Posted on: February 06, 2020
WI 969 | Follow Up

 

In the wholesaling world, the importance of doing follow-ups cannot be overstated. Today’s determined rhino can attest to the amazing power of doing follow-ups. And he’s got $49,500 to show for it!

Michael Ireland Castanon is a steadfast rockstar who’s now crushing it in the wholesaling world. However, his wholesaling journey has not always been easy. In fact, when he first started out, 4 of his first deals fell through and it took him around 6 months to close his first deal.

Fortunately, Michael does not know how to give up. Rather than letting the setbacks he experienced bring him down, he stayed persistent and just kept going. His efforts paid off big time as he was able to close 21 deals in just a few shorts months. Definitely a far cry from the 5 deals he did in a year when he first started!

If want to hear a wholesaling story that exhibits the impressive power of doing follow-ups, you can’t afford to miss today’s episode. Also, in addition to hearing Michael’s awesome wholesaling journey, you’ll also get an insight into the winning mindset that has helped him earn close to $400,000 in just a year!

RESOURCES:

How Follow-Up Led To A $49,500 Deal

Episode Transcription

I want to challenge you right at the beginning of this episode with two words, passion and purpose. It is my true belief that passion is great and strong. It gets you going and gives you enthusiasm, but passion is not enough. The purpose is what this is all about. It’s the purpose to go out and solve somebody’s problem in your community, and the purpose to not work a 9:00 to 5:00 job and live paycheck to paycheck. That has nothing to do with passion. Passion is like a quick flash in the pan. Purpose is what makes superstars in this business. Purpose is what gets you through the tough times.

When you have a deal fallout and you feel like the world is crumbling and the sky is falling, purpose keeps you. Purpose is the foundation of being successful in this wholesaling business. I will encourage you and challenge you to look. Don’t go at this business with just passion. You need to have a strong foundation of purpose. If you have that, everything else builds on top of that. It leads me perfectly into this interview because I’ve got an incredible wholesaler. He is almost at $400,000 for the year out of North Houston. There is a lot of activity in Houston. He’s going to break down an amazing deal. You are going to be so impressed. It is my absolute pleasure to bring to the show, Mr. Mike Ireland Castanon. How are you?

I’m good, Brent. How’s it going?

I’m good. I am awesome. I’m pumped. I’m excited about this because I know what you did in the last few years and what you’re doing now, and it has been absolutely explosive. Before we get into that, why don’t you break down how you found wholesaling? Why real estate? Why not something else? Why are you focused on wholesaling real estate?

Before wholesaling, I sold medical devices. I was always out in the field working with surgeons. I was in hospitals. I was probably driving maybe about 3,000 to 4,000 miles a month. It was a little taxing mentally and physically. With all that time, I started listening to different podcasts, maybe looking for a different avenue to pursue versus just working a 9:00 to 5:00 job and being on the road all the time.

I found some real estate podcasts and thought I wanted to be a real estate agent or a realtor. I got my license and traded one boss into many little bosses. I did well my first year but I realized it wasn’t for me. The sales process took much longer from A to Z. At the same time, I didn’t quit my job. I was still working, so I did both. I came across Wholesaling Inc. and heard Cody and Tom Krol’s energy on the podcast. I decided to join the tribe at the end of 2017.

A few years ago, you joined the Rhino tribe through the Wholesaling Inc. program. When you started getting the instruction and putting all this together, did you start with direct mail?

I started with direct mail and sent out some postcards. My first four deals fell through, but I knew this would work, so I kept going and learning from my mistakes from the previous deal. Finally, in June of 2018, I closed my first deal.

This is interesting that you put that. Was it six months or seven months later?

It’s six months later.

The whole goal of the negotiation is to ask for a low price without getting punched in the face.

I want to hit on this because this show is good about breaking down good, awesome and amazing deals. Let’s talk about the first seven months that you’re in this. You have four deals that fall out, which happens all the time. I talked to new wholesalers every week, and one of their biggest struggles is they get excited to get something under contract and it falls out. It’s not really a deal or maybe they locked it up too high. Maybe there are some things that weren’t figured out with title issues or whatever else. Maybe they locked it up by the wrong owner. If you can pull back and go into a time machine and look at that, what prevented those four deals from closing?

It was a number of things. Mainly, I was learning rehab and estimates. I didn’t know what I was doing back then, but I kept going. Secondly, title issues would pop up. I got under contract with somebody who claimed ownership of the property. I got it at a great price. I signed it. Unfortunately, we couldn’t close on it but I kept going. I knew what this business could bring. I wanted to change my lifestyle. I wanted to change my professional life. I didn’t want to work anymore.

I was doing all this. If my previous managers would have found out, they would be a little upset. I was doing this while I was in the field. I had a little break. I would meet with the homeowner and go to the property. I get the same questions too from other wholesalers, “How long will it take to get your first deal?” I always say, “It depends. Everybody is different. Everybody’s situation is different. It depends how bad you want it.”

There’s consistency there. A lot of people start this business with a full-time job. You’ve got to negotiate your schedule to fit in time when you can do it, call people back, set up appointments, look at the comps, and get excited. You’re wearing one hat that’s medical device sales. You take that off and all of a sudden, it’s your wholesaler hat. It happens to a lot of people. A lot of people are working full-time jobs to build up their bank accounts, and build up their minds enough to where they have enough successes to where they believe that they can do this and replace their profession or job or 9:00 to 5:00 with this business.

It’s amazing if you stick with it. I see people that have full-time jobs. You’re right there at the average it takes to get through your first deal, which is about six months because you’ve got everything going on. You’ve got your family, work, and wholesaling business that you’re trying to learn and understand. How do you do comps? What are you doing during the appointment? You cut out a lot of time by joining the Wholesaling Inc. program to understand the fundamentals of wholesaling. That’s excellent. You went through those four deals and learned something from each one.

I learned something from each one. Every other deal, negotiation and meeting with the homeowner got better and better.

That’s just reps. That’s getting in there and getting comfortable with the whole process, and making sure that you’re looking at what is happening in your business. What are the actual concerns that homeowners have? Oftentimes, we hallucinate and assume we know what’s going on or what the motivation is for a seller. If you ask the right questions that you’re trained to ask and listen to, you’re going to pull out a lot more information to understand if this is somebody that will do business with you.

It was easy to focus and pour all your energy into one deal at that time. Whenever it didn’t work, it could be crushing. I promised myself that I wanted to get to a point where it’s okay if one deal falls through. It’s okay if things didn’t work out because I have a pipeline and other deals we’re working on. It’s the Law of Averages. You can only control the situation so much, but you have to keep going and be consistent.

How many deals did you complete in 2018?

I did five deals.

WI 357 | Follow Up

Follow Up: It’s easy to pour all your energy into one deal. And it’s crushing when that deal doesn’t work out. So always try to get to a point where it’s okay if one deal falls through. Know that you have more in the pipeline.

 

How are we looking in 2019?

We’re at 21 deals.

You should be so inspired by this. He went 6 or 7 months with nothing and closed the year with five deals. Now he’s in 21. This is real life. If you can do it, other people should be able to do it.

I’m not the smartest or the most experienced person, but this is something that I wanted. I wanted to do whatever I could to make it work. Anybody can do it as long as they’re dedicated and willing put the work in.

Talk to me about what your business looks like now. Is it just you? Break down your business structure for me.

I have two cold callers. Each of them calls twenty hours a week. I hired a lead specialist. Mainly their role in their job is to follow up on cold and medium leads. Follow up with the follow-up sequence and make sure that none of the leads falls through. Everyone gets called or contacted. I have an acquisition specialist now. He’s responsible for all the hot leads and meetings with homeowners. It helps with the dispositions as well.

What is the difference in your business between a hot lead and a warm lead?

A hot lead is someone who wants to sell in the next 60 days. A warm lead is someone who wants to sell down the road, or maybe things are not lined up right now to where they can sell, whether it be probate or something like that. If it’s a hot lead, it’s someone that where we can get a contract at least in the next 30 days.

Who are your cold callers? Are they in town or somebody that you got that’s like a virtual assistant type of thing? Who are these cold callers?

My first cold caller is from Call Motivated Sellers Now out of Costa Rica. I love the work that they do. They are very consistent, very stable, and provide consistent results. A second cold caller that I have, we found through Outbounders.com. He stood out. I felt like we got lucky with him. He calls out of Detroit. We pay him the same thing as Call Motivated Sellers Now. He’s very coachable and does a great job. He’s very good on the phone.

The length it takes to find your first real estate deal depends on how bad you want it.

Is anybody looking into it? It’s CallMotivatedSellers.com. I have four of them doing 120 hours a week. You send them a list and you get leads. It’s pretty crazy. Once those leads come in, who does that go to?

If it’s a cold or a medium lead, it goes to our lead specialist. Her job is to qualify them even further and try to find some motivation. We’re not focused on price so much unless it’s outrageous. As long as there’s somewhat of a discount and if they’re motivated, if they have some type of pain point or driver, then we’ll pursue the lead. If it’s someone hot, that goes directly to our acquisition specialist. They’ll set up a few appointments and set up the meeting right away.

What other marketing are you doing besides cold calling?

Up until now, we were just cold calling. We signed up with Lead Sherpa for their texting platforms. We’re starting that process right now. It’s a little different.

All 21 of those deals came from calls?

Yeah.

You are a beast. That is absolutely incredible. You’ve got a great team and it sounds like they are great callers. It’s just getting them good lists. What lists are working for you?

My top list is tax delinquent lists. It gets updated every six months over here.

Where do you get that, Mike?

It’s directly from the county. In Houston, you can go to the county, get a CD, and have a VA convert it to a format they would like. I have mainly focused on Montgomery County, which is about 40 minutes North of Houston. They have one point of contact where I can email. She sends the delinquent tax lists. Anybody can do this. It’s easily accessible in my area and Houston.

WI 357 | Follow Up

Follow Up: A hot lead is someone who wants to sell in the next 60 days. A warm lead is someone who wants to sell down the road. Maybe things are just not lined up right now to where they can sell.

 

Let’s sink our teeth into an actual deal. Let’s break this down step by step based on condition, timeline, motivation and price. If you’re here for the first time, there are four pillars to prequalify every seller. That’s the condition of the property, the timeline to sell that property, their motivation or why they want to sell that property, and what price they want. Whenever you’re looking at or having a conversation with a distressed property owner, you need to put everything through these filters, so you know if you’re wasting your time or not or you’re wasting their time. First of all, was it a cold call?

Yeah. It was a cold call.

What list was it?

This one came from the unknown equity list.

Explain that to me. What does that mean?

It’s a list from ListSource. Sometimes the results don’t always come through whenever you try to get a list. There’s an actual setting for unknown equity, and those are people that aren’t being marketed to. It was the list that the Wholesale Inc. tribe recommended. I wanted to give it a try and test it.

There is common practice. Typically, when you’re wholesaling property, you need to make sure that these properties have equity. What happens is when you’re pulling lists, a lot of the filters that these sites like ListSource or PropStream or some of these other ones have, you can get the estimated equity. You want at least 30%, 40%, and 50% of equity so that there’s enough juice. Sometimes they don’t know what that is. They don’t know how to do the math right or it’s not recorded right. Sometimes there’s unknown equity they don’t know. That’s what that list is. You get this unknown equity list and put it in. Which one was it? Was it Detroit or was it Call Motivated Sellers? Do you remember?

It was Call Motivated Sellers.

Call Motivated Sellers guys send you in this lead. Tell me about it.

For the first 6 to 7 months, I only had two cold callers, and it was myself doing everything. I qualified the lead. They pushed it through their Mojo. I further qualified the lead, tried to find some motivation, and asked them specifically, “This sounds like a great property. It’s in a great area. Why are you considering selling it?” His whole family has already moved to Minnesota. He’s the only one living here. Eventually, he wants to get back to his family. He has been traveling back and forth. I asked him, “Have you considered selling with a realtor? This is a great area. You would make more money.” He’s like, “I have considered it, but time is not working with me. I want to get this done as soon as possible. If it doesn’t work with someone like yourself, maybe I’ll try to go through the realtor route.”

When making a deal, you have to earn the dealer’s rust by being likable.

I said, “Great. What do you think the next step is here?” He was like, “I’m in Minnesota right now. I’m going to be back in town. I’m still cleaning it out. Why don’t you follow up with me next month?” That was in February. I set up a task to follow up. I called him every month, “The last time, you told me to follow up with you this month, so that’s what I’m doing. How’s everything going?” He appreciated the follow-up. He said, “Thanks for doing what you said you were going to do. I’m not ready yet, but please give me a call.”

Finally, in July, I hired my acquisition specialist and trained him to take over our certain leads. He followed up with him exactly the way I followed up. Finally, the seller said he was going to be in town and ready. After all those months of follow-up, my acquisition specialist met with him. He built a good relationship and good rapport with him and found out exactly what problem he had, and what he needed for him to make that final move to Minnesota. Once he found that out and built a good relationship, he earned the right to ask for a lower price. Originally, the seller wanted $170,000. My acquisition specialist offered $140,000, expecting a counter and trying to meet in the middle, and he accepted $140,000 and took it.

How did he know to go lower? Did you talk to him? Was your acquisition manager had the instinct that this guy would go lower than 170?

When I first brought him on board, he pretty much shadowed me. I kept mentioning, “You want to give a low price when you felt like you earned it.” The whole goal of the negotiation is to ask for a low price without getting punched in the face. You want them to work with you, but you have to earn that trust and know that you’re trying to find a solution. As long as they’re happy, and you have a good price for which you can assign it or a good price in their contract, it’s a win-win. He tried to offer lower, a number that made him feel sick to the stomach. All of a sudden, he calls me and says, “A contract is coming your way.” He goes, “You won’t believe what I got it under contract for.” We’re so excited.

That’s a huge factor that you mentioned there. They built that relationship and rapport. We always talk about the two things you need to have when giving a low offer, which is certainty. You can’t be like, “I don’t know.” You got to be certain with your offer. The better part of that is you need to be likable. It’s certainty and likability. You need to have that likability to communicate and not get punched in the face. If you go in all tough guy or weird or your tone is off, it doesn’t work. You lock this up for 140. You want to talk about your strategy here for disposition because you’re pushing the boundaries on what you’re selling these things for. Do you want to talk about that?

I see a lot of Facebook posts, and other wholesalers talk about the 70% rule. That’s 70% of ARV minus repairs. That’s what you need to assign it for. That’s what all end-buyers want. We have about 2,500 cash buyers on our list. I knew we could push this one especially. On average, we’re assigning our deals at 75% to 78% minus repairs. This one, we blasted it out, and everybody wanted this property. It’s such a great area where you don’t normally get deals. Luckily, we were able to push it to its limit. We sold it for 85% of ARV minus repairs.

Whenever you guys are going out to get valuations of property, comps are important, but you know what else is important? Supply and demand. If there is no supply, the demand is going to go through the roof. If you’re going into these areas where there are not a lot of wholesale opportunities, not a lot of off-market opportunities, you’re going to find a lot of different buyers. You’re going to find people who want to buy it and hold it. You’re going to find people who want to fix it and live in it. You’re going to find people that will add square footage and the whole thing. Don’t be stuck in this little box. Listen to what Mike is saying here. Push the envelope. Push as high as you can and get as much as you can out of every single deal. Mike, bottom line, what did you make on this thing?

We gross $49,500.

How good does that feel to make that big of a check?

It felt amazing. The seller was happy. My acquisition specialist was happy. That was the largest deal he’s done in a contract, so he made a good amount from it. The buyer was happy for getting a great property. Not only that, I know there’s a lot of talk about needing to double close when you have a big assignment fee because you’re afraid that the end-buyer will cancel or won’t want to pay that. When you have a big buyer’s list, it doesn’t matter.

WI 357 | Follow Up

Follow Up: A strategy for disposition is the 70% rule. 70% of after repair value minus repairs are what you want to assign it for. And, sometimes you can push it even further in places with not a lot of wholesaling.

 

All our assignment contracts have our assignment fee on there. They know from the very beginning. He knew exactly from the beginning what we were going to make and wanted to close on it. It was a straight assignment. We haven’t doubled closed with all our deals. That’s one thing I wanted to mention with that. Don’t be afraid to show your assignment fee.

If you have incredible skills in negotiating, you should never be afraid of that. That’s a good point. People get nervous if it’s over $20,000 or $15,000. Come on. I’ll have a conversation before the buyer and say, “Here’s the deal. We did well on this. Are you going to have a problem? If so, we’ll sell it to somebody else. No problem.” Nobody has a problem. It is what it is. Is this a deal to you or is it not a deal to you? That’s absolutely huge.

People should probably talk to an accountant and see the difference between the income you get from an assignment and the income you get if you close on a property. All I’m saying is there’s a difference there. Talk to your accountant about that, and you’ll find out that assignment is a good way to go. I always say that reading good books are like a plunger for our brain. It plunges all that crap that we get all day long, whether it’s our personal lives, social media, news or whatever. Do you have a couple of books you can recommend to people who have impacted your business?

I’m reading a book now and I’m almost done with it. It’s called Psycho-Cybernetics by Maxwell Maltz. It’s a great book. It was written in 1960, but a lot of the principles still apply. What I like about it is you’re going to have goals, and it’s good to set them. You’ll have external goals, but for you to reach those external goals, whether it be to make more money or be fit, you have to set inner goals for you to accomplish your outer goals. It’s different principles and how to do that and respond to different situations. I like that book.

Another book that I liked that I finished reading is The Subtle Art of Not Giving a F*ck. That’s a good book too. If anybody needs a mind shift change or if you get stuck comparing yourself to other people, which is very easy to do in this business, that’s a good book to take a step back and focus on your needs and where you want to go with your business or even as a person.

Mike, how do people get in touch with you?

You could send me an email. My email address is Mike.IC@ICHomebuyers.com. I check it every day. If you have questions about anything or you want to partner up on some deals, I would be more than happy to help.

Thank you. This is incredible. It’s a big year. You’ve got it going. I’m excited to see what the next year holds for your business. I’m excited for you to fly into Phoenix and see me at my office one of these days. Every Friday, I open it up to my TTP family members to come in and see the craziness that is my whole team. I’m excited for you to do that.

Everybody, if you are interested in joining the most proactive group in real estate investing, it is the TTP Program. Go to WholesalingInc.com/TTP. In 36 videos over 10 days, you’re going to get everything laid out for you, instructions step-by-step on exactly how to explode your business by making cold calls. Check out the page, scroll down, look at all the testimonials, and see what the program is about. If it feels good in your gut, sign up for a call. You’re going to be wonderfully pleased with that conversation that they have. Mike, you’re the best. This is fun.

I appreciate that. Thank you, Brent.

Everybody out there, I always encourage you to go out there and talk to people. See you, guys. Love you.

 

Important Links

 

About Brent Daniels

Brent Daniels is a multi-million dollar wholesaler in Phoenix, Arizona… and the creator of “Talk To People” — a simple, low-cost, and incredibly effective telephone marketing program…

Also known as “TTP”… it helps wholesalers do more, bigger, and more profitable deals by replacing traditional paid advertising (postcards, yellow letters, bandit signs, and PPC) with being proactive and taking action every single day!

Brent has personally coached over 1,000 wholesalers enrolled in his “Cold Calling Mastery” training, and helped 10,000’s of others who listen to him host the Wholesaling Inc. podcast, watch his YouTube channel, and attend his live events…

A natural leader, Brent combines his passion for helping others with his high energy, and “don’t-wait-around-for-business” attitude to help you CRUSH your wholesaling goals as quickly and easily as possible!

 

Leave a Reply

Your email address will not be published.

[class^="wpforms-"]
[class^="wpforms-"]