The Science of Flipping - Episode 69: Don't Loose Money! – Real Estate Investing Podcast

Episode Date: June 24, 2016

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Welcome to the Science of Flipping Podcast. I'm your host, Justin Colby. What is up, guys? What is up? And welcome back to the Science of Flipping Podcast. As always, I am your host, Justin Colby. My co-host, Mr. Kent Clothier, is on vacation for several weeks. Leave it to him. He has a wonderful life, a wonderful wife, and beautiful family. So he likes to enjoy that, to spend time with his family. That's what we all do this for. So the next couple of episodes will be me and only me.

But that's okay because you guys have been rocking with me for years. So here I am, as always, and I am ready to jump into it. If this is your first time to the podcast, I highly urge you to get over to the website. Make sure you download our free e-book about the 15 most costly mistakes investors can make today in today's market. The market is ever-changing. And so we not only have put in our input, but also after interviewing and knowing many of the best real estate investors,

they gave us some of the most costly mistakes they also had. So all of those go into our book. And so make sure it's absolutely free. We just want to make sure that we give you the best knowledge possible for you to be as successful as possible. So again, get to the scienceofflipping.com and download that ebook. We will make sure that you guys can stay out of hot water. Also, if you guys are looking to have the option contract, which is the contract that you should be using as wholesalers, make sure to get to the Science of Flipping, download the ebook, and we will make sure to email you our option contract as well. So if you want our option

contract, I'm happy to email it to you. Uh, so go over to the science of flipping, get the ebook, and we will also email you our option contract, um, that we can give you. So, um, today guys, you know, again, it's just me. Um, I actually have been getting a lot of requests via email from our great loyal listeners. Thank you guys all very much about our flow of what we are doing. Obviously, we run a very successful real estate business here in Phoenix. Kent runs an extremely successful business in Memphis, Dallas, and Houston. People have been asking, how do we intake the leads and what are our flow systems? And so in brief, guys, I'm going to just,

I wrote down exactly what our flow is. And we have two full-time girls in the office next to me, we have two acquisition managers and we have a project manager. And I would say 95% of our business right now is wholesaling because the market is so hot. I mean, it is an absolutely smoking market right now in Phoenix and so a lot of this turns into a marketing and sales job and I talk to you guys a lot about that. This is not a real estate business, not when you're wholesaling.

And so I encourage you to really wrap your head around understanding that this is a marketing and sales position. And the better that you get in marketing and the better that you get in sales, the better you're going to be in the flows that pertain to that business. So there's a lot of business books out there. There's a lot of sales books out there. You can get plenty of that information. And so I really encourage it. Someone who is really big in the marketplace right now in terms of business and sales is Grant Cardone. I encourage you to get his books.

My entire team, we do kind of a book of the month, so to speak, and I make them read the book along with myself. And then we discuss, right? So that's just someone who I've read a lot of his books recently and I pay attention to what he says and I steal a bunch of different golden nuggets as I can because really you have to be sure you're wrapping your head around this idea about marketing and sales and what we really do. So that being said, for all of those that are out there listening to me and you want more deals

and you want to get more deals, here's our secret to our success right now. I was just in two incredible masterminds. Myself and Kent put on two masterminds. One is called The Boardroom. The other is called Boardroom Elite. If you're looking to be a part of a mastermind, absolutely email me at info at

the science of flipping, and we will get back to you about that. But Kent and I put together several masterminds a year. There's two, Boardroom and Boardroom Elite, but we meet multiple times a year. And since I got back two weeks ago, we have contracted seven deals and already have sold five of them. So it's just, you know, business is booming right now. I know everyone right now is trying to figure out, you know, oh, I need to do more deals or this market or should I virtually wholesale or all of that stuff. And the reality is the market's on fire. You likely don't even need to go virtually wholesale. So let me teach you now

exactly what we're doing in our business. Let me show you exactly what the workflow is. And then you guys can kind of start to implement some of these things as you go. The whole point of this podcast is to give you the systems and trainings and tools, software, whatever it is to implement in your business so that you can really live your life by design, right? I mean, this whole idea of living your life by design is truly what I believe in. It's what Kent believes in. This is why he is on vacation with his beautiful family for several weeks. So you likely are going to hear just from me, but this implementation of this, what I teach you right now on this podcast episode

is really gonna help your flow of business to provide you more deals, right? So let's just start from the example of you send out direct mail, okay? You pull a list, you send out direct mail. We're not gonna talk about lists today. We're not gonna talk about all that, but you pull a list and you send out direct mail.

Your phone starts ringing. So I want to answer that phone live we actually use a company called map communications that company answers my phone live 24 hours a day there's other companies out there Pat live and others that can do this for you there's virtual assistants that can do this for you that is who we have an answer map communications that they answer the phone. Um, we give them basically five questions to ask very basic questions. It is, what is your name? What is your phone number? What is your email? What is the address of the property that you were looking to sell?

And what is it that you were looking to sell for? Or why are you looking to sell? That is all they do. Okay. That email comes to us. Now we have what we call a lead manager. We have a full-time gal. Her name's Eliana. She's awesome. She's calling them back. She is the first point of contact, literally in her office, right here in the office next door to my office. And she is on the phone right now. And that's where the script becomes a little bit longer. Now, here's the key, guys. I'm not asking her to judge the motivation. I don't want any of that over the phone. I want everything to be in person. Part of the statistics about business and sales is you have a 300 times greater chance at closing the deal if you are face-to-face. So I want to remove all judgment on motivation or price

or any of that over the phone. I want to set appointments, strictly appointments. Now again, I will take a step back and understand if you are out there virtually wholesaling, if you are dealing with absentee homeowners and there's no one there. There's ways to and strategies to do this without necessarily having to meet with the seller. I am not talking about that right now. I am talking specifically about the people who are not virtually wholesaling. They're doing deals in their own market. The homeowner is available. Those are the people that I am talking about right now, right? So now we have Eliana, our lead manager, have a very basic script, and I actually have it. I literally, look, she has written all over it, right? So for those of you watching the video, the videos are always up on my YouTube channel, Justin Colby.

They're also always up on our website, thescienceofflipping.com. So you can go over to YouTube, subscribe to my channel. I put up a lot of different informational stuff on that YouTube channel, Justin Colby, as well as just go over to thescienceofflipping.com. We have the video. And welcome all, whether you're listening on iTunes, whether you're at YouTube, or whether you're on the website, welcome. So I'm just going to kind of read this as I know it in my head, but I'm going to make sure everyone knows it. Hi, Mr. Seller. My name's Eliana.

I'm with Phoenix Wealth Builders. I received your voicemail regarding your home address as such. Hey, there's the phone. All right. Did I catch you at a good time? No. Great. How are you doing today? Build rapport,

right? This is where you're building rapport. So I have a few questions for you. Let's start with, are you the homeowner or decision maker of the property? Perfect. What is the square footage? Now we're starting to go through some of the content of what the home is, right? So I have a couple of questions. What is the square footage? How many beds and baths? Do you have an air conditioner? When was the last time the air conditioner was replaced? What's the age of the roof? When was the last time you did any plumbing or electrical replacements? So on, trying to get a very basic understanding of the home. Okay, great. Let me ask you, Mr. Seller, why are you looking to sell? Build rapport, show empathy if there is a issue that is going on. How soon are you looking to

sell your property? Do you own the home or have a mortgage? If there's a mortgage, is there a balance owed? This is where we're just trying to understand. Is the person upside down? I want to build rapport. I want to be solution-oriented. Now, they give us all the answers, right? So I'm going to fast forward for the sake of time because I know you guys' attention span starts to go. So they answer all the answers. And so Eliana will say, I appreciate you answering all my questions. Now, let me tell you a bit about what we do and what we are looking for. That's a key component because they always want to know

about us. We look for properties that fit a very specific criteria that we can renovate, resell for a profit, or if it makes sense, we purchase and hold as a rental. What you will benefit from selling to us is we pay cash. We buy the property as in as is in condition. Therefore, we will not ask you to spend any unnecessary money fixing the property. In addition, we close on your time frame, meaning you will have a guaranteed price and guaranteed close date. You will also be saving thousands of dollars not paying commissions or closing costs. Most commissions are 6% or higher and closing costs can be as high as 3%. You also will not have to spend any money on repairing your home. Now, I'd love to give you a solid offer and check the property out.

Is there any way we can set up a time to come look at the home today? Period. Done. The entire conversation is all done there because our focus is to get our acquisition team to the property. As I mentioned, and I think I mentioned this already, you have a 300 times better chance closing the deal if you are belly to belly. So that is where we want to come from. That is her sole responsibility is to get through the conversation, understand what house it is, and then have them understand who we are and set an appointment,

period. Now we have our acquisition team's calendar up. She has access to their calendar. She sets an appointment based upon their availability. They're in the field. She sets the appointment. They go to the appointment. They build rapport. They focus on all the strategies that we teach them about building rapport, negotiating, and sales. They then want to make sure to sit down. So they walk the property. They're mentioning, you know, oh, when was the last time you replaced this? When was the last time you replaced that? And they're building rapport.

They actually have to sit down with the homeowner. This is where the major rapport is built and this is where you really get to quote unquote close the deal. This is where the offer is presented. This is where the questions get answered. You have to sit down with the homeowner and make the offer.

At that point, there's four major keys on why they are gonna accept or decline your offer. One, price. We all get that. if you give them the price they're looking for or above they're gonna love you and accept your offer number two is you the person are you likable likeability is what I call it did you build rapport did you make them laugh right do they you? Do they understand the process is number three. Do they understand the entire process about opening up escrow, closing escrow, getting the loan payoffs? Do they understand how title works? Do they understand the process of selling their home? And number four

is going to be their paperwork. Do they get it? Do they understand what it says on the paper? And if they do not want to move forward with you, you need to make sure that they understand those four components and ask them very simply, what do we need to do so that this makes sense for you or that we can move forward? Do you like me? Like, I will ask them. I encourage, this is how I train my guys.

You need to say, do you like me? Do they like who you are? Do they trust you? Because they might not. Maybe you come off a little funny. Now that's about, you know, presentation, your presentation skills. Like I said, you know, invest in books, invest in trainings about presentation, negotiation, sales, right?

Do they understand the paperwork? Is it price? And if it is price, where do you need to be, Mr. Seller? You need to really learn how to do that. I'm not going to go through all of the negotiation and all the sales on this episode. However, in coming episodes, I absolutely will do that. I then will also absolutely approach this from a virtual wholesaling standpoint, what you do if you are not doing deals in your own market and you don't have boots on the ground to set appointments. Okay. So guys, that's really our flow. And here's

the major change here. I want everyone to be going on every single appointment they possibly can, period. No ifs, no ands, no buts. Do not put a judgment over the phone because the majority of the deals we are currently closing are medium to low likelihood. Warm to cold leads are the majority of the deals we are currently closing right now. They're not the lay down, high probability, hot leads. They are the medium to low and or warm to cold. Those are our deals that we're getting. So place no judgment when you're over the phone. Make sure to get in front of them. Make sure to shake their hands, build rapport, learn how to negotiate and communicate, and you're gonna get the deal.

And that's the flow, right? So you have the phone's ringing. The lead manager has their script. They go through the basics of the script. They set the appointment because the calendar is up for the acquisition team. They then go to the home. They build rapport. They negotiate. They have to sit down at the kitchen table, build more rapport, make sure that the four components, the price, the people, the process, and the paperwork are all filled out, and they all understand it and close the deal, guys, that's really the important part. That's really

the big difference in what the shift that we've made in our businesses. A lot of the stuff we used to try to do over the phone, um, we were doing great, but now we've really seen a real big spike, you know, in the last 10 days to be able to get seven deals. Uh, five of them are already sold and it's not like we did this big marketing push and now all this craziness, we just really honed in on making those appointments and being face to face. So make that change guys and let's go out there and have a killer week. Again, if you are listening to me on iTunes, thank you. If you guys are on my YouTube at Justin Colby or at the Science of Flipping, again, go over to the Science of Flipping, download the free ebook. Also, we will send you our option contract if you are interested.

Just get over there and shoot us an email and download the ebook and we'll shoot you the option contract. Besides that, guys, I hope you guys have an amazing week. It's time to rock and roll. That is it. I am signing out as your host, Justin Colby, and we'll see you next week. Peace.