The Science of Flipping - Episode 90: Mastermind Series with Joe and Shane

Episode Date: March 3, 2017

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Welcome to the Science of Flipping Podcast. I'm your host, Justin Colby. Yo, yo, what's up? It is Justin Colby back with another episode of the Science of Flipping Podcast. And I am continuing our Mastermind series here. And as you guys can see in here, I have very good friends of mine, some billionaire boardroom members who are at the top of their game. They've built a seven-figure-a-year business out on the East Coast in the Baltimore area. I have Joe and Shane here for you guys. But before I get to them, I want to just welcome everybody. If this is your first time to the podcast, if this is at random your first episode you might have ever heard, welcome to the Science of Flipping. This is all about building systems and procedures and tools and secrets to the trade about building

a real estate investing business. And I aptly named it Science of Flipping because some of you might be fixing flippers, some of you might be wholesalers. Either way, you are flipping properties, right? And so my whole point to these episodes are to give you the secret sauces, the systems, the procedures to build a life that you want, right? And the reason why I'm going in on this Mastermind series is we have some incredible people such as you have seen.

And now I'm going to be introducing you to Joe and Shane here. But they've built a life by design and they get it, right? And I want to let everyone know that this is not just me. This is not just Kent or Sean. But you can really build a business to how you want your life to be. Maybe you want to grind it out. Maybe you want to grind it out. Maybe you want to work 60 hours a week. Conversely, maybe you want to be able to be completely hands-free,

leverage other people, and we can teach you all of that. If this is your first time or you simply haven't even downloaded my free book, go to thescienceflipping.com. This is the same book I sell on Amazon for $10. It's a real book. For my listeners. I give it to you for free. Go to the science of flipping.com. Download the book. It's called the science of flipping. Um, again, go over there. Uh, you will see an application button for those of you who are interested in masterminds or want to know more going and apply. The application button is also free.

Be open. Be honest. It is an application. I and my team and Sean and Kent simply ask for sincerity. Don't try to pretend like you're something you're not. Give it to us real. If you are just starting, let us know that. If you're making a quarter million dollars a year wholesaling or flipping, let us know that. If you're making a quarter million dollars a year wholesaling or flipping, let us know that. If you're like these two young gentlemen and making over seven figures

a year, let us know that. We have a mastermind for every type of person and where you are in business. So again, the science of flipping, you can get my book for free and you can fill out an application and one of us from our team will contact you if approved. It is not come one, come all. You have to be approved. So make it hard for us not to approve you, right? Be open, be genuine. And hopefully you get to be in a room with these two young gentlemen, Joe and Shane from Baltimore. Guys, what's going on? What's happening? Hey, Justin. How you doing, brother? Good seeing you. Good seeing you guys. We had a great trip down there in Cabo with all the billionaire boardroom members.

That was quite an experience for us. Yeah. We took that information and brought it home, and we're using it. We're kicking it in now. See, that is why you're in the billionaire boardroom mastermind, right? Because you learn it, you go and implement. And that's what I've found personally my greatest success. And trust me, at times it kind of comes back to kick you at times.

But I'm an implementer, man. Like my buddy says, oh, I just read this great book. And I think we were there in Kabul together. And Sean was like, oh, there's this great book. And I forget the one. I literally sat there and bought it right then. Because I just, I go, right. I trust Sean. I trust you guys. If someone says this is a great thing for God's sakes, man, my buddy was just talking to me about how he's doubled his money on Bitcoin. And I literally like, I literally go download an app

and I go buy Bitcoin. I'm like, let's Take action. That's great to hear that you guys, we spent three, four days in Cabo together. Man, it sounds like you guys got your one, two, three gold nuggets and you implemented, huh? Yeah, we definitely did. We also got a book called Profit First down there that we've been devouring. We're very excited about uh you mentioned about books and sean uh sean and kent

um uh bring in some books to us that they recommend it and uh it's a great book and that's an excellent way of looking at the business but anyway let us tell you a little bit about us my name is joe hartman this is my partner shane bloyer we're in baltimore maryland we're a per Hall Investment Group. And we've been back in the business, Justin, for about three years. We were in it in the mid-2000s, and we took a little break when the financial stuff went down. Yeah. And we had a family business that we were part of that we had to kind of attend to.

But that is now past us, and we're now both entrepreneurs again. And basically, we are wholesalers. We do have a buy and hold division, and we do rehab some houses. But 90% of what we do is wholesaling here in Central Maryland. And we made some great gains over the last couple of years. When we first got in, we might have did like some great gains over the last couple years. And when we first got in, we might have did like 100,000 the last couple months of the year in 2014. In 2015, we did about 350,000.

And last year, we did about 750,000. And we're on track this year to do over a million. That a boy. And wholesaling only. It doesn't include our rental buy and hold division. So just because a lot of people ask me, my business, right? And I'm such a cash is king guy, right?

So similar to you guys, I lost it all back in the crunch. I mean, sleeping on couches, my $500,000 condo gone, my $90,000 Lexus gone, my $90,000 Lexus gone, my $40,000 in credit card debt. I literally lost it all. And I had to rebuild from the ground up,

which is such an amazing journey because I know if I lost it all again tomorrow, I could do it all over again, right? I'm not scared anymore. But I digress. What I want to ask you guys is, people always ask me, well, why don't you buy more rentals? So if you had a percentage, your business and say, okay,

I'm driving these many leads in, we're typically buying one rental out of every 50 leads that comes in. I mean, how do you guys break that down in your business? Yeah, well, we're definitely looking at. It's definitely wholesale first, to be honest with you. I think Shane would say that too. And then we are just kind of skimming the good stuff off the top. If there's a really good rental that comes around that we don't have to do a whole lot of work to, we will snatch it up and buy it. Our long-term goal is to really get into multi-units and more commercial building. But in terms of our ratio of flips to buy and holds, it's probably in the 10 to 1, 12 to 1 range, something like that.

So for every 12 or 15, it's a little more, probably about every 15 wholesale deals we're trying to pick up rental property. Yeah, we got three things, three guidelines that we go for the rental. So if it's close to us on the east side, if it sits a certain number, a debt to income ratio, then it becomes a candidate for a rental property. So yeah, that's great. I mean, that's the point of us. And I think you brought it up already. But all of us here, whether you're wholesaling or fix and flipping, either one of those really are cash grab. I mean, that's the term I use is fix and flips typically are bigger

and they take a little bit longer to get it. But at the end of the day, it's a cash grab. Wholesaling for sure is a cash grab. You're moving, you're shaking, you're going, you're blowing. At the end of the day, I think all of us in real estate, I would argue, want that longer term play, right? Whether it's you want 100 single family home rental

properties, maybe you want 100 apartment units, maybe you want 500 apartment units, right? And it's all about systemizing your business so you can take some of your cash, bring that aside and slowly get there. I think the people that just, you know, to your point, one in 15, you guys are taken down. Some people are like, I'm buying all rentals. That's all I'm going to do. It's like you don't have to be polarizing. You can actually make some good income and pluck them down.

I mean, two a year times 10 years, 20 rental properties, that's a nice little portfolio. Well, you know, the other thing, Justin, is that the wholesaling market is just so good right now. So if we were to spend too much time focusing on the rentals and the rehabs, we're going to miss all this fruit that's right in front of our eyes. Yeah, absolutely.

I mean, it's very bust right here in Baltimore like it is across most of the country. I mean, it's a very hot wholesaling market. So like Shane's saying, we're taking advantage of it. And you know Dan, right? Bronstein? Yes, Dan Bronstein, yes. I just wanted to make sure if you didn't, I was going to make that introduction for you guys.

No, it's Dan, but we've emailed each other before, and I know he's in this area. Okay, well, if you ever need anything, I literally just talked to him yesterday. He's a Boardroom Elite member. Yes. So if you ever need anything, I literally just talked to him yesterday. He's a Boardroom Elite member. If you ever need anything, I'm happy to put you guys together. Great.

He focuses on more fix and flip. The reason why I want to put that together is he can be a great buyer for you guys. Absolutely. Just again, getting back to the Billionaire Boardroom, we have been staying in touch with several of the guys from Mexico and the billionaire boardroom. And it's been very good for us.

We're getting a lot of input constantly into our business and it's helping us a lot. That's great. Accountability is one thing that I don't think a lot of people value enough. And when you get into a boardroom and sometimes it's very hard for people to conceptualize what a mastermind is um but it's a place to learn but at the same time it is just a much about when you leave that mastermind being held accountable by the other people in those rooms to hit what the goals you want right and so i'm happy you said that because that there's as much value in a mastermind in the rooms for two or three days as there is when you leave that room

and you're held accountable by the other people in the room absolutely you can't go anywhere now now your feet are in the fires like so my question to you guys would be you said in 2015 you did roughly 350 000 yeah 16 you did roughly 750 this000? Yeah. 16, you did roughly 750. This year you're on pace well into the seven figures. What was that jump from 15 to 16? How did that all of a sudden, I mean the economy didn't do that much better where all of a sudden it was just raining properties, right? What helped you guys get there? Yeah, well I think number one is that we started this part time, what, three years ago, three and a half years ago.

And then I came full-time, you know, just over two years ago. And then Shane came full-time, you know, about 13 months ago. So, you know, him coming full-time and us really putting our heads together and putting all of our resources and our knowledge together because we did this pretty successful back in the mid-2000s on a very part-time basis i mean we would close one deal a month you know just doing tax sales or whatever make 10 to 15 grand so we made more money doing that part-time than we did full-time yeah we were we were crazy reason we didn't uh we didn't continue with it. Yeah, we were close. We were real close. We talked about it a couple times, quitting our full-time gig, and then the bubble burst.

So we were grateful that we didn't, but we learned a tremendous amount in that first round. Yeah, but I would say the jump, to answer your question, obviously had a lot to do, obviously for us, was a lot to do with marketing. So we got on to Kent's program, the FMSN, or Finding Motivated Sellers Now. And that really was a big driving force with us, along with just doing all Sean's stuff, Flip to Freedom. We just kind of just diligently and religiously followed each step we weren't going to question. We were just going to, let's not try and reinvent the wheel. Let's just do what they're telling us to do, and let's scale this business up. And that's what we did.

We scaled it. And finding motivated, I mean, that's great to this day. I mean, with that thing. I've heard there's other people in the Baltimore area that have actually contacted them and said they haven't had any success with it. And maybe it's because we're getting all the deals. You guys are stealing all the deals, man. You're taking them all. Yeah, I mean, but that's been a really instrumental part.

But it's definitely marketing, our business background. I think you've got to have a little bit of people background, how to deal with people, how to talk to people, how to influence people. I think for a lot of people just getting in if they're just used to work in the nine-to-five type of job and they're not used to sales or influencing people you know I think it's it's smart to get some of that experience learn to learn that while you're learning this so you can learn how to close a deal and learn how to get people to trust you and earn your respect so there were some of

the main keys there for us that helped us take a jump, really double our business, you know, 2015 over 16. And, you know, now we've got an office, and we're in the transition mode right now of doing everything ourselves, the hiring people that we're going to automate this thing. In the next two to three months, this thing, our goal is really to have this thing automated completely with just their oversight. Yeah, and I guess what I would say to this is you guys make this real for so many of our listeners.

I mean, I have tens of thousands of people that download these episodes every week, right? And if you were to say Baltimore or the greater Maryland area, you would say it's probably a pretty difficult market, right? It's not exactly the most easy market. Would you agree? Yeah. You go to D.C., forget about it. D.C. is ridiculous. It's like triple the prices there.

So you get a lot of people from D.C. and New York coming down to Baltimore and from south, Miami and north. So the whole east coast is going to Baltimore. One major hub is Baltimore. So it is competitive. Yeah, a lot of foreign investment as well. Yeah, and what I love having this series is basically I'm just going one by one to everyone that was in Cabo with us, right? Because you guys are proving it's not just me. My listeners have heard me now for years.

They'll hear from Kent. They'll hear from Sean. They'll say, oh, well, you guys are already eight years ahead. And you guys, you know, guys, for all the listeners out there, these two gentlemen are three years in? Yeah, three and a half years in. That's it. And you're on pace to be well into the million dollar range this year.

I mean, guys, for you are out there that have a nine to five, for you that don't believe this is possible, for you believe that, you know, it's Justin, you did it because, you know, whatever, whatever secret you had or Sean or Kent, guys, these, you know, this can be replicated anywhere. This business is nothing more than marketing and sales, right? To your point, Joe, you basically said the big change for you guys was your marketing. You drove in more leads. right to your point joe you basically said the big change for you guys was your marketing you

drove in more leads if you think about traffic and conversion it's all about driving as much damn traffic into this big ass funnel you have and then converting it right that's all it is so you just want as much traffic as you can get to go into the funnel so that you can convert it right and that's you know three years think about that i mean it sounds ludicrous to most people probably listening to this that you guys in the net in three years you went from all right let's go for it to seven figures that's nuts i mean it just doesn't happen but i would argue this do you have some superhuman power i mean do you have something that no one else could do do you have like what what did you guys do?

Talk to maybe the newbie right now. Talk to someone who's maybe making a quarter million dollars a year and wants to get to that 750 or a seven-figure a year. What did you guys do? What did you guys rely on? Because I will guarantee whatever their answer is to you listeners, you can do it too. I guarantee whatever they answer right now to this question,

you'll be able to do. So talk to whether it's the newbie or the guy who's making a quarter million dollars a year and one needs to figure out how to get to the seven figures. What were the things that you guys did? What made you special? Why you? What do you think, Shane? Yeah, I mean, you know, in Mexico, Justin, you brought up three points, I believe. Diligence, fortitude, all the things that mean that you've got to stick at it. You've got to stay at it. Tenacity. Tenacity.

You cannot give up. The marketing is the marketing. It's going to do what it does. The other thing I was thinking as Joe was talking there was do what the mentors tell you because you have a tendency to just go off track and think you've got it the right way. Don't reinvent the wheel, you know, stay on track with the mentors, get a good mentor. You know, we love you guys. You, Kent, and Sean have been huge for our business, but follow that pathway and don't give up. You know, for us, for Joe and I, the partnership has worked really well. You know, when one of us has struggled or, has struggled or a little down with the business,

the other one lifts each other up. So two are always better than one if you can get along and work together. Joe and I have known each other for a long time, so we're very good and we focus on each other's strengths, so that's helped a lot. Yeah, and you know what?

I mean, we would listen to Sean. We would watch, listen to you and always have that stuff in our ears. And whenever, honestly, whenever we get down a little bit or. Yeah, you got to turn it on. You got to plug in. You got to turn on the podcast and plug in when you think you're down and out. You don't know what your next move is.

You sent out a thousand mailers and you're not getting any leads. Yeah. You know, you got to pick it back up again and do it because it works. If you just keep doing it and you're, if you begin with the end in mind, you know, I know that's a cliche's a cliche, but if you do, you can get through a lot of this stuff. It's a very simple thing. Sean Terry was our first guy that we really latched on to. He said, look, just start with $500. Start with $1,000.

Find a way to get one deal from that. Take 15% of that money and plow it back in the market and just keep doing that and just keep scaling it, keeping it very, very simple. Just keep it simple. And that's what we've been able to do. I mean, now we're spending like $15,000, $20,000 a month in marketing. Yeah. Scale to that number. Throw that money around, baby. I like it it i like it it does i mean man i love i love what we do man i love our business i love working with you guys i mean to me and you know we don't get a lot of time to express the value that we get from you guys man so for me

and sean and kent man we love being a part in in helping you guys reach where you guys are you give back just as much you guys being here and giving back to my listeners, I couldn't tell you how much I appreciate that from you guys. Greatly appreciate it. But you guys are rock stars, man. To your point, it's just digging in and going. Like you said, it's not always puppy dogs and rainbows, man. There's hard days.

There's hard weeks. There's hard months. You got to rejuvenate. You got to figure it out. gotta keep pushing right yeah i mean we did a back in march of last year we did something like 10 000 in one month and that's when we all changed or changed after that i mean it's like and we had some deals in the pipe and all that but that's all we did in that 30-day period was like 10 grand you know and it's like we're so far ahead of that that was a year ago that was one year ago you know and um so you can change this thing around in 30 days i mean you can change

your life in 30 days and um and just listening of all them free material out there your podcast sean's i mean there's no reason why you can't um you know you can't do this thing if you stick it out and you go through the you're going to go through some tough times but um reason why you can't um you know you can't do this thing if you stick it out and you go through the you're going to go through some tough times but um and if you can get into the boardroom whether it's the the entry level or the mid-level or the level that we're at sure it costs a few bucks i mean we thought twice about putting 20 25 g's out to go to the billionaire boardroom but we just made a decision let's do it this is going to help our business and we're not looking back you know it's going to put you light years ahead of where you're at right now

because you're surrounding yourself with like-minded people, people who have done it like yourself. They've got million-dollar businesses going on. Why not get in front of them? It's worth every dollar of it. I would encourage anybody out there, if they can get in the boardroom, certainly, at the very least, go to the, whether it's Freedom Extreme event or Justin's annual, yep, you know, you got to do it. You got to do it because there's nobody in your neighborhood around you that's doing what you're doing. You have to plug into other like-minded people, and that's the only place you're going to be able to find it i mean your local rei club's not going to get it done for you yeah yeah i mean your local rei club's not going to get it done for you if you want to learn how to wholesale they're not going to do it they're just going to bring in one thing after another and fill

your mind up with 50 different things that you can do if you want to wholesale you got to plug in with other people and um you got to go find those people and put the money out to do it if it takes that. You know, Justin, just real quick, one thing that helped us a little bit too was Joe's always been good at pushing up our margins. Yep. So we'll talk to a lot of title companies around Baltimore, and they'll say a typical wholesaler, what, $2,000 to $5,000? Yeah, yeah, $5,000 maybe. But we never accepted that, and that's what got us to the numbers that we're getting. You can do 50 deals and only make $150,000, or you can do 50 deals and make $600,000, $700,000, $800,000.

I couldn't agree more. Your only limit is what's between your ears. Yeah, absolutely. If you believe it, you'll get it, right? You need to believe it before you see it mentality. And I talked about that in Cabo is you need to believe you can build a seven-figure-a-year business before you see it. Like that number is not even conceivable to the majority of society.

I mean, so far away from being conceivable, right? But the reason why I love you guys coming on is, God, it's so doable, but your belief has to be way in front of you seeing it be doable. And that's why I wanted you guys on and the rest of our billionaire crew is because the mastermind helps people, but I have a notoriety being in the public eye.

And you guys don't necessarily have that same notoriety. And for you guys to echo, you guys have said the exact same thing I've said, right? Now it's more real because you guys are saying it too. So you have to believe before you see. And if you don't, don't even get in the industry. Because you're going to just, you know, you might do okay. You might make $100,000 a year. But for you listeners, I'm sure you could go make $100,000 a year anywhere, right?

I mean, why go through the trials and tribulations of starting a company to make $100,000 a year, right? So believe it because it's real. And if you believe it deep enough, nothing can discourage you. Nothing can get in your way, and the results will come. Yeah, I mean, you've got to be – when you're one-on-one sitting across that kitchen table and you're thinking to yourself, what do I want to make here? And you hedge in any way, it's going to show up, man. Confidence just – you can see it. You can smell fear.

You can smell all those things. Everybody knows that. So like you said, I remember we were talking on the boat in Cabo, and I said, how come you don't take anything less than 15? And you're like, are you crazy? We worked hard. Why would I take anything less? So that's it. Yeah.

No, it's important. And I'll say one thing here. Pay yourself first. One thing we also believe in is tithing. If you tithe, I mean mean it's helped me out tremendously personally i don't know you know uh where people are obviously uh spiritually or what have you but it is a kind of a human law it's a law of the world if you give back 10 and you pay yourself first i think you'll find yourself a lot further ahead than where you would otherwise be yeah

that's a great point you know just to that point we did a seminar like right when we got back and, you know, got a couple guys asked us if we would be willing to teach some others talking about that scarcity mindset and the abundance mindset. And we went in there and, you know, we told them just like it is. We told them everything that we do. And I tell you, man, that next day, that next week, man, we started reaping right away. Yeah. We picked up a deal yesterday. It's just off the charts. Joe could tell you a little bit more about it, but it came from the seminar and being willing to share. And the guy said, I tell you, man, what you guys said was so impactful. Yeah. When you make connections like that, things start to fall in place for you when you're doing the right things and tithing and paying yourself first and not worrying about your bills so much. You know, too many people, they want revenue minus expenses equals profit, right?

That's what I'm learning from this book, obviously. It's revenue minus profit. Then you pay your expenses. So, yeah, just this deal real quick. I'll tell you yesterday, two days, it's a guy from the seminar we did. He bought a house at auction two days ago, got it really undervalued, decided he didn't want to keep the property. He called me up yesterday. I went and saw the property.

He picked it up for $48,000. We're going to flip this thing for $70,000. We're going to get $70,000 for it at least, and we're waiting for a contract now. But he got a great deal at auction, came to us because he thought we were the wholesale guys, which we are in Baltimore, and we're going to split it 50-50 with him. He was going to turn around and stuff out for like 55. We're like, no way, man. You've got to get more for this.

And we put it out there to our network, got a lockbox on it, and we got like a half a dozen people looking at it. It's in a hot area. So you get those kind of opportunities that will come to you if you do the do the right thing amen to that amen what that's a great note to leave off on guys and you guys are shining examples of what it means to be good business owners good people um again doing the right thing your heart's in the right place you have the tenacity diligence so from me, Sean, Kent, we really appreciate you guys being a part of our boardroom, our mastermind.

And thank you for being on this episode, man. I'm thankful for both of you. I think we'll see you in San Diego, I think, right? In a couple months? Yeah. April 24th through 28th is our next mastermind. So I'm not sure what days we'll be there, but I will be there for all the days. All right, man. Appreciate your time today. Yeah, no, it's been a blast, guys. Thank you guys for listening. Again, this is Science of Flipping.

If you guys want to be around gentlemen like you are listening to now, seeing now, go fill out the application. Make it hard for us to say no to you. It's application and approval only. So we're not accepting everybody. But the more honest you are, the more we can get to know you, the easier it is for us to accept you. But we will not accept the people

that don't belong to be in there. So go to the science flipping, fill out the application, let us know what's going on. And if you fit the mold, we'll bring you in. So guys, that's what I got for today.

Thank you again for coming on and we'll see you on the next one. Good luck, everybody. All right, man.