The Science of Flipping - Episode 152: Over 31000 Flips Together – Real Estate Fix and Flip House & Investing

Starting point is 00:00:00 Welcome to the Science of Flipping Podcast. I'm your host, Justin Colby. Yo, yo, what is up? What is up? Welcome back to the Science of Flipping podcast. And this is actually the first time, if this is the first episode you listen to, get ready. I'm actually streaming this live right now in the Science of Flipping Academy Facebook group. That's right. So now you don't even have to wait for the podcast to come out on iTunes and Spotify and every other platform, you can actually just be a member of the group. It's a closed group. The Science of Flipping Facebook group or Science of Flipping Academy group is a closed group. Just go request entrance.

Starting point is 00:00:57 We have a couple good questions to get to know you a little bit more and to make sure you abide by the rules. But you now, as of this moment, can start listening and watching my podcast live and start engaging with me real time so I can answer your questions right away. Obviously, not as I'm doing the podcast, but right afterwards, I'll jump right into the group, right into the post, and I will start engaging and answering your questions right there. So if you are listening to this for the first time, or this is your 150 something time listening, go to the Science of Flipping Academy group in Facebook, request to be added, and I will approve it or my Andrea, my assistant will approve it and we will you going, and I'll be answering those questions live. So hope this works as well as I think it will, but if not, you always have the podcast on iTunes. I actually, it's really early in the morning right now. It is the 16th of October,

Starting point is 00:02:00 and I say that very specifically because it's October 16th, 2019. And what I wanted to talk about and I wanted to get out immediately is we had an incredible Phoenix RIA partner of mine, Chris Iman puts on the Phoenix RIA. And so he asked me to be there and speak and, you know, work some panels and things of that nature. And so it was awesome. There were several hundred real estate investors there. The biggest and baddest of the industry that were in this market were there all on panels. It was incredible to see the turnout as well as the knowledge. And the reason why I wanted to be

Starting point is 00:02:37 able to get it out of my mind and over to you guys on this podcast and in this group is because the questions that were asked this panel, and there was, you know, the panel was comprised of six people, over 30,000 deals done total between everybody, right? It was incredible. I mean, I'm talking about the real deal investors, and investors from fix and flip and wholesale combination of both. And so some of these questions were great. And I think those are the same questions that you guys have. So I want to be able to offer up some of the questions and some of the answers that were answered regarding the questions. And I think the first question, which happened to be the last question last night,

Starting point is 00:03:21 was what do we see happening in 2020? And our answer across the board, quite honestly, was we don't see a major shift happening going into next year. We don't see that fundamental crash. But we all did answer when those things happen, they happen overnight, right? Sometimes you can't foresee it. And some of the things that we should be looking for are interest rates, hikes, right? Inventory on the MLS. Right now in Phoenix, there is less than two months of inventory on the MLS. I think there's 16 or 17,000 homes on the MLS. Now in Phoenix, what that means is if there are 32,000 homes listed on the MLS active, that means it is a break-even market. It is not a buyer's market. It's not a seller's market.

Starting point is 00:04:15 It is just an even market. Right now, there is roughly 16,000 or 17,000 homes on the MLS. So what does that tell you, specifically us here in Phoenix, that this market is an incredible seller's market, that the sellers are more knowledgeable, that getting a super, super, super discount deal is even harder than ever. And understanding your buyers and having the right buyers on your wholesale list is even that much more important. As some of you guys know, you know, I'm part of a iBuyer group Sunday here in Phoenix. We're also in San Diego, Inland Empire, Los Angeles, Dallas, and soon to be three or four more cities. But having those type of buyers that can buy really, really thin margins can really help you. So our suggestion when answering

Starting point is 00:05:06 that question was also make sure if you are a wholesaler that you really have a good buyers list. Continue working on your buyers list. I've been in this business now for 12 years. The rest of the panel, some of them have been in the business for 20 years. And all of them echo the same thing is you need to know how to move the property. And the best way to know how to move the property is by having multiple exit strategies. And one of your exit strategies might need to be finding the right buyer that can buy on really thin margins, including buy and hold buyers, including one of the panelists that I was next to was a super creative deal structure guy. He loves the subject to deals, right? And so having a buyer like him on your buyers list,

Starting point is 00:05:54 incredibly important. So that question was the last question of the night. One of the most important because everyone out there is trying to say what's going to happen next year? How's the marketing going to change? Is it going to crash? Everyone's waiting for this crash. And literally some of the most powerhouse investors in all of Phoenix, the answer was, we don't see it changing much, right? We see it kind of continuing. And there's some political answers in there and we can respect that. And some of that's just unforeseen what happens, uh, in the politics and how that affects the economy and things of that nature. But, uh, I would say the overall answer for myself and the others on the panel are stay

Starting point is 00:06:37 doing what you're doing, focusing on marketing, focusing on Legion, get creative. You should not be out there spending a ton of money on marketing if you are not converting well. And so that is something that you really need to be able to focus on. So that's the answer from all of us is that the market's going to continue into 2020. There shouldn't be any big crash. And I really, really don't believe that there's going to be any type of major appreciation that happens there. So go Niners. If you guys are watching this live, go Niners. Another great question that was asked, and it was one that I think a lot of you guys would probably have as well as with all the competition in the market. And obviously they were talking specifically about

Starting point is 00:07:24 the Phoenix market with all the competition on the market, how are we still able to get our deals? And some had some varying answers, but in large part, they focused on converting the deals that you were getting and making sure that you are consistent in marketing. Now, some of the people on the panel, for example, were on TV, right? And so they were on those real estate investing shows. So they had a marketing budget and a marketing style that is much different than what I would suggest for you guys, right? Another guy was really, really heavy on Instagram. A lot of his deals came through social media. Not that he pays for marketing on social media, but he really leverages his social media

Starting point is 00:08:06 to show his influence in the market. He literally does like a bunch of videos live with sellers. He did one yesterday, I think the day before, where he was at a title agency with the seller videoing him in the cellar talking about the property and closing the deal. And so he is shown to be an influence in the market. And in return, a lot of the smaller wholesalers or a lot of the newer investors go to him to buy their deals that they can't find out a way to get the deal done. Right. Another guy massively talked about door knocking. He firmly believes in it. He's been awfully successful. And though he doesn't have the volume of deals as some of us, he has massive rips. I mean, literally everyone on the panel was like, oh, I've paid him a $40,000

Starting point is 00:08:58 assignment fee. Oh, I paid him a $100,000 assignment fee. Oh, I paid him $140,000 assignment fee. By the way, an assignment fee, meaning them as the buyer knew how much he was making and were okay with it. So if you're out there, not okay with people making five grand, 10 grand, 20 grand, 30 grand, 40 grand, shame on you. Because some of the biggest and baddest still to this day, and I'm the same way, I'll buy a home knowing a wholesaler is going to make 20 grand, 30 grand, 40 grand because it fits in my box. It's a home that I want. So that answer he does big on door knocking. And quite honestly, if you've ever listened to me, I harp on door knocking. I always talk about door knocking.

Starting point is 00:09:42 You should be door knocking. The problem is, it's tough. It's not easy. And the reason why it's not easy is because you don't have a strategy behind it. The strategy is this, just to be very clear. Focus on pre-foreclosures when you're driving and door knocking on pre-foreclosures. Then find homes on your driving route that look like they are maintenance deferred and door knock those. That should be your strategy. And then it goes into follow-up and being able to

Starting point is 00:10:13 continue communication and based around the events that they're going through, be there at the right time. Another guy talked about direct mail, you know, I'm a massive advocate for direct mail, but the direct mail was very, uh, directed to, um, um, absentee homeowners. He loves absentee homeowners. So, and I do too. I think absentee homeowners can be great, especially here in Phoenix. There's a lot of snowbirds. There's a lot of, um, you know, second homes, third homes, fourth homes, you name it. There's a lot of, you know, second homes, third homes, fourth homes, you name it. There's a lot of people that have big rental portfolios that potentially want to start selling off. So he really was talking about absentee homeowners.

Starting point is 00:10:55 And then the other side, another person answered more about getting people on the phone, cold calling, and the value of cold calling. So, again, all of these are different people answering. They're all doing a ton of deals. I personally like using all of those answers truthfully. So my answer is a lot more like all marketing. This business is all marketing. You got to figure out your budget and then direct your marketing. And so Instagram's brilliant. Cold calling is great. Door knocking is great. Text messaging. I'm a massive text message advocate. It is really inexpensive and the engagement is really positive just because you have a hundred percent open rate and the people that don't want to talk to you tend to not reply. The people that want to talk to you tend to reply.

Starting point is 00:11:41 Again, if you have not heard of the company i'm using for text messaging is launchcontrol.us go there let them know you heard the science of flipping i think they even i told them i'm going to talk about them so they ask where do you hear of them because they're not a big company um say the science of flipping podcast say justin colby say whatever you need uh i'm sure they'll hook you up with whatever. I'll put it actually in the stream here in Facebook. And again, if you're listening to this on iTunes, go join the Science of Flipping Academy group. It is a closed group. You got to search for it, but add yourself, invite people in because these episodes are going to go live and you and I can start engaging. So again, the question was, how do you stay ahead

Starting point is 00:12:27 of the competition to answer all of them answered marketing, marketing, marketing, and different forms of marketing. And the last question I'll leave here for this episode is one of the biggest questions was, what was one or two of your biggest failures? And that's a hard-hitting question to people that want to look cool and want to be the guy and want to be, you know, in front of the group. And that's hard to admit. The best part about that is every one of us admitted one or two of our biggest failures. We basically all admitted our first failure.

Starting point is 00:13:04 Mine is great. I think you guys have heard my business partner used to run the auction for us when we're buying at the auction. He was on vacation. I took over and I basically bought like four sticks on a piece of land. So I made that and everyone really, really laughed, especially most of them were buying from auction also. And then I talked about a deal very recently that was a flip that really went south and was a very tough deal. A lot of money lost and every single one of them had those stories and volunteered them. And not only volunteered them, but each one of them had multiple stories. And I bring that to light to tell you guys this, as much as you might view me or others that may have a platform as incredibly

Starting point is 00:13:52 successful, I will also tell you, we've come, we have gotten to where we are today because we've been able to eat more shit than other people and keep going. We've had bigger or more failures and been able to keep going. So if you're out there just getting started and feel like you just keep failing, it's not working, or maybe you're going through your big flip that, you know, is eating shit and you're losing money. Maybe you're in that time. What I'm telling you right now, keep going because six or seven of us, whatever it was, all of us had our stories. And all of us were still there. And all of us were still doing business.

Starting point is 00:14:27 And all of us are still really highly regarded, especially in the Phoenix market. So I encourage you, if you aren't seeing the success you want yet, if you did have that failure recently or going through it currently, don't stop. Keep pushing. Because the only way you will lose in this industry, the only way you will lose in this industry, the only way you will lose in the investing industry is if you quit. And so I hope that helps you guys. Don't quit. If you need help, contact me. I'm happy to help. I will do periodically. I will work with people

Starting point is 00:14:59 one-on-one. If you're interested in that, just reach out to me, send me a message. I'm happy to have a conversation, see if it's a good fit between you and I. But, you interested in that, just reach out to me, send me a message. I'm happy to have a conversation, see if it's a good fit between you and I, but you know, listen, don't quit, find advice, listen to the people that are really doing the business. And hopefully that can help. So again, the science of flipping podcast, it is now going live on Facebook, each and every episode, get over to the group, the science flipping Academy group, so I can help you guys out in each and every way. And I promise you, I will also be answering questions right after this. Hopefully, you guys found that helpful. And I look forward to seeing you guys,

Starting point is 00:15:39 talking to you guys, and answering your questions on the next episode. Peace.

The Science of Flipping - Episode 152: Over 31000 Flips Together – Real Estate Fix and Flip House & Investing

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