BiggerPockets Real Estate Podcast - 295: Using the Web to Land 8-12 Deals a Month with Melissa Johnson

Episode Date: September 6, 2018

Are you interested in learning how to flip 8-12 houses a month at $30k a pop? Well, this episode may be just what you’ve been looking for! On today’s show, we interview Melissa Johnson—house flipper extraordinaire and owner of the company Lead Propeller, a service that provides websites to help motivated sellers find real estate investors. Melissa provides some incredible information regarding how they find motivated sellers, how they negotiate deals, how they sync up with the best contractors! You won’t want to miss the three things your website NEEDS to generate seller leads, as well as the exact process to estimate rehab costs! Melissa and her husband Danny run the podcast Flip Junkie, and in this episode, they pull back the curtain to reveal the secrets to their business. Don’t miss out on your chance to learn from a seasoned pro! In This Episode We Cover: Melissa’s story of getting into real estate How everything went wrong on her first deal  Why she doesn’t recommend a “burnout” Their amazing average flip volume and profit (hint: 8-12 deals a month!) Her top three lead sources How she uses SEO to her advantage Advice on putting up a website A discussion on flipping vs. wholesaling How to find the right contractor Tips for figuring out rehab costs Things to do when you go over budget And SO much more! Links from the Show BiggerPockets Forums BiggerPockets Webinar Mission Meats BiggerPockets Perks BiggerPockets Podcast 144: Getting Out of Your Comfort Zone and Kicking Butt at Real Estate with Danny Johnson BiggerPockets Podcast 018 : Flipping, Marketing, and Wholesaling with Danny Johnson Episode 2: Is Wholesaling Illegal? w/Brandon Turner (FlippingJunkie Podcast) Skitch BiggerPockets Rehab Estimator Calculator BiggerPockets Podcast 157: A Simple Morning Ritual to Help You Dominate Every Area of Your Life with Hal Elrod BiggerPockets Podcast 284: The “Miracle” Behind Becoming a Millionaire with Hal Elrod and David Osborn LeadPropeller Books Mentioned in this Show The Miracle Morning by Hal Elrod Flipping Houses Exposed by Danny Johnson The Five Temptations of a CEO by Patrick Lencioni The Advantage by Patrick Lencioni Grit by Angela Duckworth Fire Round Questions What is the best way to go about finding a dependable, trustworthy contractor in a large city? What is your criteria for finding a project manager? Do you strictly work with licensed and insured contractors? How do you “ballpark” the repair costs for a flip and for a rental so that the turnaround on an offer is faster? What do you feel are the top 3 skills to do yourself rather than hiring a contractor? What are the best types of loans to get for buying rental properties and rehabbing them? Tweetable Topics: “We are selling them solutions to their problems.” (Tweet This!) “Sellers feel more comfortable with people who seem real.” (Tweet This!) “We need to be the ones in control of the situation, not the contractor.” (Tweet This!) Connect with Melissa Melissa’s BiggerPockets Profile Danny Buys Hosues Flipping Junkie Flipping Junkie Youtube Channel Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 295. We want to capitalize every lead that comes in because every lead that you get is costing you money and it costs you different amounts of money depending on where it's coming from. So if you've got a high cost lead source, you want to make sure you get everything you can out of that. And so sometimes it means wholesaling. Sometimes if it meets my flip criteria, then we'll take it on as a flip. But a lot of times right now we're able to offer more to sellers and just move those and capitalize on those leads. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing without all the hype, you're in the right place.

Stay tuned and be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. What's going on, everyone? This is Brandon Turner, host of the Bigger Pockets podcast here with my co-host, Mr. David Green. How you doing, David Green? I'm doing pretty good, but not as good as you, apparently, Mr. Bacon Jerky Love. So you guys got to hear this, right? Yesterday, I'm going through a busy business day, like always, like talking to clients, looking for my next deal, working things out. And I get this text from Brandon in the middle of it that says, dude, try the bacon jerky. I thought he's, texting the wrong person because that happens sometimes. And I realized, oh, no, Brandon actually had a bag of bacon sent to me at my office or like beef jerky stuff. So then he says, I'm never eating

anything again but that. I mean, a very serious quote, right? So I take the bait. I'm like, Brandon, what are you talking about? Right? And I have to ask him. So tell us all, Brandon, what is it about this new bacon jerky fetish that you have? Okay. Okay. So, okay, so okay, so you asked for it. So a couple years, the last couple of years I've been getting this meat snack from a company called MissionMeets.co and been delivered to my house. And it's like a friend of mine, Pete is his business. And honestly, even if I didn't know Pete, it's like the best meat snacks I've ever had, I get like a beef stick every single day. All right. So the other day, Pete sends me this bacon jerky syracha stuff and it's literally the best thing I have ever eaten. Like,

I'm obsessed with it now. And when I was talking to Pete, he mentioned that he might send me more free bacon if I would happen to drop the website named MissionMeets.com on the Bicker Pockets podcast someday and maybe even casually mention, of course, I would never do this, that if you use code bigger pockets when you're checking out, you actually get a free bag of bacon. I would never do that, of course. I would never stoop so low as to sell my soul out for free bacon jerky, but it's really good. Anyway, all right, but besides jerky, we have a really good show today. We got to move on.

Enough with that. Today, we're talking with a fantastic entrepreneur, real estate investor named Melissa Johnson. Her husband's been on the show a couple times, but today, we're talking with. we got her to hear her side of it. But before we get to that, and talk about how they're doing numerous deals, like eight to 12 deals every month. Let's get to today's quick tip. All right, today's quick tip, very simple. So we at Bigger Pockets, because of the size and strength of our community, have negotiated discounts with numerous different companies, both pro, like there are pro only discounts. And then there are just all member discounts. So if you are a

BiggerPockets member of any kind, go to biggerpockets.com slash perks. And you can actually save money. In fact, Melissa and her husband, Danny, actually own a company called Lead Propeller, and one of our perks is actually a discount on lead propeller. So definitely check that out. There's a ton of them in there, and we're adding new ones every month. So again, BiggerPockets.com slash perks, check it out. For decades, real estate has been a cornerstone of the world's largest portfolios.

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They do some wholesaling. Her and her husband, Danny, have been doing this for a while now. But today we hear how she's really running the business. We learn how she does that, how she estimates rehab costs. She goes into a lot of detail on that. She talks. She talks about about the three, the top three lead sources for how they actually get deals coming into their pipeline. Two things that your website has to have in order to attract visitors and what to look for in a bad contractor plus a whole lot more. So make sure you guys listen to this show. You're going to love it. You're going to love Melissa. So let's bring her in. Hey, Melissa, welcome to the Bigger Pockets podcast. Good to have you here.

Hi. Thank you. I'm excited. Yeah. So tell us real quick. How did this come to be you on the podcast? You are you are connected with another person we've had on the show. Is that correct? very closely connected to somebody on the show, Mr. Flipping Junkie, Dan Johnson, as my husband. And you were on our flipping junkie podcast a few weeks ago. And y'all chatted. And he said that you guys wanted to talk to me. So I said, that sounds like fun. Let's do it.

Nice. Nice. Yeah. Danny is one of my favorite people in the entire world. So good job of marrying him. He's a good dude. So, and that actually, that episode, we'll link to it in the show notes. But I thought that was probably the most fun, like, interview I've ever done.

done on anybody's show like before. So anyway, if people want to hear a really fun episode, I thought that was pretty cool. So anyway, cool. All right. So when I was talking to Danny, though, the reason that sparked this is because he said, you know, really like Melissa just like runs my entire real estate life. Like she's just like, like he bragged about you quite a bit and said that you're very, very good at what you do. So that's why I thought it'd be fun to kind of figure out, you know, what are you doing? How did you do it? But before we getting into all the like the future stuff, what you're doing now and where you're headed, let's go way back to the beginning of your story. How did you get involved with real estate? So 15 years ago, we were working

jobs, just normal jobs. And I really didn't have any idea about what real estate investing was. It wasn't on my radar or anything. But my father-in-law was doing it. Well, back up, Danny, I were still dating at this time. We hadn't got married yet. So my future father-in-law was doing it. But it just sounded so great. Danny was talking about it. And he just really was so excited about the freedom that his dad was having doing it and we started talking about it. And so we decided, well, let's try it. You know, I think I think we could do this. And so we worked for a few years, part-time flipping houses and full-time at our jobs. And then there came a point actually two weeks before our wedding, super stressful, that the company decided that they were going to lay him off.

And so we said, well, let's just do it full-time then. And so it's been full-time, 100 miles hours since then. That's awesome. And what did you, what did you guys decide to start with? Like, what type of property? Is it flipping rentals? Yeah. Is there a story there? There is the story there. Yeah. Let's hear it. Yeah. So our first deal was probably, it was crazy. It was like everything you could ever imagine happening or going wrong in a deal happened in the first deal. So it was pretty intimidating, but we learned so much. So I can't think of a better situation, actually, just for learning. the house, it was a burnout. And so it was half burned down. The people had taken the insurance money, just left the house vacant, went and bought another house. And there was a lot of legal issues with the

property that we had to deal with. And then we finally got it. And then they realized, I think there was like no deed or something. And so we had to go to this attorney. It was just all this stuff. So basically, we ended up buying a piece of paper and selling it to an attorney. And that was our very first deal. That's an interesting way to begin, I guess. Looking back, looking back, do you regret any of that? Like, do you're like, here's where I screwed up and that should not have done that? Or what went, what went wrong on that or what could you have prevented today if you were in that same position? I don't know that there's anything we could have prevented, but I think the great thing was just all the things we were able to learn, like all the situations, how to talk to attorneys, how to deal with

these buyers, or not buyers, but these sellers that had these situations with insurance companies and things like that. It was everything, you know, we had been listening to podcasts and reading forums and stuff like that, but nothing really prepared us for the actual experience of going through that. Yeah. So the learning was the big thing. Yeah. And that's something David here and I talk about all the time is that like that first deal is so vital. Like regardless of how well you do on it, like the first deal never makes you rich, never makes it successful. It doesn't matter how good you did. You make 100 grand.

It's not, at the end of the day, it's not really that life changing, but it's the lessons you learn during that that it's going to change your life. So do you feel that way like that first deal really helped kind of prepare you? Oh, absolutely. And the bonus of that was when we got the check for that property. I looked at the check and I looked at Danny and I said, this is ridiculous. This is my whole year's salary in one freaking check. Yep.

What did you make on that? At that point, I think we made like. like 23,000 or something. That's awesome. And we didn't even touch the place. It was crazy. So essentially, well, you basically wholesaled it. I mean, like you got under contract and then basically flipped it, right?

And so did you jump into wholesaling them more heavily or did you jump back? I know you got to do a lot of flipping today. We were just dead set on rehabbing because that's what we knew and that's what we had prepared ourselves for. Wholesaling wasn't a thing like it is now. I mean, we did some. But I feel like definitely right now, you know, wholesaling is a big thing. But back then, we were just all about rehabbing and we were kind of

bummed that we didn't get to buy that house and rehab it. It was on to the next one, which turned out to be another burnout. So we got to rehab that one. Like burn burnout is that somebody lit a fire. You guys remodeled it from, yeah, I have not done that. Yes, I don't recommend it. Oh, really? Why is that? There's a lot of things to those type of properties. You have to deal with the city and permits. And of course, you want to make sure everything is really safe for your and buyer. So you just, there's a lot more to it. And you just want to take more care and be careful. So it can take more time. It definitely costs more. You want to make sure you're, you know, getting rid of the anything that's burned, smell of smoke and that sort of thing. So it's a little bit more

work. Sure. So now, Melissa, you guys are flipping a lot of houses. Let me ask you a couple of questions and we'll go through getting an idea for what your business does. Can you give us an idea of how many houses you're flipping a month right now? We're bringing in probably about two to three contracts a week. Okay. So you're closing, what is that, about eight to 12 deals a month on average? Roughly. Okay. And then what's your average profit on, you're just your average flip? Average flip profit is about 30K. And we have been doing more wholesaling lately. So those can average anywhere between 8 to 15.

Of course, we get ones that are like crazy home runs that are awesome. We've made 50, 60 on some. And then you make, you know, five on some other ones. So are you mostly looking at your construction availability and like, hey, we don't have any crews available. We should wholesale this one. Is that how you make the decision whether you should fix it up and sell it or wholesale it? Yeah, so there's a few things with that. One is I am a numbers person. And so I like to look at all the details of everything and see kind of, I keep a good track of where we are revenue wise.

And so I know that those the flips are going to bring, you know, if they're bringing 30K and we want to had a certain point, then I know we need to pick up more flips. And then everything else we try to wholesale. Some other criteria that I have, too, for the wholesaling is I don't like to do foundation houses anymore. I did a lot of them last year and they are a lot of work and a lot of headaches sometimes. That's kind of a criteria for me. Just, you know, I just choose not to mess with those anymore. And there's plenty of other investors that do. And it's fine. It's just a personal thing for me that I just don't want to, I really don't want to full with those right now. So if it needs foundation work, it's an automatic wholesale.

So you find the deal. And then once you find it, you have like a system of what funnel this is going to go into. Oh, this is a bang out job. We can get someone in there, fix it up. We'll put our crews on it. Oh, I don't want to deal with foundation. It's a pain in the butt. Oh, this is one of those deals where it's going to tie us up forever.

Those are ones you wholesale. Is that about right? Right. Those and also for us, the higher priced houses, which in our market considered higher price is anything over, I would say, like, 210, 215, just because then you get into that holding and it's more expensive. And so our sweet spot for flips is usually about 130 to 199. And so I make sure as another criteria that our ARV fits into those numbers. See, I love that because you, you've done this for long enough that you know when this comes

across my desk, I'm going to do this with it. And there's not a whole lot of anxiety when you're at this stage of your business that you know, this is my system. If it's within this range, 130 to 190, I believe you said, that's a great house to flip. If it falls outside of that range, maybe it's going to sit on the market a little bit longer. Maybe it's going to take a lot more work to get at the way we want it to look in order to sell to a high-end buyer. I'm going to wholesale that to someone else and make that their problem. Get my money back and go after the next one. I really want listeners to understand that when you first start off, it feels so scary and just there's so many things you don't know.

But after you do it a handful of times, you start to recognize patterns and makes your job a lot easier. So if you guys are doing eight to 12 deals a month, that's insane, especially seeing like your average profit margin. You're doing very, very well. You guys are obviously good at what you're doing. I'd like to ask you a little bit about how are you finding these deals? What can you tell us about what systems you're using and what processes you have in place that are getting these houses under contracts so you can figure out what to do with them once you have them? Sure. We do lots of marketing, obviously like everyone else does. So my top three lead sources are my online, which is just our website. My second highest source is, and I separate these because

I'm a nerd, but online paid marketing. So that would be AdWords, Facebook, marketing, things like that. And then number three for me is direct mail, which I was doing a lot more of last year, not doing so much of it right now, mostly just mailing to probates. So those are the three main ways that I'm getting, that I'm getting deals, getting leads, really good qualified stuff. That's cool. So we've had a lot of people talk about the direct mail. A lot of people are doing that. But you mentioned something that I don't hear us talk about a lot, which is more of

the website leads and SEO leads. I think for a lot of newer investors who don't have a big budget, they don't necessarily want to go spend $5,000 to send out letters. SEO can be like an easy place to start. Can you talk to us a little bit about what systems you're using to generate leads to the internet and how much they cost versus how much mail costs? So just to give you a quick example or quick kind of breakdown, last year I did direct mail and I spent $72,000, which is crazy to me. It seems like a lot of money. But my SEO, I spent $15,000. So it's like a $57,000 difference. And what I found was that my online leads, so things that were coming through my website were better leads. They were more qualified leads. They were looking for me. And so, you know, when you, you You've got people that are looking for specifically for your services and you're able to rank and be up there at the top.

They're going to call you first, right? With that, the organic traffic is, you know, we have an SEO optimized website. And so that entails two things that make that work. It's the on page and the off page. So the on page stuff in order to rank your site to optimize it the best is having good content that's relevant to the industry. So you want to make sure that what you've got on your site is relevant. And then you want the site to load fast. So that's super important.

And then the user experience needs to be very easy to use, very clear message and very clear direct calls to action. You want people clicking and filling out your forms and submitting that information to you. So what happens with our website, we've got a lead propeller website, obviously, because we own that company. And so everything comes through our lead propeller website. And then it goes straight into our CRM, which is great because all the details, everything that people add in through their form, we get it automatically. And then we're able to contact them and set up appointments and things like that. That's cool.

I want to dive a little bit deeper in before we get, because I want to talk to CRM too, because that's kind of an advanced strategy that a lot of new investors don't even know exists, right? But before we get there, I want to talk about this like using online paid marketing. So I'm assuming, are you talking Google? Are you guys doing anything with Facebook? or we just talking about the little ads that when somebody searches, sell my house quickly and where are you, San Antonio, right?

Yes. Yeah, sell my house quickly in San Antonio. Is that what we're talking about? What are you doing for that paid marketing? Right. So, yeah, the paid traffic is things like AdWords, Facebook, marketing, Bing ads, are another one that we use. So those are all based on keywords.

And it's an auction system. So you put your keywords in and then you basically bid on those keywords. and when people click, then that's, you know, that's how you pay for that. So that's, it's paper click. What people call paper click is AdWords, Google Atwards. And then ours is even super specific. So you can have the keywords, but then you also want to target specific areas. So like mine is even down to zip codes because I've studied now the source of all my leads.

And so I'm able to see I got a lot of leads from this zip code and this zip code and this zip code and I'm able to target the ones that I want. So the areas of town that I want, like I've got specific areas where I like to rehab. And so I've got those zip codes in there. And so anytime someone goes in, you know, looking for that, I'm there. That's awesome. So essentially you're saying so people go, they're going to Google and they're typing in, you know, I don't know what terms you're ranking for or you know, targeting, but like sell my house quickly, how to sell my house. Is it like how to find an agent maybe? Like things like that, right? So then they see your little ad there on the side.

and it says something like, you know, we buy houses fast and quick or we buy homes cheap and easy or whatever. I'm not sure what your message saying. I actually love to know that as well. But like, so you get, they see this little ad and they're like, oh, I'm going to go click on your website. Then they land on your website. And now from there they fell out a form. And that form goes to you. It goes into your CRM.

And now you have somebody calling them, following up with them, checking up with them. But you only pay when somebody clicks. Am I summarizing this all correctly? Okay. Yeah. That is correct. Yes. I love this stuff.

I mean, we do a little bit of this little bit of it with bigger pockets, not much. And then I've done a little bit of that over the years with my real estate. I've never had a lot of success with it because I live in a very small area. So I very quickly maxed out who I could reach. I mean, a few thousand people. And so like, it was like, okay, well, I stopped. But if I was in a big city like San Antonio, I think that would be a lot of fun is to do that because there are a number of people that are legitimately searching.

And like you said, the real power of that is that with direct mail, you're sending something to somebody who doesn't really. really necessarily want to sell. You have to convince them to sell. Then you have to convince them to sell to you. But with the online marketing, they are coming to you because they are looking for you. Like they are specifically looking for help. And you're like, I can help. And you guys are able to work through that. So I'm assuming those leads are way more qualified. They're way more motivated. That said, are you guys finding, I mean, in today's market, I don't think anybody's unaware of the fact that we're in a really, really hot real estate market nationwide, right?

I think most people know that's going to. So why would somebody search, sell my house or I want to move or whatever? Why would they search that instead of just contacted an agent selling through a real estate agent? Well, yeah, I think it's, we provide so much value, I think, for people that are in specific situations, you know, and we kind of address this in our marketing to why sell with us versus an agent. And, you know, I think we offer so many benefits, you know, like being able to close quickly and they can leave stuff. the house. I think people have, you know, sometimes get a lot of anxiety about all the things that come with dealing with the realtor, right? Because they come in and they're like, oh, you got to take your pictures off the wall and you got to be available for showings and lock up your dog.

What's funny is just just this morning. So I put my house, the house I live in, I put it on the market last night. So this morning, about a dozen agents from my town, they do every week, they go through all the new listings on the area. And about a dozen agents came to my house. I had to pack up my dogs. I had to go take all the photos off the wall. Like, like, like, it's really obnoxious. And like I just felt like, like we were leaving as they were coming. And I was just like, they're all just sharks looking at me like, like judging my house. And I was just like, jerks. Even though they're all like great people, I'm sure. But I'm just like, why are you judging me and tear my house apart in your head?

You know, like, I don't know. Like, I totally get that anxiety thing that sellers have. And if somebody could offer me a fair price that I was comfortable with without having to deal with an agent, I totally would at least entertain that conversation, even if it meant getting a little bit less because I just saved that hassle. When I first got into real estate, one of the early podcasts we did back like, I don't know, first 10 or 15, 20, I talked to somebody. It might even been Danny about this, about how I felt like I always felt I was taking advantage of people. And it wasn't until I changed my mindset that I am offering somebody a different option. It might be less money, but there might be other benefits that matter more to them.

And once I realized that, I was like, oh, this is way better. So now I have no problem talking with people. And I'm fine. I can tell them, look, you can probably get a little more if you went with a real estate agent. Like, I don't doubt that. at all. But here's what we can offer. And so that's basically what you're saying, right? Right. Yeah. And we just let people know, I mean, we're selling them solutions to their problems, right? Yeah. You know, they've got this problem. They don't, they can't see their way

through it or they're confused. That's what, you know, we find too. A lot of people, they just don't understand the process. And, you know, one of our big things is just really being there for them throughout the process and contacting them. And we have, you know, processes in place to to make sure that they're getting, you know, we're getting in touch with them twice a week and making contact with the title company so that they're not in the dark because I think that's a big fear for those sellers too, right? Definitely, which is also a good lesson for us as they're real estate agents, right, David? Like, that's what sellers are worried about. So if you're a real estate agent, like, don't let your clients be in the dark. Yeah, it's what you guys are describing is exactly right.

It's, I have people who said they want to sell their house and I want to come look at it and tell them, hey, don't worry about spending money on this. No one's going to care. Or, yeah, we really want to find someone they can do this. Let me start to look for someone they can put in these countertops or whatever. And everyone's afraid because they don't want you to see their house is messy or they think it's not in great shape and there's like shame associated with it. Oh, if I don't keep a clean house, I'm not a good person. And that's exactly right. A lot of them, they just won't let me come see the house at all. And then they spend all this money that they didn't need to or they spend it on the wrong things. And now it's like, oh, I got to have this difficult conversation that

It's great that you like put this really expensive mural in your house, but your front yard looks horrible. Like $50 could have been such a bigger difference than what you did. And I mean, that's like the worst part of my job. I really hate having those conversations. But you're right. There's people that just there's so much anxiety with that that they would totally just Google how to sell my house fast or sell my house easier or whatever. And then they find a website and it says, hey, we'll buy your house without a real estate

agent. What you're really saying is without any of the anxiety will come by your house. And there is a value in that. What I want to know, Melissa, is if somebody wants to start their own website, it's relatively cheap, I'm assuming. Can you give us some advice for how easy it can be to put up a website? What's the first things that they need to know to get started? And what's the most important part they get right?

Like I mentioned before, you want a website that is going to load fast. You know, if it's taken forever the load, the thing's spinning and, you know, they're getting frustrated because I'm like, darn it, like, I just want to get some information. So that's super important. And then I'm going to make sure it's clean design. I think a lot of people fall into this trap with their websites where they want to put everything on there. And it's so much. And people don't want to read all.

I mean, I don't want to. Do you want to read all that stuff? I don't. It's just, it can be a lot. You know, just keep it simple and keep it to, you know, what are you going to be able to give them? It's going to help them make this decision to sell their house to you. So that, that's important. not a lot of text. You want clear calls to action everywhere. So you want to make sure that they know

where they can reach you. How can they call you? Can they email you? You want to have all that stuff very clearly on your website. Also, we use kind of a pre-qualifier form, which is really nice that we offer on our websites, where they can put in information and send it to you. And it knocks out a lot of stuff, you know, like it already asks, you know, what do you owe on the property? What's the most you're willing to take? What's the least you're willing to take? Details, you know, how many bedrooms, bathrooms, that sort of thing. But all these things that are helpful when you're going to negotiate or contact them the first time. And then on ours, we have a picture of our family, you know, because we are a small family business. And that's important to us. Our reputation is really important to be known as,

you know, we're not some big company, which those are fine. too, but finding a lot of sellers feel more comfortable with people who just seem real. Yeah. You know, and that's actually one of our core values is keep it real. You know, we don't show up and, you know, fancy cars and suits and stuff like that. We're just regular people, just talking to other regular people. And then the biggest thing that I cannot stress enough for you to have on your website is testimonials. And if you're new getting started in the business and you haven't done a deal yet, you can get testimonial,

even if it's just a character reference or something, you know, from somebody that you've done business with before, somebody, maybe a realtor that you used or a loan officer that you used or somebody that you have a relationship that can attest to your character. Just anything that's going to, yeah. And those can be written or video. They're both great. Yeah. Melissa, by any chance, do you have a sample website that we can go and check out to see what

a really good one looks like? I can direct you to our website. website. Okay. What's that? So our website is dany buyshouses.com. That's pretty easy. Not Melissa buys houses.

Yeah. I know, right? There's something wrong there. I always tell people, Danny doesn't even buy houses anymore. You couldn't get the domain name. Danny buys houses, Melissa runs the actual business.

I know. I totally should. I feel like that needs to be on a t-shirt, right? It should be. That's a good domain. I'm going to go steal that one right now and I'll sell back to you for like 10 grand. All right.

You could put Danny buys houses. houses in big letters and underneath it in parentheses, but Melissa does all the work.com. Exactly. Yeah, I like that. That's awesome. That's funny. All right. So, I love what you're saying about like the website needs to be like clear. I mean, a lot of people screw up and they just put way too much stuff. Like there's a, I can't remember what the test is called, but it was called something like the, I'm going to totally say this wrong, but it was like the drunk five year old test or something like that. And it was like, could somebody who's like just wasted or a five year old go to your website and within three seconds know exactly what you

do, right? And it's not like, you know, small fun and a million things. It's like, this is what we do. Like, I buy homes in this town for cash and can close quickly. Like, things like that just makes such a big difference. And people like, oh, that's exactly what I'm looking for. I guess I'll, you know, move forward with this. So I actually have one of your guys's websites as well, one of the lead propeller websites for my like apartment buyer site. And I actually rank really well in Google. So like, nice work. So thank you. But so one thing I love. One thing I love. that they have in there is like up front, somebody can submit just like their name and the property address and that's like it, right? And it goes to me. And then the next page is like more information.

And I love that because if you scare people with like, give me 400 pieces of information, nobody's going to fill out the form. But if you just ask for a couple simple things, now I have their email, their phone number and, you know, they have property address. And if they want to fill the second form out, then I get that as well in my inbox. But if not, then I don't have to worry about that. I thought that was genius when I saw that you guys do that. So anyway, that's super, super clever. Then you mentioned this idea of like once, and the testimonial thing, by the way, is I'm like, I don't have a single testimonial on my site.

And I'm like, why do I not have something? I know. I'm like totally feeling really horrible right now. So I'm going to totally do that. And I love what you said about it. It doesn't have to be like this person bought, you know, bought my house and now I'm so happy. It can simply be like, I love this person or they're such an ethical person or whatever. It can be like a character testimonial.

I think that's fantastic as well. So, yeah, good stuff. Okay, so that's cool. You talked about, let's kind of recap a little bit. We talked about the three lead sources that you're getting is website, which we talked about. We talked about SCM or search engine marketing or SEO, however you want to call that. And then direct mail marketing. So those are kind of the things that you're using.

Then you mentioned that you've been increasing the number of wholesale deals you're doing. I'm wondering why that is. Actually, let's go back. For those people who don't know the difference, what is wholesaling versus? is flipping. Can you cover that real quick? So flipping for us is buying a property and then rehabbing it and then resailing it for retail price. And then we do wholesaling, which is basically a signing of contracts, signing of equitable interest in a contract. So basically we get the house under contract for a certain price. And then you find an end buyer. And then they close on the

property and then we collect the difference. That's just a very simple way of explaining that, I guess. Sure. So why would you choose one over the other? Why would you decide the wholesale and get a smaller amount probably than flip and get a larger amount? Well, for one, the big thing that I've noticed right now, the way the market is, you know, where we're at, people are just, you know, they're offering more. They're paying more. And we've got pretty big buyers list. And so what we're finding is that there's landlords, they pay, more. So we have it kind of broken down.

Like we know that landlords will pay a little bit more than like a regular investor would pay somebody that's going to fix it and flip it. Sure. We get a lot of out-of-state buyers too in our market. So that kind of they're used to paying more. And so actually our prices seem so cheap to them. And it's

just it allows us, my big thing with running the companies, I want to be all about efficiency. And if we've got projects, you know, rehabs going, on and we don't want anything sitting. So we'll just move them, you know, because that's efficient, but also being efficient as far as we want to capitalize every lead that comes in because every lead that you get is costing you money and it costs you different amounts of money

depending on where it's coming from. So if you've got a high cost lead source, you want to make sure you get everything you can out of that. And so sometimes it means wholesaling. Sometimes if it meets my flip criteria, then, you know, we'll take it on as a flip. But it'll lot of times right now we're able to offer more to sellers and just move those and capitalize on those leads. And so that's kind of where we've been going lately. Okay. So for the houses that you're actually going to keep and you're going to flip, my understanding is that you are the rehab queen. You know how to estimate rehab costs. You know how to talk to contractors. I'd like to quickly get into this for our listeners who are intimidated by the rehab process. Tell us what every beginner needs to know about how to

find the right contractor. What what should we be asking and what answers are we looking for? You know, I have a guy right now that I've been using for a long time. And I'm prefacing with this because I think it's so important to build a relationship with your contractor, first of all. If you find somebody that's good, you want to keep working with them. You want to keep them busy. So that's that's super important. I set very clear expectations with the contractor when I haven't worked with them before. So after I find them, I just tell them, you know, when we meet, here's how I work. We're going to sign a contract. All the details are going to be in the contract. You're going to be charged $50 a day every day that you're over the due date. I use a draw schedule.

I use a material spec sheet and a scope of work. If you're good with all that, then we can move forward. If you don't like that, then we won't. So I've had guys that they just, they won't sign my contract or they don't like the draw schedule. So things that you use. do want to look for is somebody that if somebody tells you they're not going to sign your contract and they won't even look at it you probably don't want to work with them yeah just because you know we need to be the ones in control of the situation not the contractor anyone that asks you for money up front on a job don't do it yeah Brandon you have a story like that don't you yeah you know I'll I lost five grand ones circle back to that yeah yeah so I agree guys are never that's never a good thing

And the way I get around that is just by using that draw schedule, the first draw is always demo. It's like it didn't cost you anything to demo except some labor. So you get the demo done. Then you get a check. And then we're started in the process. Now you got some money. Now you can buy materials for the next thing. I don't buy materials for my contractors.

They are responsible for going and picking up stuff. I don't have time to run around and pick things up for them. And I shouldn't, you know, we shouldn't be doing that as investors. It's not our job. That's the contractor's job, in my opinion. And when I have them bid things, I have them bid at labor and materials. And I know people do that differently, and it could work differently in different markets maybe. But I try to keep as much off of me as possible because, you know, we have a lot going on.

And so it's not efficient for me to run around buying materials and stuff like that. It's just crazy. So I'm not going to do it. So I think those are some big thing. that don't have references. You don't want to work with those guys. You want to make sure that if you want a licensed person, you know, check that out. If you're okay with them not being licensed, check their other jobs or other people that

they've worked with, stuff like that. And don't hire any man that shows up to a job. This is for the ladies, by the way. If he's wearing a shirt that says FBI on it. I had a guy show up one time. Do you know the story? I don't know the story. I know the shirt.

Oh, no, yeah. It's bad. It's bad, ladies. I'm wearing you now. So I was at a house and this guy pulled up and, oh, the other thing, he was driving a giant truck, which is never good either. So he was driving like a $65,000 truck, pulls up, gets out. He's wearing this FBI shirt and I look at it and I look a little closer and it says a female body

inspector. Yep, yep. And I'm just, David, you have that shirt, don't you? Yeah, it's my lucky podcast shirt. Whenever I get interviewed on another podcast, that's the shirt that I wear. Or when I go to meet new clients, that's like how I win him over. Yeah, that's called for a female body inspector, right? It was bad.

I think his belly was hanging out of the bottom of it too. This guy sounds like the perfect storm of horrible. He shows up in a $65,000 truck that says, I make a lot of money on your rehab that I probably shouldn't be making because I can by this truck. Then he has that shirt on. Then he's got his gut hanging out over the bottom of it. So you're like, well, I don't think anyone's inspecting your body. Is that how you became the FBI? That's funny. And then I think he gave, I'm taught like to add insult to all of that too. I think he quoted me like $30,000 to paint a house. It was like 1,100 square feet.

Oh, man. Shocking. That came out of the guy. Yeah. Also, do you find that contractors because you're the one dealing with them more often? And like, do you find that they try to push the limit on what they're charging you? Or are they pretty like, because you seem like you're probably a pretty good, like, taskmaster for them. But do they try to take advantage of you because you're a female? You know, sometimes they do. And actually, I was talking to a friend about this recently. There was a roofer that we had for a long time.

And Danny had used him forever when we were working together. And, you know, the guy always responded. He was cheap, you know, so fine. Well, when I started running the rehabs, you know, I was like, I need a roof. Well, I better call Ray. Well, Ray would never answer my phone calls, ever. So finally, I told Danny, can you call him?

He's not answering me. And he would answer every freaking time that he would call. And I'm like, there's something wrong here. He would never respond to me. So finally, I went and found another roofer and who did a great job. And he cost maybe a little bit more per square. But I was willing to pay that just to have the peace of mind that it was a job well done. and that he was going to be respectful of me.

So that was a big one. But it does happen sometimes. They do try to get away with stuff, but I try to keep that in check. So you mentioned costs per square. Oh, do you want to go ahead, Brandon? Well, I was going to say, I had a contractor one time. Well, he was a resident manager who later on in the relationship refused to talk to my wife

or my mother-in-law who manages most of our properties. Like she helps a lot with that because they were women. and women didn't belong in business. And like he flat out said that and then just wouldn't answer their phone calls anymore. So after that, after that shift in his mind happened, we fired him very quickly. But it was just he couldn't handle taking instructions or direction from. Yeah. It's sad that there's people like that out there, you know?

My wife is fantastic at this way better than I am. Well, the funny thing was a few months after all that happened, then he called me looking for work. And I said no. Yep. Sorry, I got nothing for you. So I think something, I think for a lot of women, that's just going to be a struggle they're going to have as contractors and other people. They're not going to treat them with the same respect or they're going to take advantage of them. I hear a lot of women complain when they go take their car to the mechanic that their mechanics are always trying to say, well, you need to do this and this and this.

And because they're not as familiar with the mechanics of a car, they're more likely to say yes. So the remedy to me is that you know your stuff really well. and when you go speak to them, they can tell that you know your stuff. And they're less likely to think, oh, this is an experience damsel in distress. I can take advantage. And they think, oh, I better bring my A-game or I'm going to lose this contract. So tell us a little bit, Melissa, for those listening that are not familiar with rehab costs, how do you know what a good cost per square is for a roof?

How do you know what a kitchen remodel should cost? If you're looking at properties and you think it's a good deal, how do you know how much flooring or the bathroom remodel should be? Can you give us some of the rules of thumb that you use to know, this is about what a rehab should cost. And then you can tell if the contractor's jerking you around. I think the good way it doesn't start with that is by doing a good scope of work. That's how I typically start a rehab as I do a scope of work.

And I do the, I pull together my material spec sheet so that I know what I'm looking at material-wise. And then- Can you explain what scope of work is? Sure. Yeah. Sorry. So, yeah, scope of work is basically when you first close on a property, we go out and I

just look over the whole. whole house and I take a notepad and a pen. I'm sure there's probably some other easier way to do it, but I'm kind of old school like that. I just start with the outside and I go all the way around the house and I just look at everything. I look at the roof. I look at the siding. I look at the windows, the doors, the trim, the fascia, the soffets, like everything, the landscaping, the concrete, like sidewalks, porches, things like that. And then I go inside and I just start by going through the front door and I just write everything down like living room needs new ceiling fan needs you know whatever we need to take this wall out or something whatever it is bathroom we need to get it so I break it all down

by the room and what needs to be done and then I have a section on my scope of work that just kind of covers general things so like we always change the switches and the plugs to white and if you're not doing that you need to be doing that and your rehabs changing hinges on doors. If they're brass or something, you know, those need to be changed, changing out the air vents. Just things that apply to every room, smoke detectors, just those sort of things. Try to list out that are just specific, you know, for the entire house. And then I break it down by room. So when I'm doing that, then it gives me an idea of what, what things are going to cost. So if I walk into the house, for example, and the bathroom is completely outdated and it's nasty,

I know just is a typical standard bathroom. I budget $2,500. That's just to keep it simple. Because I know my vanity cost, you know, $250. And I know that a tub costs $100, you know, depending on if I'm replacing it or refinishing it, which I do a lot of that too. I have all these little things that I like to do to save money

because I like to save money. It's good. I was going to say cheap, but that sounds bad. And we do very quality work. Thrifty. Thrifty. That sounds responsible. Fiscally responsible. There you go. I am very, I like to stick to the budget. Yeah. That's smart. Freaks me out being a numbers person going over the budget, but also being mindful to if you don't want to over rehab, you know, certain things. So don't go sticking granite in a house that needs to have laminate, you know, things like that.

So I kind of, I know a bathroom is going to cost me $2,500 in the kitchen, if the cabinet, are good. I know I'm probably going to spend about $1,200 in there. You know, by the time I put lighting, replace fixtures, paint the cabinets, change the hinges and the handles, which is something I do a lot and saves a lot of money in time. I usually budget, and this is all just a standard-sized house for us, like a normal rehab. I can usually get done for about $20,000, $15,000 to $20,000. That's with no foundation issues or major electrical or anything like that. I know that a roof is going to cost me about 5,000, unless it's two-story.

Then I throw on another 1,200 or so for that because that usually costs a little bit more, with it being higher. Bedrooms, a couple hundred bucks. I estimate paint and flooring by the square footage of the house. So I know that I'm paying $1.25 a square foot for paint, and I'm paying about $2.25 a square foot for flooring. And that's combined because I tend to do, I do laminate, the LVT, the luxury vinyl tile. Oh, I love that stuff. Yeah. Amazing. Yeah. I use that in every house now. And then I'll mix up carpet in there, too, like for bedrooms and stuff. So I took the carpet price and

the laminate price and just kind of averaged it together to get the 225. Okay. Do you add like at the end of the process, you got all your numbers, you basically broke. So you start with the scope of work, which is perfect, right? And one, just one thing that I do, and I'm not saying anybody else has to do this, but what works for me, I take a video. I take my, I take my, phone. Every time I go to a project and I walk through the exact same thing you do, but I talk out loud to my phone. I don't know if it's because I'm more of a visual person, but I'll walk around, you know, outside and then I go inside and I just talk to myself, right? Like, yeah, it looks like this trim is pretty bad. Yeah, this wall's going to be tore down here. Anyway, so then when I get

home, I've got this 20 minute video and then either I or I've outsourced that to like an assistant, we'll just go through and create the scope of work for me. Ideally, I always want an assistant to do it, but normally I just end up doing it because I have trust issues, but like, I, I, That works out well for me. That's kind of my techy way of trying to do it. And then the nice thing is that I usually will have like video, which I can then, you know, pause, take a screenshot of. And then like highlight.

I use an app called Skitch. I don't know. A lot of you guys probably use it. It's like a Mac. I think they have a PC. Anyway, just lets you like highlight and draw pictures on other pictures. Anyway, so I use this and I like draw arrows and like mock up little things what I want to do based on that.

And then I have the original video too. So afterwards I can make good before and after pictures of project. So anyway, so okay, you got scope of work. You go through, you divide up everything. And do you do more by room? Like you were saying, you know, 2,500 for that or 1,200 for the kitchen or 25 for the bathroom? Or are you more like electrical total is going to be this much? Plumbing total is going to be this much?

Or is it kind of a combination? It's kind of a combination. So my scope of work is very detailed. But then my estimates are very, it just basically it says kitchen, bathroom, which would include. however many bathrooms, electrical landscaping, just all the, anything that's major, I just kind of mentally or on the notepad just like jotted down and then average it out. And then I always add 10% to that total. I was just going to ask that.

Do you do like a buffer at the end? Yeah. I do. So a couple of quick plugs here. We'll go ahead. Just resources I'll point out. First of all, Bigger Pockets now has a rehab estimation calculator. So if you're listening to this and you want a little help with the scope.

of work and going through. It's kind of cool. I like it actually quite a bit because it basically walks you through exactly what you're saying here, Melissa, like, you know, let's go through the kitchen. What do you got? Let's go trim. Let's go paint. Let's go flooring. Let's go this room, this room, right? And then you can add prices. You can do price per square foot or you can do just a fixed cost or you can do like labor material. So there's three ways to divide up any of the rehab things. And then at the end, it prints up a nice scope of work and kind of a rehab summary that you can then go and plug your numbers in or you could take to a contract or whatever. So anyway, I'm just pointing that out there.

If you guys want to check it out, go to biggerpockes.com slash kelk. The second resource I'll point out as well is that actual lead propeller, which is your guys' company that does the websites, which I use for one of my lead generating websites. We actually have a BiggerPockets pro member perk with that. I think it's 10% off. All of our pro members are getting on that right now.

So if you're not a pro member, consider that as well. There's a lot of cool perks you get. So, all right, moving on. I'm wondering, what do you do when you go over budget? Like, if you go over budget on a project, How do you deal with that? Well, first I come to my office and I close the door and cry. Me too.

Sometimes I want to. When I go over budget, I really try not to, but it does happen sometimes, things that you don't anticipate. And I like to be prepared. So that's kind of difficult for me. But one of the things that I do is see where I can make something else up somewhere. So, for example, I had a house. I was at the end of the budget. And I hadn't done any landscaping yet.

And I'm like, oh, man, I budgeted, you know, $1,300 for landscaping. And I've used that $1,300, you know, somewhere else in the house. You know, some unexpected thing came up. And so I'm thinking, I'm thinking, what am I going to do? I don't want to go over if I can help it. And so what I ended up doing was walking around the house and noticing there was all these great bushes and stuff like on the side of the house. And so I had my yard guy go and dig them all up and put them in the front and then just throw some mulch in the bed. And it cost me like

$100 to do that. So I went over budget, but it wasn't, yeah, like way over budget. Yeah. So I try to watch too as things, you know, are going along. I do use that draw schedule, which helps really keep us on task with spending. I have it broken out by what they're doing. And if something comes up, then obviously we have to deal with it. Cool. Cool. So anyway, what I like about your business and what you're doing,

you're very systematic about it, right? You're like, this is the scope of work. This is how I do it. This is how I deal with contractors. And this is how you're able to do eight to 12, you know, potential flips or wholesale deals every single month. It's because you have to be organized and systematic about your business. everything that you do just screams like you are on top of this as a business owner.

Like I don't see you in there like swinging hammers and getting too emotional and everything. You're just like, this is this is a business and I'm running this business really well. So anyway, kudos to you on that. That's awesome. So, all right. Yeah, but we're not done yet. We got the next segment of our show. We're going to move over to it's called the deep dive.

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I do. All right. So we're going to fire a bunch of quick questions at you. First of all, how did you find this deal? Through my amazing website. Nice. Very good. All right.

How much did you? Actually, let's go back. What is the deal? What is single family house? I'm assuming? It was single family house. I think it's about 1,300 or no, 1150 or so square feet. And it came to us online through an organic search through the website.

All right. Cool. And organic, of course, means you didn't pay for it. It wasn't like a pay traffic. Like it's just somebody typed into Google and it happened to rank well in Google or Bing or, you know, dog pile or whatever people are using these days. I think it's mostly Google. But all right. So how much did you pay for the property?

When the lead came in, they were asking $65,000. And we ended up picking it up for $57,000. All right. Then how did you negotiate it? It was actually pretty awesome because the guy that owned the house, he inherited the house. and it was being used as a rental and he was out of town owner. And he had no idea what kind of condition the house was in because there were tenants in there. And even the other neighbors had told me after we closed on it, they were disgusting.

So the house being in way worse shape than he anticipated was definitely in our favor to be able to say, hey, it needs a lot more. You said it just needed paint. And it clearly needed way more than paint. Yeah, most sellers will say that. Just need some paint and carpet. Yeah, sure. All right.

That's good, though, because if you lock them into that, well, I'm saying like a cop right now, lock you into your statement and then we can find discrepancies in it later, right? It's like it's way you make someone look guilty. So in this case, they said, oh, I want $65,000 for my house. All it needs is some paint. You said, okay, I'd be happy to pay you $65,000 if all that it needs is paint. Then you realize, oh, it needs another $8,000 of work. You can negotiate the price down.

Was it $57,000? You said you got it for it? $57,000. Yeah. Yeah. So that's a really good way to like approach that for people that are afraid to negotiate or they don't like that conflict. Well, you just say, hey, that works for me if it doesn't need any work. You're telling me it doesn't need any work, right?

Oh, yeah, all it needs some paint. Boom. You just gave them yourself your, you know, your escape route when you want to get down to a lower price. Can you tell me how you funded this deal? So that deal was funded using private money. And we exclusively use private money. We've got several private lenders that we've been dealing with for years. and built relationships with them.

So I can't stress enough how important that is. And the reason why is because terms, we funded that property for the purchase price plus the rehab cost. And it was $800, $200 origination fee, no payments. And everything was paid at closing. Nice. Very nice.

I like doing that the no payment thing. Because I mean, like the person still gets the same amount. It just accrues all until the end. And so it just makes it a little bit more breathing room while you're doing the flip. that's usually built by trust with private lenders, but when you can get that, it just makes it. Definitely. Yeah, it makes it awesome.

Cool. All right. So what did you do with it? What did you? Yeah, what did you do with it? I rehabbed it. Nice. It was a good one.

It was the ideal thing, right? It was like full of fleas and it was all the walls were just like black. And then I found out it was actually dust that was built up on the walls. So it was pretty nasty. It was gross. Sounds like I'm describing Brandon's beard. That's not dust. It's food.

I leave it for later so I can, you know, get a fleses. Yeah. Well, the fleas are pets, so we don't get rid of them. So you ended up selling it after you rehabbed it. How much money did you make on this one? So, you know, we bought it for 57. We ended up, so I just want to share this because this is, I think this is kind of a cool thing. So when we bought it, we had set the air V at 118.

And something I started doing with all these market changes is right before we go on market, we were on comps again and look at everything again. And so we had pegged it at 118. We actually end up selling it for 125. Nice. And that has happened so many times over the last two years. Yeah. We're just going back and checking again on that ARV right before you go to market with it has got us thousands more. Yeah, there's actually been numerous times in my career where I've flipped a house and then sold it and not done that.

And I kick myself later. I'm like, wait, I could have sold it for more. Or, you know, sometimes my agent's there to be like, yeah, you know, you could definitely push that higher. But other times, like, agents was just do whatever I tell them to do because I assume that I know what I'm doing. But then, like I make a mistake and I don't check my RV and it's been four or five months. And like you said, that could be thousands or even tens of thousands of dollars in today's crazy market. Yeah, nuts. All right. So how much did you put into that one then?

Did you say that one? We had estimated the repairs. I think I said like 21,000. Okay. Yeah. And I actually came in at 18, I think, on that one. Under budget. Yeah.

Yeah. We're pretty conservative with our, you know, with the rehab estimates just because I always want to, I try to watch out for those things. You know, like we talked about going over budget. So I would rather plan to spend a little bit more than come in under. That's awesome. Which market are you in, Melissa? San Antonio.

Okay. The house was in San Antonio. Yes. Is that all you guys? Is that everything you do is in San Antonio? In the surrounding areas, there's a lot of little towns around San Antonio. It's all the same area, but you know, different names. Okay.

So you bought it. So you had roughly 75K into it by the time you're all done. You sold it for 125K, which is like 50K total, you know, gross. Obviously you pay agent commissions and all that, right? But at the end of the day, you're still walking away with, I'm, I don't know, $35,000, $40,000, right? Yeah, it was 30, 32, I think, after it was all said and done with closing cost assistance and realtor fees and all that sort of thing. I love that.

How much total time do you think you spent on that deal between negotiating and acquiring it, managing people? That house we purchased at the rehab took two months. I think all said and done, it was probably like three months. Cool. Three and a half months. And, of course, you've got contractors working over there and you're doing, you know, numerous deals every single month.

So it's like, this isn't a 40 hour a week on one job. I mean, this is a few hours to maintain it, right? And keep the plate spinning to use an analogy, right? Right. That's cool. All right. Last question, David, of the deep dive. Can you tell us what you learned on this deal?

You know, I think that was the first one that we had started rechecking that ARV. And so that was a big one. But also, like we talked about before, in the negotiation and just knowing that that those people had no idea how bad that house was in really using that to our advantage. You know, we've run into that sometimes, but we get so used to things sometimes that you forget about that

and really being able to say, you know, to help somebody out of a situation that they weren't even aware of, you know, that the house was so much worse than what they thought it was. And even the neighbors had come over to me

after we bought it and said, God, those people were disgusting. And it was like a free-for-all over there. And it was really, bad and I don't know. It was just being able to use all that stuff was kind of helpful. There you go. Cool. All right. Well, that is the end of the deep dive of today's deep dive. Of course, come back next week, y'all folks and listen to the next week's deep dive.

But we're not done with today's show because we are moving on to the next segment, which we call our fire round. Fire round. It's time for the Fire round. All right, let's get to the fire round. These questions come direct out of the Bigger Pockets forums and we're going to fire them. at you in kind of a quick Q&A sort of time here. First one, I'm going to grab Melissa. So I'm going to be investing in an area I've never invested in before. My concern is how to find a contractor when I don't know the city at all. What's the best way to go about finding a dependable, trustworthy contractor in a large

city that I have no connections in? My top way of finding contractors is I'm sure everyone's heard of driving for dollars. Yep. So I drive for contractors. Nice. And I drive around areas and stop. And if I see somebody working on a house, I stop and talk to them. And this is a great way to find contractors, by the way, because you can see their work, which is really cool.

Because when they, if they're just some random guy calling you off a Craigslist or something, you don't know, you know what their work looks like. But if you're driving around and you can see the job and build a little rapport with them and kind of let them know who you are and make sure you let them know that, hey, I do a lot of deals. I can keep you busy because that's a big thing with them. too. It's a pain having to go find work all the time. So that's a big thing that I do. Another thing you can do is search for cash sold on MLS or have your realtor do that for you and drive by those properties. Most likely an investor bought them and they're working on it. And then you can, you know, talk to those contractors. One other thing that I do is just talk to your realtor friends or realtors that you know.

I get my realtor refers contractors to me all the time because they're, They're always calling realtures looking for work. And so that's another way to find them. All right. All right. How about Melissa using a project manager for a flip? Somebody wants to know that they're talking to a general contractor and they're looking for someone who is in charge of making sure the contractor is actually getting the work

done on time. Do you use a project manager? And if so, how much do you pay them? Actually, I'm the project manager. So, but I am. I actually have just. I've started training someone to take over that role for me, which has been really helpful, but they do need to be trained.

And so I think that's an important thing, too, is just to make sure that when you find a project manager, make sure that they are into details and that they are strong enough to stand up to contractors when they need to and to make sure that they understand, like you share with them the expectations, just like we talked about before, you know, that we use contract, we's a draw schedule. The guy that I'm training, because he's training right now, so this might be kind of a weird thing. But I'm just paying him basically for his time hourly to go find new contractors for me

and to go check on jobs so he gets paid hourly. And then I'm paying for his mileage on his car. And then once we kind of get him going, I probably put him on a salary. Cool. All right. Next one. I'm new at flipping and I'm wondering, do you set goals for your flipping business or should I just like do what comes

naturally from my work? Like, how do I know how much to aim for when I don't have previous years of flipping to compare to? I mean, like, I think this guy's saying, like, should I just aim for eight to 12 a month? Like, you know, some people or is like one this year good enough? Like, how do goals come into your business? Well, you know, you don't want to set a goal that's going to be demotivating, right? Especially if you've never done it before. You don't want to say, well, I'm going to go close 20 properties this month.

And then the end of the month, you don't close anything. And then you're sad, totally not motivated. So that's not a good, good thing. So I think setting reasonable goals, and maybe if you haven't done it before, maybe not even setting the goals to be like how many deals to do so much is, how much am I going to market? How many marketing pieces am I going to send out? And maybe coming at it from that way first.

I love that. Because the deals are going to come from that, right? So, but if you're not doing any marketing, you make a goal that, well, I'm going to go talk to this many realtors this week. And I'm going to send out five. hundred postcards this month to this area and be very specific with those goals. And then when you hit those, then the other things will start to happen. You know, I'm going to go find one contractor or, you know what I mean?

Just like start with all the back end goals that will bring the deals to you. And then I feel like you have a good point to set goals for how many deals you're going to do because you know, you know, what you've got coming in at that point. Yeah. I love that. I love that. Hal Elrod, who's a buddy of David. Green and I, he's been on the show a couple of times. He has this great quote that says, like, when talking about goals, it says if you,

if you focus on the process, I'm going to butcher this quote, but if it says when you define your process and commit to it for an extended period of time, the results will take care of themselves, right? So if you want to have a six pack, if you just put up, you know, tell everyone you want to have a six pack that does nothing. But if you set a goal for the number of crunches you're going to do and the number of calories you're going to eat, that's like a process goal versus a results goal. So yeah, I love that.

Cool. All right. So moving on, let's get to the last segment of the show, which we lovingly refer to as our famous four. Let's jump into the famous four. These are the same four questions we ask every guest every week. And now we're going to ask you. So Melissa, number one, what is your favorite real estate related book? Flipping houses exposed. Is that Danny's? It is. Nice. Well, we'll give it to you. I actually really love that book. It's so good, though. There you go. All right. Okay. What is your favorite business book? Oh, I have a lot of those. I have a really big stack of books next to my bed. Patrick Lincione, the Five Temptations of a CEO.

Oh, okay. Yep. Has been really, really good. I also like his book, The Advantage, and I love his process. I took our whole business through that process. And, you know, we really worked through that and got a lot out of it. So very good stuff in there. Cool.

Josh Dork. Josh Dork and just the other day told me I needed to read those books. So I'll put them on my list. I'm not going to listen to Josh, but I'll listen to you, Melissa. You should read them. They're really, really good. And they're real easy to read super fast. Okay.

That's good for me. How about some of your hobbies? I am also a mixed media artist. And I've had... What does that mean? So I make art and I use different mediums. I make art journals and I've had things published in magazines. I've got some of my artwork published on some product packaging.

It's kind of cool. Yeah. So I really enjoy that. That's kind of my thing. And then spending time with the family, you know, we have five kids, lots of swimming and just hanging out with them. I don't know if that's a hobby. Mostly just the art. Yeah.

And I do love to read. I try to read a lot. I like to read things and just learn. So it's a big one. Oh, and workout too. I love working out. Yeah. What's your workout routine look like?

What do you do? Are you like a class person or a aerobics person or a weightlifting, bench press person? I wish. I like to wear index and leg warmers. Oh, me too. Me too. Weird. Yeah, that is weird.

No, I like, so I boot camp twice a week and then I like to run, kind of. And then I started a couple of years ago taking Muay Thai lessons. And so that is Thai kickboxing. and it's freaking amazing. Lots of fun. That's cool. I've done that. Yeah, it's fun.

David's a Thai kickboxing champion, actually. That's not true. I don't just kick boxes. I kick a lot of things. All right. Last question from me. What do you think separates successful real estate investors from all those who give up, fail, or never get started?

You know, you just, you have to keep at it. I know that sometimes it seems, And this is probably so basic, but it really is the heart of it. Things, it seems like you want to quit or it's too hard or nothing's happening. And almost always the change is right around the corner if you just hang in there. You know, we spent so much time in the beginning, just driving for dollars all the time. And we just, we hit it hard for a long time before we even got our first deal. I mean, it's not like we just said we're going to do it and got a deal.

It took a lot of work. It took a lot of sacrifice and dedication and time, you know, away from our kids and stuff, just trying to get everything going. But then once it started going, you know, you just, you can't give up and always learn, always be learning something. Yeah. There's so much to learn in this business and there's so many great people to learn from. Like you guys, just, you know, don't get stuck where you're learning and you're not taking action,

but it's good for you to always just, you know, something comes up. You learn about you evaluate. You know, if you run into a problem, learn what you can about that. I was dealing with a contractor, just real quick example. I didn't know anything about roofs. I didn't know what a saw off it was or, you know, ridge vent or anything. But I spent some time studying about that. And then so it was great because then I was able to go talk to this guy and climb up on a roof and surprise him and myself.

Yeah. So there's always something to learn. And it's fun. It's, you know. Yeah. Just be looking for those opportunities to learn something new. and just don't give up and don't stop your marketing, whatever you do. Yeah, that's actually, yeah, I mean, that's a lot of really good advice.

I was going to say, I just got finished reading grit, the book Grit by, who's it, by Angela Duckworth. Yeah, yeah, good book. It's all about kind of like just not giving up. And it's like moment. It takes time to build something, anything. And the people who are successful tend to be the most gritty. But anyway, good stuff, good stuff.

All right. So moving on, last question of the day I'm going to give to David Green. David. Where can people find out more about you? They can find me on flippingjunky.com. That's where we have our podcast and resources for people. Also, leadpropeller.com for the websites and services that we offer, managed services. And also, we have a YouTube channel, flipping junkie. And there's a lot of cool videos, just some of our before and afters and me going through some rehabs and talking about deals and things like that that you can find there.

Awesome. Cool. All right, Melissa, well, thank you so much for joining us today. I love hearing your perspective on all this stuff. So without further ado, we're going to get you out of here. So thank you so much. Thank you. All right, take care.

And that was our show with Melissa Johnson. Yeah, she seems like a rock star, just managing that whole process. Doing something I could never imagine, like, trying to flip numerous houses. I mean, I have trouble with, like, one house flip. Two is tough. I think I've never done more than two at a time. And she's over there doing eight or nine. It just, you can tell why, because she's very,

very good at what she does. She's very thorough. She's very organized. She has a process for everything. And I can see how that helped them to scale password, someone who really just kind of wings that are flies by to see their pants really can't. Yeah. And one thing that they do better than almost anybody else I know is just their online marketing.

Like I'm glad we got to kind of dive in that on how they're doing that. Because again, there's a like a lot of people are doing direct mail. Not as many people are trying the online route. So definitely something if you're listening to this, you're like, hey, that sounds interesting. Make sure you check them out, learn what they're doing. I know they have a lot of content out there. The flipping junkie podcast is fantastic. And Danny and Melissa are just both great people.

So yeah, learn from them. Keep going and grow your own business. So with that, we get to get out of here. I'm going to go eat some more of that bacon jerky. And I'm kind of obsessed with. And, you know, what are you up to today? Anything fun? Just another day grinding in the business,

learning more about real estate, helping more people, probably going to get a video from you munching on bacon jerky, mumbling about how great it is. There you go. Just a typical Tuesday. There you go. All right. Well, with that, let's get out of here.

You want to take us out? This is David Green for Brandon Bacon Lever Turner. Signing off. You're listening to Bigger Pockets Radio. Simplifying Real Estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Be sure to join the millions of others who have benefited from BiggerPockets.com.

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