This is the answer to a Flipping Junkie Podcast #Just Ask question. Erik Drentlaw asked what my exact direct mail strategy is.
While I think it’s true that you need to become an expert at one thing before moving on to another is a great strategy, with highly specific things like online marketing, it’s best to let the experts take over. If you need to focus on becoming the expert at direct mail, do it! But allow the people who are already experts at SEO and PPC to manage that side for you. That way, you’re getting the benefit of both online and off-line marketing without wasting your time trying to learn strategies for both.
Erik, I see that you mentioned you have a competitor website but would have liked to switch. You still can! In fact, we have a team of professional PPC and SEO experts here who would gladly manage your online marketing so that you can focus on direct mail. That way, your business will benefit from marketing on two fronts. These guys manage my PPC marketing, so I can promise you they’re great.
As far direct mail goes, we’ve done something like $80k+ on direct mail in the last 12 months. I have absolutely no problem sharing my direct mail strategies. There seems to be some level of secrecy when it comes to asking about direct mail strategies, as if some investors are doing things that no one else would think about. The truth is, direct mail strategies doesn’t vary that much.
What is rare is people actually doing it and sticking to it. It’s difficult to keep it up, but as long as you do it and stay consistent, it’ll pay off in the end. Just stick to what’s being taught, and actually do it
The biggest list we mail to is the high equity list. This is key. Mail to owner-occupied, and absentee-owner high equity direct mail list, targeting ages 45+ of the household. That demographic has been the highest converting as far as direct mail is concerned.
The next question becomes, “Where do you get that list?” You can get this information from ListSource.com, you can get your rates down by calling and asking. Definitely do that. You go into the site, and specify the types of properties you’re looking for in your target area. Look in your farm area, the spot where you expect most of your leads to come from. Choose the property value next. Don’t go high-end properties; you should limit the appraised value to just above medium home price to avoid the crazy expensive ones. After that, you target equity.
There are two ways to do equity targeting:
1. Mortgage Amount
2. Equity percentage.
Stick with equity percentage. We tend to go with 50% equity because you want the seller to have enough equity to actually be able to sell to you instead of needing to go through a 3rd party. This helps you to weed out any bad leads before you start pooling.
What it takes in direct mail is money. The people who are succeeding are spending lots of money. Just from this list that we have, and sending direct mail, we’ve got about 12 leads this year from direct mail. To make direct mail a success, you need to get a large enough number of calls to justify the amount you’re spending on it.
We’re sending out roughly 10k - 20k postcards a month, spending about $5k per deal (which is a little more than I would like to be spending). But we want the deal volume, so we’re spending it to get it.
The key to success with direct mail is to keep your list decent enough, but not too big. If it’s too big, you’re going to not be able to mail enough because it’s going to be too expensive. As far as what to put on your postcard, you need to include:
Branding is super important, and not enough investors know about it. You need to make sure your postcard is unique to your business and stands out to your motivated sellers. The reality is, you’re not the only one in your market mailing, so you’re probably not the only piece of mail that they get. Avoid looking like spam by making your postcards individualized.
On that same note, you need to have a large pool to mail to. Don’t just be sending out 200 letters a month and wonder why you haven’t heard anything. The minimum you should be mailing is 1,000/month, but even that’s a little low depending on your city and market size.
It’s very easy to make your own postcards. That helps your business stand out from all of the others that are just using templates. You don’t need fancy software, goto Canva.com and design your own for free. What we do to get them mailed out is we go to a local print and mail house, tell them how many we want, and negotiate prices from there. As long as you get it out and in front of people, you’ll be in the clear. Make sure you give them variable printing so that each postcard is individualized so that your leads feel like you mailed personally to them.
We mail roughly 45 days apart to the different lists. Remember, you have to spend money to make money. Direct mail is an investment, just like everything else. Work on your acquisitions skills to get them under contract. My friend, John Martinez, has a lot of sales training on that sort of thing. Check out his stuff in the links.
Don’t neglect online leads, either. If you want, reach out to us at Sales@LeadPropeller.com so that you can let our experts manage it for you. Or, call (210) 999 5187. Our pros here would be more than happy to help manage your PPC to get you quality leads online.
If you have a question that you want answered, post it in the group with the hashtag #JustAsk, and tag me @DannyJohnson. I’ll make a podcast episode to answer your question for you!
Thank you again for the question, Erik. Hope this helped!
I'm the youngest of 4 daughters and I grew up in rural Pennsylvania. Being the favorite child has given me an overabundance of confidence, which I use to my advantage quite often. (My sisters will kill me for saying that, but only because it's true. :)). I've always been an exuberantly tenacious person, setting stretch goals and moving on to the next one.
Looking back at my life I find certain experiences really stand out. I spent my junior year of high school as a congressional Page, working and living in DC running errands for Congress. It was a truly amazing experience and I'm sad the program doesn't exist anymore. (But the fiscally conservative side of me totally gets it.)
I went to WPI for mechanical engineering on an ROTC scholarship, where I met my husband and some of my amazing best friends. When I graduated I became a US Naval Officer. My dream was to be a pilot, but unfortunately my eyes disagreed; instead I served on an Aircraft Carrier. It was a great consolation prize, and even though it was incredibly tough at times, I will treasure it.
After about 4 years in the Navy, I got a job as an engineer working in the energy arena, helping to build a power plant to support aircraft carriers stationed in Japan, and then a bunch of other awesome projects. I felt way out of my league and also incredibly excited to be a part of something so massively cool. I worked with that company for 7 years, and again was fortunate to be around some seriously amazing people.
When my 3rd daughter was born, I decided to spend less time traveling and more time at home. We bought our first rehab, which was a hoarder house that we essentially gutted, and I was hooked. Making ugly things pretty is my favorite. The first year I flipped 3 houses, the second year I flipped 6, and then I moved up to one a month and started building out a team to support that. This year we're on track to do 20+ flips and a few wholesales, as well as venturing into the rental arena.
As an aside - It's crazy that I always feel like the little fish because I keep moving to bigger ponds. If you had told me 3 years ago where I would be now, I would not believe it. But here I am, and it still doesn't feel like "enough"!
Getting the Money - Susan Lassiter-Lyons
12 Week Year
Focus, focus, focus. That’s the key to success.
You don’t want to be distracted by your first ideas. You need to stay focused when it comes to growing your business so that you’re on top of your game.
The steps to staying focused isn’t that difficult. Here’s what we do to stay focused:
Hunting leads can be difficult to find, we know. Searching on the MLS can be exhausting. The biggest mistake an investor can make is staying in their comfort zone. If you only ever do bandit signs, how are you going to generate consistent deals?
That was just an example, there’s nothing fundamentally wrong with bandit signs. But you need to focus in on at least one method - direct mail, bandit signs, PPC, SEO, online marketing, driving for dollars, etc. - and become an expert at that.
Send out as much as you can, be active. The more you do, the more you’ll learn. Stay hyper focused, gather data, find a way to turn it into a system, become the master at it. Only then should you move on to the next thing. In no time, you’ll be an expert at every aspect of real estate investing. At the end of the day, you need to be making progress.
In these podcast episodes coming up, we’re going to be having an open Q & A with you guys. Your questions are important to us. It’ll help you learn, but it will also help us to know what it is you’re struggling with so that we can make content that’s helpful for growing your business.
Have a burning question to build your business? Just ask! The steps are easy:
There’s no such thing as a bad question. Anything that you’re curious about, we’ll help you through it. Let’s stay focused, let’s become experts, and let’s make progress in building our businesses!
Danny and Melissa share the secret to the massive growth in their flipping business over the last year.
The story begins several years ago when they were wearing all of the hats in their business. They were killing themselves trying to do it all.
Danny shares how he met Justin and learned how to scale his business without having to do everything.
This episode shares the story and shows how you can do the same.
Ted Thomas, best-selling author and publisher is best known as America’s Tax Lien Certificate and Tax Deed Authority. Thomas has sat for more than 200 radio and TV interviews, most recently on ABC, CBS, NBC and Fox and he has been recognized in Newsweek, USA Today and the Wall Street Journal. Ted Thomas is the go-to guy when people want to discover how to invest in secure government certificates that pay 16% and 18%.
Ted’s best selling Home Study Course titled, Quick Start to Buying Government Tax Lien Certificates & Tax Deeds, is considered the benchmark standard for the Tax Lien Certificate and Tax Deed industry. Thomas also conducts live tours of Tax Lien Certificate and Tax Deed auctions.
Houses with tax liens are a safe, secure investment because you won’t run the risk of losing large sums of money.
Ted’s number one suggestions is this: Start out buying vacant residential land. Most mentors won’t suggest this, but Ted does for this reason. He wants to make sure his students are staying conservative in their investments. Buying land is a low risk investment, and sell for 10 - 20 cent on the dollar. If you sell it for 50 cent to buyers then you’ve made a profit! Ted’s suggestion is to go slow, stay conservative, and watch your income build.
There will never be a shortage of properties. There are 100 million properties in the United States alone, and 2 - 3% of that will go into tax lien territory. Ted’s point is that there’s no reason to try and rush your business. Let it grow steadily. You’ll always have properties to buy and sell.
Ted answers these common questions:
Q: What is a tax deed auction?
A: A Public auction where real estate is sold on property that is delinquent in taxes. A deed sale happens after a tax certificate applies to the tax collector for a tax deed after the certificate has been held for the statutory period.
Q: What is a tax lien certification?
A: Tax lien certificates pay you guaranteed fixed rates of return interest per year.
Q: Which states are tax deed states?
A: Tax Deed States:
Q: Which states are tax lien certificate states?
A: Tax Lien Certificate States-
Rob leads property acquisitions for Holdfolio, a real estate crowdfunding company headquartered in Indianapolis. Under the name Buy To Renew, Rob leads a team focused on purchasing properties and gentrifying neighborhoods. Since relocating to Indiana in 2015, Rob and his partners have purchased over 100 properties for crowdfunding and wholesale opportunities. For fun, Rob and his wife enjoy traveling, soccer, and recently took up competing in triathlons.
Set For Life by Scott Trench
Relentless by Tim Grover
Jason has been in construction over 25 years. He started out of highschool working with his dad on misc projects and went on to own and operate a cabinet company for 12 years. After closing the company he started lending to rehabbers for Gap funding and learning about this thing called flipping and started flipping in 2010. Jason has been flipping ever since and joined up with Peter in 2014 and have flipped or wholesaled 50 + deals together.
Jason is married with a split family of 4 kids. All who are very active in sports, Competitive Dance, Swimming, Gymnastics, and basketball and football. They just moved into their new home they had built a couple weeks ago.
Jason and his wife Megan who is a Vancouver school Principal enjoy traveling together, are very active in Crossfit at their local Box.
Share your backgrounds and how you started flipping houses and working together.
Been in construction since 1993 owned a cabinet shop for 12 years build a few houses, Started in 2009 lending gap funding to a rehabber. Started doing all the work on flips in 2010-13 flipping about 15 in that time, Peter’s roofing company did all my roofs and we became friends during that time. We partnered on our first deal July 1st 2014 closed 3 deals that year together 2015 we did 11 deals, 2016 completed 22 deals wholesaled 10 and started a wholesale business we are partners on.
What are your goals for 2017?
Goals are 50 flips we have 25 on the books so far this year Plan is to wholesale 50 also min
Closing within 2 weeks 4
What are your favorite and/or most profitable types of houses to rehab where you are?
We love 2/1 800sqft houses we are in an out within 3-4 weeks
What do you do to prepare to start rehabbing before you close on the purchase?
We make sure we are ready to start the rehab the min we record we have a crew there to start and usually have house demod within a few hours.
Walk us through your rehabbing process from determining scope of work to lining up contractors to getting it ready for sale.
My business partner is my GC so he keeps our numbers in line.
What issues have you encountered when trying to sell rehabs?
Portland is a really hot market so our product sells within 2 weeks max most within the 1st weekend
How can anyone from the audience get in contact with either of you?
What are some of the things you do before putting the finished product on the market?
How to work with our Realtor Laura to get the property on the market?
With the real estate market still going strong here, how fast have the houses been selling?
How do you handle when we get multiple offers?
I know we’ve accepted offers before in the past only to find out the buyers couldn’t qualify. How do we now avoid this problem?
So a common situation is where a buyer will get an inspection and ask for tons of repairs. What is our procedure for handling which repairs we’ll agree to do and which we won’t?
On FlippingJunkie we get the question all the time about the FHA 90 day rule. What is that and how do we deal with it?
What do you do after acceptance of an offer to make sure all is on track to close?
What’s your top tip for being more efficient in this part of the house flip process?
Melissa Johnson has been flipping houses for 14 years, and man have they come a long way.
From brown (and one time green) carpet to sleek new tile, Melissa has been transforming the way she rehabs properties. But before you can make the houses look nicer, you have to have your team together.
Start with a contractor you can trust. Melissa has been working with her contractor for a long time now, to the point where they have an amazing working relationship. One of the key point of making sure you and your contractor are on the same page is to set the ground rules from the beginning.
Making sure you and your contractor have the same payment schedule agreed on will keep everyone involved happy. Melissa talks about going through the property with the contractors before hand and looking at every single detail of the house. That way, everyone is on the same page for what needs to be fixed.
There’s much more to your team than just you and the contractor, though. Melissa has been working with a realtor she trusts, and has become great friends with. It’s so important to work with people who are great at their jobs, and who are there for you.
For example, there was an issue with some buyers not being able to qualify for the property they wanted to buy and, instead of just closing out the deal, Melissa’s realtor fought and negotiated until all parties were happy. Having a realtor who will work with you, and also your buyers, is great for having your properties sold quickly.
All in all, Melissa has been working hard at showing what an amazing Flip Pilot she is. If you want to network with other Flip Pilots, join our closed FaceBook group by going to FlipPilot.com here: https://flippilot.com/beta-notify
This vlog, Danny talks about how important it is for you to do what needs to be done for your business even if you’re afraid. Don’t forget, all of the vlog episodes (and more) are available on the FlippingJunkie YouTube channel at http://youtube.com/FlippingJunkie
Making big steps is scary for just about everyone. When Danny was working on getting his pilot’s license, he would stop in the parking lot and think about two things: how exciting flying is, but also how dangerous it is. Even though learning was a lot of fun, there was still that risk involved.
The same is true for running your own real estate investing business. Especially when you’re getting started. When Danny and Melissa first started buying and selling houses and the first call came in he was so nervous to talk to the motivated seller that he threw the phone at Melissa so she would talk to them! And while that was scary, the reward to going through with the lead was bigger than any nerves they had.
So that’s the takeaway from this vlog. Knowing that being afraid is ok, but pushing past that to get to the good stuff is even better!
Stay tuned and be sure to subscribe to the FlippingJunkie Youtube channel: http://youtube.com/flippingjunkie
Geremy Heath is the owner and founder of Texas All Cash Home Buyers.
Geremy was on the podcast during the early days for episode 3 where we talked about <a href="http://flippingjunkie.com/episode-3-the-mindset-that-guarantees-flipping-houses-success/" target="_blank">The Mindset That Guarantees Flipping Houses Success - Click Here To Listen</a>
We talk about his Miracle Morning routine…which is incredible. If you want to find out more check out my interview with the author, Hal Elrod: <a href="http://flippingjunkie.com/episode-24-foundation-the-miracle-morning-whal-elrod/" target="_blank">Click Here To Listen to My Interview with Hal Elrod</a>
There’s a lot that goes on in between contracting and closing on a house. Especially when it comes to the numbers. You have to make detailed estimates of the labor costs, material costs, and other specific skew costs. If you’re not precise in your estimates, then you’ll run into some funding roadblocks.
Geremy makes the suggestion of not going through with a property if the exact estimate is higher than 10% more than the original estimate. When Melissa and I were doing it before we got our team, we would know if something was off when we got to the rehab (which wasn’t too fun).
This work does need to be done regardless. And Geremy makes the point that it’s better to get it over with sooner rather than later. It’s better to know what you’re getting into before you start the closing process.
To get your invite to the new Flip Pilot closed Facebook Group, visit the <a href="http://flippilot” target="_blank">Flip Pilot Invitation Page - Click Here</a>.
This vlog, Danny talks expands on what it means to be a Flip Pilot, and what it takes to make measurable progress with your real estate investing business. Don’t forget, all of the vlog episodes (and more) are available on the FlippingJunkie YouTube channel at http://youtube.com/FlippingJunkie
What does it really mean to have a 30,000 foot view of your business? You have to really take a deep look at it and where your business is going, but you also really need to take a look at yourself.
Staying in place without anything driving you personally will affect how your business expands. You need to take a closer look at why you get up in the mornings, what keeps you motivated, and how you’re growing as an entrepreneur.
The biggest concern is making sure you’re not overloading yourself with too many goals that aren’t realistic, or that are too distracting. “Shiny Objects” can get in the way of you developing what you need to for your business to continue to be a success. That’s something that we struggle with. Staying focused and on track, and completing one goal before you move on to the next one is essential for a healthy business.
Stay tuned and be sure to subscribe to the FlippingJunkie Youtube channel: http://youtube.com/flippingjunkie
This vlog, Danny talks about the beginnings of his house flipping business, and the learning curves it took to get the hang of it. Don’t forget, all of the vlog episodes (and more) are available on the FlippingJunkie YouTube channel at http://youtube.com/FlippingJunkie
Learning what to do to run your business the right way takes time, but mostly trial and error. There is a huge difference between running your business and working in your business, and what it takes to be the pilot instead of the crew.
So here’s a story. When Danny first started rehabbing houses, he showed up to his first demo site the day before to get it prepped. He went and personally started taking nails out of the walls so that the sheetrock could be laid properly, thinking he was doing a great job and showing that he has what it takes to be an investor.
And then his mentor showed up, mad. He started telling Danny that it’s not his job to be taking nails out of the wall. Not because he was somehow better, but because he was supposed to be running the business and not working in it.
The takeaway is that as an investor you shouldn’t be swinging the hammers. It’s your job to work on your business, not IN your business - that’s what it means to be a Flip Pilot!
Stay tuned and be sure to subscribe to the FlippingJunkie Youtube channel: http://youtube.com/flippingjunkie
This vlog, Danny talks about the difficulties that running a real estate investing business can cause, like attorneys talking sellers out of deals. Don’t forget, all of the vlog episodes (and more) are available on the FlippingJunkie YouTube channel at http://youtube.com/FlippingJunkie
You know what really grinds my gears? Attorneys. And thieves (but we’ll talk about that second).
Do you ever run into issues with attorneys? For the most part, they’re not too much of an issue, but when they start making sellers or buyers question the deal it gets a little frustrating. For example, the attorney mentioned in the vlog wrote the buyer’s contract in such a way that it, basically, made the contract null. Just a little frustration.
Ok, those thieves. Long story short, our entire website got copied and pasted. Word for word, code for code. Understandably, Danny wasn’t happy. But, after taking a step back and looking at how poorly this is being taken care of, these thieves aren’t as intimidating as they think they are. We won’t get too much into it here. Just know that if Danny isn’t worried, no one else needs to be!
This this vlog, Danny talks about the idea of being the pilot of your flipping business instead of someone working on the ground. Don’t forget, all of the vlog episodes (and more) are available on the FlippingJunkie YouTube channel at http://youtube.com/FlippingJunkie
Are you working in your business or on your business? That might sound like a small difference, but it’s more important than you’d think. If you started your business from the ground up (like most real estate investors have) then you’re the boss. And being the boss means you can’t be spending your time running around within your business. You need to be taking care of things from above - working on your business.
That’s where the idea of being a Flip Pilot comes in. You need to be able to see your business from 30,000 feet up to be able to take it to the places you want to go. So focusing on managing your business means that you’re going to have to give up some of the hands on work to take on the bigger issues.
Let’s break it down. If you’re working in your business, you have to wear a lot of hats. You have to be the marketer, and the hiring manager, and the sales guy, and the foreman, and the legal team, and the boss. It’s too much. If you’re spread too thin then you aren’t replenishing your inventory fat enough to continue to make money.
Take Danny’s example. When he and Melissa were spread too thin, they would focus all of their energy on one property at a time. Which worked, for a little while. But once that property was finished, there was nothing left on deck. So then the marketing had to start all over with nothing generating money in the meantime.
Basically what we’re getting at is, are you switching hats too much in your business or are you taking charge? Be a Flip Pilot, not the ground crew! Let us know what you think in the comments :)
This this vlog, Danny talks about the similarities between PPC marketing and direct mail marketing tactics, and why sticking with PPC is so important for constant deal flow. Don’t forget, all of the vlog episodes (and more) are available on the FlippingJunkie YouTube channel at http://youtube.com/FlippingJunkie
Doing direct mail marketing is great for growing your reach to motivated sellers, but can often be discouraging (as we found out) when getting a 0.1% response is a good response…
Investing only about $500 to direct mail just wasn’t working for a few reasons: there wasn’t a targeted enough audience, and there wasn’t enough funding behind it.
The same rule applies to PPC marketing. If you’re only allotting $500 a month for pay per click, how can you expect to get the best ROI? You can’t. True, PPC is much more targeted, so your ads are getting in front of your exact audience, but as Danny points out this is a pay-to-play strategy. And it WORKS.
The other thing to consider when budgeting for PPC is how much a single deal is costing you. The more you pay, the better the return. You can’t just rely on getting lucky for every deal. So, let’s say you spent $3000 on getting one deal. That one deal will last you, what, about 3 months? That’s great! But you need to be generating other deals in the meantime. That’s why PPC isn’t a one-and-done thing, it’s on-going.
You can learn all about it in this vlog episode, and on the podcast.
This this vlog, Danny talks the crazy storms in San Antonio, and his upcoming Masterminds Meeting with Justin Williams and Andy McFarland. Don’t forget, all of the vlog episodes (and more) are available on the FlippingJunkie YouTube channel at http://youtube.com/FlippingJunkie
Aside from the insane storms in San Antonio (right near the office too! Yikes), Melissa and Danny are heading to Justin Williams’ and Andy McFarland’s 7 Figure Flipping Masterminds Meeting!
Not only is this an important networking opportunity, but it’s a great place to learn. Expanding your understanding of what you’re doing will keep you improving and make you a more worth while real estate investor.
There’s a saying that goes something like: “10 years of experience is only 10 years if you’re learning. If you’re not, it’s just 1 year repeated 9 times.”
Don’t be someone who’s just repeating one year of experience for the rest of your real estate investing business’s career. You want to be learning and expanding all of the time so that you can always be on top of what’s changing in the industry.
And there’s no better place to start that at the 7 Figure Flipping Masterminds Meetings! You can learn more at this link below. And we’re in the video! Neat :)
This this vlog, Danny talks about why you should be using a vision board to keep you on track both professionally and personally, and the steps needed to achieve those vision. Don’t forget, all of the vlog episodes (and more) are available on the FlippingJunkie YouTube channel at http://youtube.com/FlippingJunkie
Are you using a vision board? They’re great for keeping you on track, and motivated to reach those goals. Danny had a lake house and a plane on his vision board, as things that he never thought he would actually achieve. It wasn’t until this past weekend at Danny’s lake house that he realized he had achieved both of those things.
Melissa turned to him and said, “Hey this looks like the one on our vision board!” (Talking about their lake house). And she was right! Danny had reached the lake house goal, and (for personal reasons) he had gotten his pilot’s license! All from keeping himself motivated with his vision board.
Having a vision board will keep you organized and motivated. So, are you using a vision board? Use it to set personal goals, and business goals. Where do you want your business to go? What goals are you setting for your own self growth? Let us know in the comments!
This this vlog, Danny takes a drive up to his lake house where the family is spending the weekend, and talks about the importance of stepping away from the computer. Don’t forget, all of the vlog episodes (and more) are available on the FlippingJunkie YouTube channel at http://youtube.com/FlippingJunkie
Aside from just spending time with his family, it’s important for Danny to get away from the office and clear his head so that he can return to work on Monday ready to tackle the week. It’s important for everyone to do that! Danny spent his weekend with his family at his lake house, but how are you spending yours?
Stepping away from your computer is something Danny found valuable when he was on BiggerPocket’s show talking with them. This is something that’s just stuck with Danny, and has helped keep him grounded and focused on what needs to be done. Getting out there and talking to people in person, and driving around your city, are great ways to expand your knowledge of your target area. So don’t just sit in front of your computer all day, get out there and start talking to other investors and motivated sellers!
In the third vlog episode, Danny talks about his morning routine with his wife, Melissa, in the car with him on their way to the office. Don’t forget, all of the vlog episodes (and more) are available on the FlippingJunkie YouTube channel at http://youtube.com/FlippingJunkie
Danny’s morning routine got started when he found Hal Elrod’s Miracle Morning. Basically, the start of anyone’s day should be used to set up the rest of the day for success. So Danny talks about how he used his mornings for self reflection, exercise, and breakfast (or course).
Is your morning routine like Danny’s? Are you setting up your day for success from the moment you get out of bed, or are you pushing through everything instead of taking your time? Your morning should be a time to make sure your day will be a success, use it wisely!
In the second vlog episode, Danny talks about working the system to better run his real estate investing system. Don’t forget, these episodes are all available on the Flipping Junkie YouTube Channel at http://youtube.com/FlippingJunkie
Knowing how to run a business and making it successful has to do with how you work the system and react to things in a professional way. Danny talks about the ‘homework’ (because you never stop learning, even when you’re done with school) that he and his team have: reading.
The book Work the System, by Sam Carpenter, talks about how to manage a business with an emotionally detached point of view. Which really isn’t heartless, it’s objective for running a business efficiently. One of the best quotes that has helped Danny run his business is about looking at the work from above. The analogy goes something like this:
There are a lot of workers cutting down trees in a forest. They’re working really hard all day for weeks, and then the leader climbs up on of the trees to see their progress and finds out that they’ve been working in the wrong forest all this time. Danny keeps this in mind when working on his business instead of in it.
You can find the book at: http://www.workthesystem.com/get-the-book-free/
Danny has decided to start sharing the day-to-day inner workings of his businesses vlog (video log) style. Yes, the videos recorded for these shows is available on the FlippingJunkie YouTube channel at http://youtube.com/FlippingJunkie
These will be quick episodes sharing stories of the days happenings and what it looks like for him and his team as they achieve their goals.
He (this seems awkward as I’m writing this in the third person… anyway) wanted to have a platform to share all the epiphanies, struggles and wins experienced as each week goes by. A video log seemed the best way to do so. Each episode will be included as audio on the podcast.
It’s going to be awesome sharing each day in the life of a real estate investor with the vlog and podcast.
In the inaugural edition of the Flipping Junkie Day In The Life vlog series, Danny talks about his breakfast meeting with his dad and brother. As a real estate investor himself, Danny’s dad shared some stories of already installed flooring being stolen and Danny shared that the furniture, rugs, pictures and knick knacks from a fully staged house were stolen.
This first episode gives us a glimpse of what to look forward in the coming episodes.
I’ve been hearing more and more investors talk about how they buy houses using online auctions like auction.com. I’ve been fascinated by the strategy and was glad to get Paul Lizell on the show.
He’s buying 8 to 15 houses a month that he buys from online real estate auctions….all over the country. How cool is that?
Paul started in Real estate in 1999, became a full time investor in the fall of 2004. He had a background in commercial business loan underwriting and 4 years as a business development officer. He’s been a licensed Realtor since 2006. As a national real estate wholesaler, he does 6-12 fix and flips per year and owner finances 10 properties per year, mostly to investors.
You’d think that the ratio of houses to bid on to the number of deals he gets would be pretty crazy but he actually does pretty well. He’s got online real estate auction thing figured out to where he bids on about 150 properties and ends up with between and 8 to 15 per month. That’s awesome!
His favorite auction websites are:
He mentioned that hubzu is nice because you can get away with small earnest money deposits than the typical $2,500 the other auction sites require.
When looking for properties to bid on, he focuses on the smaller markets and targets in on the houses that have been listed for a long time. The houses that are for sale for over 180 days or more are the ones that he puts bids in on.
During the episode he also gave several reasons why he prefers to close each of the deals at the title company of his choosing rather than the one preferred by the bank that owns the auction property. The main reason was their hidden title company fees and lack of control over what is going on with the deal.
He was also kind enough to share with us his technique to get Realtors to tell us their BPO (which most don’t want to give out). He does this by not asking for a BPO but by asking, “what would you list it at for a 30 day quick sale?”
Be aware that when buying auction houses online and then trying to wholesale them, you will not be able to assign them. You will need to double-close…yet another reason to have a title company you know that can close the deals.
John Martinez, founder of Midwest Revenue Group, LLC (www.midwestrev.com) is a sales development expert and a highly sought after consultant who brings humor, insight and real-world advice to his audiences. His practical, street-smart approach to selling has helped hundreds of investors, sales organizations, call centers, business owners, and independent professionals increase their revenue with more control, greater confidence and less effort.
Today I wanted to talk about how to handle negotiations with sellers so that we get the price we want and they feel good about the whole process.
This is an aspect of buying directly from motivated sellers that keeps a lot of people on the sidelines.
John shares with us today several tips for working with motivated sellers so that they feel good about the process and everyone gets what they want.
John’s first tip involves empathy. You’ve got to have empathy for each and every seller and what they are going through. Period.
Don’t hide what you’re feeling and how you feel about their situation. Let them know that what they are going through is not easy and that you know it must be hard.
John’s second tip is to make use of price anchoring. You’ve got to reset whatever initial price the seller is expecting to get so that your offer doesn’t hit them like a huge punch to the gut. One way to do this is to share recent comps for nearby houses that have sold for low amounts.
As you negotiate price, continuously lower the increment that you come up in your offer. This will signal to the seller that you are nearing your max. He also advises that you end with an odd number as your final as it appears to be your highest calculated offer. Great tip!
If your max offer doesn’t do the trick, make non-financial concessions. Offer to allow them to leave stuff they don’t want behind.
I asked John about common objections from sellers and how to handle them. I absolutely love the approach he offered.
He doesn’t feel like there is ever any canned objection/counter that will work. It’s always more of a situation by situation ordeal. His approach is to find out the real reason for why they are selling and have them hash out what objections or problems they have with doing so.
Then, understand that you can never overcome sellers’ objections. They must overcome their own objections. You can aid this by asking them questions that plays their objection against what they are trying to accomplish. In this way, they will see that accomplishing the sale of the house and resolving the situation is much bigger than the smaller problem of the objection.
Bill Allen has been flipping for over 3 years now and has done an incredible amount of growing in that short amount of time. He’s a full-time flight instructor for the Navy and has managed to grow a house flipping business from himself to a team running like a well-oiled machine.
I highly respect Bill and how he thinks. He’s the type of guy that loves to think through all types of situations and coming up with solutions. I think we’re wired the same.
In this episode, Bill shares with us how he got started. We then go into how he analyzes deals. His method of analysis is very similar to mine.
He uses the 70% rule of deal analysis for a quick idea of whether a deal is feasible or not and then goes into more detail.
A very important thing he mentioned was that the 70% rule works well for houses in the over $100k to about $180k range but not so much for anything outside of that. I tend to agree.
His quick method for repair cost estimation is to use $20 per soft of the house and then add costs for major items on top of that. Now, if a house needs major repair, this number will be low. This is more for typical updating, not relocating walls and re-sheetrocking, etc.
Bill became a father again recently. His son, James was born with a heart defect. Though he’s been through a lot, James is doing well.
You can read the story here on Bill’s blog: http://blackjackre.com/james/
Bill is an awesome father and person as he decided to set up donation page for the Children’s Heart Foundation and has pledged to match all donations.
This is incredible and I highly encourage everyone to make a donation. There’s nothing more important than our kids and I can’t think of a better cause.
Please pledge a donation here: Bill’s Children’s Heart Foundation Donation Page: http://www.childrensheartfoundation.org/donate-now
Please be sure to leave a mention of your donation on Bill’s Facebook page so that he can match your donation: http://facebook.com/blackjackestate