Epic Real Estate Investing - Local Investing vs. Virtual with Brian Ellwood | 255

Episode Date: April 10, 2017

Check out this very special episode of Epic Real Estate Investing featuring a talented real estate investor & entrepreneur named Brian Ellwood. Learn about how Brian built his virtual investing business that provides passive income and a lifestyle of freedom working just 20 hours per week. Then, discover how you can organize your team to build a system of deal flow for more consistent success. Get ready to grow your virtual investing real estate business the Epic way! ______   The free course is new and improved!  To access to the two fastest and easiest strategies to a paycheck in real estate, go to FreeRealEstateInvestingCourse.com or text “FreeCourse” to 55678. What interests you most? • E.ducation • P.roperties • I.ncome • C.oaching   Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Broadcasting from Terrio Studios in Glendale, California, it's time for Epic Real Estate Investing with Matt Terrio. Hello and welcome. Welcome to Epic Real Estate Investing. This is the place where I show people how to escape the rat race using real estate. Now, if you're just getting started and or you're, maybe you're just looking for new and creative ways of making money in real estate, I've put together a free course just for you. you, including a checklist, a very thorough checklist on how to find motivated sellers. Motivated sellers. We hear about that a lot. What are they? Well, they're property owners that

are willing and able to sell you their property at a discount. So to access that free course, go to free real estate investing course.com. But why in the hell would they sell you a property at a discount? Well, it's a very simple reason. 95% of all transactions are conducted on the MLS. They are not motivated. They will not discount their properties. But we're not looking for those. We're looking for the 5% that are, the people that are in three types of distress that we come across, either financial distress, personal distress, or the property itself is in distress. And that represents problems for people. And what we are, we're problem solvers.

And if we can go and solve someone's problem, they will give us equity in exchange. They will exchange equity for peace of mind. They'll do it every day, all day long, and twice on Sunday. So that's the 5% that we're looking for. And if you'd like to access that free course, go to free real estate investing course. All righty. Got a great show for you today. As always, we've got a really good chain of shows going on in the last couple months

and no time or no reason to stop now. So before I get there, though, a few more events on the calendar. I'll be at the Sin City Ria in Las Vegas on April 20th with my good friend Omar, Omar, Omar Merced. And this is going to be a meeting like no other. There's no sales pitch. They're not trying to get business from you or anything like that. They're just talking about the good, the bad, and the ugly of real estate investing

as this is a special meeting. They're going to have some prizes given away at the end, so don't miss out as their venue for now will only hold 60 people. So for more information on that, log into meetup.com, M-E-E-T-U-P dot com, and search Sin City Ria. All righty, that's April 20th. Love to have you out there.

It's open to the public. On April 29th, I'll be the keynote speaker at the third annual RIA Bar Camp. This is hosted by Thrive Ria in San Ramon, California. So for those of you that who are unfamiliar with their, their bar camp, the REI bar camp, the concept, it's kind of like an unconference. There's no formalized presentations. Instead, bar camp participants, they decide the topics to be discussed at the bar camp

and then real estate investing pros lead discussions about those topics. So whether you're a newbie or a season investor, you're going to love this REI bar camp and you'll walk away feeling more confident and inspired than you did walking in. That's their guarantee. So save the date there. That's April 29th, 2017, and they are on Meetup also. So go to Meetup.com and look for Thrive Ria, T-H-R-I-V-E-R-E-R-A. And that's in San Ramon, California, Northern California.

All righty. And then, finally, May 24th through the 26th, the Epic Intensive, it's officially open. And there we're going to give you the highly potent tools and methods. Every real estate investor can use to find more motivated sellers, buyers, and lenders in as little as 60 seconds. That's right. No hype there. I'm going to show you a couple strategies where you can generate leads just like that really quickly.

Even if you think you've heard it all before. Like, oh, I heard this. I heard that. No. I'm going to show you some new stuff. And I'm going to give you the, with these weapons of mass production, that's what with the theme of it. Weapons of mass production. With the weapons of mass production at your disposal, you're going to find more deals.

You're going to cash more checks. And you're going to finally start calling the shots in your life. Early bird pricing is still available, but not for long. That's May 24th, 25th, 26th. the closer we get to capacity, the higher the price is going to be. And that's not some dumb hurry up and get it quick gimmick. No, it's nothing like that. It's due to the nature of how hotels and venues work.

I wish I could get around this part, but I just can't. So the sooner that we can confirm the numbers with the hotel, the cheaper it is for us. And if it's cheaper for us, we can pass that savings on to you. But if you sign up later, it costs us more to make those adjustments down the road. So therefore we have to ask you to share in that expense with this. So, I don't know, probably more than you really needed to know. but that's why the prices go up, the closer we get to capacity,

the closer we get to the date. So ignore all of that, I guess. Just go sign up. Epicintensive.com. You don't need to know any of that. Just go sign up. I'd love to see you there. We're going to arm you with these weapons of mass production and we're going to turn you into a downright fire breathing closer

and producer yourself. All right, we're going to give you some skills and some techniques that are going to really turn you into a top producer. That's the intent. Epicintensive.com. All righty. On the phone today, great friend of the show. previous guest, we had to delete his episode for various reasons, and we'll get into that.

But I guess let's actually get into it. And let's help me welcome to Epic Real Estate Investing, Mr. Brian Elwood. Brian, welcome to the show. What's going on, Matt? Thanks for having me. You bet. Glad you're here. So, Brian, you are in, last time we were on the show, that you were in Nashville.

I think you've changed or you've moved locations. Tell me about your current situation. Yeah, so our business has always been in and around Nashville, kind of middle Tennessee. And I lived there for the first two or three years that we were in business. And kind of over time, we worked on making our business built in such a way where we could run it from our house. And we didn't need to leave to go to any of the properties or anything like that. And so once we built it up to speed, we tested that theory by moving across the country. I've always wanted to live in Colorado.

And so now I do. And I've been here for a little over two years. And we still run our business virtually from here. And the business is still in Tennessee. Got it. So two years running, you've been running it virtually? Yep. Awesome.

Awesome. Any loss in production or anything like that? You know, I'd say, you know, if I'm being honest, if we lived in Nashville, we'd probably be doing a little bit better. There's always things you're going to see when you can put eyes on properties and when you can meet your team in person versus over the phone. But it's what I would call a lifestyle tradeoff. So maybe I make 20% less money a year by not being there. But what I gain in that is getting to live in Denver and, you know, go snowboarding, you know, 30 days a season and all that stuff.

So I'm willing to make that trade. Super. I get it. Totally makes sense. Let's talk about, I want to talk about virtual wholesaling in a minute because it's, it's, or just virtual real estate investing, not necessarily wholesaling, but real estate investing overall because it's on a lot of people's minds. And we'll get to that in just a sec. But just kind of removed the big pink elephant out of the room. You were on the show, I don't know, maybe a couple years ago.

And it was an outstanding episode. You revealed, I mean, the inner workings of your business. It was really informative. But we had to take it down because there were some issues. and this is actually not an issue that's exclusive to you. There's a lot of people that are concerned with this. There's some people out there who it has affected, but I don't think it's, you know,

it hasn't killed anybody's business by any means, but it is something out there that's at top of mind, and depending on who you talk to, you know, it has to do with wholesaling and whether you are violating representing real estate without a license. Can you, without going too deep, we don't need to get into the nitty-gritty, but essentially you would, you were,

wholesaling properties in Nashville, you attracted some media attention, some not favorable attention. And, you know, so what was the complaint and how did it get resolved? Yeah, so basically what happened is, you know, we were wholesaling, you know, assigning contracts to investors. We were doing rehabs and buying rentals, but some of our business was assigning contracts. and there was a disagreement among one of the investors that we did business with internally in their business. And someone in their business, you know, kind of brought to light all the transactions we had done with them because they thought it was like violating real estate code and turned those into the local news who made a story out of it. And so I think at the time, you know, I was just a little freaked out by all that. And I had just been on your show and we talked about, you know, doing assignment deals.

And I asked you to take it down just in case it would, you know, somehow add more fuel to the fire. Probably in hindsight it wasn't necessary. I wish it would have never asked you to take it down. But, you know, that didn't really, once the news article kind of came out, You know, there was a couple weeks where everyone was calling me and saying, hey, what the hell was that? You know, you okay? But, you know, everything worked out fine. You know, I did even speak to the Real Estate Commission and made sure our transactions were kosher and everything.

I will say that it's been, shoot, closer to three years since that happened. And over that time, we have switched our business model to where we just close on everything. and do some amount of work to it. I put it back on the MLS just to make sure we're in 100% alignment with the rules. And another thing I like about it is that, hey, we get to control the customer experience. So we're not backing out of contracts the day of closing, which you just said you had an issue or someone did that to you. And it's the worst, right? I hate when a buyer does that.

We had signed a contract. It's the worst thing ever because we have to pay it to sell. you know, one to three grand in earnest money when that happens and they're pissed off. And so that doesn't happen. And then B is that we get a much larger buyer pool. We get to sell to everyone on the MLS, not just investors, which means we can scale into a lot of other areas. So I actually prefer that model over our previous one. Right.

Great. A couple points on that. And I've always like wholesaling, it can be a business, absolutely. And, you know, when you start making a lot of money, you start drawing a lot of attention to yourself. And some people like it. Some people don't. Some people applaud you. Some people give you the big boo.

But I've always looked at wholesaling as the last resort when your initial exit strategy didn't pan out. And assigning a contract is not illegal. Doing a double escrow or double clothes, not illegal. You know, I just had a guy that works for us here in the office, Miguel. He just went and got his real estate license. And he took the crash course, the weekend crash course, and the guy teaching the course, this is in Southern California,

teaching the course was swearing up and down that double escrows are illegal. This is the guy teaching the course. He says, assignments of contractor illegal, wholesaling is illegal, those were his very words. And little did he know that Miguel is a reserve LAPD officer. And Miguel being the smart guy that he is.

He says, wow, I didn't know that. I've been doing that for a long time. I didn't know it was illegal. You know, I happened to be an LAPD officer. Can you give me the civil code for that? So the next time I catch a real estate investor participating that activity, I'll know what to charge him with.

I thought that was really funny. And the guy was speechless, and I don't think the teacher appreciated that too much. But nonetheless, Miguel did pass his test, and he still got his license. But I thought that was really good. And at our last event, our last epic intensive here in Los Angeles, we had a title rep that was there and she was sharing lots of goodies with everybody and she'll be back again this one in may too so if you need access to records and stuff like that and you want to do research and you want to do that for free be at the next epic intensive because that's what she does is she grants access to

everybody for that but anyway one of the questions that i had asked because i just wanted everyone to hear it from someone other than me was is wholesaling illegal our double escrow's okay um are uh is signing contracts and she without I mean without even hesitation says no everything is perfectly legal there are no laws that prevent it the only time you come into any sort of situation is just against a closing company or closing agent's policy it might be against the company's policy but it is not against the law it is not punishable by any civil or penal code so anyway just to clarify um so anyway that that was an issue for you and there's some other people that we know that were in Ohio and they had a little bit of an issue. They made a couple adjustments to their contract just

as precaution, just like you've altered your business model as a precaution. But not necessary. Just so everyone out there listening and they can get some insight on that. All right, let's move on. Let's get into something more productive, right? All right, so since we've taken down that episode and it was so fantastic, let's try and recreate it a little bit. What made you want to get involved in real estate investing, Brian? Passive income. I'm just another one of the Kiyosaki guys. I read Rich Dad, Poor Dad, when I was working at the grocery store.

I would go in the bathroom. I had this tiny copy of the book that fit in my pocket. And I would read like another half chapter every time I went to go pee, basically. And by the time I was done with that book, I was just thinking about making my dollars work for me. And so I was fascinated by that idea. And I think at the time I thought I had to get into fix and flipping in order to buy rentals. It's kind of like an assumption that people make. Like they have to go all in in real estate in order to create passive income, which we know now is not true.

Any doctor attorney, anyone who has the money to invest in buy rentals. But I went all in. And I actually met a mentor who, you know, agreed to show me the ropes. And that was another reason I dove in. But, yeah, it's always been about creating enough passive income to cover my basic expenses of, you know, kind of living my ideal lifestyle. That's been goal number one. Got it. So I didn't know we had this in common that we both discovered rich, dad, poor dad while working at a grocery store.

You too? Yeah, totally. It was the grocery store manager that turned me on to the book, in fact. Wow. Yeah, how funny. Yeah, it was after I got out of the music industry and I was bankrupt. I was divorced and I was lonely and broke and I was working bagging groceries at age 34 years old. And of all people, the grocery store manager who happened to be 34 years old also. That was like, talk about insult to injury or pouring salt on the wound when you're the same, you're bagging groceries for $7 an hour.

getting a hundred grand a year and you're the same age. But anyway. That's really interesting because I had had a better job and all that before as well. And I've always played music and sang too. But that's kind of another story. But I took the grocery store job so that I couldn't get comfortable anywhere else. I wanted my job to suck so that I'd be forced to be actively thinking about my alternative. did you do it for the same reason?

Yeah, well, after I went through and submitted job applications to everything I could think of, I mean, I went to car sales, I went to insurance and financial planning, and then I was working at a temp agency as a typist. I went and looked at MLMs and dabbled in a few of those. So by the time I got to the grocery store, that was a certain level of comfort than I was experiencing just previous to that. But very quickly, they're bagging groceries and punching that clock

and literally punching a clock. It got uncomfortable really quickly. And I was just like, I looked up one day. I was like, I can't believe this is it. I can't believe this is where I am with my life. And I was just waiting for a helping hand.

I was waiting for a strike of luck. I was waiting for someone to just come and say, Matt, come on, you're better than this. Come with me. I'll go and make you famous. But it never happened.

And after about six months, months, it finally sank in. Wow, if it's to be, it's up to me. That's I learned that in an MLM, by the way. If it's to be, it's up to me. And, you know, I sit there in the grocery store and I was thinking those very words. And I was like, all right, let's get the hell out of here. Wow, that's great. Yep. So here we are. And here you are. So tell me about what your life looks like right now, then. Sure. So I run the real estate business. I only pencil in and my business partner, Frank, who you also know, we both agreed that we think setting limitations kind of allows the essential to rise to the top and the other stuff to fall away. So based upon that theory, we limit our work weeks to 20 scheduled hours a week.

Now, everyone listening is probably saying you only work 20 hours a week. You're a lazy bum. But what that does is it requires you to say, what is the most important 20 hours that we could spend? And so we can't, you know, be a victim of all the got a minute meetings all week long. We have to batch things and think highest and best through a lot of strategical work. But anyways, to answer your question, I'm on the phone with our team members. I'm over marketing and operations and finances in our company. and Franks over sales and our renovation projects.

So we've kind of divided the business up into those two silos. So I'll be on the call, a call with my direct reports, or we'll have a call with our whole team, or I'll be constructing our quarterly plans to see what we're going to work on, like quarter two starts in two weeks. So I'm finalizing the quarter two plans for each of the departments right now. So I do a lot of high-level strategic. I've also started business coaching recently. I've got two students. So that takes up a little

bit of time and a couple of joint ventures with buddies where we're buying rentals together. So I'm trying to find a way. Maybe you have some advice on this. You know, like I've always said I want to be like a shark on shark tank and, you know, be involved in a hundred different businesses, you know, but not really do any of the work. I feel like I'm involved in like about three or four right now, but I'm still doing too much of the work. So I'm trying to figure that out. But that's kind of a snapshot of what my week looks like. Working with our marketing director, working with our CFO and our CLO, which the CMO and the marketing director are the same person, where our business isn't as big as I'm making it seem. We have probably eight or nine people. But we're

looking at KPIs. We're strategizing and how we can grow the business and that kind of stuff. Yeah. Wow. Okay. So there's so many different directions I could go with all of that information. When you talk about your team, well, first of all, I think one thing that could be applied to anybody's business and tell me if you agree or not. But when you're limited to a certain number of hours a week to work on your real estate, for you, it's self-imposed. But for some people, they don't have any other option.

They might only have a few hours a week. It forces you to focus on what's most important, right? And, you know, we have a thing here inside the Epic Pro Academy called the Daily Success Report. And I was like, if you have just two hours, three hours a week, and that's the only three hours you have, you should be doing nothing but what's the activities that are outlined on this sheet, which are the money-making activities. And kind of what you just said, that the essentials will rise to the top. And we can fill that time with anything that we want. But if you're focused on your business and you're generating income and you've got people to pay, then you've got to focus on the transit. You've got to focus on bringing in the money.

So I think that's Parkinson's law. Business expands or contracts to the time that's allotted. I think it's Parkinson. Mm-hmm. Uh-huh. You can check your email all day if you want to. Totally. Totally.

You know, and sometimes we all can fall into that trap of just doing it. Like I'll go to my computer to look something up and got sidetracked into an email and it turned into 17 more emails and now I forget why I was even sitting on my desk. Yep. So super. So that's that. So you have a designated amount of time and that can be self-imposed or if it's imposed upon you, then that's what you have to work with. But as long as you focus on the essentials, you can still do this business. That's where I was trying to go with this. Second thing is you're saying how you talked a lot about your teams and managing your team. So you live in Denver. You're enjoying in the snowboarding lifestyle and the Denver lifestyle. Great place I was there in December. And what an awesome place to visit. And it looks like an amazing. amazing place to live as well. So I get it while you're there. But your business and your operations are still in Nashville, Tennessee.

So explain to me who comprises your team to make that dynamic work? Sure. So I guess I'll talk about everybody, even though the boots on the ground people in Nashville are probably the ones of most interest. We have an acquisition manager. We used to have two. One guy just left after three years because he wanted to move back to where his parents live. So we're just operating with one right now.

I'm probably with the intent to hire back the second one soon. So he obviously has to live in Nashville. We have an inside sales rep who is out of state who is on the phone all day. We have a marketing director, which is just our full-time marketing guy, happens to live around Nashville, doesn't need to. Our office manager, who is also the CFO, lives in Nashville, and she needs to because you have to go to the bank, you have to go to the mailbox, you have to do local things.

We have a renovation manager who's local, and that's the person who goes to all the projects, both ahead of time and once we've bought them, to manage the rehabs. We don't do real heavy extensive rehabs. You know, we do kind of like rent-ready type rehabs. We prefer putting seven to ten grand in houses because that's a level of rehab that we're good at when we can scale.

So who am I forgetting? We have another guy who's what we call our lead manager because we have so many leads at this point, just either coming in or just in our database that someone kind of has to analyze them full time and prepare them for the acquisition manager's appointments. He's local, but technically would not need to be local. And he also does the transaction coordination. There's another key position.

That's probably better to have somebody local because occasionally you need to go pick up a seller and drive them to clothing or something like that. But that's, yeah, that's about a general snapshot of what our team looks like right now. Got it. So you've got quite a few people on the ground in. in Nashville that are working for you. How would it impact your business

if you didn't have them on the ground and you were doing this 100% virtually? Well, I know that there's people that lock deals up over the phone and collective genius. You know, we hear about guys who have big operations but nothing but inside reps

that never leave the house. Right. They just rely on volume. And I understand that that could work. We've chosen the other avenue of having outside reps and creating kind of a little bit different of a customer experience where they actually get to meet the person. And since we're closing on these properties, we do need someone to go into the house and put eyes on it and stuff like that.

So if we didn't have an outside sales rep, I think would be screwed. I think that if he quit, it would be, you know, all hands on deck to find our next outside sales rep. And then the office manager too would have to be there. The renovation manager would have to be there. absolutely. Those three are critical, but beyond that, you can hire everyone else in your business from literally anywhere in the world, as long as they can work on your time zone. Right, right. Yeah, you need the face-to-face contact, I think is so important, and especially in a market where, you know, just our whole economy right now, it's kind of hot and real estate's even hotter.

And so someone over the phone competing with someone face-to-face, I think, is at a huge disadvantage. Yep. Right. So as you could imagine, I interact and speak with a lot of people that are at various stages of their real estate investing. A lot of people just getting started. And everyone always thinks the grass is always greener on the other side, meaning, you

know, someone living in, you know, I don't know, say someone living in Nashville thinks the market's really hot in St. Louis. And they're like, well, maybe I should start a virtual business and work in St. Louis and the people in St. Louis were like, I heard Nashville was the new place to be. And so they want to go work in Nashville. If you were to start all over again, and this is kind of a cliche question, but I'm actually very interested because I can see if your answer aligns with mine. If you were to start all over and you had to start from scratch, would you stay there in Denver? Would you move or would you try and do it virtually from Denver or would

you try and work in Denver? That's a great question. One that I've never really thought about. You know, I would probably I'd stay in Denver And I would start so I would start a virtual I started a virtual business The reason I wouldn't invest here locally in Denver is The price points very high It's not something I'm really comfortable with

I know that's lame all the Denver investors are like You know what a wimp I mean we're making tons of money here. I get it But you know if you're having to buy a house for three or four hundred grand brand before you rehab it to sell it. If it doesn't sell, there's no other exit strategy for that. You just lose money. So another thing I didn't mention about our business model is just about everything we buy and renovate.

If it doesn't sell, we just keep it as a rental. You know, it's a great second exit strategy. We just had one where we listed it and we had to reduce the price, reduce the price. It's not going to sell. So we're getting one of our private money lenders to just loan us. the money, pay back the original lender, you know, who has the really high interest rate. And then we're going to hold on to it and refinance out with the bank in a couple of years. And we'll have another rental in our portfolio.

So we turned what looked like a loss into a win. And you can't do that if your house is listed for 500 grand and it's got, you know, cherry hardwood floors and granite countertops. It's not selling. I don't really know what your next step is if it doesn't sell. So all that to say is I would start a business virtually. but it would not need to be in Nashville, but I would make sure it was in a market

where I could have multiple Lexa strategies on the deals where the price points were low enough to where everything would work from a number standpoint as a rental if I couldn't sell it as a rehab. Right. I would tend to agree with that, but I know plenty of people just like you do that, you know, they're scratching their head,

like why would I ever consider investing outside of Southern California? Right. I mean, we know somebody like, Mr. Osborne inside of our mastermind, he is very much one of those people. Like, you guys are insane for doing this business virtually. All the gold is right here, you know. But from someone just getting started, here's where my opinion differentiates a little bit, because I certainly think this could be, this business can be done virtually, and I do it virtually myself.

But when someone is just learning to learn how the business works and how to do a transaction and to also learn how to do it virtually, it really compounds the challenge, wouldn't you say? Yes, yeah. The benefit we had with Nashville was I lived there and I understood the market. And so I built the business while there and then moved away, which is unique.

Most people don't do it that way. I do think you can overcome that challenge. Mentorship is a big, big thing. So if you can get a rock star realtor to help you learn the neighborhoods and the values and how to run comps and all the little quirky things about a new market, that really speeds up your learning curve. We had a couple of those that helped us a lot. Even when we were in Nashville as newbies, we still needed mentors, like multiple people. Every time I get a lead, I was so scared, I need to run and ask my guy, hey, what is this worth, you know? Is this a smart offer?

I never was confident. And they helped so, so much. But yeah, yeah. Rockstar realtor. It's almost an oxymoron, though, isn't it? They're out there, you know. They're out there. They're like finding deals, though.

I mean, you've got to go through a certain number of them before one actually sticks and works. Right. And speaking of deals, but what your, and you had mentioned earlier that, you know, you've got so many leads to process and you have a lead manager. What's your, what's your top strategies right now for finding new deals? Um, direct mail is still our, our main strategy. Um, it's gotten a lot more competitive, as you may have noticed. I'm sure a lot of other people listening have noticed to. We used to get, um, 50 or more leads every single week just from direct mail when we first got started. It was insane. You know, now our numbers are not that high. But, uh, we combine that with, uh, with paper click with, um, building a, like a refurb. Um, building a, like a refurb. referral network. So that's a really powerful thing. If you're just getting started and you're like, I don't have any money for marketing, building a list of all the wholesalers, all the investors,

the realtors, the attorneys, the property managers and the title companies in your market and just sending them an email every Tuesday morning, blind carbon copy everyone and say, hey, you know, I'm looking for deals. You got anything? I'm ready to buy three this week or whatever you need to say. Staying top of mind with people. That's a really powerful strategy that we've, uh, we've done um what else do we do you know i got i got to i got to back up and you're asking me about marketing i just i want to say this you know for everyone listening the the number one biggest mistake i ever made you know as an entrepreneur was not focusing enough on uh marketing and sales from the beginning we kind of just took for granted the direct mail is always going to be great

and always going to perform and i could just automate that and just watch the money pile up but as soon as that one lead channel, as soon as the message gets diluted or it doesn't resonate with your customer, your leads dry up and your business dries up. And so we have taken steps over the last year or so to correct that, but it's been a lot of,

a lot of focus on marketing and sales to get things back in order. So we're experimenting with a lot of things. Have you ever read No BS marketing by Dan Kennedy? Yes. Okay. So I'm going through that a number of his no BS books. Okay. Yeah, I've just bought Ruthless Management. I'm excited to get into that one. But anyways, he talks about like a low threshold offer versus a high threshold offer in there. And every real estate investor uses

high threshold offers, which is jumping straight to the punchline. Sell me your house right now. You know, it's like too, it's too sudden. So we've, we've developed, you know, an ebook where we educate sellers on what the process looks like and give them a lot of helpful tools and checklists and things and resources and starting to get email addresses via just advertising that free download to kind of ease people into the process of working with us. I can't report on how well that works yet. It's a little hard to track, but I'm excited about it. I really feel like messaging, Copywriting is a huge, huge thing that people don't take a look at when it comes to real estate marketing.

Like, you have to have an offer and everything. You have to have a sense of urgency. You have to have clear instructions on what to do next, you know? I mean, you know this from the info marketing world, but it doesn't really carry over into people's copy they write in their direct mail and stuff. And so we've infused all of our messaging with that type of stuff. And it's definitely more effective than just kind of lazy or wimpy marketing, you know, that doesn't ask for what you want. So, yeah, that's, your people always say, well, what marketing channels are you in?

Man, well, I do direct mail. I do PBC. Well, what do your messages say? Right. That's half the battle. Totally. You can't just say that you do Craigslist. You know, what does the Craigslist ad say?

What does it lead to person? What does that place say? You know, you have to think through every sequence of the marketing process or it's logical for the customer. the next step and the next step and the next step you can't just kind of half asset so couldn't agree more yeah i mean marketing is is really the the messaging that the then you have the delivery message or the delivery vehicle of that message and people are so focused on the delivery and not the message itself that they come and say things like direct mail doesn't work or everybody's doing direct mail or you know ppc doesn't work or my craigslist is all saturated with a bunch of scammers

what are you saying? Do you look like a scammer? Maybe your message is blending in and you're doing the same thing everybody else is doing, right? Yep. Do you remember Dean Graziosi spoke to us at the last CG?

He said, planes fly. You know, marketing works, Facebook works, Craigsys, everything works, planes fly. You just aren't doing it right, you know, and you have to continue to improve at your craft until you figure it out. On that note, this is what I've always said when people ask this is it's going to work on my market.

has something absolutely it won't work in your market. There are nuances to every market, but it will work. For example, you know, in a high dollar value market, such as a Denver or Los Angeles or a New York or, I don't know, a Miami, your message is going to have to be a little bit different than it would be in St. Louis or Kansas City or Columbus, Ohio, right? Yeah, absolutely. I mean, someone that owns a million dollar house compared to somebody that owns a $50,000 house. Just face it, let's just get straight. There's a different level of sophistication there. Yeah, and the people want different things.

And another thing about marketing is the best marketing. It enters the conversation that's already going on in the customer's mind at the moment that it arrives to them. So they're thinking about three big fears and three big desires. And your marketing needs to address all of those. And then they're going to say, wow, this was like divine intervention that this postcard arrived in my mailbox. It's saying the things I've been thinking. So how do you know what people are thinking? You have to ask them.

So one thing we implemented recently was what we call customer development interviews. And so every time we close a deal, we call the customer. We ask them a lot of questions about their fears, their desires, where they found out about us, you know, not just demographic information, but what they call psychographic information where you find out what's going on in their head. And then you can write better copy that's more suited to your customer. But before you do that, you really don't have any idea what they want or what they're thinking. Right. That's great. How long have you been doing that? Just for a handful of months. Okay.

That was part of our vision for this year was to implement these customer development interviews and try to fix a lot of broken parts of our process as a result of getting feedback from our customers and letting them score us on how we did, basically, in delivering our brand commitment is what it's called. So through these post-deal interviews, what has been the biggest shocking answer that you've received? You know, probably that we don't communicate enough from the time that, you know, a contract assigned to a closing.

You know, people don't know what's going on. Another thing, this is Dean as well. I don't know if you remember he said he hired someone to secret shop his business. and found out that no one was calling them not until like five or six days after they had spent thousands of dollars on this product and then people get all nervous like I spent the money and I haven't got the email yet you know what's going on here and his cancellation rate was through the roof and so our contract cancellation rate is higher than we'd like it to be and so we realize that we need to communicate better with these people to put their minds at ease throughout the process

so like one of the first things we did was implement us a rule. where right after a contract gets signed, our transaction coordinator calls the customer and says, hey, you just signed a contract with us. I'd like to acknowledge that. My name is Philip. I'll be your point of contact.

Here's the title company. You know, here's what the rest of the process looks like. Here's my phone number. Call me if you have any questions. Right. And that one change could easily, you know,

reduce our cancellation rate by 10 or 20% a year, which is massive. Yeah. That's goal. dude. That is that is gold right there. Fantastic. So tell me what what about the let's let's do this. What are you noticing in the market right now? And maybe you've already answered this and maybe having to say, hey, I already said that. What are you noticing in the market and how is it changing the way you are approaching your business?

In Nashville, I've noticed that a lot of houses are staying on the market for longer. There's more listings. Things aren't selling as fast or selling or as high of prices. It's getting a little bloated out there. So just off the top of my head, some adjustments we're making is we're being more conservative about the properties we get under contract. We've tightened up on our after repair values, our ARVs, just to make sure that we'll be able to sell the property. Another thing that We've kind of always done this, but especially now is what I did say earlier about making sure that everything we buy would also work as a rental. That's real estate 101. Totally.

You have to have multiple Lexus strategies. Otherwise, you could become a multimillionaire and then lose it all. You know what I mean? It's just it's stupid, like to put everything on the line just for the next paycheck when you've already worked so hard to get where you're at. So doing that and then really focusing on marketing and sales. Our goal is to become an amazing marketing and sales organization at heart that delivers a great experience to the customer. And that's a big claim. That's a big undertaking right there.

So for me to say, and I'm also going to build skyscrapers once I get the lay. You know what I mean? Right. It's unrealistic. You can only really, you know, businesses are supposed to dominate. at one thing. They're supposed to dominate their market in one area, not in all areas. You know what I mean? Like the guys that are building the skyscrapers usually aren't great marketers. They just get spoon fed deals by realtors. So that's why we've kind of adjusted. We're on the back end or where we monetize the deals. We do close on everything, but we don't do tons of detailed, expensive work because that just clogs the whole business up. And then you can't focus on marketing and sales, bringing new leads in. But I do. I do. think that is the biggest weakness in every business, period, is bad marketing, bad sales. They just suck at it or they don't do it.

And that implies to the music industry or like anybody. So we want to just really, really get good at those two things to make sure that even in an up market, in a down market, in a competitive market or non, we can do well. We can still thrive. but also, you know, not letting the business get too bloated with expenses and overhead is a good thing to do. You can tighten up ship a little bit when the market gets competitive and your profit starts a dip to make sure that you as the owner are still getting paid at the end of the day. You got to read the book Profit First by Mike McCallowick's about taking your profit up front. It'll totally, you don't need a degree in finance if you read that book.

Basically, I was talking to Joe McCall about this the other day. But yeah, those are some of the things off the top of my head that we've kind of done to adjust to the climate out there. Yeah, the low-hanging fruit is not as low as it used to be. So you've got to basically sharpen your fruit picker. Yep. I just came up with that. But that's very much what the next Epic Intensive is about is arming people with these weapons of mass production, specifically focusing on lead generation of marketing, but then turning everybody into weapons themselves.

increasing their conversions in their sales skills. So, I mean, that can never be a bad thing regardless of market conditions. Yeah, and that's another thing that we could do a whole podcast on. And if you want to, just give me a holler because sales is the other big arm of your company, right? Like, you can generate leads and that's great. But let's say your guy's going on 10 appointments a week, which he should be going on at least that many. And he's bringing back one contract a week.

And you implement one sales process, one tactic that can just allow him to bring in two contracts a week instead of one. Right. Because he's asking some different questions while he's on the appointment. You've doubled your business. Right. You went from a 10% to a 20% conversion rate without spending more money on marketing, without hiring any new people. So that's why. I, and John Martinez is a great sales coach to real estate investors. He's in our mastermind too.

And we hired him to build out our sales process in our company. It's gotten a lot better since he came in. And it's, it's made me realize the importance of having a sales process, first and foremost, something that you can repeat and track and test and find out where the problems are. But then just all the little things that people do on appointments, you know, it's make or break. It really is. So that stuff's just as important as your marketing. Right. Yeah, when we switched from just sending purchase agreements to sending a purchase agreement, and if they rejected that, then we followed up with a three-option letter of intent, that doubled our conversion rate right there.

All of a sudden, just by that one extra step and with no additional marketing. And now with the way that we do present our offers, we ask for the offer five different times and five different ways to where it doesn't sound like we're asking, asking, and that has impacted our conversion. So it's one thing to generate the leads. It's another thing entirely to convert them. The better you get at converting them, the lower your market spend goes down, your ad spend.

Absolutely. That's awesome, dude. Shoot, maybe you can come out and be a guest speaker at the intensive. We'll talk about that if you're open to it. Okay? Yeah. Super. So if any listener wanted to reach out to you,

what would be the best way for them to do that, Brian? Yeah, so, I have a website. It's my name.net. Elwood has two L's. B.R. It's not literally my name.net. It's Brian Elwood.net.

Okay, got it. If I had my name.net, I probably could sell that for some money. Yeah. But anyways, I'm sure you'll put the link in the show notes anyway. So if you go there, I did write a free e-book. It's 110-page e-book called Passive Business Profits, where I spell out everything that I think you need to do to build both a profitable and a passive business. It's a business that works, you know, at least somewhat without your involvement. I've gotten it down to where I can work about 20 hours a week, so I'm not like a shark on shark tank yet, but I aspire to be on that level.

And then if you're interested, there's more information on there about working with me as a one-on-one coach. Super. Awesome. Well, Brian, thank you. Once again, another outstanding episode. I'm not deleting this one, and no matter how many times if you asked me to. Deal. This one is staying up and it's just pure gold.

And thanks for sharing. Thanks for being generous. And it's been a pleasure. We'll do it again, all right. Thanks, Matt. It's always been a pleasure, man. Love being on the show. Super.

All right. All the best to you and yours, Signore. That's it for today. I'll see you next week on another episode of Epic Real Estate Investing. Go to Epicintensive.com. Reserve your seat. Early bird pricing still in effect. All righty.

God bless. To your success. I'm Matt Terrio, Living the Dream. You've been listening to Epic Real Estate Investing, the world's foremost authority on separating the facts from the BS in real estate investing education. If you enjoyed this show, please take a minute to visit iTunes and share your thoughts. Thanks for listening. We'll see you next time here at Epic Real Estate Investing with Matt Terrio. This podcast is a part of the C-Suite Radio Network.

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