The Science of Flipping - Episode 59 – Interview with Justin Williams | Real Estate Investing Podcast

Episode Date: February 6, 2015

document.addEventListener("DOMContentLoaded", function () { podlovePlayer("#player-5eb5ab31be1e6", "https://thescienceofflipping.com/wp-json/podlove-web-player/shortcode/post/673", "https://thescienceofflipping.com/wp-json/podlove-web-player/shortcode/config/default/theme/default"); }); <p> document.addEventListener("DOMContentLoaded", function () { podlovePlayer("#player-5eb5ab31be27b", {"title":"Episode 59 - Interview with Justin Williams | Real Estate Investing Podcast","subtitle":null,"summary":null,"duration":"","poster":null,"chapters":"","transcripts":"","audio":[{"url":"http://thescienceofflipping.com/wp-content/uploads/2015/02/justin-williams.mp3","mimeType":"audio/mpeg","title":"AUDIO/MPEG","size":0}]}, "https://thescienceofflipping.com/wp-json/podlove-web-player/shortcode/config/default/theme/default"); }); <br /> Justin Colby interview the founder of House Flipping HQ, Justin Williams. Together they talk about systems, building a power team, marketing budget, and how to working in your business less then 10 hours a week.

Welcome to the Science of Flipping Podcast. I'm your host, Justin Colby. Welcome everybody to the Science of Flipping Podcast. I am your host, Justin Colby. Welcome back to all my loyal listeners. If this is your first time to the podcast, welcome. This podcast is all about creating systems in your real estate investing business so that you don't have to be working in your business and you can actually be working on your business. Again, if this is your first time or in fact, if you have been coming to this podcast and you are a loyal listener, no matter who you are, get over to thescienceofflipping.com because I am giving away my best-selling book on Amazon named The

Science of Flipping. I'm giving it away for free. This is the same book people are paying $12 for on Amazon that is selling each and every day and I'm giving it to you for free. So go to the scienceofflipping.com and download that free book. Again, this is a bestseller on Amazon. It's been out for over a year now. People absolutely love it and continue to mention to me that they get two to five golden nuggets each and every chapter. So go ahead and grab that. And let's just get started. I have a special guest on the line here. And I just want to kind of jump in.

His name is also Justin, which is very ironic. And he and I have very similar business models. We both started Fix and Flipping and continue to fix and flip. I think he is the perfect value for you guys. I think it's awesome that he was able to share his time. Again, his name is Justin Williams. He also has a podcast. He is flipping over 100 homes a year.

Guys, please let me welcome Justin Williams to the call. How are you, buddy? Doing good. How's it going, Justin? It's going awesome, man. After I'm working up a sweat here, I get so energized for these things. So, you know, it's warm here in Phoenix right now. How is it out in Southern California? It's absolutely beautiful.

Very beautiful. I bet. Can't complain. Can't complain. Well, hey, listen, thanks for jumping on the call, man. My whole goal with these podcasts, and I'm sure yours is the same, is just to give incredible immense value. I've been coaching

for five years now and have hundreds of students. I just want to make sure that I'm bringing them the best value. Once I found out a little bit more about you and what you did, I knew this was going to be an incredible value for our listeners. So thanks again for jumping on. Absolutely. The Justin and Justin Show.

Let's rock it, man. That's it. Hey, we might have to start a whole new podcast together and just make it the Justin and Justin Show and show them what it's all about. I like it. So as I mentioned, you have your own podcast on iTunes, right? It's called The House Flipping HQ. Tell me a little bit more about what you talk about on your podcast. Cool. So I'll give a little more of my background because it's kind of what I talk about on my podcast as well. Basically, I've been flipping houses full-time for about eight years now. I

think you and I both, I think we were talking talking it sounds like we started about the same time um during that time i flipped about 400 homes i'm currently flipping about 100 houses per year and i shouldn't say i'm flipping my i should say my business is flipping uh because i have actually very little day-to-day involvement although i've been the the one who's created those systems to flip those houses, I don't have much to do with the day-to-day involvement, which means I can go do what I want when I want, and my business continues to buy and sell properties and profit. So that's the goal, right? And I'm not here to make it sound like that's super easy

or something you do overnight. It obviously took a lot of time to build up to that, but that's where we currently are. So that's kind of what we focus on in our podcast is those systems and how do you go about getting to that level or even getting started, I should say. Yeah, I think we're both men of systems. And I think that probably is why we even started our podcast is because there's a lot of investors out there who really just run around like chickens with their head cut off, right? They might have read a book, they might have seen a late night infomercial, they might have even taken a course or two and

they feel like they know what to do and they just run around very similar to how I started. I just kind of ran around hoping to get something done, right? Throwing mud against the wall and hoping something stuck. And so I think we both probably run our podcast for the major reason of trying to implement systems into people's businesses. Yep, absolutely. For sure. Now, I know one of the things that you really focus on, and we were speaking about this, is you have something called the three C's, correct? Yes. Why don't we talk a little bit about that and go in depth on your three C's principle?

Okay. So I've seen what I've done to be successful. I've seen what several of my fellow colleagues have done. And now since I've been coaching for the past year and a half and coached hundreds of students, I'm able to see the things that they struggle with and the things that they need to do. And I've kind of summed it up to what I call the three C's of house flipping success. And the first one stands for content. We all know there's a lot of people out there who don't get educated and they don't learn anything

they just think oh i'm gonna go out and buy a house and make money i saw this show where they did it on tv and i think i can do this right and a lot of time those people will end up losing a lot of money because they missed that first year they didn't learn the content they didn't learn the fundamentals they didn't learn the basics of this business. So you've got to learn the basics. And obviously, your listeners know that because they're listening. So I know I'm kind of preaching to the choir here. But you got to learn those fundamentals. But kind of along with that, you don't want to get analysis paralysis or information overload. You don't want need to feel like you need to know everything. I'm sure you would say the same, but I've been flipping

for eight years and still am learning. I still don't know everything. So you don't need to know everything, which brings us to our second C, which is corridor. You've got to enter the corridor. Otherwise, you've got to start taking action, but not only taking action, taking action where it really counts, where it's going to really make a difference to your bottom line. And the reason I specify action where it counts and not just massive action, just because of what you said, there's a lot of people out there running around

with their chickens with their head cut off. Or I'm sure you've seen this as well, but I see a lot of people who spend like a week designing a business card or have like 20 books that they feel like they have to read and just setting up their office a certain way. I've heard it all. It's all, it's crazy, right? So you've got to take actions where action, where it counts. So if you start at the first seat, learn the fundamentals, and then you've got to identify

the first step, right? You don't need to start with the last step. I see a lot of people, too, who feel like they need to know absolutely everything there is to know about selling a house. And I'm like, well, you haven't even bought a house yet. You haven't even marketed to buy a house. You haven't even made an offer on a house. Like, it's good to know that that is going to come. But how about start at the beginning? Because if you feel like you need to have all your ducks in a row now before you ever get there so our third c is community so as you take action as you get going um you're going to fail you're going to have questions you're going to have

friends and family that are going to tell you, oh, what are you doing? You shouldn't do that. And you need to surround yourself with a community of like-minded individuals that are on the same path as you. And this community needs to include two things. It needs to include mentors or people who have been there before you, people who can kind of show you the ropes, answer your questions. And then it needs to include people who are on the same path as you. And a lot of these people will probably be more accessible to you than your actual mentor. You're going to develop strong friendships with these people. And you can someone you can call up when

you're having a rough day or and stuff like that. So you have the community, which is your mentors and your people who are on the same path as you. And as you enter this corridor, as you get going, they're going to be there for you to answer those questions and to give you that information you need. And when you've got a deal and you've got two hours to figure it out, you're going to have those people to turn to. And then you kind of rinse, wash, and repeat. Once you've entered this corridor and have this community,

your learning curve is going to increase dramatically. You enter this hyper learning. It's just way different. Anyone who has learned, gone to a seminar, and then actually taken action and gone back and learned again, they'll know that the things that they learn are amplified. They just learn different things. They learn in a different way because now they're a part of this club, right? They've done it. They're not just on the outside anymore. So those are the three C's in a nutshell. Yeah. And I think those are, you know, I think for those who have been to seminars or have had coaching or even listened to my podcast or other podcasts that are out there, your three C's are common principles, right? A lot of

people would call that, you know, or one of the C's would be, you know, kind of building your power team and having the people around you so that you don't have to do everything and that if you do ever get in trouble, they're able to be there for you and help you out of those times and help you make as much money as possible. And so these are common themes that, you know, yourself, myself and others myself, and others really try to harp on. Because quite frankly, Justin, you and I know more than most, these are the most important things in not only real estate, but just running a business in general. Wouldn't you agree?

Absolutely. No, absolutely. I was recently on different podcasts just for entrepreneurs in general, and we talked about these same concepts. Because it doesn't matter really. I don't look at myself so much as a real estate investor but more a business owner. Real estate just happens to be

the inventory that I buy and sell because I find it to be incredibly you can make good money doing it. Really, any business is really ran on the same principles of surrounding yourself with those right people, getting educated, taking the action, and not only action, but action where it counts. And those are the things that ultimately help you achieve success in any area of your life.

Right. And I'm sure you do, and I take a lot of time and money and invest it back into myself, and I continue to hire mentors and coaches all throughout my life, whether it's personal, business, real estate, because as you said, I don't know it all. I've been doing this since 2007, probably around the same time as you. One of my business mentors that I am currently working with and paying, and as you know, when you do things like this, these are tens of thousands of dollars, whether it's real estate coaching or business coaching. And I truly believe in always investing in yourself.

And so one of the things he talks about more than most things is it doesn't really matter what business you're in. If you don't have systems, if you don't make a decision, you don't take action on those, you're just going to fail. I mean, there's really no other result for you to get. You know, you're going to stay exactly where you are. You're never going to grow. And most likely you're going to fail. And I think that's what we're talking about right now, really. Yeah. No, absolutely. I mean, systems are huge.

Because if you don't have those systems in place, what happens is, I don't know about you, but some days I'm more motivated than others. Right? Yeah. So some days I just can't find it in myself to do those things. So at first, you do have to do it. You kind of got to take that action and get going. You got to dig deep. But over time, you're going to want to identify the things that you do continuously and figure

out how you can systematize those things. So we can get into that a little more if you want on kind of how I've done that in my business and some of the little gold nuggets, as you mentioned, that I use, if you think that's beneficial. Yeah, no, I think, you know, one of the things I was going to say is, you know, why don't we talk about one or two of your actual systems that you're really utilizing in your business that allows you to work five to 10 hours a week at most, right? And let's kind of jump into that so that people can really hear a little bit more about what you're actively doing, what systems you're actually putting forward in your business

that allows you to live that kind of lifestyle, because that's what this podcast is all about. Okay, for sure. So first off, I believe, you know, I talk about the five pillars, which are the building blocks, the things that make up your entire house and business, which to me are deal analysis, buying, financing, rehabbing, and selling. So what I've done is I've gone through and I've tried to systematize every one of those as much as I possibly can.

It's just an easier way to break it down a little bit more rather than, say, systematize your business. So I won't talk about all of them, but as I mentioned, you got to enter the quarter. You got to start from the beginning. So to me, the first thing people need to make sure they really have a good handle on is how to properly analyze properties and how to get properties under contract. You and I are both retail flippers,

but as we know, there are a lot of people out there that create a business just out of getting properties under one thing. You're good. You're golden, right? I've had so many people tell me I don't have money. I don't have the capital. I don't know how to fix houses. All this nonsense. I'm like, look, if you can learn how to market, negotiate with sellers and get properties under contract, you're going to be good to go in this business. So as far as that goes, something that I've done is I've created, I make sure I know what my criteria is, and I've come up with forms and videos, and I share that with agents or other wholesalers or other bird dogs that are out looking for properties for me.

And I do not let anybody bring me a house, number one, that is not in their contract and it doesn't meet my criteria. I used to spend hours and hours analyzing properties and looking at all these deals from different people, whether it's a wholesaler or an agent that, quite frankly, just wasted a ton of my time. So I've taught them to do all of that legwork. In my opinion, in your business, you need to spend most of your time on acquisitions. So if that's the case and I'm spending, let's say, 40 hours a week, then I can't really

run a business, right? I'm spending all my time on acquisitions. So my goal is to have about 100 hours a week spent on acquisitions, but not from me, from other people. So I guess you could say the system is letting them do all that legwork. You've got to have people out there that are doing that legwork for you. After you've learned the basics, you've got to have people out there that know your criteria. They're out making offers for you. They're negotiating for a house to you

once they have it on that silver platter. Now, I'm to the point where I don't even, my assistant even handles that. But at the beginning, that's where you want to start. You want to learn the fundamentals, learn how to analyze deals, and teach someone else how to do that so they can be out there doing that for you.

So I know I kind of – hopefully that makes sense. Yeah, you're talking more what I would call just outsourcing, right? So in our business, we have a lead acquisition – or a lead manager, an acquisition manager, and a project manager. And all of that is so I don't have to be working in my business, right? Absolutely. have to be working in my business. Right. So, um, one of the keys that you said that I want to really hit home for everybody is that quite frankly, the best way to train people is create videos of you doing it and send them the video. And the reason being is they don't have to ask you questions all the time. They can just go back and watch the video again. Um, and it's very, very effective, especially if you're training someone who isn't sitting in your office.

Like right now I have my lead manager. I'm looking at him. He's in the office right next door. He threw his hand up right now. His name's Anthony. I can talk to Anthony anytime I want, right? But he's sitting right next to me. So if I was training someone who isn't right next to me, obviously, as you mentioned, training videos are the best way to go. Yeah. So let's talk about the rehab process a little bit and we'll we'll leave it at that um for my rehabs i don't go see any of my houses at all so i i'm flipping 100 houses a year i don't go see any of them and people think that's crazy i don't understand how i do that but um let me give you a few a few things that i do i have a a lot of

people have a materials list. I assume you do. I mean, do you paint every house a totally different color or do you use like a lot of the same colors? No, you stick to what works. I mean, if you're buying a different house, of course, it's different. But if you're sticking to your standard, then you stick to your standard stuff. Yeah. So 90% of our houses, we use the exact same paint, the same flooring, the same fixtures, the same everything. So we have a materials list with all the SKUs on it.

First off, for me personally, this might be different for you. I like working with general contractors. To me, the less people I can work with, the better. I know some people who think differently, but it's all about systems, right? Not every system is going to be the same, but for me, I like general contractors. What do you do do do you do general contractors or i have one project manager who manages all of our general contractors so i only deal with one project manager and if we're running three like right now we're running two different jobs i don't talk to anybody except for one guy okay so you agree with me the less people you can talk to the better off the the more time you're going to have

to actually run your business, right? Correct. So I just know people who, you know, they're running two or three jobs and they work with all the subcontractors directly and that's all they can have time to do. So first off, I like to work with general contractors, not subcontractors. And you're right as well. You've got to have a project manager or someone to run that for you. So that's first. And then we have a materials list with all the SKUs. So I am, of course, never going to the Home Depot. My contractors don't have to call up and ask,

what do you want here? What do you want there? They just know. They know what color we want to use. They know all those things because we have that materials list. And then something else that I do that most people don't is something called a price list. And once again, this isn't applicable to 100% of our properties, but 90% of our properties.

What I've done is I've realized over time, okay, problems that I often had with contractors in the past was taking a lot of time, bidding, you know, the bids and then negotiating and going back and forth and dealing with all this nonsense and then price creep. So what I came up with was I realized, okay, for just about for every property that we're doing, it's costing us X to paint the walls. It's costing us the same amount per square foot for them to put in tile or wood flooring. So what we've done is we come to this price list that says what they're going to get paid per square foot for the item that they do, right? So it used to be $1 per square foot for paint.

Now it's $1.25 just because things have gone up. Let's use $1 just to make numbers easy. If they're getting paid $1 per square foot for paint and they paint a 1,500-square-foot home, they're getting paid $1,500, okay? And the same thing with laminate with flooring is per square foot of how much they put in, they know what they're getting paid.

And what that's done is it's allowed me to not have to get more than one bid per property. They know what they're getting paid. I know what I'm going to pay them. And we've covered just about every item. I mean, there's a couple things that come up on each project that we pay them separately on. But for the most part, this covers 90% of all that. And we no longer have to haggle.

We don't have to worry about price creep. And it's just really systematizing. Something that my assistant, who has really very little to actually know, she had no experience with rehabs before she started working for me. She's just able to manage that system, right? She can easily look at that and say, okay, check, check, check. Looks good, looks good, looks good. And then we're able to go to work with that. Yeah, no, I hear you. It's implementing those systems. And those are all systems, right? I mean, you have very specific systems on how to run your flips. Having that can really be a time saver. The best part of that is ultimately those type of systems are a huge money saver.

I'm sure you say the same thing to your students. You make your money on the buy, but if a deal starts to become tight, it absolutely doesn't hurt to save as much money as you can while you're going through the process. With the asterisk or the caveat, you get what you pay for at the same extent. So if you try to go too cheap, you're going to get the results that you paid for. No, absolutely. I've had contractors that have sent me a bid that was too low, and I know not to work work with that guy because I know he doesn't know how to run his business. I know the work isn't going to be good. So you kind of learn those things with time. No doubt. Well, hey, Justin, listen, I really appreciate

your time. I know you're an incredibly busy man. I know you're doing podcasts and coaching and flipping homes and you got a lot of things on on your plate. I really just appreciate your time to give to my listeners. I know they greatly appreciate it. Guys, if you want to speak further or learn more about what Justin does, again, he has the House Flipping HQ podcast that you can download and subscribe to. He has a HouseFlippingHQ.com website, and he also has a formula. And Justin, speak a little bit about that house flipping formula that you have that I know you can go to houseflippingformula.com, but tell us a little bit about that. Yeah, so if you go to

houseflippingformula.com, there's just a free course that you can get there, and it just talks a little more about the biggest struggles that people have with house flipping, how you can overcome some of those things. And yeah, it's just a free four-video course that you can check out for free. So, HouseFlippingFormula.com. Right on. Well, hey, thank you so much for being on here. I greatly appreciate it, brother. Awesome.

Thanks, Justin. We'll talk to you soon. All right. All right, guys. That is it for today's episode. I'm Justin Colby. I had a very special guest, Justin Williams, on today. Guys, if this is your first time or even if it's your almost 60th time here on thescienceofflipping.com,

don't forget I have a brand new, or it's not brand new, but I'm giving it away. My book that is a bestseller on Amazon is now being given away at thescienceofflipping.com. It is free. Go get it. I promise you, you will love it. Also, if you are interested in talking to me a little bit further about coaching and mentoring, please email me directly at info at thescienceofflipping.com. That's info at the science of flipping.com. And I'll personally reply to you to set up a free strategy call with you. So that's it for me, guys.

We will see you guys next week. Peace.