The Science of Flipping - Episode 61 – If you are new you must LISTEN to this episode. Justin Colby interview master wholesaler Sean Terry | Real Estate Investing Podcast

Episode Date: March 6, 2015

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Welcome to the Science of Flipping Podcast. I'm your host, Justin Colby. What's up, guys? Welcome to another awesome podcast, the Science of Flipping. I am your host, Justin Colby. Guys, I am pumped. I'm sure you can hear it in my voice. We have one of my good friends, master wholesaler, Sean Terry on the line with you today. So this is going to be an incredible episode for all you loyal listeners. But before we get started, I got to do a little housekeeping as usual. If this is your first time and or your 60th time listening to this podcast, The Science of Flipping, get over to the website, thescienceofflipping.com. I've given you guys a little treat. I have a book on Amazon. It's a best-selling book called The Science of Flipping,

and I'm actually giving it to you for free at thescienceofflipping.com. So if you have not gone there yet, or if this is your first time getting to this podcast, make sure to get over to The Science of Flipping and download your free version. Again, this is the book that I get emails daily about, about how important it was to brand new investors, even seasoned investors, and I'm giving away all of my systems of how to get started and run a real estate investing business So it is absolutely free don't go to Amazon don't pay 1299 get it from me for free at the science of flipping calm And now the housekeeping is over. I'm done. Okay, let's bring in my buddy. This is the man. He's here in Phoenix. He does hundreds of deals a year. He is a master wholesaler. He is a great mentor and coach. Let's bring in my man,

Sean Terry. How are you, buddy? What is up? Kicking. Awesome. Good, man. Good. Say that again? Awesome intro. Hey, I got to do what I got to do. I got to keep the loyal listeners coming back, right? Yeah. Big weekend this weekend. We got the Phoenix Open, right, which is a waste management open where Tiger Woods is making his first appearance forever. And there's about 250,000 out by the golf course. We're going out there this weekend for that.

And then, boom, we got Super Bowl on Sunday. Yeah, man. I've already been to the Phoenix Open twice this week just to watch the practice rounds. So I have tickets for the whole week. And I just, you know, I want to see Tiger so bad, obviously, because he hasn't been here in like, what, 12 years or something. But I don't know. It's just mayhem out there, man. It's absolute mayhem out there.

Mayhem's good. It can be good, right? I can be a fan just mayhem out there, man. It's absolute mayhem out there. Mayhem's good. It can be good, right? I can be a fan of mayhem. But yeah, this Phoenix is on fire right now. And I think you and I would both agree real estate in Phoenix is absolutely on fire right now. I know you're doing a ton of deals. We have four in escrow today that should be closing either today or tomorrow. And we're rocking and rolling, man. How are things going with you? Good, man. It's, you know, in every business, you know, because I have employees and have an office and staff and stuff like that, you know, I went through a big transition in October to like December. I had my right hand guy, Stan, who is pretty much for two years running my whole

real estate business. He's taking care of dispositions and marketing and reporting on specific numbers. And he's a close friend. I've known him for years. He's actually one of my best friends. And he and our kids have been dancing together forever. So he got a job offer from an elevator company, which was his previous career. And it was just a ridiculous offer. Gave him all these benefits and all this money and all this stuff at him. And he actually turned it down. And I told him to actually take it because I think it's good for him and his family and stuff.

And so that was that was a transition. So now, interestingly, so I was dealing with all the dispositions, all the calls coming in from the from the properties and dealing with now the marketing side. And then my my right hand sales guy, Steve, you know, phenomenal. He would go on, you know, 10 appointments, come back with eight contracts and the contracts weren't, you know, five or ten thousand dollar deals. It'd be 20, 30, 40 thousand30,000, $40,000 deals. He was just great in negotiating. He was an ex-contractor, so he knew numbers. He built rapport with people. He was phenomenal.

Well, he dropped dead of a heart attack just out of the air. And it was just an astonishing situation. And he was a healthy guy. He was in good shape. Basically, the doctor just said it was genetics. His father passed away the exact same way. His grandfather passed away at the exact same age within within, you know, years of his age. So so so now I'm in a situation where I'm literally like brand new, right? I'm like I have – I'm solo again.

Now I have Jerry Beth that's taking all the calls and my other team and stuff like that that's dealing on my information marketing side and stuff. But for the real estate, those are my two primary guys that were handling all the sellers and handling all the dispositions. So it was like I'm brand new. Now I'm going on seller appointments. I'm negotiating deals again. I'm getting like, I'm brand new now. I'm going on seller appointments. I'm negotiating deals again. I'm getting contracts. I'm talking to buyers. I'm, you know, I'm, you know, transaction coordination, marketing, you know. So it was, it was insane for literally the end of October, November, the beginning of December. And I went on a massive hiring spree and hired two rock stars. And I have on a massive hiring spree and hired two

rock stars. And I have this like hiring process that I worked with, but hired these rock stars and they are just crushing it right now. And which is, which is phenomenal. So yeah. So now I have a time to do an interview. Yeah, man. Yeah. Sounds like it's always fun having that start over button, right? The restart button. I know you had to push that and you and I went to lunch a couple weeks ago and we were talking all about that. It's always a blast to have to do that, isn't it? Well, I don't think and I'm going, wow, I spent a lot of time, you know, working with Steve and understanding comps and going through processes and procedures and what we do and how we do it. And, you know, obviously it was tragic that that happened, a shock.

And then same thing with Stan for two years. And they had everything and all my systems, everything down. So I felt like I took like 10 steps backwards. And, you know, it's right now, it's the end of January, beginning of February here. And people might be listening to this. And maybe they came out of the gates in January and they might have been motivated. I'm going to kick 2015. It's going to be the best year ever.

And now it's a month into a month. And they're going – and they don't see the momentum. They don't see the progression. They don't see things going on. They get that kind of depressed feeling of the kind of winds out of the sails. And they're like, oh, back to the same old, same old, back to the grind of whatever they're doing. I kind of felt like that. My wind was out of my sails.

I had to regroup and refocus. And it's interesting, whether you're brand new or you're getting started or you've been doing something for a while, you know, you really got to get back to the core vision of exactly what you're going to accomplish and really spend time in that vision of what's your mission, what's your mission and, you know, kind of invoke that fire inside you of being crystal of exactly what your mission is and exactly where you're going and what you want to accomplish. And I think if, you know, you rekindle that vision and focus on that vision, it kind of,

you know, it kind of, I guess, you know, in a choppy, you know, ocean, it just kind of in the morning, if the morning, if you ever go to the ocean in the morning, it's like placid. It's very calm and very placid. And it kind of makes everything placid, which is great and allows you to focus. Absolutely. I mean, I couldn't say it better. That's a great message. And one of the things I wanted to talk to, first of all, I just want to give my condolences to you. And I know he was a great friend of yours and not just someone that worked for you. But, you know, I give you my condolences.

I'm sorry to hear that. Sucked. Yeah. Yeah. You know, and I know you and I talked a lot about that. So, again, I'm very sorry about that. But one of the things that really came from that, that you and we all have to do this from time to time in our businesses is hit that reset button and kind of start over. And I know you've been there for me and my partner at times when we've had to kind of start over. And kind of taking that experience

that you just had to go through, I'd like to kind of jump in for those that listen. Maybe you're just starting. Maybe this is the first time you heard this podcast. Maybe you're hitting the reset button. Listen, Sean is the master wholesaler. Everything I know from wholesaling pretty much came from him. I've had mentors in the past. He's not only a friend, but he's a mentor. He's right here in my market. He has an education center called Flip to Freedom and Flip to Freedom Academy. You can find him there. I'll let him talk a little bit more about that here shortly.

But this guy absolutely knows what it takes to get a business started, getting it off the ground and making it successful. So I really want everyone to take their pens and papers out and really listen to some of the things that I'm going to have him open up about, about either pressing restart and or just getting started and maybe the five golden nuggets of what that would be from you know marketing and the systems that you need and what you would say is the you know top two avenues to market in right or how to market I think let's just start there I think a lot of people you know the difficulties right now in our

market and whether it's Phoenix or across the nation, as I coach hundreds of students everywhere, they need to find that deal. They're always saying, how do I go find that deal? Let's take the position that we're just getting started, you and I. What would you suggest or what would you tell me if I was just getting started would be the top two marketing strategies that you'd be using right now? Well, first off, before we get into marketing, which is important, there has to be a mindset first going in. So we've got to go, when you're starting any business or you're pressing the reset button or you want to accomplish something. Let's say we want to accomplish getting our first check. Or maybe you've got a

check or you've got two checks and then you kind of slipped away from it. It's been inconsistent. But now you're going to make a goal that I'm going to go out and get a check. So part of the first thing and what basically it puts a ripple effect into the universe, I guess you could say, is that you have to make a decision that you are going to do this and you are going to get your first check at all costs. So you're going to do whatever it takes. You're going to overcome any obstacle. You're going to take any no and you're going to try to find a way to turn it into a yes or that no is going to fuel to talk to the next yes or the next whatever, next product. So you are going to do whatever it takes. Once you get a concrete mindset that I am going to do whatever it takes, I'm going to make a decision that I don't care what happens.

I'm going to make it and you're going to put your foot down. You're going to stand for it and I'm going to get a first check. I don't care what it takes. I don't care if I have to work till, you know, you know, ridiculous hours in the morning to learn stuff, whatever it takes, I'm going to find a way to do it. That is the first step that you have to do because all the other steps along the way, they're, they're, I don't want to say they're, they're not easy. Okay. If they're, you know, anybody that's going to tell you that getting rich in real estate is easy, oh yeah, it's a push button.

All you got to do is have this and it's easy and you can make a million dollars. It is absolutely dead wrong because it's not easy. It takes work. You're going against the grain. It's tenacious. I mean, do you realize, you know, I've got, you know got guys that I've worked with

and taught and stuff like that that went going from making $50,000 a year to $100,000 a month in real estate. Well, $100,000 a month, do you know how much part of the population makes $100,000 a month? We have a Diamondbacks pitcher who just bought a property from us, right? He's a pitcher, just bought a property. He makes annually $450,000 a year, and he's a starting pitcher in the Major League Baseball. So for the Diamondbacks, he's a good pitcher, $450,000 a year. Well, guess what? I mean we're talking about hundreds of thousands of dollars a month you can generate in revenue. Now, I'm not saying, you know, you're going to do that tomorrow. But the bottom line is,

is that you are doing something different, you know, and you have the ability to go out and make a fortune. But it has to have that concrete decision that you are going to do it no matter what, because it is not going to be easy. You are going to have to go against the grain, you know, but if you have that tenacious, I'm going to make it happen no matter what, then you can overcome those different obstacles and it'll push through it and you'll expect it and push through it and be able to get the results. So now back to your question, marketing channels, because, you, because when it comes to getting started and you're in a market, what happens is there's two ways when it comes to the marketing world. You can go chase or you can attract. If you chase, like when I first got

started, I went and knocked on pre-foreclosure doors. Okay. The pre-foreclosure, someone that's in foreclosure, they're about to lose your house. I would go up to their house. I'd knock on their door and I'd ask them if they're interested in selling before their house goes to auction. I was chasing deals. I would have a map. I'd run all around and I'd knock on people's doors. I don't suggest that because you have to have a thick skin like a rhino to be able to handle the dogs and the people yelling at you and stuff like that. So I suggest for someone new to attract people. So then you want to attract the right type of person, right? And to do that, we want to – and one of the best ways to do it is through direct mail.

I love direct mail. It's a way where you can put a lot of lines in the ocean and you can – you don't know what type of fish you're going to catch, but you're going to start catching fish. So what's going to happen is direct mail. And what we do in our business is – and it's scalable. It's something that you can start small, you and you can scale into it. So when when we first started, we were mailing, you know, 1000 1500, you know, 500 1200 postcards at a time. And then we generated revenue. So, you know, so we targeted a list. we talked to, I talked to Justin early

about this, which is a phenomenal, you know, you can go to listsource.com or even better, you can go to Kent Clothier's system with Find Motivated Sellers Now, which, which is a great program. You can pull a list out of there of non-owner occupants that have high equity and potential vacant properties, which is a great, is a great source to pull a list. And then you can send them either a yellow letter, which is basically a form of a letter, or just a regular letter like Justin does. He shared on an earlier podcast. Or you can send an actual postcard. But the goal is to get the phone to ring off the hook with sellers that are your target, what you're trying to target. And what we're looking for is some sort of distress. We're

looking for a seller who has a property where the tenant just trashed it. We're looking for potentially a divorce situation, a foreclosure situation where they're about to lose the house. So it's an impending event, maybe a tax default situation where they want to do it. Or maybe it's a vacant house that they moved out of and they're just going to let it go. So there's, you know, there's, you know, different events that you can target. And the goal through direct mail is to then pick a list, right, that you want to target and send a mail piece to where you can get sellers to start calling you. Yeah. No, I agree 100%. I think you and I are both- It's pretty basic. Yeah. You and I are both huge advocates. And I know my listeners have heard this over and over,

but direct mail is our key right now. And you do it and I do it. We both do online marketing and other strategies. But when it comes down to it, our highest return on investment has always come from the direct mail avenue. So I'm right there with you. So interestingly, and I like to talk about, so you have the initial, let's say you start, you want to drop 500 or you want to drop a thousand or 1500. What the goal is, is to be able to one track that. So you drop 1500 to a specific list. And then how many calls did you get? You know, how many, how many appointments did you go on? How many contracts did you get? And how much revenue did you make? So, you know, you should have some sort of spreadsheet or something that can track your specific marketing

channels. And I wish I would have started that when I got started. I wasn't smart enough to be able to track all my marketing, but I wish I would have done it. So if you're brand new and you're getting started, find a way to be able to, in a spreadsheet, track your marketing to determine the ROI. But once, now that you have a revenue, let's say you go out and get one deal and make $7,000 and you spent, you know, $800 on marketing. Now you have revenue. What you can do is reinvest 15% back in the marketing. So now you can reinvest that money back into marketing. And as your marketing grows, then your revenue grows, and then you'll find a point. So people go, well, how do you go from doing one deal a month to 10 deals a month to 20 deals a month?

Well, obviously there's different marketing channels, and you want to max out the marketing channels. But a huge portion of it is dropping more strategic, targeted direct mail. So we drop over 100,000 mail units a month in the Phoenix market. And when you do that, it generates more leads. When you generate more leads, you have more opportunities. When you have more opportunities, you can get more contracts and then generate more revenue. Right, right. And I don't want to get too into this because I want to stay focused, but you and I both know how important the ROI is and especially when trying to find free leads and working with other bird dogs and wholesalers. And there's definitely a whole avenue that you and I discussed a couple weeks back about really the importance of increasing your ROI by finding deals that you don't pay for that would be considered free, right? Right. Yeah.

And, you know, it's funny because, you know, every year I kind of go through my business and I look at, OK, where's the major lead source that came in? How much did we spend on it? What was the revenue that we made off it? And kind of looking at the, you know, the whole bigger picture. And right now we do that on a quarterly basis, but I look at on an annual basis. But one realization that came out of looking at all the numbers is that some of our best deals are the deals that were generated for free. So in any, whether it be direct mail, in any type of business, you want to have the ability to generate leads and generate deals where it's not attached to a marketing dollar.

So the ways to do that is through developing bird dogs. Now, if you're brand new, it's hard to develop bird dogs because you're brand new and bird dogs are looking for more of a way to, you know, for a leader that can kind of help them. So it's a little bit more advanced, but, um, but you know, other ways would be going on Craigslist and, uh, and looking for, uh, people that want to, you know, sell their houses that are looking for sale by owner for sale by owner sites. You can call those, um, looking for other, um, wholesalers that are marketing properties and make a connection between you and a potential buyer. Um, you know, that would be a way to do it. Hitting the MLS and targeting, uh, the pending properties that you can a potential buyer. That would be a way to do it. Hitting the MLS and targeting the pending properties that you can focus on. That's a great way to generate potential deals. On social media, you can find buyers that way on social media in any specific

niche and then be able to reverse engineer and find out specifically what they want and then turn around and either contact other wholesalers that have the inventory and play middleman or turn around and market for those specific criteria that the buyers are looking for. So there's lots of ways on a free method to be able to generate deals. But here's what I find is when it comes to scalability, you're going to want to learn direct mail in your business. You're going to want to have that element on it because those type of lead generation where you're doing it from free sources, you can't control the amount of deals that you're going to get. And it's very difficult to predict income that way. What you can predict

income is when you're doing channels of marketing that produce consistent leads. Yeah. I mean, dude, if you guys are not with a pen and a paper right now listening to every word Sean is talking about, you're missing out. I mean, download it again, listen to it over and over. You know, I wanted kind of five golden nuggets from Sean and being able to start a business. And this guy is giving you the goods. I need you guys to be writing this down. Sean, you're rocking the house right now, man. I don't even want to slow you down. You're giving all you got. I mean, it's not all I got, but yeah, but, um, well, and Sean, I wanted to, you know, I don't want to put you out there, but you have created an incredible spreadsheet for these numbers.

And whether you've shared it with me and I can either hand that out to people or if you want them to go get that from yourself or whatever, I'd love to be able to get your permission to get our listeners to have that spreadsheet. And if you have an area for them to go get it, please let them know now because you've shared it with me and it's changed our business because you've really put me on the mindset of the focus and the numbers and your return on investment. And I think all business owners should be looking at it that way. So whether I hand it out to everybody or if you have somewhere that they can get that, that would be awesome. Yeah, well, let's first tell them what the spreadsheet is and then what it can do for them. And then I do have a place I can send them to download it for free. Basically,

it's my revenue matrix. And what I do is 90% or 80% of my focus is my real estate business. I spend all my time there about marketing, about doing things, doing deals, talking about deals. I meet with my team every Monday. We go through all of our numbers and tracking and reporting of specific key performance indicators that we look at in our business. So I spend all my time in real estate. And what I do is I test something in the real estate or doing doing when you're running a business like this, it reveals information to you. And then what I do is I look at it, I test it, I think about it. And then, you know, then I teach it on the other side. So everything that I teach on the other side is a result of me running my real estate business.

And I look at teaching to me as a hobby. I spent like 20% of my time in that part of the business where it's a hobby, it's fun, I love teaching people, it's a blast to do because I love watching people develop and change. So back to the spreadsheet. So the spreadsheet, what I did was I looked at all the numbers and what it did to create a bottom line.

And I looked at where if we're going to look into 2015 and we want to make X amount of dollars, say $10 million in just revenue, what is that going to break down to in an expense ratio when it comes to marketing? And what's it going to look like in an ROI and what is the company going to get for the bottom line after I pay employees and commissions and costs and stuff like that. And then to look at the three key numbers that will literally make or break your business. So what are those three numbers? The three numbers are your average deal size, right? Your average deal size, which is critically important.

So when it comes to tracking, right, and you're doing deals, you want to know over a course of time, what is your average deal size? Some deals you're going to make 15,000 on, then some deals are going to make 25,000, some deals are going to make five. What is that average out to? What is your average deal size? Which is incredibly

important. The next thing you're going to look at is how many leads does it take to procure a contract, right? So, you know, our number is 24. For 24 leads that we generate, we get one contract, right? And then the other important, the third number that's critical is the cost per lead. How much is it costing per lead to generate a specific lead? So if you have those three numbers, that's all you need to basically figure out income, right? So now you go, I want to make $10 million, I want to make $5 million or I want to make $100,000. And you put in your cost per lead and your cost per lead is, say, $150 and you put in your conversion rate and your conversion rate.

It takes you 25 leads to get one contract. And then you put your average deal size, $5,000. You start looking at it and the amount of marketing that has to be done based upon those numbers. you start looking at it and the amount of marketing that has to be done based upon those numbers, what's going to happen is you're going to find that, wow, I'm running at about a 60% to 70% expense ratio. That doesn't work. I can't do that. So what you have to do is now set goals to say, hey, listen, I've got to get my average deal size to 14,000. I've got to get my lead conversion down from 25 to 20. And I'm going to get my cost per lead from

150 down to 125. And it allows you to manipulate those numbers to see what it does for the bottom line. That's one aspect of it, and that's on paid marketing. Now, the other aspect on the spreadsheet is a section on there where you can add basically free leads or leads that come in where there is no marketing. And that would be like we just talked about pending sales. It could be leads from bird dogs. It could be leads from social media where you find a buyer and then turn around and find another wholesaler has a property and you make a matching game. It could be finding off, you know, apps, you know, was a for sale by owner or Craigslist where you're generating, you know, deals in revenue without paying that lead cost. Once you put that element into the spreadsheet, what that does, it shows you what that, you know, it does to the expense ratio. So you might be in a 60 or 70%

ratio, which now will drop it down to 25 or 30% expense ratio. And you go, holy cow, that is the importance of driving traffic and driving deals that become from a non-paid source. So it's really revealing. And I know when I built the spreadsheet and I kind of looked at it because I built it for myself to kind of see numbers and stuff. And I put my own actual numbers in there and what actually came out and stuff. But it was interesting to see that, wow, an element of doing deals without tying it to a marketing dollar is incredibly important. So for a brand new person that's looking at it and they're saying, hey, I want to generate $100,000 this year, you know that you can focus on marketing to get us in focus on how much you can spend per lead and then also focus on finding ways to generate free

deals that will affect that bottom line. And you can start playing around with it and looking at it. And it gives you a clear vision and direction of the numbers in your business of where you need to be. So then when it comes to direct mail, when it comes to maybe you want to do yellow pages, maybe you want to do an ad in the newspaper, maybe you want to do direct mail to a specific list. Now, when you're looking and tracking those numbers, you can say, holy cow, I just spent $300 cost per lead. Well, guess what? I'm not doing that marketing channel again. You know what I mean? Because that is a ineffective marketing channel that will affect your bottom line and, you know, and put you out of the numbers, essentially. So, yeah, go ahead. Yeah. So, you know, I created this spreadsheet,

puts all the information in there and I have it if you want, it's called a revenue matrix. So it's at flip the number to freedom.com flip the number to freedom.com forward slash revenue matrix. One word it's revenue. Um, no hyphens, no nothing revenue matrix. Um, flip to freedom.com forward slash revenue matrix. You can go there and you just download it. Yeah, right on, man. I greatly appreciate it. I mean, it literally has changed our business here. It has been incredible help. So I appreciate you giving that out. And I have two more basic questions. I want my listeners to know where to find you, get a hold of you, any goods you have, let them know where to find you and where the best place would be for them to go.

Well, if you go, my blog is flip2freedom.com. I wrote a book and they can get it wrote that literally starts from very, you know, the start of being brand new, explaining wholesaling, what it is and how it works, all the way to advanced building bird dog teams and stuff like that all the way through. But it's been downloaded about a half a million times. And I've got raving reviews about it, five star reviews. So it's for free. You can go to flip the number to freedom. half a million times. And I get raving reviews about it, five-star reviews. So it's for free. You can go to flipthenumber2freedom.com to get it.

And I have a podcast in iTunes with about over 100-plus different episodes that we go through every nitty-gritty detail that talks about the how-to of the business. We bring on great interviews, like I just did an interview with you, Justin, that you just rocked the house and that will be coming out here next week. And also we have a lot of motivational stuff that is your mindset, the inner game portion of the business, which is critical as well. Yeah, right on. And you're the one that got me into the podcast, and you've always been a great help and a mentor to me, man. So I greatly appreciate it. I enjoyed being on your podcast and I'm so thankful that you're here. And I kind of want to have one more question I want to leave our listeners with.

Specifically, a little bit back more into the real estate, which would be, you mentioned about your ROI and trying to get those free leads. Can you give our listeners that are just starting right now, right, whether you're just starting or you need to lower or at least increase your ROI, give everyone a handful of areas that they can go find those free or extremely cheap leads. Can you give us a handful of what you would recommend? Well, there are several different ways. Number one is – and there's two different things. If you're brand new or if you're a little bit more experienced and you want to increase your revenue without spending any money is set up a meetup group. And what a meetup group will do is meetup is like

a search engine. It's meetup.com, a search engine for people within similar interests that want to meet. Okay. It's like a networking. It's like a massive, it's a Google networking group pretty much. But you can set up a local meetup in your area and it will start small and it will build where you can start meeting other bird dogs and then essentially teaching them. So what we do and I'm in the process of opening my office right now. We're at the final stages. It should be open in the next week or two. But it's like a close to 4,000 square foot office. And the reason I did that is because to bring local bird dogs every single month in there, teach them specific things to be able to go out and generate deals. And a lot of bird dogs don't know the disposition side of it or don't

have a large buyer's list where then we can partner and do deals on. So if you're more experienced and you know real estate and you have a buyer's list, that would be a great way to generate a ton of free deals. And it's cool because you kind of mentor people as well. That's why, and if you're brand new, it's good to be a part of something like that. Maybe there's another someone in your market

that's holding groups like that that you can be a part of. So that's number one. The next thing you could do is you have to find deals where either via – we talked about via Craigslist or via For Sale By Owner. That should be – and there's a site called If Then This That. What's it called if do you know i'm talking about no i don't i'm not familiar with that then this or if this then that that is if it's i f t t if then if then this that whatever but just google it if this then that right i think it's what it is so what what it does, it allows you to create a search string

with inside of Craigslist, okay? So you put in motivated sellers or you put in whatever the case may be. What you do is you take that string, you put it in if then this, that, if that, this, then whatever. But then you put it in there. And what it will do is it will automatically, constantly, 24-7, search for anything that relates to your search query.

And then it will send you an email, automatic email, with the content on Craigslist. So it's not like you have to go in and search everything every single day. It's a free service. You set up these triggers. And what these triggers will do is then automatically send in your email. So what we do is we have it go right to Jerry Beth. The leads come in and then she'll immediately call the seller and try it. And that's a great free way to have leads coming in that are specifically targeted to what you're looking for. So that's a great way. And you might be able to do it for a for sale by owner. We haven't done that yet. And another way is pending sales. So now you have agents, right? And these agents have properties that go in pending

status. Once they go pending, there's two major inflection points where that property could go and fall out of escrow. And there's a huge percentage, 20, 30% of the properties that get in the escrow and then fall out for whatever reason. So what happens is at the 10-day point, that property could fall out because every buyer within the MLS going through the MLS has the 10-day inspection. And when they go through that 10-day inspection, typically what they'll do is they'll request a bunch of repairs or a price reduction from the seller. The seller will either, you know, accept or, you know, concede and then or not want to, you know, do the repairs. And what will happen

is that deal will fall out of escrow. So what you do is you target those specific properties within the MLS that meet a criteria and then you call the agent, tell them that you're the backup go-to guy. If the deal falls out, contact us. I can give you a cash offer. And the reason why they will call you, the motivation behind the agent to call you is you tell them you're unrepresented, meaning that they can get both sides of the commission. If they list the property and they sell it through the MLS and they have another agent that brings a buyer, they have to split the 6% commission, 3% to the buyer broker and 3% to the selling agent. So in this particular situation, if you come unrepresented, then they can keep all of the 6%, which is double the amount they would make by selling it any other way.

So if you call them up, tell them that you're the go-to person, and you follow up with them on the 10-day, and you follow them up with them on the closing day, what you'll find is these deals will fall out of escrow. And then what will happen is you can be the backup offer. So what typically happens, the agent will call you up and say, hey, I got this deal. It just fell out of escrow. I know you can be the backup offer. So what typically happens, the agent will call you up and say, hey, I got this deal. It just fell out of escrow. I know you can do backup stuff. Please let me know what you can offer on this. And what you want to do is just find out from them

what, say, listen, what's it going to take on a cash basis if we can close quickly to get this deal done? The agent can't tell you the exact number, but they can give you a ballpark. Well, if we're in the mid to low 50s, I think I can make something work. OK, so then now, you know, you can do your numbers, do your due diligence on it, and then you can submit an offer and you'll get that offer accepted. They'll present it to the to the seller and you'll get that get that deal under contract and you can do that. And what will happen is now you get that deal and you generate revenue without spending any money for leads. But it's scalable because what can happen is now you make a lot of relationships with these agents. They will start sending you their pocket

deals before they put them on the MLS. Why? Because you're unrepresented. You've closed previous properties. You've built a relationship with them and they get to get the full 6%. So why would they list it? So it's something that's great. It's a long-term, something you can build. It can be done in any market across the country. It's scalable. And literally, we have a phone person where all they do is just hit the phones and call agents all day long. That's their job. Yeah, man. I don't know.

When we first got on the phone earlier today, we have a new lead manager. And part of his lead management duties is to do exactly that, is to knock the door on the agents that have pendings and under contracts for this exact reason. So we're training him today. Actually, Eddie has been training him all morning on how to do that. So listen, I'm right there with you. This is an unbelievable strategy. It may not be the quickest strategy, but if you're consistent at it, it absolutely will give you an extra four to ten deals a year depending upon your market.

And if you're doing deals like Sean and he's shooting for, I think you're shooting for what, 20 grand a wholesale fee, right? Well, yeah. I mean, we've got to get, our average wholesale fee in 2014 was $11,115. So that was our average wholesale deal that we had. So right now, if we can increase that 20 to 30%, if we can get it up to, um, to say $15,000 per deal, um, that will do a dramatic, you know, uh, impact to the bottom line, especially when you're doing, you know, three or 400 deals a year. So, yeah, man. Hey, listen, Sean, I know you're super busy, but I know you brought it today. I thank you so much for your time. I'm greatly appreciative. Again, Sean has a podcast on iTunes called Flip to Freedom. He has a coaching platform, Flip to Freedom Academy.

He is just the man. And so I have been blessed to get him on The Science of Flipping. And I just want to thank you again and let you know I appreciate your time today, bud. Well, Justin, it's been awesome. I love your podcast and you're out there doing deals. I see your stuff out there. I'm on your list, your buyer's list. So I see you guys got some good deals you're pumping out there. You've always been a great example, very abundant in everything you do. You and Eddie are rock stars, so I appreciate it.

Yeah, and one last thing to that, guys. Sean and I do deals together. We are an abundant mentality. I've bought, if that's even a word, I've purchased, bought, gosh, 10 to 20 deals from him. We've co-wholesaled deals. We are an abundant group of people here. And to be honest, that's how everyone makes money and that's how you become wealthy. And so just understand, I could easily look at Sean as a competition or vice versa. But we don't and we work together and we're in the same market and that's the whole thing here. So guys, just understand, none of those other investors are your competition. Work with them.

Sean and I do here and it's been a blessing to do so. Yeah, you know, when it comes to competition, and I wouldn't know, we've got to wrap this up, but when it comes to competition, there's two mentalities. There's I'm going to hoard all the information myself. I'm not going to teach or I'm not going to train anybody. I'm not going to tell anybody because I've got to get my own deals. And those people I see wither on the vine.

They just wither on the vine. And what happens is then there's the other personality. Like I know when I first came out with the podcast, people thought I was nuts. You're telling all your information. You're telling all your trade secrets. You're telling everybody everything. You know, what are you, crazy? I can't believe it. People got pissed at me.

Local people in the market got mad at me because I was sharing everything that I do. And interestingly enough, they're not around anymore. They got wiped out. And I'm still in doing more business than I've ever done before. It's because it's the abundant mindset. So, you know, if you're in a position right now where you want to just hoard your information and do it, I wouldn't do it, man. There is more than enough. If you believe that there's more than enough, more than enough deals, more than enough money, more than enough information out there, then you'll always have deals that will come to the table and you won't have to scratch and claw for them. Amen to that, brother. Amen to that. All right, guys, that is what we got for you today.

We had the master wholesaler, Sean Terry, his academy is Flip 2 Freedom Academy. He is a rock star. Make sure to start following him. He has his iTunes or his podcast on iTunes, the Flip 2 Freedom podcast. Thank you again, sir. And that is what we got for today at the Science of Flipping. I've been your host, Justin Colby, and we will see you on the next episode. Peace.

Boom.