The Science of Flipping - Episode 128: Q&A with James Bovard | Real Estate Investing Podcast

Episode Date: August 10, 2018

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Welcome to the Science of Flipping Podcast. I'm your host, Justin Colby. All right, Mr. James Bovar. What's up, man? Good, buddy. What's going on? How have you been? I've been good, man. Grinding away, trying to grow this business. And I look forward to some good stuff in the future. Love it. Love it. So the point of this call is I'm going to be able to repurpose this call.

This is a Q&A. You're actually a part of one of our billionaire masterminds unit, Partner Scott. This is a mastermind that has been ranked by Forbes as one of the top 10 masterminds in the world. You and I have worked very, very closely together. You've actually come and worked with me directly aside from the mastermind in our boot camps. Tell me a little bit about what it's been to be a part of the mastermind, but also working with me and being at kind of my two days and working with me directly. I think the easiest way to put that is if you're really trying to grow a business and it's something that's new and, you know, isn't something that's extremely common,

you really got to surround yourself with people that can take you to that next level. And I really feel like our membership with Boardroom has really done that for us. And, you know, the knowledge and information, not just from you and from Kent, from Sean, but from the individuals that we've been able to build relationships with in that group have really helped us take this business to the next level and streamline it, I guess, would be a really good way to put it. Yeah, man. No, I think that's exactly how it is. I mean, you're streamlining the scale of your business. And so this is going to be all over YouTube, Facebook, uh, social media, but the point

of this was you had some questions. And the reason why I wanted to do it this way is because you're not the only person that is a in our masterminds or B that I work with personally on a one-on-one basis that has these questions. So I wanted to actually record it and then allow you to ask the questions. And we're gonna have normal conversation, um, about your business and we'll just take it from there so go ahead and shoot because i know you are growing your business you're hiring you're scaling you're doing a bunch of deals so um i'll just let you fire away and we'll just do a q a cool deal so i guess my first question is is now

that we've gotten into a little bit of momentum here obviously bringing on an assistant was a conversation that you and I had at the boot camp and you know it really really made something for me well since I've been able to bring on an assistant we've been able to kind of free up a little bit more of my time so I can focus on acquisitions in doing so we've actually we've acquired five properties and sold four of them just in the last weeks so it's definitely working what I want to do now is I'm looking to to bring on potentially a lead manager is what my next thought process is to make the lead generation and the follow-up a little bit more consistent, uh, because consistency is key. And, uh, I think the more time I spend out

in the field and going on appointments, the, uh, the more deals that we're going to do. So realistically, like my question today is, you know, I brought on an assistant recently, and we're really trying to figure out things, make things fair all across the board for everyone. What has worked for you guys and how do you structure pay scale, job requirements, duties, accountability? Can you talk to me about that a little bit? Yeah. So the first answer is the way I structured mine might not be 100 hundred percent how I would actually suggest you structuring yours right but I will tell you I basically lay out the things that I need to get done that actually aren't

generating any revenue for me so you you said it already like you go on you're in the field working with the sellers that's an immediate generating a revenue um and we're specifically talking about a personal assistant, correct, or are we talking about a lead manager? Let's start with the personal assistant, and then we can jump into the lead manager. So what things through your day are you being pulled away from generating money?

And you have to write those down. So, I mean, what my assistant does for me, she's actually getting a promotion, which is really really cool uh we sat down yesterday so very excited for her but um she does everything from like paying the bills on her flips setting up electricity you know when we're flipping homes doing kind of the um clerical work if there's anything needing to be done on a deal, right? So if we're wholetailing it or we're rehabbing it and there needs to be insurance put on the home,

electrical, water, power, like all that kind of stuff, she handles it, sets it up, pays it, closes it out when we're done flipping the home, right? Ends the account, all of that stuff she handles. If there's any vendors that we have in our business, she is paying them. So if we get a bill from LexisNexis or whatever, she strokes the checks and pays those bills. Because those are all things that have to be done in a business. But if I'm doing it, I'm generating any revenue right right so we start there um that has transitioned to she runs all of our transactional coordinating okay she deals

directly with the title and she deals directly with um my team who uploads the documents into Podio I know you guys use um what do you guys use um as far as like a crm i'm using yeah right so she she has access to all the open files in boomtown for your example and she literally works with the acquisition people which would be you to make sure every t and t is crossed i's are dotted and then she works directly with title and the buyer. And she handles the transaction just like a normal transaction coordinator would do. Now, I don't pay her more for that. That's part of her hourly salary compensation. Okay.

So because all of those things don't necessarily make me more money. Right. Setting up any and all marketing, right? So my email blasts, she puts together all of the email blasts that goes out. So she grabs it all because in our CRM and podio, sorry, my back's hurting. I'm at home. So you can see my little Buddha. What's up? Um, so she grabs all of the pictures from the email blasts and then she's the one that puts together the email and sends out the email she doesn't answer the call from

the buyers because that's a revenue generating activity so my acquisition team handles the acquisition and the disposition takes it from A to Z but she'll put together the email and send out the email. She'll send out all the, we use Scipio to text blast our buyers as well. She handles all of that. What else? You know, and obviously my business also has a whole, you know, kind of an agency behind it, right?

Which would be the branding of Justin Colby and the branding of Science of Flipping. So she handles a lot of that marketing and branding in that sense. So in your business, you don't necessarily have that, but your assistant could handle any and all of the marketing side of it. Maybe you have websites, maybe you need websites. My assistant will go in and research companies for me. Right. So if I'm interested in maybe using someone's service, I say, Hey, I want you to go, um, research it and give me a quick email about what it does. And like, almost like a cliff note of a book. Cause I don't want to have to go in it. Like that's just time I'm spending there researching these companies. Like I have an

interest in this company. Let me know what they do and how effective it is and how much right give me the cliff notes so she does a lot of that kind of stuff um and that's what she does i mean again there's no real limit to what she does um if there needs to be something done and it doesn't actually bring in any money that's my focus i put it on her desk okay and what part of her promotion i'm very excited about her promotion is I'll be and it's funny because we're live right now on Facebook in our group that she has access to so I don't know if she's on here or not so well if you are congratulations the hella way of break it to her but uh part of that will be is we will be giving her bonuses based around how well the company's performing.

Because she is so integral in the kind of minutia of it, though she's not generating revenue, if without her, I wouldn't be able to generate the revenue. So based around that, we will be giving her. And we don't have a structure for sure. Like it may not be per deal. It may not be per month. Maybe it's per quarter. Maybe it's annually based around the company.

So part of that will be to bonus her on top of what she's getting hourly. So I guess my next question would be like what. So you're paying on an on an hourly basis. We're kind of looking at potentially both routes, either hourly or basically commission, like a split on the percentage of the net profit. So have you experienced both of these in the past or has it always been for you, this is the direction it needs to go on the hourly side? So I would say you start them out hourly and as you want to connect them to your company and you realize they're a huge asset to you, then you would start incentivizing them based around productivity of the business and how it's going. Because the reality is my assistant who no longer is going to be, this is probably the last time I'll be able to call her a true assistant. Though she's going to be assisting me, but we're giving her a true promotion. She's of massive value, right? To call her an assistant would be an understatement, right? And that's why she's deserving of this promotion. But I wouldn't automatically go into a relationship

with somebody giving what I'm about to give her, right? Which is percentages of the company and the profits and things of that nature. I would kind of test them out for six months because it's a high turnover position. So if they can't last six months, then why were you going to give them bonuses? And if it's money, you know, they quit because of the money, then you needed to kind of just internally realize that. Right. And if someone does want to quit, you say, Hey, let me ask you, are you quitting because you don't like it here? Are you quitting because you need to make more money? What's the reasons? Um, and then from there you can kind of pivot. Right. And I'll tell you, we started her

out at $12 an hour. Okay. Then she's been with us three years, three something years. That then has up to this very moment until this new promotion, she was at $16 an hour. Okay. And now again, she's watching, it's funny, but she will now be at $20 an hour. Awesome. Right, and so in three years, she's made almost 100%, you know, but she will now be at $20 an hour. Awesome. Right.

And so in three years, she's made almost a hundred percent, you know, she's made 80% increase in her income in three years, which if you talk to anybody, that's crazy, right? Like we're giving her a 25% increase in pay.

Like I'm going to talk to her about it today. Right. And so, uh, that's a crazy percentage. I mean, I think some people probably wouldn't, but they also don't know the value. I think when you see that value, you know, you'll do that. Right. But if you're just doing it to keep somebody, you can just find anybody. Does that make sense? Yeah, of course.

So I guess going into the next step, what would your next hire be in your mind? Like when you started out, it was just you. You brought on an assistant. What was your very next hire? Who do you recommend through your experience and the time that you spent in this business and your coaching with other people? What is your next hire and what does that look like? I would hire someone to handle the front end of the leads. Um, I wouldn't have that person analyze the deals necessarily put any qualification or judgment on the deals, whether it's a good deal or bad deal or whatever, but just handling the leads, being

a representative for the company. Right. Um, because once you can get there, they can then start to level up and depending upon how good they are, you can kind there, they can then start to level up. And depending upon how good they are, you can kind of get them into an acquisition position, excuse me, replace yourself. The last position you're ever going to be replacing is the acquisition side. Right. And the reason why is that's everything, right?

And so that is your very last position you're going to replace. So I would handle someone on now, what are your marketing? What are you doing right now? You're doing direct mail and PPC. Uh, a lot of cold calls, cold calls. Um, we just started a direct mail campaign, uh, that hasn't gone out yet. Um, Alan's got it all set up for us, uh, through your recommendation. So we should be starting that here soon. So knowing your business and knowing I have a cold calling floor, how my leads are handled and how maybe I'm going to answer your question because it's very specific to you. Um, in that business, there really isn't a higher, right? Because your full callers are basically putting a lead into your boom town and then you're working it. Correct.

Yeah. Then instead of a lead person, I would actually bring in a followup person for you because you want to, you want to very quickly capture the low hanging fruit. So you want to be in the field, you get on the phone, it's a hot lead, boom, boom, boom, you want to go contract immediately. The ones that are like, yeah, I'm thinking of selling, but I think I got to get into, you know, we got to get through the first quarter of the school system because the girls blah, blah, blah. And you're like, oh,

that's four months from now, right? Well, is it your best interest to continue following up knowing that? Or would it be better for someone else to be able to just give them a ring every so often? Hey, we're just still here. We know things change. So we just want to let you know we're still very, very interested if anything's changed. Right. And every couple of weeks have someone do that. Otherwise, you're doing that, which is fine. Right. But for those that are like hemming and hawing and they're eight months out, 12 months out, but they have an interest in selling and talking to you, that's a viable lead. Um, at least in my business is a viable lead, but then your, um, value time should be working the other leads and having someone else in your business continually

following up. And they still have to be good. There's a component of sales to that, right? You can't just, you know, that's not just a, Hey, so do you think you want to sell yet? Right? Like that's not the followup pitch. So it's still a huge value. Our follow-up guys still do not judge the property. They don't have any autonomy to give a value to the property. All they're doing is they're taking it from a follow-up. Hey, James, you ready to sell your home? We're still very interested. James says, yeah, man, thank God you guys called. Actually, I just got in a car accident. I have all this insurance I have to pay. The only way I can do it is I got to sell my home now. I can't wait anymore. So thank you for calling. Awesome. Now my follow-up guy takes James and puts them back on my acquisition guy's desk

right then, right there. And now my acquisition guy knows this is high priority. Get back with James. That's how that works. Awesome. that look like for the for that individual um would you put that off on to the assistant as the follow-up manager as well or would you hire out for that specific position and what would that hire look like that is dependent upon how much you have your assistant doing how many hours you want to pay her. I'm assuming it's going to be a her, but maybe it's not. Um, how many hours you want to pay her, how much you're paying? Like, it just depends. You could, um, we don't my Andrea and you know, Andrea, you met Andrea. I mean, she has my entire life in her hands, right? So she has plenty to do. Um, so basically I'm taking

people who would be interested in working with us and bringing them in in that model first and that model works you know again i pay hourly for that model okay because then you can keep people a little bit longer and then you can incentivize them if they get good at this then again that could be another potential for you to replace yourself but i would pay hourly for that model. But I also would want someone who wants to be in the business, right? I don't want to just go pay hourly for someone who doesn't give a shit about real estate. I would want someone who potentially is like, I don't know what I don't know. Maybe a rookie. I'm interested in getting into it, but I don't have any money and that kind of person,

right? So you can put ads. We find people on indeed for that. Okay. Potentially your cold callers fall into that. Yeah. Um, that's, that's where we found two of our fault. We have two full time followup people. They went from front end and now they added the back end cause they're like, Hey, I love working here. I love the culture. Um, our cold callers only dial four hours a day. I don't know how many years do, but ours do four. So they still have a half a day left. So they're like, I want to keep, I want more work, right? So we're like, fuck, yeah,

you do. And you're good. Here's what the difference being is you're not cold calling these people. They have already heard from us. You're just keeping them warm, right? And so we kind of train the difference okay awesome what i think you've definitely answered a lot of questions that i had and i appreciate you you know spending some time morning looking forward to uh boardroom this month and hell yeah next month so it should be good it'll be awesome it'll be awesome scale and escape is going to be awesome me and kent and sean we're just we've been weekly game planning and putting together a scaling escape dude is going to be one of our better

ones for sure awesome I can't wait yeah any uh any questions or anything for me anything I can help you with no I'm glad you guys are rocking um I don't have any questions bro I appreciate you and I look forward to hanging and having a couple of beers and eating with you and sitting down at the mastermind here in like two and a half weeks, right? Yeah. Just under three weeks. Three weeks, yep. So I will see you here in about two and a half weeks down in San Diego at the mastermind. Awesome, man. Appreciate your time. Thank you.

All right, buddy. Later.