Epic Real Estate Investing - How to Close Over the Phone, Fix n' Flips, and more! with Don Costa | 1095

Episode Date: November 5, 2020

In today's episode, Matt is joined with Don Costa, a rehab & real estate expert, a Founder at The Inner Circle Elite Mastermind, and a host of the Flip Talk Podcast. Don Costa is an absolute real estate ace who successfully closes the deals over the phone and thrives in the midst of the lockdown in California! Stay tuned as Don talks about his lead generation, how he manages his team, what he has learned during the pandemic, and how he sees the future of the housing market.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Making offers and cashing checks. What's new? What's Next with Ashley Montaigne. Hello, Epic Investors. Ash here, bringing you what's new and what's next at Epic Real Estate. We just wrapped up an awesome epic intensive just under two weeks ago. We did it both live and virtually, live here in Las Vegas, Nevada. And it was awesome just connecting with all of the investors who were engaging virtually. It was a really great event. Matt covered so much info on unmasking the market.

And we hope that you guys took this information home and are taking action with it. All righty. So let's start with what's new. I'm going to read some wins from our Facebook group on follow through Friday. So Chevy, he's working on acquiring 30 plus inheritance properties in L.A. to sell or to flip with partners. Holy wow, that is huge Chevy. Congrats. John. John, he connected. with a virtual property finder. Awesome. Good find there, John. Chris, he closed 19,000 in a wholesale gross profit, converted a rental to a note, and he's working on another owner finance purchase. Jamie, he said he has his first wholesale deal assigned should close in 10 days for a quick $12,000 profit. That's awesome, Jamie. Congrats on that first wholesale deal. So Mike, he posted a screenshot

of his first disbursement from his first property. He said, thank you, Epic Staffing Community. And it's for $471. That's great, Mike. Any payday is a good payday to me. Brendan, he closed on his first buy and hold by means of a sub two deal. This makes five rentals for the year. That is big, Brendan.

That's huge. Looks like you're on fire. Keep it up. And another one from Chris here. He also closed two wholesale deals for $15,000. And Adam, he went deep sea fishing for the first time, which is awesome. I'm happy you had a good time there, Adam. Alrighty.

So for RIA students, this one is for you. So we're going to be hosting our first investor lab in January here in Las Vegas. Again, this is for RIA students. We're looking forward to seeing you again in our first live mastermind since COVID. And if you're looking to join us and want some more details, you can email support at epicinvested.com. and we'll take care of you, send you all those dates, get all the details finalized, and we hope to see you there. That's all that I have for you guys today.

Enjoy the show. This is Terio Media. Success in real estate has nothing to do with shiny objects. It has everything to do with mastering the basics. The three pillars of real estate investing. attract, convert, exit. Matt Terrio has been helping real estate investors do just that for more than a decade now. If you want to make money in real estate, keep listening.

If you want it faster, visit r-e-i-aise.com. Here's Matt. Hey there, Rockstar. It's Matt Terrio from Epic Real Estate, where we show people how to invest in real estate with an emphasis on retiring early. This is the Epic Real Estate Investing Show. That's what we do here. And if this is your first time here, really glad that you found us. If you like what you're here, make sure you hit the subscribe button before you go.

And if this is not your first time here, welcome back. And thank you for sharing this with your friends and your family and your associates and everybody that you know. You're the absolute best for doing that. I really appreciate it. So thank you. In the news this week, this week, really just one thing in the news, right? And I'd put off recording this episode to when we'd actually know who would be running the country for the next four years. and perhaps by the time you hear this, we will know for sure.

But it's looking pretty much as I'm recording this. It hasn't been decided. It looks like it's going to be Biden and Harris. And certainly looks like Trump hasn't given up yet. He's going to get after it. But I'm a little bummed about it to tell you the truth, not because I love Trump, although I have discovered a newly found respect for him

over the last month or so. you know, having being a man of his age and his stature and having contracted this deadly disease, the pandemic that has turned this entire world upside down. And having recovered in just a few days, really, and hitting the campaign trail like an absolute madman, he just exhibited a work ethic and a desire to achieve something. like I've never really seen before. And I think whether you love him or hate him, I'd hope you could walk away with that lesson

and potentially or ideally pass that on to your generations because that's what hard work looks like. That's what ambition and desire looks like. And I thought that was pretty remarkable. And, you know, I've wavered in and out of my respect and fondness for him, those that don't like him, I totally understand why. But wow, I'm feeling a little bit different about him.

It is really awesome to witness. And that bums me out. And like I said, not because I love him, but because I love this country. And although we have our flaws, I don't think we're nearly as flawed as the progressive movement believes or the progressive movement wants you to believe. And the thought of an overhaul and restructuring of the, the system as they have stated that they want, that they want to do, and they've exhibited that they are willing to fight to achieve it, that makes me a little nervous, especially when it's toward a

socialist type government, you know? And I discussed a few episodes back the difference between a capitalist government and a socialist government. And just how, and I kind of poised it all around the idea of Antifa. But those two governments with, and how they impact. how they each impact real estate investors. And overall, really entrepreneurs in general and small business. And I'm not going to go into detail in any of that if you want to listen to it. I think it's Antifas after your real estate or something like that is whatever I titled it. So you can go check that out.

But what I'd hope that those in love with the socialist and Marxist ideas in this country, I doubt any of them are even listening to this type of a show. But maybe you could pass it on if you know one of them. But I would hope those that find romance in the socialist or Marxist-type ideas would recognize this, that although it may read well and feel good on paper, those in this country that have had direct experience have lived under socialist and Marxist-type governments. And I'm specifically referring to the Cubans and the Venezuelans. it really, and it looks like it impacted the overall Latino vote as well. They made their voices heard by handing Florida to Trump. And I don't think it's because they love Trump either.

But they voted for them for the fear of our government turning into something like what they left. They fled those governments for a reason to come to America for the better life that America promises. And I really don't think this is even a partisan issue because I don't think the vast majority of Democrats or the vast majority of Republicans want that. But I think the Democrats are definitely being used as a means to infiltrate our way of American life. And that's what makes me nervous. And if you don't agree with me, that's okay. It's likely because you're younger, you know, at the age of 30-ish or so and less. and as they say,

if you're under the age of 30 and you're a Republican, you don't have a heart. And if you're over the age of 30 and you're a Democrat, you don't have a brain. And that's a little direct and it's very general.

And it's not my quote. I'm just repeating it. But I understand the intent of the quote. And as the progressive left seems to be of a much younger demographic, and they are gaining power. I mean, there's some very youthful, faces in the house.

And what I fear is that they use their big hearts, their big youthful hearts to overhaul this country. And down the road, when it's too late, their brain recognizes the mistakes that they made. Who knows? This worry, like most worries, may all be for nothing, as they say, worrying works. Whatever I worry about never seems to happen. So historically, that seems pretty. accurate from my experience, I hope in the future it stays true as well. But whoever ultimately

comes out as the winner of this election, like I supported Trump, I will support them as well. And then we will all vote again in 2024. That's all we really can do, right? So anyway, moving on. Let's talk real estate. And today's guest has a flourishing business and he's thriving in the midst of the COVID lockdown in California and successfully closing deals over. the phone, amongst other very cool things. And I invited him to come on the show to share it all with you. He's the host of the Flip Talk, No BS podcast. He's a returning guest, actually. This is a second time back here at Epic Real Estate Investing. He's a fan favorite. And of course, I'm talking about Mr. Fix and Flip himself, the real Don Costa. So Don, Don, welcome back to the Epic

Real Estate Investing show. How you doing, man? I'm glad to be here. Yeah, no, I'm glad to have you back. So I've been interviewing people that are actively investing in real estate. I've been trying to stay away from all the coaches and the theorists and the idealists and stuff like that. And just get down to brass tax and talk about, you know, what's going on right now. There's a lot of uncertainty. I think people are after eight months or so, nine months here in the quarantine, everyone is starving for some certainty. and I've done a lot of research.

I've kind of developed my own opinions. I've shared those opinions here on the show. But I'd love to give kind of your perspective from all different parts of the country, different strategies and stuff like that. So that's what I want to talk about. Sound good? Yeah, I'm game, man. Super.

So bring us up to speed. I guess what does your business look like right now? So, you know, typically through the last couple years, we've been heavy, heavy rehab. We're about 130-ish rehabs a year and about 60 wholesales a year. We sit around 200 transactions. deals a year. I would say deals because deals and transactions are different. And about a million postcards a year, I've been a big postcard guy. Well, obviously, COVID's changed some of that. So with the with the impact of COVID in California, every state's a little different. And it's

always good to kind of get an understanding of what every state's doing. But with California, we have been the first to lockdown. We're still back and forth on lockdowns. And so that, you know, early on. Which part of California are you in? I'm right smack dab in the middle. I'm in Fresno, California. Fresno. Okay. So, yeah, and we operate from about Bakersfield up to Sacramento and some of the Bay Area. So we're in like eight different counties.

So the sellers, you know, obviously not knowing what's going to, what's going to happen, what they're going to do, where they're going to go, you know, our sales cycle kind of changed. It became more of, you know, a longer sales cycle for us. And so I backed off a direct mail because direct mail is kind of costly as an avenue. And I started going heavy into cold calling and text messaging. and really heavy. For the first time, you know, I've been reelected. I'm the old-school guy that has an office.

I've been reluctant to do the VAs. This year we hired VAs and our VAs are our lead managers and follow-up at this point in time. And we just really, really scrubbed our database, all the leads that we've generated over the last couple of years. And where we're finding most of our deals right now are basically the follow-up first. Follow-up is number one, pulling stuff that's been in our system, you know, a year or two or so. And then the cold calling and is second and text messaging is third for us. So we're still dripping out direct mail. When I say I cut back and said, you know, I'm still sending probably between 30

and 40,000 pieces a month, but compared to the 100 to 150,000 pieces a month, it's significantly different. Got it. Okay. Super. You said that right up front that there's a difference between a deal and a transaction. What do you mean by that? Well, people will use the word transaction.

I've done 50 transactions. Well, when you buy it to transaction, when you sell it to transaction, So you might have done 25 properties. So I always want to make sure I make that distinction. It's the same thing with revenue and, you know, profit, net profit. People will say, well, I've done 10 million of revenue, but how much did you net? Got it. I understand.

I like the distinction, you know what I'm saying. Right. No, I understand the distinction, but you said it so quickly. I was wondering, like, what you actually meant by that. Okay. We're on the same page. Very good. Yeah.

All right. So you come way down on the direct mail, you're saying. I want to talk about the cold calling and the texting and how you're using the VA. But you are still sending out, what, 30,000 or so pieces, right? Yeah, 30 to 40,000 pieces. 30 to 40,000. Great. So if you've trimmed way back from the 150 that you're doing and now you're just doing 30 to 40,

what's the difference in that mailing list? Getting more precise in the data, you know, list stacking and, you know, looking at for paying points, you know, you can, we were a big shotgun. We take like an equity list, you know, non-occupied and mail that out, owner-occupied and mail that out. And, you know, I tracked my life. list. So if I did non-unoccupied, it would have a certain phone number. And if I did owner-occupied, they have a certain phone number. So we just kind of see where we're buying from and, you know,

how long it took us to buy from them after we sent it out and that crazy deep dive stuff. But so now we're just getting more precise. We're not just taking a shotgun approach. We're getting kind of laser focused and saying, okay, we want people in these certain zip codes that obviously have equity in their property or likely to have equity in their property, but have a certain pain point layered in. Maybe it's a default or a tax lien. or divorce or bankruptcy. And so now we're tackling stuff that has, you know, two or three or four pain points versus just shotgunning out everywhere.

Got it. So if you're going to stat two, three, four pain points and you still got a list of 30,000 people, that's still a big list when you're stacked. You got to understand. I'm also mailing to eight different markets. Eight different counties. Eight different counties. Okay.

That's broad. Yeah. All right. So that takes us down the whole other direction. So this is a huge operation. How many people do you have working for? Yeah. So right now, I'm a lot similar. I was about 16 people. So right now we have three VAs and we have one, two, three, four, five people in the office. So we're eight now. So we're about half of what we were originally. Originally I had five people on the phones and I had, you know, multiple acquisitions, people on top of that and then office admin as well. But with COVID, we, you know, there's, yeah, we can go so many different directions with this. It's like when you're running a business, you know, you can generate so much income, right? They talk about going deeper, going wide. You take a market and you can, you can, you can. You can. You can. You can. You can. You can. You can. You can. You can. You can. You can. You can. You can. You can generate X amount of dollars in that market.

And then the only other way to make money is to start to increase your profitability by treatment of your expenses. And that's getting more precise in your marketing, tracking your marketing better, really refining your team, you know, and like keeping the A players and trimming the fat. And so when COVID hit, basically, we went through a whole exercise and trimming all the fat our organization and just really trying to streamline our profitability in our organization and maximize that. Got it.

All right. So eight different markets. That's a big area. And you got four to five people in the office, three VAs. Are people going out on appointments? Are you closing everything over the phone? Everything's over the phone right now. We do, yeah, we do an appointment every once in a while.

If the seller is local and they really insist on it, but we're 99.99% on the phone. Got it. Okay. So the entire, that initial conversation results in an offer eventually by the end, I'm guessing? Not always in the first conversation. Okay. And you walk me through the traditional vanilla process? So generally, if a seller calls in, or say it's a cold call or they call in, obviously, the first contact is fact finding, you know, generating the information needed for our acquisitions team to kind of make a decision on the property and have a valid conversation with the seller. There's some rapport building there. And then an appointment set for our acquisition team member. We set appointments just like you would going out on it. If it's super hot, we'll do a warm handoff if that's possible, but nine times out of 10 an appointment set, our acquisitions person will call back on the appointment time. Continue the report building.

They get into the fact finding a little bit more and kind of get to the bottom line of what the seller's need is and how we can solve their problem. If a deal can be closed right there initially, obviously we encourage them to do it. But the sales cycle is a little longer. Whereas when you go on an appointment, you kind of feel like you can't leave without the contract. We may call you back two or three or four times over a period of that day or even a couple of days before we actually end up with the contract. Got it. And each time in between those calls, is it because the seller ended it and said, no, thank you. or you just said you need to look up some more information

or talk to your manager or something like that. Either we need to dig into more information or the seller is reluctant to make a decision or it may be a situation where we asked the seller to send us pictures of the property. Maybe the seller wants a number that's super tight and we need pictures before we can really commit to that. Whereas if the number, you know,

if the math works kind of in a worst case scenario situation and we can close without having to see the pictures or not as they close, but at least lock it up without seeing the pictures, we'll move forward a little faster. There's a lot of variables in there. You know, it's just a different sales cycle over the phone in a lot of cases because, you know, you don't have that necessarily sense of urgency for yourself. We find we actually buy better by taking a little bit more time with the seller.

And since we're doing everything over the phone and we're not waiting to go out an appointment when they're available and they're going to be home, we're usually the first conversation and therefore we don't have that sense of urgency of trying to be competitive of competitors. Right. Sometimes we're still up against competitors, but a lot of times we're not now. I understand. So asking the seller for pictures, do they easily comply with that? It depends on the age of the seller.

Okay. I guess it's a good test also for motivation. If they're going to go through that hassle to send you pictures, they are motivated. Right. Yeah. Super. All right. So if you, let's imagine that you've eventually reached this deal with the seller.

what's your preferred method for getting the actual signature on the contract? DocuSign. We like DocuSign. So, you know, for instance, so I like to do an exercise where I walk through my office and I'm like, give me something to close because I started doing acquisitions. And Friday, one of my team members said, I got this seed for you. They handed me a lead sheet, which basically told me my buy box where I needed to be. I called the seller up.

It was a really easy seller. you know, we had a conversation about, you know, he wouldn't give me a number. So I basically anchored them. And I said, you know, if I can throw you an offer between 150, 160 is that a conversation we're willing to have. He said, absolutely. I said, great, let me work on some numbers. I knew I could I think I could pay 175 for the property. So I didn't want to jump because I didn't want to be too eager. You don't want to be thirsty, right? So I said to be back. Reluctant buyer. So I got out the phone. I kind of kicked back in a chair for about 15 minutes. And then I called him back and I made my offer. I actually offered a 165 for the property because it was very fair number. And he agreed.

So what I did is I said, all right, I'm going to get the contract set up when you're going to be in front of your computer. And he gave me a time. And actually it was pretty much right away within the next 15 minutes. So we got the contract set up. I called him back. I said, are you in front of your computer? Great. I had my team member send it over to him. And I said, okay, go ahead and open it and make sure it populates. Got it. Did. And I said, read through it. Let me know if you have any questions. He did. And I said, okay, click here, here, here, here and here. And he did. And he did and the contract was executed. So you got to control the process. I wanted to, I wanted to lay that in there. Like, you can't just send a contract into a black hole because things happen.

They get busy. They get cold feet. You have to control that process in order for it to work. Yeah. It's almost like a call to action. You have to hold their hand through the entire action. Right. Tell them exactly what to do or else they just get lost and sidetracked and you went through all that work and you end up with no deal. 100%. Yes. Super. Thanks for sharing that. I appreciate that. Because I, I, I, I think that was really helpful. And I think a lot of people found that helpful as well. All right.

So let's go to cold calling and texting. The cold call, you're finding most of your deals just through your old data, right? For old data. And that's, that I've been hearing that frequently. People are just kind of going through their old data and discovering that the, the time-honored cliche, the fortune is in the follow-up is actually true. 100%. And I just want to add that sometimes it's not that the seller is something for the seller change.

Like right now with markets being as hard. they are. Sometimes the ARVs are changing and now the deal works. That's something I think people overlook. They'll go through the notes and they go, oh, well, you know, we could not have to say what they wanted last time and they move on. And you should be recompying those properties because we're finding a lot of times that the number works now and we're able to do it. So. Very good. All right. So you're calling through, you're texting. Are you doing both at the same time or do you have a sequence for those two? We're kind of attacking it all at the same time. I'll be honest with you. You know, a lot of people like to do one and then the other. I have one group doing

the texting. I have a call service that I use that's doing the cold calling for us. And I just send them both the same list because people respond differently. Like people are going to respond to direct mail that aren't going to respond to cold call and people are going to respond to the text and aren't going to respond to direct mail. Yeah. You know, and so we just attack it all at once. Yeah. My assistant coach, Josh, he has a, he sends to a probate. He works the probate list. But he'll send three marketing pieces at the exact same time from three different angles, looking like it's come from three different companies. 100%.

And he gets the response rate varies, but all together, his response rate is really good. All right. So that cold call, let's say, let's start with what that conversation might sound like if it was you're following up with an old lead. Yeah, so I don't do those. Yeah, I don't do those. But typically they'll just call back. It depends on the list and how we're attacking it in our database, right?

So they'll either call back and act like we're a new company. And they'll be like a clean cold call and just basically, you know, we just want to reach out and have a conversation with you about property XYZ and see if it's something you might be considered selling. And, you know, if they say yes, great, they have the conversation. They just know, is there anything else? You know, do you own any other properties? You might be interested in selling type of icebreaker.

If they're calling somebody that's been in the system that they're going to admit that, you know, they're in the system, then they'll call them back and say, you know, hey, this is so and so. And, you know, we just want to follow up with you. you know, we've had a conversation with you X, Y, Z months ago, and we wanted to kind of see if you're still interested in possibly selling that property. So, you know, very simple. We've, I had a CEO come in for a while that's really tried to make us structured and corporate. And as you know, as well as I do, that doesn't work in this industry. The more you sound mom and pop, the more you sound approachable, the more you just sound like a genuine human being, the more success you're going to have in conversations. And we really try to push that in all of our approaches. I even, push my team not to identify our company name on the phone calls at this point in time and to make us sound less corporate and more approachable. You have been saying that the, I've been saying this for several years now,

but the new sales game is to have no game at all. 100%. Just be straight, right? It's the best way. And it just happens to be the most effective way these days. Perfect. All right. So we've got the old leads.

And so the text messaging, what is that? What's been the text message you've been sending out that has the best response? There isn't one that has a best response. The key with text messaging is alternating your messages because if you do not, carriers will block you. And that's a whole game of cat and mouse. Alternating your messages or alternating the numbers? Alternating your numbers and alternating the messaging.

So you don't want to have, you know, you want to send the same message out just a handful of times before you change even the message part of it. And it's kind of a cat and mouse game of, you know, trying to figure out like what's not going to get blocked and what people are going to respond to and that kind of thing. And I'll be up front and honest to you. I have VAs doing that. I don't even know what they're sending to be on it. If I'm being real with you.

No, that's fine. But I do know it's a whole cat and mouse game of alternation and numbers and everything else just to make sure that they're constantly not getting spam, you know. Right. So you have the VA's doing this. They're doing the initiating of the contact or they are taken, but they're also taking in that first call as well. Yeah.

So depending on where we're at in our day and how busy, the rest of the team is, they're ideally the ones that are going to be handling the first calls. If my acquisitions managers are available and a call comes in, they'll definitely grab a call. But primarily the VAs are the first point in contact. They're the ones reaching out as far as the text messaging goes. And the second they get somebody on the hook, they turn them over to the acquisitions team. And the same thing with the phone calls, they'll turn them over to the acquisition team. So it's the grunt work, right?

You don't want to burn your acquisitions team out on and you don't want to do it yourself. And that's really what we have them doing. Got it. Perfect. What type of training and management do you have over the VAs? And first, are they U.S.-based or are they outside the U.S.? They're outside the U.S. You know, a good friend of ours.

I think you know well Robert Nichol and Rocket Station is who we utilize. And they are outside the U.S. I really ended to between me and you. I really struggled with doing outside the U.S. VAs. I really thought it was going to not help my business. I thought the accent and stuff like that were going to hinder our business. And the funny thing is a lot of the people that, especially the men who are talking to these young women are trying to flirt with them. So it hasn't hindered us in any way, shape, or form.

There are a few people that, you know, our objective to having somebody call with an accent. But for the most part, it's been really, really good for us. So we have somebody on our team that I hired in 2018 as a lead manager that's now our sales manager. And she's the one that manages and trains the VAs and she meets them, you know, three times a week. and this is the phone calls. We have a VA that's like right in the middle of her and the VAs. It's like just a real good systems and process this person that goes through and gives me daily KPIs and everything they're doing and listens to all the recordings and flags anything that

Ledi needs to listen to. So you have to manage them. You have to listen to the phone calls. You have to give them feedback and coach them and teach them. There's no such thing in this business. I just don't believe they're set it and forget it, you know, plug and play. You know, you really have to, you know, constantly, you know, key. And the fundamentals, you have to keep teaching your team the fundamentals and reminding them of the fundamentals over and over again.

You know, a good friend of mine used the analogy blocking and tackling and football, you know, and that's what they practice over and over and over again. And it seems so basic and simple yet that's what they practice the most. And it's for a reason. That it's. Practice. Yeah, practice makes perfect, right? Yeah. Teaching and coaching practice, you know, keeping the fundamentals in check, making sure that you guys are doing what you're supposed to be doing all the time.

Right. I remember when I read the book the first time, the four-hour work week, and that was probably 11, 12 years ago, something like that. And I was like, I can get a guy in Pakistan to do all this work for me for $4 an hour. And you're right. There's no such thing that said it and forget it because I went through a number of VAs in 10 different countries. And I was like, why aren't any of these people getting it right? Because they're real people on the other side. And they need the training and the encouragement and the management just like someone would if they were sitting in your office with you.

Right. 100%. You got to build your team. I mean, you can't, you know, and that's just this part of being a leader. You got to recognize that, you know. And once you build good leaders, you got to put processes in place to help them stay, you know, good employees. So. Great.

Well, thank you for sharing how that works for you, that process. What are you noticing right now that, say, is different than four or five months ago when we first entered into COVID? You know, when we first ended into COVID, I really, I went through the 2008. crash. I'm not going to rehash that. And I lost everything because I was just a tool. So I'm super conservative in my business. I know my numbers. I know my team. And we went into COVID. I went into protection mode. You know, it's shore up some capital. Let's cut some expenses and just make sure we're smart about everything to do. Prepare for the worst and hope for the best. And I really thought that things are going to crash quickly. And I'm just surprised at some of the real estate markets.

They're on fire. I mean, even the market I'm in right now, Fresno here, I mean, stuff's just going for ridiculous numbers. We're wholesaling and wholesaling stuff and getting money that just blows my mind. And so that's something that's definitely different than a handful of months ago. And I don't know how sustainable it is. We have all kinds of factors that says it isn't sustainable. But while it's happening, I'm definitely going to capitalize on it and just keep my eye on the market and not take it for granted and be ready for it to pivot or turn when it does. Right. I think, you know, I was in the same boat as you. I thought, okay, get ready. Prices are about to drop and we're about to start

cherry picking just the best stuff. And it never really happened. And I noticed with the conversations with sellers back then and I noticed with, and Jeff Garner, a guy that leads the ground of pound school with us here at Epic, he's in St. Louis. And, you know,

just for months, like we were just sensing zero pain on the seller side of things. It almost like motivation disappeared for a minute. Right. And how are those, are you noticing a different conversation happening right now that we're, you know, maybe we've been in this eight, nine months now. Yeah, you know, early on, we noticed that there was a conversation difference in the fact that they weren't sure what was going to happen so they didn't want to make a

decision. You know, that was one of the things that led us to kind of change some of our marketing channels because we knew that there was going to be a longer sales cycle. Right now, one of the biggest challenges is our market's so hot. So anything that's worth buying is flying off the shelves. There's really nothing available for rent. And so the challenge with sellers now is, well, where am I going to go. You know, I want to sell my property. I have this pain point. I'm ready to move, but, you know, where am I going to go? And so that's been a different conversation, you know, and we've had to kind of scramble internally to say, okay, well, let's start looking for options, you know, and ideas and resources that we can refer them to to help them, you know, have an option

to move. They choose to sell their property. There's a report this year. There's probably going to be a 700,000 person difference of people exiting California this year. And I was just talking, we just, we had a new private client register with us. And he's a real estate agent in Silicon Valley. And we were just going back and forth. And I was talking. I was like, you know,

with everyone leaving California, I mean, gosh, our house is sitting over there. And he says, nope, as soon as someone moves out, there's five people ready to take their place.

And it's just pretty remarkable as to what's going on in the market. And then that price point between $1 million and $1.5 seems to be the fastest growing market in the country. Have you experienced that? Yeah, you know, we are, Fresno, California is more like the rest of the country. We sit around $250 for median house value. I'm sure that's increased recently. And, you know, Bakersfield up to Sacramento, it's relatively the same. We do stuff in the Bay Area, where we do stuff like in Oakland, California.

you know, we did make $165,000 on a wholesale in Oakland. I mean, so the numbers are definitely different in the Bay where we do business, but in our main market, anything that's under 300 flying off the shelves. I mean, we got a million dollar property here is still a very expensive property. And they're not necessarily moving as fast. They're still moving quickly, but not as fast as some of the lowering stuff. Now, if you're in the Bay, like in San Francisco, a million dollar property is an entry level property. And that's one of the reasons why, you know, in California, you know, in those larger markets,

you're seeing that kind of stuff move a little quicker. Anything that you've learned in during this pandemic that's mad of, you've discovered a better way to do things that you'll probably keep even after the pandemic is gone? I was adverse to not have been in office. You know, I'm old school. I like being able to walk through my office and feel the energy. And I really fought the virtual side of this business.

And the one thing that this changed for me is, you know, my team locally for months was working from home and then we've added the virtual component to it. And I'm looking around the 3,000 square foot office. It's now half empty and realizing that I really don't need an office. And so I think that's going to change for us. I think that's where the impact is going to be largely in the real estate space. This commercial is really going to have their butts handed to them because a lot of people are thinking the same way. You know, I fought it and now I'm embracing it. And so that's changing. on the marketing side of things you know

cold calling we're going really really hard in we were always doing cold calling but never to the level we are so that's changing for us and for me like I said I'm just trying not to take things for granted and just kind of watch you real close and what's going to happen I think that the biggest lesson for me here is kind of the same lesson I've learned all along which just reinforced is you know

even when you think you know stuff happens it just blows your mind you know and you just just got to be prepared. You got to run a real business. You can't take things for granted. And you got to make sure that you are smart about your money and your numbers and all of that. And so it just reinforced all that. So what are you doing to prepare for the future, maybe immediate future and long-term future? Well, I've always been big on keeping capital reserves. You know, I run my business. I'm one of the few people that I feel like can run a rehab business

and cash flow. You know, I've learned how to structure my borrowing. I've learned how to structure, the way my expenses are in my organization so that I actually can cash flow, even when I'm growing as a rehabber. But capital reserves have always been big to me. And so just shoring those down, making sure that I'm being smart and lean about my organization to prepare. I know something's coming. I think we all feel it. I don't know when. Like I said, my bet right now is commercial is probably going to be the largest opportunity out there. And I just want to be ready to take advantage of it. And so I'm just positioning and educating myself. I think that's a huge thing that people think that when you get to a certain point, you don't educate yourself. I'm in as

many masterminds as I can be in. I'm talking to as many smart people as I can talk to and just trying to make sure that I have as close to a crystal ball as I can possibly have. Because regardless of what the market looks right right now, there are going to be huge opportunities unfolding here in the near future. And I want to be ready to take advantage of them. Right. Speaking of masterminds, you run a mastermind now, correct? I do. And how's that been going for you? It's been good. It's been really, really good.

You know, it's a little over a year old. And, you know, COVID hit kind of smack dab in the middle of our first year. And see, it really, it was really good to have a good group of people to surround yourself with. You know, I had, I brought some tremendous experience at table from going through 2008. A lot of the members, you know, are newer in the business and had a really good eye on opportunities and technology and different things like that. We're able to come together as a collective and just really kind of short. each other up. And I just think that's huge. When you're in the right group of people, you know, and they all got your back, it's, it's one of the reasons why I am where I am and

one of the reasons why I feel like I was able to, you know, keep my head on straight and maintain stability through the whole COVID thing. And it's just a really good group of people. Getting around the right people and just, even if it's just like-minded people, particularly with as an entrepreneur, we really, I mean, it's everyday life to us and it seems normal to us, But we really are a rare breed inside of society. And it can be a lonely existence and getting constantly interacting and engaging with a group of like-minded people. And even better, if you can find a group of people that are doing more than you are, just cannot be stated enough.

I wish they would have taught that like our senior year in high school. They should have been embedded in us all the way through. Totally. Because it's been such a game changer. I mean, I went through the whole music business thinking, I can do this on my own. and I had a major label distributed record label that I tried to run 100% on my own. Like I was at the mailhouse. I was the producer.

I was the A&R talent scout and I was the marketer. I was even designing my own CD and album covers. You know what I mean? And that was just a lesson that I learned going into real estate and getting around with the right people of how much more quickly your success, how much more it accelerates by that way, just by relationships. So good, good. That also highlights getting out of your business, though, and not in getting the right people in place, too.

Yeah, no, totally, totally. I mean, just the fact that you can get around people that are doing the same or better business than you, there is so much to gain from that interaction, that whole mastermind principle. And when two minds get together, a third one is created. Right. So you've got your mastermind, and I would love to come visit. How many people do you have engaged? Yeah.

So we have 49 members right now. You know, we are, we're growing. We're not growing as fast as we probably would have every push through COVID. We really stopped the marketing because we wanted to focus on the group. So, and right now we're just basically, you know, we're looking for just the right fit, the right people. You know, we're kind of quasi invite only, but it's an application process. And I'd love to have you at one. And, yeah, as a guest, we have one coming up in January of this year that is going to be in Miami.

It might be cool to have you there. So, and we just hang out and we dive into businesses. And we're unique. We don't just do the whole hot seat thing. Like, you know, this last one we had everybody bring their 90 day plan and we like broke down everybody's 90 day plan and took a deep dive. And a lot of people, we reinforced what they're going to do. And some people we turned around and said, you know, this person you want to hire.

That's not what you need. You don't need a business admin. You need a project manager and just kind of help refocus businesses. And that's the fun part. And then we got to sit and hang out and have dinner and talk and, you know, really, really just collaborate and it just, it's really powerful. That's awesome. Who is the ideal person that you're looking for? Somebody that is doing deals that has a business. We don't care if you're doing 100 deals a year, but you're, you have a real business. You're not going to be asking the basic

questions, right? That you're going to be able to come and not only learn, but add value to the group. So we're looking for somebody that doesn't have, you know, I guess in a scarcity mindset, you have an abundance mindset that you're willing to share openly. And, and yeah, I mean, at the end of the day, it's really about, you know, are you willing to have our back? Are you somebody we're willing to have your back? And that's what it comes down to. And we're just looking for the right people to be in the room. Great. If someone was listening right now and they're like, hey, you're talking about me. What would be the best place for them to go to apply? Be in this room.com is the place to go. The group is called Interstircle League,

but going to be in this room. Because that's the room you want to be in. You don't want to miss being in this room. I like it. I'm a big fan of domain names. When I hear good when I get excited so I like that one. I'm a domain hog as well. Yeah, each, I got about 300, I think. And each one represents a brilliant idea I had usually while I was tossing and turning in the middle of the night or was in the shower. And of course, I have to get up right away and go pay my $7.98 cents to grab that domain just in case. Anyway, perfect. So moving forward, you know, you said you see there's going to be a lot of opportunity coming up. You know, you said you had a crystal ball.

You just admitted it. I want you to tell me what you saw in there. What opportunities do you see and how soon do you think they'll be here? Well, I wish I had a crystal ball, right? No, no, no, no. You said you get close to the crystal ball. I try to get as close to crystal ball as I could add. You know, I think I really, really, really in my bones feel like commercial is going to be where the opportunities are at.

I mean, so many businesses are realizing that the virtual thing, I don't think it was going virtual. There was the issue. I think it was whether or not they believed there was technology to support it. And the technology is there, right? With Zoom and all the apps and everything else and the social aspect of things, the technology's there to support virtual offices in a way that you can make them almost feel like a real office and have the accountability you need and so on and so forth. So I think a lot of businesses have been forced to realize that through COVID. and that's going to change the commercial landscape significantly. As far as when, I think landlords are starting to feel it now.

I'm seeing more and more lease signs for lease signs pop up. And I think over the next few months, we're going to start to see more of those opportunities unfold, as leases come due especially, and people aren't renewing. In the residential space, so that's a hard one to bet on. It's one of those things, it's like, if this, then that. Like if the government continues to do bailouts and does some crazy loan programs to prop people up, this thing could last, you know, three or four or five years, just like, you know, 2000, you know, two, three, four, and five. If they don't, it could fall sooner. And so the million dollar question is, what are they going to do? Who's going to be in office and what are they going to do to shore things up? You know, right now interest rates are super, super low. And once they burn through all those buyers and the demand and the inventory starts to go up, that's going to decrease, I think, some of the demand in the market. and then what are they going to do to increase more demand?

Are they going to start to do the liar loans again? Are they going to start to do some of these crazy loan programs they did back then? You know, there's just a lot of what-ifs in the residential side. How much is the lack of jobs going to impact people and their ability to stay in their properties? That one's a toss-up for me. If I had a bet, I would say within the next year we're going to see some shakeout, but it could be three or four or five years. Yeah, the last time we were at this employment or unemployment rate, I can never keep those straight. was there's only about eight years ago when we were at 8% and uh you know we had good tenants then

right so i'm not so concerned what i'm actually seeing is this migration from the major metropolitans to more suburban and rural areas and actually a lot of downsizing um people are coming in and paying cash for their residences just like an investor would pay cash and i'm also seeing people i don't want to buy yet so uh i'm going to go ahead and rent for a little while So I see a really strong demand for rentals right now. Go back to commercial because I agree with you. It's got to got to shake up because this is totally transformed how people do business. But if those commercial properties, if they were to go vacant and start becoming available at a discount, what is the opportunity there for you?

Well, I mean, you can wholesale commercial, right? But to who, right? That's what I'm thinking. If nobody wants it because. everybody's figured out a better and more efficient way to work without office space, then what happens to that space? For somebody in my position, you know, I've always been really residential geared with an eye on commercial. And, you know, when the markets do what they're doing, you know, there's an opportunity for things going to sale. When things go on sale, you want to, you definitely

want to try to buy what you can. So for me, that's my time to, you know, make my commercial play, you know, to start buying things at a discount and just position myself in commercial in a way that when the market comes around again, if it comes around again, there's opportunity. I don't know what that's going to look like. I don't know if commercials are going to be dead forever. I just know it's going to take a hit. And, you know, things like, you know, in my business, I'm paying for a lease here. You know, maybe I buy a building and now I don't have to pay for a lease. And, and, you know, I'm somewhat virtual and I'm somewhat, you know, office space. You know, I don't know, Honestly, I just, I think the economic impact, honestly, of what's going to happen in commercial is going to roll through other markets. And that's, that's really where a lot of the opportunity is going to lie. I wish I had a good answer for you, man, because I'm not a commercial. I just, I just curious. Like if it goes, if that type of, if nobody wants it and therefore it goes on sale, then why would you buy it unless you had an actual personal use for it? Right. Right. I mean, it's a tough call right now, you know, at the end of the day, because, you know, it's the same thing when the market fell apart in 2008. Everybody was like, don't, don't invest in rental.

on this and this and that. It's like, but the people who did when it came back around were in a really good spot. The question is, if everybody goes virtual, we'll commercial come back around. I don't know.

Yeah. It's going to be interesting to see what the future holds for us. Because as of this, when this records, we will probably already have a decent idea as who is going to be president. Very true.

Let's just, let's pretend that, let's see, how can we play this game? Let's pretend Trump wins. Do you see, where do you see the opportunity or how do you see it changing? Or do you? Man, you know, everything I'm doing right now is guessing I want to be very clear.

And I, you know, Trump is, he is a businessman. And that's, you know, it's unfortunate he's not a politician because, you know, he, his mouth gets him in more trouble than it probably should. But he is a businessman. He understands business. He understands regulation and everything else. And I think he's going to do everything. He's a winner.

He's not going to let him. fail in the economy. He's going to do everything can to drive the economy. And I think we're going to have the V they're talking about, depending on the fight, obviously he has up against the other side. But I think that just by the nature of who he is as a businessman as character, we're going to see, you know, a bounce back in the economy. We're going to see a lot of good things happen. If Biden gets in, you know, I think. That's my next question. So now let's play the game if Biden wins. Yeah. If Biden wins, you know, when Biden and Obama were And we saw one of the slowest economic recoveries ever.

I mean, I think it's going to be kind of the same thing. I think he's going to increase taxes and regulations. I think it's going to slow things down tremendously. And then the million dollar question is, what are they going to do to prop it up? The thing they did this time, you know, which was different in 2008, they propped up Main Street more than they propped up Wall Street. In 2008, they kind of saved Wall Street and left Main Street to die. So in this particular case, they're doing kind of the opposite, which is allowed everybody to feel good and feeling good, you know, kind of drives the economy. me. So I just think at the end of the day, people are going to feel better under Trump than they will under Biden. And I think that unless they do something crazy under Biden, like I said, the liar loans and the stated income, state of asset stuff that they did or the pick of payment loans, you were going to see a very stagnant growth, if any at all. And that's my guess. And I'm not trying to say which way I'm going to go politically. In this, I just think that there's two different processes, two different philosophies, you know, two different mindsets from each individual. And I feel. I feel.

like one's going to choke everything off and one's going to give something, give everything gas. Yep. Yep. I agree. I wish people could really, in this environment, could separate policy from personality. 100%. But we're strong personality people in this economy right now or in this society right now. Right. I think that's going to dictate the results. But if we're policy, I think it would go to a different direction. But you know what? We got no control over that. We can cast our votes and then go on about our lives and play by the rules that are given to us. So, I'm ready to move on though. I'm done with this year.

I just need to know what's at stake or not what's its stake, but what it is, what's the game, what are the rules, and now let me figure out how to win that one. 100%. I agree with you. Right. Well, Don, it's been a pleasure. If someone wanted to get in touch with you outside of applying for the mastermind, be in this room.com, by the way, if you want to go apply it and join up with Don. What would be the alternative way for them to get in touch with you? Yeah, they can always email me at Donoflip.com. I do respond to that.

And you can find me on Instagram at the Real Doncosta. And I'm all over Facebook. You are the real Don Costa? I'm the real Don Costa. Oh, okay. Got it. I thought I was talking to that other guy. Look, there's a Don Costa music composer out there.

So you Google me from like the 50s. And I can't beat that on Google. So I always have to tell people, if you want to find me on Google, go to the Don Costa real estate to find me. I always hate that when I'm trying to find. I try to Google some. and I find out there's some obscure actor from, you know, 1970s with the same name and they've just filled up the whole internet

and now you can't find the person. Yeah, he's got a beat, yeah. But if you search the real Don Costa, then you're easily found. Yeah, you'll find me on Instagram with the real Don Costa. Awesome. So pleasure, Don. Let's stay in touch. Let's do this again.

And best of luck to you. 100%. I appreciate it. All right. Take care. All right. If you found this episode valuable, who else do you know? Because there is a good chance that you do know somebody else that would.

And if you think about it, when they're, when their name, comes to mind, share with them, and ask them to click the subscribe button when they get here, and I'll take great care of them. All righty, that's it for today. God loves you, and so do I. Health, peace, blessings, and success to you. I am Matt Terrio. Live in the dream.

Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. You didn't know home for us, we got the cash flow. This podcast is a part of the C-suite radio network. For more top business podcasts, Visit c-sweetradio.com.