JF1115: Strategically Partnering So You Can Move Faster With Your Investing with Jeff Cohn and Clint Bartlett
Jeff and Clint knew each other for a long time before deciding to partner up. They have been able to do a lot more deals as a result of their partnership, with one of them being full time with investing, and the other being part time while also running a brokerage. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!
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Jeff Cohn and Clint Bartlett Real Estate Background:
-Founder of Omaha’s Elite Real Estate Group Nebraska’s #1 selling residential team for last 3 years
-Went from 80 to 600 transactions in 5 years
-Creator of Omaha’s Largest Real Estate Mastermind
-50 full-time agents on track to sell over 750 homes in 2017, making it the #1 team at Berkshire Hathaway HomeServices worldwide
-Based in Omaha, Nebraska
-Say hi to them at www.omahaseliterealestategroup.com/
-Best Ever Book: Unbroken and How to Win Friends and Influence People
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Joe Fairless: Best Ever listeners, welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff.
With us today, Jeff Cohn and Clint Bartlett. How are you two doing?
Jeff Cohn: Really good, Joe. Super pumped to be here.
Clint Bartlett: Great, Joe. Thank you.
Joe Fairless: Nice to have you two on the show. A little bit about the gentlemen who we’re talking to. They are with Omaha’s Elite Real Estate Group; it’s Nebraska’s #1 selling residential team for the last three years. Went from 80 transactions to 600 transactions in five years. Based in Omaha, Nebraska. With that being said, do you two wanna give the Best Ever listeners a little bit more about your background and your current focus?
Jeff Cohn: Yeah, absolutely. Our real estate team launched five years ago, this will be our sixth year. We’re on track to do a little over 750 transactions this year, in 2017. My business partner, Clint Bartlett, who’s on the call with us, he and I started a company last year called Dynamic Properties, with the intent to buy rental properties and then also flip and wholesale and wholetail. It’s interesting, a lot of people listening are probably in that world, but for anyone listening that’s not, it’s really challenging working another job and flipping a house at the same time; you might have some people that identify with that.
I knew personally I didn’t wanna have to do the legwork and all the day-to-day management of a flip and/or rental acquisition business, but I knew all the strategies around doing it, I just needed the right person. When Clint Bartlett ended up moving back to Omaha – this is where we grew up and where we met – a couple of years ago, I said to him “Take your full-time job that you’re already doing and help me do a couple flips a year just working nights and weekends, and if we can make good enough money at it, maybe you’ll be at a point where you could quit your full-time job altogether and go all in.” Clint, why don’t you take it from there? Last summer Clint quit his full-time job… Why don’t you share with the listeners what’s happened?
Clint Bartlett: Yeah, one year ago I quit my full-time corporate role here in Omaha. Jeff and I, up to that point in 2014, we did three deals; this was all just part-time. In 2015 we did five deals, then in 2016 half-way through the year I quit my job. We did 14 deals last year, we kept five of those as rentals, and part of our strategy coming into this year was to really keep — about one-third of every deal would be a keeper, we’d hold it as a rental.
2017, year-to-date we’ve done 18 deals and we have kept eight of those, and this year we’ve also bought a few multifamily, so this year we’re at about 20 doors that we’ve purchased as rentals.
Joe Fairless: Is this in Omaha or all of Nebraska?
Clint Bartlett: This is the Greater Omaha Metro Area. We have a couple of properties that are a little outside of the Omaha Metro, but generally speaking, yes, Omaha, Nebraska.
Jeff Cohn: The original strategy going into 2017 was Clint as a full-time person; we also have a superintendent that oversees the job sites who’s in a full-time capacity and he has an assistant in a full-time capactiy, so really we have three people full-time, with Clint providing oversight to everything. My role is strategy, and I have a weekly meeting with Clint, and then Clint’s holding his super and his super’s assistant accountable.
Where Clint and I found some great synergy is the fact that I have a real estate team of 30 agents who have been selling real estate for a very long time and being very effective at that. Up until 2017 the majority of my agents focused on three lead buckets – one is their sphere of influence, two is outbound prospecting and three is internet leads… But I had a few key people that I thought would work better with rental acquisition leads rather than internet leads, so they converted a third of their residential sales to rental acquisition. So we now have three full-time rental acquisitionists – two in Omaha, one in Lincoln, Nebraska – that we’re sending all the rental opportunities to.
Where the synergy really comes into play, 1) they know how to evaluate all the properties because they’ve been selling houses for a long time, but 2) every appointment they go on, if there’s not a fit from a flipping standpoint or rental acquisition standpoint, they can just simply list the house traditionally and then our investment company can charge them a 50% referral fee.
Joe Fairless: So you’ve evolved the business model and you’ve also incorporated it so that you can gain a competitive advantage and involve more people.
The typical – maybe not typical deal, but just an example of a deal… Can you give us a case study of “Bought it for this much, put in this much, sold it for this much”?
Clint Bartlett: Yes. Our average deal – we’ll buy somewhere between 60k-80k, and it’s usually about anywhere from 15k-25k input in terms of rehab, and then we try to be anywhere from 125k to 175k price point for our ARV. Generally speaking, this year we’re averaging about $25,000 of profit per deal.
We love to buy under the $100,000 price point because, as you know, there’s less square footage, there’s less risk when you have a lower down payment… So when we can, we stay at a lower price point.
Joe Fairless: That’s helpful for the types of deals. Now can you give us a specific example of one deal and just give us the numbers of that particular deal?
Clint Bartlett: Sure, we could even take one of our more recent ones. We bought a house in a decent part of Omaha; we try to focus on areas that are good school districts, where we know they’re gonna have good resell value. We bought a little three-bedroom, one-bath home for $40,000. This was an off-market deal that actually came through our network, through our accountant who knew somebody in the state that they needed to get rid of quickly, and it was distressed, so we took on the project. We just actually sold it yesterday for $125,000, and I think we had to give a few thousand dollars back in closing.
Jeff Cohn: We closed on it yesterday.
Clint Bartlett: We closed yesterday.
Joe Fairless: Congratulations.
Clint Bartlett: Thank you.
Joe Fairless: What did you buy it for and how much did you put into it again?
Clint Bartlett: We bought that one for 40k, we put about 22k into it and sold it for 125k, so that was a good one. That one ups our overall average. I think we’re clear about 45k-50k on that one.
Joe Fairless: What would you attribute the higher than average profit on that deal to?
Clint Bartlett: That’s purchase price. Most investors in Omaha, if you were to go buy that even at the auction at the Courthouse, you’d have to pay 80k for that house, and we were able to just get a great deal because it was off-market and it was a direct buyer to seller transaction.
Jeff Cohn: It was a seller’s life situation. You will attribute low purchases prices every single time to the seller’s life situation. If it’s bank-owned and we’re in a buyer’s market, banks will give their properties away at 50 cents on the dollar. When you’re in a seller’s market, we’re not seeing as much success at the Courthouse; those are usually going really close to market here in Omaha, and what I’ve heard from other investors across the country… So where we’re having the most success right now it’s happening into our sphere of influence, letting everyone know we can buy now in cash in seven days or in 600 days – whatever that works best for the client; we don’t really care if we have to sit around and wait.
But our unique acquisition process right now has been using virtual assistants out of the Philippines to acquire a property. We have about eight full-time callers through 1000callsaday.com that are making all of our outbound calls for us, and then we re-route all of the lead opportunities to our acquisition team in Southern California, Lincoln, Nebraska and Omaha, Nebraska, and then we have those agents going out. That’s how we’ve acquired probably 80% or 90% of our properties so far this year.
Joe Fairless: Thanks for mentioning that… Let’s dig in there. Walk us through the process for how that works.
Jeff Cohn: 1000callsaday.com – you essentially reach out to them. There’s a link on the site and you let them know you want a caller. It takes about 30 days to get the caller onboarded, and then they get the data through several different sources; one of which we used is ExactData. They have predictable analytics that go through 100-150 different quadrants to determine who’s most likely to sell below market value. We bought a list from them of 50,000 people for around $3,000.
Then we take that list and we break it off into segments and we give each caller around 2,000 phone numbers a month, and the expectation is that they call through every single phone number a total of 10 times in a 30-day period. Once they’ve called through someone 10 times with no one answering, they move that person off the list and they add someone new to the list. The list is always revolving.
What we’ve found is in one month 22,000 outbound calls through 1,000 calls/day gets us about a 10% connect ratio with the decision-maker. When we have about 2,200 people that are answering the phone, out of 2,200 people we have six people (six!) that say “Yeah, we’d sell our property”, and out of those six, the acquisitionists on average have only thought about half of them are worth our time to even go out to the property to do a video and to run all the comps and really make a determination as to if we wanna make an offer.
We always make offers if we go to a house; every property should be purchased 99% of the time… So out of the three deals that we go to and we make offers on, we’ve been averaging one acquisition a month.
Breaking it all the way from 22,000 calls to 2,200 contacts to six people saying they wanna sell, to three people letting us in their door that we actually were interested in, to making three lowball offers — it’s usually 70% ARV?
Clint Bartlett: In between 50% and 70%.
Jeff Cohn: And then one of those takes the offer, it still ends up only being — $1,800 is the cost of the caller, so we’re spending $1,800 to get a deal that on average we’ve been netting about $20,000 per transaction, which is a 10x return on our overall acquisition strategy.
Joe Fairless: You mentioned that it takes about 30 days to get the caller up to speed… What’s that training process look like?
Jeff Cohn: So this isn’t just me pitching this third-party company; I’m one of the owners in 1000callsaday…
Clint Bartlett: Shameless plug.
Jeff Cohn: Exactly. [laughs]
Joe Fairless: Oh, I got it…
Jeff Cohn: But I actually didn’t use callers for myself through 1000calls just until January of this year and we’ve been around for a couple of years… But we started learning about some of our clients that we’re using this for rental acquisition… Some top guys across the country that I’m not gonna name, because they didn’t give me their permission. So because of a lot of the successes we saw them experiencing I said to Clint “Hey, let’s try this strategy in Omaha and see if it works”, and we’ve been only doing it for about six months. It’s been wildly successful, so we’re gonna just continue to scale out.
But the training process is 1) we get them synced up with our acquisition sales team in the Philippines, and so they’re listening to live calls for 30 days day after day, to learn and listen to the dialogues that the callers are making that are already working for us. Then we’re training them on the CRM we use. In residential real estate a lot of agents use BoomTown; it’s one of the top CRMs. You can use anything – SalesForce, Real Geeks… There’s lots of systems out there, but it’s a place where all of these leads live, so we can have documentation of every phone call, every text message, every e-mail if we have an e-mail address etc.
Then we also have my dialogue coach in Omaha that coaches all of my agents. He does a live stream every Wednesday at 10 o’clock Central through another business I own called Livestream.com… It’s ERSLivestream.com. What that does is it gives us the ability to train the callers the exact same way that we would train our own individual agents, so that they are then empowered with the exact dialogues that my agents would use when engaging with leads.
It’s a pretty robust training process in that 30-day period. Some people come out of it quicker, some people take a little bit longer, but they can be hitting the phone within 30 days.
Joe Fairless: Jeff, it sounds like you’ve got your hands in multiple cookie jars… How do you focus your time and prioritize your time?
Jeff Cohn: I have about 10 businesses and my focus is always on helping people become leaders within all of the different organizations [unintelligible [00:12:22].16] so anything I wanna do I put it on a calendar so I make sure that I do it. The thing that I have passion about is helping people grow within their positions, and then taking on the higher level strategy conversations and decisions. I love the marketing side of all of the different businesses – Facebook advertising, Google ads… I like all the analytics, I like to get into a lot of the numbers…
I use the same CPA for all of my businesses, so she provides me with a monthly P&L statement. I’m always looking at the numbers, because they tell you a lot of information. I guess timeblocking would be the easiest short answer for how you keep everything organized.
Joe Fairless: You’ve got 10 businesses… Which one is the most and which one is the least profitable?
Jeff Cohn: Most profitable is the real estate business; it’s been around the longest. Last year we made 2.6 million dollars gross commission income, and I kept 30% of that. Least profitable would have to be one of the newest ventures. I’d probably pick my insurance business. I started about eight months ago. I own a property and casualty insurance business, and it’s only the least profitable because we’ve just started, and in the insurance business you make your money based on residuals and you have to be around a couple of years to really generate a profit.
Joe Fairless: Have you started a company that you have identified is not a good long-term play so you’ve stopped it?
Jeff Cohn: I’m sure I have… Let me think of it.
Joe Fairless: The reason I ask is you’ve got 10 businesses, so when does one not make sense and how do you identify that?
Jeff Cohn: Great question. Most of the businesses that I started I was able to direct leads to those businesses through the success of Omaha’s Elite… Not all of them. 1000callsaday can grow [unintelligible [00:13:59].22] Omaha’s Elite success; so can our flipping business, so can our rental acquisition business and multifamily acquisition… But a lot of the other businesses are title and escrow – insurance, coaching… The coaching business can live on its own as well, but having a lot of sales in the residential spaces gives us a little bit more credibility when people are thinking of joining us.
One of the biggest fails was actually a test… Everything we do, we believe strongly in failing forward. Last year the big buzz in the residential space was talking about expansion, and I know there’s a lot of investors that wanna move into different markets and expand as well. And we don’t think that it necessarily doesn’t work, we just challenge the idea that — we think if there’s enough opportunity right in your own backyard that maybe is not being tapped the way it needs to be… So last year we said “Hey, let’s try this expansion idea out”, and I started real estate teams in Salt Lake City, Boston Massachusetts, Lincoln, Nebraska and San Diego, California, and all four of the teams gave me a positive return on investment, none of the teams gave me a positive return on my time. So while it was worth the investment monetarily, it was not worth the investment from time, and had I just put all the energy I had put in all those locations into my team in Omaha, I think we’d be a year or two further along than we’re at right now. We are growing right now, but obviously creating a second location takes a lot of time from you.
So I would say the same thing from an investment standpoint – we are actually expanding around Southern California right now, so it’s a lot easier to hold someone accountable when they have to come to a physical, face-to-face accountability meeting where you can actually drive to the properties that they’re putting offers in on once a month and just kind of check their work, check their numbers, make sure that you think what they’re doing is right. So it’s all about the people if you are gonna expand far, but my worry always with any expansion of any business if it’s not a franchise – that individual with whom you expand with at any point and take all that intellectual property and just simply do your strategy on their own.
Joe Fairless: Based on your experience as real estate investors, what is your best real estate investing advice ever?
Clint Bartlett: I’ll go first. My best real estate advice ever is that your entire real estate investing business hinges on your ability to market for deals. Any investor who tries to do it full-time knows that properties don’t just fall in your lap – you’re not gonna be able to go find them on the MLS – so your ability to understand what marketing is critical and how to do that marketing and then how to capture those leads, your entire business hinges on that. I think a lot of people who are new in the business think that being able to rehab a property, to make it look really nice is the key part, but that is really just an afterthought when you look at the marketing end of any investing business.
Joe Fairless: And just a follow-up question before Jeff gets into his best ever advice… What would you recommend to an investor who has a bit of experience – a couple deals under their belt – but wants to take their marketing for deals to another level?
Clint Bartlett: My best advice would be to listen to some awesome podcast, the Best Ever podcast being an example… But there’s so much free content out there about how to go market on a budget, whether it be bandit signs starting out, or doing a simple mailer… With the age of today, there’s so much content out there that is free, from a google search to a podcast; you can learn a lot.
Joe Fairless: What are the top three lead generators that you’re doing to get your deals?
Clint Bartlett: Jeff talked about our calling process – that is 90% of what we do. This year otherwise it has been our network. We’ve had people within our network bring deals to us that know what we’re doing, because we talk about what we’re doing all the time.
Joe Fairless: Got it – like the accountant and the state sale you mentioned earlier.
Clint Bartlett: Exactly.
Jeff Cohn: Yeah, I have a huge database; I have 60,000 people in my network. We use a company called Viral Marketing and we create a video every single month that gets sent out to all of those individuals. All of the different business entities I own, I can create a message that goes out to my database and lets them know about the value of whatever that business venture that I’m in offers to them.
A lot of people know people in distress, they know homeowners that need to get out of their properties quick, and we want them to think of us as the solution to that problem. The biggest challenge is just getting that messaging out, and obviously, you can do it a lot of different ways, and we feel like the caller way is probably one of our best. Another one that Clint didn’t bring up – we have a few of the top short sale agents in Omaha as agents on my real estate team, so everytime a short sale hits the market, we always go in with an offer, every single time. That’s been another strategy where we picked up a lot of houses last year.
We’re doubling down on the call center, we’ve got a lot of success with that… And we’re not selling anything, so for those out there listening that are worried “You can’t be doing that”, my attorney says there’s no issue because we’re calling to offer them money for their house. So we’re not calling selling them anything, we want them to sell us something. But we don’t call cell phone numbers, we just call land lines, and ExactData can control all that.
So my answer, Joe, in terms of “What’s the best thing someone can do?” first is to just do it – I’ll steal Nike’s slogan. I know so many investors that we’ve met at like REIA, or have reached out to us for lunches, that will ask us for our time and advice, and they’ve never done one deal. I know there’s people listening to this that just haven’t done that first deal. Even if you do the first deal and you lose money, you will have learned more in that first deal than what you’re probably gonna learn in listening to 100 podcasts. No offense to Joe, because he’s a great [unintelligible [00:19:17].23] I’m on probably five podcasts a week, and Joe, you’ve done an awesome job already on this call.
So my number one thing is just go do your first deal, because that’s how you’re gonna learn; it’s the school of hard knocks. And then number two – birds of a feather flock together; surround yourself with the type of people you wanna be like, and as much as you think that the people that are succeeding at the highest level might not be willing to give you the time of day, it’s actually the very opposite. We find the wannabe investors are the ones that think that they have private ideas that they’re not gonna share with other people; it’s the ones that have the abundance mindset, that are sharing on podcasts and giving all their information out for free that are succeeding at a high level and are willing to sit down with you.
Find the person in your market that’s doing really big things and align yourself with them, and that’s the best way to learn and to grow.
Joe Fairless: Are you two ready for the Best Ever Lightning Round?
Jeff Cohn: Go!
Joe Fairless: Alright. First, a quick word from our Best Ever partners.
Joe Fairless: Okay, best ever book you’ve read?
Clint Bartlett: I’ll go first – Unbroken, written by Laura Hillenbrand, about Louis Zamperini World War II experience.
Jeff Cohn: How To Win Friends And Influence People, Dale Carnegie.
Joe Fairless: Best ever deal that you’ve done that you haven’t mentioned already?
Clint Bartlett: We had a wholetail deal that we bought a big old mansion that we intended to rehab. Instead, we just put it on the market in as is condition and made $80,000, so it was a good turn in three months.
Jeff Cohn: And I’ll take to one before we had started Dynamic Properties; about a year and a half ago we got a deal through a friend of a friend for $40,000, and Clint and I were gonna flip and put about $40,000 in and list it for 120k; we were getting ready to go on a family trip to Mexico and I said “Hey, what would happen if we just wholetailed it and put it on the market for a week, take close bids, and we will review all the offers when we get home?” And we sold it for 82k and made 42k, so we didn’t have to go through all the work of fixing it up and got the same net out of it.
Joe Fairless: What’s a mistake you’ve made on a transaction.
Clint Bartlett: We’ve lost money on a deal, Joe; it was only a few thousand dollars. The biggest mistake on that deal was the length of time in the project. It took us way too much time. But that’s not a huge regret of mine; my biggest regret are a couple of deals that I’ve passed on because we were tied up in too many other transactions. Looking back on a couple of deals that I’ve passed on, I now wish that I had either owned those properties as rentals, or I’d flipped them.
Jeff Cohn: We bought a property last year – I was actually the decision-maker on this one, and I don’t go to very many properties. Clint was gonna be out of town, and it was one of the — what was it…? Like a tax sale? An IRS sale. IRS sells a few houses a year in Douglas County… So I went to it, we picked it up for really low below market, like 80k below market, but it had been smoked in excessively; everything was yellow on the ceilings and on the drapes and everything, so Clint researched as much as he could on how to fix the smoking issue, and we did a lot of due diligence to get the smoke out, and we never got the smoke smell out. It still smelled smoky, and it was on the market for about four months and in the end we were like “Screw it!”, we threw our hands in the air and just rented it out.
We’re hoping whoever rented it from us that they take on all the smoke smell when they move out. We’ll see what it’s like when they’re gonna vacate this summer.
Joe Fairless: What’s the best ever way you like to give back?
Clint Bartlett: I’d love to say that I was giving back all the time; I’m a pretty selfish person. But when I do give back, Joe, I think working in the food pantry downtown is one of the best ways to give back, because you’re helping people with the essentials of life, basic necessities.
Jeff Cohn: Clint and I both are involved with the Boy Scouts of America, we’re both Eagle Scouts, so we do a lot within our church… Volunteer work with Boy Scouts, camping and camp out… I serve a lot with kids, youth 12 years old to 18 years old – I spend about an hour a week. But I think the greatest way to give back, it’s like you can give a man a fish or teach him to fish; for me, it’s giving people advice on how to scale their businesses. That’s where my greatest passion is. I have a podcast called The Teambuilding Podcast by Jeff Cohn, and that’s where I give back. It’s my greatest contribution to help people take their lives to a level they never dreamed possible.
Joe Fairless: How can the Best Ever listeners get in touch with you two?
Jeff Cohn: On Facebook you can just search “Jeff Cohn” – that’s how you get in touch with me. Or you can e-mail Jeff@omahaselite.com.
Clint Bartlett: For me it’s Clint@dpomaha.com.
Joe Fairless: Well, thanks for talking about your business models — you’ve got 10 businesses across the board, Jeff, and Clint, thanks for going deep with us on some case studies and acquisition criteria. I love to hear when people are fixing and flipping that they’re setting money aside and pumping that back into long-term rentals. I think that’s a trap that a lot of fix and flippers get into, where they just keep churning and they’re not building a portfolio for a long-term growth and wealth. And then also talking about how you’re getting the leads; granted, there’s some conflict of interest there with that, but I appreciate the disclosure. But really, if it’s working, it’s working; that’s the most important thing.
Then lastly, I love your point about focusing on helping people become leaders; that is a major focus and that’s something that I’m gonna implement in my business too, just reinforce that mentality, so thank you personally for that.
Thanks for being on the show, you two. I hope you have a best ever day, and we’ll talk to you soon!
Clint Bartlett: Awesome, thank you.
Jeff Cohn: Thanks, Joe. Have a good one!