The Science of Flipping - Episode 34: Put Money In Your Pocket | Real Estate Investing Podcast

Episode Date: May 2, 2014

document.addEventListener("DOMContentLoaded", function () { podlovePlayer("#player-5eb5ab32127b6", "https://thescienceofflipping.com/wp-json/podlove-web-player/shortcode/post/517", "https://thescienceofflipping.com/wp-json/podlove-web-player/shortcode/config/default/theme/default"); }); <p> document.addEventListener("DOMContentLoaded", function () { podlovePlayer("#player-5eb5ab321671c", {"title":"Real Estate Investing Podcast u2013 Episode 34: Put Money In Your Pocket","subtitle":null,"summary":null,"duration":"","poster":null,"chapters":"","transcripts":"","audio":[{"url":"http://thescienceofflipping.com/wp-content/uploads/2014/05/Podcast-Episode-34-Focus.mp3","mimeType":"audio/mpeg","title":"AUDIO/MPEG","size":0}]}, "https://thescienceofflipping.com/wp-json/podlove-web-player/shortcode/config/default/theme/default"); }); <img src="https://thescienceofflipping.com/wp-content/uploads/2013/09/itunes-justin-colby-150x150.png" alt="itunes-justin-colby" width="150" height="150" /></p> Justin goes over what to FOCUS on in your business to put money in your pocket.  Entrepreneurs can often times feel like they need to do a million things in their business, but Justin breaks down what you need to be FOCUSED on at all times. Flipping homes has a lot of facets to it, but Justin tells you how remaining FOCUSED will make you rich.  This was recorded on his birthday so he is a little excited hahaha. Enjoy!! 

Welcome to the Science of Flipping Podcast. I'm your host, Justin Colby. Welcome, welcome, welcome everybody to the Science of Flipping Podcast. I am your host, Justin Colby. I'm very excited to be with you guys today because guess what? It's my birthday. That's how dedicated I am to giving you the top knowledge in real estate investing and flipping homes. It's my birthday and I'm here rocking with you guys, making sure you get the best information possible out there.

It's a wonderful day day I feel incredibly blessed I've been getting so many calls text messages Facebook messages Instagram messages you name it I feel so blessed and humbled by the love that you all show me so today is my birthday it's April 30th'm excited. I'm another year younger. Life keeps getting better for me, my business partner, Ed. The Science of Flipping Academy is going to launch soon, everybody. I am so excited. I'm sure you can hear it in my voice. The Science of Flipping Academy will be launching soon. I am excited about that. Again, I have a lot of requests coming in.

For those that are interested in working with myself and my business partner and team and learning from us, give us an email at info at thescienceofflipping.com. I do get a lot of requests for those who are out there interested in working closer with us, learning more from us, working kind of hand in hand. If you are interested in working with me, my business partner, Eddie, my team, learning how we do what we do, give us an email at info at thescienceofflipping.com and my personal assistant will reach back out to you to set up a time to speak further. Again, you guys can hear it is my birthday. I'm excited. It is podcast episode 34. 34. That's ironic. I turned 33 today.

I probably should have waited one week and then I could have done my podcast 33 on my 33rd birthday, but here I am doing my 34th podcast on my 33rd birthday. All right, enough about my birthday. You guys have heard enough. You get it. It's my birthday. Anyways, if this is your first time coming to this podcast, listening to this podcast, I highly urge you to get over to our website, thescienceofflipping.com and make sure to download your free ebook it is the best ebook you can get it is free but it is all about the 15 most costly mistakes you can make in today's market you know right now the real estate markets really hot it can ebb and flow depending upon what city you're in you need to make sure you're

not making the mistakes that many investors do including myself that's how I was able to write the e-book. So make sure to get over to the website, thescienceofflipping.com, and make sure to download your free e-book. The podcast, if this is your first time, is all about the systems in your fix and flip business, in your flip business,

to systemize and organize your business so that you are not working in your business, so that you are running your business from the comfort of your own couch or on vacation or wherever so you don't feel like you're doing everything. So often, myself and business partner Eddie included, when we first started, the first several years, we literally did everything. We did them all. We did everything except for swing the hammer. We always have outsourced that. But this podcast is all about being able to teach you how to build a seven-figure flipping company that is a true company in a business and not just you running around ragged like a chicken with its head cut off. That's the intent of these podcast

episodes. So I want you to listen each and every week. I want you to subscribe to the podcast. It's free. So you can get the motivation. so you can get the system, so you can get the organization, so you can get all of the intellectual property that is ours, that is mine, that is my partner's, that is my team's last night and we had a pretty long in-depth conversation about how he's feeling in his business. He's a successful investor in his own right, but he feels like he's not making the incredible jumps that he wants to be making. And the main reason because of that is two things. A, he has a full-time job. He has kids. He has a wife. He has what we like to call life.

Life gets in the way, guys. We understand that. But what that really makes you need to do is get hyper-focused. And that's what I want to talk about with you guys. Myself, my partner, my students, my colleagues, my friends, they all have life that gets in the way of their business. Because let's face it, life is the only time and life is the only resource we really have. So we don't want to be working all day. We want to be enjoying our friends, our family, the fruits of our labor, the money we have so we can go on vacation.

But if you're not hyper-focused, you don't have time to do it all. So he was calling and saying, hey, I'm really struggling because I get off at six, and then I try to get to the gym, and then I want to spend time with my kids and my wife. And by that time it's 930 at night and I can't call the sellers back. My phone's blowing up because I'm doing the marketing that you're telling me to do, but I can't even get back to the sellers. And then, you know, when I do get a home under contract, I don't have a great buyer's list. You know, if it doesn't fit for me, I want to wholesale it and flip it and flip the contract. I don't have a great buyer's list to do that with. A lot of times, I get it under contract and I can't even wholesale it, but I don't have time to flip it right now, blah, blah, blah.

I told him to take a step back for a second. because you need to really focus, hyper focus on what makes you money. And so for all you listeners out there, what in our industry makes us money as investors? What makes us money? Building a huge buyers list? Does that put money in your pocket no but so what does make you money finding the deal makes you money and some people will argue well if you find a deal and you have no one to sell it to well how are you gonna make money trust me on this if you find a deal and you're in contract with the deal and you don't have money right now and you're in a position in your business where you don't have the money to fix and flip it, or maybe it doesn't work for your model because it's a perfect buy and hold, but you're in contract, how motivated are you going to be to go find a

buyer? You are going to get incredibly motivated and you're going to go make sure you find a buyer. And one of the things I told him specifically to do in these situations is, you know, listen, you need to learn how to leverage other people. If you don't have a buyer, there might be a wholesaler out there that does. So you can do a co-wholesale. Don't always put all the pressure on yourself to do it. Go find another person who has that buyer's list and give it to him on an exclusive to market. And you agree upon a percentage that you think is fair. Now, anytime that we do that, we always have the percentages of, we always take 25% of the gross profit back in our pocket for the marketing costs that we put up. So if there's a ten thousand dollar wholesale fee

We immediately take twenty five percent of that off top, which is twenty twenty five hundred dollars Two thousand five hundred dollars now, there's seventy five hundred dollars left on the table in that case I would split it with the coal wholesale Wholesaler and it would be 50 50. okay that deal would be a 50 50 deal after i take my 25 back for marketing period that's how we structure it now the reason why we go there what i'm talking about is he needs to find the deal he needs to get hyper focused on one thing and one thing only and that's finding the deal because when he gets those deals you will also become hyper focused on getting paid on those deals and how do you do that in

this segment we're talking about if it doesn't fit for you you get paid because you wholesale it you co-wholesale it you leverage other people and what I brought up is in our current business here in Phoenix, Arizona, we are developing 79 townhomes. We are fixing flipping properties. We are doing a podcast. We have an educational program that I talked to you guys about on the front end. We're building the science of flipping academy. We have a high-end consulting business for investors that we work with each and every day. We don't have time to take on a full-blown wholesale system. So what did we do here in our business? We did exactly what I'm telling my student to go do,

and that's partner with another wholesaling group. And what we did is we created a business with this other wholesaling group who's currently already wholesaling. Last year, they wholesaled 300 homes. homes so I said what better partner would be than to have someone that already has the systems up and running and we'll be able to split everything 50 50 when we pay for marketing he pays half we pay half when we get the deal and it gets sold he gets 50 of the profit and we get the deal and it gets sold, he gets 50% of the profit and we get 50% of the profit. But we don't have the time to be extremely focused on building that side of the property.

So we leverage other people's time and efforts and money to get the result we want. And what we focus on is exactly what is putting money into our pocket which is finding the deal now why is finding the deal the most crucial part of this because think about this if we go do 20 000 mailers a month that brings in let's say 10 properties a month now we're fixing flippers you know that's that's 80 90 of our business now we are developing this wholesale department we're fixing flippers. That's 80, 90% of our business. Now, we are developing this wholesale department. We're also developing 79 townhomes. We have our coaching, so on and so forth. But 80%, 90% of our real estate business is fixing flipping. So what happens when I'm driving in 10 deals a month? Do you think I'm finding deals that I can fix and flip?

Absolutely. Absolutely. So what puts money in my pocket? Finding the deal. Now for those, let's say out of those 10 deals a month, only, you know, only let's say two of those work out as a fix and flip. Maybe even one. Well, what am I going to do with the other eight or nine?

I'm going to wholesale them. Get in contract. Give it to my wholesaling partner. And let's go get some more paychecks rolling in. Even if they're smaller. Let's say, you know, again, it's pretty common to make $10,000 on a wholesale deal here in Phoenix. So let's say we make 10 grand. gets five we get five okay well we did let's say three or four of those every single month let's say we actually double that and we do eight or nine or ten of

them every single month that's a nice little income to go along with our fix and flip business, our 79 unit development, our coaching program. So my point to you guys that's out there and you're listening and you're thinking, man, I don't have a buyer's list. I can't get focused. I got my family. I got my work. I got my job. I got my nine to five. I got gym. I got my exercise. I got all these things. How do I do that? stop Stop it. Take a step back get hyper focused on what puts money in your pocket and what is that activity? finding the deals How do you find deals you ask well listen I have a lot of podcasts is the 34th episode I talk a lot about how to find deals, but I'll give you a cliff note version. Direct mail marketing is our number one way of finding deals. Internet marketing, Craigslist, Facebook, network, networking at real meetings, title

companies, real estate agents, brokerages, the MLS, getting your realtor team together so you can be banging the MLS to find those deals, getting inheritance properties with direct mail. Guys, there's a lot of ways to go out there and do it. Door knocking, cold calling, pulling a list from your title company or paid websites like listsource.com. You pull that list, you pay for it. And if you don't have a lot of money to do direct mail, go out there and door knock. Go out there and do a reverse lookup to see if you can get those homeowners phone numbers. Cold call them. There's a lot of ways to go out there and find the deal. So stay super focused on finding that deal. The buyers and building a buyers list, that will come naturally. But if you need to leverage another wholesaler or someone who has a bigger buyers list,

then that's what you need to do. Because with all the social media out there, with everything that's out there, once you get that deal and you send it out to your Facebook family and your LinkedIn family and your Twitter family and you go out there and you network with the RIAs and the real estate agents, trust me, you're going to get that deal sold. But you're going to have to grind. Once you find that deal, you're going to have to grind to get that deal sold or leverage other people. If you know of another wholesaler that has a huge buyers buyers list I'll give you another great example there is a group out here who we've done a lot of business with they're incredibly good at what they do and for the most part they focus on a little bit lower end properties than we would like so anytime

that we come into a lower end property that obviously we're not gonna fix and flip and maybe our wholesale buyers list doesn't necessarily want to pull the trigger on we send it over to them that's exactly what I'm teaching my student to do it's a 50-50 split here we have the deal it's locked up under our name you get the exclusive right to market it to your buyers list because this is a type of property that you guys focus on. So you get this deal and we'll give you a 50-50 split. And so that works out great for us because it's a deal we wouldn't buy fix and flip.

It's a deal our buyers probably wouldn't really pull the trigger on. So why not? That's a perfect opportunity. And it keeps us focused instead of going and scrambling to try to find that buyer it keeps us focused on what's most important and that's going and finding another deal go find another deal super important guys super important always be you know when you feel overwhelmed and you have 30 things on your plate, which happens to all of us. I always talk about kind of more money, more problems, as Biggie says, Notorious B.I.G. says, more money, more problems. To a certain level, that is absolutely right.

The bigger you get, the more money you get, the more opportunities hit your plate, the more things you have to do, the more responsibilities you have. So you, the more opportunities hit your plate, the more things you have to do, the more responsibilities you have. So you, the bigger and more money you make and the more successful you are as you listen to this podcast, as you become a student of mine and my business partners, you know, you're going to become, you're going to have more responsibility and you need to take a step back. I have to do this myself and really focus on what brings in the money, and that's what I got for you guys today. It's my birthday, y'all. I'm excited. I'm excited. You can tell. Focus. Take a step back. Focus on bringing in the money into your pocket because it makes you have the ability to enjoy the life that you want to enjoy.

For my student, I told him, if you go and do three or four wholesale deals as you're fixing flipping and you bring in $8,000 to $15,000 every single month, do you think you can quit your job? He said, yes. I said, perfect. Go find the deals. Go out there. Go find them. Go find them, guys.

All right. Holy moly. I'm hopped up on caffeine it's my birthday I'm excited that's what I got for you guys today it's been a wonderful podcast again if you're interested in working closer with me my business partner the science of flipping team to help educate you guys and get you to the next level. Shoot my assistant an email at info at the Science of Flipping, and we will get right back with you guys. I appreciate you all. I appreciate your love. I appreciate your support. I feel very blessed today. As you'll see on my Instagram and in my Twitter and my Facebook, I just say blessed, and I truly am. I just say blessed. And I truly am.

I think we all are. Let's go out there and have a blessed day. And I'll see you guys on the next podcast. Talk soon. Peace.