The Science of Flipping - Episode 164: How To Start During Covid-19 | Real Estate Investing

Episode Date: April 17, 2020

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Welcome to the Science of Flipping podcast. I'm your host, Justin Colby. What's up, everybody? Justin Colby with the Science of Flipping, and I want this episode to be how to get started during this COVID-19 coronavirus epidemic. Listen, this is something we have not ever seen. It's something that all of us are trying to navigate the waters real time, but the first thing that you have to understand is you can absolutely get started in real estate investing, becoming a wholesaler, becoming a flipper, whatever you might want to be doing at this very moment. The first thing is all about your mindset. You are going to only be limited to what you believe you can do. And I am telling you, and I am encouraging you, now is the time to get in the game. There's a lot of people leaving the game right now because they're uncertain or they're just scared. That is not

my approach. My approach is when everyone's running out, I'm running in. Now, I'll tell you, yes, I am a little bit more conservative with my offers. Yes, I've had to do a good job to get back to finding new buyers, building relationships with my current buyers. I've had to do the work that I did 10, 12 years ago. But at the end of the day, if you have not gotten into this game, you're still looking for your first check, it is still a very good,

if not a better time to get in so you can gain some market share. The reason why I believe that is because there's new buyers coming in. There are people that I've never heard of that you can actually have access to. And I say that to say the very first thing that you need to be doing as a brand new wholesaler will be, make sure you're starting to build your buyers list first. It is paramount in everything. One of the things that I felt when this coronavirus thing hit was simply, you know, my buyers got scared and they clammed up totally normal,

totally natural. I understand that they're spending their money to, you know, buy and rehab and rent and whatever it may be. But I can't keep my business from moving forward, right? So what I had to do immediately was go out and start finding new buyers. I had to go out there and find out who else was buying, where they were buying, how many deals are they looking for. I also had to go out and continue to maintain the buying list I had and to be able to provide them value right and so I say this all of this just simply say now is

a great time to be able to jump it in the market now what would be the first couple things that I would be telling you to do that's the question well where do I start what do I do well the very first thing is get in front of buyers. Now, the best place I can tell you to find buyers is PropStream. If you look down below, you'll see a link that says TSOFdata.com. Just go to TSOFdata.com. They'll give you a free account for 14 days. Right in there, you will see a cash buyers square. It literally will say cash buyers, right? Right there, you have the people that are buying cash.

You can skip trace them. You can contact them. And you can say, listen, I am looking for real buyers that aren't scared in this market. If that's you, how do we start a relationship? That is the very first thing I would be doing. Quite frankly, it is what I'm doing right now. that's you, how do we start a relationship? That is the very first thing I would be doing. Quite frankly, it is what I'm doing right now. I am now 13 years into this business. I started in 2007. For those that don't know my story, I started and I was broke, busted, and disgusted. I was sleeping on my friend's couch. I had no money. And so for those of you out there that

are thinking, how can I get into this? How do I get my first deal done? Promise you, I had no money. And so for those of you out there that are thinking, how can I get into this? How do I get my first deal done? Promise you, I had no money when I started. I started as the world also was about to start the great recession. It was a turbulent time at best. And I can tell you, based around my own experiences, you can do this. So the first thing is the buyers list. Again, if you go to T S O F data.com, it'll bring you to a free 14 day membership to prop stream. Um, and right in there, you will be able to pull a list of cash buyers. You will be able to pull their information. You will then be able to skip trace them. Um, and then you will be able to give them a call, send them a text message or, or well, send them a call and send them a text message, right?

That's what you want to do. You want to really get in front of them. Right. And so, um, where I get my, uh, text messaging from is, uh, get Ivy data.com, getydata.com. They are incredible. As a matter of fact, I can hook you up with a discount and know the owner, but we'll get that. If you want to send me a direct message, follow me on Instagram. If you're not following me on Instagram, you need to. The Justin Colby and Facebook, The Justin Colby. Listen, I just finished and came off a week of doing the real estate roundtable with roughly 23 of the biggest, baddest investors in the game. And what I can tell you is this is the one thing each and every one of them mentioned

that they are going back and doing work on their buyers list. Whether they're finding new buyers, whether they're recultivating the relationship, whatever it may be, this is the one thing that they are going, including myself, that they're going back and doing so that they can actually navigate these waters as they're changing. There's never a better time to get into the game when the pros and the veterans are all kind of topsy-turvy because there's now new market share for you to gain. It doesn't mean you need to go spend a lot of money. It means you need to do the work. And the first thing you need to do is go find those buyers. There are plenty of buyers out right now that are still buying. I promise you that, right? Now, what they're buying, how they're

buying, and then how deep they're buying has changed. So that is what you'll have to navigate. You'll have to figure out what they're looking for, what price they're looking to pay, what type of homes. You have to do the typical questionnaire of understanding their business. But once you do that, step number two is go find the deal. Well, if I'm a rookie, guess who has the deals? Other investors, people like me, right? So I'm a veteran investor. If I have a rookie come to me and say, Hey, I got, you know, 10, 15, 20, 30 buyers that are hungry right now. Would you

mind if I sent your deal to them more often than not, as long as that rookie or newbie is clear that they have to mark it up based around the price I sent it, I have no problem. As a matter of fact, we just closed a deal that there was literally two other investors in the chain of closing that deal that made money, and I still got the number that I actually wanted. It was a great job by them. They were able to take a deal that I found. They spent no money for it. They did not negotiate it. It didn't take any of their time and they just had the right buyer. This is the key to this business. And if you are a newbie, this is what I would be doing. I would be networking with all the veteran investors who were in your market. I

would offer them the ability to sell their deals. I would have no problem with that. I don't think anyone that I know in this market who's been around for any amount of time would have a problem with it as long as you're marking it up. It doesn't matter to me. But the next thing is you need to perform. So I would tell you is you have step one, go find the buyers. Again, tsoflist.com will bring you to a 14 day trial prop stream. And then you need to be able to skip trace them and call them. The next thing is getting in front of some of these more experienced investors. And where do you want to find those? Well, you can find them, you know, on Facebook. You can find them in meetup groups. You can obviously, RIAs now have changed drastically. I used to be able to tell everyone, well, you should go to the RIA. Well, there's no more going to the RIA anymore, right? This is not that. The times have changed. I'm not sure if events like that will be coming back anytime soon. I have no ideas, anyone's guess. But what I can tell you is there are RIA groups on Facebook.

And I would be in there and I would be engaging and I'd be communicating. I'd be spending my time building those relationships, asking those questions. There are a lot of Facebook groups out there, some large, some smaller, some localized to your market, some national, that you can go in and find people that have deals. Now, again, it doesn't do you any good to go out and resell a property at a price your buyers aren't going to take. You're not going to actually get the deal done. The original investor who found the deal isn't going to have high hopes for you to find them a buyer. So really diving in and understanding what your market is, what your buyers are, or who they are,

and then understanding their buy criteria. Because if a rookie investor, let's call them a newbie, right? Maybe they've done a couple deals, but they haven't really done hundreds or so. If a newbie came to me and said, hey, Justin, I have a buyer who's looking to buy 70% of ARB all day long, every day. Do you have anything that would fit that box? Well, now we're talking now, at least I know, Hey, I'm going to, you know, meet with the seller tomorrow, or I have a contract out right now that might fit, or I have a deal that would fit. At least they're bringing me value for the person that actually went out and got the deal. Right. And so that is really, really important. If you are the newbie, I would always be trying to offer value in the very best way's a realtor, but also an investor.

He's looking for rentals. He likes, you know, certain areas. So he defined for me what he's really looking for. If I have that knowledge going into either new negotiations based around, you know, homeowners, or even if I have a deal already, I can send you the right deal versus just sending you a, you know, a big ad square footage rehab flip that your buyer's not going to want anyways, right? And so being able to provide that value can really help the seasoned investor help you, right? And so those are the two big, big, big ways that I would be taking advantage of this time,

gaining market share, networking, talking to people. A friend of mine, Brent Daniels, he has TTP, talk to people. I mean, that is what you need to be doing right now. Now, if you want to take, you know, the next step in step three, and actually you want to be going in, um, speaking with sellers in marketing, I will tell you my top three marketing and maybe four marketing strategies I would be advising you to do right now as a newbie. And I actually am also still doing them in our business

and that's why I'm advising it because it's just working, right? First and foremost, text messaging. Text messaging has been one of the most, I guess is one of the newest marketing channels that there are, which gives us 100% open ratio. I absolutely love text messaging. I still love cold calling. I've never quit cold calling.

Cold calling still works. You need to be making more calls. Right now, people are in a state of flux. People don't know what to be doing. I'm talking about sellers. They don't know, uh, you know, what's going on in the economy. They're losing their jobs or is a lot of pain out there. There's a lot of vulnerability. And if you can come to them and, and be a value, um, and help heal that pain, you're going to win. And so I tell you, you know, get in front of as many people as possible. And that's cold calling. I also recently started back up voicemail drops.

Voicemail drops have been doing incredible for us because it's so wide and we can, it's so vast that we can hit so many people. And so what did I say? Text messaging, voicemail drops, and cold calling, and then driving for dollars. Now Text messaging, voicemail drops and cold calling and then driving for dollars. Now that's a little bit more unique, right? Cause driving for dollars. Now people don't want you knocking on the door, going to the door, but it doesn't mean you can't find the right properties that have that maintenance deferred look and then go back and skip trace that address. So maybe physically knocking on the door wouldn't be the right thing to do this day in time, but driving the neighborhoods that you've already

done your work. Part one, you've talked to your buyers, you drove, you know, you understand what they're looking for. So you drive the neighborhoods that they would be wanting to buy. You know, you write down, you use an incredible app, um, uh, the deal machine. And again, all of the apps, all of the services, all of the systems that we use, if you just send me a message on Instagram, that means you have to go follow me on Instagram, the Justin Colby. I will give you every single service we have. So you can just go there and, and use what we're using, right? So you use their service, deal machine service, and you have the ability to cold call them there. You can skip trace the data there.

You can do some follow-up with it. At the end of the day, you don't necessarily want to be door knocking right now. It is not the thing to be doing. But being able to find that person, find the home that looks maintenance deferred, obviously would have great value. Now, here's another thing. Two other lists. If you're going to look at pulling lists, I like the vacant list.

I like the absentee list. Those lists are really, really good right now because obviously as we have the rent moratorium and we have all this craziness happening with the banks and the lending and people losing their jobs, I think there's a lot of people right now that if the home is vacant, they want to just get rid of it. And if they're a landlord, I think there's a lot of people out there second guessing their landlord ship, if you will, and wanting to figure out a different option. Can they take some money off the table and just walk away from some of these headaches, right?

I really advise you to be using those lists if you're gonna be pulling a list and going after data for cold calling and text messaging. I like vacant, I like absentee, I like 60 plus, meaning the homeowner is 60 plus. And the reason being is they might want to downsize. They might have some equity. They want to pull off the table. And those are the lists that I've been pulling. And again, the list provider, the text messaging, the skip tracing, all of those, here's how you're going to get the information. If you go follow me on Instagram and then ask me the question, who are the services? Where do I find them? What are

the lists? I will be replying to you happily as I want more engagement there. But that's how I would be getting started in this business right now. Again, to reiterate, number one, find your buyers, communicate with your buyers. Number two, find your seasoned wholesalers and people that are already having the deal, network with them, find a good relationship, a giving relationship so that they see some value in working with you.

Then I would be using my marketing strategies from text messaging, cold calling, driving for dollars, and voicemail drops to the list of vacant, absentee, and 60 plus. And if you surround that, you will start to get market share. I promise you this. You will be able to break into this industry now as the entire industry is in flux. It is a great time for you to get into this industry. If anyone is telling you otherwise, those aren't the people you want to surround yourself with. You want to surround yourself with people that are positive, that are motivated, that are encouraging, that want something bigger and better, and that you deserve that. And as long as you surround yourself with those people,

you will win. I'm happy to be that for you guys. Again, follow me on Instagram, and I will give you each and every one of those services from the list providers, text messaging, you name it. Happy to do that for you guys. And so that is this episode. This is how you break into this business

during this COVID-19 coronavirus time. It's shaking up the world. This is your opportunity to get what you want. I hope this finds you guys well. You guys are all healthy and happy and spending quality time with your friends and family. Hopefully more family than friends. Love you guys. Peace.