The Science of Flipping - Episode 80: Realtors and Investors

Episode Date: January 6, 2017

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Welcome to the Science of Flipping podcast. I'm your host, Justin Colby. Hey guys, welcome back to another awesome episode of the Science of Flipping. I am your host, Justin Colby, and alongside me today I have my great co-host, Mr. Kent Clothier. What is up, dude? What's up, brother? I'm glad to be here. Glad to finally get back to the grind again, right? That's right, man. Sometimes we find ourselves spread out, but it's good to get back to the grind. It makes you feel good. I can tell you that much. It makes me feel good. Well, listen, we have a great episode today. This is a topic pretty near and dear to my heart is really kind of how I got started in the industry. And I just want to jump right in. But before that, actually, before, listen, if you guys are new to the show, if this

is randomly the first episode you've ever heard, get over to the Science of Flipping and download the free ebook of the 15 most costly mistakes you can make as a real estate investor. This is a book that has been comprised of my own mistakes, Kent's, and several other of our good friends who are full-time real estate investors. We want you to succeed. So this whole program is about tools, systems, organization, implementation on how to be a successful investor. So it's a completely free ebook. Go download it, thescienceofflipping.com, and make sure that you stay away from those mistakes. With all that being said, housekeeping out the way, let's go ahead and jump into something that

I think is very valuable. And the reason why it comes to mind is I've been talking to a lot of realtors recently because, as I've mentioned before, is I've been talking to a lot of realtors recently because as I've mentioned before is I have a really special relationship with Fidelity National Title and they've recently brought me into several of their events to speak. And so realtors and I've been having a lot of different conversations, but I wanted to talk about this whole idea of this realtors hate investors, investors hate realtors, they tend not to get long. And I just want to put a quash to it today on this episode, dude, because I know Memphis Invest does a ton of deals with realtors. I know I, over the years, have done a ton of deals with realtors,

and there's absolutely a way to make it work. And it's just, you got to release that competitive situation. We'll do more deals together than we will apart. You know what I mean? I want to address that today on our episode because it's so important for investors to work with realtors and vice versa. If you're a realtor out there, you need to understand how advantageous it is to work with us investors. Yeah. I mean, let's talk about it. Where do you want to start? Well, let's just start with this idea of like the, what I hear all the time is you're just going to low ball my clients, right? You're going to, you're going to try to steal their home or,

you know, those, this idea that we're out there to like almost be malicious, right? And that's just not the case, right? This is a business for us. And we understand as investors that this is their home, that some of them have lived in for 30 plus years. Some of them have lived in for 30 days, but it's their home. And we understand that as real investors, but at the same time, there's a business component. And so by no means do us investors ever go after realtors or their listings or their clients in terms of, let me try to steal this home and let me offer 50 cents on the dollar because I just want to make a ton of money. That's not the case. The case is we have to buy an investment and we have to get a return on our investment. And the numbers that we come up

with are based around the return that we are looking to get on our investment. Again, to buy a home is not cheap. It's expensive. There are hundreds and hundreds of thousands of dollars and at times millions of dollars that we have to come up with to buy someone's home. So as a business and as an investor, you have to always understand, and you don't have to understand anything, but what I'm trying to do is help you and encourage you to understand, we have to make some sort of return on our investment to make it make sense. We are not trying to be malicious and trying to hurt somebody or disrespect somebody or steal someone's lifelong inheritance. That's not what we're here for. So I think to start is us investors have to make it very clear to realtors prior to ever even working with them what our vision is, what we stand for,

what we stand against, what's our intention, how do we do business? You have to be clear and concise on these things for that relationship to work. Otherwise, quite frankly, Kent, the realtor has a plot to stand on when looking at investors' offers at times, right? They actually have an argument to say, you're just trying to steal my client's home, but they just don't know the other side of it, right? Yeah. I mean, I think it really boils down to this from my perspective, is the world is filled with scarcity-minded people, right? In fact, it's the majority. Most people are not people that believe in any kind of abundance whatsoever. Most people are immediately looking at the world through a box of, why are you trying to play in my sandbox?

Why would I share information with you? Why would I be open about my business? Why would I share any of my goals and my value or anything with you? They just come in a very closed situation where they bring no value to the relationship and they're constantly looking to protect what they've got and not share what they have. And so that's just natural. It's just human nature. I mean, it's just the way, the world we live in. And so you can either participate, you can be the person that thinks exactly the same way, be that scarcity-minded individual, whether it's with a realtor or anybody else, quite frankly, or you can be the person that's a little different. And being a little different as what you're talking about, being bold and being very open and honest about what

you're trying to do and the value you bring to the relationship and answering that question for them, what's in it for me? And this is what I stand for. And this is what I stand against. And this is the value I bring. And here's where I'm going with my business. And this is what I can do for you. And this is where I need help. it does you a lot of good to be that way. Because what that has the ability to do for you very, very quickly in a realtor relationship or any relationship is it quickly puts a line in the sand and says, man, either you're with me or you're against me. Either you're in or you're out.

It's black or white. There is no gray area of you trying to recruit somebody into your business or go talk a realtor or anybody into trying to be with you. What you need to be is just this is what I'm all about. I'm totally out there. I'm going. I'm willing to give. I'm willing to share as much information as you need me to share.

I'm willing to share leads. I'm willing to bring listings. I'm willing to bring value. I'm willing to bring all this stuff to the relationship. And if you want it or you don't, and if you want it, this is what it looks like to do business with me. And if you don't want it, this is what it looks like to not do business with me. Get in or get out. Get on the pot or get out. I don't care, but I would rather lay that out there very quickly because it has a 100% close rate when you do that. You win 100% of the time. What will happen by being

that way is you will quickly, like I said, draw a line in the sand. And the people that want to be around you are going to be so attracted to that. And they're going to be like, oh, my God, I cannot wait to do business with this girl or this guy. Man, I'm ready. This is awesome. I didn't know these kinds of people actually existed. Or you're going to get like, man, this guy's a jerk off. This guy's a clown.

I'm out. I don't want to be in business with this guy. What this guy? What the hell is this guy talking about? But either way, you know. So you win right there 100% of the time after that conversation, you know exactly where you stand. And so I think it's really, really powerful to realize that it is a winning proposition to be very, very upfront about working with realtors. And I will tell you, but you also have to be very realistic. You got to

go into the situation realizing that most people, I'm talking like nine out of 10, are not going to be looking at you in a favorable way. And it has nothing to do with you. It has everything to do with just the world we live in and the way they're taught and the way they're, the lack of training that they have. And what you also need to recognize is the very best realtors in the market, the ones that do the most business, the ones that win more business than anybody else, those are the people that truly understand the value of this relationship. You have to think through the realtors and investors, quite frankly, in both of these industries. It is absolutely an ocean of mediocrity. It is a watered down, diluted cesspool of people that have very little training and

are just going through the motions at best. There is a reason why almost half of the people in these industries do no business and why the top 10% do the vast majority of the business. It's because it's just filled with people that just are poorly, poorly trained. So when you're out there searching and when you're out there looking, it's reasonable to assume you're going to run into some duds, that you're going to run into some people that just don't get it. But wouldn't you rather just figure it out really quick? Yeah, I think it's, I couldn't agree more with what you're saying right now. It's almost,

you know, I'm a single, I'm a single guy, right? And you and I talk a lot more with what you're saying right now. I'm a single guy, and you and I talk a lot about that, and you try to do your very best to put some wisdom on my singleness. At the end of the day, it's a relationship. Regardless of it being a business relationship or a personal one, you need to be upfront, and you need to show them who you are, what you're about, you know, what you stand for, what you're looking to do, what your vision is. And they are either going to say, I'm on board, let's ride, or they're going to say, sorry, I'm out.

But to Kent's point, you have 100% closing ratio. I mean, and you don't waste your time. And you come from a place of abundance saying, hey, if we do this together, my vision is this, and we're making this much money. And you come from a place of abundance saying, hey, if we do this together, my vision is this, and we're making this much money together if you're on board. But if not, then no harm, no foul. You go your way, I'll go mine, and I'll find the next one. It takes one. It literally takes one. I had a goal when I started, Kent, to do 100 calls a day to realtors. I didn't know anybody. I had no coaching, no mentor, no anything. And that was my goal. I went to realtor.com and I would print out 100 realt and disgusted and had no money. And Starbucks at the time had that deal where if you buy a coffee and you drink it there, they'll keep refilling it for free. So my broke ass is like, I'm into that.

And I literally just sat down and had the same conversation so many times. I can repeat it now. I'm not going to, but I could. And it just took one realtor to get our first deal. Now it took a long time, but it took one realtor who got us our first deal, our second deal, and quite frankly, got us about our first eight deals because I took the time to go find the right person who understood what I was about, what our vision was, what it was going to take. And ultimately, quite frankly, he made more money than we did on the deals as a realtor, right? You have to be that way, right? And it's not easy. I think you and I talked about it on the last episode,

just talking about this. You just got to grind it out. You have to do it. And not everyone's going to be the right fit. Just like I brought up dating. You got to go out and date a little bit because you're not going to find the right fit. Same thing with business relationships and realtors and vice versa. If we're talking to realtors out there and you're a realtor, you know, put your shoe on the other foot. You know, realize you need to explain to them what you're not looking to do or us investors, right?

Tell us what you're about, what you're willing to do, what you're not willing to do. And then ask us the questions that we're telling you now, right? What is your vision? How is this going to work? What is your role? What do you stand for? Where are you going? You know, what are you currently doing? Ask us those questions so we can give you the honest answers about that and to see if it'll work. Here's the other thing I would tell you is do, you know, you and I have spent a lot of time training people. One thing that's really, really powerful to do, you just mentioned it, right? Put the shoe on the other foot. Think for a moment.

What is the pain point of the person that you are talking to, right? So if I interviewed 10 realtors, 10 okay realtors, but not necessarily the best realtors, but ones that have the desire and they're working their tails off to be the best. I mean, Justin, you and I both know the answer to this, but let me ask you, what's a pain point for a realtor? What do they hate? They hate driving buyers around all weekend long. That's what they hate. Right. They hate going to the open house. They hate driving people around. They hate going through all the motions. They hate the simple fact that house. They hate driving people around. They hate going through all the motions. They hate the simple fact that there's so much time, effort, energy invested in prospects that don't actually turn into revenue.

I mean, it's shocking how much effort goes into this. I go buy these bullshit leads online from Zillow or some of these other services that are marginal at best and require years worth of follow-up to even turn it into any money, right? And basically, again, it's a race to zero. They're just being dumbed down by the moment. And so that's the world a realtor lives in, largely. Now, the top realtors don't live in that world, right? They've taken their destiny into their own hands and they go off and create their own leads and they create their own situations. They understand exactly what we're talking about. But my point is, is if you understand

the pain point of your prospect, and in this situation, the prospect is definitely that realtor. If you understand the pain point, then address it. Position your value to address that pain point. Think about it for a moment, right? Be a solution. Be solution-based, right? I talk a lot about this. When I talk about sales and selling, you're selling yourself. You are, guys, you are in marketing and sales, period. You are not in real estate. Contractors are in real estate. You are marketing for a property. You're selling the seller to sell you a property. You're selling a buyer and buying it from you. You're selling a realtor on working with you and giving you deals and structuring a partnership. You are selling. And the best way to

sell is to find solutions to Kent's whole point there. Find the solution. And it might not be one solution. Or even better, be the solution, right? Be the solution. Basically bring your value to the equation as the solution. At the end of the day, if you're doing your job and as a wholesaler, as a real estate investor, you actually understand what the hell it is that you want and what you're trying to buy, and you've done all that work, then position your value to them very succinctly. At the end of the day, Mr. Realtor, here's what I can do. I'm going

to buy a lot of property. I want to buy five, eight, 10 properties a month. I know exactly what I want. I know exactly the price I want to pay and the neighborhoods I want to buy it in. What I don't want you to do is send me a list of anything. I don't want you to go print off or create this CMA for me and just send it over. I don't want any of that stuff. I don't want you to go print off or create this CMA for me and just send it over. I don't want any of that stuff. I don't want you to drive me around. I don't want to go to open houses. I don't want anything. What I simply want you to do is do your research, do your marketing, and create the very inventory that I want to buy. And not only will I buy it once, I'll buy it multiple times every single month. I'll buy it month in and month out,

over and over and over with very little effort on your part. I just know I need somebody on my side that wants to go to bat and bring me the very deals that I am willing to give you all the information on exactly what I want, where I want to buy, how much I want to pay, and how many I want to pay when I want to close. And oh, by the way, I have millions of dollars in cash that I can use and close in as little as 30 days. Now, when you position it like that with a realtor, if somebody tells you no, then you do not want them. It's really simple. But to the right realtor, you represent the goose that laid the golden eggs. Oh my God. Somebody actually knows what they want. I don't have to think about it. All I have to do is just go and use my

marketing, use my efforts, go off and get the listings that fit perfectly into this person's situation and turn around and flip them quick. And they're going to buy, most realtors get to sell one property to one buyer every five years. You're a buyer that will buy five properties every month, month in and month out. It doesn't get any better than that. But we're so busy begging people to do business with us and kissing everybody's ass that we're not actually thinking about, wow, this is the value I bring and this is the value I should push out there. And if I push it out there into the right audience, somebody's going to love it. A lot of people may not, but that's okay because God Almighty, if somebody doesn't want that, then I don't want them. Right.

I mean, that's the bottom line. And that's how you create a really good partnership is you lead with, this is what I can do for you. What's in it for me? That question that you have to answer in your prospect's mind every time, what's in it for me? Answer it. The same goes on the other side. If you're a realtor, an agent, and you're looking for an investor, go the other direction. What absolutely kills investors is when realtors don't do their damn job. When a realtor turns around and just sends over a list and says, makes me dig through all of their crap.

So effectively, you just print off the MLS or you set up an alert and I have to go and figure out if it's comped, if it's the right property or whatever the case may be. Solve my problem. Hey, Kent, I went, I took your criteria. I found these exact scenarios. I actually went and looked at three of them. I think they're exactly what you want. They're at the price. I've talked to the seller. I believe that there's some motivation here. What's next? Do these things that make it easy for me to say yes, and all of a sudden,

you've got a customer for life. This is not a difficult relationship to mutually benefit from, but you just have to be a little different. You got to stand out and treat it like a business. Move with intention. Do not sit around and be the passive jerk off that everybody else is in the business. No doubt. On that statement. Right? That was a great statement right there. So guys, I mean, go out there, find realtors, tell them what you're about, what you stand for, what you stand against. If you're a realtor, go find investors. The real investors really play ball. They really have money. Do not mistake it. It is a business. They do have to offer at times lower than what you as a realtor would like. But man, when you find the right investor like me or Kent, you will be making money. Period. month and month out, multiple times in a year that is just effectively on autopilot. The vast majority of realtors do not have any such client whatsoever. How different would your life look

if you had a client that would buy one house every single month from you? I mean, suddenly you have an ATM machine. I mean, it would be so nice to be able to, especially as a realtor, just show up and know, right? Last time I checked on a $200,000 property, a 3% commission is six grand, right? A 6% commission is 12 grand. Just know that somewhere between six and 12 grand is going to show up in my bank account regardless this month because I've done so much lead work and I've invested in this relationship with this investor so deeply that I know exactly what they want, where they want to buy, how much they want to pay.

I mean, I know everything to the point that I just know that this month, 10 grand is going to show up in my bank account before I even get my feet on the floor, $120,000 a year is coming into my bank account. And guess what? I don't have to drive around with some douchebag that's not going to buy from me anywhere. And even if they do buy from me, I'm going to get to the closing table and the financing is going to fall through or some new whatever, right? A hundred different scenarios that happen at the closing table that realtors also hate. So it can be so much different on both sides of the coin, but you have to move with intention. You have to act like it actually matters. And while some of you are so busy trying to protect this little fiefdom that you've got

that's paying you $45,000 a year, you're basically spitting in the face of somebody that could pay you $120,000 and vice versa. I mean, it's really silly. Yeah. I think you guys get the point. I mean, really, it's silly, right? Get out there and do the work. Get out there and build those relationships. Last episode, if you didn't listen to that, go listen to that. It's all about those relationships. This one, we're talking about realtors and investors and that symbiotic ability to work together and make more money. We'll make more money together than we will apart, period. That is the point.

Amen. Find the right realtor and find the right investor and go out and get it. All right, listen. Kent, you got anything else, dude? I think we're wrapping this one up. That's it, man. That's what I got. All right, man. Well, you got anything else, dude? I think we're wrapping this one up. That's it, man. That's what I got. All right, man.

Well, listen, everybody get over. If you want to hear more from us, if you want to talk to our team, if you have more questions, go to alliancewithkent.com, alliancewithkent.com. Fill out an application. We'll have one of our expert team members call you back, talk to you, answer your questions, and help you on your way. Besides that, guys, we are both signing off, and your questions and help you on your way. Besides that, guys, we are both signing off and we will see you on the next episode. Peace.

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