tell you how many times I've gone a listing presentation. 00:31:15 Krista I see other top producers coming in and they choose me like every time because they already knew they were going to choose. 00:31:21 Krista Before I even got there, or they wouldn't have called me. 00:31:23 JD Right? 00:31:24 JD No, this is a good example. Again, is that is the mailings that we do. I can't tell you we it's a very persistent, consistent thing. 00:31:29 JD Yeah. 00:31:32 JD You know, I'm constantly sending out postcards, but it's almost on a regular basis now that I'll get a phone call on an old number on a mailing I did like a year ago. 00:31:46 JD And it's because they got enough of them that they just one of them slipped into their in into their drawer. 00:31:55 JD Or a family member found it, or you know, it's. It's a top of mind thing. They kept it and for some for some reason. 00:32:00 Krista Yeah. 00:32:03 Krista Have you ever heard of a website called Carrot, yeah. 00:32:07 Krista Do you use carrot? 00:32:08 JD Yeah, we've had. I do use carrot and I've had him on the on the show. 00:32:14 Krista Trevor yeah. Trevor's friend of mine. 00:32:15 JD Get the trailer. 00:32:16 Krista I was gonna say carrot would. 00:32:18 Krista Be really, really good for your listeners to use carrot. I know he's and again he says Krista. 00:32:23 Krista The video content works better than anything else, but getting it getting people to do. It's almost impossible, right? He's like the ones that do the video. 00:32:28 Krista Hunter are the ones that dominate on carrot. 00:32:30 JD Right? Yeah? And that's one of those things that I we got to get better at. We got that we got the platform but we don't embed the videos as often. 00:32:31 Krista Right? 00:32:39 Krista Yeah, start. 00:32:40 Krista In that. 00:32:41 JD Yep. 00:32:43 JD Well I appreciate it again Krista, this was awesome. 00:32:46 Krista Thank you for. 00:32:47 Krista Having me, I really appreciate it. Jack, you're awesome too. I'm really proud of you for getting outside of your comfort zone because you're making an impact. 00:32:53 JD Well, I appreciate it, thank you.
35 minutes | May 27, 2021
Hard Money Lending 101 with Kevin Rodman #237
Kevin Rodman joined Asset Based Lending as a partner in 2014 and brings 30 years of experience in the mortgage industry to the ABL team. Along with Dan and Paul, Kevin is one of ABL’s three loan underwriters. Kevin is leading ABL’s expansion in New England, with a focus on Connecticut and Massachusetts. Kevin also works on building ABL’s strong capital base, which is one of the largest in the hard money lending industry.Kevin began his career at Morgan Stanley, where he spent 25 years and served in a variety of roles in the Firm’s securities and mortgage businesses. He was President of Morgan Stanley Home Loans, a retail mortgage business, and CEO of Saxon Mortgage, a Morgan Stanley subsidiary focused on mortgage servicing. Kevin was co-head of Morgan Stanley’s Prime and Alt-A mortgage conduit, which purchased and serviced mortgages from over 600 mortgage banks across the US. After leaving Morgan Stanley in 2008, Kevin held several senior management roles in the mortgage industry. Kevin holds a BA in Government from Clark University and an MS in Energy Management and Policy from the University of Pennsylvania.Connect with Kevin!Website: https://www.abl1.net/Email: email@example.comAs you can already tell we have made some changes and a few more are on the way. If you are interested in what we have planned, head over to Patreon.com/REImastermind, and support the show today. Financial contributions are always appreciated along with a LIKE, SHARE, and REVIEW. It really helps us grow and reach more people with this valuable information. See you next time and tell a friend!LIKE • SHARE • JOIN • REVIEWWebsitePatreonApple PodcastsGoogle PodcastsYouTubeSpotifyStitcherDeezerFacebookTwitterInstagramSUPPORT THE SHOW!Get Exclusive Content on Patreon! • https://www.patreon.com/reimastermindGet $10 and Reduce Your Business Costs by Shopping at AppSumo • https://bit.ly/reiappsumoGet $10 Towards Your First Purchase at Drop • https://drop.com/?referer=3DC729"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - JD---Transcript 00:00:01 JD Hoss We have Kevin Rodman here on the line with us today. Kevin, I really appreciate your time and this is a topic that I'm really looking forward to diving a little deeper because we have a lot of newer listeners to real estate investing and we're going to essentially do a hard money lending 101 class here today so people have an idea. 00:00:21 JD Of what hard money lending is? How to make use of it? And some of those questions that they should probably be asking themselves and their in their potential. 00:00:31 JD Vendors. 00:00:32 JD But before we kick things off, we I wanted to make sure everybody has your contact information. First of all, I believe your website isebl1.net is that. 00:00:45 Kevin Rodman That's correct, that's our weather. 00:00:45 JD Is that one? Is that one of the best places to get ahold of you? 00:00:49 Kevin Well, that's our website and there's a lot of information there for new investor, so I suggest you go there and play with it and. 00:00:56 Kevin And look for information, but the way to get in touch with me is my email. UM, it's my initials KR at ebl1.net. 00:01:01 JD Sure. 00:01:08 JD Sure, and don't spam his email now. 00:01:13 Kevin Correct? 00:01:13 JD Well I appreciate. 00:01:14 JD Appreciate your time today and like I said we have a lot of newer to real estate investing listeners. So let's start things off by. 00:01:25 JD Helping them understand what hard money lending is and how they can incorporate that into their real estate investing goal. 00:01:32 Yes. 00:01:33 Kevin Hard money lending uhm it. It covers a pretty somewhat broad spectrum of the type of lender, but it's an alternative to a bank. A bank. Take time. 00:01:46 Kevin A load of clothes. 00:01:49 Kevin UMH does a lot of due diligence digs a lot, wants you to prove your income when you have construction draws, they could take a week to review it and ask questions and fund it. A hard line lender is somewhat more based off of the asset. 00:02:07 Kevin We don't underwrite the borrower as deeply as we underwrite the underlying real estate and the other hallmark of what we do is we close fast. 00:02:21 Kevin At EYBL, our average time to close in two weeks last week, I closed the deal in two days. 00:02:29 Kevin Uh, in order for that to happen, the borrower came with. 00:02:33 Kevin Clean title. 00:02:34 Kevin Insurance and all of his documentation ready to go because he got frustrated with another lender. 00:02:42 Kevin Bell 00:02:44 Kevin It's, uh, it's it's a bit of a. It's usually a high touch business. Uh, my speak directly to borrowers even though we we've done almost over 700 million in loans in the last about five years. 00:02:57 Kevin UMH UMH we. 00:03:00 Kevin Even though uh after its asset based lending and it hands, it relies more on the value of the real estate. 00:03:08 Kevin I don't want people to think we don't look at the borrowers we do. We move by coast. We look at two years of income taxes. 00:03:16 Kevin And we pull a background report and we have a in depth conversation with the borrower. Mostly the determined. Does the borrower know what they're talking about? 00:03:29 Kevin So what's the proposed project? 00:03:32 Kevin And before we get on the phone with the borrower, we'll research that House in that market and we'll have a good idea of of weather and the borrower would have had to submit a draw schedule or scope of work for the renovation. 00:03:44 Kevin So we'll have a good idea, but we still want to get comfortable with the borrower after we've gotten comfortable with the real. 00:03:51 Kevin State. 00:03:52 JD Sure, can you talk a little bit about like what? What are those things that you're looking at regarding that that real estate, that House that a person would need? 00:04:00 JD To to be aware of. 00:04:03 Kevin Well, the most important thing for the borrower and eibl is that you buy the house right. That means you buy it at the right price. 00:04:09 Hmm. 00:04:13 JD Right? 00:04:13 Kevin And uhm. 00:04:15 Kevin Generally. 00:04:17 Kevin Especially, you know if you have new new people to real estate on the phone. 00:04:22 Kevin Uh, on I'm sorry on the program, UM? 00:04:26 Kevin Buying on MLS. 00:04:28 Kevin It's generally full price. You're not gonna find some diamond in the rough. 00:04:30 Umm? 00:04:35 Kevin On MLA, so over, but we have over 500 borrowers in our book right now. In our portfolio. We're direct lender. 00:04:43 Kevin We have 100 million in capital and 60% of our borrowers are repeat and those borrowers are professionals and they know how to find houses. They've got real estate agents. 00:04:56 Kevin Who might find them a property before it's listed they go to court? How they go to courthouses for auctions? 00:05:04 Kevin They have connections with banks for sports sales. UM and Dario. 00:05:10 Kevin UMD and UM. 00:05:13 Kevin You know one that's rare, but we find often is a hoarder house. Most people, when you see a real hoarder house, it's shocking. You know you could get three dumpsters to clean out a 2000 square foot house. 00:05:28 Umm? 00:05:28 Kevin Stuff piled up to the ceiling and you just can't. Some people can't envision what it could be, but a professional investor does so. So the most important thing is. 00:05:40 Kevin This. 00:05:41 Kevin Uhm, to answer your question is by the house right? So then, once you buy the house the investor with that you know without our help have to figure out what's the house going to be worth if I fix it and and what does. 00:05:59 Kevin To be repaired. 00:06:01 Kevin And so there's small renovations that are umfer typical homes of say, you know 1800 to 2400 square feet. More renovations are redo the kitchen, redo the bathrooms, maybe refinish the floors and some paint. 00:06:20 Kevin That you know that might be $25 a square foot. 00:06:24 Kevin Then you get into slightly bigger renovations, which would include biting roof and Windows. Now you're in for a maybe. 00:06:37 Kevin $50 square foot. 00:06:40 Kevin Maybe 4. 00:06:40 Kevin 30 00:06:41 Kevin And then there's bigger renovations where you're replacing the heater, adding HVAC, doing a bunch of electrical work. If you're putting in HVAC, you might be putting in duct work. Now you're getting into, you know, $70.00 a foot, though we the, the investor. 00:07:03 Kevin I have to figure out how do I make the most money. 00:07:07 Kevin Do I do the $30,000 job, the $50,000 job, or the $70,000 job and in order to figure that out, you have to know the local real estate market. 00:07:19 Kevin So there are some markets where you just have to have central air conditioning to get the right price. 00:07:27 Kevin Often you you know you need a 2 1/2 bath. 00:07:34 Kevin Not too bad. 00:07:36 Kevin And you almost always need a new kitchen. 00:07:40 Kevin If you're buying a house that got updated or beat up kitchen, Bella home and honestly bathrooms. Bella home. 00:07:48 Kevin Then it's pretty easy to refinish the floor so so the investor has to decide which way they're going to go, how big a renovation. 00:07:56 Kevin If I do the 80,000 renovation, do I get paid back all of that and maybe it sells the house quicker than $30,000 renovate? 00:08:06 Kevin And, and so there's their decisions to make. Then you get a scope of work. 00:08:11 Kevin Should you should have a contractor or interview two or three, get a scope of work, what it's gonna cost. 00:08:17 Kevin Then you come to ABL. Now during this period you'll be working with one of ABL sales people and they know. 00:08:25 Kevin The the regions that they know, just like myself and my partner. 00:08:30 Kevin You know, every town that we lend in and what the markets are like in those towns and our sales. 00:08:36 Kevin People have more time to talk with a potential borrower and talk about what we think might spell in that market. 00:08:45 Kevin But really, what they need is a real estate agent, the investor. They need a real estate agent to guide them. 00:08:50 Kevin And tell them, yeah, you. 00:08:53 Kevin You gotta put in central air from you. You know you need a second bathroom, sometimes in lower middle income neighborhoods we might see a 70 year old Cape home where there's three bedrooms upstairs with one. 00:09:11 Kevin With one bathroom but no bathroom downstairs and you know? Or what does that mean for resale and what? What would it mean if I put in a half bath? 00:09:22 Kevin So, so those are the types of things you have to figure out before you present a real loan opportunity to EBL and you want. 00:09:31 Kevin Maybe I'll lend you money. 00:09:33 JD Sure. 00:09:34 Kevin Hope that answers your question, yeah. 00:09:35 Kevin Yeah. 00:09:36 JD Yeah no, yeah it does it and what is interesting is that you you're pretty much painting a situation where you could really use your hard money lender as one of those team members to validate a few things. 00:09:45 Yeah. 00:09:51 Kevin Well, we are a local lender. We land in 10 states. Most of our lending is in a state that touches the Atlas. 00:09:59 Kevin Nekocon, and that's because we've been around for 10 years and we started our based in Jersey Stadium in New Jersey and we started just blending in New Jersey and New York. And then we added Connecticut. And then we added Pennsylvania and then we added Delaware. 00:10:20 Kevin Delaware Maryland, Virginia. Uh, we recently added Rhode Island, Massachusetts, New Hampshire, and along the way we added Florida, which has become one of our biggest markets. 00:10:31 Kevin Dumb and dumb are. 00:10:34 Kevin Ohrum 00:10:37 Kevin Our value or our mantra is blend in areas that we know I don't know how to land in Kansas. 00:10:45 Kevin I I don't know the market lending markets that we know and we know those markets and so we're a high service. 00:10:54 Kevin Uhm, somewhat lower volume shop then if you go online and you see national lenders that lend everywhere, they're not going to give you the service, they're not going to hold your hand like we will. 00:11:06 JD Sure. 00:11:08 JD So just as a reminder, everybody head over to ebl1.net For more information. And as Kevin mentioned, there's quite a bit of information out there. 00:11:17 JD For for you there and it's great to see a lot of those resources just available for people freely on on your website. 00:11:26 JD Uhm, when you're doing your due diligence on a property, then what? What are you looking for like it? Apparently there's going to be comparable and what can the neighborhood and the market support? But what are some of those due diligence items that? 00:11:39 Kevin Yeah. 00:11:43 JD Uh. 00:11:44 JD That you will be asking for. 00:11:46 Kevin Great question Jack. So the way the process works is my sales person worked with a potential borrower to put a submission together for the loan, and that's going to include a signed purchase contract, a scope of work and a borrower experience working. So what else has the borrower? 00:12:06 Kevin John in real estate investor. 00:12:08 Kevin Uhm, and then they submit the package, uh, for underwriting. So then I pick up the file to take a look and I spend. 00:12:16 Kevin And by the way, there might be more information in there that borrower has submitted like tax returns, maybe or. 00:12:27 Kevin Uh, survey? Other things related to the property. 00:12:32 Kevin So the first thing I do is I take a look at the property address. 00:12:37 Kevin And I go on Google and I pull it up. 00:12:39 Kevin And there's a remarkable amount of information on Google, so I look at the House. 00:12:45 Kevin Uhm, sometimes it's, uh, there's photographs of the house online inside. I then look at the Street View. 00:12:55 Kevin Uhm, how does this house compare to the other houses on the screen? 00:13:00 Kevin Then I zoom out and take a look at the town. Uhm, where is the town in relation to other towns that we know? 00:13:08 Kevin Where is it in relation to New York City or one of the cities in Florida or Boston, wherever whatever state we're looking in? 00:13:20 Kevin Then I take a look at the scope of work. 00:13:23 Kevin I already know from looking at the house what I think it's worth. 00:13:27 Kevin Uh, because we just know the markets and we know, you know, we know what sells. And then I look at the scope of work and based on what I'm seeing online, does the scope of work makes sense? 00:13:40 Kevin And we've underwritten thousands of loans. But then when we get into the scope of work. 00:13:46 Kevin If it's a house that's going to sell for 350,000. 00:13:50 Kevin It doesn't need a $20,000 kitchen. 00:13:54 Kevin But there is a now. It needs $10,000 kitten. 00:13:58 Kevin So if somebody put a $20,000 kitchen in line at him there I would know there's a serious problem. 00:14:04 Kevin Either the borrower doesn't understand what they're doing, or they've got a contractor who's trying to steal money from them, or. 00:14:12 Kevin Tell me one or the other. 00:14:14 Kevin Same with bathrooms. A $300,000 house the bathrooms could be around 5000. 00:14:21 Kevin Master could be 7. 00:14:24 Kevin Uhm, and and so uh and same thing we go down I go down I do a quick scan fighting for that house could be 6000 the route 37,000 in the in those ranges and so if it all looks good. 00:14:40 Kevin And, uh, we also have a profit calculator, but uhm, we take a look at assuming an average hold time, which pre pandemic was ten months. 00:14:51 Kevin 22 00:14:53 Kevin Get a project completed and sold and come and that timeline actually had been lengthening over the last few years. There was eight months. 00:15:04 Kevin Three years ago, and there's a lot of reasons why things were getting a little bit longer, but a post pandemic six months everything is moving. 00:15:15 Kevin Uh, in in in the suburbs inner city, inner City, Brooklyn and Bronx. Different story. If you're in an inner city market, those markets are not selling as well right now as suburbs 'cause people are getting out of this. 00:15:29 Kevin Pretty. 00:15:30 Kevin Uhm, so uhm, we run the calculator just be how much profit the borrower has built in. We have our own policy which is the borrower has to make a minimum of $25,000 profit after all expenses or the lesser of that and 10% of. 00:15:50 Kevin How much they're spending? So if they're buying it for 250 and putting in 50 so it's 300 deal costs, then they have to have $30,000 profit. 00:15:59 Kevin Based off of probably will put in a seven-month whole time. 00:16:03 Kevin So, so that's what I look for, and then I get on the phone with the borrower. 00:16:09 Kevin And introduce myself. 00:16:12 Kevin And uhm, start asking questions. I asked the borrower to tell me about himself. 00:16:18 Kevin Uhm, what do they do for a living? 00:16:20 Kevin Uhm, uhm, do they have any partners in the transaction? What the flight goes before? How much money do they have in the bank? What? How much money do they make? Have they set up an LLC for the property? 00:16:33 Kevin Uhm, uhm, how do they know the contractor and describe the Prof? 00:16:38 Kevin Yeah, and the borrower has to sound like they really understand the project. 00:16:46 Kevin That to give me confidence in my partners confidence that they're going to execute because we're in this together and it's not adversarial really. We're partners. You know, we want to just make our money back from the loan. 00:17:04 Kevin Uhm, make our interest. 00:17:07 Kevin Have the house pay off so we can put the money out again. 00:17:11 Kevin And we want to help the bar or get it done. Borrower wants to get it done as fast as they can sell the house, make their profit, buy another house, hopefully finance with the ABL so we're all aligned together and EBL out of our. 00:17:31 Kevin 3000 loans we've only had problems on about 80 to 100. 00:17:37 JD Sure. 00:17:39 JD So it's it sounds like you know outside of you know you you talked about the statement of work. You need the address. 00:17:47 JD Maybe some tax information? What like your ideal applicant if they came in fully prepared, what would they have in hand for you? 00:17:58 Kevin Purchase contract. 00:18:01 Kevin A well, a well thought out scope of work. 00:18:05 Kevin And an experience worksheet that we would give them a form where a template in Excel where they would put that in and. 00:18:17 Kevin Uh. 00:18:19 Kevin That's really All in all, you know this is part of money. Hard money is bad. 00:18:24 Kevin So, uhm, that's really all we need to. 00:18:29 Kevin Get on the phone with the borrower. 00:18:32 Kevin Talk about the deal and give them a decision on the call. 00:18:36 Kevin It's either OK. 00:18:38 Kevin Uhm, sounds good. Everything you said sounds good, so we're going to move forward. We're going to send you a term sheet and if everything you told me uhm works out, we'll do this loan. 00:18:52 Kevin But there's a. 00:18:53 Kevin Fair number of steps between what I just said of sending a term sheet that you know and closing the. 00:19:00 Kevin No. 00:19:00 Kevin Uhm, and we can go through that if you'd like to that you know, processing from terms too. 00:19:08 Kevin Uhm? 00:19:10 Kevin Those but the most important thing to them, the two of the most important things that happen first is the appraisal. So once we've issued a term sheet, we order an appraisal. 00:19:21 Kevin The appraiser and we have appraisers in every county and the you know, we move fast and our appraisers are hard money appraisers and they know we have to move fast so we send them the order. The appraiser will call the borrower, set up the appointment. 00:19:41 Kevin Usually happens within two days, maybe 3. The appraiser has the scope of work so they know what's being proposed to be renovated in the house and they meet the borrower and the appraiser at the property. 00:19:55 Kevin And the and the borrower then pays the appraiser typically $450 a month for the appraisal when they meet, and the appraiser then takes off with the scope of work as the borrower explained the project. 00:20:09 Kevin So they hear it, and then the appraiser will walk through the house, photograph everything, photograph the entire exterior, photograph the Street View, go back to his office or her office, and within 48 hours send us an appraisal report that the report that says if the borrower. 00:20:29 Kevin Does all these repairs the house was going to be worth X. 00:20:33 Kevin And that's the biggie. 00:20:36 Kevin That's the biggie. So if the borrower came to us instead, I'm certain this House is gonna sell for 3:50. 00:20:42 Kevin I have a real estate agent. I have comps, you know parables that you know other sales. I know the neighborhood I've done this before in this neighborhood. That's great. It comes back at 3:50 and we had. 00:20:56 Kevin Price the deal for the appropriate profit margin and you know, say the borrower is borrowing on that deal maybe 275, so they've got 75,000 baked in. 00:21:07 Kevin Uhm? 00:21:08 Kevin I'm sorry, but they're probably boring, more like 250 because they're spending more than or lending UM, then, uh, that's 85% of the deal right there. All that's remaining is some paperwork. Pretty standard like the LLC Formation documents, then operating agreement. 00:21:29 Kevin Like there's more than one person and the title report and credit so credits the next really serious one borrower. But I'm always gonna ask the bar or what's your FICA? 00:21:43 Kevin Well, it says my flight goes 700. 00:21:47 Kevin We get borrower gives us authorization to pull credit. We pull credit, it comes back at 700. That's great. 00:21:54 Kevin Comes back at 600. That's the big discussion. 00:21:58 Kevin You know comes back at 6:50. Usually it's because of high credit card balances. Not a big deal. We'll probably proceed. I was back at 600. That's a. 00:22:08 Kevin Talent. 00:22:09 Kevin Uhm, so there's a. There's a phico discussion to be had, and then there's the bank accounts. The borrower might need $40,000 for this deal. They build $40,000 with down payment. 00:22:25 Kevin All right? 00:22:26 Kevin For the first draw up, pay for closing costs so they have to spell U.S. bank statements that go the that they have the cash. 00:22:38 Kevin Close the deal. 00:22:40 Kevin Uhm, and then the title report is the final thing. It's always the final thing. UM, the borrower has to pay to have a lender's title report means there's a title company that's been storing that. When we make our mortgage. 00:22:56 Kevin We're going to have our first lien and no other. 00:23:01 Kevin Entity like the county or the date looking for taxes or an another mortgage lender has a lien in front of ours that the title insurance. The purpose of it is to guarantee the lender that we have a perfected first. 00:23:21 Kevin Priority lien in the in the in the property. 00:23:24 Sure. 00:23:24 JD Here. 00:23:26 JD So you know then I I probably are going to say that it it likely depends on the property, but how do the what would you typically see for terms and how does the how is the money utilized? Like if if I buy a property? 00:23:45 JD Uh, I know that the IT comps out if I get it all repaired, it's going to be worth 250,000, but I'm buying it for. 00:23:52 JD Half that 100 and a quarter. 00:23:56 JD What would somebody typically see like regarding the purchase price? And then how does the funding work for the rehab? 00:23:57 Kevin Uhm? 00:24:05 Kevin Another great question Jack. So uhm every lender. It has somewhat different rates points and proceeds that they lend and it also varies depending on the experience of the borrower. Though as borrowers get more experienced they get. 00:24:25 Kevin Lower rates. 00:24:26 Kevin And more proceeds higher level. 00:24:30 Kevin So our rates range from 9% to 11%. 00:24:37 Huh? 00:24:37 Kevin And our points range from one point to two points. 00:24:41 Kevin There are borrowers that are doing. 00:24:43 Kevin In deal deer are getting 9% and one point. 00:24:48 Umm? 00:24:48 Kevin Meaning if the loan is $200,000, that's $2000. They pay us in upfront points. 00:24:56 Kevin Uhm, and while I've never done a deal before, it's getting 11%. 00:25:01 Kevin And two points. 00:25:03 Kevin OK, that's the range. It's a pretty tight range. It's actually much lighter than it was years ago. 00:25:11 Kevin Where new borrowers might have had to pay. 00:25:14 Kevin 13 percent 14% the market you know gotten tighter. 00:25:19 Kevin Uhm, and then you're posting. 00:25:21 Kevin No, for somebody that's never done a deal before, we, we, we, we have our loan at 85% of their deal cost. So if their purchase in your example is 100 and 25,000. 00:25:38 Kevin And their rehab is 50,000. I'm making numbers up, not diploma calculator for this Jack, that's 175. 00:25:42 Kevin Huh? 00:25:47 Kevin So our maximum proceeds would be. 00:25:50 Kevin 100 and 4800 and $48,000 so. But from that we cracked the 50 for the construction escrow, which means we would come with roughly $98,000 to close and the borrower would have to come with roughly $27,000 down. 00:26:10 JD Sure. 00:26:11 Kevin And dumb. 00:26:12 Kevin So. 00:26:14 Kevin Uhm? 00:26:15 Kevin That's an important concept of most hard money lenders. It's very core to our culture, which is what we call in in the game. 00:26:27 Kevin How much? 00:26:28 Kevin Pak does the borrower have to put in this deal? 00:26:32 Kevin So. 00:26:33 Kevin It's enough to incentivize them to get the deal done. 00:26:38 Kevin Right? 00:26:38 Kevin 'cause obviously if we went 100%. 00:26:42 Kevin They just walk away. 00:26:44 Kevin But they've got no skin in the game. 00:26:47 Kevin So like the big lesson learned from the UM, the Great Recession of 2007 and what went wrong with the mortgage market is borrowers were getting 95 and 100% loans and then they all just walked away. 00:27:04 Kevin So, uhm, we all we've learned our lesson and now we require our table with some cash. 00:27:12 Kevin Sure. 00:27:14 JD You know, we talked about what your due diligence would be on a property, but what let's? Let's spend in the last few minutes we have talking about the due diligence a borrower should have, like what kind of questions and what should they be asking for from a potential borrower or lender. 00:27:32 Kevin Well one of the oh what's the asking from lender? Oh OK. 00:27:37 JD Yeah, just to make sure that it's a good fit for them. You know, you know there's a lot of. 00:27:41 Kevin Yeah, sure. 00:27:44 Kevin Sure, so number one is. Are you a direct lender or a broker? 00:27:49 Kevin A direct lender like us. 00:27:52 Kevin Generally keep the loans in our portfolio. 00:27:56 Kevin And that means we have a lot of flexibility. 00:28:00 Kevin Because nobody else is telling us what to do. 00:28:03 Kevin A broker. 00:28:05 Kevin Is going to send the loan to some other prompt. 00:28:09 Kevin And. 00:28:10 Kevin You might be getting into a situation with a lot of unknowns. Uhm, there's a lot of good brokers out there who brokered in good firms. 00:28:14 JD Right? 00:28:19 Kevin And then there's other quickly. 00:28:23 Kevin UMH so direct lender, that's number 1 #2 how fast can you close? 00:28:29 Kevin It's gonna take Me 2 months or two weeks because my seller told me I have closed in two weeks. 00:28:37 Kevin But like you know, yes or no. Can you close and then take a look at their reviews on the web? Eibl has hundreds of reviews and 98% of them are. 00:28:50 Kevin Great, and so are the reviews online, consistent with what the person you're talking to is saying. Are you certainty of close? That's the number one thing our borrowers are looking for. 00:29:02 Kevin And you both. 00:29:04 Kevin OK, so are you in or out broker with direct lender? Can you close tell me about the closing process? 00:29:13 Kevin Is this going to be somewhat easy or is it gonna be really painful and what? How are you gonna make this easy for me? 00:29:22 Kevin Uhm, and uh, what's it gonna cost me to close? 00:29:27 Kevin What are all my cost ABL discloses it in our terms, every cost we have is there. Are there any other costs that you're not telling me about? 00:29:38 Kevin Uhm OK then uhm. 00:29:43 Kevin Then, uh, when am I gonna get punky? 00:29:47 Kevin When am I gonna know exactly what you're offering me and uhm? And is the term sheet. 00:29:53 Kevin Uhm? 00:29:55 Kevin Gonna change. 00:29:56 Kevin Are you gonna? Are you going to change the deal at the last minute when you know I have to close? 00:30:03 Kevin Are you going to raise my rates or you know you know what? What are you obligated to do? 00:30:08 Kevin And you know the truth is any lender can change anything at any time. But check out their reviews online. 00:30:16 Kevin Because Blender can do that. 00:30:19 Kevin Well, it couldn't honestly if. 00:30:22 Kevin It's up to you know, are we going to have a trusting partnership or not? 00:30:29 Kevin So those are those are the big. 00:30:32 Kevin Questions that come. 00:30:34 Kevin And some other questions borrowers ask is that I hire an attorney. 00:30:40 Kevin And the answer is yes. 00:30:43 Kevin No, we think you should hire an attorney and we're never going to advise you otherwise, because if we advise you not to, and everything gets screwed up. 00:30:54 Kevin Or I was going to say, but you told me not to hire an attorney. 00:30:57 Miller 00:30:59 Kevin But in addition, ABL has a closing attorney. 00:31:02 Kevin But those they're not part of our company, they're external. We have attorneys in every state, and so our borrowers have to pay the attorneys cost. 00:31:10 Kevin It's one of the biggest parts of the closing cost in Florida. It's $500, but up here in the Northeast it ranges from 1000 to 1500, so it's a significant part of the closing. 00:31:23 Kevin Awesome. 00:31:24 Kevin Uhm, and another question borrowers asked is that I order the title report or will you and our answer to that is whatever you want. 00:31:35 Kevin We have a title agency that we work with. We don't have an ownership interest in that title agency and we don't think lenders good. 00:31:45 Kevin Have ownership interest in title agencies, uh, because it could be somewhat of a conflict of interest and and but some do and it works OK. 00:31:56 Kevin And typically we tell borrowers to go out and order your own title. 00:32:00 Kevin Because. 00:32:01 Kevin We are. 00:32:04 Kevin We think it's the right thing for a borrower to have freedom to do. 00:32:10 JD Sure. 00:32:12 JD Well, the last question I have for you then is there. Is there a question you wished I would have asked you here today? 00:32:20 Kevin Uhm, you've really covered it well, Jack, uhm I don't. I can't think of anything right now. And you know, do your lender to the people listening. 00:32:28 Kevin OK. 00:32:28 Kevin 00:32:29 Kevin OK. 00:32:29 Kevin 00:32:34 Kevin Do your lender due diligence do? Do you know there's a lot of lenders you can find on the web on the website? 00:32:40 Kevin Out there, you know, a lot of lenders paying. 00:32:44 Kevin Or paid apps. And then there's the organic EBL. We're proud we've been around so long we're near the top of the organic search in every state. 00:32:54 Kevin So what does that mean? How do you get there? Well, you get there by having a lot of people land on your web page and use your website. 00:33:04 Kevin And we're proud of that. But do you want to work with a lender who's only been in business for two years? 00:33:11 Kevin Or one year, so check out your lenders, uhm, check out their reputations. Talked to a few of them, interview them and. 00:33:24 Kevin That's my suggestion and see if they're helpful. See if they can tell you about the market that you want to be in. 00:33:32 JD No, that's a great advice. You know, as much as anything, I keep seeing everything. And as just adding a number, another team member and you know you need to make sure it's a good fit. 00:33:43 Kevin That's right, you really do. 00:33:46 JD Well, again, if you want to hear more from Kevin, Head over to ebl.net For more information. I really appreciate your time. 00:33:56 JD This has been a great session, especially the long overdue hard money lending 101 and I really appreciate the insight and help. 00:34:05 Kevin Thank you, Jack. Thank you to everyone who's listening.
30 minutes | May 23, 2021
A Simple Approach to Financial Freedom with Myra Oliver #236
Myra Oliver was twenty-two when she decided she wanted freedom from debt and consumerism. After earning enough passive income through smart saving and real estate investments, Myra became a self-made millionaire and retired in her thirties. She currently owns multiple Keller Williams Realty franchises and her closed volume for 2019 was right over 1.4 Billion in sales. She just released her best-selling book Down Home Money: A Simple Approach to Financial Freedom in which she shows how financial freedom is not about how much money you make, but what you do with it.We chat about: Real estate investingFinancial planningPassive income streamsFinding your "big why" and the amount of money you need to make to do it.Connect with MyraWebsite: https://downhomemoney.com/YouTube: https://www.youtube.com/channel/UCaUzIrJ4orQpYtQRn71JMnQFacebook: https://www.facebook.com/downhomemoney/Instagram: https://www.instagram.com/downhomemoney/As you can already tell we have made some changes and a few more are on the way. If you are interested in what we have planned, head over to Patreon.com/REImastermind, and support the show today. Financial contributions are always appreciated along with a LIKE, SHARE, and REVIEW. It really helps us grow and reach more people with this valuable information. See you next time and tell a friend!LIKE • SHARE • JOIN • REVIEWWebsitePatreonApple PodcastsGoogle PodcastsYouTubeSpotifyStitcherDeezerFacebookTwitterInstagramSUPPORT THE SHOW!Get Exclusive Content on Patreon! • https://www.patreon.com/reimastermindGet $10 and Reduce Your Business Costs by Shopping at AppSumo • https://bit.ly/reiappsumoGet $10 Towards Your First Purchase at Drop • https://drop.com/?referer=3DC729"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - JD
37 minutes | May 20, 2021
Time To Change Your Marketing Message with Eric Reed #235
Eric Reed never had trouble finding the experience to learn from, whether from leadership positions in media companies, building out marketing and sales infrastructure, strategically positioning revenue for start-up acquisition, or challenging people to always RETHINK, as host of take5: The Rethink Marketing Podcast. A Renaissance man whose expertise has been honed through a variety of perspectives, Eric’s success in business growth is rooted in his proven sales and marketing leadership and sophisticated marketing media strategies. This he applies along with the concepts of the Entrepreneurial Operating System, EOS to help businesses clarify, simplify and achieve their vision. As the founder of reed5group, Engage Digital, and Take5: The Rethink Marketing Podcast Eric has over 15 years of passionate experience in sales and marketing leadership. He is a thought leader in strategy and tactics and a pioneer ad tech, content silos, and digitization. With an emphasis on culture, it’s not hard to see why Eric is defined by his passion for and belief in people. “It's not about being perfect, it's about being present, every day".We chat about:How do businesses decide if the EOS model is right for them?What are emerging or proven tactics in Ad TechWhat are intender channels and how do you build them?What is the STP Sales System?Everyone throws around “Sophistication” What does that really mean in Marketing?Where is healthcare marketing heading- Community Health or Treating Symptoms?How can digital audits help businesses to establish and improve their online presence?What is Fractional Sales and Marketing Leadership and how can it bring credibility to your business?What does it mean for businesses to have the right person in the right chair and why is it important?What are the 6 key components to a business's success?How do companies bring back their teams after COVID?Is Google my Business all it Billed to be?Why do we always think we can make people better?What is a Level 10 Meeting?Connect with Eric!Website: https://reed5group.com/Podcast: https://reed5group.com/take5%3A-the-podcastTwitter: https://twitter.com/Reed5GroupFacebook: https://www.facebook.com/take5rethinkmarketingAs you can already tell we have made some changes and a few more are on the way. If you are interested in what we have planned, head over to Patreon.com/REImastermind, and support the show today. Financial contributions are always appreciated along with a LIKE, SHARE, and REVIEW. It really helps us grow and reach more people with this valuable information. See you next time and tell a friend!LIKE • SHARE • JOIN • REVIEWWebsitePatreonApple PodcastsGoogle PodcastsYouTubeSpotifyStitcherDeezerFacebookTwitterInstagramSUPPORT THE SHOW!Get Exclusive Content on Patreon! • https://www.patreon.com/reimastermindGet $10 and Reduce Your Business Costs by Shopping at AppSumo • https://bit.ly/reiappsumoGet $10 Towards Your First Purchase at Drop • https://drop.com/?referer=3DC729"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - JD
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