Of course, finding and looking into new deals and investment leads is one way for you to expand your real estate horizons and develop a sustainable business. There are, however, other ways to scale up without sacrificing quality or your peace of mind. Having a thorough strategy for how you want to build and grow your organization will give you a competitive advantage and help you to make better decisions.
Growing a real estate business is similar to any traditional business because there are critical factors that must be taken into consideration in order to be successful and avoid expensive mistakes. Some examples include learning which property valuation methods to use, which type of property to avoid, or how to expand or curate your target market.
Here, I have compiled an extensive amount of information for you to use and learn from, in order to discover how business development in real estate works and tips for lucrative real estate investing. The more you know, the better you will be able to adapt to changing market needs.
Whether you want to learn more about business development in real estate or start growing a real estate business, apply to work with me today to get started! Additionally, if you would like to find out why so many passive investors trust my business skills, apply here.
A little more than a year before the onset of the coronavirus pandemic, I wrote a blog post entitled “Why I Am Confident Multifamily Will Thrive During and After the Next Economic Correction” (which you can read here).
The economy was experiencing a record long expansion and showed no signs of stopping. However, like most economic expansions, various economic and real estate experts were warning about an impending recession.
“The stock market is inflated” and “real estate prices and rents will not increase forever” they said.
However, whether the economy continued chugging along or experienced a minor or massive correction, I was confident is multifamily real estate’s ability to continue to perform.
My confidence was not emotionally driven or biased because I am a multifamily investor. It was based on my analysis of the facts. The most telling fact was the change in renter population.
Historically, more people rent during recessions (which is one of the reasons why I was attracted to multifamily in the first place) and more people buy during economic expansions. The former held true for the 2008 recession as more people began to rent. However, during the post-2008 economic expansion, the portion of renters continued to increase (more US households were renting in 2016 than at any point in 50 years).
Therefore, I predicted that the portion of renters would increase or, at minimum, remain the same during and after the next correction.
Then, coronavirus hit and induced an economic correction (or a temporary slowdown, depending on who you ask).
A metric that is used to measure lending standards is the Mortgage Credit Availability Index (MCAI). The MCAI is based on a benchmark of 100 set in March of 2012 and is the only standardized quantitative index that solely focuses on mortgage credit. A decline in the MCAI indicates that lending standards are tightening while an increase in the index are indicative of loosening credit.
Joel Kan, Mortgage Bankers Association’s Associate Vice President of Economic and Industry Forecasting said in the August 2020 report, “credit continues to tighten because of uncertainty still looming around the health of the job market, even as other data on loan applications and home sales shows a sharp rebound. A further reduction in loan programs with low credit scores, high LTVs, and reduced documentation requirements also continued to drive the overall decline in credit availability.”
People will always need a place to live. Their only two options are to rent or to own. As indicated by the massive MCAI declines since the end of 2019, less and less people will be able to qualify for residential mortgages. The programs available to people with low credit or who cannot afford a high down payment have disappeared.
Therefore, by default, more people will be forced to rent.
One last interesting thing to point out is how the MCAI during the current economic predicament compares to the 2008 recession.
Here is an expanded MCAI graph that shows credit availability back to 2004. The pre-2011 data was generated biannually, making it less accurate than the post-2011 monthly generated data. However, the graph still highlights an important point. At least as it relates to the availability of credit at the time of this blog post, the current economic recession is nowhere near as severe as the 2008 recession.
Building a real estate business from the ground up is certainly an exciting endeavor, but once your business is going, you may find yourself at a crossroads. Should you stay in your comfort zone by maintaining the status quo in your business? Or should you work on taking your company to another level?
If you’re seeing a positive return on your investment in real estate, you may naturally consider exploring various ways of maximizing your business’s potential. But if you don’t have much experience with scaling a business, you may find yourself at a standstill.
Fortunately, you don’t have to stay there.
Here’s a rundown on how to scale so that you’ll have an increasingly successful real estate business long-term.
How to Scale a Real Estate Business Tip 1: Master Your Marketing
This is an essential step in building a successful real estate business. Specifically, if you’re looking for lead generation ideas, it’s critical that you understand who your clients are first. For instance, who truly make up your buyers if you’re into wholesaling or flipping? Or who are your tenants if you’re renting out properties?
You can gather a lot of this information from sources such as surveys, Facebook reporting, or even your business website analytics. These sources can tell you your ideal customer’s psychographic and demographic makeup.
Also, find out what your ideal customer’s pain points are. For example, what tends to keep your customers up at night? It’s also a good idea to find out which marketing channel provides you with the best return on your investment for reaching your target customer. As an example, using Facebook is particularly helpful for generating a list of buyers as part of your real estate business development process.
How to Scale a Real Estate Business Tip 2: Automate or Outsource Your Activities
If you’re serious about creating a successful real estate business, it’s imperative that you complete an in-depth analysis of the business to see exactly where any bottlenecks and inefficiencies are occurring.
For instance, maybe you can take advantage of cloud computing to streamline your business process. You could also make your job easier by setting up a marketing system that will work while you’re asleep. You might also benefit from getting rid of any daily task items that have a low return on your investment; for instance, you may want to spend less time on social media if it’s not leading to substantial business gains.
Another way you can grow a successful real estate business is to outsource any non-essential tasks. Sure, this may seem scary if you’re used to handling a variety of tasks for your business. However, if you can hire an expert to help you with duties like producing marketing content for your real estate business website, you can devote more time and energy to developing your skill set as a real estate investor.
How to Scale a Real Estate Business Tip 3: Grow Your Real Estate Network
If you want to have a successful real estate business, it’s critical that you develop a strong investment network and continue to build on it. That’s because your business relationships are among your most critical assets in the real estate investing world.
For instance, let’s say that you are trying to raise capital. A good partner—for example, the right passive real estate investor—can easily elevate your real estate business by making an excellent apartment acquisition deal possible. Not all potential partners will be a great fit for you, but you need just a few good ones to get a leg up in the real estate investing industry. Real estate conferences, investing clubs, and networking meetings are excellent places to start building industry relationships.
How to Scale a Real Estate Business Tip 4: Establish a Niche to Build a Successful Real Estate Business
As a general rule of thumb, people enjoy working with others with whom they are comfortable. This is why it’s a smart idea to develop a solid niche in the real estate industry rather than trying to dabble in a number of areas of real estate. The better you are in your specific aspect of the industry, the more credible you’ll appear.
For example, if you’re especially passionate about buying and holding properties to rent out, your goal should be the best buy-and-hold investor in your market. In addition, try to focus on a specific type of real estate property, as this will make it more effortless for you to recognize great deals when they crop up.
The more experience you gain in the market, the more you’ll be viewed as a field expert. In time, you’ll see your credibility pave the way for brand-new deals for you.
Important Considerations When Trying to Build a Successful Real Estate Business
If you’d like to scale your real estate business, note that this won’t occur by accident. Instead, you’ll need to plan for growth and surround yourself with a strong team who can help you to reach that next level.
As a real estate entrepreneur, you want immediate results. I get it. However, it’s paramount that you don’t rush things when trying to build a successful real estate business. You need to know that the particular strategies you’re using or targeting are actually healthy for the business.
Keep in mind that the seemingly minor adjustments you make today can have a huge impact on your company down the road. Also, don’t look down on the opportunity to make steady, slow progress in your business’s next phase. This, in fact, may actually lead to faster growth than you initially thought was possible.
Start Creating a More Successful Real Estate Business Now!
Growing any business comes with its challenges, and real estate businesses are no exception. Still, that doesn’t mean that scaling your real estate business is impossible. It’s very possible when you have the right real estate strategies and people on your side.
I am more than willing to help you to grow your business like never before. I currently own over $600 million in real estate after getting my first major break in 2012, when I raised a million dollars in private investment dollars and purchased an apartment community. Enroll in my private real estate program and find out how I can also help you to develop a successful real estate business.
Anyone who has looked into investing in real estate has found that there are frequently investment barriers that must be overcome. I am often asked: What is the biggest obstacle you faced either when you started investing in real estate or as you grew your business?
This is such an important question that I reached out to some of the top investors in the field to see what they had to say.
1 – Tracking Passive Investors
Allison Kirschbaum is an established real estate investor who is trying to scale her business. The biggest investment barrier is keeping track of all the new investors her company meets without having them fall through the cracks.
There are many CRM providers who offer tracking services, but they can be quite costly, especially if you are just starting out. That’s why I created my very own investor tracker, which I am willing to give out FOR FREE. Not only does this spreadsheet allow you to keep track of potential and current investor information, but it also automatically creates data tables to track the cities with the most investors (in terms of people and dollars) and the sources that generate the most investor leads. You can even use this tool for tracking the money raising process for a specific apartment deal.
If you are facing a similar obstacle as Allison, email info@joefairless with the subject line “Money Raising Tracker” to receive my custom investor tracker spreadsheet.
2 – Finding Deals in an Expensive Market
Two investors are finding it difficult to locate qualified deals in their local market. Sarah May lives in the highly competitive Denver market, and Killian Ankers also lives in an expensive real estate market. Both are open to start investing in real estate in an out-of-state market, but among their investment barriers would prefer to remain local, because they know their home markets like the back of their hands.
My company faced a similar obstacle in 2017. My target market is Dallas, Texas, which was and remains highly competitive. Our solution was to get creative. We found an on-market opportunity that was highly publicized and marketed by a broker, which resulted in an ever-increasing price. Instead of walking away from the deal, we had our broker reach out to the owner of the apartment community across the street, and we were able to negotiate and put the property under contract at a significant discount! If we had only purchased the on-market opportunity, it wouldn’t have made financial sense. But due to the cost-saving associated with purchasing two apartment communities on the same street, we were able to close on both.
Micki McNie is facing an obstacle to which everyone can relate – focusing on a single real estate strategy. Shiny object syndrome befalls investors of all experience levels. The near infinite number of potential investment strategies can paralyze an aspiring investor. Then, the longer you’re in the industry, the more people you build relationships with, which naturally results in being presented with a greater variety and volume of new and exciting investment opportunities.
How does the aspiring investor decide which investment strategy to initial pursue to avoid investment barriers? Well, I think you need to identify the root of the problem first. Are you truly struggling with selecting the best investment strategy or are you just using that as an excuse to not take action? If it is indeed the former, pick the investment strategy that aligns most with your current interests and unique skill sets and show up EXTRAORDINARY, always keeping in mind that investors have had success in every investment strategy for the past 50 years! If it is the latter, you need to learn how to identify and crush your fear barriers!
How does the established investor overcome investment barriers and avoid chasing after opportunities that are outside of their skill set? Accountability! And if you’ve found that holding yourself accountable is a challenge, outsource that responsibility by either starting a meetup group (social approval is a powerful way to keep you on track) or hiring a mentor.
4 – One Person Team
Neil Henderson has hit a barrier in growing his business because he’s trying to wear too many hats at once. He’s a loyal employee at his full-time job, father, husband, underwriter, marketer, capital raiser, negotiator, and thought leader. Similarly, Vince Gethings struggles with finding the time to operate his business as he adds more units to his portfolio and balances his remaining time between family and work.
Whether you want more time to explore other non-real-estate-related passions or spend more time focusing on the long-term vision of your real estate business, the way to overcome investment barriers starts with outsourcing and automating some or all of your business, in addition to building a solid, trustworthy real estate team.
Scott Hollister just got his start investing in real estate lacks the experience, net worth, and liquidity to enter the real estate arena. He’s already identified a solution, which is pursuing seller financed deals, but doesn’t know where to get started. In particular, he doesn’t know how to find seller-financed opportunities.
Another strategy for those whose primary investment barriers center around lack capital is house hacking, where you purchase a two to four unit property with a low down payment owner-occupied loan and live in one unit while renting out the others.
Do you need help overcoming obstacles? Whether you’re just getting started or you’ve been in the biz for years, consider applying to my Private Real Estate Program and take the next step towards financial independence.
Josh Dorkin knows a thing or two about growing a business. Not only is he the CEO of BiggerPockets, which boasts more than 825,000 members and landed at #400 on the Inc. 5000, but he also produces the top-rated real estate podcast on iTunes, which raked in $7 million in ad revenue last year, and founded a publishing firm.
I had the opportunity to pick Josh’s brain (part 1 and part 2) for his Best Ever entrepreneurial success habits.
Read on for Josh’s advice on growing a company, his Best Real Estate Investing Advice Ever, his morning routine, and more.
Is there one person that sticks out in your memory as having been helped by BiggerPockets in all the work that you have done?
The one person that sticks out, the instant answer to that is Brandon Turner. Those of you who are unfamiliar, Brandon Turner is co-host of The BiggerPockets Podcast. He works for us, and initially, when I came to know Brandon years and years ago, he was a user on our platform; he was trying to find financial freedom and used the BiggerPockets platform to get there.
He was the pure representation of who we were and what we strived for. He was this guy living in the Pacific North-West who had been kind of floundering around in his life. He was trying to figure it out, like the rest of us. He came across BiggerPockets and the idea of real estate, and used BiggerPockets to help him build this passive portfolio of real estate.
Of course, living in the area that he lived in, he was at a point where he no longer needed a job. He had created that freedom for himself. He was writing for BiggerPockets, and at that time I was in need of help. I needed to hire somebody to come and join me as my first employee, and we got to know each other and I brought him on.
Brandon really just is that pure representation of who we are, but there’s countless stories. Not a day goes by where we don’t hear from somebody who’s like “You guys are transforming my life. You guys are helping me out. You guys have helped me quit my job” or “Helped me retire” or “Helped me build income for my family”, or whatever it is. That’s why we do it. We’re here to help people succeed.
What are the 3-5 most important things in your experience to growing and scaling a company?
One, having a good idea that’s scalable – start there.
Two, having some kind of plan, whether or not it’s written… I don’t think you need necessarily a written plan from zero (I didn’t).
Three, your business has to solve some kind of need for the customer that somebody else is not serving. I say that out loud and I think about McDonald’s versus Burger King. Burger King is solving a need, McDonald’s is solving the same need, but now it’s flavor choices, right? So, do you like A or B better? But having a USD (unique selling proposition), something that is unique or that you believe to be unique about what it is that you’re doing – you’re building, you’re offering service, products, you name it.
Four, being passionate, or having a team of people that are absolutely passionate about that idea. It’s pretty rare to see successful companies get to a point of success where the founders or creators or people running the show that don’t have some kind of passion for it, it’s too hard; it’s too much work, it’s too difficult to struggle through that without having that passion. Also, having a dedication to people and to your own people. You can’t build a scaling company without taking care of people, and I’m saying that and I can think of examples of companies where they have a really crappy culture and I’m like “Hmm, maybe not…”, but at the end of the day I think what goes around, comes around.
Five, I think something that we didn’t do in the past – and by “we” I mean businesses in general – is becoming very data-oriented. Metrics and data and understanding your business from a data perspective. I think you often see small businesses where they don’t get it struggling a lot. Knowing your numbers — let’s take real estate investors. If you’re a real estate investor and you market by mail, if you don’t know your send and open rates and your cost per send and your funnels, you’re just throwing money out the window. You don’t know what you’re doing, you have no way to measure whether or not what you’re doing is successful or not.
What feature of the BiggerPockets platform do you think is most underutilized?
I would have to say the member notes. Here’s what member notes are – you can go to anybody’s profile and take a note on them. I can go to your profile, Joe, and make a note and say “Yeah, Joe and I had a conversation about X, Y and Z.” Only I can see it, nobody else can see it on the platform. It’s almost like a mini CRM, right? The next time I come back and the next time I interact with you I can be like, “Hey, Joe… Remember we talked about X, Y and Z the last time we connected?”
I think partially that’s due to people not knowing what it is. We have not updated that in a very long time; we are working on some really nice and sexy redesigns of certain parts of the site, including user profiles and our onboarding, and as part of that, I think we’re going to be creating a little more clarity in that tool. I think it’s extremely useful, I use it all the time. I talk to you about whatever I talk to you about, I put it on there, and the next time I come back and I’m ready to talk to you again, I know exactly what we chatted about.
When you were considering starting BiggerPockets, what was a number one fear holding you back from starting?
There was no fear that held me back from starting. I didn’t start BiggerPockets to create a business. I started BiggerPockets to help me stop screwing up in real estate. So, my biggest fear was continuing to screw up in real estate.
There was nothing that was kind of “Alright, if I create this thing and nobody shows up, then nobody shows up. I’ll figure something else out, I’ll find my answers in some other way.”
How has podcasting enhanced your business and opened up doors and connections that you wouldn’t have had otherwise?
I think by having a big show that has a big audience, it gives you the ability to talk to and reach out to people who you may not have had the opportunity to do that with. So, it builds your name, it builds your brand, and especially if you do a good job and stay true to who you are and what you’re doing, then ideally that continues.
I’ve gotten to talk to authors that I may have not otherwise met. There’s not a show that we have where I don’t learn something. So, for me as a person not affiliated with BiggerPockets, it’s so powerful. And as the CEO of BiggerPockets, obviously having those people and those stories inspire other people is also so powerful.
What are your morning routines or daily practices that you do on a regular basis?
I go back and forth with a miracle morning – or non-miracle morning – routine; it depends how spent or burnt out I am. I don’t ever get up and then go to my phone, or go to my internet or anything like that. I like to get up, I like to stretch. On the good mornings, I like to exercise. This is all before anyone else in the house is awake.
Then get up, get dressed, do my thing, take care of my kids, get them ready for school, driving to school, and then at that point I will look at work. I don’t do work before my kids are off to school; I’m there, I’m present… I’m not playing on my phone, stressing about e-mails, dealing with any of that stuff. The morning is for me, followed by family, and then I head to work, and then work begins. After work, when I get home – four, five, six o’clock, whenever it is, I’m present again; phone’s away, not working. I may jump on social media from time to time, because it’s a hobby, but I’m not doing work per se until my kids are asleep. Family time is family time, and then when the kids go to bed, I usually like to thaw for a little bit, and then maybe I’ll do some work, as needed.
It’s very different than had you asked that question four years ago, which would have been “I get up, I work, I take a shower, I work some more while my kids are getting fat (or whatever) and then I leave to work, and then I come home and I work, and then I work through dinner, and then after dinner I continue to work, and even though I’m with my family, I’m not there.” I came to the realization that I was doing that, and hated myself for it, and said “This is just not who I want to be. I am a father first and foremost, and my family is the most important thing to me and my life, so I’m not going to let anything, especially my company, get in between that.”.
On those good mornings, when I’m fully miracle-morning-ing, I don’t actually do the full miracle morning, which refers to a book called The Miracle Morning by Hal Elrod, for those of you who don’t know… But I’ll stretch, I’ll do some meditation, I’ll do some exercise, and I’ll do some reading. Those tend to be the four things that I do.
What’s your Best Real Estate Investing Advice Ever?
Figure out your why. Why is it that you’re getting into this for? If you don’t have a strong why, then you’re not ready to begin. If you’re already an investor and you’re thinking about scaling your business or growing your business, what’s the why? What’s driving you? What’s motivating you? Because if you don’t have it, do you know who’s not going to have it? Your partner, your spouse, your family. So, you’d better have a solid why that everybody can buy into, because otherwise there’s going to be opposition at every step from those people who should be supporting you.
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In late 2016, I wrote a blog post entitled “5 Reasons You Are Not Scaling Your Business & 5 Keys to Push to the Next Level,” which was based on an interview I conducted with my business coach Trevor McGregor. Trevor has over 10,000 hours of business coaching under his belt. One of the five commonalities he found between entrepreneurs that don’t scale their businesses is a lack of consistent and persistent action. They take action for maybe a year, but are disappointed in the results, or lack thereof, and give up or just coast on by.
One of my favorite quotes from Tony Robbins that addresses this concept is “we overestimate what we can do in a year, but we underestimate what we can do in two, three, five, or ten years.” Since we are living in an instant gratification world, we expect to receive instant fruits from our labor. However, if we aren’t thinking in terms of multiple years or decades, we will continue to be disappointed with our results.
My personal journey is evidence that supports this concept. I recently released my 1000th podcast episode. If I expected instant results, I would have given up podcasting after a few episodes since my audience was only comprised of my parents, a few friends, and my dog. However, after consistently putting out podcasts for 1000 days in a row, I was able to create the world’s longest running daily podcast, and as a result, my company has achieved a portfolio of over $130 million in real estate in under 24 months.
Using this idea of consistent and persistent action, in combination with other Tony Robbins’ success principles, Trevor McGregor created the concept he calls The Real Estate Investor Ladder of Success. In our recent conversation, he outlined this ladder and explained how it can be used to gauge where you are showing up in your business and determine if you are putting forth the persistent and consistent action required to scale your business.
The Real Estate Investor Ladder of Success
Either draw out or visualize in your mind a vertical ladder with six rungs. Each rung on the ladder represents how you are showing up in different aspects of your business, or life in general. The higher up the ladder the ladder you are, the better you are showing up.
Rung #1 – Showing up POOR
The very first run of the ladder is what Trevor calls showing up POOR. He said, “We often say in real estate that if you show up poorly in something – let’s say it’s property management – what kind of results do you think that you get?” If you think the answers is poor, you are mistaken. The answer isn’t no results either. Trevor said, “Poor equals pain! You know that as a property manager if your property management isn’t good, poor doesn’t equal poor. It actually hurts. It’s like a kick in the teeth. It gives you pain.”
Poor = Pain
Hopefully, if you are a best ever reader or listener, you aren’t showing up POOR in any aspect of your business, so let’s move to the next rung of the ladder.
Rung #2 – Showing up GOOD
If you are on the second rung of the ladder, you are giving a little more effort and are showing up as GOOD. What kind of results do you think you’ll see when you show up GOOD?
Trevor said, “GOOD isn’t enough anymore. There’s too many people out there looking for deals, vying for investors, so we often say that good these days equals poor results.”
If you’re just good at communicating with contractors, for example, yet you see poor results, that’s because you’re showing up on the second rung of the ladder of success. If you want better results, you need to climb to the next rung of the ladder.
Rung #3 – Showing up GREAT
The next rung up, number three, is showing up GREAT. “Imagine yourself if you’re a real estate investor that has efforts that are great, in today’s world, again, great isn’t great enough, because we say that GREAT equals [GOOD],” Trevor said. “If you’re just great at finding deals today, when there’s literally tons of other investors out there doing the same thing, being great at finding deals will give you good results.”
GREAT = GOOD
Three rungs up and you should start to see a pattern. Poor = pain, good = poor, and great = good. You must show up at a higher rung than the results you want to achieve.
Before moving to the next rung, draw – on paper or in your mind – a horizontal line between rung three and four. Because when you’re showing up at rung four or above, you start playing the game of real estate at what Trevor calls “above the line.” At the very least, you want to be showing up above the line.
Rung #4 – Showing up EXCELLENT
When you’ve reached rung number four, you are showing up as EXCELLENT. Based on the pattern thus far, what do you think your results will be when you are EXCELLENT?… GREAT.
“If you’re excellent at negotiating deals or negotiating terms, or finding anything like that in your toolkit, you’re going to get great results,” Trevor said.
EXCELLENT = GREAT
Rung #5 – Showing up OUTSTANDING
When you are one rung away from the top, you are showing up as outstanding, meaning you will see excellent results. Trevor said, “As an outstanding investor, if you’re outstanding at raising capital, you’re going to have excellent results and be able to rinse, then repeat it and do more deals.”
OUTSTANDING = EXCELLENT
Rung #6 – Showing up EXTRAORDINARY
If you are at the top of The Real Estate Ladder of Success, you are showing up extraordinary. At this level, you apply yourself and you wake up every day and show up extraordinary in everything you do. As an outcome, you will produce excellent results.
People who show up extraordinary have a unique selling proposition and are able to market who they are and what they do with an extraordinary elevator pitch. If you adopted this extraordinary mindset, do you think you’d attract more people to your real estate outcomes?… You bet!
EXTRAORDINARY = OUTSTANDING
Trevor asked, “Where are you showing up today? Are you poor? Are you good? Are you great? Or are you playing above the line and you’re excellent, outstanding or extraordinary?”
It’s a conscious choice.
A philosophy that I got from Tony Robbins is that there is no failure, there’s only feedback. Maybe you’re playing at level three right now and you want to go to level four; or maybe you’re playing at level four and you want to go to level five. You have to align your state, your story and your strategy each and every day, to be able to show up and do it at that level.
Something else interesting about the success ladder, Trevor said, is “it takes a massive jump to go from poor up to good. It’s massive. But to go from good to great is literally about one yard, or one meter. To go from good to excellent is about one foot; that means you’ve got to do things just a little bit better. To go from excellent to outstanding is almost six inches, and then, just like an Olympic athlete, to go from outstanding to extraordinary or extra-ordinary is what we call a two-millimeter shift. It’s the small things, it’s the subtle differences in how you show up and how you play full out] that are really going allow you to live at the highest level.”
How to Objectively Determine Where You’re Showing Up?
How can we have an objective evaluation of where we are at on the success ladder? Trevor said, “it’s really situation-specific. We’ve all got things that we’re really good at and that we love to do and we kind of default to that, and we know that there’s other areas in real estate that we need to seek outer advice. I think the categories that you would break down into is ‘Who are you? What is your X factor or your unique selling proposition? What is your platform? What are you really good at? Is it finding deals? Is it working with contractors? Is it raising capital? Is it property management?’ and literally go through each of those categories and give yourself a score. When you give yourself a score, you’re literally saying ‘Where am I showing up on the six levels? Am I good? Am I great? And if so, what would I have to do differently to go to excellent?’ … It’s not about having necessarily a quantum leap and going from good up to extraordinary; it’s starting to understand that it’s the little things that add up to the big things. Going to some networking events, putting in more offers, driving more neighborhoods, getting really good at asking investors for capital. And again, we always want to shine our shield and sharpen our sword so to speak, so that we know we’re getting better.”
The outcome of this exercise is to raise your standards. It’s changing yourself from saying “I should” to “I must.” When you make that shift, like I did a few short years ago, and you resolve to get better one small step at a time, that is how you exceed your expectations for how much you can achieve over the span of year/decades.
The Real Estate Ladder of Success has six stages. At each stage, you put forth a specific effort and receive a specific outcome:
Rung #1 – Showing up poor equals painful results
Rung #2 – Showing up good equals poor results
Rung #3 – Showing up great equals good results
Rung #4 – Showing up excellent equals great results
Rung #5 – Showing up outstanding equals excellent results
Rung #6 – Showing up extraordinary equals outstanding results
Your overall goal should be to wake up every day and show up extraordinary. However, your first goal, if you’re showing up poor, good, or great, should be to show up above the line, meaning reaching rung #4 at the very least.
Determine where you are currently showing up on the ladder of success and brainstorm ways to climb to the next rung. Once at the next rung, repeat the exercise until you are consistently showing up extraordinary, and as a result, you will see the outstanding results you’re striving for.
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If your vision is to scale and create a massive business, at some point, you will need to hire employees. If you have never managed a team before, you likely won’t have a clue what you’re doing. Even if you have management experience, it’s a whole different monster when you are at the top of the food chain.
Fortunately, Shawn Casemore, who has published over 1000 articles, booklets, and resources on improving individual and organization performance, specializes in teaching business leaders how to effectively manage a team. In our recent conversation, Shawn provided 4 tactics to get more out of your real estate or business team.
1 – For contractors, consultants, and non-employees, make your business their priority
If you are a real estate investor, whether you’ve manage a team or not, you’ve worked with contractors. We all how much of a hassle that can be.
To get more out of your contractors, Shawn said, “you have to realize those folks have their own businesses and have their own priorities, and therefore you need to somehow make your business a priority.”
One method, which is what you see on the real estate TV shows, is to go out and beat up on your contractor and threaten to pull business if they don’t get their act together. However, TV isn’t reality. Go in and yell at a contractor and they may perform even worse.
Instead, here a few examples provided by Shawn on how to make your business the contractors priority that doesn’t involve throwing a temper tantrum:
Give them more business and they will give you more attention. Simple.
Make them feel like they are a part of the business
For example, Shawn said, “when you’re going out to take a look at a property, you bring your contractor … with you. Do you involve them in the decision making? Do you actually give them the chance to take a look at situations and provide potential solutions, and when they do, do you thank them for it and you take some of their advice?”
When dealing with contractors, Shawn said, “it becomes trying to ensure that other people who support me, although they’re not an employee, they feel like this is their business. That comes back to building relationships, which includes things like trust [and] honesty. And you’ll find that a lot of contractors will be very receptive to that, because everybody treats them like crap, so they’re happy to work with those who actually treat them like a human being.”
Don’t be a jerk
As business owners, we are constantly in the business mindset. We are fixated on the finding the next deal, developing the next opportunity, or maximizing our cash flow. As a result, we’re so busy and stressed out that we may run over those who support us, hopefully inadvertently, and we can come off as jerks.
Shawn said that when we are in this business mindset, “that stress then when you turn to answer some questions of your employee or contractor comes out that you’re a little bit of a jerk. And then what do they think of you? They think you’re a jerk, so are they going to stand behind you? Are they going to be there when you really need them? The answer is no.”
Therefore, you must complement the business mindset (i.e. focusing on the next deal, cash flow, profitability) with a separate, people-oriented mindset. Shawn said, in regards to the people-oriented mindset, “in order to be successful, I can’t do this alone. I need people, be it employees or contractors, or otherwise, and people are receptive to other people. People are receptive of being treated fairly, being treated honestly. In fact, I can actually warm people up a little bit if I start to maybe go that extra mile or if I drop off a coffee. When I go in to see my contractors, I always try to grab some coffee for the guys.”
Other example that your contractors would absolutely love is to drop off a case of beer if they are working late on a Friday or a weekend.
2 – Ask for feedback, advice, and ideas on projects
Another way to get more out of your team is to ask for input on projects you are working on. For example, Shawn said “I was just speaking with a client this morning. We were working with kind of a subset of a small group of people in the organization. We identified some very minor changes to something. This morning we sent that out to the broader team before it went live and said, ‘Hey, give us your feedback. What do you think?’”
It’s important to understand that your team isn’t an amorphous blob. They are a collection of individuals with their own experiences, including personal experiences, work experiences, and their own ideas, and everybody wants to share those ideas and experiences. Therefore, Shawn said, “if you want to create a stronger team and a better business, you need to really understand that everybody’s an individual, and deal with them on an individual basis to get the most out of them, to get these ideas that help them feel like they’re part of something.”
Always ask for input and feedback from employees. Some of it might be terrible advice if they don’t have the experience that others on your team do, but many people just want to be heard, even if their ideas aren’t acted upon. If you can listen to them and start to capitalize on the good ideas, you will build a very strong team and an even stronger business.
3 – Schedule face-to-face personal meetings
Again, when we are in the business mindset, we may neglect to schedule enough time to meet with our employees. Shawn said, “you need to calenderize some time where you’re only dealing with your people… This isn’t a stop by a property and just say, ‘Hey, how’s it going? What’s new?’ … I tell my leaders all the time: Stick it in your calendar every Friday to spend the afternoon or the morning going around and just talking to people. You might not hit everybody every Friday, but make a point of doing that. What you’ll find is you’re able to better understand everybody as an individual, therefore when you’re positioning things, ideas, viewpoints, [and] asking questions, you can position it from a perspective that they personal appreciate.”
What if you have a remote team? Will having this interactions over the phone suffice? The answer is no.
Face-to-face interactions are important because you’re forced to pay attention and vice versa (you’ll see if they are sending emails), you can see their body language to see how interested they are, and it saves a lot of time (you can get across the same message in a 5-minute phone call that you can in 30 emails).
Therefore, if you have a remote team like Shawn, he says, “I schedule time (if they have Skype, or Zoom, or something else) where we get face-to-face. Maybe it’s once a month, maybe it’s once a week, depending on how important that person is to the business and how frequently you can interact… Face-to-face is key with those remote people to ensuring that you’re having a valuable dialogue.”
4 – Provide Individualized Recognition
Now that you realize you must treat each member of you team as an individual, it should go without saying that you need to recognize them as an individual as well. For example, Shawn said, “let’s say you’ve got a few people on your team and you have a great year and you do the cliché send them all a jacket or give them all a ball cap. That’s fine, but if you’ve ever received the jacket from maybe a business you were working in at some point, some people love that jacket, some people would rather have cash, some people didn’t like the color, some of them got their names spelled wrong. So when you look at recognition or just thanking people, that also has to be individual.”
Recognizing each team member as an individual is the only way to ensure that it’s actually valuable to them. In doing so, you are going to find people more appreciative and more supportive of your business
The four tactics for getting more out of your business team are:
For contractors, making your business a priority to them and making them feel like a part of the team
One of the most common questions newbie real estate investors ask is “How can I invest in real estate if I have no money?” Standard responses are, “Well, you have a few options. You can become a wholesaler. You can pursue zero money down creative strategies. Or you can raise money from private investors and become a syndicator.”
However, there is another option to building a war chest of cash to invest in real estate that many newer investors overlook. They can start a consulting program.
That’s right! And in my recent conversation with Sam Ovens, who has created 9 millionaires and 136 six-figure consultants from his trainings, he provided a step-by-step guide to create a consulting program from scratch.
Sam said, “When you’ve got not money, cash flow is the most important thing in the world because you have to keep yourself alive and you have to stay in the game.” But most importantly, he found that “you have to have confidence. If you don’t have a certain amount of cash in the bank, you start making lousy decisions, and you’re desperate. You’ll want to jump at a deal which you usually wouldn’t jump at if you have enough cash to float you through the year.”
If you want to start a consulting program, you don’t need a lump of cash upfront. Rather than selling a product, you are selling a service. You are selling advice.
So how do you launch a successful consulting program? Well, the following is Sam’s five-step process.
Step #1 – Pick Your Niche
The first step towards creating a consulting program is selecting a specific niche. The keyword here is specific.
“The man who chases two rabbits catches none,” Sam said. “A lot of entrepreneurs are too afraid to narrow their reach because of what they might miss out on, but they don’t understand without narrowing their niche, they don’t get anything.” You can always widen your focus later, but it is mandatory to select a narrow niche upfront.
How do you determine which niche to pursue? Sam says, “It honestly doesn’t matter. You can’t pick the perfect niche. There’s no way to do that. This isn’t a science or at least a science that exists at the present moment in time.”
Instead of wasting time trying to find the perfect niche, Sam recommends performing a thought experiment: Imagine someone has a gun to your head. They’re going to blow your brains out in ten seconds. What niche are you going to pick? Whatever comes to mind is a good place to start.
“Your mind is like an algorithm,” Sam said. “It optimizes. If something doesn’t work. It’s like ‘Okay, we don’t do that again.’ If something does work, it’s like ‘Maybe we’ll do more of this.’ So it doesn’t matter what you start with, it’s just that you need to start.”
So gun to your head right now, what niche do you pick?
Step #2 – Know Your Audience. Know What You’re Selling.
“People feel like they have to go out and just learn a whole bunch of skills and acquire a whole bunch of knowledge, and it’s the wrong way to go about it,” Sam said. “If you just go out and you start learning – learning what? What are you optimizing for? … Whenever you’re going to learn or whenever you’re going to acquire information and knowledge, you need to have a reason why. You need to have some sort of intent. Then once you have that intent, it’s very easy to acquire the knowledge.”
If you don’t know what your end customer wants, then how do you know what skills and knowledge you need to acquire? You don’t, which is why the next step is to go out into the market and find real problems that need solving.
Sam explains it to his clients this way: “Imagine that there’s a girl called Suzie and she’s sitting on a park bench. You’re siting on a park bench opposite her and you’ve got to guess what Suzie wants for lunch. You have no idea what Suzie wants for lunch. You could sit there and think about it all day. You could read every book there is. You could listen to every podcast. You could read every blog … and you still wouldn’t really know what Suzie wants for lunch… Very simply, Suzie is the market You need to go out to your market.”
If your market is real estate investors, for example, you need to reach out to them and ask them the following question: “What are the most painful problems you face on a day-to-day basis as a real estate investor?” And you don’t stop with asking one investor. Sam said, “One person can be wrong. One person can be an outlier. You need to listen to enough of them. I would say a sample size of about 20 or more. After you’ve talked to 20 people in one specific niche, you’ll start to recognize a pattern and you’ll start to recognize recurring themes between these conversations.”
When have these conversations and are attempting to uncover pain points, it’s important to remain as objective and unbiased as possible. Don’t fall into the confirmation bias trap. “A lot of people, they already know what they want to sell to the market,” Sam said, “so they go there and they’re asking questions to position it just so that they can sell their thing.” You need to remove all of our biases. You cannot have an agenda because you either won’t find a pain point, or you won’t find the biggest pain point.
Step #3 – Structuring the Offer
Now that we know what the market needs, we can structure an offer to fulfill that need. When structuring an offer, Sam uses what he calls a minimum viable offer, which is based on the concept Minimum Viable Product from Eric Ries (The Lean Startup). “[Eric] found in the sales world that people were building these big bloated products that had like a thousand features and they were like rocket ships, and people were sick and tired of all of this crap; they just wanted something lean, and just something that was simple and could do the job. So these new protagonists emerged in the market who were people who focused solely on minimum viable products and made them dead simple, and they were actually able to beat the fancy, complex products. It was a case where simple beats complex. In the consulting world right now it’s gotten complex, so it’s a ripe time to come in with that same strategy.”
Minimum viable offer is the same as minimum viable product, except selling services instead of products. Sam said, “We look at the customer’s problem and we ask the question to ourselves ‘What is the least amount of work I can do to get that person what they want?’ … I’m just trying to offer the least possible because that means it’s easier for me to deliver. It mean’s it’s simpler for the client. It’s more simple to communicate and it’s a lot easier to do.”
Your answer to that question is your starting point. Then, you go out to the market, sign up customers, and begin working with them, at which point they will either get the result they want or they won’t. Then, you go back to your original answer and determine what you can improve, where you went wrong, what you should do more of, and what you should do less of. Now you have a new starting point, so you go back to the market and start the process over again. Sam said, “It’s just an iterative process, each time coming closer and closer to the perfect offer.”
Step #4 – Pricing the Offer
When determining how much to charge for your offer, Sam recommends pricing it at around 10% of the value. “These days, it’s all about value,” he said. “You really have to determine what is it worth for this person to have their problem fixed.”
Here is an example Sam provided for how to price an offering:
“Let’s say we’re in real estate investing and this guy has a bad deal; it’s bleeding him out like $2000 per month. If he doesn’t fix that, it’s going to cost him $2000 per month for some horizon of months. You could assume maybe six months – it would cost him $12,000. Then if we would have priced our offer, if we thought we could save him from that deal, we could say ‘Okay, the value would be $12,000 for him,’ and to make it a blockbuster deal, we want to price on 10% of value. If he’s going to save $12,000 if we charged him $1,200 for that, then it’s a no-brainer, right? That way you’re going have an awesome offer.”
In this example, we could technically charge $10,000 or more, but by offering your services at 10%, Sam said, “You don’t even need to market. You don’t need webinars. You don’t need all this crazy copywriting, which all these copywriters do and put highlighter and countdown timers everywhere. It’s just a bloody good offer and people talk about it.”
Step #5 – Learn the Skills and Knowledge
Once you know what the market needs, you now know what skills and knowledge to acquire.
Sam said, “Learning things is very easy. Knowing what things to learn is the hard part. That’s how we figure out what to learn. We optimize off the market. We go speak to the market, find out what Suzie wants for lunch, figure out a solution to give Suzie what she wants, and then acquire all the knowledge and information necessary in order to fulfill Suzie’s want.”
A great way to build up a nest egg to use for real estate investing is to start a consulting program. Building a consulting program is a five-step process:
Select a specific, narrow niche
Know your audience to know what to offer
Structure your offer using the minimum viable offer concept
Price your offer at 10% of value
Obtain the skills and knowledge needed
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There’s rich, and then there is super-rich. If you are rich, you stay in the nicest hotels, eat at the fanciest restaurants, and drive the trendiest cars. The super-rich own those things. If you’re wondering how to get rich by investing, there are seven key principles to follow.
John Bowen, who founded four multi-million dollar businesses, authored more than 15 books, and is a regular columnist at HuffPo and Financial Planning, is a leading expert on extreme wealth, which he defines as a net worth of $500 million or more.
These are not your everyday entrepreneurs. In fact, according to the Credit Suisse 2016 wealth report, there are less than 2,500 US citizens with a net worth of $500 million or more. With an estimated population of 322.8 million, less than 0.0008% of the population meet the requirement for the “super-rich” designation.
Obviously, these are great individuals to look to if you’re attempting to learn how to get rich by investing in and/or creating successful companies. So, John recently conducted a study of elite business owners with the purpose of identifying exactly how they were able to achieve such high levels of success. Upon analyzing the results, he found seven principles that were common between these super-rich individuals. In our recent conversation, John outlined these seven principles of the super-rich. Adhere to them and maybe, just maybe, you will join the ranks of the top 0.0008%!
1 – Commitment to Extreme Wealth
The first principle was an expressed commitment to extreme wealth.
Extremely wealthy individuals share a similar mindset. They consciously decide extreme wealth is what they want to pursue. At the same time, they’re also willfully committing to the amount of work and effort required to attain the millionaire and billionaire status.They understand how to get rich by investing their time, not just their money.
What it is not is a commitment to an abstract goal. It’s a commitment to a defined number. “What’s your number? That’s what you’re asking,” John said. “Commit to extreme wealth – just determine whatever that means to you. For some people, it’s a million dollars. For some people, it’s a billion. It’s anywhere in between.”
The super-rich knew exactly what they wanted- which varies from person to person- had at least a working knowledge of how to get rich by investing, and consciously decided it’s what they would pursue. Then, they engaged in enlightened self-interest.
Here’s how John explained enlightened self-interest: “What you want to do is you want to determine your counterparty – whoever you’re going to do the deal with, [who] you’re negotiating with, [and who] you’re partnering with. What is their criterion for success, too? And then you’re going to find that and leverage it to use it.”
Business isn’t done in a vacuum, and people who know anything about how to get rich by investing realize it is extremely difficult to become super wealthy on your own merits and work. You’ll need to work with others. And it shouldn’t be just anyone.
When the super-rich are going to do a deal with someone, John says, “I’m the first to make sure that whatever I’m doing is going to be aligned for my success criteria. Then, I’m going to try and gain a better understanding of what [they] want to accomplish. Can I help [them] advance what [they] want to achieve, and will that move me toward my success? Then I’m going to go ahead and negotiate in good faith to have that happen.”
This isn’t a lesson on how to get rich by investing or making deals with selfish self-interest, but enlightened self-interest. John says, “You never want to burn the counterparty, whoever you’re working with, because we’re in it for the rest of our lives. You want to make silence, and one of the things you’ll find about billionaires is they’re silent a lot. They’re letting you do a lot of the conversation, and one of the biggest risks of all is so many people negotiate with themselves. They’re going through all these mind games. What we want to do is hear from the counterparty how we can help.”
To earn extreme wealth, you want the “I’ll scratch your back, and you’ll scratch mine,” reciprocal relationship, not “I’m going to exploit this person to achieve my goals and then throw them to the wayside once I’ve done so.” The latter, which may seemingly work in the short-term, is a recipe for disaster in the long run.
3 – Put Yourself in a Line of Money
Principle number three of how to get rich by investing in real estate or business is: the super-rich put themselves in a line of money. “[For] people with $25 million or more of financial assets, 9 out of 10 made it being an entrepreneur (business owner),” John said, which includes real estate.
“If you’re going to be successful, you want to be successful on purpose,” John said. “If you’re going to do a nine to five job and you’re going to do it well, you can have a great life, but you’re not going to become extremely wealthy. You’re not in the line of money. Unless you have an equity ownership, you’re not in the line of money.”
If you are loyal Best Ever listener, you are either already a real estate investor or are in the process of becoming one and learning how to get rich by investing, so you should already have this principle covered.
A common stereotype of the wealthy is that they are cheap with their employees and/or business partners. However, according to John’s study, this isn’t the case. The super-rich are “very deliberate on who they hire,” John said. “They work with the top talent, and they make sure they’re taken care of.”
The super-rich who have become experts at how to get rich by investing are extremely well connected. They focus on deliberately forming relationships that create value, result in economic gain, and are always win-win scenarios.
Someone in a super-rich network, John said, is “somebody that I can get on the phone, and we can have a conversation and create value together in our collective, enlightened self-interest, and we’re going to maintain that relationship over time.”
More than likely, this is not your best friend, family, or college network. These are the business people that can help you reach your extreme wealth goal while you’re going to do it for them as well.
Another characteristic of the super-rich is their acknowledgment, acceptance, and recovery of failures. They don’t fail and go sulk in a corner. They fail, determine the root cause, analyze their mistakes, refocus, and try again.
Even more importantly, they are confident enough to test different strategies without fear of failing. They seek out failure as a natural part of learning how best to get rich by investing.
John says, “The nice thing in today’s world [is] the cost of testing anything has gone way down, whether you’re creating products, the ability to 3D print, whether you’re doing it electronically, the Internet, buying a few ads digitally. It’s very low cost.”
“Good business people always mitigate risk – we’re not big risk takers. But what we want to do when we fail, we want to fail quickly, and then [ask] how do we avoid making the same mistake repeatedly? And more importantly, doing an autopsy so we can see ‘Is there some value here that we can capture and tweak it, refine it, [and] refocus it to create value?’”
The key takeaways for this principle are having fearless approach, and, when testing something, if you’re going to fail, fail quickly!
The final principle may seem redundant, but that is because it’s the most important principle when you’re learning how to get rich by investing. The super-rich didn’t just make the initial commitment to extreme wealth and then forgot about it. It is always top of mind and something they continuously focus on.
John said, “It’s always keeping number one in place. One of the things I like to do is to take a look, from the standpoint of ‘Where are you spending your time, your money and your energy?’ because really time isn’t an [infinite] resource, its energy. [So] take your calendar … and look at it for a week. We can really get caught up in going ahead and thinking because we’re so busy, we’re doing well; what I find over and over again (and it’s one that I struggle with, too; and many business owners and entrepreneurs do) is it’s so easy to lose track of what’s working and get defused… And as we get defused, boy, we’re in trouble. So it’s focus, focus, FOCUS.”
Whether it’s daily affirmations, a vision board, or getting your number tattooed on your face, you must constantly remind yourself of your commitment to extreme wealth and to spend your limited time and resources accordingly.
Based on a study of the super-rich, who are entrepreneurs with a net worth over $500 million and experts at knowing how to get rich by investing, there are seven common principles they all follow:
Commitment to Extreme Wealth
In the Line of Money
Pay Everyone Involved
Networking like a Machine
Failure to Refine and Refocus
Stay Focused on Extreme Wealth
I hope to see you in the Forbes millionaire or billionaire list one day!
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Are you a newbie or a seasoned investor who wants to take their real estate investing to the next level? The 10-Week Apartment Syndication Mastery Program is for you. Joe Fairless and Trevor McGregor are ready to pull back the curtain to show you how to get into the game of apartment syndication. Click here to learn how to get started today.
Chris Clothier, who is a Partner for a group of passive investment companies that specializes in purchasing, renovating, leasing, and managing passive portfolios for single-family property investors, which manages just over $400 million in real estate assets, is one of many speakers who will be presenting at the 1st annual Best Real Estate Investing Advice Ever Conference in Denver, CO February 24th to 25th.
What was Chris’s advice? When screening potential business partners, including brokers, agents, property management companies, etc., never take anything on faith.
Faith =/= Success
Chris has been an entrepreneur all of his life. He and his family have founded a combined nine different companies. Each of the nine has achieved over $10 million in annual revenue. Of those nine, three has reached over $50 million in revenue and one company, which is his current endeavor, has over $100 million in annual revenue. The point is, Chris has accomplished, experienced, and seen a lot in the business realm, which makes his Best Ever advice that much more powerful.
From being involved in nine multi-million dollar businesses, Chris described his Best Ever Advice: “Before you do business with somebody, I tell investors all the time [to] take nothing on faith.”
“Make sure that you check, double check, and do your due diligence,” Chris continued, “even as you begin to get to know someone. Don’t take anything on faith. That’s when investors get hurt.”
This advice applies to newer investors, as well as experience investors who already have a standard of excellence that has brought them their success. “Always make sure that the standard you’ve come to expect remains the standard you receive. Never, ever begin to take anything on faith.”
What are some tactical ways for investors to check, double check, and perform due diligence on potential business partners? It’s quite simple actually. Chris said, “Number one … Ask them!”
“If you’re going to do business with somebody, … they have a certain level of experience, and they’ve been around for the last 8 to 10 to 12 years, ask them [two questions]: ‘What’s the biggest mistake they’ve made in real estate?’ ‘What are they doing to keep you from making that same mistake.’”
Chris finds that there are three typical responses to these questions, which will allow you to qualify or disqualify them from working with you.
No Answer: “What you’ll find is that if they can’t answer the question, they’re not trustworthy in my opinion.”
Vague: “If the answer they give is very meaningless, it’s not a mistake, [and/or] it’s something small and harmless, they’re probably trying to hide something from you or they just don’t have the experience level that matches what they say they have.”
Honest: “If they get brutally honest, they lay it out there, and they tell you that ‘this is the mistake I’ve made,’ ‘this is where I’ve been,’ and ‘this is how you avoid it,’ you’ve probably found somebody pretty good.”
If you receive a response like 1, no answer, or 2, vague response, RUN! However, if they provide a brutally honest answer, as well an explanation of how to avoid the mistake in the future, Chris says, “[That’s] somebody worth investigating a little deeper and [somebody to] go a little more in-depth with.”
Chris’s Best Ever advice is to never take anything on faith when screening for potential business partners. This is one of the main reasons why investors fail.
To accomplish this, Chris recommends that you always ask two questions: (1) What’s the biggest mistake you’ve made? and (2) What will you do to avoid making that mistake again.
There are three standard responses you’ll receive: (1) no answer, (2) a vague response, or (3) a brutally response. The only person you should pursue further is the individual who provides the brutally honest response, while avoiding all others!
Want to learn more about screening potential business partners, as well as information on a wide range of other real estate niches? Attend the 1st Annual Best Ever Conference February 24-25 in Denver, CO. It’s the only real estate investing conference whose content and speakers are curated based on the expressed needs of the audience. Visit www.besteverconference.com to learn more!
Kevin Amolsch, who has spent more than 14 years as a real estate investor and 10 years in real estate lending, closing on over 1,100 transactions as a buyer, seller, and lender, is one of many speakers who will be presenting at the 1st annual Best Real Estate Investing Advice Ever Conference in Denver, CO February 24th to 25th.
I interviewed Kevin on my podcast mid last year and he provided his Best Ever advice, which is a sneak preview of the information he will be presenting at the conference.
What is Kevin’s Best Ever advice and the secret to his success? It’s simply and straightforward: Move at a steady pace.
Let’s unpack this advice and address the two important points: move and steady pace.
Kevin believes move is the most important word in this statement. He finds that many newer investors get caught up in the education trap. They read book after book, blog after blog, and attend seminar after seminar, but they never actually take any action in the real world. While education is essential for an investor’s foundation of knowledge, you don’t need to know everything before you start moving, taking action, and doing deals. Instead of waiting until you know everything (which is never going to happen anyways), Kevin advises newer investors to attempt to implement what they learn along the way. No matter how much education you get, you are going to make mistakes, so as mistakes occur, simply correct them, learn from them, and then keep on moving forward. In other words, it is an iterative process.
Now the question is, how fast or slow should I be moving?
The second part Kevin’s advice is to make sure that you are moving at a steady pace. When 2007 rolled around, Kevin had mastered the move portion of advice. However, instead of moving at a steady pace, he was struck with the “Ready, Fire, Aim Syndrome.” “Ready, Fire, Aim Syndrome” is when you just go after it, guns a blazing, at an extremely quick pace. While this is great if you are an Olympic sprinter trying to shatter the 100-meter world record, it is not advantageous for a real estate investor that is in it for the long haul.
Adopting this “Ready, Fire, Aim” mentality early in his career really hurt him.
What are the consequences of not following this advice?
Kevin had quickly amassed a portfolio of 35 properties. He was well on his way to accomplishing his goal, which was to create a huge real estate empire… Or so it seemed. The goals and milestones he set for himself were:
How many homes he was going to purchase in a month
How many of those houses was he going to keep
How many was he going to sell
This may be the way you are setting your real estate goals as well, so you may not see it as a problem. Kevin soon learned how ridiculous and dangerous these types of “means to an end” goals could be.
If your goals are based strictly on the number of transactions you complete, you will ultimately end up doing bad deals in order to get to your goal. And if the market were to take a tumble, like it did in 2007, and you are stuck with a bunch of bad properties that are highly leveraged, you are going to be in trouble.
This is the exact situation that Kevin faced. He had a portfolio of properties that were not that great AND were purchased with no money down loans. Once interest rates started creeping up and rents started going down, which is the signal to sell and start unloading properties, he couldn’t because he was so over-leveraged. As a result, he ended up losing a couple properties and had a really stressful couple of years.
The main lesson Kevin learned from this situation is to avoid the “Ready, Aim, Fire Syndrome” by moving slowly, instead of full speed ahead, so that you mitigate the chance of getting in over your head, and potentially losing everything you’ve taken the time, effort and money to build.
Want to learn other real estate professional success habits, as well as a wide range of other real estate niches? Attend the 1st Annual Best Ever Conference February 24-25 in Denver, CO. It’s the only real estate investing conference whose content and speakers are curated based on the expressed needs of the audience. Visit www.besteverconference.com to learn more!
“What would you attempt to do if you know you could not fail?” – Robert Schuller
Kevin Bupp, a Florida-based real estate investor, top iTunes podcast host and serial entrepreneur with over $40 million in real estate transactions, is one of many speakers who will be presenting at the 1st annual Best Real Estate Investing Advice Ever Conference in Denver, CO February 24th to 25th.
I interviewed Kevin on my podcast a few years ago and he provided his Best Ever advice, which is a sneak peak of the information he will be presenting at the conference. This advice includes:
How to use partnerships to quickly scale your business
Lessons learned from losing everything during the financial crash
When Kevin was 19 years old, he was introduced to real estate investing by a local investor, David, who he met through a mutual acquaintance. David told him what he was doing in real estate, how he spent his spare time, and provided an overall sense of the lifestyle he lived as a full-time investor. Kevin was very intrigued.
As a result of Kevin’s interest in investing, David invited him to attend a 3-day real estate seminar in Philadelphia. David had already purchased two tickets, but his business partner couldn’t attend, so the timing could not have been more perfect! At the seminar, Kevin was able to network with new and experienced investors and also learned how to invest in single-family residences as a wholesaler and fix-and-flipper. After leaving the seminar, Kevin was pumped up and excited about the prospect of taking the knowledge he had gained, and using it to get out in the real estate market to make some money.
Learning Through Mentorship
The first item on Kevin’s agenda post-seminar was to focus on how to do his first deal, so he reached out to David for advice. Since David had previous experience investing in real estate, he decided to take Kevin under his wing. David wanted Kevin to learn the ins and outs of real estate investing before spending any money so he didn’t make any (or as many) mistakes. Kevin literally followed David around for a year, gaining first hand knowledge on what life was like for a full-time real estate investor. Kevin went to his home office every day, and watched what David did, listened to him talk on the phone, went to see properties, and looked at some of the apartments that David owned.
After a year, Kevin decided it was time to pull the trigger and purchase his first property. He found an old, dilapidated property in Harrisburg, PA, purchased it for $26,000 and put in an additional $10,000 in renovations. Kevin funded the project with private money he raised from one of David’s investors. He sold the property for $59,000, making a profit of $5,000, which was about as much money he was making in a year working in his current job.
Advice in Action #1: Not only did Kevin learn the ins and outs of real estate investing from his mentor, but he was also able to raise $36,000 in private money from one of his mentor’s investors. Gaining knowledge is not the only benefit from having a mentor. If they are active in the market, they will also have a network of other real estate professionals they can send your way. Commit to finding or hiring some sort of mentor and you will benefit in a many of ways.
Scaling Quickly By Starting a Business and Partnering Up
Kevin continued doing fix-and-flips as well as a few wholesale deals on the side while finishing up the last two years of community college in Pennsylvania. Upon graduation, he decided to try his luck in a new market, so he quit his job and moved down to Florida. As soon as he arrived, Kevin started pounding the pavement and got involved in two real estate investing clubs. Through these efforts, he found the good areas of town, determined what he wanted to focus on, and discovered the best way to make money in this new market. It took about 8 months of research and networking before Kevin found his first fix-and-flip deal.
By continuing to fix-and-flip and network, Kevin became familiar with who the active movers and shakers in the market were and what types of investment strategies they were using. Through these experiences, he was able to form two partnerships, both of which allowed him to quickly scale his real estate business.
Partnership #1 – Mortgage Brokerage Firm
One year after making the move to Florida, Kevin partnered up with an entrepreneur who owned a mortgage brokerage firm that already employed 12 full-time loan officers. Together, they originated millions of dollars in loans each month, primarily within the sub-prime niche, and sent out 100,000 pieces of direct mail every month.
Partnership #2 – Investment Group
Kevin had also built a relationship with an experienced investment group in Sarasota. He knew this investment group because he had wholesaled and bought some deals from them in the past. Kevin and this group decided to put their brains together and ended up combining their efforts and partnering up. When Kevin initially met this group, they were doing 10 to 15 deals a month. After the partnership was formed, they were buying 20 properties a month. Their main strategy was long-term buy-and-hold rentals, with the majority of the homes being SFRs, along with a few smaller multifamily properties. By 2007, the partnership had a combined portfolio of 500 SFR rentals. Kevin was not a full partner because this investment group already owned a number of SFRs before he joined, but he was still able to amass a personal portfolio of 100 properties.
Advice in Action #2: Both Kevin and this investment group benefited from partnering up. For Kevin, he was able to scale his business to 100 properties, and the investment group was able to purchase an additional five to ten properties each month. It is extremely difficult to quickly scale a real estate business all alone, so if you plan on building a real estate empire, partnering up with another investor or real estate group is very advantageous. However, make sure that you perform your due diligence up-front, because choosing the wrong partner or entering a partnership at the wrong time can get you into a lot of trouble.
The Effects of The Financial Crisis
Up to this point, everything was going great. Kevin had two successful partnerships and was making a ton of money, but when the market crashed in 2007-08, it started to go downhill fast. First, Kevin sold off his ownership in the mortgage company. This was before the crash was at full force so everything was going okay, but he sold his stake to his partner, who ended up going out of business a year later. Kevin’s other partnership was the one that affected him the most.
Leading up to the crash, Kevin and the investment group wanted to mitigate their risk, so they committed to purchase SFR rental properties for no more than 65% of market value. When the financial crisis occurred, not only did property values plummet, but the rental market crashed as well. Homebuilders who had built brand new homes were unable to sell, so they were forced to hold on to them and rent them out. Unfortunately, these brand new properties were renting for the same price as the 20 to 30 year old homes Kevin and the investment group owned. As a result, they ended up giving 90% of their properties back to the banks.
One would think that someone purchasing properties at 65% of the market value would be able to sustain a crash. However, due to four main factors, this was not the case:
The taxes and insurance rates are much higher in Florida compared to the relatively low rates found in the Midwest.
Kevin and the investment group had 500 properties, mostly SFRs, spread across 7 different counties that stretched 200 miles north to south, so they had a large property management company with a lot of inefficiencies.
Many of the markets in Florida had economies revolving around real estate. Once the market crashed, construction workers, real estate agents, and other real estate related employees lost their jobs and their source of income. Kevin and the investment firm were losing tenants and people were leaving Florida faster than they were coming in.
Property values decreased more than 50%, and in some areas, as much as 65%. Properties they purchased at 65% ARV for $60,000 were selling for $35,000 in 2010.
The typical home Kevin and the investment group purchased was a 3 bedroom, 1.5 or 2 baths SFR that would cash flow $150 to $200 a month. Even though they were never paying more than 65% ARV plus repairs, after accounting for the four factors above, there was a very small margin to make a profit. A cash flow of $200 per month ($2400 per year) is very easy to lose, if there is turnover. If anything happens, even something as minor as a tenant tearing up the carpet, the repair expense alone would eliminate any profit expected for that year.
Advice in Action #3: Take a look at the four main factors that resulted in Kevin losing 90% of his portfolio and see if any of these apply to your real estate business:
Are you investing in an area with higher than average taxes and insurance rates?
Is your portfolio spread across a large region?
Do you know who the main employers are in your market? Does your market have a few large industries or is there a diverse spread of different industries?
When the market crashed, how much did the property values in your market drop?
If you find that one or more of these factors apply to your business, what can you do to mitigate these risks moving forward?
Looking back, Kevin believes experiencing the market crash was a good thing, although he didn’t know this at the time. After giving back 90% of his properties, he spent the next few years licking his wounds. He was stuck in a funk and didn’t see the light at the end of the tunnel. Eventually, Kevin took a step back, re-evaluated his life, and instead of being negative and saying “poor me,” he decided to put his focus on something else until he was ready to get back into real estate. As a result, Kevin started a few other businesses, a sports apparel company and a printing company, both of which are still running to this day.
Lessons Learned From Losing Everything
As time passed, Kevin began reflecting on his experience of going through the real estate crash and losing everything. He realized he had learned a lot about himself and about real estate investing in general, and figured out what he could have done differently. The answer: investing in cash flow rich properties. Looking back, Kevin wishes he had focused more on multifamily properties and learned many lessons, including:
Invest in multiple larger properties that are closer together. This will spread out your risk and eliminate the inefficiencies of a large property management company. The amount of time and effort it takes to purchase 150 SFRs is also much higher compared to purchasing one 150-unit building with the same type of returns.
Out of the 90% of the properties he gave back to the bank, not a single one was a multifamily property. They all survived the crash.
Don’t get stuck in your comfort zone. Kevin continued to purchase SFRs because that is what he knew, instead of getting out of his comfort zone and pursuing multifamily investing.
Don’t focus on appreciation. Kevin calls appreciation “funny money.” It is not spendable unless you sell it at the right time. Don’t buy based of the expectation that the market will continue to increase indefinitely, year over year.
Understand your investment criteria before deciding to purchase. Figure out the return on investment you want and commit to only purchasing properties that meet your criteria.
Don’t overleverage. Kevin and the investment group would wait until they had 10 to 15 homes. Then they would take a commercial line of credit, pull the money out, and purchase more properties. When the market crashed, they were unable to obtain lines of credit, so everything fell apart.
Advice in Action #4: The main takeaway is to focus on cash flow. If you are buying for cash flow, you are getting an asset that will continue paying you month after month, no matter what happens with appreciation. Buy for cash flow and have the appreciation be the icing on the cake.
Want to learn more on buy-and-hold investing and a wide range of other real estate niches? Attend the 1st Annual Best Ever Conference February 24-25 in Denver, CO. It’s the only real estate investing conference whose content and speakers are curated based on the expressed needs of the audience. Visit www.besteverconference.com to learn more!
Tony Robbins says, “Success leaves clues.” While there is a common thread running between successes, the same logic applies for failures as well. Trevor McGregor, who is a master coach with the Tony Robbins group, has over 10,000 hours of experience coaching real estate investors, so he is very familiar with both the common investor roadblocks, as well as the tools to overcome them. In our recent conversation, he provided the 5 reasons why investors are not scaling their businesses and the 5 keys to reversing their fate and pushing to the next level.
5 Reasons You Are Not Scaling Your Business
Lack of Clarity – You don’t know who you are or where you want to go. You don’t know what you want and you don’t have a blueprint, recipe, or roadmap that can take you from where you are to where you want to be. You haven’t sat down and, with the end in mind, reverse engineered how to achieve your goal. Therefore, there is a lack of clarity in terms of the what (i.e. goal), as well as the how (i.e. the steps).
To be successful in anything, you have to do the right things, in the right order, and at the right time. It is like building a skyscraper. You cannot feasibly build floor 5 without first building floor 4. You also can’t successfully build a skyscraper if you don’t know why you want to build it. Similarly, in real estate investing, you must get clear on what you want and why you want it.
Fear and Disempowering Stories – Many investors have disempowering stories that are continuously repeated in their minds about why they can’t move forward and buy that next property, or hire a property manager, or find that next investor. They always focus on what is wrong. What’s wrong is always available, but they forget that so is what’s right.
If you can’t deal with the doubt, fear, and anxiety and take action in spite of it, you won’t be able to grow your business.
Lack of Consistent and Persistent Action – You don’t understand nor appreciate the importance of getting out there, analyzing deals, running the numbers and making offers. As a result, you are cheating yourself out of learning and putting yourself in the position to conquer what you set out to do. While there are times when you need to be patient, if you aren’t putting one foot in front of the other on a daily basis, you aren’t going to get to where you want to go.!
Lack of Leverage – For a lot of people, they don’t have enough big, fat, compelling reasons why they want to be a real estate investor in the first place, or what it will give them, or how it will impact their lives, their families lives, investors lives, and everyone around them. If you aren’t finding leverage or a purpose behind what you are doing, it leads to an interest, but a lack of commitment to go out there and make it happen, which based on Trevor’s experience, isn’t enough.
Lack of Accountability – You don’t have somebody holding your feet to the fire to make you follow through with what you say you are going to do. So often times, you follow the path of least resistance and cheat yourself out of what could have been.
Advice in Action – Take a look at these 5 reasons and be honest and clear with yourself on which of those are holding you back. If you can get past those, you can start to move in the direction that you really want!
The 5 Keys to Push to the Next Level
Now that we know what not to do, the next question is, “what should we do in order to conquer every day in pursuit of building an amazing real estate portfolio?” Before getting into the 5 keys to push to the next level, it is important to understand that it is never a matter of resources, but rather, it is a matter of resourcefulness. In other words, it is about YOU.
If it was just about resources, everyone would be a successfully investor. The resources are available to all of us, so it is about your ability to take action and use that information to scale and grow your business. The person that isn’t resourceful is full of “should” statements, while the resourceful person is full of “must” statements. Therefore, the following are the 5 keys that you must follow to push your business to the next level.
Feed and strengthen your mind for 30 minutes a day – We all have 30 minutes a day to listen to podcasts, read a book, go to a seminar, etc. According to Trevor, this will start to get your neurons firing like a successful investor. So, you want to feed and strengthen your mind for a minimum of 30 minutes a day.
Get the clarity you need – Grab a pen and paper, sit down, get quiet for a minute, and let your mind get clear on what it is that you truly want. If you don’t know what you want, start going to networking events, listen to more podcasts, and read some books. Do whatever you need to do. When you are resourceful, there is always a resource that will help you get clarity on what you want.
Create leverage – What is your why? What is your big, fat, compelling reason that is your MUST? This is the rocket fuel that keeps you going when times get tough. As you create this vision of who you want to be and what you want to manifest, get absolutely clear on your why.
Get yourself an accountability partner – Pick an accountability partner that is excelling in whatever it is that you want to do.
Take massive action – Absolutely nothing happens in real estate unless you are out there taking action and making it happen.
Trevor’s final piece of advice: “All growth occurs outside of your comfort zone.” If any of this feels uncomfortable, that is probably a sign that you need to stop, reflect on it, get honest with yourself, and start doing some of the things that you MUST do to take your business, and life, to the next level.
Comment below: Which of the 5 roadblocks are you currently facing in your business, and which of the 5 keys to you need to apply in order to overcome them?
Over the past four years, I have learned a lot. Four years ago, I owned 3 single-family homes. Flash-forward to the present, I control over $400 million in apartment communities. While it would take much longer than a quick blog post to explain, in extreme detail, how I was able to accomplish this growth, the following is a 3-step, high-level approach that ANY investor can follow in order to replicate my success.
Step 1 – Get Your Hands Dirty
On my first multifamily deal, a 168-unit, I assumed all responsibilities. I did everything, which included raising the capital from private investors, managing the property management company (i.e. ongoing asset management), performing the due diligence and underwriting, securing the financing from the lender, and essentially putting together all the pieces that make for a successful deal.
One benefit of starting off by getting your hands dirty and doing everything yourself is that it forces you to confront, and ultimately conquer, your fears and limiting beliefs about real estate investing. If you had any doubts in your mind that you weren’t capable of raising money, finding a good deal, communicating with different lenders, brokers, property management companies, etc., upon closing the deal, those will all be demolished. If you can just push yourself to do it once, you will gain the confidence to do it again and again.
Another benefit is the hands on, real world education. While reading books and listening to podcasts, for example, are amazing educational tools, there is nothing quite like tactile, kinesthetic learning. You will be fully immersed in multiple facets of real estate, which will be of great importance moving into step 2.
Step 2 – Identify What You Are Really Good At
By getting yours hands dirty during your first investment, you will understand, first hand, what it takes to successfully, or unsuccessfully, complete the different aspects of closing and managing a deal. In doing so, you will understand which aspects you like and dislike, and more importantly, what you are good and no so good at.
Personally, I believe that we all have special talents and are really good at one thing. I also believe that we are all here with the purpose of applying that “one thing” to improve the world. Therefore, the next thing that I did was determining which “hat” (aspect of real estate) fit me best. For me, it is sales and marketing. As a result, I focus my energies on tasks like my daily podcast, these blog posts, YouTube videos, etc. That “one thing” is what I utilize in order to grow my business by bringing in more private money investors, buying properties together, and sharing in the profits.
Step 3 – Fill In the Blanks with Experts
The final step, after identifying what I was good at, was bringing in team members who could complement my background with their expertise. In other words, I brought on experts who could “fill in the blank” and assume the responsibilities that I discovered, from step 1, that I didn’t like or wasn’t good at. I brought in team members who are phenomenal at underwriting, for example. I am pretty good at underwriting, but I am not extraordinary. Therefore, I brought in experts who have many more years of underwriting experience than what I have. I also brought in great property management, an assistant, and every other team member that I needed in order to run a successful business, while I get to focus solely on sales and marketing.
Once I got my hands dirty, identified what I was really good at, and brought in partners, I was ready to scale my business. As a result, I was able to go from owning three SFR’s to controlling over $400 million worth of real estate in just 4 years. Are you ready to do the same?
COMMENT BELOW: Based on “getting your hands dirty,” hands on experience, what is the one thing that you are REALLY good at? What is the thing/things that you aren’t so good at and need to outsource to other team members?
In my conversation with Peter Vekselman, who completes 5 to 10 deals per week in 6 different markets, he provided the lessons that he learned from losing EVERYTHING and then gaining it all back. His secret was transitioning from a one-dimensional investing approach to a multi-dimensional, consulting business model.
Lessons From Losing Everything and Gaining It Back
Peter’s main lesson learned from losing everything is that real estate is a business of decision-making:
Do I hire this guy or do I hire that guy?
Do I offer this price or do I offer that price?
Do I work with this realtor or do I work with that realtor?
Do I invest in this neighborhood or do I invest in that neighborhood?
The mistake that created Peter’s early struggles was that he was making all of his decisions off the cuff. He didn’t have anyone to run his decisions by. He didn’t have a mentor. He didn’t have anyone that he could go to that was more successful than him. As a result, during his first 6 months, every single decision he made was incorrect. He bought in the wrong areas. He paid the wrong prices. He had the wrong contractors. He hired the wrong realtors. He worked with the wrong lenders. However, once he had made all the incorrect decisions, by default, he now had all the RIGHT answers moving forward.
You must have a basis understanding of what the correct decisions are before you haphazardly get into real estate investing. Peter is a huge proponent of getting out there and taking action. However, you need to have a prior level of expertise so that you don’t make the same mistakes that he did and end up having to start from scratch. We all get our education one way or another. Either by making the wrong choices and learning from our mistakes – which is the hard way – or by getting your education upfront and learning from the mistakes of others. Which method do you prefer? Ultimately, the choice is yours!
One-Dimensional to Multi-Dimensional Consulting Approach
After getting all of his early mistakes out of the way, Peter was able to develop a very efficient marketing program. He was consistently receiving 500 to 600 seller calls every day. However, the problem was that he had a one-dimensional, inefficient approach to negotiating the deals. All of the negotiating was occurring on the phone. With 600 sellers calling in every day, Peter didn’t have the resources to hire 600 reps to meet with 600 sellers in their living rooms face-to-face. On top of that, he was only offering the sellers one option; with that option being the Peter would personally purchase the property.
Now, Peter has transitioned to a multi-dimensional, consulting approach. First, instead of conducting negotiations on the phone, he began utilizing real estate agents that would go inside potential seller’s homes and meet with them face to face. Secondly, Peter began offering the sellers two options: (1) He will buy the property on the spot or (2) He will help them sell he property.
Going into negotiations and saying “I am the best and greatest real estate agent” doesn’t work. Sellers hear that all the time. Also, going in and saying “I am an investor and I want to buy your property for 50 cents on the dollar” doesn’t work. Sellers get scared and turned off by this approach. However, by going in with an all encompassing, consulting approach, saying “we know that we can help you. We have multiple options and you, Mr. Seller, are going to be in charge of those options,” has been a game changer for Peter’s business. His investment business tripled and his retail business, which was virtually nonexistent before, went through the roof. He attributes the entirety of this success to transitioning to the multi-dimensional, consulting approach.
With his new multi-dimensional, consulting approach, Peter has created a win-win scenario for himself and his agents, plus for the sellers.
He is able to cherry pick the best deals, which he will rehab and sell for a profit.
His investment business has tripled
He gets to do what he loves, which is adding value to the lives of his employees and his customers
For His Real Estate Agents
They have a continuous pipeline of prospective sellers to meet with face-to-face due to Peter’s marketing system
They get paid regardless of which option the seller selects. If Peter decides to purchase the property, the agent receives a fix commission within one week. If they list the property for the seller, they receive the regular commission
For the Sellers
The seller wants one thing – to sell the property. They have the ability to make that happen because Peter will either buy it himself or help them sell it
Due to Peter’s consulting approach, the sellers get to meet with the agents face-to-face, instead of a faceless voice on the phone.
How can you add multiple dimensions to your current real estate business model and create a win-win scenario for yourself, you employees, and your customers?
In my conversation with Doug and Andrea Van Soest, who own a rental, fix-and-flip and wholesaling business, they provided their best real estate investing advice ever. Following this advice has enabled them to create a 57 door, $8.5 million rental portfolio and complete over 300 deals. The advice? Follow-up, follow-up, follow-up!
Follow-up, Follow-up, Follow-up!
You can get leads and you can make offers, but if you don’t have a follow-up process for after an initial offer is rejected, then you are missing out on a lot of deals. For Doug and Andrea, they can attribute 30% of their 2015 deals to their extended follow-up process. If you just look at their $8.5 million rental business, which is their second most profitable business behind fix-and-flipping, 30% is $2.55 million! That is a HUGE chunk of their business that might not have been if it wasn’t for their commitment to following up.
The Follow-up Process
If Doug and Andrea make an offer to a potential seller, the seller’s information is inputted into their follow-up system. The seller will stay in their system if:
Their offer is rejected for whatever reason
The seller has not sold the property
Over the next 14 months, as long as the seller still owns the property, they are going to hear from Doug and Andrea 35 times from a combination of the following 4 communication methods:
Direct mail post cards
35 communications multiplied over hundreds of potential sellers is a lot. Doug and Andrea do not have the time or man power to send out that many manual emails, texts, voicemails, or post cards. Therefore, Doug and Andrea have create an automated follow-up system that is a compilation of 4 different software programs:
Podio – main CRM system for customer contact information
Call Loop – automated text messaging and voice mail sending that are sent out on a periodic basis
I was honored to be a guest on the Old Dawg’s REI Network podcast, hosted by Bill Manassero. In this interview I discuss how I grew my real estate business in just three short years to over $28 million. Here are the 3 things you will get from listening to this interview:
How I made the big jump from single family homes to apartment buildings