Posted on: May 06, 2020

Undeniably, when this COVID-19 pandemic started, no one anticipated how much impact it will have on businesses and the economy in general. If you’ve been complacent, you’re probably all stressed and anxious now, scrambling to find ways to keep the business afloat.

Today’s remarkable guest however knows what it’s like to go from top to bottom and get knocked out (was left with $14 million in debt and had to file for bankruptcy at one point). The good thing is, the whole experience has also taught him how to prepare for business challenges of epic proportions and come out of it victorious!

Billy Alvaro is the president of Max Returns Real Estate Investments and a coach at Flip Masters. He is also the host of Real Estate Investing Radio. The visionary, serial entrepreneur, and practitioner of the law of increase has started and built numerous real estate related organisations and has done over 11, 700 real estate transactions!

In this episode, Billy candidly shared how he transformed his self, body, and mind to prepare for economic downturns, the shifts he did to adapt to the changing economic climate, and the mindset that has helped him stay on top of things. If you need expert, no-nonsense, and wise guidance as you navigate these trying times, this episode is for you!

Key Takeaways

  • Why marketing consistently is crucial
  • How he shifted his marketing to drive ROI
  • What he did simultaneously in terms of marketing
  • The importance of staying on top of your expenses
  • How he doubled his business lifeline
  • Why selling virtually is key and how he went about it
  • What a “one and done” close means
  • How he leveraged technology to close more deals
  • Top 2 to 3 software/apps they’re using right now
  • What he recommends people do immediately, daily, and consistently
  • Where people can find him

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Episode Transcription

Tom Krol:
Man, I’ve got a very, very special guest today. Someone that I have a ton of admiration for, someone that I listened to, and over the years, someone that has actually become a dear friend to me. Been down at Tulum a few times. We have [crosstalk 00:01:07] out. And this is somebody right now as I watch a lot of people on the content they’re producing and what they’re talking about, Billy Alvaro is somebody that knows what they’re talking about because he’s been there before. So we’re going to start today hearing a little bit about his story. But here’s what you’re going to get. By the end of this recording, by the end of this podcast, you’re going to understand the four significant shifts that Billy’s done and it’s what we’ve done, and I believe he is absolutely right on track. So you definitely want to stay on and hear what he has to say.
So Billy, first of all, tell us a little bit about you, man. Where are you located? Where are you from? How long you’ve been in the game?

Billy Alvaro:
Yep. Been in the game for a bit, been in the game since… Well, first of all, I’m from New York. Live in New Jersey and New York, so I go back and forth to both states. We have an investment company in the New York area. We have right now about 11 people on the team. We primarily do rehabs, wholesale and we have a rental portfolio. Been doing this full time since 2009, but I’ve been flipping investing in real estate since 19- I think 1989 was my first investment property that I purchased. And then each year, I do a couple of deals here and there, but never as a true business. Really the truth of the matter is I had no freaking clue what I was doing in the early years. I was just lucky with what I was doing. Then I got into this business full time in 2009, because I had no other choice basically.

Tom Krol:
So let’s go there. I mean, a lot of times people just do a short little intro. We’ll go directly to the meat, but I want to add some massive credibility here because your story is… I cannot say it’s crazy, but it’s what has brought the wisdom and the experience that you have because of the pain that you’ve gone through. So for those that don’t know a little bit about your story, give us a little background and then we’ll get to the meat.

Billy Alvaro:
All right. So just a three-minute overview. What we’re experiencing today, I experienced back in 2008 when the crash happened, but in that life, I had 950 employees. I had a national mortgage company that was in 41 or 42 states, and we were doing about a billion dollars a year with about 40 plus million dollars in revenue. I was taking a company, doing a reverse merger, taking it public, and the whole bottom fell out for me prior to the banking blow up in 2008. This happened to me about a year prior. I went from here to here overnight, $14 million in debt. [crosstalk 00:03:34]-

Tom Krol:
Wow. Say that again. How much in debt?

Billy Alvaro:
$14 million in debt. Honestly, it was the toughest time of my life. That happened the middle of 2006, and I didn’t get my head out of my ass for three years because I didn’t know what I didn’t know. I built a company fast. I had the wrong people around me. I had a ton of different moving parts. And when I finally did come out of it and I realized what I needed to do, I just immediately started taking massive action and I cut through all the red tape, all the bullshit. Believe it or not, I fired all my attorneys and I bought a course online called Jurisdictionary, How to Represent Yourself in Court and Win. Studied-

Tom Krol:
Wow.

Billy Alvaro:
Yeah. Hired a paralegal because I had no other choice. I had to become resourceful because I was broke, man. I burned through all my cash, $40,000 a month, trying to fight lawsuits. I’m realizing the attorneys aren’t doing it for me because their best interest is to continuously bill, right? They get paid by billing. They don’t get paid by settling. They get paid by billing depending on the law firm you’re going to. So when I realized this, I go, “I have to take matters in my own hands.” Took matters into my own hands. Within about two years, I got that 14 million… Going to court by myself, pro se, I got that 14 million down to about 2 million and then the last $2 million I had to go through and file bankruptcy.
But going through that on the financial side, like going from the top to the bottom and get knocked out, I have a Harvard education in how to transform yourself, your body, your mind, your finances, by going through all that bullshit. And that’s, what’s helped me with this downturn because for the last two years, even though I didn’t know what was going to happen with a virus pandemic, I knew a downturn was coming. Like it was every 10 to 15 years, the cycle happens.
So I was preparing for myself and my business. And now, we’re at the point where luckily… I mean, New York is getting hit the absolute hardest out of all the states. We’re not just on shutdown. We’re on lockdown. Nothing is happening in New York. But because of what I’ve been through in 2008, because of the massive action I took over the course of the last month, and because I was mentally prepared for it and financially prepared for it, we’re going to be able to withstand and then come out of this thing. And when we come out, and this thing passes, the opportunities are going to be unfreakingbelievable.

Tom Krol:
I love that. I love the light that you’re painting at the end of the tunnel. It also reminds me, I know you’re probably a Ray Dalio fan like I am. If you’ve not read the book Principles, but there’s a principle in there that hit me really hard, and he calls it the principle of first encounters. It’s the whole idea that the first time we encounter something, like what you did back in ’07, ’08, the reason that it knocks us down so hard is because we haven’t developed the principles yet to deal with it. So it feels life-ending. It feels life-threatening. But once you go through something like that, you’ve developed the principles so that when it happens again, you now can tackle this thing entirely in a different way. It’s like going into battle, but going back into a battle in a way that you didn’t go in the first time, and that changes everything.
So what we’re going to talk about now are the four things that you took from that first experience, these principles and talk about what they are and exactly some practical shifts that you’ve made in your business, because one thing I love about you Billy is while everyone was still talking, you are executing. And when everyone was executing on some of the things you’re executing, I’m like, “Billy’s like done. He did that a week or two weeks ago.” Which lets you know you’re not screwing around because you’re smart enough to know that and this could get serious and I’m not going to get caught with my pants down.
So let’s start with number one. The first principle is this idea of consistently marketing, but also shifting the marketing to what’s driving the ROI. So help us understand a little bit about that principle and practically what that looks like for you right now.

Billy Alvaro:
Great question. Every state right now is going through something different. New York compared to, I guess, I don’t know, Wyoming, in Wyoming, you could continue to do what you’ve been doing because you’re not really getting hit that hard. In New York, TV came to a standstill. My direct mail went down to about 0.01% response rate. All the marketing mechanisms that we were utilizing stopped working.
So what do we do? I didn’t just throw the towel in. We did a complete change. I went hardcore over the phone telemarketing to our database of like a hundred thousand leads that we’ve had over the course of the last 10 years. We’re rehitting everybody and we started doing massive text blasting. Just by doing that, first, I was able to save. It was about $40,000 a month cutting my overhead because of the marketing wasn’t working.
So [inaudible 00:08:18] reallocate part of the resources. Came offline with Facebook, came offline with Google, shit that was working that’s not. Put the allocated resources into telemarketing and into text blasting, and we’re getting deals. We’re still making business happen. Nowhere near where we were before the pandemic happen, but we just reallocated or reshifted. Now go back to when I had the mortgage company years ago, when I started seeing the shifts happen, I didn’t know what I didn’t know. And I didn’t have the experience, and I was always…
You said earlier, this time around, I was two weeks ahead of what everybody else was doing. Back then, it was two months behind. So I didn’t shift my thinking. I didn’t execute quick enough. And if I didn’t turn this thing around within a month, I could have bled out $40,000 that I can now utilize for something else. And every dollar in what we’re going through, this pandemic, counts to your bottom line. You really need to hold onto and watch every single dollar that comes in and out of your business.

Tom Krol:
I agree. So if I were to sum that up, the principle is continue to market, but understand that the change in environment might cause you or require you to shift the way that you’re doing that. So you got to be agile enough to go, “This marketing’s not working. I’m going to jump over to something that is.” I love that you did two things simultaneously. You really reduced your marketing expense, but in that reduction, that also gave you some capital to reallocate over to what’s working for you up in New York, which is text blasting and doing outbound cold calls, which is great. So I love that really to kind of sum that up, what you did.
So let’s go to number two, right? Get control of your expenses. Now, I think everyone at this point listening is going, “Yeah. Heard that.” But can you drive this home? Can you get the audience to understand? Let’s go to Dave Ramsey, gazelle-like intensity, right? Can you talk about the intensity that you did and actually what you accomplished in the sense of cuts and the timeframe you did it in?

Billy Alvaro:
Yeah. As soon as I saw shit hitting the fan, I went into like war zone mode and I just got completely focused in on the task at hand. Number one was keeping my business afloat liquidity wise, not to burn through. We could last for a while, but why would I want to still burn money? So the first thing I did is I downloaded all my expenses out of QuickBooks into Excel, everything I did for the last year, by how much we spend from the most to the least. I literally spent two days hunkered in this office and I just started cutting through every single expense highlighting, which ones we needed to whack out.
Then I contacted the vendors and it was either stop it permanently, stop it part-time for the next 90 to 180 days, or cut back the amount that we’re spending for that particular service because there are certain things we still needed. But I contacted, dude, every vendor, every marketing company, my landlord. I went through the whole entire list and I looked at my employees. You know, who is the A players, who’s the B players, who’s the C players. Went through this whole thing. And when I came out, we had $40,000 that was on hard cut outside. It was actually 32 to $38,000. It was a hard cut to the bottom line that I’m not going to take back on overhead wise. The rest of it was either a forbearance or negotiated down. And that was two days.
When I got that done, I sat back and I’m like, “All right, with what we have right now, if I don’t bring another dollar in, worst, worst, absolute worst case scenario, if I keep the current staff the way it is without letting anybody else go and I don’t bring a dollar in, how long could I survive with no money coming in?” Now I’m at a 17, 18 month run rate where I can’t bring a dollar in, I’m good for the next 17 to 18 months. But before the cutbacks, I was at like nine months.

Tom Krol:
Yeah, absolutely.

Billy Alvaro:
So, it doubled my lifeline in the business. Now, money is still coming in, thank God, nowhere near what it was. But if I didn’t do that, again, I’d be burning through money unnecessarily. And when the opportunity arises, when this market shifts, and it’s going to shift, I want to have the resources, the financial resources to attack and go out there and start taking off what you call properties on the [inaudible 00:12:27].

Tom Krol:
Absolutely. I mean, I went through 2008 as well. And just to literally affirm everything you’re saying, we went through the same exact process, and I’m saying this because if you’re listening and you haven’t done it, you’re already behind. You should clearly get off this podcast and start this process. But we went through the same thing. Can we renegotiate it? Can we cut it? Can we defer it? We roughly cut off about 35%. But the mentality that you have is what I totally agree with. And that is, it’s all about extending the runway as long as you can, because the whole game is don’t run out of money. Money is oxygen. And when the oxygen runs out, you die.
So every dollar cut, everything you can shift and defer as long as you get more and more time, that’s what you need. Because the more time you have, that leaves room for more creativity, for more ideas, for more shifts, for more adjustments, and of course, to get on the other side of what we’re talking about, and that’s the winning side when the opportunity comes, because we want to be on that side when it happens. Right?
It’s like, if you ever saw Forrest Gump, when Jenny goes out and the boat and everyone gets wiped out and then Jenny, the boat just is coming in, right? And then what’s the next scene? The shrimp and business gets easy. Right? And they’re just killing it because it’s all about those that survived the storm and make it to the other side. So, man, I couldn’t agree with you more.

Billy Alvaro:
Good.

Tom Krol:
Let’s go to number three.

Billy Alvaro:
One thing before we go to number three, because a lot of guys and girls that are on this webinar that will be saying, “Well, this doesn’t pertain to me because I don’t have a big business. I don’t need to cut back.” Well, I didn’t just go through and cut back on my business expenses. I went through and I said, “What am I going to do on my personal side?” Even personally… Look, I didn’t have to, but even on the personal side, I went through and I cut back close to $4,600 a month. That’s 60 G’s a year off the top, off of what you call the line right down to the bottom line.
The other thing I said to myself is I have a shit ton of money on the side personally, and this is the mistake I made when I have my mortgage bank. If I didn’t cut back on my business side, I would have been bleeding financially on the personal side and take what I’ve accumulated to dump into my business. Why in the hell would I want to do that? I have a complete separation of powers. I have my business income and expenses, I have my personal income and expenses. So if you’re out there and you’re listening, if you’re a business, you don’t want to bleed yourself personally to fund your business. And if you don’t have a huge company, you’re a solo practitioner, cut back your expenses. I don’t care if it’s $500 a month, cut it back because it’s $500 a month that’s going to stay in your pocket. Then you’ll have more money to start marketing for when this thing is over.

Tom Krol:
Well said, I like it. All right, we’re heating up. We’re heating up here. Let’s go to number three, Billy. Selling virtually, right? Why is this important? Again, I think everyone has now been bombarded with the word virtual, but let’s get into some practicals, man. What does this look like? How do we sell virtually right now and maintain social distancing.

Billy Alvaro:
Yeah. So, this is key for us. I think the one good thing that this pandemic had for my company coming out of this is for me to realize that we really can organize, run and scale this business virtually. I know you’ve been doing it for years. I’ve never done a virtual business like this. This pandemic forced us to work from home and not only work from home, but to contact, connect, get the sellers of these properties to know, like and trust us over the phone or through Zoom, to leverage technologies, whether it’s an iPhone or having the seller zoom through the house, so we can see the process and see the type of property it is and what it looks like. And then take that video or have a professional videographer go out and sell the properties without a buyer going into the house. So we’re buying virtually, we’re selling virtually, and we’re actually closing on these deals.
Is it easy? Absolutely not. There’s all humps that we’re going through, but it all starts with the sellers up front. It’s a completely different psychology of closing. My guys, when they go out to the home, it’s a one-time close. Obviously, if they don’t close it, it’s follow up. But when we go to that house, our intent is to go there, know, like and trust, let’s settle on a number. Let’s sign the paperwork. When you’re dealing with them over the phone, it’s really a four, five or six touch. You have to get them over the phone, and it’s a process, a psychological process you have to take them through. You’re not going to call them, connect with them, and on the first phone call, send them over a contract and try to close it.
In my experience, I think you’re going to lose more deals if you do it that way than gain them. If you leverage your personality style and mirror to the people who you’re connecting with over the phone, and you have a process that takes them through a five or six-step process and slowly inches them to the next step, I think you’re going to have a high success rate with closing these deals.

Tom Krol:
That’s good. So what I hear is really a shift in the way that we sell, but particularly the speed of the sell. Like you said, I’m used to the face to face where my sales team for me, goes out, and we call that a one and done, right?

Billy Alvaro:
Yeah.

Tom Krol:
One and done close. But now you’re moving into a little bit more of a dance, if I could say it that way, in the sense of slowly leading somebody to that close, because you’re having to do it virtually, which I think at that point requires just some self-awareness, right? about myself as a salesperson and the seller on where they’re at as well as some patience.
What’s interesting that just hit me is we definitely understand that process with people that are elderly by nature. Right? As long as we’ve been in sales, we’ve always been told you can’t rush usually the older generation. They’re a little bit more slower. So we have adjusted historically to that. Now, it’s taken that mentality, it sounds like, and applying it down to people, even at younger ages because we’re doing it virtually.

Billy Alvaro:
Correct. You nailed it right on the head, dude.

Tom Krol:
Yeah. I love it. Okay. Anything else you want to drive home on selling virtually before we go down to the last and fourth nugget?

Billy Alvaro:
No, I think buying and selling is the way to do it virtually right now. You just have to have all your ducks in a row and know, just like you said, it’s a slower process.

Tom Krol:
Yeah. Now, did you say that you had a video series or something? I know you said you encourage people to do it, but is there one that you’ve come across that people could go online where that’s free or buy anything? Just curious. Have you come across any, like someone that’s put out some training on how to do this?

Billy Alvaro:
Yes. Honestly, John Martinez has the absolute best training out there when it comes down to buying and now buying over the phone. I mean, he’s very, very good. All my guys have been with him for two years and going through the sales training process and on the backend, when this whole pandemic happened, he put out another series of how to take what he’s taught you and now shift it and do it over the phone, and it’s working, man. Like, hands down, his shit works.

Tom Krol:
Good. Okay. So John Martinez, again, we’re familiar with him. I’ve heard nothing but great things about John. I actually did a little video series with him a couple of weeks ago, too. So highly recommend that, check that out. It sounds like he’s on the forefront of driving some practical virtual training, if you feel like you need it.
So let’s go to the last thing. Point number four, nugget, number four, leveraging technology. Specifically, what are we talking about? How do we leverage tech right now to be able to close more deals and to make money?

Billy Alvaro:
Yeah, so I mean, this really ties and wraps up the whole conversation that we’re having. I mean, we’re leveraging on the marketing side all different types of technologies from the dialers that are going out to the text blasting services that are going out, to the email services that are going out. We’re also using what we’re on here right now. Everybody’s familiar with Zoom, but this is like running our company. It’s keeping us together as a company. So we might not be in the same office, but we’re having huddles on a daily basis, and all 10 of us are on this thing like The Brady Bunch. And we’re all reporting of what’s going on and keeping each other up to speed.
With the sellers, we just started getting into doing Zooms with sellers on their phone. So they’re actually walking us through their home, on their cell phone and it’s being recorded. So now we have that information, what the house looks like on the recording side. So if we can’t get in somebody with a video camera, because the people inside the home are like, “Look, I don’t want anybody in,” we already have the footage that we need in order to then take that property and sell it to a buyer, a cash buyer on the back end. So it’s just doing things differently, increasing your efficiencies and leveraging any technology that you possibly can to make your job better, faster and easier.

Tom Krol:
So what would you say are the top two to three softwares, apps, tech that you guys are leaning on right now that you’re saying, there’s a bunch out here, but here’s the three that I think we’re literally utilizing the most day to day in our business? What are those three?

Billy Alvaro:
Yeah. I’m having a brain fart with the texting one. I can’t remember what the hell it was, but there’s a texting platform that my guys have been utilizing, and it’s fantastic. I can give it to you afterwards. I just can’t think of it off the top of my head because that’s [crosstalk 00:21:19].

Tom Krol:
No problem.

Billy Alvaro:
Zoom, definitely. And then on the email side, simple email, which is the GMass. We’ve been utilizing GMass to blast these properties out to the buyers of the property.

Tom Krol:
Okay, perfect. I love it. So wrapping up, Billy, anything else you’d like to just leave with the audience in the sense of like, I’ve given you some practical stuff. This is what I did in 2008. This is obviously what I did much faster. And I know you, right now, again, there are some challenges, but you’re not just stressed out. You’re not having sleepless nights. Right?

Billy Alvaro:
No, dude.

Tom Krol:
You got this fear, you got things under control because you’ve been proactive and got ahead of it. What would you like to close, and just say, man, if you guys hear me on anything… This could be on principle, heartfelt, whatever it is. What’s the last thing you want to leave everyone listening with?

Billy Alvaro:
It’s very simple. Get it clear, get focused and take action. Those three things you need to do immediately, daily, consistently, because if you don’t, you’re going to lose. You also have to realize shit no matter where you’re at. It might be decent where you’re at right now. In New York, it’s extremely harder. There’s people here that are struggling. If you keep your mindset straight, this is going to pass. It always does. It’s an up and down type business. The opportunities that are going to become available if you’re in the right position, in the right frame of mind, you’re going to create wealth, tremendous amount of wealth over the next two years for the next 15 years. It’s going to be an outrageous, unbelievable experience that we’re all going to be going through the next couple of years.

Tom Krol:
Absolutely. So say it again. Get clear, get-

Billy Alvaro:
Focused, and take action.

Tom Krol:
And take action. Perfect. Well, Billy, I appreciate it. As always, if you’re tuning in and you’ve got an interest in utilizing radio, Billy, I know for us in Texas, we didn’t have to shift that. We’ve actually pushed harder on radio because it’s working really well in Dallas, Fort Worth. And on top of that, we’re running the same 600 ads per month, but we’ve negotiated the rate down 45%, [crosstalk 00:23:18] which is crazy, right? So the same frequency at 45% of a less price, and that’s not just for a month. We’re hoping that that’s going to continue to stick with us even as we come out.
Yeah. They might try to negotiate at some point, but now we know how willing they’re willing to go. So that is, I say we buy it dirt cheap. I don’t know how you describe 45%. Crazy, I couldn’t believe it. So if you’re interested in that, go to wholesalinginc.com/reiradio. Again, wholesalinginc.com/reiradio. Billy, if people want to hear more about what you got to say, follow you, where do they find you?

Billy Alvaro:
Yes, absolutely. So online Facebook, the Unstoppable BA same thing with Instagram Unstoppable BA, and then you can go to my website, billyalvaro.com.

Tom Krol:
Awesome. All right, we’ll talk to you guys soon. Billy, thanks for your time. Appreciate you.

Billy Alvaro:
Thank you, Tom. Anytime.

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