Epic Real Estate Investing - Persistence Will Pay with Francis Rodriguez | Episode 121

Episode Date: September 15, 2014

Today Matt is interviewing another new investor, Francis Rodriguez.  Francis is a loyal listener and Epic Pro Academy member.  His story will resonate with many listeners, as he is a new investor struggling to turn his leads into deals.  Matt gives him sound advice regarding how to both improve his lead generation strategies as well as improve his close rate.  Enjoy!    ------- The free course is getting a facelift and the new version will be released soon!  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

From Terrio Studios in Glendale, California, it's time for Epic Real Estate Investing with Matt Terrio. Hello, and welcome. Welcome to another episode of Epic Real Estate Investing. If this is your first time listening to the show, welcome. Super happy that you're here. If this is not your first time, welcome back. As you may or may not know, this is the place where I teach people how to escape the rat race by investing in real estate. And if I were to do it all over again, I'd do it exactly the same way. Wouldn't change a thing. I wouldn't change a thing whether I had money and credit to work with or not. Because while I was learning how, I stumbled upon 12 different strategies of investing in real estate with little to no money. And in hindsight, being forced to get started that way with no money or credit, I believe that

made me a better investor. And a lot of people were just kind of attracted to what I was doing and asked a lot of questions. I had a lot of coffee meetings. I had a lot of lunch meetings and dinner meetings. and realize that a lot of people want to just kind of, you know, they were looking for a better way to do things. And so they felt I had a better way. And, you know, I don't know if that's actually true or not.

But I know it works for me and I know it works for the people that have followed it. And so I want to share that information with you as well. I want to make you a better investor also. So what I did is, of those 12 different strategies, I put the first two inside of a free course just for you. And those are the two that I believe are the easiest and fastest strategy. to a paycheck in real estate. Put that in. They are into this free course.

It's whole and complete. No purchase required. No strings attached. No nothing. And you can access that course. My free gift to you at free real estate investing course. com. Or if you are listening in via smartphone or some utility vehicle or utility instrument like that,

I've got something for you too. You can text free course to 55678. Free course, all one word. Text that to 55678. You get the course right there. on the phone. And we are just days away, I believe, crossing my fingers, but we are just days away from launching the brand new version of that free real estate investing course.

And as far as I know, you're not going to have to do anything different. If you already signed up, you shouldn't have to do anything different as well, you can just go back and revisit it and then you should see the whole new course. God willing. All righty, so let's see what else. I think that's kind of it. I have a great show for you today. No major announcements, but a conversation I'm excited to have with you,

another Epic Pro Academy member who has been kind of flying under the radar. And my team kind of pointed out and said, you need to talk to this guy. And he's done very, very well. And so that's about all I know. So I am learning at the same time you are. I'm getting to meet him at the first time for the first time, just as you are.

And I can't wait to hear all about it. So on the phone, I have Epic Pro Academy. member, Mr. Francis Rodriguez. Francis, welcome to the show. Thank you, Matt, and I appreciate you welcoming on to the show. Yeah, no, go ahead. We have learned a lot since I've been here.

Well, that's good, and I want to hear all about it. Before you got here, though, what were you doing? Okay, basically, first grew up and started out in New York City in Staten Island, New York, and parents ended up deciding moving down to Texas. At that point, And basically parents split up, but basically went through hardships and everything else.

And just like many other people, joined the military right out of high school, and pretty much started listening to my father. And I know at the time, he's been a truck driver, his whole life. And he has, he's the one, I guess, to kind of inspire that entrepreneurial spirit. and how you told me about the trucking company was planning to do that. But at the same time, we're still kind of working on myself,

trying to go to college and do the whole army at the same time and work in my normal job and trying to learn as much as I can about the trucking company. Well, as I was about to start, basically in 2008, the market kind of crashed. and kind of left me stranded to try to figure out my own way,

try to basically at that point, I had to figure out what other type of entrepreneurial things I had to do. Well, my current employer at the time, I working for the Army, I just sort of applying for better jobs, I realized, okay, time to kind of grow up, try to find a career job. and I started applying at different places and started out in the Sheriff's Department

that I went on and I found a police job in D.C., which is where I currently am. I've been there for about almost eight years, and this is around the time when the market did crash, and I went ahead and started talking to people at work, different things that people were doing, and they were doing real estate.

By and large, most of them were doing real estate. Mm-hmm. And kind of inspired me, tried to understand it. And I ended up hearing on the radio about a show that does, I guess they also have, like, podcasts, they also have. But it was more like an infomercial type of setup, but they were coming into town and they had a workshop. I ended up attending. It got me definitely piqued my interest. and they kind of strung me along for a bit,

and that was about a $10,000 investment there. Me and my wife both attended, and kind of learned a little bit about real estate. They didn't really talk too much about it. They did the, they taught about, like, LLCs, they taught about, they taught about, like, how to look at a house to see if it's somewhat a deal. Right. They talked about, okay, meeting up in their group up in Baltimore. I didn't even know that there was other groups.

I figured that owing investors had to go to these workshops to kind of talk to a business-like people in that industry. So I basically was attending the groups and doing what they were doing. And they were big, very big in preaching, like trying to use other people's money, trying to save up your own money to be able to get, real estate. Well, after went through the class and everything, I purchased my first property. I was going through the motions, trying to understand. And basically,

once I ran on my own money, I basically had to go back to work, start saving up money, and I kind of sell off the bandwagon. I bought my first property after I attended the class in 2009.

Finally got it financed in 2010, and then from there, Basically, from there, basically, I just didn't have enough money to keep going. Right. And I went through that first property also with definitely a learning experience. I went and got a hard money loan, and I found out how much I really don't like hard money. They end up taking a lot more of your profit than you expect. Sure, sure.

Was this a buy-and-hold property or was this a fix-and-flip property? This was a buy-and-hold property. They really did not preach the whole fix and flip side of business. They preach trying to attain properties using leverage, which definitely excited me. I always knew I'd rather be the type of person to rent rather than try to fix and flip. However, of course, at that time, more TV shows started coming out about fix and flip. I just wasn't too interested. I wanted to focus in on doing rentals.

However, I could not. It just took a very long time trying to save the money for the down payment. Sure. Trying to not only save the money for the down payment, but you also had all the closing costs. You had if I wanted to go through hard money, I had to go through that. I don't come from a family where everyone is like cohesive,

where they're going to go ahead and give me money, so I knew that wasn't an option. And I was new to the area, so I didn't really have the friends to go ahead and ask for money or anything like that. Right. So it was definitely a learning experience, and basically from 2010 until I heard your show,

which was October of last year. So very recently. Basically, I just trying to save money to get to the next deal. And basically, at that point, I started listening your show, and, man, I was just completely blown away about

how much I really did not know about it. I probably went through your show by the end of October. I probably already went through almost all your podcasts, and I not only heard your podcast, but I also heard

podcasts of some of the people that attended your show, and all of you guys, mostly you, more than anyone else, have definitely inspired me. I'm hearing your story, hearing other people's story that are going through the same thing. I know in business in any type of industry that you, that you're going to go through your own hardships. And I know I had mine, and I continue to keep going because I know real estate is definitely the place where you can kind of make the most out of things in a short

period of time as opposed to other industries. Basically from there, that's basically for the past few months, I've been doing the mailers, as you've been saying, the mailer that I chose to do was it's probates, and I definitely had my fair sure call. Most of them negative, which is fine. That's not a problem for me, handheld. handling calls. I also understand people

are going through their own stressful situations, and the last thing they sometimes want if somebody trying to take one of their properties from someone that just

passed away. But it was definitely and I have gone on a few interviews. As of right now, none have been successful, but I definitely

still plugging away, still doing that. I also look on the MLS, which, surprisingly, in the D.C. area, the MLS is still used by and large by most investors. I know not a lot of investors actually do the direct marketing. So I know I have, I guess, more opportunity because of that. A little bit more about myself, me and my wife. Basically, at the time I was listening to our show, we purchased our own house. and we have five kids and my wife stays at home she also does she also does daycare to help out of course she started daycare when we when we started uh

basically going through all of the the steps that you are saying to to use like the correct marketing things like that of course those come with extra costs and she she's she's definitely been a God's then just trying to help, trying to inspire me to keep going, and I definitely couldn't have, couldn't do it without my wife. Great. I don't know how some of, I'm not, I'm sure not only some of your listeners, but I know some of the real estate meetings that I have attended, some people, they don't have the full support at home. I don't know how they are able to do it,

but definitely more, more power to those people that can still endure on their, that type of stress. Right. Let me stop you there for my Francis. Yeah. So you are in the D.C. area right now? Yes, I am in the D.C. area. All right, perfect.

And then you've got a loving and supportive wife. You've got five kids. You own your own house, and you do have one rental property as right now, right? No. Around middle of the year. Of course, through those hardships, I'm trying to, I guess, trying to be how we went into a new property. We went from one property to another.

So the other property that we were living at is being rented out right now. And that one's in a different part of Maryland. It's not in the Baltimore area. It's more in the D.C. area. And basically got a bigger house so that the kids have more space. And then as the summer kept approaching, I wasn't getting any deal. So, seeing how we weren't getting any deals, I just decided to, okay, let me go ahead and we bought the house at a fairly decent price. We went ahead and leveraged the house and went out and bought more rental properties.

So basically, I have a rental property that I bought about three weeks ago, and I'll be closing on another one by the end of next week. Okay, sweet. All right. So good. I was wondering where this was going. So that first property you bought, do you still have that one? Yes, the property that I bought, the very first property was the one I bought for myself in O-Sip. Okay.

Then I went and I purchased my first rental property in 2009. Got it. Okay. And so those... And that one was in the Baltimore area. Got it. I just have done the whole cash flow in Baltimore for me, just, just, Baltimore for me definitely has better cash-halling properties than most different areas.

I also, and then, of course, the next property I bought last month, about three weeks ago, and that one is also in the Baltimore area. And then about to buy another property, which is in the Baltimore area as well. Super. Okay, so the one you just bought three weeks ago, you were able to, leverage your primary residence because you had equity in that one? That is correct. Okay.

Very good. And then the one that you are going to close on, did that also come from the equity in your primary residence? Yes. The primary residence combining with the money that I have saved. Okay. Very good. Perfect.

Okay. So you've got, and then do you own your residence that you live in now? What do you mean? The one you bought in 2007. That's the one that you turned into a rental? Yes, I did, because as I was living at that house, I was fixing up along the way. Got it. And ended up, of course, when I initially bought that house, it was a townhome and just the townhome industry.

And in the D.C. area just doesn't sell well, but it rents very good. Got it. It rents for a fairly decent price. So, although I was not able to sell, I believe that property is about $70,000,000, under water. and wasn't able to sell, but I was able to get a rented there fairly quickly. Okay. Uniquely to most cities in the United States, D.C. will always be a high demand of jobs, just because all the government agencies and everything.

Right, right. Okay, cool. So you've got a good little portfolio started. Probably happened a little bit slower than what you wanted. Oh, most definitely. But you've done something which I think is very interesting. It's not interesting. I actually am a big advocate of it.

And that is tapping into your primary residence to keep your rental portfolio, your investment portfolio growing. And the reason being is, I mean, I've said this several times. I think your primary residence is, really, it's probably the worst investment in the entire country. When you do the numbers and you look out over, you know, 30 years, you could have done so much more with your... You could have done so much more

and so many people believe in and paying their house off to get rid of that debt. But what you're really doing when you do that is you're retiring your money before you actually get to retire. So like your money gets to rest but you still have to go to work every day. And, you know, the philosophy that I tried to...

Well, I live by myself and what I teach is that, you know, your money should work. You should get to retire before your money does. and so I like what you're doing I like the track that you're on so congratulations on doing that now the next step you said you're

sending out mailers and which mailers are you sending out the mailers that I am sending out is I guess you would haul on postcards to just find postcards when you're dealing with probate tend to work a little bit a little bit better

and I also took your advice in October as I was listening to your show, I know you said, take what you learn and apply it immediately and just kind of keep going, and as long as you are persistent, that you'll, that things will kind of come together.

And so I did take your advice. I started attending seminars. I found the local RIA group and basically joined a fix-and-flit group, which kind of teaches, this aspect of real estate that I had no idea exactly how that whole setup works. And basically, I also started picking people's brain and trying to see what other people and other strategies people are using.

They kind of helped me. There was a person in that group that he took his time. He wanted to sit down. He explained me exactly, like, the different. I said like yellow letters that you also preach about sending out those yellow letters. And he taught me about like the different websites you can go to to do probate. In Maryland they have a complete database system to, I know some states probably don't have that, but Maryland has a complete database system where you can access the probate list.

And I bet that's basically what I've been using. and I've just been blanketing everyone in my area with those mailers. Okay. And how many are you sending out, say, a week? Well, I don't send them out a week. I send it out in a month. Okay. And I do it every month.

And basically I'll send out new ones every month and every other month. I do follow-up. I'll send out the follow-up letter. And if I haven't got a response from them, then I try to stay persistent and say, and send them another postcard with the foreseeing slightly different message trying to get them to call me back and I mean that's basically where I'm at now I know you say you keep doing it and it will definitely pick up

however that is not the case right now but I definitely am not giving up I'm definitely just keep sending out the mailers along with looking at the MLS Got it. So how many are you sending out a month right now? In a month's time, I send out the old list, which is about like 300, 350. All right.

And every month, typically it's about another maybe 20 to 30 people that end up getting onto the list. Okay. Perfect. Okay. So say 350 a month is what you're doing right now, and that'll grow by a few each month, right? Right. Correct. Okay, super. And how long have you been doing that since October?

Yep, I've been doing that since, not October, but I've been doing that since January. January, okay. That's about the time where I started, I met the person that was at the Rio Group, and he kind of guided me along the way of how to do probates. I have been using that along with MLF. I just see MLS working better for people that do fix and flip to acquire properties. Of course, if you're doing it, though, the way that you preach, which is the, which is, like, subject to's and trying to get people to do it at a cheaper rate. Um, basically, I just try to, I try to use your strategy.

And because I'm in their group, I also use their strategy and trying to find something that, that definitely worked. Like I said, I have gone on several interviews and definitely learned a lot from, from just that in and of itself. Let's stop right there. So the phone is ringing from the mailings that you're doing. And you've gone out on interviews. How many, can you kind of tell me how many calls a month you think you receive?

I get about, I would say, between anywhere from 15 to 20 calls out of those 300, 350 yellow letters. And I would say most of them, sorry? This is a postcard, right? Yes. Okay, not the yellow letter, the postcard. Oh, sorry. Through postcards. Okay.

And I get about maybe two to three people that want me to go and see their property. Okay. Perfect. So you've been doing this all year. You're getting 15 to 20 calls. You send out 300 postcards a month. You're getting 15 to 20 calls, which is actually right on the money. I mean, actually, that's a pretty good return for a postcard.

So you're doing that right. And then from there, you're getting two to three motivated people out of there. So that's about right. those numbers are actually you're above the average on the numbers. Now, tell me when you go looking back on the appointments that you've been on, what is the reason that, what do you think is the reason that a deal hasn't happened yet? I would say, I mean, the reason why I haven't had deals, of course, I just haven't been, I would imagine, I need to be more, I guess, proactive

and trying to, I guess, kind of bump up my market. I guess you would say my marketing. Okay. I am trying to do that. Sure. What I'm noticing right here, though, Francis, what I'm noticing is that your marketing is actually working. Yes, you can absolutely afford to scale this up a bit, and I would absolutely recommend venturing outside of probate. Keep doing the probate, but venture outside of that as well.

But your response rate, the number of calls you're generating is strong, the number of appointments you're going on per the calls that you're receiving are strong. So what I'm wondering now, what I'm trying to get at, is trying to narrow down how we can get you a deal based off of your marketing efforts. So what happens at the meeting? Where's the breakdown there? How do those meetings typically end up? Typically, the meetings end up. I mean, I guess I always try to end it on a positive note. Maybe I need to be a little bit more aggressive.

But I do give them the contract at the end. However, they just don't agree with the market. is showing. I tried to use the same strategy you're saying as far as telling them, well, this is all the I can, this is what the market is showing for your property. So this is what I

have to base my numbers off of. And a lot of, a lot of the people, just, they value their property at a much higher level. Sure. And although they seem like they're willing to

negotiate on the phone, when I get down there, That's when they basically have a number in mind, and they just don't agree with the numbers. Okay. I also tried to, took your advice and sending out, like, a letter, thanking them for their time and doing up the follow-up call. However, none of them have came back, but I still feel confident that something will definitely give. Okay. So here's what I would try.

There's two things I can see right away. One, you're going to want to scale up your marketing because 300 letters a month, you know, is that's not really enough to have a consistent, build a consistent business off of. I mean, if it's where you can start, then go ahead and start, but have the idea that you want to want to scale that up. But we're going to want to scale that up by actually doing a deal. I don't want you, I don't want your wife to take on more kids in the daycare department. I don't want you to take on, you know, grave.

yard shifts or double shifts to try and pay for your marketing. I want the business to pay for it. So what I would see there, if that common, I guess, conversation you're having with the motivated seller, well, first of all, motivated is quote unquote. Realize that the foundation of every deal is in the seller's motivation. If they don't have the motivation to sell, then probably nothing you can do is really going to make a difference. Okay.

But one thing that I would consider trying, if you're going on that many appointments and you're reaching this impasse over price, I would really look at the three-option letter of intent training inside the academy. That, okay, I understand if you want all cash, this is what the market is going to allow me to give you. Now, I understand that you think your house is worth more than that, and I can appreciate that. It's a very nice house and most people do think their house is worth more than what the market says it is. So I understand that. I can get much closer to that number if we were able to work with the terms a bit. You see, I buy properties in one of two ways. Either I can buy the property on my price in your terms or we can buy the property on your price and my terms.

So what I've done for you is I've prepared a few different options. Why don't you take a look at these and see if any of these work for you? something to that effect. That wasn't verbatim, but something to that effect and at least give them options. Because if you're consistently, there could be something else there

and I can't tell for sure unless I was actually there and was like kind of a fly on the wall or a birdie on your shoulder. But if you're consistently reaching this standstill at the price, then you're going to want to shift, well, what about the terms?

Okay. So I purchase properties and one of two ways. We can do it my price, your terms, or my terms in your price. And so I would leave them with that three-option letter of intent behind with those three different options. Or, you know, if they don't like the contract that you left them up front, let them know that, you know what? What I can do is I'll go and work on a few different options for you. And then mail that along with a thank you letter. Okay.

Okay, try at least that. I mean, always presenting in person is always the best option. But how you could basically implement that three-option letter of intent without a whole lot of disruption to your existing approach is just include that additional option or those additional options inside your thank you note. I'm not saying it's going to get you a deal, but it will get wheels turning. Things in writing have a way of changing the psyche of the whole conversation. And if you put it in writing, they might not say, okay, I'm going to take option two or I'm going to take option three. But what they might say, hmm, option two is interesting. Could you give us a little bit more money down, then we'd probably be open to this part of it?

So it'll reopen the conversation rather than just saying yes or no over the price. Because you never want to have your negotiation narrowed down to just one issue. That's why you always want to keep it the price or the terms, not just the price or not just the terms. because then you hit a point where now someone has to give in. But if you have your negotiation still open to more than one variable, then you can create a win-win situation. The other thing I would look at, are you using the seller information questionnaire?

Yes, when they initially call. Okay. So finding out what they want out of the deal, like that second question when you're on the phone, like what do you want to have happen? paying really, really close to attention to that question can be crucial in getting a deal done. Because if you can give them what they want, then they're more likely to give you what you want as well. And then inside that seller information questionnaire, it asks, why are you selling three different times in three different ways?

And that's really to dig in and tap into their motivation. Those are probably the three most important questions on the whole questionnaire. And they sound kind of like just random, oh, by the way, questions. but they're actually probably the most important because it gives you an insight to what their motivation is. And that gives you an insight of how you can approach your presentation of the offer. Okay? So that's one thing I would do. I would expand the marketing.

Let's go after absentee owners or something like that. And then the second thing would be start implementing the three-option letter of intent if you're consistently getting an impasse at just the price. No, definitely. I definitely will apply that to the three-letter option of intent. You're right. I mean, I did go over that in your Pro Academy. However, I definitely do need to apply that.

As far as the marketing, I know I need to expand in trying to do. I know also, I'm sure putting like bandit signs in may also be a fairly decent option. Sure. But the hardest part is, of course, I don't have like Friday nights off, like you are saying. I do work a graveyard shift. And it does make it difficult to put out signs on Friday. Put them in the back of the police car. Just kidding.

At least you don't have to worry about being pulled over, right? No, so, okay, so, yeah, other options, true. But what I do want to point out that you're doing, Francis, is you are doing the right activities, and you are doing them consistently, and you have been doing them for a while. So I commend you for that. You're doing a lot of these things right. I'm trying to find out where the breakdown is of why a deal hasn't happened.

And I think it has to just do with the presentation of the offer that the seller doesn't feel like it's going to solve their problem. I mean, aside from you, you should be generating more calls than 15 to 20 a month. But the other part of that is that they just don't see it as a solution. So, I mean, I do agree. I agree what you're saying and everything, but a major problem also align in, as I am a police officer, that you do have to also, if somebody calls in sick, if different things just happen, I cannot just leave work. Sure. They will force me to work an extra shift. and that and of course lies the problem being how it is DC there's constantly things happening so

I would say that is very hard I have to definitely time management I saw in the beginning of the year that I had to buckle down and and try to create as much time in a day as I possibly can even if I had to do follow-up calls on the way home just just different things that, of course, that I did have to do. The hard part, what marketing is, yes, you do have to spend time to do that marketing. And that is the reason why I wasn't trying to jump around and do different things. What I was trying to do is, in order to bump up marketing, I needed more cash flow. So that's the reason why I have been pursuing, like, rental properties and trying to produce more in that cash flow. so it can provide me with a better opportunity to do the marketing.

Got it. I'm totally there with you. And I understand everything. And I think you're doing everything right. You're doing a lot of great stuff. And you're going on appointments. So you've got the hardest part down. That's what most people can't even get that far to even get to the appointment.

So I just want you to capitalize on all the hard work that you are doing. And I can tell that you're putting forth the effort. I can tell that you're listening. I'm going to tell that you're a good student. I can tell that you're persistent. You've got all the qualities of a successful real estate investor. It's just breaking down right there at the meeting. So I just thinking that a different presentation

or a different approach to the presentation of your offer might be the missing ingredient here. I think it is. But again, I wouldn't know for sure unless I was, you know, a birdie on your shoulder during the whole process. So those are the things that I would. I would recommend to help you be more successful. I would certainly extend you to reach out to me any time that you want.

And I will be glad to help you with anything. But, you know, just like you've done the work up to this point on your own, consider the advice that I've shared with you today and implement that. And let's check back in, you know, 30, 60, 90 days and see if we don't have a deal or two under your belt. Oh, sounds great. And I will definitely take your advice. I do appreciate. all the advice that you give with me today and also through your podcast.

I'm sure many, many, if not millions of people that listen to your show, that they get a lot out of your show. And we definitely all appreciate the hard work that you provide in trying to create the better podcast and provide a wealth of knowledge in your podcast to help people like myself. And I know you also have many.

just regular normal people that you've been interviewing. I definitely just appreciate all that you do as well. Well, you're very welcome. And, you know, I can't even imagine what it would be like to be a police officer in D.C. I'm sure you're very busy. And, you know, and thank you for your service to our country. And thank you to the service for the D.C. And, again, if there's anything I can do for you, you let us know.

And we'll be happy to support you in any way. that we can deal. Sounds like a deal. Awesome. Well, Francis, thank you very much. And that's it for today. I'll see you Thursday for another episode of Third Degree Thursday. I'm Matt Terrio, living the dream.

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