Today’s extraordinary guest is a mentor, a best friend, and a brother—Todd Toback. Todd has been helping some of the tribe members triple their assignment fees. He also helped Brent Daniels and his team increase their average profit per deal from $13,700 to $24,000. Yes, that’s a whopping $10,000 plus difference!
In today’s episode, Todd shared secrets, tips, and techniques that can help your wholesaling business grow exponentially. So many actionable tips you can readily implement so you can take your wholesaling business to greater heights!
Todd has been investing in real estate since 2002. Back then, he was unhappy with his job in the corporate world. While feeling dejected, he found his first real estate book—Multiple Streams of Income by Robert G. Allen.
The book taught him how to find out-of-state owners in his neighborhood. He sent 24 letters, closed a single deal, and earned $8,000 from his efforts. However, he only decided to go into wholesaling full-time 2 years after closing his first deal. And he has never looked back!
- We adjust to what we believe we are. It is important to change your mind-set to what you think you deserve.
- Do not let your market restrict your profit. Do not use your market as an excuse.
- When meeting sellers, always be a truth teller and a truth seeker. The more of a truth teller you are, the more people will trust you.
- Build up your buyers list.
- Do not sell based on what you want to make.
- Create competition among your buyers.
- Do not rush through the selling process.
- The revenue will fuel your business and allow you to attract good people.
Todd is one of the best in the business. There’s no denying he knows how to find deals, create deals, and create larger deals! Give his tips a try and you just might be able to duplicate his success!
- Multiple Streams of Income by Robert G. Allen
- Psycho-Cybernetics by Maxwell Maltz
- The Compound Effect by Darren Hardy
- No Limits Real Estate Investing Podcast
- Bigger Deals Sales Training
If you are Ready to Explode Your Wholesaling Business, Click here to Book a Free Strategy Session with me right now!
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Tom: Hey guys. Welcome to another awesome episode of Wholesaling Inc. Bam. I am so excited to be with you hear today. We have an extraordinary guest. I am talking about the best of the best of the best. It is so exciting. You guys are going to flip out. Today with me, I have my mentor, the guy who brought me into the business, the guy who taught me everything that I know about wholesaling and we are going to pick his brain, we are going to put him in the hot seat. It is going to be super exciting. And of course, I am talking about my mentor, my best friend, and my brother, Todd Toback. If anybody who’s wondering about the term “brother” it’s because we’re step-brothers. We have different last names. He is a rock star. He’s been my mentor from day one. He’s still my mentor today. He’s still the guy I go to.
And what we are going to be specifically talking about today… Guys, I am so excited. This is a game changer. What we’re going to be speaking about today is Todd is going to give you the one secret that is going to triple your wholesaling business right now. I want to say that again for anybody who missed it. Todd is going to give you the one tip, the one strategy, the secret. It’s not a new marketing channel. And it’s not some silly thing that you’re going to implement. This is the nuts and bolts. We’re going to get down to brass tacks, how you’re going to triple your wholesaling business right away with one little trick. So Todd, I’m excited to have you. Can you hear me? Are you there?
Todd: I’m right here Tom. I’m ready to rock.
Tom: Awesome. Honored to have you on the show. Honored to have you as a guest. Thank you for doing this. This is super exciting. So Todd before we get started, can you just go ahead and tell the audience a little bit more about who you are, what you do, and what that looks like?
Todd: Sure. For those of you that don’t know me, my name is Todd Toback and I’ve been investing in real estate since 2002. Like many of you, I was reading books, attending seminars, and I was unhappy with my job in the corporate world. And if you haven’t heard the story before, one day I was dejected about not getting a raise and I had a little scuffle with my boss. Verbal scuffle. And driving on the 101 in California, I was a little bit depressed, looking for something. Saw a Barnes and Noble bookstore on the right hand side, I swung across three lanes of traffic, pulled off the exit into the bookstore, and picked up one of my first books on real estate. I’m looking at it right now. Called Multiple Streams of Income.
Todd: One of the things this book taught me how to do was find out of state owners in my neighborhood, who lived in my town, and they were out of the area. And I sent out 24 letters. I didn’t know any better than 24 letters usually doesn’t yield a deal. I prayed over those letters and I got one phone call back. I got a motivated seller. I locked it up. I had no idea what I was doing, just like you didn’t have any idea what you were doing on your first deal Tom.
Tom: Right. Absolutely.
Todd: I was shaking like a leaf and locked it up and turned around and sold it about 30 days later for $80,000. I was pretty excited about that. That was my first deal. Literally, I said hey I’d like every deal to be this size.
Tom: That’s awesome. Right. That’s awesome.
Todd: I wish I could say that the rest was history. I got a little lazy, complacent, I stayed at my job for a couple years after that and lost a little bit of my hunger. But eventually I decided to make the full-time jump and once I made the full-time jump into my current business, the rest is history. So our business exclusively finds discounted property that we buy and resell. And it’s the business that I love today. So I’d like to share with your audience today how I view the business, how I look at profits, how we use the tools that we’re going to talk about today to exponentially increase what we do inside our business, and how we can do that for your business.
Tom: Let’s talk about that. So you guys know, this is the no fluff, no BS zone. We are going to not waste any of your time. We are going to dive right into the details right now. I will tell you that I… this is specifically, we are going to talk about tripling your business by increasing your deal size. Let’s talk about bigger deals. This is what we’re going to be addressing today. We want to do more deals and we want to do bigger, bigger, bigger, bigger deals. This is something that Todd has helped me with. Recently he’s been helping some of our tribe members with this.
He just recently had a call with Brent Daniel, who has had significant deal growth. You guys know Brent Daniels from this podcast. He’s a rockstar for TTP. We are going to talk about how he helped him and Todd I want you to deep dive into those numbers. But I’m going to ask you point by point how you did that because Brent kind of gave me a little bit of an intro to this right before this call with you. First of all, tell me a little bit about what did you do for Brent, what were some of… I know you guys had a few conversations then immediately he had some deal size increase. What were his average deals before and after and what did that look like?
Todd: Sure. So Tom if it’s okay, I guess I’d like to get into… because I’m looking at actually Brent’s text messages. And if you want, if it’s okay with Brent I’ll e-mail them to you, maybe you can post them on the website if that’s okay with-
Tom: Yes. Absolutely. For sure.
Todd: But I had a conversation with Brent because Brent’s been helping us with TTP, and I wanted to give back to Brent. He’s such a giver. So Brent, if you are listening to this, thank you. I wanted to give back to Brent any way I could. He says, “Since you’ve talked to my team we’re averaging 24K a deal. It’s like magic… Man.”
Tom: That’s awesome.
Todd: So awesome. That was… Let’s see here. That was just on October 23, he said that his average deal size- This was like a week after we spoke. – increased from $13,700 to $15,500. That was the last two weeks. And then he e-mailed me about a month later and he says, “Since you’ve talked to my team we’re averaging 24K a deal.” So that’s an extra $10,000 a deal for Brent. I was pretty excited for that because Brent’s already a good sales guy. So man, I was really really really excited to hear that.
Tom: So you guys, I want to just recap on what just happened there because Todd is the only guy who speaks as fast as I do. So let me just go over this. Brent Daniels average deal size, his profit per deal, was $13,700 and is now, only a few weeks after the conversation with Todd, is now $24,000. Raising his average deal $10,000 on average per deal. You guys, that is insane when there are some wholesalers out there who are doing per deal only $5,000 or $6,000 or $7,000. I’ve had similar growth and I know there’s other tribe members who are killing it with these methods. So let’s deep dive this Todd. Let’s get right into it.
I just had a call with Brent. I said Brent, talk to me. What are some of the key takeaways from Todd? He told me a lot of different things. First thing I want to talk about is, I want to ask you about what he said. He said Tom, right out of the gate, number one, first thing was certainty and likability. He didn’t expand on that, so I have no idea what he was referring to. So tell me a little bit more about certainty and likability. What did you teach him? What does that look like? What is he talking about?
Todd: Sure. So Tom, I wrote down actually five points that I’d like to address today. And this is actually the first one, okay. The first thing that we have to get over as wholesalers or business people or entrepreneurs… I don’t care if you own a janitorial company or a wholesaling company or you’re selling hot dogs on the side of the street, you’ve got to get past two things. Number one is that you deserve this. You deserve this. Let me tell you a story. I used to race triathlons in my late twenties. Actually, I’m starting to race again. But one of the things… I was a swimmer in college and one of the things that used to happen to me is a theory that you’ll read about in the book Psycho-Cybernetics, and that is that we adjust, our bodies adjust, and what we say and do adjusts, to what we believe we are. So if you believe that you only deserve $5,000 for flipping a contract or doing a double closing, you are going to go in there and negotiate with a seller or a buyer to earn, guess what?
Tom: Right. And not less.
Todd: Let me tell you what used to happen to me. Okay, and I’m almost embarrassed to admit this. Sometimes when I used to race, because when I moved out to California from New York and Michigan, the competition was much stronger. So when I used to do the swim… I was a college swimmer. I used to swim and get out to a huge lead. Like the top two or three. And what I used to do is sometimes I used to see how far I was ahead and I didn’t realize this is what I was doing. I’m like oh my gosh, I can’t be this far ahead. I can’t be this good. And guess what I used to do?
Tom: Slow down.
Todd: I used to slow down so the pack could catch up. How ridiculous is that? But we all do it. So you have to take a mental inventory and say wow, what do I believe I deserve, do I deserve to make $5000, $10000, $15000, $20000, do I deserve to make $100000. So you have to change your mindset to what you think you deserve. This is a constant battle. It’s a muscle that you have to build. For our team, what we try to do is we try to make a minimum of $50,000 on every single deal that we do.
Tom: Wow, can you just say that again for everybody who wasn’t listening?
Todd: We try to make a minimum of $50,000 on every deal that we do. I know of a real estate guy up in San Francisco, his name is Jason Boozie, and I think this guy tries to do $100,000 or $200,000 every single deals that he does. And guess what he does?
Tom: He does exactly that.
Todd: He does exactly that. Right. It’s funny, that $50,000 the other day, I was like wait a minute, I’m talking about this, why am I only trying to make $50,000. By the way, we’ve made more than $50,000 on deals. We’ve made actually double that on deals. So I’m excited to share some of these things. So number one, you have to believe that you deserve this. You’ve got to get rid of all the garbage in your head that says hey, I can’t make this amount of money just for flipping a contract or just for reselling it because the seller’s not going to like me or the buyer’s not going to like me or the escrow agent is going to get angry or there must be something wrong with this if I’m making so much money. No. No. No. No. No. No. We’ve got to get our head in the right space. You’ve got to know that you’ve got to deserve this. The value that you bring to the marketplace is the ability to negotiate a great deal and solve a massive problem for the seller. So I know we spent a lot of time on that, but that is so key.
The second thing- And Tom, I need a deal from your audience. If you’re listening to this, for me to move on, I need a mental agreement from your audience. Is it okay if I ask that?
Tom: Let’s do it.
Todd: Okay. Now you’re not allowed to say this. You are not allowed to say, “But Todd is in XYZ market.” That is total BS. Now, can the size of the market determine your assignment fees? Well yes, but only to some extent. So for example if a house’s top value is $100,000 well okay maybe you can’t make more than $100,000. But my point here is this, do not let your market restrict your profits.
Let me tell you about a recent deal that we did. I’m in San Diego. We only do about 20% of our deals in San Diego, but we recently bought a house for $10,000 that we resold for $80,000. Now this house is in the armpit of California and I guarantee you that this part of California is not as nice as where you live. And I don’t mean Tommy. I mean whoever is listening to this. This is not a desirable area. People think that all of California is super nice and I don’t even want to say the name of the city because I don’t want to offend anyone who lives there. But we bought the deal for $10,000 and we sold it for $80,000. So if you’re listening to this, don’t use your market as an excuse because my single goal for this episode is to triple your profit size in the current market that you’re currently working. We don’t need to add a new marketing channel, we don’t need to switch markets, we don’t need to change our postcard, we don’t need to run out and get a new office. We’re going to use some techniques that we’re going to talk about here on this podcast episode to just triple what you’re already doing. Is that fair enough?
Tom: Fair enough. And I will say that for myself personally, and you know this brother, is that it does work for me. It worked for me in my market in Port St. Lucie, which has been awesome. Which my assignment fees have more than doubled. So go ahead. You’ve got the show. I’m listening to you.
Todd: We’ve got to bump that up now. We’ve already talked about that offline.
Tom: I know, I know.
Todd: But the biggest thing is don’t skip over number one because number one was the first step. We’ve got to get our head straight. You got to know that you deserve this. And then you know that it’s not your market. It’s the internal skills that we’re going to develop. And part of that is the mental. So I’ve got a book recommendation, and that’s Psycho-Cybernetics. I don’t know if you can put a link to that or whatever, but that’s a phenomenal book and that’s a great place to start.
Tom: Okay so yeah. Todd you’re going to go ahead and just go through these. I’ve got other notes here from Brent, but it sounds like you have five that you want to go through. So let’s just go through them.
Todd: Yeah. So the number two… By the way, all of these things work together to exponentially increase your profit. So Tom, is it okay if I ask you to do some of the math here?
Tom: Yeah, let me grab a calculator. Hold on for one second. Let me see if I-
Todd: We don’t need a calculator. Just write it down on a white board and it’s simple math, but it’s something that we’re going to check [inaudible 00:15:05].
Tom: Let’s do it. Let’s do it.
Todd: Okay. So the first part is what we’re going to do when we meet with sellers. We’re going to meet with sellers. We’re going to use some of the techniques that I talk about actually in my No Limits selling system. But when we’re meeting with sellers or we’re talking with sellers we want to negotiate bigger profits. Duh. Right. But the biggest thing about that is this is the first key. So one of the things that I’ll talk about, and it’s a little bit of a teaser, is always be a truth teller and a truth seeker. A truth teller and a truth seeker. So a lot of people are like well Todd, I tell the truth, I’m not a liar. No. Let me tell you what a truth teller and a truth seeker is. When you’re a truth teller and you’re bluntly honest, what it does is it gives you the ultimate negotiating power. The ultimate negotiating power. When you’re bluntly honest it takes away all the fear out of losing the deal.
So some people like to go around the house and point out all the things that are wrong with the house, and they like to exaggerate and they like to say well your window’s over here and your roof is over here and your flooring is over here and it’s going to cost me $50000, $60000, $70000 or $150000 or a billion dollars to fix the place. There’s nothing wrong with that. If you’ve got a really analytical seller on the other side, they may want you to talk about those numbers. But in reality, think about this, if you know you’re going to just wholesale this house, are you being bluntly honest talking about all the repairs that you’re going to have to make on this property?
Tom: Absolutely not.
Todd: No. Right. You’re kind of like stretching the truth and it’s kind of like making you unsure and uncertain and sometimes you’re just a little bit uncomfortable in your own skin. So even if you’re not lying, you’re not being completely honest, it doesn’t free you to be who you want to be. So one of the things that I’ll do with a seller… So for example, we had an appointment with a seller last Friday and the seller was taking the… Long story short, I haven’t been out to a house in about three years, but through a weird set of circumstances I was actually at the property. The seller says to us, he starts taking me around, and he was not analytical, and he starts saying let’s take a look at this, what needs repairs in the kitchens, in the bathrooms. He’s got a pad and he’s going over the calculator about how much it’s going to cost me to repair this property and fix it. So he knew the ARV. He knew all the comps. He had everything there. He had like a whole spreadsheet. He started asking me… He goes, “Well how much is it going to cost you to fix it?” And what do you think I said?
Tom: I’m not going to fix it. I’m probably just going to resell it.
Todd: I said sir, can we just be really frank with each other. And he’s like sure. I said sir, I offer speed and convenience and I’m probably, most likely going to buy this house and immediately resell it without touching it. And he sat there. We sat there for probably like 15 seconds. It probably felt like an eternity to him. He’s like oh okay, I appreciate that. And I go, our company, we specialize in speed and convenience and if you’re willing to trade some of your equity for that speed and convenience, I’d love to be able to do business. But if I can’t offer you value, then I don’t want to do business. And all of the sudden, like the calculator went away, the pad went away, the six or seven realtor cards that I saw on the desk went away and went in the drawer. And it was like ah.
Tom: Right. And that was a sigh of relief guys. I just want everybody, just because Todd is going through pure liquid gold right now so I want everyone really to rewind this about a minute and listen to what Todd is saying and really understand that this whole idea of just being who you are and more importantly really, just not pretending to be someone you’re not, being a truth teller, being a truth seeker, it’s so key you guys. Really absorb this information. It will make you more money, 100%. So go ahead Todd. I didn’t want to interrupt, but I just wanted-
Todd: I’m not going to argue about the guy’s value as-is. He knew the value of the property so I’m not trying to convince him otherwise. I mean, what that’s going to do is that’s going to breed mistrust. So the more blunt you are, the more of a truth teller you are, the more this person’s going to trust you and the more that you are going to be certain, the more they’re going to be certain. So I know that Brent talked about certainty. Man, this gives you certainty. And once you’re blunt like that the sellers are so caught off guard. They’re like oh my gosh. So they immediately trust you 100%. They’re not like… A lot of sellers think it’s about price and they tell you it’s about price. But if it was about price why did they even call you? It’s not about the price because if it was about the price, they would have been in that living room with a real estate agent.
Tom: I love it. Brother. Now I know why I’m a good wholesaler, because you were my mentor. I mean, this is so key.
Todd: They may even tell themselves. So now that you give them certainty it gives them permission to say I want to work with this guy, and they tell him that. Right. And now price with your competitors many times, not all the time, but many times it’s going to complete a line… Not alienate. Annihilate because they trust you more than your competitor, or they just stop shopping all together. So that’s the most important thing.
Okay now, that’s the first part. That’s being a truth teller. By the way, this is only part of this. I mean, we’re like rolling in here. Little bit longer than I thought. But the other part of that is being a truth seeker. Okay, a truth seeker. So truth teller, truth seeker. You’re going to tell the truth but you’re also going to demand the truth. So when a seller speaks or they’re vague or they say they’ve got to think about it or they give me an answer…
Many wholesalers or real estate people, what they do is they gloss over the answer. So if they say I want to think about it or if they give a response to a question like well it’s just time to sell, when they ask why they’re selling or they say they’re moving out of state and that’s why they’re selling, well they’re not telling the entire story. So one of the things I’ll ask for a seller is if they say they’ve got to think about it, I’ll just ask the question. I’ll say “Sir, what I’m hearing in your voice is a little uncertainty. I’m hearing something that’s making you uncomfortable of what we spoke about. Can we just put everything out on the table and just tell me what’s going in your mind that you’re not saying to me?” Ask that question.
Tell me what you’re thinking that you’re not saying to me. That’s like the most powerful questions. Or “Sir, what keeps you up at night regarding this property?” I got that one from one of my coworkers when I was working at Pfizer selling Viagra. His name was James and he used to always the doctors “What keeps you up at night?”. So you’ll ask that from a seller. Or sometimes I’ll ask a seller or I’ll train our Acquisitions Specialists, I’ll say “Who else are you speaking to? What are their offers? Where are you in your decision making process? How do I compare with other people that you’re speaking to? Let me ask you, what does it take to get a deal done today? We’ve spoken six time, why haven’t we done business?”. All these questions. Now Tommy, let me ask you this, why do most people not ask those questions?
Tom: Fear. Fear of the answer and fear of losing the deal.
Todd: They’re scared of the answer.
Tom: Right. Right.
Todd: Here’s the crazy thing is that they’re scared that if the seller verbalizes that then they’re going to lose the deal, like they’re going to trick the seller. But the truth is if the seller’s thinking it, you’re still going to lose the deal. The only way that you’re going to be able to get the deal is to get the seller to say it so that you can at least handle the objection.
Tom: Right. You guys, this is so key. I hope everyone is really really really paying attention because Todd is just dropping bombs right now. I’m telling you guys this is the reason… The is the key. Go ahead brother. I don’t want to-
Todd: Right. So you can’t be scared of the answer. What this does… I’m going to come back to this. So this is step two. Now what this does is this enables you to be more confident and be honest with sellers, but really it just takes price off the table. Now why am I saying this? You’re like Todd, give me the goods. You’re just kind of talking about theory. No, because you’ve got to get your head straight before you speak to a seller.
So now that you’re kind of disarming the seller with a lot of objections or comparing you with other wholesalers or why they deserve more or the beautiful kitchen, what I do number one is I will get a seller to always name the price first if at all possible. A lot of people will say well I asked the seller and they wouldn’t give it to me. Now that happens sometimes, but in my business it only happens 20% of the time. The other 80% were able to get it out. Most wholesalers, they give up after the first try. They ask them what they want, they say well you called me. Well the next thing that you need to do is you need to ask at least, at least five times in different ways, what the seller will take for the property. How many times?
Tom: Five times.
Todd: Five times. Now inevitably when I hire somebody new or I work with somebody and I tell them five times, how many times do you think they ask?
Tom: One, if that.
Todd: Maybe. They’ll ask in a different way and now they’ll start asking for two, and then maybe they’ll ask a third way. What do you think happens when they step away from the training for a little bit?
Tom: Their deal flow goes down.
Todd: Well their deal flow goes away, but they go back to one. Why? Because they’re uncomfortable asking the seller and really pressing them on the issues.
Tom: Absolutely agree. Yeah.
Todd: Right. So it all goes back to fear. So we got to blast through fear. Now let me tell you something. You can not kill a motivated seller. We talked about this. You can’t kill a motivated seller. Can’t do it. They’re like zombies. Like zombies. The only way you can kill a motivated seller A- is by lying to them or B- trying to be sleazy. And sure can you miss out on a deal, their competition? Yes, but it was probably a crappy deal and you were probably only going to make $5000 and if you’ve been in this business for any length of time you know that the deals that you make $5000-$7000 on take forever and time, energy, and resources. Try making $2000 on a deal. It’s like climbing Mount Everest.
Tom: I totally agree. Those are the most difficult deals.
Todd: Right. The way to really do this is get the seller to mention a number. Now the other part of that is yes it is true that sometimes you’re going to deal with a shrewd negotiator who is holding their cards close to their chest. Now some people say Todd, if a seller won’t give a number then they are not motivated anyway. That could not be furthest from the truth. Some of these people they know, well I’m not going to mention a number first. And sometimes these are the most motivated sellers. So if you’ve got one of those sellers on the line what we do is we soft pass everybody who won’t give us a number. A soft pass, what you know is it’s a non-threatening way to make somebody an offer.
Let’s assume that I know I could pay $150,000 for this house and make $10,000 and I know that I want to make $50,000 I’ll throw out an offer, I’ll train our Acquisition Specialist to throw out an offer. I’ll say “Look Mr. Seller, I don’t know. What if I could give you $60,000 for the place?” when I know I can pay $150,000. And if you’re not… One of my first mentors, Peter Acconti and David Fickle, they taught me this. If you’re not embarrassed by your offer, if you’re not scared you’re going to get hung up on, if you’re like oh my gosh this sounds ridiculous, your offer isn’t low enough. It’s not low enough. So what they’ll do is sometimes they’ll take it and you would be surprised. That’s when your six figure profit comes in. Sometimes they’ll take it. Other times though, now the negotiation ensues. So if you know that you could pay $150,000 and you say $60,000 well if you ended up at $100,000 man the seller is ecstatic because they’re the type of person that would not give a number, needed to negotiate. They needed to negotiate to feel good about the deal. So now you negotiate and you end up at where you needed to be.
So this goes back to number one. It always goes back to number one. When you’re talking to sellers you’ve got to be able to have that strong confidence, you got to have that mental barriers and eliminate them, and now negotiate like you deserve it. So the seller mentioning a number, that’s obviously only one part of it, and I think Tom, we’re kind of… We’re already at 32-
Tom: We’re already… Yeah, so here’s what I want to say-
Todd: Let me move on to the next part, okay? There’s four of the things that you can do with sellers, which I’m not going to get into today. But let me talk about the buyers. Now Tommy, do me a favor. Remember I talked about the math. Under sellers, what I want you to do is I want you to write $10,000 next to sellers. We’re going to pretend like we’re going to negotiate with sellers and because of that we’re going to add $10,000 on our spread when we negotiate with sellers.
Tom: Got it.
Todd: Okay and that’s usually what people think about. Okay, I’m just going to buy deeper. So that’s important. Now the next thing is buyers. Buyers, buyers, buyers, and Tommy we’ve had so many conversations about this, right?
Tom: Probably a thousand at least.
Todd: CBE. A CBE. I don’t know if you came up with that term or I did, but what is it Tom?
Tom: Cash Buyer Employee, and that was one of the rare Tom Krol originals.
Todd: If you wanted a job and wanted work from somebody, you should have stayed where you’re at. I know this because I used to be one until one day you break out of this and you go back to step number one regarding your mental barrier. Tom, where does it all come back to?
Tom: Your state of mind.
Todd: Step number one.
Todd: So the best thing that you can do is build up your buyers list. Now this is only the first part of this. But you’ve got to build up your buyers list and build it up and build it up and build it up and build it up so that you have many options when you sell a property. So what’s going to happen when you do what I tell you you’re going to do, you’re going to immediately increase your assignment fees by $10,000 to $20,000 immediately. If you just did this and didn’t want to sell, you’d increase your assignment fees $10,000 to $20,000.
So the next thing that I’m going to recommend is A- start stretching the envelope from what you’re asking for your properties. Do not sell based on what you want to make. Let me say this. You want to push to at least what you want to make. But sometimes you can make much more. Does that make sense?
Todd: Okay. So you should have done your math right on the front end. On the back end you want to envision what you want to make but if the market can take it higher than that, let’s do it. Let’s do it. You’ve got to push. You’ve got to push and grind because the hard work was with the sellers. So now you’ve got this, what you want to do is you want to create competition among your buyers. Never send out a property to one person. The reason why you do this, it turns into a unhealthy relationship where you feel like you owe something to that cash buyer because you sold things three and four and five times. Imagine walking into a store, like a 7-Eleven and asking the guy at the front “Hey, I bought three candy bars from you, on this fourth one you really owe me a discount.” Imagine doing that. And what is the guy at the counter going to say?
Tom: Absolutely not.
Todd: Absolutely not. So what you want to do is create a competition. Now not everyone’s going to agree with me. But what I like to do is I like to create a competitive bidding system with my buyers. So I like to say highest and best offer, and regardless, I know Tommy has some very specific ways that you like to word things on the way that you send your properties out. So Tommy markets the contract and not the property. So you can have people bid on the amount they’re going to buy the contract from you. I don’t want to get into all the semantics of that. But basically, no matter what you do, you want to set up your buyers in competition with each other so that you get the most out of this contract. Period.
Tom: Todd, I want to just… So let me just review this. So you have on the front end, you’re basically, there are tactics and strategies and mindsets for getting the property under contract for as low as humanly possible and now we’re really talking about guys, on the buyer side also increasing that contract by having a lot of buyers. And I will tell you guys for sure that the freshest buyers list, the buyers list that is big and bad and includes everybody in town, it’s usually the people who are going to pay the most. Number one, they look and act and smell and taste and touch mostly like the motivated sellers, but additionally it’s the fresh list. So the guys in town who are doing the biggest deals, the most deals, they have the freshest list, they’re continually adding cash buyers to that list all the time. So Todd’s just on the back end of this thing now. But I know Todd, just to get back to the sellers for a minute, how many different strategies do you implement for the front end in order to get those deals as low as possible?
Todd: So that’s five. But we only had time for one today. And I know we [inaudible 00:33:14] here but I really want to get into the buyers. The reason for the buyers is, going back to this… The other thing I’m going to talk about too, there’s a term, and it says haste makes waste. Haste makes waste and I can tell you the time that I lost out on a million dollars because I sold the property too quickly.
Tom: Got it. Wow. Okay.
Todd: I had a property one time, I had it on a contract, it was residential, it was a big lot, and I knew that actually had some commercial possibilities. I’m embarrassed to even say this on your podcast. And I was in such a rush to sell it, I sold it to one of my first buyers. Long story short, I’m scared to drive by because of the apartment building that I might see there. Okay. That wasn’t there before. So I have not driven by it. The person bought that to develop it and I could have gotten a lot more for that property. So what you want to do is when you sell, in your selling process, do not rush through the selling process.
Tom: Well yeah. One thing I know, you taught me early on was don’t adopt the sellers anxiety about selling the property quickly.
Todd: Yes. So if your normal turnaround is three days, I would extend that to five, six days minimum because sometimes somebody offers, people who are the most analytical will pay the most. So just wait. We just did a deal and we thought that we were going to make $35,000 on it, we just waited another 24 hours and we made sure the phones got quiet on it, and boom, someone came in and paid $13,000 more. Now we’re going to do that math. So Tommy do me a favor and I want you to add another $15,000. Actually, let’s be conservative. Remember how we’re doing the math here? Add another $10,000 on the buyers.
Tom: Got it. Okay. Got it. So we’re $20,000 total.
Todd: We’re at $20,000 total.
Todd: Okay. Now one of things that I’m going to talk about here is four, and this is being more efficient. You’re going to be more efficient. A lot of times people spend time with the wrong people who have no motivation. It’s really really important to learn how to have a good ear and to ask the right questions and to learn how to work with sellers to make sure that you are spending time with the right people. Now there’s some things that we do, it’s called a stealth mismatch, which enables you to drag out the real objections from a seller. What it enables you to do is decide whether you’ve got a contender or a pretender. I don’t care which one it is because at least I know the truth. So I’m going to spend my time with the contenders, and we want to eliminate the pretenders as fast as possible so that you can spend your time and be more efficient.
So a lot of times you talk to a seller or newbie and they get excited and they’re like I’m going to do this and I’m going to ask these questions and I’m going to hit them between the eyes with honesty and they’ll say well you’re not motivated or are you motivated or you sound like you really really need to sell this house. We’ve got to add a different kind of finesse with this. Something that we call a stealth mismatch where we’ll say hey look, it doesn’t sound like we’re a fit and I understand that. It sounds like you probably need to list with a real estate agent, fix some things up, and get top market dollar for your property. People will respond to that in different ways. If they say “Yeah, that’s exactly what I say.” well boom, now I know I can eliminate that person.
Tom: Absolutely. Got it.
Todd: But then there’s the person who says “Well, actually that’s why I called you.” and now the truth comes out.
Tom: Right. Right.
Todd: The truth will set you free. And so now you can be really really really efficient. So we use those stealth mismatches to get off the phone quickly because when you’ve got a motivated seller on the line, you want to spend time with that person. Absolutely. You don’t want to rush that. But you want to get off the phone as fast as possible with people who are not interested in doing business with you. So being more efficient, training your employees to be more efficient, I’m telling you this right now, this is going to give you at least, at least one more deal a month. So Tommy, what I’d like you do is I want you to write a one next to being more efficient.
Tom: Got it.
Todd: Okay, one more deal. Now this last one is very very very important. We are in the game of inches. It’s a game of inches. You spend $10,000 on a marketing campaign and you only make $20,000 guess what’s going to happen? You’re going out of business. You’re going out of business. Okay. I’m sorry. That’s just the truth. What happens is… This is a necessity. If you’re struggling and saying I’m not getting any return on direct mail, this is it. So where I’m going with this is eliminating fatigue. Eliminating fatigue. Why you need to eliminate fatigue. Because you need to learn to love to sell. You need to learn how to teach your people to love to sell and be on the phone. So when you do this you will reduce turnover in your people. If you’ve got to close a deal yourself or you want to do a deal yourself, you will get on the phone when the leads come in.
Now let me ask you a question for all these newbies on the line, and I can tell you that it’s happened to us in our organization. What happens when you are talking to unmotivated people all day and it’s time to make phone calls the next day?
Todd: What do you do? So what is the symptom of burnout?
Tom: They will not make the calls or they’ll call them late.
Todd: Oh man. Okay now, if you’re in the car listening to this or you’re listening to the podcast, I want you to scream “guilty.” Guilty as charged. If you’re an Acquisitions Specialist listening to this, guilty. And that’s okay because the first… By the way, guilty. The first path to recovery is acceptance. And so if you’ve ever gotten on the phone and you talked to a seller and they said “hey, I just sold this property to one of your competitors.” or “I just sold it.” Man, the feeling, that pit in your stomach. It’s disgusting. And if you’re a business owner, by the way, and you have Acquisitions Specialists, don’t worry. You’re like, that doesn’t happen to me. I promise you, it does happen to you. Your Acquisitions Specialist probably didn’t tell you because they didn’t want to get fired.
Tom: Absolutely 100%.
Todd: So you’ve got to eliminate fatigue and the way that you eliminate fatigue is by spending time with people who want to do business with us. So I guarantee you that if you eliminate fatigue and you learn how to love to speak with sellers by people who are motivated and eliminate those who are not, you are going to do at least, at least one more deal a month. At least.
Tom: Let me just put this out here guys. Todd is my original mentor and he is the best in the business. There is no question. He is specifically really good at making bigger deals. And he’s getting more deals, bigger deals, increasing your efficiency, and training you in sales and negotiating on how to make bigger deals, how to get your Acquisition Managers to do more deals, how to get them to do deals without you, how to get larger assignments. Because that’s what it takes. If your assignments are getting smaller or if they’re staying small, you are going to be out of business. So I want to- Todd, is it okay if I talk about the app here to find out more about that?
Todd: Sure, go ahead.
Tom: Yeah, so here’s the deal guys. What I want you to do is if you are interested in working with Todd on this and doing everything we just talked about-
Todd: Wait Tom, actually before you get into that… Okay actually, why don’t you talk about the app and then we’re going to take a quick break and then go over that math really quick and then we can go back to that app again.
Tom: Yeah, because that’s really what it comes down to guys. I want to show you what that looks like, as if you can just do a few more deals and increase the size of your deals, you are talking about a business that runs without you, a business that’s exploding without you. So that is the key. So here is the deal, head on over to www.wholesalinginc.com. That’s wholesaling I-N-C.com/biggerdeals. That’s wholesalinginc.com/bigger deals. Find out more about Todd Toback, who he is, what he does. This guy is the best. There is no one better. He understands the dynamics of a deal. He understands what it means to be a truth teller and a truth seeker in a deal, to be blunt, to get passed on the deals that are no good, and to make the good deals better, to make the good deals bigger. That is what creates your business.
If you want… Everyone talks about scaling and growth and automation and delegating and systems. All of that means nothing if you’re doing a handful of $2000 or $5000 deals a month. If you want to explode your business, check out www.whoesalinginc.com/biggerdeals. Go to bigger deals and Todd is going to have some information there for you. But it is going to be absolutely 100% worth your while. Todd mentors me on a daily basis. Not only did he get me to do my deals, which is exactly what we teach at Wholesaling Inc, but additionally when my deals were $5000 and $6000, he is the guy who more than doubled that for me and now we’re working on tripling it, getting me out of my comfort zone. So if you want to get out of your comfort zone, explode your business… And Todd, let’s talk about the math for a second, about exploding it. So let’s go over that math. What does that look like?
Todd: Yeah, so let’s pretend you’re a wholesaler right now in your market and I’m going to just talk about your typical, struggling wholesaler if that’s okay. So let’s pretend like Mister struggling wholesaler, what you do is you spend $5000 a month in direct mail. Okay?
Tom: Got it.
Todd: $5000 in direct mail and because of kind of where you head is at and I don’t know why most wholesalers gravitate to this number, but the majority of wholesalers love $5000-$10000 assignments. That’s the mental barrier that they’re stuck in. So let’s go back to this really quick. So let’s assume that they spend $5000 and because of that they do, let’s say a deal for $10000 and a deal for $5000. So now they’re making $15000 on $5000. Now that’s if they’re doing everything themselves. Everything themselves. So now their profit for the month, without any employees, including any other overhead is about $10000 a month. If they have the Podio and their computer and their MailChimp and all this other stuff that’s going to squeak down to maybe $7000 or $8000 with their virtual assistant or whatever that is. And all of the sudden they’re making what they would make at a job.
Tom: Right. And that’s the point. The bottom line is what this does, if you can increase your margin on the acquisition and then you can in turn do the same exact thing on the back end of the deal and then do one more deal a month that is going to explode your business. There is no doubt about it. Go ahead Todd. I’m sorry.
Todd: Let’s do a new [inaudible 00:44:40]. You spend $5000. Okay, you got it?
Todd: Now let’s start at the bottom here. Because we’re more efficient, we added one more deal. Because we have less fatigue, we’re doing one more deal. So now what we’re going to do is we’re taking those two deals and now we switch that to four deals. Okay? And now from four deals what we’re going to do is we’re going to move that average assignment to at least, at least $20000. And to me, I’m telling you right now that’s so conservative. That’s so conservative. You can do much better than that. You can do much better than that. Okay. But now we do four deals at $20000 a piece. So you see how you negotiate with the sellers and how you negotiate with the buyers. Which by the way, that’s only… The way that I talked about that, is if you’re negotiating $10000 on the sellers and $10000 with the buyers, that’s actually a $20000 increase. So that’s $30000. So let me go back to that. Again, I’m just being conservative. Is that now if you’re doing four deals at $20 grand a pop, what’s the revenue?
Todd: $80,000. With what marketing spent?
Tom: Is that the same $5000?
Todd: Same $5000.
Todd: Okay. Do you see that?
Todd: That’s if you have no employees. Now here’s the beauty. There’s a book called The Compound Effect. I love it. I talk about it all the time. All of our little habits, all of the little things that we do affect one another. I remember one time I had a bad ankle and my bad ankle… everything started to hurt. My back started to hurt. My neck started to hurt. And it wasn’t until I got my ankle fixed that everything healed up. So if you’re scraping the bottom of the barrel and you’re spending $5000 and you’re only netting $7000 or $8000, what are you scared to do next month?
Tom: Spend money on marketing.
Todd: Spend money on marketing. And what are you also scared to do? Hire help.
Tom: Hire help. Yeah. For sure.
Todd: And when you’re worrying about money, you’re all scared, you’re not your best self on the telephone. So now that $70,000 profit is going to be the fuel, the engine, the juice, the gasoline that’s going to drive your business. Okay. Through the sky. It’s going to drive your business through the sky. So the first step that you’ve got to do is get more out of what you’re already doing. When you first have that revenue it’s going to fuel your business, it’s going to enable you to attract better people.
Tom: That’s it you guys. Right there, what Todd just said. That is going to allow you… The revenue will fuel your business and allow you to attract good people. That is absolutely the key to all of this. But yeah, go ahead Todd.
Todd: Yeah. So your engine needs fuel. If you want to remain a one person shop, hey that’s fine. It’s better to take home $70,000 than it is $7,000. That’s okay. It’s funny, one of my former employees, my first sales rep who worked for me, worked for me for four and a half years and I taught him this system, and he could not lock up a house for the life of him when he first came out. Now he’s out on his own and I can tell you he’s a one man shop, but my best guess is he’s probably netting $300,000 a year as a one person shop using these very techniques.
Tom: You guys, no brainer. We keep these podcasts short. So Todd, I’m going to cut you off. Bottom line is this, Todd is the best in the business. He knows how to find deals, create deals, create larger deals. Absolute no brainer. If you can just tweak a few things that you’re doing in your business, the secret to growth and scaling and all of that is in the details here to do more of what you’re already doing and do bigger deals of the deals you’re already doing. So it’s www.wholesalinginc.com/biggerdeals. It is going to be an amazing journey. Todd, thank you brother for sharing this stuff. It’s been awesome going through this with you. I know there are tons and tons and tons of steps here to make sure that those deals are bigger, but I appreciate that man. Thank you very much for sharing all this data with us today.
Todd: Awesome. I had a great time man. Love the Rhinos.
Tom: Bam. The tribe. I love it. I like that. Talk to you soon. Thanks Todd.
Todd: All right. Thanks brother.
Tom: All right brother. Bye bye.