At the February 2017 wholesaling real estate meetup, two eager attendees got the opportunity to take the “hot seat” and receive immediate coaching from Brad Chandler. He also answered several questions from the audience about mailing size, the strongest marketing avenue for seller leads, creating a strong brand and online presence, following up on home visit conversations, negotiating with banks, measuring rates of return on direct mail, using different phone numbers vs extension numbers, and on finding hard money lenders.
Before he got into the hot seat coaching, Brad shared that Express Homebuyers is selling its entire property management portfolio. If you know anyone who wants cash flow rentals, go to EHBDeals.com. They will add close to 70 occupied rental units on that site in the coming weeks. Additionally, you’ll find a tons of deals on EHBDeals.com if you’re in the local DMV market and looking for an investment property fixer upper.
On to the hot seats:
Joan was the first participant on the hot seat and was struggling with not being able to find enough inventory and too few motivated sellers in her Winchester, VA market. Brad recommended she not focus as much on MLS deals because it’s so competitive. He liked that she’s using car signs and bandit signs for marketing. However, she’s using a Google Voice phone number with an out of state area code. Big no-no. You want to build trust with sellers and a non-local phone number raises all kinds of questions in their heads. So make sure to use a phone number local to your area. Then, if you’re not able to take every single call at the time it comes in (which is virtually impossible for anyone to do), enlist the services of a call center or a virtual assistant. Brad says, “Voicemail is a killer. Avoid voicemail at all costs because now we’re in the internet age where people want things done yesterday.”
Because she hasn’t gotten a lot of calls yet, Joan admitted she doesn’t have a follow up system. Brad reiterated his advice from last month. “Don’t spend a dime in marketing until you have a follow-up system in place.” He likened it to building a house where you try to start putting the drywall up and you don’t have the foundation set.
Velora was the second person to take a seat in the hot seat. She is focused on working in the DC and PG County markets. She’s going to the courthouse and pulling probates. She’s wondering about the best approach to take in wording her marketing letters and how often she should send them. Brad suggests that everyone use the approach that feels comfortable for them in terms of referencing an inherited property. He also advises sending a series of letters every 30 days for the first six months and then every 60 days for the next 12-18 months. Calling the personal representative is an important part of the process as well.
For her second list, Velora is driving for dollars and (smartly) only mailing to properties that have been owned for more than 10 years. These are the ones that are most likely to have equity. Brad recommended that in addition to mailing, Velora knock on the doors and see if she can talk with the owner right there. If that’s not an option, he suggested leaving door hangers with an emotionally driven message.
Lastly, since she is a Realtor, Velora is combing through the MLS for properties that have been on the market for a long time and/or have had price reductions. This is a better strategy than Joan’s less focused use of the MLS. Make an offer on these houses because you never know what information you can get from the agent or where the seller is with their frustration level.
Brad closed the conversation with her saying, “Velora is a brand new investor. She’s doing a lot of right things. She’s a got a couple steps to take in terms of follow-up, building out Podio, but continue doing the things. You’ve got to be consistent, consistent, consistent, and I promise it will come.”
Go to Express Homebuyers Wholesaling Meetup page on Facebook (this group is only open to people who physically attend a meetup meeting) when you have questions, when you are struggling with a seller, and you don’t know what to do. Post your real estate wholesaling questions on Facebook.
If you haven’t taken the hot seat in a recent Meetup and are interested in it, please click here. You will essentially be getting 30 minutes of free coaching from Brad.
February 2017 Meetup
Brad Chandler: Welcome ladies and gentlemen to Express Homebuyers Wholesale meet-up. We have a good crowd tonight. How many folks are new tonight? Some of you guys are going to hear the first couple of slides again. We are doing something different tonight which we’re super excited about. Actually, we’re going to do a bunch of things different tonight. It’s going to be an awesome meeting.
I hope you guys walk out here like last time, saying, “Wow, that was amazing.” We’re doing Facebook Live tonight so instead of just giving this content to the 50 or so people in this room, I bet by the end of this week, thousands of people are watching this Facebook Live and if not, hopefully they’re share and thousands will see it. Welcome, welcome.
We’re going to go through probably ten slides, and then we’re going to do something we did approximately three meetings ago. Who was here when we did the hot seat? Great, we only had three or four people. We’re going to do the hot seat again. The hot seat is you guys will come up here, present any obstacles you have in your real estate business and what’s keeping you from reaching your real estate goals.
I’m going to destroy them. I’m going to chew them up and spit them out, so when you walk out of here, you have a frame of reference saying there’s absolutely nothing that I can’t accomplish because I sat in your seat 13 years ago, and I’ll get into that in a second, but I sat in your seat 13 years ago, saw all these people doing deals, and said, “If these people can do it, I can do it.”
Here I am, 2000 deals later and I’ve done it, so you guys can do it. I’m going to hopefully help you guys reset, do a mindset shift. Let’s get going. Who am I and why am I standing up here? My name is Brad Chandler of course.
I read a book when I was in ninth grade on how to buy real estate with no money down by Robert Allen. Anybody ever read that book? I think it came out in the ’80s. Robert Allen has certainly had his success, and just like most of us, has run into some tough times but he always seems to surface again. Thank you to him for getting me started.
In 2002, an investor bought my neighbor’s house in Vienna. I went over and talked with him. He said, “Yes, I buy houses from motivated sellers at a discount, fix them up, and resell them.” At that time, I had an undergraduate degree in residential property management and an MBA in real estate.
I sat for my real estate license. I never got it but I passed the exam. I said, “No one ever taught me that you could buy steeply discounted real estate. Wow, that’s amazing. I thought you got rich in real estate by putting 20% down, buying a house, paying it off, getting it rented, and it hopefully appreciates.” That’s how I thought I was going to become wealthy in real estate.
I didn’t even know this fix and flip thing. Thank God I ran into him. That was in December of 2002. I made up my mind that I was going to make a run at this and I was going to make it work, so I would work a full time job. I was actually working here in Springfield with a local developer.
I would work until six o’clock, I’d come home. My son was just born. I would put him to bed, and eight o’clock to midnight, I would work and I would everything. We were out when the sniper was firing. We were out putting bandit signs out.
I was hand addressing hundreds of envelopes. You name it, I was door knocking. I was doing everything. Every day that went by without a deal, I got more and more persistent because I kept coming to these meetings. Back then, there was no meet-up. It was the REA. Everybody has been to the REA or heard of a REA.
Every time I’d go there, I’d see these people. They would stand up in the room in what’s called deal’s corner at the beginning and say these great deals they were doing. I’m like, “Gosh,” and instead of quitting, I kept going. Every day, I kept getting more and more dedicated, more and more persistent.
That was in December that I decided to. It wasn’t until July of the next year – it took me eight months to find my first deal. In July and August of that year, somehow I bought six deals, and in October, I said goodbye to my boss, sayonara, I’m done.
I’m done with the J-O-B, and I started Express Homebuyers, and here we are 2000 deals later. I tell you that, that other point right below there, I started out with a negative $80,000 net worth. I didn’t have a lot of money. The things that I teach you guys and have taught you guys, I was in the same position you are. I had no money.
I was hand addressing envelopes because I couldn’t afford to get them printed. I had an $80,000 that I had too, and at the time, I wasn’t making a ton of money. I tell you all this stuff, not to brag, but so you guys can relate. I’ve been where you’re sitting and there is another side to this, but you got to follow our advice.
There’s a lot of stuff that a lot of investors and a lot of gurus teach that aren’t right. If you follow our advice and do it step-by-step, it will work for you. It’s not easy. It’s definitely not easy, but it will work. My mom loaned me the money to buy my first house. It was a subject to deal.
For those of you who don’t know subject to, it’s essentially buying a house where you don’t have to come up with the cash because you keep the person’s mortgage in place. You actually bought a house and you own it, but the bank typically doesn’t know that you buy it.
If you just keep paying them, they don’t care. I bought my first. She lent me $20,000. I flipped that house and I think made $40,000 on that first deal, and that was about what I was making for an entire year of working. You can imagine when I got that check, I’m scratching my head thinking, “What am I working for this guy for? I just made almost as much money in a two-week transaction.”
That wasn’t two weeks. I found it on the Listserv. Anyone know what a Listserv is? Like a Google Group, but back then, it was Yahoo. Yahoo dominated. This lady posted that she had a house for sale. I went and talked to her.
Like every investor, I offered her too much. I underestimated renovations. She turned me down. I came back six months later, and now I knew about the business so instead of offering her 125 or 120, I said, “All I can pay you is 105,” and she accepted it.
It was actually people beat us up a lot in this business but this lady had five kids. Unfortunately one of her kids drowned in the home in Manassas Park. She was taking her husband’s paycheck and spending it on I have no idea to this day what but she had no money, and they were seven days away from foreclosure.
Had an investor like myself not stepped in, she told me, “My family would have been homeless,” so when you hear about people giving us a bad reputation because some people aren’t scrupulous, we’re not only scrupulous, we do help a lot of people. I have countless testimonials, hours of video testimony of people saying, “Thank you, thank you, thank you.”
Last slide on this one, the million dollar question taught to me by Robert Shemin. If you ask this question the rest of your life, it’s, “Do you know anyone else that wants to buy or sell real estate? Do you know anyone period?”
The first deal that I did, the deal that I ended up being able to quit my job on, I had bought a house in Arlington. Excuse me, the Manassas house that I just talked about was my first deal. I put a, “We buy houses” sign on there. I had already sold it but I kept the sign up there because you guys know I like marketing.
A lady calls me and says, “Can I buy the house?” and I said, “It’s already sold.” I could have easily hung up the phone but I didn’t. I said, “Do you know anyone else that wants to buy or sell a house?” and she said, “Yes, my mom has a house in Arlington for sale.” “How much?” “I think she wants $225,000 for it.”
Immediately, bells were like boom, boom, boom, $225,000 in 2003 was still a good price in Arlington. She’s like, “Let me call my mom. I’ll call you back.” She called me back in 20 minutes, and she said, “I just talked my mom down to $185,000,” so I bought that house.
Because of that house, I met my partner Jud Allan because he lived in the neighborhood. Without meeting Jud, I wouldn’t be here. We wouldn’t have bought 2000 houses. We have a great partnership and we’ve had a great relationship. We’ve helped each other in our weaknesses.
Ask that question. You guys, I didn’t have any money so I had to ask that question. Now we can market and people come to us, but you guys run into people all the time. Have a card, have a little bonus on there that you’ll pay them if they send you something, and just ask the question, “Do you know anyone who wants to buy or sell a house?”
It’s as simple as that. That’s the million dollar question. Don’t forget it. This is my family. I got remarried two years ago in Mexico. We have four buckets to Express Homebuyers. One is our buy, fix, and sell. For those of you who have been here, you can see we added one and we’re about to add two.
I’ll get to that in a second. Buy, fix, and sell is our primary business, like I said, founded in 2003. I think we’re somewhere around 2100 houses so far. We seem to be growing each year. We’re doing more and more volume each year.
Our second bucket is condo development. We’re not doing a ton of this but I just say this because if you guys come across a property in DC that’s a multifamily, we are interested in looking at it. We have a full service property management company with 80 units that we are selling.
We’ve decided it’s the right time in the market. We bought them primarily in 2010 and 2012. We’re selling our entire portfolio, so if you know anyone who wants cash flow rentals, you can go to EHBDeals.com, and I’ll be putting that up in a second.
Our fourth one, we’ve always kind of done it but I added it as a bucket. Tom pointed it out earlier because we’re doing it on such a big scale. We’re having tremendous success wholesaling deals. Haven’t you guys all seen our new site, EHBDeals.com? It’s on our Express Homebuyers portal, phenomenal site that was put together by someone we know.
It’s a great place to go and find deals if you like them. Those are our four buckets. I’ll introduce one more bucket that we’re going to be starting here very shortly. Core values, I’m just going to run through these really quickly. This is just to give newcomers a feel for who we are.
These are the core values that we live by everyday in our business and our personal lives, perseverance. I told you that I’ve been living that since 2002 when I started. Fairness, humility and confidence, if there’s a problem, fix it, learn and improve, candor, and then finally, work/life balance.
As you guys build businesses, you definitely have to have culture and you have to have core values. It’s not something that you just say, “I’m going to sit down today and come up with core values.” It’s really who you are at the core.
We really did our core values a year, year and a half ago. We’ve already been in business ten years. It’s not like I could have made these up. We sat down as a management team and said, “What are the things that we really embody as an organization?” These are the things that highlight.
When we hire people, just like you guys should do, we’re not going to hire someone. When we look at candidates, humility and confidence, we’ll just pick that one. If someone comes in and they’re talking about how great they are, and all the accomplishments they’ve done, and they’re the best in the world, they’re not going to be a fit for us at the Express Homebuyers.
Just another tidbit when you guys are growing your business, make sure that you’re very clear on what your core values are and what you stand for as an individual and as a company, and make sure that those people’s core values mesh that. It’s really anything in life, relationships.
You’re not going to have a successful marriage if you married someone whose core values are way different than yours. We’re going to have plenty of time at the end for questions. Wholesaling, what is wholesaling? Wholesaling is I get a call from Joan, and Joan needs to sell her house.
I go over to Joan’s, and I put her house under contract. I get it for $100,000. I go over to John and say, “Hey John.” They’re not married. We’re just using that they’re separated now here, living in different parts of the country.
I say, “Hey John, I’ve got this deal here that I want to sell for $125,000. Do you want it?” and John looks at the numbers and says, “Yes, I can renovate it for 50, sell it for 250. I’ll do it.” You say, “Okay, great. I’m going to assign the contract. It’s a simple one-page form.
“I’m assigning the rights to buy Joan’s house to John.” John shows up at closing. He writes a check for $125,000. The seller, the title company gives the seller the $100,000 and they give me a $25,000 assignment fee. Everyone familiar with that? Everyone know what wholesaling is?
Little to no money needed, very low risk, highly scalable because you don’t need a ton of money. You don’t need to go raise a bunch of money. There’s no money needed except for operating business. There’s no capital to actually buy the house, and you get paid immediately.
You don’t have to wait six months to renovate the house. You don’t have to wait for the building permits, the inspector, all that stuff because typically it’s a cash buyer with no contingencies and they’re just buying the house and moving on. My initial thoughts on wholesaling, I told you guys I used to sit in this room back 13, 14, or 15 years ago.
My twisted view was that wholesaling was for the less sophisticated person, and when you got really smart, you would then go to rehabbing, which is completely not the case. I’m here to tell you that. We’ve proved that in the last 60 days. We’ve absolutely crushed it.
We’ve had two of the best months we’ve ever had because we’ve been focusing on wholesaling. Rehabbing, what is rehabbing? Rehabbing is extremely capital intensive. At one point in time, just on the fix and flip business, we had 15 to 20 million dollars out.
That’s a ton of money, a ton of risk. A lot of it, we signed personally for. You guys remember what happened in 2008? We woke up overnight and our portfolio was down about two million dollars, and we were like, “Oh my gosh, are we going to be able to sell this and get out of it?” so extremely capital intensive, cost overruns.
Who has renovated a house in here? Who has cost overruns? Every single hand, every single person has had cost overruns, variables, market changes. When you bought a house in mid-2007 and it took you six to eight months to buy it, I hope you underwrote a 10% decline or 5% decline because things were going down like crazy.
That doesn’t happen in wholesaling. Wholesaling happens immediately. The bottom line is higher risk for more potential upside, and potential should be bolded and highlighted there because there’s no guarantees. You can lose a lot. Education, if you guys haven’t been to ExpressHomebuyers.com/category/wholesalers, a ton of great information there.
We started this meet-up group to give back. We started this meet-up group to help you guys generate deals. That’s what we’ve done from day one. We’ve given a ton of great content for asking nothing in return. It’s all been give, give, give, and hopefully that’s helped you in some way, shape, or form.
Bigger Pockets is amazing resource. Sean Terry’s podcast are an amazing resource. He’s had three million downloads, 200 countries. Now, this is the fourth thing, the fourth bucket to Express Homebuyers, and now the new and best source is that after 13 years, we decided to get into coaching.
We decided to get into coaching. We want to do this on a national level. We are going to – this has nothing to do with the coaching part but in a second, we’re going to hopefully have some volunteers to come up in the hot seat, and that’s for those of you who have seen it before, it’s a great way to break down any obstacles that are happening for you. Facebook Live will get to see that as well.
BradChandler.com, that is our real estate investor training. That is coming. Don’t ask me a whole lot of questions about the coaching program because I haven’t figured it out. All I’ve done is that I’ve made a commitment that I hope in the month of April, that’s our target date, we’re going to start coaching.
There’s probably going to be a local component and a national component. If you’re interested in saying, “Hey, I’d love for you to coach me,” just go there and sign up. I think there are two or three fields in that form, so real quick, ExpressHomebuyers.com/free-coaching.
I’m starting a podcast. The reason is I think there’s a real niche in what I’m going to do. Last meet-up group, we had the best feedback of the ten meet-up groups of any. Who was here last meeting? You guys remember what we did.
You came in and had a bunch of obstacles, and things that were standing in your way of reaching your real estate goals and dreams, and Tom and I literally systematically broke down every single one of them. We’re going to do the same thing on the podcast.
We’re actually going to work with folks like yourself, folks from around the country, and instead of me speaking about, “Hey, this is Express Homebuyers, and we spend $2 million a year in marketing,” some people can’t relate to that. I’m going to bring it all the way back down to when I started and I had no money.
I had that negative $80,000 net worth. We’re going to break down the barriers with the hopes that folks like yourself all around the country will hear this and say, “Well, if this person can do it or if this person got this piece of advice, that’s exactly what I was looking for.”
Tonight is going to be the start of that. We’re going to have this live question and action. We’re going to need 20 to 30 minutes a session. I’m hoping I’m ready for this if two or three people are going to raise their hands. Hopefully it’s not somebody who has been up here. I’d like to get some new people.
Again, this is a tremendous way. I don’t know what the coaching is going to look like. It’s going to be expensive though because there is a huge need for good coaching. We’re going to do things completely different as we always do. We’re going to teach people from A to Z how to do it, and we’re going to make sure they’re successful.
The point being is it could be $3000 or $5000 a month, it could be $100,000 yearly program. Tonight, you know what the fee is? Zero. You’re getting my time that is going to be worth, again, $2000 to $5000 a month for an hour or two a month.
You’re going to get tonight for free. Think about, the folks in the crowd that want to come up, think about your obstacles. What is really keeping you from reaching your real estate goals? Then Tom and I are going to break them down and give you some actionable items that you can take out of here in the coming days, weeks, and months and actually implement to start reaching your goals that you want.
Most of you guys know that the next one, it’s www.ExpressHomebuyers.com/submitdeal. That is our form if you guys have a deal that you want to wholesale to us. Now, we’ve spent the last three months collecting over 10,000 buyers in this local market.
You guys all know what a great job we do with finding motivated sellers. We’re great at it. I think that’s one of the things we do better than anyone in the country is marketing. We’re going to start doing that to buyers, so we’re going to dedicate $2000, $3000, $4000, $5000 a month, $10,000 a month to finding buyers.
If you guys have a deal and you bring it to us, and it’s too skinny, it doesn’t work, we’re going to come to you. We don’t have everything figured out but we’re going to say, “Hey, do you want to put this on our site and wholesale it? There will be some split.” More to come on that.
If you don’t have a huge buyer’s list, and you don’t want to go out and build a huge buyer’s list, this is a way to generate some nice instant quick cash. Lastly, we mentioned this earlier, EHBDeals.com. Are there any realtors in the room? Any of you realtors work with cash buyers who are always looking for deals?
The realtors have loved – we’ve sold a lot of product in the last 60 days to realtors whose cash clients can’t find anything, MLS, there’s not much inventory out there. We find the inventory we do because we spend almost $2 million a year.
If you guys or your clients are looking for deals, check out EHBDeals.com. The final slide is just the closed Facebook group. I mentioned this when you guys were walking in. If you gave Alex your name and email address at the beginning of the meeting or walking in, you got to go to Facebook and type in Express Homebuyers Wholesale Meetup, and then we’ll look on the list and see that you’ve signed up, and let you in.
A lot of great back and forth; if you guys ever have any questions, any questions at all – we’ve been saying this now for however many months we’ve been doing this, ten months – if you post that to the group, myself or Tom will answer it. Myself personally, I’ve been involved in over 5000 real estate transactions.
If you know what the charge is on Facebook, ask me a question – zero. How many Facebook questions do I get a week? Almost zero. Guys, come on, come on. If I were sitting in your shoes 13 years ago and someone, John Peterson happened to be the gentleman who helped me through my first deal. Any of you know John Peterson? He runs a REA group around here, Washington REA.
Facebook didn’t exist then. If he would have said to me, “You can ask any question on Facebook,” I would have had five questions a day up there, but every month I come in and I say this, and we still hardly see any questions. I’m not sure why that is but you guys are blowing it in that respect.
I know everyone in here is not reaching their real estate goals. We’re a free resource. Use it, use it, use it because you never know the day I might say, “Hmm, I might start charging for that.” I doubt on Facebook, but come on guys, ask questions.
When you ask a question, there’s a good chance someone else in the room is going to have the same exact question and we can help each other. That’s really the point of the transition. What we’re going to do right now is not only helping yourself but there are going to be people in this room that are like, “Yes, that’s exactly the question I had.”
We will hold questions until the end. Who in here has thick skin and would like to come up? A couple of caveats, you are obviously going to be on Facebook so hopefully there’s no issue with that. You can’t come up here, sit down, and say, “I’ve been thinking about real estate for a long time.”
You have got to be actionable. You have got to be out there doing something actionable which means you’ve made offers, you’ve got bandit signs out, you’ve done marketing, whatever it is, but you’ve had to have taken action. I don’t want people here or on my podcast that are just at the stage where, “Hey, I’m thinking about it and I don’t know. I can’t get into it because I don’t have money, so can you break down that objection?”
No, I’m not going to do that. I want people that have actually taken the step. Who is interested in being in the hot seat – Joan? All right, I’m going to see if I can tee up anyone else before we put you in the hot seat. Come on guys, just one person in this whole room?
We got one other taker. All right, I think maybe you guys are a little scared about how mean I’m going to be. I’m not going to be that mean. I won’t bite you but I will tell it like it is. There’s no hand holding here. We’re all adults, and you guys are here – there we go, got one more, Velora. We got another brave soul.
All right, Joan, you are the first. Have a seat right there please. Joan, thanks for taking the time to sit down and talk with us tonight. Where are you from, Joan?
Joan: Winchester, Virginia.
Brad: How long have you been real estate investing?
Joan: Almost a year.
Brad: Tell me about your obstacle. What is your struggle? What are you going through?
Joan: Right now, one of my biggest struggles is not enough inventory. We do actually work with a realtor to help us find deals, and we’ve put in offers but the sellers are not motivated enough. I’ve heard that the area that we’re working with is a seller’s market. That’s one of my obstacles that I’m dealing with, that there’s not a lot.
The houses that I’m finding with some real estate agents are too pretty, and then I’m finding the ones that need work, and I’m putting in offers but not getting deals.
Brad: Okay, so are you making offers in the Winchester market?
Joan: Yes, I am.
Brad: As most folks in this room probably know, most all of DC metro is in a seller’s market. What’s a seller’s market? It means the seller can do whatever they damn well please because there’s low inventory. Buyers are scurrying to get deals.
Forget deals, buyers, homeowners that just want to jump in before the interest rates go up – everyone knows interest rates are going up – want a house. There’s very tight inventory.
We have never been a fan, nor have had any success, with making MLS offers, with the exception of when the housing crash happened. There was a month in 2010 where it was actually February of 2010 when we bought 24 REOs from banks.
We stopped our marketing, cut off our marketing machine because the deals were plentiful. Now we’re in a seller’s market. The inventory is ridiculously tight. You guys have heard me say this before.
Finding MLS deals or spending your time there would be one of the last things that I would tell you to do. It is so competitive, and if an agent can find you a house, it most likely has to be really beat up, so they probably put in the comments, “TLC needed, handyman, fixer-upper.”
Are those the kind of things you’re seeing in the comments?
Brad: Those are the buzzwords that every guru in the country teaches you to search for. Those are the buzzwords that the automatic searches are set up for, all those motivated seller house terms. Guess what? That’s what everyone is going to be bidding on.
It is going to be extremely hard to make a business out of real estate investing making offers on listed houses. It’s just going to be impossible. Are you guys doing any marketing?
Joan: I’ve done bandit signs, and I have put some Craigslist ads from time to time, and haven’t gotten any responses off of the Craigslist, and we haven’t gotten any responses from bandit signs either but we’re getting phone calls off of the sign that’s on the side of our car that gives our information.
Some of our marketing is working and I guess some of it is not working as well.
Brad: Great, a couple of points on that, maybe the second through the fifth deal, I told you guys I bought six deals in July and August of 2003, three of those were from a car sign. A car sign costs you probably 50 bucks. I had huge magnets. I had like the Dominoes pizza thing on the top of my car, that after it flew off on the beltway a couple of times, I did the heavy magnets, like, “I probably better not do that,” so I stopped doing that.
The magnetic bandit signs on your car look silly but I got started with them, so you don’t have a lot of money, those are the things you guys have to do. One of my favorite sayings is getting wealthy isn’t hard. It’s just doing things other people aren’t willing to do.
I was willing to put these enormous, ugly, yellow signs on my car. A lot of investors didn’t do it. Guess what? I got three deals, and that propelled me to quit my job. They were actually all three in Martinsburg, West Virginia of all places.
One was a mobile home, first and only mobile home I’ve ever bought. One was an apartment that the guy’s brother was in, and he couldn’t get them out. You’ll find we do a lot of deals with people who have family members or friends in houses, and they’re scared to get them out, not to get sidetracked.
On your bandit signs, where are you placing them? How many are you putting out? When are you putting them out?
Joan: We usually place them at freeway off-ramps so people will see them. Sometimes we’ll place them near stores like Lowes or Home Depot and stuff like that. We typically try to put them out on the weekends, on Friday night kind of thing.
That way, they’ll stay there a little while instead of putting them out at the beginning of the week.
Brad: Okay, how many are you putting out?
Joan: It’s varied. Sometimes we put 25 out at a pop and then do another set after that.
Brad: Okay, and you’re just leaving them up?
Joan: Leaving them up typically.
Brad: I would say my expert days of bandit sign hanging have been a couple, 12-13 years ago, but we used to put out, my partner Jud and I, we’d go from 10 to 12 at night. I think our goal was to put 100 out.
We would staple them high up on telephone poles. Yes, we would get fined. Yes, we would get people calling us. We don’t do it anymore but it is a source of deals, guys. Bandit signs are a source of deals.
You need to check with your local municipality to make sure. Most places don’t allow them. You can put them up on Friday and take them down on Sunday afternoons. Vienna, very tough; Alexandria, very tough; the city of Frederick once showed up with $2000 worth of fines.
The city manager actually drove to our office in Springfield to hand deliver those, very nice of him because he couldn’t find me for some reason, not that I was all over TV. They work though. They work, and they’re a cheap source.
If you’re new, I would highly recommend them. Just like with any marketing, you need to do it with consistency. You can’t put up a sign and then think you’re going to get a deal. You may have to put up 100 signs, and you may have to make sure they’re up week after week after week.
You guys heard me say it took me from December to July, eight months to find my first deal, so you guys may need to put up bandit signs, it may take you nine months but you got to do it consistently. When the phone rings, what does a bandit sign say?
Joan: We buy houses in any condition, and then it gives our phone number.
Brad: What’s the phone number?
Joan: It’s our Google Voice phone number.
Brad: An 800 number?
Joan: No, it’s Google Voice. It’s like a 714 number for California because that’s where we got started.
Brad: Okay, so that’s a big problem. If someone sees a 714 number, they’re like, “What is 714?” You’re better off with a local number. Are you guys 540 and 703?
Joan: I have a 434 number.
Brad: Winchester is now 434?
Joan: No, that’s Central Virginia. He has 540.
Brad: Okay, so I think Winchester is 540. Anyone know? It’s mostly 540. You should have a 540. We used to do 800 numbers which are better than a non, like California number is just the worst. Don’t do that.
Get rid of the signs immediately. That might be a reason, “714? Where am I calling? Who are these people? Are they going to scam me?” A lot of times people call, that’s the first question they ask is, “How does this work? Is it too good to be true? How can you really buy my house in seven days?”
All you’re doing is adding on a layer of complexity and skepticism that you don’t have to, so get a 540 number. Go buy 200-500 bandit signs and put them out on a regular basis. Get double-sided. I like yellow with black writing. “We buy houses,” I’m not even sure you have to put “any condition” because if you put “any condition,” that means you’ve got to get the font lower on the phone number which is the most important thing, and “We buy houses.”
I would redo it. I get “We buy houses,” and get yourself a 540. Local people, oh, these people are local, there’s no skepticism there. When the phone rings, who is answering it? Where does it go?
Joan: Usually I’ll answer it but there are times that it goes to the voicemail.
Brad: Is this your full time thing or do you have a job?
Joan: This is our full time thing at this point.
Brad: Do you answer 20% of the calls, 98% of the calls? Do you have any idea how many calls you answer?
Joan: The majority of them.
Brad: Voicemail is a killer. Avoid voicemail at all costs because now we’re in the internet age where people want things done yesterday. Who uses Uber? Who uses Uber religiously? Can you imagine having to wait for a taxi and take out your wallet?
Come on, the world has changed so much that they just don’t want to wait. They don’t want to wait. They don’t want to wait for a call back. No one likes to talk to a voicemail, so what we do is the phone rings three or four times, and if we don’t pick it up, it rolls over to a call center, PATLive in Tallahassee, Florida.
They do a great job, so 100% of all our calls are answered live because the other thing is when you leave a voicemail, if they leave a voicemail, you got to get back in touch with them. There was a time when Tom was spending, I think we ended up hiring another guy, Tom, because you came in my office one day and said, “I’m spending 80% of my time following up.”
We made a major shift in my business. I don’t remember what it was, but it was in direct relation to it was a direct cause of him spending so much of his time trying to follow up on the leads.
Tom: On the weekends, we had a cell phone that it would ring to, and we just couldn’t do it because then you’re checking voicemail and going back. We spent so much time. It was a huge waste. I think we were averaging 100 plus calls a day, so times that by seven, times it by four and it was bad.
Brad: Lesson learned is don’t use voicemail, and figure out a way to have the calls roll over. It’s very cheap, or again, you guys have heard me say countless times, this is the greatest time in the world to start and run, and grow a business because of technology costs and labor costs.
You can use VAs. There’s a company out of – I don’t know that I’m going to recommend them but there are companies out there that you can hire full time VAs for $4.50 an hour, and you can hire part-time VAs for $5 an hour, and there are some good ones on that payroll. You just have to find them.
There’s no reason where a lot of this stuff you’re doing, that you’re doing $10 or $15 an hour things, you should have someone else doing, and you should be building the business. You should be doing the dollar producing higher dollar activities.
They can answer your phone. You can call PATLive. When I call PATLive, they told me the greatest discount was the Ron LeGrand discount. You can do that. When you actually do get someone, what if any follow-up system are you putting them into?
Joan: I don’t really have a follow-up system at this point. I haven’t gotten a lot of calls yet.
Brad: Okay. You guys have heard me say this a bunch of times too. Don’t spend a dime in marketing until you have a follow-up system in place. Countless ones, you go back to Express Homebuyers, the category, the wholesaler thing. Was anyone here for the first two meet-ups we did on how to find motivated sellers on a beer or champagne budget?
No one was here for those first two sessions, okay. We talked a lot about that. Follow-up systems, there’s Podio. There’s a guy in Baltimore, Dan who has Investor Fuse. I think it’s a couple hundred bucks a month but what he’s done is he’s completely built it out.
If you can’t or don’t want to spend $200 a month, again, this is why it’s the greatest time to start or grow a business because you can get Sugar CRM. You can go ZoHo CRM for $19 or $20 a month. Even though you’re only having a couple leads, I still would give you the advice to set your foundations.
Like building a house where you try to start putting the drywall up and you don’t have the foundation set, everyone in this room – this is advice for everyone – if you don’t have a follow-up system, stop marketing. Spend your dollars on the follow-up system and the time it’s taking to market.
Spend your time on creating that follow-up system. All it is, is a sequence when someone comes in, how you should be following up. We did a whole presentation on follow-up. We follow up like crazy, crazy. You guys should be doing the same thing all over them.
Anything that I haven’t asked you that you think is helpful that you’re doing or not doing in the real estate business that I could comment on?
Joan: We’re also looking at the MLS. We are looking at REOs, the bank owned to see if we can be able to get a deal that way. I’m trying to think of what else.
Brad: Looking at REOs, everyone in the world is looking at REOs. Local people, people that want to be investing, foreign investors who want to be in the DC market, probably the first thing they’re going to look is REOs.
You’re going to have such a hard time finding an REO deal. First of all, there’s just not many out there. When one pops up, they’re going to get flooded with offers. You got an REO?
Participant: Yes, 57 Baldwin.
Brad: In Baltimore?
Brad: Okay, Baltimore, we’re not talking about Baltimore here. We’re talking about Virginia. To break down Joan’s issues I think is that complete wrong focus on where she’s marketing to. Is that something you guys were taught or is it something you guys just came up with?
Joan: We’ve learned some of the information.
Brad: Okay, the problem, and this is one of the reasons we’re getting into coaching is because certain people in the United States will claim to be real estate experts, and they’ll sell these programs on how to make MLS offers, and yes, it will work in your market, because what else are they going to say?
No, it’s not going to work in the hot markets? No, because they wouldn’t sell anything. They’re selling these products to you guys, to investors around the country, and some of them just flat don’t work. MLS offers in this market flat don’t work right now.
Will they work when the market tanks? Yes, they’ll work again but they don’t work now, so as business owners and real estate investors, you’ve got to shift with the times or you’re going to be out of business. Forget making MLS offers right now.
It’s very hard and very competitive. Can you do it? Yes, you can do it but you probably have to put in 1000 offers, hundreds of offers and maybe you’ll get lucky. Stop that. Get your follow-up systems, and do consistent marketing.
Bandit signs are good but I think you need to take it one step further, and you need to do a targeted direct mail list. Do a direct mail list. Buy a list from List Source that has equity, can be absentee owned or absentee owner which means they don’t live in the property. They’re a landlord or it can be owner occupied.
Just make sure they have equity because in order to buy a house, you have to have equity. Was that helpful?
Brad: All right, thank you Joan.
Participant: Question, how many people should we be mailing out to?
Brad: The question at the back of the room, I’ll answer this and then you guys write down all your questions, and we’ll answer them all, possibly if we run out of questions, we’ll go to Facebook Live. If you guys have a question about the talk I just had with Joan, just take note of it and we’ll try to answer questions at the end.
Your question was how many direct mail pieces should she be sending out. The real answer is how much money does she have. You guys as business owners – and you’re all business owners if you’re in this business. You got to have that mindset that you’re a real estate investor.
When someone asks you what you do, “I buy houses,” come up with something catchy so in 30 seconds, the old elevator pitch, you can tell them exactly what you do within 30 seconds. You guys need to craft that.
As a business owner, we look at and say, “We’ve got to form a budget.” We look at our numbers and we say, “We can afford to spend this much on marketing.” I don’t know what Joan has available to spend but let’s just say that it’s $500.
If you can only send out one mail piece, you’re wasting your time. You need to figure out what you can spend over a six month period, and then you’ve got to budget for at least four mailings to the same address. You just back into the mailer; what does it cost to send a postcard?
It costs us 32 cents because we send close to 150,000. Let’s say it costs you guys 50 cents, worse case. You just figure out with your budget how many can you send each month, and then you mail the maximum each month. Does that make sense? It’s really individual.
When I started out, I didn’t have money so I had to handwrite the letters. I would sit down on the kitchen table on the weekend, and I think I would hand address 300 until I couldn’t write anymore, and then I would send them out. I told you guys this story before.
My sister was a stay-at-home mom in 2003 when I was trying to build the business, and she kept sending out letters to people. We didn’t have money to buy a list. She hand addressed the envelopes, and I got a call one day, and the lady said, “I wasn’t planning on selling my house but I just got your,” it was either sixth or seventh, “letter and I’ll sell my house.”
Guess what? She had tenants in the property that she didn’t want to move. “I don’t want to kick them out.” I’m like, “I can’t believe it because these people in my opinion are basically taking money out of your pocket and your family’s pocket,” but for some reason, some people are just really hesitant to kick out people they know.
The reason for that story is that had my sister sent one, two, three, four, five letters, I think I made $38,000 or $40,000 on that deal. All I did was get the tenant out, and I think I relisted the property. When I talk about so much greatness has happened just when the person was about to give up.
Jack Canfield, his famous book Chicken Soup for the Soul, I think it took him 121 publishers to get that book done. You can imagine if he stopped at anywhere between number 10 publisher and 120 publisher, he wouldn’t be what he is. He’s changed the world now.
In his own way, he’s changed the world. His book Success Principles, if you haven’t read it, it’s about yeah thick. Get it on Audible, listen to it on 2x like I do all the books I listen to. It’s a phenomenal book on how to be successful.
It gives you all kinds of practices and techniques on how to be successful. Jack Canfield, Success Principles, and now he’s probably changed thousands and thousands of people’s lives with just his message. He’s got some great teaching and great education.
Who is going to be number two in the hot seat? It’s pronounced Velora?
Velora: It is.
Brad: All right, how are you? Good to see you.
Velora: I’m well, how are you?
Brad: Awesome. Tell me where do you live, and where are you investing?
Velora: I’m in DC, and I’m focusing on DC and PG County in Maryland.
Brad: Okay. Tell me what obstacles are you finding that are keeping you from reaching your real estate investing goals?
Velora: Just to give you a little bit of an idea of where I’m at, I have started doing it full time as of about three weeks ago. Part of my challenge is the passing of time. The things I’m working on now, I started from marketing a probate campaign in DC where I went down and got all the addresses for the last few months from the courthouse, doing driving for dollars.
I bought a list for inherited properties in PG County and then put some ads on Craigslist. I’m a realtor in DC, so you’re going to love this after all you said about the MLS but without calls coming in, I have been looking at MLS deals, focusing on properties that have been on the market for more than 180 days that have had significant price reductions within the last two to three weeks.
Then I’ve gone out to those different properties to actually valuate them. I’ve also tried to work with other local experienced investors, so various marketing campaigns, attempting to work through the MLS based on specific focal points. That’s where I’m at.
Brad: Okay, a lot of great things that we’re going to break down one-by-one. I forgot to ask on Facebook, if anyone out there likes this, could you please like it, share it, share with your real estate investor buddies, anyone who is out there who could possibly use this information. Please share it. Thanks so much.
I heard a lot of great things in there. I just want to take it step by step. The first thing you said, can you tell me again the first thing you said you were doing?
Velora: Probate in DC.
Brad: You’re going to the DC courthouse, you’re pulling probate, awesome niche. You will get deals that way. However, it is highly competitive. There are going to be a lot of people doing it.
How are you going to be different than everyone else out there? What is the message you’re sending these folks?
Velora: You mean as far as the message in the letter?
Brad: The message in the letter, yes.
Velora: Explaining what I do, that I buy their distressed property that others in this area have found that helpful. For me, I generally with probate, I feel there’s a need to be sensitive. Maybe that’s just because I’m newer at it.
Given what they’re experiencing, I’m not wanting to come on too strong. Maybe that’s a plus. Maybe that’s not.
Brad: That’s something no one can answer because each person is individual. I’ve heard investors who have had success with taking – they don’t say anything about probate. They just say, “We want to buy a house,” and it just happens to be they think that person will say, “Oh, someone sent us a letter. Let’s sell the estate.”
Then I’ve heard other people who have success actually offering condolences, being a lot softer. When are you sending out these letters? If probate happens February 1st, when are the letters going out?
Velora: I’m going there every other week, and to start off, I had just accumulated the December and January probate lists and sent that out as a first campaign, and so actually tomorrow, I’ll be going down there to gather from the last two weeks, and then adding them to the campaign.
Brad: How long do you plan to mail these folks? How many times?
Velora: For each of them that I mentioned, five touch is what I plan.
Brad: Okay, and how long of a duration?
Velora: Every three weeks.
Brad: Okay. Every three weeks, that would mean 15 weeks. That’s not enough time. I’m going to give you guys a ton of different information from investors that I know around the country and what we’ve experienced. You have some people that say you need to be the first out of the gate.
You need to be the ones who are sending the letter the second that it happens. I also know someone who is an expert in direct mail in Texas, and he likes to wait 12 months because by that time, most investors have stopped so if you’re only doing 15 weeks, we’ve bought houses from people that have been in estates for years.
What I would do is I would try to get to them immediately. I would send them a series of letters probably every 30 days for the first I don’t know. I would probably send six for the first six months, and then I might space them out every 60 days, probably going out 18 months, and you’ll be shocked because so many investors, just like with everything else.
That deal that I bought in Manassas Park, it was on a list serve with 300 people. Who is the one guy that followed up? Me. I followed up, I followed up, I followed up. No one else did. I think that’s great.
What are you doing? Are you doing anything in terms of calling?
Velora: I haven’t yet.
Brad: If you guys want to increase your results from your direct mail, you can call. In DC, unless things have changed when we pulled them – and we don’t do it anymore – they had phone numbers of the personal representatives.
Velora: They do.
Brad: You can call the personal representative. What I like to do is, “Hey Mr. Smith, I sent you a letter a couple of weeks ago regarding the estate. I was just following up,” similar to what your letter says, “I understand this is a difficult time. I offer my condolences. I’d like to know if there’s anything I can do. I buy a lot of houses from folks going through probate.
“We make this process really simple. We buy as-is. There are no contingencies. You don’t have to fix up the house. You don’t have to pay a realtor. We’ll help you. Would you like us to make an offer on your property?” something really simple like that.
Any time you can do that with direct mail, it does add a layer of complexity because you need to go buy the phone numbers, you need to track down the people, and it just takes time and resources but it will definitely increase. Nowadays, you can buy phone numbers for any list.
Back when I was starting, it was really hard to get phone numbers. Now it’s a lot easier to get phone numbers. When they call, who is answering it? Where is it going? What type of follow-up do you have?
Velora: I’m answering.
Brad: What percentage of calls do you think you answer?
Velora: I’ve either been able to answer each or follow up from the voicemail.
Brad: Okay, so they’re just going to regular voicemail?
Brad: I’m not going to reiterate what I said but that’s a big no-no. You got to get those calls answered live and you will see results from that. Your second list?
Velora: Driving for dollars.
Brad: What does that look like? What are you doing driving for dollars?
Velora: I’ve targeted specific neighborhoods within DC, and then have gone to identify different properties that are obviously distressed based on the exterior of the house, and then have gone into the DC property records to find the owners, and then sent out mailings from there.
Brad: Okay. Tell us how you identify a property that’s in distress.
Velora: Actually it’s kind of funny because I found that I find fewer the more I go out and do it. When I was first going out – it makes it sound like such a long time ago – when I first started doing it, “Oh look, that one has an air conditioning in the window,” so it automatically went on the list.
Then as I’ve continued to go to do this, I become a little bit more judicious. “Also let me make sure it doesn’t have more than one metered unit,” meaning that it hadn’t already been broken down into condos. “Let me look and see, let me drive around back if there’s an alleyway.” Sometimes they’ll just fix the façade, but what does the back look like?
That’s I think going to be a better indication of what’s going on inside too, just trying to get a rounder picture.
Brad: When you look up the information on the property record, what are you looking for?
Velora: First and foremost, the owner and owner address, as well as the recordation year because if they just bought it two years ago, they’re probably not going to want to sell it. I’ll still include it on the list just because I won’t know until I’m actually adding it.
Then when I send out the mailing, I’ve filtered out everything. I only send to those from 2007 and before.
Brad: Okay, that’s a great point. I was hoping you were going to say that. If you guys are going to do driving for dollars, before you waste your time of sending out all these mailers, check what year the property was transferred. If it was transferred in the last five or ten years, you’re wasting your time for the most part.
Could they have inherited the property? Yes, but we’ve got to play the odds in this business or pretty much any business. I think we did an analysis in the last 18 months. We looked at the last 200 properties that we bought, and I think that the person owned them for an average of about 20 years.
Guess what? That’s another criteria that you can do when you’re buying a list is you can buy a list of people who own their house for 20 years. The equity isn’t always perfect on these lists. No equity, you’ve got to know their mortgage balance.
Mortgage balances are tough to find, and not all these list providers have it. As a backstop, if you did that they’ve owned the house for 25 years, there’s a good chance that you’re going to get a house with equity. Door knocking, are you knocking on any of these doors?
Velora: There have been some but it’s in the minority.
Brad: Okay, door knocking could increase things because when you’re there, when you meet someone, you can talk to them. They can see that you’re a real person. The other thing is do you have door hangers?
Velora: I haven’t done that.
Brad: If you’re driving around, you might as well have door hangers in your car. Go ahead and stick a door hanger on your car, again, explaining your services. I won’t go into great detail with marketing, but essentially, you’ve got to talk to the emotional part of the transaction.
People don’t go out typically and buy stuff because there’s an external need and an internal need. The external need is they want to sell their house but the internal need is – this is the seller’s that we buy from. I’m not talking a traditional seller.
Why does someone want to sell their house? There are a number of reasons but they all come down to emotions. They’re embarrassed of the condition of their house. They’re scared. They’re nervous. They don’t know what’s going to happen. They’re not going to be able to make their next payment.
You got to talk to those factors. We made this mistake for many years. We just changed this in the last couple months of talking about everything that we do. No one cares about what you do. They care about how can you solve their problems, so you need to talk to them from an emotional standpoint of how you can solve their problems.
I bet you if you guys gave me your mailers or I went on your Web site – and that’s one of the things I’m going to be doing in the podcast is we’ll actually be pulling up websites. I’ll be asking people to supply their direct mail pieces, all of their collateral, and I’ll break them down.
I guarantee you that most of the people are doing what we are, what we did for so many years, and that is trying to tell the seller how great we are. They don’t care about that. They care how you can solve their problem, so door hangers would be great.
Velora: What do you all put on your own door hangers?
Brad: We’ve gotten out of so many of those guerilla roots marketing because we’re doing it on such a mass level, and we hope to expand regionally and possibly nationally, so we’re doing things that are easy to replicate around the country, so we don’t do it, but the same thing that we would put on our Web site, the same thing that we put on a mailer.
It’s, “We understand that you’re frustrated. You’re scared.” We don’t really like to say embarrassed, because who wants to admit that? You need to talk to, “We understand that you are maybe going through a difficult time,” if it’s a probate person, “We can solve that frustration.”
Here’s your problem, here’s your internal problem, and here’s how we’re the solution to it and how you can walk away. If you go to our Web site, you’ll see a couple smiling. When they approach it, people want to see what’s the outcome for them.
You’re not going to want to put – years ago, I had these stressed out people on a postcard at the table with a stack of bills, “How am I going to pay my bills?” People don’t want to see that. People want to see what’s going to happen after we do a transaction with you.
We’re going to be happy and dancing around the living room. That’s what the picture looks like. The next one you had was?
Velora: An inherited properties list for PG County.
Brad: Okay, inherited property list, PG County, great, so everything I’ve just said. Make sure your marketing message is right. Make them regular. You should be sending a minimum of six letters to these folks, and probably again, just spacing them every 30 or 45 days.
If you can do it, I like 30 days better. If you guys need to stretch your budget, it’s not going to kill you to go out 45 days but don’t go out 60 days. Don’t go out 90 days. You need to be in front of these people when they’re coming home and their car breaks down.
Can you guys let us know if you can see us or hear us on Facebook? I put the settings public. Is it working? Can you hear or see me? All right, we’re back in the great world wide web.
I completely lost where we were.
Velora: We just talked about Craigslist.
Brad: We have not had any luck with Craigslist, but look guys, it’s free so you might as well try it. It is indexed by Google so if you put the right keywords, sell my house fast Prince George County, there is a good chance that you can put a link – can you put links on there back to your Web site?
Velora: No but you can write out dot com.
Brad: So there’s a little secret, you can write out dot com, and it will allow you to do that.
Velora: Since I’m a realtor and have MLS access, I’ve also been doing that.
Brad: The final thing she said was MLS offers. You guys heard me beat up Joan and John on MLS offers. However, if you’re going to make MLS offers, Velora is doing it the right way, and that is look for properties that have been on the market for a long time, that have had price reductions, and then lob in an offer.
The worst they can say is no. Just like the person that’s driving home and their car breaks down, and they’re like, “I’m freaking fed up with it,” you never know when you’re going to catch these people. Just because the house is listed for $300,000 doesn’t mean that they won’t take $200,000.
I hear so many people say, “I’m not going to bid on that house because it’s just listed too high.” Who cares what it’s listed at? Freaking just offer what is going to work for you guys.
Don’t just go make blanket offers on anything. Go and hunt down the properties that have been on the market forever, and then lob in an offer, or call the agent. The agent is probably sick and tired of the person.
Call the agent and say, “Hey, is there a reason this place is listed for 360 days?” You guys would be so amazed. Remember the question I told you to ask at the beginning, if you know anyone else who wants to buy a house?
You can’t believe the amount of information that some agents will give you. They will give you information that would probably cause them to get their license taken, but they still do. They might tell you that, look, agents have to get paid too, and they may be in a financial situation.
They’re like, “I want to sell this house too. The seller is really motivated now, so maybe $200,000 will work. Ask them.” “What happens if I give a $200,000 offer?” “Well, we’ve had ten offers at $250,000 and they’ve declined them all.”
If that’s the case, then don’t waste your time but pick up the phone and call the agent. See if you can find some information out of them.
Velora: I actually got one accepted today.
Brad: You got one accepted today, all right, so there you go. Just forget everything I just said. Tell us about the specifics of how you got it. How was it that you could buy a listed property?
Velora: There were several things that helped. One, I’m partnering with a company here that they’re more experienced investors. They also have deeper coffers than I do, so it’s a high value property. We ended up getting it today at 1.4, but the key thing about that is that it’s a property that can be subdivided.
Numbers wise, it can be subdivided. We put in a longer contingency period of 60 days so we can do some due diligence to see if the city actually will, and architect, etcetera, feels like it can actually be done. There are still some question marks about it. It hasn’t closed yet.
Until that happens, it’s not being counted just yet but it’s still that next step farther.
Brad: Guys, I’m glad she said that because that puts things in context. That is a development deal. We’re not here to teach about development deals, nor are we here to teach about multimillion dollar properties. Obviously I hope it works out for you.
In the future, please bring us those deals. I don’t know if you did. Did you present us that deal?
Velora: Not this particular one, no.
Brad: You can see, everything I said last time, this is a development deal. She may get it. She may be paying close to market for it, and she and her investment partner are going to create the value through the development process, but unless you guys have a ton of money and you can lose a ton of money, you do not want to be doing development deals.
We bought a house in North Arlington in 2005 where we lost $923,000 on it. We thought we could subdivide. We hired an engineering firm. They said yes, you can subdivide. We went higher on the deposit.
Six months into the entitlement process, they go, “Hey sorry, we messed up. You can’t subdivide it.” They could have pulled a title report for $75 and in 15 minutes, they could have said, “There’s no way you could subdivide this property.” We lost $923,000.
We also bought two properties that same month, a multiunit in Adams Morgan and a house that we still own to this day proudly near the XM Headquarters, one end street. We were so smart in 2005, we had made so much money the first five months of 2005 that we were smarter than everyone in the world.
We figured we’ll just do development deals. We’ll buy this house and put another level on. Guess what? DC didn’t allow another level to be put on. Those three properties, we lost three million dollars on. You guys saw my net worth to start.
It wasn’t like I called an uncle and said, “Hey, can you bail us out?” We worked for free for many years because of development deals. I’m here to teach you how to make money, and even more, I’m here to teach you how not to lose money.
Do not, do not do a development deal unless you’ve done them before and/or you have an experienced partner that is going to put the money up and put it at risk because it can be devastating. It could have completely wiped us out financially. It could have been bad, but we obviously fought through it and we’re better for it to this day.
It still pains me to say that, but whatever. We’re going to finish up with you. A couple things, you’re doing a lot of great things. What Velora is doing, she has a very targeted bunch of niche lists that are really good. You need to work them more. You need to do more phone calls.
You need to stretch out the time that you’re sending them the letters. What are you doing from a follow-up perspective once you get folks on the phone? How are you following up with them?
Velora: For the last while, since there haven’t been as many, I’ve mostly been using an Excel spreadsheet, but just this week I got Podio so I’ll be setting that up.
Brad: Did you buy just the base version of Podio?
Velora: It was $24 a month.
Brad: $24 a month for Podio, who can afford $24 a month? Podio is like buying a painting where it’s just the canvas and you got to go paint it. Now she has to build out everything, or you can go to Investor Fuse and everything is built on. It’s a beautiful portrait ready to put over your fireplace, but it’s going to be $200 a month; so $24 a month to possibly make thousands of dollars.
We have such a great follow-up system now that last year alone, I think we closed nine deals from just calling back missed phone calls.
Tom: I checked because I figured you were going to ask. It’s ten.
Brad: Ten, sorry, Tom just corrected me. We did ten deals last year, average profit between $30,000 and $40,000. We did ten deals from missed phone calls. That’s why you need a follow-up system because when you start to generate a bunch of leads, there’s no way an Excel spreadsheet, you can effectively manage it.
Great for you for getting Podio. I was reading something that Frank Kern sent me today. Anyone know Frank Kern? Frank Kern is one of the top ten kind of info marketer guys. He says, “However many follow-ups you’re doing, double them.”
He goes, “You may get scared, you may not want to do it, but err on the side of following up too much with people than too little.” Tom, how many times do we touch a lead in say the first seven to ten days? Tom’s thinking about it.
Brad: Twenty-five touches of a lead in the first seven to ten days.
Tom: If we don’t reach them.
Brad: If we don’t reach them of course. I’m actually pushing Tom to do more than that. You got to be all over these leads because if you’re not, someone else is going to be.
Velora: Just to clarify, you’re calling them that many times?
Brad: Those 25 touches in seven to ten days are a combination of text, emails, phone calls, and voice mails. Hit them from all angles. Now Facebook, you can look them up on Facebook. You can Facebook message them. You can look them up on LinkedIn. You can LinkedIn message them.
If you’re not getting in touch with them, get creative. Drive to their house, knock on their door, whatever you need to do. Look up their phone number. Zaba Search, ZabaSearch.com, completely free and you’ll be amazed at how much information can get from there.
It’s scary how much information is out there about everyone but every piece of information you can ever imagine on yourself is out there somewhere. It’s a little scary. Awesome job, I think you’re headed in the right direction.
Velora is a brand new investor. She’s doing a lot of right things. She’s a got a couple steps to take in terms of follow-up, building out Podio, but continue doing the things. You’ve got to be consistent, consistent, consistent, and I promise it will come.
I can’t tell you if it’s going to come next week or seven months from now, but it will come.
Velora: Sounds good, thank you.
Brad: Thank you so much, great job. Are you guys up for one more? Who wants to come up? Are there any questions in Facebook land? For those of you who are in Facebook land, if you’re coming late, I’ve been a part of 5000 real estate transactions and have bought over 2000 houses, and I’m here to share free information as we do every month at our wholesaling meet-ups.
If you guys have any questions that you think would be good for yourself and the group, please post them and Tom will relay them to me, and we’ll answer them. Anything to do with real estate investing, marketing, follow-up, valuing deals, renovating deals. Yes sir?
Participant: [66:54 inaudible]
Brad: The gentleman just said be careful how much you do on Facebook because they’ll block you. I don’t know if they still have this feature but in the last two years, a couple times, I reached out to sellers. I had to pay a dollar to get into their inbox. Is that gone now? There may be a paid option.
If anyone wants to raise their hand and come up, do at any time. In the meantime, we’ll start fielding questions.
Tom: Adam asks on Facebook live, “What’s our strongest marketing avenue for seller leads?”
Brad: Strongest avenue for seller leads is direct mail. For years and years, we toyed around direct mail, and didn’t have success with it and it wasn’t until we started, number one, doing consistent mailings. We’ll hit a list now six months, and we’ll get a new list.
We actually have a list where we’ll buy high equity. We do equity on list source between 50 and 100% and then we also do the other category because you don’t know what’s in there. You don’t know if they have 1% equity or 100% equity, and then we actually have hooked up with a data analytics person who will take that list and say, “Here, mail to the top 20 percent.”
He’s exclusive in area, so this area is completely gone, but we did it for years without those, and many people around the country. Just do some of the criteria that I told you to do, and it’s more about your message and your consistency than it is about having a data analytics expert behind you.
Just do high equity, own for at least 20 years, 15 years. You can toy around with absentee owners. You can toy around with owner occupant, but just have a good message that doesn’t talk to the seller about how great you are because no one cares about how great you are.
One of the famous marketers said put yourself in the head of the conversation that that prospect is having at the time. If you’re at home or at work, whatever, and you are stressed out about your house because the roof is leaking, water is coming in, you don’t have the money to repair it, you’re facing foreclosure, you just inherited a house, think about the thoughts.
Put yourself in their shoes, and say to yourself, “What would I be thinking?” and then when you write that marketing message, talk. Put yourself right in that conversation. Michael?
Participant: Follow-up to the question, when you get a new list of a whole new area, do you move on to a new area or do you just refresh that list?
Brad: His question, Michael’s question was do we move onto a whole new area or do we just refresh the list? No, you guys should all be focusing on one target area or multiple target areas, and then just doing that, refreshing the list every six months. Buy a new list from the list company or the broker, whoever you’re buying it from.
Tom: Adam has another good question for us. How do you create such a strong brand and online presence?
Brad: Wow, I spend millions of dollars and do it for 13 years is the quick answer. Building a brand is tough. Literally we have spent over 10 million dollars in TV advertising building a brand.
We are probably less than one percent of people in this country in terms of brand building. Most people don’t have a brand. You don’t need a brand. If you want to build a colossal company then you do need a brand, but don’t focus on building a brand right now. Focus on making money.
How do you build a presence online? You do everything that we are doing. What are we doing? We are doing Facebook ads. We are doing Facebook non-ads. We are doing Google pay-per-click. We are doing Bing pay-per-click. We are doing Yahoo pay-per-click.
We do retargeting so when someone comes to our site, they get retargeted. They get followed around on the internet through both Google and I think Bing and Facebook.
So if someone comes to our page, Facebook puts a pixel, it is like a cookie – that is on our site. So Facebook knows someone has come to our site. And then in their Facebook feed, we will serve them up ads about selling their house.
And consistency – that is another really good answer. We don’t just do this for a month and say this isn’t working. We do it month after month after month.
For those of you guys sitting here saying I don’t even know what Google pay-per-click is, I don’t have the money, if you go back to my original, the first couple of meet-ups on ExpressHomebuyers.com/category/wholesale it talks about the steps you need to take and what things you should be doing if you don’t have a huge budget.
The number one thing is get a follow-up system. Velora said she just got Podio for $24 a month. If you can’t afford $24 a month, use an Excel spreadsheet for the time being.
But have a follow-up system and then I think the second thing I would do, depending on how much money, I would probably go out and get a seller website which you can get now between $50 and $100.
You guys have heard me for years rant about OnCarrot. They are great – awesome, awesome, awesome. I think they are $49 to $99. OnCarrot – can you type that into the comments? OnCarrot.com – they are awesome.
So you have your follow-up system. You have your website and then I would focus on banner signs and direct sales. Then when you get some money, then you reinvest into things like driving people to their website through pay-per-click advertising.
Pay-per-click is just when you type where to find red shoes on the top of Google you will see three sponsored ads, actually now four because they got rid of the right column. Those are pay-per-click.
People are paying and bidding for that real estate. And it can become very expensive. We are into the tens of thousands of dollars on that, so we have a huge online presence.
Michael had a question. Let’s answer Michael’s question and then we will go back.
Michael: I got a call. I visited a homeowner in her house, inspected the house, listened to her stories, made an offer on her house on Friday early afternoon. Late afternoon I followed up with an email to her thanking her for letting me see the house.
Again, I reiterated my offer. It was low. She wanted to think about it over the weekend plus today. What is my next follow-up message to her?
Brad: So Michael said that he met with a seller. He had a good conversation with her. I met her at the house. He presented the offer. She said that she wanted to think about it. And Michael’s question is, “What the heck do I do now?”
Tom: I think that really depends on what you said when you left, because depending on what you said after you met with her is going to determine what would make sense to say next.
Michael: Well, the house was in very big need of repair.
Tom: But in terms of follow-up, did you tell her – like she said I wanted to think about it for a few days. And you said, “Sure, sounds great.”
Michael: I did not say, “Would it be okay if I called you back on Monday.” I did not say that. It was left open.
Tom: You could do a couple different things. You really want to set a next step. “Hey that is great. I totally understand you want to think about it. I would do the same thing. How about we talk Monday? How does noon sound?” Give really specific times so that they know and then you could have a reason to follow up.
Without setting that, we talked before where there are these advanced agreements where you set the stage of what is going to happen next. You put yourself in a difficult position, so now you are going to be chasing. She likely may just avoid you since there wasn’t that commitment from her.
Brad: We did a whole meet-up group on that. One of the things we are great at doing is to set proper expectations up front, and then each party is going to know exactly what’s going to happen. When you get to the house you set those same proper expectations, and then you actually say what’s going to happen in the meeting, and then depending on what happens, you say ‘okay, here are the next steps’. Now he’s in a jam so what are a couple things he could do?
Tom: You would want to create some urgency, “Hey, Ms. Seller,” this is assuming you can’t reach her. “Hey, just trying to get a hold of you. Just wanted to touch base to see where things are at. I have another house that I’m looking at in the neighborhood. I only have money to buy one house this month. I’d really love to buy yours. If you don’t want to sell me yours, that’s okay, no problem, but if you could just let me know either way.” Something like that could work.
Brad: Okay guys if you could hit ‘like’ and ‘share’ on Facebook I’d greatly appreciate it. Are there a ton of questions? Are we getting to them all? If we don’t get to the questions by the time we wrap up, just continue posting them and we will answer every single Facebook question in the next 10 to 24 hours.
Tom: Adam had another question. It is a long one. He has some good questions. “What is your sales and follow-up process with sellers?”
Brad: We could spend an entire 60 minutes going over that.
Tom: What is the URL?
Brad: ExpressHomebuyers.com/category/wholesalers We have that all documented, so just tons and tons and tons of follow-up.
There is a hand that went up.
Juan: Hi, my name is Juan. I have been getting leads. I have been using eFlow to automate all my mailings. And for some reason, I don’t know if it started this way, but I’ve been getting more in bankruptcy. And I have been getting some responses. It seems like the point when a lot of sellers call me when they have an option date sell and it is really short.
So I don’t really have a lot of leverage because it is either they are underwater, and I’ve tried to negotiate with the bank, but they don’t want to sell it to me even at a price higher than what they wanted to sell it for at auction, because they happened to meet with a seller that made an offer to the bank, and it was sold at an auction for a lower price than what I was offering.
Brad: That’s ridiculous.
Juan: And I’ve been getting a lot of sellers with the same situation. I haven’t been able to get a deal because of that.
Brad: So Juan is finding that a lot of sellers – he is using a program that I haven’t heard of, eFlow, that I guess pulls a list and does direct mail for you. He’s getting a lot of people in bankruptcy, and a lot of people who are close to their auction date, and the banks aren’t willing to negotiate.
One, I would say you probably need to change your lead source. Number two, he did mention that they ended up selling it auction for less than his offer price, which is maddening and makes zero sense. I don’t get it, never have, never will get it. There’s no answer to that.
However, we have bought houses in as little as 22 hours from the time the person called us to the time that they closed. This was a property four or five years ago in Herndon.
So you said that you actually lose leverage; you can actually gain leverage if the auction date is close. You just have to find those properties with equity so you’re dealing with properties that the bank has to take a short sale, which means that they have to take less than their mortgage amount, and banks just aren’t doing that now.
They would, as Juan just said, time and time again go to auction, and they sell for less. Does it make sense? No. Did it make sense when they made a trillion dollars’ worth of loans that were upside down? No. Banks don’t make a lot of sense.
There’s no real answer to that. If you have a list that is continuing to produce consistent results that are poor and don’t fit the category, which is equity, if those folks don’t have equity there’s nothing you can do, then you just need to change your marketing source. Stop direct mail with that list, get another list, and then continue to do online presence, bandit signs and that type of thing.
Laura: On your marketing what do you use to analyze your rate of return specifically with direct mailing?
Brad: What was your name?
Brad: Laura’s question was, “What do you use to measure our rate of return on direct mail?” We have a tracking system, we use Infusionsoft and then we also have our own proprietary software that we have created over the last year. It measures response rates, and then we look at cost per lead, and then we look at cost per deal.
Laura: And what’s your percentage, like for example, if we buy [inaudible 1:19:57] and we work it for 12 months, what is a good percentage of return? I guess you could say this is a good zip code or it’s not and move on or refresh or something?
Brad: So her question was that if she mails into a zip code, what is a good criteria to look at to say whether the direct mail campaign was a success or not. We don’t look so much in percentages; one, we look at it as a cost per deal, and two, are we spending a dollar and making four, five, six, seven dollars? That’s the way we look at it.
I can tell you that decent direct mail returns can be anywhere from four X to ten X. So again, you spend a dollar, you should be getting gross profit back in somewhere between four and ten. Some people get higher than that. Some people get up to 15 but it is probably with a highly, highly targeted list. Did I answer your question?
Laura: Over a standard year, or are you talking [inaudible 1:20:58]?
Brad: It doesn’t matter. If you want to look at it on a monthly basis or even a yearly basis, daily basis, if I can spend a dollar today and get four dollars back I’ll do it. If I can spend a dollar over a year and get four dollars back I’m fine. It just depends on the multiple of what you are spending in terms of what you are getting it.
Tom: And there’s a little bit more to it, too. You could have a great list, but if your copy is awful, then I would ask you, “What are you doing? Are you testing your list?”
We are always running two tests every time we mail so that you have a basis. You have your control and then you have your test. Then every time we see the test is performing better than the control, then we have a new control and we do a new test. I think that is something that is important.
We have had experiences in years past where we would do direct mail for two months. We wouldn’t get any deals and then we would stop because we didn’t think it worked, but it could have been the frequency. It could have been the message. There are a lot of factors.
Just be very careful to say, “Oh, it is not working,” or, “My rates – I’m not getting the same conversion rate.” There are a lot of factors. You really have to dig into it.
Brad: I would say that if you are sending out any more than probably a thousand minimum and it is not going to cost you that much more to split them up in groups, 500 and 500, just try a different message. Try a different headline. It was the great online marketers do all the time. It is what all great marketers do. They are always testing.
It is a little more complicated when you don’t have a lot of money. I wasn’t testing back in the day. I just sent one letter. But if you can, now with technology costs and printing costs, it doesn’t cost a whole lot more money to chop them up.
Try two different messages, just slightly varying it and see what happens. And then do it for three months. If you get one winner, sometimes it is just not enough. Try two or three months and see if that continues.
A lot of times what happens when you do a test online or in the publication in the direct mail world, you see an initial spike and then you get all excited. But what happens over time is it comes back to the control group. So do it for a couple months.
Participant: I basically just have one phone number, but it provides unlimited extensions for the purpose of analyzing the marketing or whatever the case is.
Participant: I have a great CRM, but I haven’t gone into breaking it down into extensions to do tests for the marketing, but some kick back that I have heard from other investors is you don’t want the client to be having to pound more numbers than just the ten numbers that they have to.
How do you feel about extensions?
Brad: So her question was she has a great CRM, but what is the CRM?
Participant: It is called REI BlackBook.
Brad: REI BlackBook – yep, Damon is a buddy of mine. He owns that company. REI BlackBook gives the option to do extensions. The reason for extensions is you can get a better tracking of your different marketing mediums.
So if she is going to do these postcards, the only way she is going to know if it works or not is by having different phone numbers. If you have the same phone number, how do you know if the test works?
I would not be a fan of extensions. I would be a bigger fan – we probably have a hundred different 800 numbers. I would definitely put a number on there. And again, numbers are so cheap now, rather than an extension. I kind of agree with them.
It is called friction. Any time the person has to fill out an extra form, if you have a website and they have to click a button to call you or they have to click a button to get to the form, it is friction and you are losing people.
So none of your websites should have buttons on your homepage. It should have the form right there, the phone number right there. Remove all friction because they are just going to go to the next person.
Are there any other good questions on there?
Tom: We had one earlier from Greg that I think is a good question just for the folks here. Greg addressed it already but someone said, “What are things to consider when finding a hard money lender, fees, rates, timing of funds, reputable company, anything else?”
Greg answered it for us.
Brad: So a question on finding hard money lenders.
Tom: Look into their approval process. Find out if they ask for any money upfront. We have heard time and time again where someone put up X amount of dollars only to get denied. It is almost like a game where some of the lenders out there are just there to collect your fees and they are never going to approve your loan.
Just make sure you talk to someone like Washington Capital Partners that we know really well. They actually have a lot of people who come to them because they didn’t have a good experience other places.
Brad: So don’t ever, ever give money upfront on a hard money loan. No reputable hard money lender is going to ask you for money upfront.
Tom: Greg made a great point. Find out about the draw process and how they find construction money. Nothing worse could happen than you got a deal, you buy it, you think you have this loan, and then your money is locked up and you can’t renovate the house, and you run into issues.
Brad: I would also add that just like with anything, ask for referrals and talk to people who have done business with them. Find out and check the Better Business Bureau. Nowadays, if it is ABC Hard Money Lender, do ABC Hard Money Lender reviews.
Check around. There are plenty of reputable hard money lenders out there, so don’t get stuck with one.
Laura, I am going to come back to you. Yes, ma’am. Just one second, I was going to ask her.
Participant: What do you mean by money upfront?
Brad: Her question was what the heck do I mean when I say don’t give money upfront to a hard money lender? No, that is strictly before you are even approved. These hard money lenders are asking for money – before you are even approved.
Then they are taking your money and saying, “You are not approved, sorry.” It is a nonrefundable application fee. It is just crap. If you went to Wells Fargo for a home loan, you are going to sit down with a consultant and they are going to say, “Give me a thousand bucks.” No way.
So if they don’t do it, hard money lenders shouldn’t do it.
Tom: Frank wants to know your address. He said he needs to mail you some socks.
Brad: What’s wrong with my socks? I like really bright ones, bright blue, pink, whatever.
Participant: Sugar CRM.
Brad: Sugar CRM is one of them. Zoho CRM is another really great one for like 20 bucks a month.
Tom: Frank Calla.
Brad: Alright, I’ll take it. Laura, what was your question?
Laura: I use List Source and I am wondering even though I do have a good group that provides cash buyers, but is there anything online such as List Source that you guys use or that we can search for cash buyers?
Brad: For cash buyers – so a good source of cash buyers – wow! I took a while – I need to turn that into a blogpost because I actually put together a couple of pages of notes from all around the internet on how to find cash buyers.
I will commit in the next 30 days to do a blog on how to find cash buyers and mail it out. How do we find cash buyers?
Tom: Hold on. They are sitting right here.
Brad: That is the number one source which is to call us. We are cash buyers. Like we said earlier, if we can’t get the price that you want, then we can also push it out to our cash buyers. But realtors are a great source, Find Cash Buyers Now is a source, the list providers like you said is a source.
Realtors can actually go and pull you a list of cash transactions that have happened in the neighborhood in the last 18 months or whatever. All joking aside, we started this meet-up group to, one, give back, but to also teach you guys how to find deals so that we could do deals together.
So if you guys have any deals, big or small, please run them by us. We spent a lot of hours and a lot of time. I have two kids at home now waiting for daddy to come home, and I am here talking with you guys because I really want to make this work and help you guys out.
Everyone has done a great job of keeping questions real succinct. We will take a couple more. If you can ask your question really quickly because the folks online can’t hear.
Mike: If I find a vacant house that is owned by a bank, how do I figure out if it is worth chasing? What do I do?
Brad: What is your name?
Brad: Mike’s question was if he finds a vacant house owned by the bank, what does he do and is it worth it?
This is just my opinion because I have tried to work this angle too sometimes. It is very, very tough. You heard what Juan said earlier. These banks are like trying to get through the White House. They are very, very difficult.
When you get through to them, you have to get to the correct asset manager. They have a process that they go through. Nine times out of ten, if you get to the right person, you will probably be told that it is not the time to buy. They are not accepting offers.
They are going to put it on the market because they have this magical thinking that they are going to list this property and get more money than if you came along and bought it six months or 18 months before they actually sell it.
So I don’t have a good answer. If I was coaching you I would say that if you see – actually, if we are talking about driving for dollars, one of the things I would have said was if you come across a vacant house and you look in the land records and it is owned by a bank, freakin’ move on.
I mean, prove me wrong – prove me wrong and come back and tell me and I will be the first to admit it. But it is tough. It is ridiculously tough.
You have to wait and you don’t know if they wrote it off. It is a nightmare. It is just one of those things where it is just not worth your time.
Are there any other questions on there? Any other questions? Any other questions from the crowd?
Kelly: [inaudible 1:31:05] capture minimal amount of information…how much do you have?
Brad: What’s your name?
Brad: Kelly’s question was, when we use PATLive, which is our answering service, for those folks just joining us, on any incoming lead that we get, if it is not answered in our office between three and four rings, it rolls over to PATLive.
We have a pretty simple script that PATLive asks, and it is really just contact information. Hey, we are here to gather some quick information. They are not sales experts. They are telemarketers. They are operators.
So it just takes minimal information. Make sure that the caller isn’t sitting there forever. Make sure that the people are – if you don’t go with PATLive and you go with someone else, test them periodically. Call in and act like you are a seller and make sure that they are polite, they are asking the right questions, and that type of thing.
Just don’t get into a motivational or that type of stuff.
Tom: I have it pulled up right here. It is just contact information, asking price, mortgage balance, is it listed, how long they have owned it, what their timeframe to sell is, where you found the number that they called us on (for tracking purposes), and just any comments.
So we have a box in there so that if they tell them something, because every call is going to be different. The folks at PATLive are good enough to be able to engage them in conversation.
Brad: Can you explain what you mean by ‘we have a box in there’.
Tom: So there is just a big text box where they can type a paragraph. A lot of times there is nothing in there. Sometimes there may be some information in there that is helpful for us. Our guys just check it out before they call.
I would say that whatever call center or service or VA, whoever you are using, you just want to make sure you are going back and checking the calls, seeing how long it is taking to pick up, so you don’t forget anything.
Brad: Do you guys know why we ask if the property is listed?
I couldn’t hear anyone.
The reason is because it is a way to prioritize. If the property is listed, we know that 99 times out of 100, we are not buying it. We quickly call them and say, hey, we typically don’t buy listed properties because most of the time people list properties they are looking for full market value and they don’t mind paying the realtor commissions.
Laura, I think your hand was up next. Do you have a quick question?
Laura: Two parts – one about the scripts. Are those something that you would be willing to share?
Brad: She asked if we are willing to share our scripts. We actually have shared them. They are on the Facebook group. When you guys go tonight or tomorrow to Facebook and go to Express Homebuyers Wholesaling Meetup, and we accept you because you have been here.
For those of you online, just pop on a plane and come see us next month and we will give them to you.
And what is your second part of the question?
Laura: One you get information back from PATLive, what are the next steps from there?
Brad: Once we get our information back from PATLive, our answering service, what do we do then? They are now into our funnel. Everyone needs to have a funnel and the funnel is like I said earlier – we are on them 25 times in the first seven to ten days with texts, emails, voicemail, and phone calls.
Laura: So you don’t use PATLive to reach back to them?
Brad: No, the call center does not reach back out to them. We do that.
Tom: Just to reiterate what Brad said, if you are here and Alex got your info, you can go on the Facebook group. On the group, I searched on call script, and you guys can’t see it, but there is a search box up at the top.
You can see it right there. Those of you who are not here, if you were here you could see that this is information that you would have through our call service that we use every day. You would have access to it, but you guys don’t get it since you didn’t show up.
Brad: Cathy, you had a question?
Cathy: So PATLive takes this phone call. How do you get the info? Do they call you, text you, send you an email? Do they put it directly into your CRM?
Brad: The question was, “How do we get the information from our call center?” They actually enter it on a form on our website so that it goes right into our CRM. It kicks off the whole autoresponder and the whole campaign.
Again, you guys go set up Sugar CRM or Zoho, and they have that technology. You just literally take a form code and stick it on there. Again, it is like a VA. It is so easy that some of those men and women have the ability to do that. It is not that complicated.
Question: On your group that you have there, at the top there should be a link that says Files and that will show you all the files that are posted in your group.
Brad: Okay, so we just learned something. At the top of our Facebook page, somewhere there is a button called Files, and it shows… What’s it under?
Tom: It is right next to Search this Group.
Brad: So right next to Search this Group, there is Files. Thank you so much for that tip. It will show all the files. So we have repair estimate worksheets in there. We have scripts. We have all kinds of stuff.
Juan: [inaudible 1:36:30 – 1:36:35] sign a contract and they want to back out of the deal, how do you enforce that?
Brad: The question was from Juan, if we are in a deal with a seller and they back out of a contract, how do we enforce it? It is on a case by case basis. We have walked away from a bunch and we have pursued a bunch.
We have had some success and we have gotten crushed in some, so it is really a case by case basis. But if you have a legal, binding contract, and you have done everything that you said, you by right have enforcement of that contract.
So you would get an attorney involved and most likely file a lis pendens on the property. Then eventually it is going to go in front of a judge and the judge is going to rule should you be buying a house or not.
If you are a new investor, my advice would be to attempt to close, but don’t spend a lot of money doing it because it can get very, very costly and sometimes you will lose money even if you do get the house.
Juan: That is what my lawyer told me.
Brad: That was probably pretty good advice.
Participant: How much is your earnest money?
Brad: How much is our earnest money? When we are buying a property, what is our earnest money?
Tom: $300 to $500 – we will do up to 1%.
Brad: So $300 to $500 up to 1% on our earnest money deposit. We don’t do it, but there are ways you can actually do a note in lieu of an earnest money deposit and that is actually legal, we have been told by our attorneys, and it would hold up in court, so you don’t have to come up with any money.
I personally don’t think it shows good faith or gives a lot of credibility to you if you have to sign a note for the deposit because you are trying to convince these folks that you have the money to buy their place. But if you don’t have enough money to come up with $500,000 then it would certainly put some red flags up, so I would not advise that.
Tom: And there have been cases where we are in a super competitive situation. If we were making an MLS offer, we would be doing a lot more than 1% because we wouldn’t stand out. But again, I wouldn’t do like a dollar or anything like that – make it a little bit, but it doesn’t have to be as much as you would think.
Brad: Yes, ma’am?
Participant: Do you use a title company to help confirm a person who signs a contract with you? [inaudible 1:39:06]
Brad: Two part question – Do we have a relationship with the title company that insures that the person who is signing is actually the person? And secondly, do we always have a contract when we walk in the door?
The second answer is, hell, yeah, of course we do. We are not going to go to a house – we go to a house because we have already talked to them. The decision makers are going to be there and we are ready to sign up that house. So absolutely, if you go to a house without a contract, shame on you.
The first part of the question was do we have a title company. Yes, we have a title company. I would highly advise you to make sure that you find an investor friendly title company that understands real estate investing.
However, we have used title companies that have not done their job and the seller really wasn’t the seller. We have done, like I said earlier, 2,100 transactions and it has happened to us less than three or four times.
Ironically (I don’t know if that is the right word) – unfortunately, I think most of those were with one title company. So needless to say, we are not using them anymore. Just like anything else, get references, check with other investors.
We actually use right now Universal Title. They have several offices around. They are good with investors. There are several. That shouldn’t be an issue.
Participant: What qualifies as an investor friendly title company?
Brad: What qualifies as an investor friendly title company? Just call them and ask them, “Do you deal with investors?” Our deals are always very hairy. By hairy I mean there are title issues. There are judgments. There are liens. There are heirs that are in prison in California. There are people with drug addictions. There are people with mental issues.
I guarantee you that some title companies are just like, “I don’t want your business.” Just ask around like anything else.
Are there any others on there? Guys, I think we are going to wrap up. We will take one or two more questions.
Participant: [inaudible 1:41:10]
Brad: Where do we buy properties? Right now we are buying in the D.C. metro and we do some investing in Baltimore as well, so Maryland, Virginia and D.C.
Participant: So you don’t buy anything outside the state?
Brad: Right now, no, we are not. But I have quite a large network. I have probably 80 percent of the United States covered with people whom I know personally, so if you have a deal, let me know. Put it through our site and then put a special note that, “Hey, I was in the meet-up. Brad said he had investors all over,” and I will pass it along. Then we will come up with some share.
Because the people that I have are like the top of the top, it is not going to be some newbie investor that I’m handing it to that doesn’t know. We will get it closed if it is a deal.
Tom: Wasn’t there one that just happened last week?
Brad: Are you talking about through the mastermind group?
Brad: Yeah, so I got a lead actually in some rural town, South Carolina. Gave it to him and he gave us 25% of the profits, so next week we are going to get a $4,800 or $4,900 check, so we can definitely share that if you have leads from outside of the area.
Alright guys, it was a great meeting. In closing, again, if you are – I don’t want to get these websites confused – can you put those back up there? If you guys are interested in future real estate training by me personally, I am probably not going to always do it personally, but we are certainly going to start out probably the first year of doing real estate training.
Go to BradChandler.com. If you are interested in free real estate coaching on our upcoming podcast, go to ExpressHomebuyers.com/free-coaching. And depending on how popular it is, we may do once a week. We may do twice a week. We may do once a month.
So if you want free coaching, very similar to the hot seats that went on earlier. If you just joined this Facebook Live conversation or video, go back to about 15 minutes in, 20 minutes in, and we had some folks in the hot seat. That is the same format that our podcast is going to have.
You are going to learn a ton. We are going to give you actionable items to take. And then hopefully, there will be some success and we will have you on a future month telling the whole world about your success.
Finally, if you have any wholesale deals, you can submit them at ExpressHomebuyers.com/submitdeal. And then finally, we have tons of deals on EHBDeals.com if you are in the local DMV market and looking for an investment property fixer upper. We also are going to be putting close to 70 occupied rental units on that site in the coming weeks.
So go sign up if you are a realtor, make sure you sign up because you can help your investor clients. And if you like this video, please, please share it. We spend a lot of time here for really nothing, no money that is, so please if you can, do your part and share it.
We would love to ask for one or two or three seller testimonial videos outside. If you guys thought this was good, you will raise your hand just for me to ask you three or four questions about the meet-up so we can promote it.
And then if you liked the meet-up, you will probably get a message saying, “Hey, did you like this meet-up?” If you do like it, please rate us a five and put a nice comment, share it on Facebook. If you didn’t like it for some reason, come talk to us and say how we can improve this, people in Facebook land. We are here to serve you guys.
I don’t even know what the next meeting is going to hold. We may do something similar. We may do something completely different. But if you guys would post something and say, “We really want to know about this topic,” we will present it to you. We will let you know.
And I had one other thought. Getting back to the Facebook group – again, use it. It is a free resource. Go to Express Homebuyers Wholesale Meetup on Facebook when you have questions, when you are struggling with a seller, you don’t know what to do. Post it on Facebook. Don’t private message me, don’t email me. Put it on Facebook so we can share.
I am sure if you are going to ask that question, someone else is going to ask the question, too. Awesome meeting; thanks everyone for coming.