The Science of Flipping - Why Bigger Isn’t Better — How to Scale Smarter, Convert More, and Keep More Profit

Episode Date: March 21, 2025

In this episode, I break down one of the biggest myths in real estate investing — that bigger is always better. After 18 years in the game, I’ve learned that chasing more leads, building bigger teams, and spending more on marketing doesn’t automatically mean more profit. In fact, it can crush your margins. I share how focusing on lead conversion, leveraging tech like LeadDetector.io, Rocketly CRM, and AI-driven data, and running a lean, efficient operation can make you way more money with fewer people. My goal is to show you that you don’t need a massive team or huge overhead to hit $100K months — you just need the right systems, the right mindset, and the discipline to focus on profit over vanity metrics. -- Resources & Tools Mentioned: ✅ LeadDetector.io — Capture 20-30% more leads that never opt in: https://leaddetector.io✅ Rocket Sites — Done-for-you investor websites that convert: https://rocketsites.com✅ Rocketly CRM — AI-driven CRM with lead nurturing automation: https://rocketlycrm.com✅ REI Lead Machine — Pull high-quality, AI-enhanced seller lists: https://reileadmachine.com -- Thank you to our partners for supporting today's episode! Empowered Investor LIVE! - Take control of your financial future with top real estate experts, builders, lenders, and investors. Join Us at Empowered Investor Live – April 4-6, 2025, in Irvine, CA! Spots are limited – grab your ticket now! 👉 Get Tickets Joe Homebuyer – Want to scale your real estate business fast? Get expert training, weekly coaching, and a proven system to close more deals. High achievers even qualify for luxury rewards! Learn more at joehomebuyer.com. 📊 Quality Skip – More accurate data means more deals! Get premium skip tracing for just 6 cents per match and connect with the right sellers every time. Use code "SOF" for 10% off at qualityskip.com! Mando Whole Body Deodorant – Stay fresh and confident with Mando's doctor-developed, aluminum-free deodorant. Clinically proven to block odor for up to 72 hours, it's safe for use anywhere on your body. Use code 'COLBY' for $5 off a Starter Pack! --   About Justin: After investing in real estate for over 18 years and almost 3000 deals done, Justin has created a business that generates 7 figures in active income through wholesaling and fix and flipping as well as accumulating millions of dollars of rental properties including 5 apartment buildings, 50+ single family homes, and 1 storage facility Justins longevity in real estate is due to his ability to look around the corners, adapt to changing markets, perfecting Raising private capital, and focusing on lead generation which allows him to not just wholesale and fix & flip, but also accumulate wealth through long term holds. His success in real estate led him to start The Entrepreneur DNA podcast and The Science Of Flipping podcast and education company, and REI LIVE where he’s actively doing deals with members. He has coached and mentored thousands of aspiring and active investors over the last decade. Connect with Justin: Instagram: @thejustincolby YouTube: Justin Colby TikTok: @justincolbytsof LinkedIn: Justin Colby

Still treating your real estate business as a side hustle? At Joe Home Buyer, we help real estate entrepreneurs scale to full time with right strategies, training, and community. Join a winning community of go-givers. Get access to weekly strategy calls, leadership training, and industry expert master classes. Plus, we'll help you get more deals across the finish line

and increase your profits. If you wanna stop grinding and start growing, Joe Homebuyer is your competitive edge. Because that's where I think you need to start. I don't think any of us as entrepreneurs go into entrepreneurship to make less than 250 grand a year. But somewhere along the lines, people want more, they want to get bigger, they want to have employees,

they want to do more. But more doesn't mean net profit either. This is why I want to expose this kind of myth or people talking about how like grow bigger, you know, and all this other stuff. I have so many points to just basically point out that it's not always the case. What is up? What is up? Science of Flipping Fam. We are going with a solo, dolo, hardcore, tactical, real estate advice from yours. Truly, the Justin

Colby. Now if you're not following me on Instagram, you probably should. I am giving away incredible content right there on Instagram. Go follow me at TheJustinKolbe and go follow everything and you'll see some great stuff there. Now, I wanna dive in to some tactical myths, the myths that I think need to be broken here in the real estate investing space, as

well as I want to talk to like lead and conversions, right? And so there's a lot of myths that I think that are out there that fly around from people that probably have never really built a big business and probably are just solopreneurs and, you know, say things that they think to be true, but that aren't true, right? And so, starting out with this idea is bigger is better and more is better. Now, you talk to Grant Cardone and he's going to tell you bigger is better, right? Now, he's done something pretty spectacular. And many of you guys probably read books just like I do

and there's a great book out there by Dr. Hardy, you know, 10X is better than 2X. So I'm all in alignment with that. But I think from my own 18 years of experience, anytime I go way outside my realm, outside my expertise, way outside my realm, outside my expertise, without individuals around me in that expertise, I find that I always feel some pain, right? Sometimes it's just growing pain, sometimes it's some bigger pain, but I think there's a lot of people that want to get bigger and more and more deals and more money and more and more and more.

And I don't fully subscribe to that. Now, I always want everyone here listening to me and watching me on YouTube and Instagram to push themselves. I always want to encourage to grow. I think it just needs to be framed in the right way. Right? it just needs to be framed in the right way, right? I wanna talk specifically about like more deals, more leads, and I wanna kind of frame it in a way that I think you guys are gonna appreciate because whether it is a myth that bigger is better

and more is more and better or not, I'm tired of people really kind of making that the narrative. What I do believe specific to the lead and deal flow side of what we do, mostly in the single family space, okay, I'm talking mostly in the single family and then I'll circle back to some commercial and apartments. But there are services that can help you actually do more deals with what you already have. So a lot of times we as wholesalers and fix and flippers and transactional investors, we need more leads to do more deals.

We need more leads to do more deals. We always want to keep investing in marketing to do or to get more leads to do more deals to make more money, right? But I think there's some efficiency. So the first thing I'll tell you to write down right now is I want you to look into lead detector.io lead detector.io. If you are one of those investors that has a website and you push any amount of traffic to the website and by pushing traffic I mean if you do pay-per-click Google advertising or Bing advertising, if you do Facebook ad advertising, if you do TV commercials and or even if you do direct mail with your website on it.

If you are driving traffic to your website, then lead detector.io is a great service that will help you capture roughly 20 to 30% more leads. Then if you don't use lead detector, I'll give you an explanation about this. lead detector. I'll give you an explanation about this. There's roughly an industry standard that we see roughly 1 to 2 percent of those that visit our website opt in to our form. Give us information, want us to call. Roughly 1 to 2 percent. Well, so what happens with the rest of those people? Where do they go? What do they do? What happens to them?

You know, I have a website, literally I run TV commercials to this website. It's called Justin buys Bama. Okay. Uh, we spend a lot of money every month doing TV commercials for, uh, the greater Birmingham area and Tuscaloosa area. And so on that website, I have lead detector for those that do not give me their information out of the gate. The only reason they're going to that website is cause they saw my commercial

and they want to do something with their home or maybe it's a rental home. Maybe it's the home they live in, whatever. something with their home or maybe it's a rental home, maybe it's the home they live in, whatever. Why else would anyone go to Justin buys Bama? I don't think there's a person ever on in the United States of America, let alone the world, who has googled Justin buys Bama without seeing that TV commercial or maybe even without someone telling about it. So for me I want to figure out if you've landed on my website you have some level of interest to be there because it is your classic website saying we buy now we buy fast you know we buy cash no appraisals no fees no

you know classic real estate investor website. So we are getting roughly 20 to 30% of those people that just visit our website. We are getting them dropped into our CRM with their contact information because of leaddetector.io. Not only can I get their contact information, I can actually enrich the data and I can actually pay for their credit score. I can pay for the credit utilization. I can pay for the credit availability. I have access to be able to understand who is this potential client. What is the scenario? And then from there, I can keep my sales team focused on the people that we believe

to likely have the most financial pain. And when you can harness who your salespeople should be focusing on, you ultimately are gonna win the bigger war, not maybe just the battle, but the war, because your salespeople will convert more. So this goes back to the more is better, bigger is better. In this specific example I do not always agree that you need to spend more on Google, spend more on Facebook, spend more money on TV. You need to have tools like

leaddetector.io sitting on your website so that when people visit your website, they can actually be captured and not only that, spend a couple extra cents on enriching the data So we know who would perceived to be the most financially needing, if that's the right way of saying it, person, right? Who is in the most pain financially. If you're a sales team or you can focus on those people, you have a much higher chance of conversion on top of which you're getting more leads anyways. So even if you're not the best salesperson, if you do not have to pay more for these leads,

you are just simply gonna convert more deals out of a law of averages. The more homeowners you talk to, the more chances you have to get a deal. And you're not spending another $250 per lead on Google. All businesses traveling and ensuring I get my morning workouts in. Staying fresh isn't just a preference. It's a necessity.

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So when it comes down to the idea of a bigger marketing budget, depending upon your specific scenario, who you are, how much experience, how big is your team, you know, whatever, I highly encourage individuals who are doing any type of online marketing, not to necessarily spend more money, but to take a service like leaddetector.io and put it on their website. Now for some of you, you might not have a website. So there's a great website would be Rocket Sites, Rocket Sites.

They're affordable, they are very specific to what we do as real estate investors. They're there for you, they have the right message, pre-built, you don't have to do anything. You put lead detector on that Rocket Site and you have a killer combination. Now let's go back to talking about conversion. The conversion of these leads is typically what people underestimate the value of and some don't but a lot of people just

want to keep spending more right that they want to get up to 40 or 50 thousand dollars a month marketing spend but if I were to audit their CRM, I would almost guarantee you I'd find leakage in conversion ratio. And this is why I would tell you more is not always better because any good sales rep, right, in our space, they're really converting one out of every 20 leads at worst some really good one out of ten but they can't hold more than I would

say 70 to 80 leads at any time so if you look at your operation and you might be out there listening and watching this that you are the only part of your operation, you are the operation, you might realize I have too many leads, right? I'm not even being efficient in what I'm doing here and I need to focus on conversion. So then you say well how am I gonna follow up with, I'm gonna make up a number here, how am I gonna follow up with 500 leads in my CRM? Knowing that you are the only person working those leads. Well, that's where the cool technologies of today have come in, right? So like, Rocketly CRM has automation within it that nurtures the sequencing of communication with those individuals.

Now, typically that nurture can come through email, texting, or you could physically call. Now we don't do any outbound within Rocketly CRM. That's, you know, obviously all those laws have hit pretty hard, but if you need some sort of nurture sequence, leveraging AI is the way to go. Again, this is why I'm not totally in belief of more is always needed. If you use AI for the use case and it's there and built in a way that's communicating with the seller to rehash the conversation or bring them back to

the table, then you don't need more leads. You need the AI to work so you don't have to. Now this also goes to this idea and myth I wanna break of, bigger is better with your operation. Given the state of technology these days, I just, I don't believe that much anymore. And I'm not saying some operations shouldn't be large, but if you

want to be making a hundred thousand dollars a month, you don't need more than five people in your business. Five people, right? Now again, I'm talking to the transactional real estate investor here. I am NOT talking to the apartment owner. I'm talking to the transactional real estate investor. If you have one or two acquisition people, you have one or two disposition people, and yourself, you should be able to run a full-fledged $100,000 a month transactional business between wholesaling and fix and flipping.

For sure. I would even make the argument, if you do it the right way, you could take those acquisition people and turn them, not turn them in, but they, part of their job is transactional coordinating. They got to make sure all the paperwork is done right, all the paperwork is submitted to the title companies or closing lawyers.

And then I'd also make the disposition people be transactional coordinates as well. Make sure all the jobs done right, the earnest money is in, the assignment is in, the loan is done, whatever the case is done for the back end of it. But you wouldn't need more than five to get this done. I have a client, I do from time to time.

I do one-on-one consulting, right? I take on one real estate investor, one business, and I help them build out their business, right? And I have a guy still to this day in Phoenix. It is just him and he's just an executive assistant. That is it to this very day. And he does well into the six figures a month, well into it with two people.

And I'll tell you, he does not work very hard. He is choosing to do the bigger, better deals. If it makes a small dollar amount, he doesn't care. He's only looking for the big winners, okay? And because of that, he doesn't need a lot of people because he doesn't need to do a lot of deals. He doesn't need to brag about, oh, I did 30 deals this month. He doesn't need to do that.

He'd rather do one or two deals a month and make 50 grand per deal than do 20 and I can't blame them as someone who's built out an operation myself having construction management having operational management having TC management having listings in property management I mean God we have investor relationship management. I mean, I have a full-fledged business running. Some of you guys wonder why I'm bald. Austin deals, higher profits, a roadmap to financial freedom. That's exactly what we help entrepreneurs achieve at Joe Homebuyer. We provide the sales, negotiation and

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Just to be able to say you have this big business or this office or this amount of people, it's really, no one really cares. You know, I tell a lot of people, people always ask me when should I hire, when should I start hiring? And my first question, and I want you guys to hear this question, are you putting 250 grand a year in your pocket? Not in the company, in your pocket, are you actually doing that level of business? Because that's where I think you need to start. I don't think any of us as entrepreneurs

go into entrepreneurship to make less than 250 grand a year. Right? But somewhere along the lines, people want more, they wanna get bigger, they wanna have employees, they wanna do more. But more doesn't mean net profit either. This is why I want to expose this kind of myth or people talking about how like grow bigger, you know, and all this other stuff. I have so many points to just basically point out

that it's not always the case and you know, you know, one of the things that people aren't always thinking about is their bottom line. You know, there's definitely been years, especially you know, 8, 9, 10 years ago, we made a whole lot of money top line, we didn't make a whole lot of money bottom line. Right? I mean it was very cool to talk about the millions we were making. All over social media. bottom line, right? I mean, it was very cool to talk about the millions we were making all over social media. It wasn't very cool to know that I probably could have made more being a manager at a Starbucks, right?

Uh, and so we, we start a business, we start being an entrepreneur so we can buy our time back. Well, the only way you can buy our time back. Well, the only way you can buy your time back is if you're making money, right? And that's the point. So if you're listening to this, and this is maybe triggering you a little bit,

then you gotta really look at that. Because I talked to an individual just yesterday, he actually applied to work with me one-on-one. And this guy's doing really, really well, but he has a really small functional team, right? He's doing, um, he's spending a hundred grand a month and doing roughly three to four hundred grand a month, give or take on the month, and that's very high functioning team. Now I'm not suggesting all of you guys go spend a hundred grand a month, but

what I'm saying to that is he doesn't have some, you know, 18 person office. It's very functional, very, the best word I almost want to use is like, they're like snipers, right? Bigger is not better. The shotgun approach in this case, isn't better. The rifle is. They know what they're like snipers right bigger is not better the shotgun approach in this case isn't better the rifle is they know what they're looking for they know the areas they know the deals they know the profit margin spreads and he's transactional and he fix and flips and he wholesales and so I encourage you from this episode to audit what you're really wanting right I mean you guys

have heard me say this time and time again, right? The first law of success is you got to decide what you want and then who you need to be to get it. You know that to be the first law and then you got to commit to that and I guarantee all of you say I want an office with a hundred people and I'm making a hundred grand a year. No, no, no one's saying that. That's not what you want. You want to be rich. You don't want to be working as much. But the interim to get there is you do need to work a lot, right?

But then you need to work smarter. So I'm going to take a step back. I'm going to bring this conversation back to leads and conversion. You don't always need more leads. You need to convert more and you're not even capturing the ones that are going to leads and conversion. You don't always need more leads. You need to convert more. And you're not even capturing the ones that are going to your website because you're not using a company like leaddetector.io. And so this is the whole cycle of this bigger and more. All of it, like everything I'm saying at this point would tell you

and I know this to be true. In most cases, I mean most it is not better It is actually worse. You will be worse off You will make less money because you will hire more people you will have more cost you'll have operational bloat and you won't have the conversion of the leads at the pace you want and and you won't have the conversion of the leads at the pace you want and you're not gonna make as much money growing and going big and by the way this isn't even to mention about you know being able to increase profit per deal we haven't even talked about that now this doesn't have anything about being bigger but if you

focused your time, energy, and attention not on hiring and training and all that stuff, but actually increasing your margin of deal, right? Instead of averaging 10 grand, average 25 grand, you don't have to get bigger. You don't need more deals. You're making more money per deal. And that is just creating efficiencies.

And so, you know, I want you guys to realize there's a lot of technology. Not that that's unknown, but there's a lot of great technology like lead detector.io, like RocketlyCRM, like RocketSkip. There's a lot of AI. You know, and you combine that with an opportunity out there to have like AI data, which can get you, you know, the most highly motivated sellers out there. You know, REI Lead Machine is another great resource.

They have lists that have AI data working behind it and scrubbing 400 billion data points, 400 billion, and like almost half a trillion data points, finding out who's the most highest likelihood homeowner to sell. You start to combine all this technology and creating efficiencies. Bigger just ultimately will always point to not necessarily better. In our space there are a few examples that you can say

bigger is better for sure. But my experience has been stay small and you can keep it all. The grant card owns of the world, they weren't inherent, you know, big real estate moguls, but they surrounded themselves with people who are. So my point to those that do want to scale a business, there's difference between growing a business and scaling a business. Most of you should focus on just starting and growing a business. But if you do want to be the next Grant Cardone or whatever, and scale, then you need to make sure you have someone by your side. You need to have experts in the field.

Grant is not the financial expert. He is not the real estate expert. He does a very good job surrounding himself with people who are, and he doesn't even have to train those people. So he will pay them handsomely. So if you're going to do that, then you have to pay the people handsomely, again, going back to operational bloat.

If you are at that place financially, fine. My argument being is most of you probably aren't, okay? And so I'm not trying to be negative. I'm just trying to say be smarter, right? Why don't you just go get rich, like real rich, and then you can go buy your own apartments, right? And so I want you guys to focus on that first. And then it comes down to operational efficiencies,

heavily leveraging technology and AI in today's world. I still believe you guys need to have a human component of the sales. You need to be negotiating, you need to be underwriting. I don't suggest to leave up analysis to technology. I know there are people and companies that are trying to make that work. I don't like it.

I do believe you as the owner operator should be operating the business a whole lot longer than you think. I think there's a lot of I know there's a lot of operators out there. They just get a little worn out. They're tired of being a solopreneur and they start hiring out the acquisition role or they start hiring out the role of dispositions or whatever. Those are the two roles that make you the most money specifically in the whole selling space Why are you gonna use those two roles as the first place to hire?

It doesn't make any sense So you want to really think through some of these now? I have a great group if you guys are newer. I'm not sure if you guys are newer yet reilive.co my joke is I couldn't afford the M reilive.co and we have calls every day two three hours a day Monday through Friday and Saturdays for the premium side if you are new and you're trying to figure out how to get a deal you don't need a coach to sell you on 5, 10, 15, 20, 25, $30,000 of coaching.

You need someone who's willing to do the deals with you and get in the trenches with you. That is what REILive.co is. That is what it is about. Great community of like-minded aspiring investors trying to break in and grow a real estate investing business. And I am right there by your side holding your hand, shoulder to shoulder doing it with you and sharing in the deal 50-50. So if that's something that you're on the newer side

of this and that appeals to you, go check out reilive.co. If this was helpful and you think you know people that need to utilize some of these technologies, some of these services, the things I've mentioned as a as kind of a rewind or reminder I guess is the best way of saying it. I talked about lead detector.io Which is a great software that sits on a website and captures non opt-in leads lead detector to IO

Rocketly CRM that comes with AI nurture sequences. So if you're bringing in leads, you don't have to be the one responsible for Nurturing all the relationships the AI, so your conversion rate can go higher. You have, what else did we talk about? REI Lead Machine. REI Lead Machine, great list pulling and comping software that you can use to pull data that is the highest likelihood of a homeowner looking or interested in selling. Our AI lead machine has AI data built into it. And what else did we talk about? There's just incredible software out there right now.

Rocket sites, if you don't have a website, go to rocket sites. It's already pre-built for us investors. a website, go to rocket sites. It's already pre-built for us investors. Make sure you go to rocket sites. And then lastly, if you're a newer, you're struggling, you've been out there, you've been trying, you just need someone to do it with you and you want to do a 50-50 deal split, go to REILive.co. REILive.co. All right, y'all, if that helps and you think someone needs to hear some of this stuff, make sure you share this with at least two of your friends.

We will see you on another episode of the Science of Flipping. And make sure all people know about the podcast. Also as a reminder, there is a book I wrote it has become a best-selling book Flipping to Wealth. Flipping to Wealth is found on Amazon. It is out there for you guys please check it out it will help greatly it goes over my entire life story of the last 18 years in building this real estate business so glad this helped share it with two of your friends we'll see you

on the next episode peace