Posted on: April 29, 2020
WI 416 | Hot Deal

 

While a bit more challenging, it is reassuring to know that finding deals and disposing of properties can still be done even in today’s current economic downturn. The key is you just need to make a few tweaks and adjustments to adapt to the changing times.

Today’s guest is Chris Arnold’s director of disposition, Christa Swan. Thanks to Christa’s expertise and guidance, they are still finding deals and disposing of them with ease. In this episode, Christa shared the changes they made to ensure they continue to find and close deals even in today’s current economic climate.

There’s no denying we are living in unprecedented times. And unprecedented times call for unprecedented measures. Fortunately, as long as you make the right adjustments, it’s easier for you to steer your business in the right direction. For valuable tips you can use, don’t forget to tune in to today’s episode!

I’ve Found A Smokin Hot Deal . . . Now What – With Christa Swan

Episode Transcription

I have a very relevant topic for us. There are a lot of people talking about how to move properties. The big struggle is not finding deals. There is a bit of a struggle there, but the real struggle is once we have the property, how do we dispo it? We have investors that might be backing out of contracts. We have lenders that are pulling money. We have to do deals in which we can’t get face-to-face. How do we do this?  

I’m excited and you wanted to know this. We are going to be talking about the five shifts that we made on our disposition side. I’m going to be doing that with none other than Christa Swan, who has been our Director of Disposition. She and I have been working together for a few years. If you were in Dallas, Fort Worth, you would know who Christa is because she moves a ton of properties. Every investor knows her. They are constantly calling her to get on her good side and to try to get properties. She does a fantastic job of delivering volumes.

Christa, I’m excited to have you on and hang out. Welcome to the show.

I’m happy to be here.

People know we are doing deals in Dallas, but where are you located, Christa?

I do deals in Dallas, but I live in Oregon.

Our Disposition Director, Christa, does not even live in Texas. Christa, have you ever even been to Dallas to meet us face-to-face?

No, I have not. The closest I have gotten was the airport years ago. I have never met our team in person.

We trust you implicitly with all of our dispositions. You do an incredible job. We say all that to challenge your thinking on virtual world because we are being pushed into virtual world faster than we all thought we would be. Let’s hop in. Let’s get to meet Christa. Let’s talk about the five things that you shifted in our organization to make sure that we are continuing to be successful.

When you’re disposing a sale with the cash buyer, it’s usually relationship-based.

The thing that I would give my hats off to you is you are still moving deals, closing properties, and still getting properties over $20,000 profit on deals. You have not slowed down. The question is, “How have you done this for us?” Christa, my first question around the shift is, you said that we first had the shift technology. What practically did that look like? What did you have us do?

We have always operated on a model of advertising the properties. People were able to view them in person. Due to the circumstances, that hasn’t been a possibility. We, as a team, had to come together and think about, “How can we market this so people can see how they were, get a feel for the properties, and what the rooms look like?” We did that by attaching videos. We have 5 to 7-minute videos attached to our marketing. We have a great person who does our walkthroughs for us. He shows the house and the rooms. The buyers get a true feel of what the house is like.

Let me get this. If you are selling a property, you are utilizing GetResponse, Mailchimp, or whatever anyone uses. You are embedding a 5 to 7-minute walkthrough video so that the person on our cash buyer list can see the property without ever leaving their house.

That is correct.

Here’s the question. The audience is like, “Christa, are you telling me investors are buying houses without ever stepping foot into them?”

They are and they are loving it. Our click-through rate on our market has skyrocketed. We know people are clicking those videos and we are getting offers above what we are asking. We did a deal with a $30,000 assignment fee.

That was often embedded video that got email blasted out to the cash buyers list. Those are great numbers. Another question that has popped up is, “What if I can’t access the property to do this nice 5 to 7-minute walkthrough? What do I do?

We are dealing with that as well. We do have situations where we are not able to do that walkthrough. We hopefully have pictures, but we are still moving properties site unsold with the promise that the buyer will be able to walk the property before we close.

They can walk before they close, but they are going ahead and tying it up.

WI 416 | Hot Deal

Hot Deal: How can you advertise properties without being in person? How can they see and get a good feel for the properties? You start to attach videos, that’s how you do it.

 

We moved one in Dallas that the buyer never saw the inside. They had outside pictures, but our numbers were solid. We went ahead, closed that, and made a $9,000 profit.

We are also getting walkthrough videos and pictures from the actual seller if we can’t access the house. Talk to us a little bit about that as an option.

We understand that our sellers are apprehensive about having people come in. What we have done is purchase a tablet that is easy to use. It has a great pixel count, so the videos came out good. Our associate goes and does the outside. They hand the tablet off to the seller with directions, “Please look at the floor, the ceiling, the kitchens, and the bathroom.” Those are easy, precise instructions on how to take video. They do that on the tablet. They hand it back to our associate and we process it for our advertising.

If I were to sum this up, the first shift around technology was getting super creative on keeping everything virtual and making sure there was no face-to-face interaction. Most importantly, it surprised our entire team how effective it is working. It is one thing to come up with the idea. It was another to execute on it and step back and go, “This is a solution enabling us to still sell properties.” Let’s go to the second shift. You are calling this the shift that you had to do on how you are approaching the sell with the cash buyer when you are dispo-ing? How has that changed? How have you shifted that?

Many of our sales are relationship-based. We maybe know the buyer and what they are looking for. In this environment, people are afraid. “How do I know the market is not going to drop? How do I know these numbers are accurate?” There is a lot more handholding and building that relationship. We have past relationships because our numbers are always solid. We try and be as honest as possible and people trust us. We have been able to build on that, but there is a lot more handholding, alleviating fears, and telling people, “This is business. This is what we do.”

If somebody calls in as an investor, you are not just providing a deal. You are also consulting them in a sense. They are coming to you and saying, “Christa, I have bought deals in the past from you. Can you tell me what you think about the market? Can you give me some data?” You are almost coaching them through the process to move forward with the sale, with good assistance, help, and truth in numbers.

There is nurturing and they are leaning on us for our experience. “Have you bought in this neighborhood before? I can’t see the property, but what have you sold there before? What does it result before?” We are able to coach them through this process.

The second shift is approaching sales and moving over to a little bit more of a helpful heart approach. That means, “I will provide you numbers that you need. I will pass along the needed data that I have. If I need to get in and have a heart-to-heart with you about your fear of what’s going on, I will do my best to coach you through that so that you can make a good decision for your business as an investor.” That is an important shift. That speaks to your years of experience in doing this, knowing that needed to be done.

Let’s go to the third shift, Christa. Let’s talk about shifting the type of buyer. A lot of people are saying, “My traditional buyers on my cash buyer list are not getting off the fence.” They are saying, “I don’t want to make a move until I see what happens in the market. I don’t want to manage a rehab cruise because I’m not getting sick and bringing that home to my family.” What did we shift with the type of buyer that we are working with? How did that change?

If you remove chaos and volatility from an economy, it will become weak and the entire economy will collapse.

We are always growing our buyer’s list and adding to it. In a lot of ways, there are opportunities for new buyers in this market. We do have people who are sitting on the fence. They are looking to see what the future brings. They have that luxury, stockpiling cash, etc., but because they are not bidding up properties, new buyers have a great opportunity to get into the market.

The big guys do not snap things up before they get a chance to make an offer. There have been a lot of new buyers who maybe have bought one deal or have not bought any deal. That goes back to that education that we are always trying to give people Wholesale 101, explain the process to them, and nurture them. We build this relationship. This may be their first deal, but they are also going to buy their 50th from us.

Some of the more seasoned investors or big dogs are sitting on the sidelines. Some of the newer investors are going, “This is my opportunity to get in the game because the big dogs have taken themselves out. I’m willing to take on that risk because I want to get in the game when there is lower competition.” You are turning that into a coaching relationship that is going to build loyalty because you took the time to walk a newer type of buyer through the process of getting an early on deal. Maybe it is their 1st, 2nd, 3rd, or 4th, but you are selling to them and they are buying, which is great. That sounds like a complete win-win.

It is for us.

My biggest takeaway is the best focus you could be doing is making sure that you are rebuilding your VIP list. Christa, we have 20,000 on our buyer’s list. We have 50,000 that are roughly VIP. We lost a good chunk of the VIP buyers that would normally buy from us. We aggressively rebuilt that VIP list and went, “We are fine with this VIP list looking different. We are not going to rely on the same one we have before and sit around. We are going to get aggressive and we are going to rebuild.” That was crucial for us.

Let’s go to number four. This is a big one. I see this post all over social media, financing. I had a deal. My hard money lender pulled out. I want to buy this deal. I can’t find anyone that is financing. How have we shifted there? What have we done to ensure that we continue to dispo properties and get around this challenge or obstacle of financing?

Right now, we are speaking to lenders. Some are new lenders that we have never done business with before and we are vetting them. “What are your rates? How do you work?” We can honestly tell people, “I spoke with them. They might be a good fit for you if you are looking for hard money and they are still lending.” A lot of the hard money lenders have closed shop for not wanting to be over-leveraged if things go south.

You got proactive about making sure that we had a list of lenders that are lending. When a buyer comes to us and says, “My lender backed out. I want to move on this deal, but I don’t have one,” you are like, “Here’s a list of people we know that are lending,” and being proactive in handing that to them, correct?”

WI 416 | Hot Deal

Hot Deal: Going virtual is not happening because there is a crisis right now. This is the future. You can even take it a step further and do virtual showings or sell properties without ever showing them.

 

We are giving them that list, but we are also doing personal introductions.

You are not giving a name and a phone number but making a personal, warm introduction.

Even if it is an email saying, “Greg, this buyer is looking at a deal from us. He is looking for lending. I wanted to introduce you,” so those lenders who we have spoken to know that we are bringing them a buyer.

You can follow the pattern here. Some of the new buyers are new buyers that want to get in the game when the competition is low. The lenders are probably newer lenders who are looking at it the same way. “The big boys are out of the way. This is my time to gain some ground. I’m willing to take on a higher risk and I’m willing to lend.”

You are seeing this pattern of there is a different demographic of people buying and lenders lending. You got to shift over to that and start to rebuild those types of connections. It makes so much sense when you sit back and think about it. Christa, let’s go to the last thing. This one is interesting. Number five is a shift in thinking or this idea of, “Is this our future? Is everything we are doing a forced step forward, not a step backward?” Talk to us about what the shift has been in your thinking for us as an organization?

We were to a point where we were comfortable with our process. We are forced to make changes. Maybe we talked about those changes, “Someday, or we will talk about it.” Now is the time to talk about it. We have instituted those changes and had amazing results. Maybe this is not our, “We are in a crisis. This is our future.” We have always been virtual. Maybe we are going to take that a step further, continue to do a virtual showing and selling properties without ever showing them. It changed our thinking about what our future is.

There are two ways that you can look at what is happening. That is, “These challenges are hurting my business. I’m going to be bitter about that, or these challenges are growing my business. Rather than being bitter, I understand that this is making us better.” Christa, there is an actual book that talks about this and I’m going to recommend it. There is a term called Antifragile.

The whole idea of something being antifragile is that in order for any environment organism or anything to grow requires volatility and chaos. If you remove volatility and chaos, the actual system will die. Let’s use the human body. If you are not walking, moving, exercising, or putting stress on your body, what happens to the body? We see that the body starts to become weak.

What’s interesting about the body is it is antifragile. When you go into the gym and work out and break your muscle fibers down, not only do they grow back, they grow back past the point they originally were. That is why we build muscle and get stronger. That is why the body is an antifragile system. When you break it down, it builds up stronger than from what you originally broke it down.

In disposing properties, radio leads are the most genuine because they are ready to sell.

Christa, what you are saying is so important. I look at the volatility and chaos as breaking our system down. I understand that we are antifragile and not only will we grow back to where we were, we will grow past where we were. We will be stronger, smarter, and better. I’m getting excited about this. If you can understand this concept, you will have the perspective that Christa and I have.

This is a step forward. You will embrace chaos and volatility, realizing that your business will die without it. If you remove chaos and volatility from an economy, the entire economy will become weak and collapse. When there is chaos and volatility, it washes out the weak parts of our business and it strengthens what we have that needs to be made stronger. That is what grows everything. Shifting the thinking is a powerful thing. As you are reading and you want to be able to see video and listen to Chris on iTunes, remember that you can always go to our YouTube and put a face with the name, which is great to do if you prefer video. That is Chris Arnold Real Estate Coach.

Christa, you dispo properties, which means you sell properties that come through all different types of lead sources. They come from internet marketing or direct mail. What difference have you seen on properties that you dispo that have come from radio? Are they better? Do they get bigger profits? What have you observed being the Director of Disposition about the lead source of radio?

The radio leads are more genuine. We do get leads that sometimes the seller is sketchy or they are not committed. With the radio leads, those people who are calling us are ready to sell, work with us to clear title, move out of the home, and get renters out of the home.

They are more motivated. They are higher quality leads because there is a greater motivation is what you see. What would be one other thing you have observed about these leads on the disposition side?

The profits seem to be bigger. They are the ones that are doing $20,000 and $30,000 assignment fees. There is a larger profit margin. I don’t know if it is because they are so motivated. They are ready to sell. There is more profit import or they are also a better style of properties. There is more money to be made.

I will connect the dots for you because you know that the profit is bigger. You are observing it. You gave a cause and action. If you have a lead source that is more motivated than your other lead sources, that allows you to get a deeper discounted price, which will give you a higher average profit per deal on that lead source, which is common sense. You see that and I’m connecting the dots for you on why that is in our business.

If you are reading, you want to know more about radio, and you are like, “It is 2020, I need something I can depend on. I can tell you radio is strong for us.” People are like, “People are not driving around.” They are. Some people are still commuting. People are getting out and going to the grocery store. People are still advertising on the radio. The reason we know that is because we exceeded our monthly goal on executed contracts by a profit of $3,500.

I stood back and said, “I’m grateful that we have radio.” Christa, you know that because our job is to provide you with contracts to sell. March was a great month for us. Most of the contracts we gave you to resell came from radio, which is fantastic. If you want to know more, you want to see if your market is open and you want to figure out that stations are the most negotiable, ask questions, book a call, and learn more about this. Go to WholesalingInc.com/REIRadio. They have softened. I have not seen this in my many years of doing radio. They are hungry for business.

Christa, you are incredible. I’m so glad you are a part of our team. If you were there in Dallas and understand Christa’s position, she is the gatekeeper to profit. You are the one that moves deals and everybody is hungry for a good deal to fix and flip or add to the rental portfolio. I’m amazed at how well you have sharpened your skill of disposition. That is your baby. You run that show for our business. Christa, thanks for having you. I’m glad to have you on. To the rest of you, guys, we will catch you on the next episode. Thanks so much.

 

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About Chris Arnold

WI 908 | WholetailingChris Arnold is a 15 year Real Estate veteran who has closed over 2500 single family real estate transactions in the DFW metroplex. Chris is the founder of multiple companies that are managed by a US virtual team, which allows Chris to run his organizations while living in Tulum, Mexico full time. His passion for leaders has led to the creation of Multipliers brotherhood which serves the top 5% of real estate entrepreneurs out of the US. Most recently Chris has launched his REI Radio coaching program. This program is designed to teach real estate investors the marketing stream that everyone knows about but NO ONE is doing!

 

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