Posted on: May 07, 2020
WI 422 | Cash Buyer Shifts

 

Ever wondered what the most successful wholesalers are doing right now to keep up with the ever-changing times? Wonder no more!

In this episode, our very own REI Radio coach, Chris Arnold, talked to Mr. TTP himself, Brent Daniels and shared the shifts they’ve made to ensure they retain momentum and stay profitable even during these unprecedented times. Chris Arnold has been active in the real estate arena for almost 15 years now. Based in Tulum, Mexico, he’s been doing wholesaling virtually and is considered one of the most successful wholesalers in the industry, having done over 2, 500 deals through radio ads alone!

If you’re experiencing a substantial decline in wholesaling revenue, this is one episode you can’t afford to miss. Chris not only shared simple, practical, and easy to implement tweaks, he also gave a clear insight into the mindset that has made him one of the best in the industry!

The Top 5 Cash Buyer Shifts and How to Adapt to Do Even More Deals!

Episode Transcription

This show is going to be on fire because I’ve got one of the Wholesaling Inc. coaches. He’s one of the top wholesalers around the country. Mr. Chris Arnold is with me from Tulum, Mexico. Chris, how are you?

Hanging out with you, you know it’s going to be good. We will bring some value and have a good time like we always do.

We are going to get right into it because we had a conversation about what are the top things, the top shifts, the top tactics, the top hacks, so to speak, of what we need to do on the disposing side of our business. Chris is going to go through his top five shifts. It’s important now more than ever. This is our time for sourcing real estate opportunities. Essentially, wholesaling is sourcing real estate opportunities.

We need to have quality conversations with distressed property owners but now more than ever, it is all about building up and strengthening our disposition side. If you have never heard that word before and you are brand new to wholesaling, it means, what is your exit strategy with the opportunities that you uncover? In this show, we are talking about wholesaling this property, putting a property under contract, and selling that contract to a ready, willing, and able cash buyer. Chris has done these thousands of times.

He is running his business virtual from Tulum, Mexico. If you have never seen it, google it. It’s worth the google. It’s absolute paradise but let’s go because this is a huge strength for you, Chris. You have built an incredible team but not only that, you have built it to the point where you can move and shift quickly. Let’s talk about that. First, let’s break down the five tips or steps that you would give to everybody. Let’s start with number one.

We know there are two challenges. There’s the challenge of getting motivated seller leads and that entire arena of, “I’ve got to get deals executed.” We are hearing that the bigger challenge is, “I’ve got a deal and facing the bigger hurdle, which is the disposition, my ability to resell this property to a cash buyer on the other side.” We are a virtual company by nature. Luckily, we live in a virtual world. When this whole thing hit, we made all these shifts in about a two-week period because we took our virtual mindset and pushed it further virtually than we ever had.

That did give us a leg up to be able to pass this value back down to you, who might not be as familiar with the virtual world. Let’s go through these. These are the five shifts. I was talking about my director of disposition on this and she crushed it on these five things that we shifted. Number one, we shifted our technology. Let’s talk about specifically how we did this on the disposition side. What we were getting feedback on was the investors were not wanting to go out to the properties anymore.

“I can’t go out because I don’t want to get my family sick. Whatever it is, I’m not leaving my house.” The first thing we did was start embedding a 5 to 6-minute walkthrough video of the house into our email blast system. Whatever you want to use, constant contact, get a response, you name it. We did not know how they were going to respond. The question was, are they going to buy a house based on a 5 to 6-minute walkthrough video? We sent the first one out, closed it, and made $23,500.

Fast forward, I asked my disposition, “How is this still working?” I get texts like, “We sold 2, 3, and 1 for $30,000.” She goes, “Not only is it working, Chris.” In my opinion, she has been doing this for several years. She goes, “They are starting to love buying houses off a video.” The big thing that people ask is, “What about the inspection side needing to get into the house?” Remember, I also think it’s important to provide an inspection report.

 

We live in a virtual world. When things hit, take your virtual mindset and push it further than you ever had.

 

It’s important. What we did in our business is we started reaching out to our cash buyers with the question, “Do you buy a property sight unseen?” That’s such an important question to ask your cash buyers. The follow-up question is if they say yes, then you say, “What do you need from us to make a smart decision?”

Every single one so far has said, “I need a walkthrough video, and everything ugly and terrible. It doesn’t have to be an hour-long but I need to get a good idea of what I’m up against here from a rehab standpoint through these videos.” It’s critical. Are you using an iPhone? Are you having the sellers do it or are you having your acquisition managers do it?

There are a few ways to get these videos. If you are dealing with a tech-savvy seller, you can have them do the video walkthrough, which means you never have to enter the house. If the house is vacant, you can do it yourself. We are talking about owner-occupied properties. If they are tech-savvy as well, on top of that, which is cool, you can utilize Zoom and do a recorded walkthrough where you can guide the seller like, “What’s that over there? Can you explain that? Go to the right.” That gives you more control over the video by doing it virtually.

Thirdly, if they are what we call tech-deficient, which our sellers primarily might be over the age of 50 not comfortable with it, we deliver a tablet to their door turned on to the video where all we’ve got to do is pass it through to them. They are like, “Push this button and go.” They record and bring it back. We can watch it. If we don’t like something, we send them back to do it again. Between those three methods, there’s no reason that you shouldn’t get the inside footage of the house.

Let me give you one more. We talked about embedding the video into your email blast. The other thing you can do is get access to the house if it’s vacant and do group showings if you like. What we are doing are Zoom open houses. You can get multiple investors on Zoom bidding on the house as you are walking them through and maintaining social distancing. Isn’t technology amazing?

It’s so incredible. I never even thought about using Zoom for that. It makes perfect sense. Is there a paid version of Zoom that you use or is it free?

There are free versions that you can use, which is great and then there are some paid ones. My team sets it up. Isn’t it in under $20 a month? It’s something cheap. I can’t remember. The other tool they will bring which has been cool is Rehab Estimator Pro. We found this out and implemented it immediately. I want you to think of it this way. There are two things you can’t get wrong. You can’t get the ARV wrong or you are going to screw up the deal. You can’t misdo the rehab repair amount that’s needed.

If those two things are wrong, you are in trouble. If you get those two things right, you will be okay. Rehab Estimator Pro was developed to be able to do the rehab estimate, walking through an app and pushing buttons like a dropdown. It’s giving a very accurate repair amount within under thirteen minutes. Here’s why this is important. There are two ways you can use it.

 

 

WI 422 | Cash Buyer Shifts

Cash Buyer Shifts: If you can get access to the house and like to do group showings, you can do Zoom open houses. You can get multiple investors bidding on the house as you walk through and maintain social distancing.

 

We pull up the video of the house we’ve got. We pull up the app and as we go through the video, we click the buttons on the app. By the time we finish the video, the app tells us what the repair amount is going to be. Secondly, we send that nice professional printout to the cash buyer. They are getting a video and an actual printout of the rehab that needs to be done, which makes them more comfortable because it’s more professional than just a video.

I will tell you what, Chris. This has taken it to the next level. Not only does letting them know that you understand what repairs need to be made but also it upgrades you as a true professional. If they have all this data and the video, they can make a decision that fast. That’s why you are having success selling that. Is Rehab Estimator Pro a website? What is it?

You go to the website. When I was talking with the owner, you know how people are given some pretty cool discounts. The owner is giving 70% off monthly long-term once you are locked in. I was like, “That’s a heck of a deal.” If you want to go check it out, go to RehabEstimatorPro.com and look at the system. I love it. It’s a great fit.

Do they have to use a coupon code or something?

Yes, it’s REIRadio. Not case sensitive and that drives it down to $29 a month. Isn’t that cheap?

That’s a must-have. I’m going to get that. That’s incredible. Send that with them. It’s almost like they have walked through the property and written it all down themselves.

Here’s the thing. Everyone is going to pick up on the video thing here pretty quickly if they have it. We are trying to stay ahead. If everyone is sending a video, we are going to send a video and a cool professional report to go along with it. It’s one step ahead every time of what everyone is doing in the market. That’s shift number one, technology.

Number two, we had to shift the way that we approached the sale with the investor. What we have found is we have had to move over to what we call a helpful heart approach, a coaching approach. You’ve got to realize the investors out there will see you as an expert and a wholesaler having particular data and an understanding of the market. What my disposition director, the person who sells these properties to the cash buyer, is doing is having heart-to-heart about fear, the emotional side, and what the future holds.

 

Be one step ahead every time of what everyone’s doing in the markets.

 

She’s not just getting in there and talking about the sale and the numbers but she’s switching it over to a helpful heart like, “What are you feeling?” She said that hand-holding with the investors and changing that approach has been effective in helping people cross that line. People get stuck for three reasons. We know this based on external, internal, and philosophical. The external side is the numbers but are you attacking the internal and philosophical things that your investors are wrestling with before they buy? We started taking the time to do that and that’s when our conversion started to increase.

You are asking them like, “How are you feeling? What are you thinking is going to happen? What’s your strategy?”

We are consulting them. We are being their coaches, counselors, and confidants about what’s going on. When you think about it, it’s common sense because they need to talk it out and put language to how they are feeling. It’s surprising how effective it has been. The point being is you are shifting your approach in how you are communicating with your backside investor.

Not only that. One, it’s going to build a strong relationship for the future but you can uncover and see, “These people might be 50/50 on this deal. They might back out of this deal in a week or so. I need to make sure that I understand if they are committed to their business, purchasing this property, and completing this transaction.”

It hasn’t happened in our business. The cash buyers that we are working with have completed every single deal that we have put under contract with them but I have been hearing that people are canceling contracts at the last minute, they can’t get financing or something happened. I feel like the news changes the mood of our business every single hour. It’s important to get in there and understand what is going on inside their mind and what is their fears and anxieties. Can you help them with that or is maybe now not the right time for them to purchase this property and go with that second offer that I’ve got? That’s huge.

You’ve got to realize that the environment around the world is naturally being pushed to a place of being more vulnerable. That’s what pain does. We are all willing to go to a level of conversation because we all have this bond as an entire world of going through the struggle together. Struggles bond people together, which creates a deeper, more vulnerable conversation, which normally doesn’t happen in a regular environment, it’s powerful.

That goes back to your thing, the Rehab Estimator Pro, and the video. If you can give them all the tools to make a smart decision, there are not those underlying thoughts of, “Maybe I don’t know something about this property or maybe this isn’t the right decision.” You are giving them all of the data that they need to make a smart decision from a mental standpoint but then you are going one level deeper. You are seeing emotionally, do they still want to be in this business? Do they still want to purchase this property? Do they find optimism in what’s going on? Do they think that the sky is falling? That is a powerful 1 and 2. What’s number three? Let’s keep building this momentum.

We had to shift the type of buyer. Let me break this down for you. Everyone has their buyer’s list. On that list, they have what we call your VIP buyer, those people that tend to buy a lot from you. We all love those buyers. In our world, that was about 50. We have a list of 20,000 but we’ve got 50 bread and butter that love us and we love them. We lost in a fell swoop about 40 of them for 2 reasons. “I’m not doing deals because I’m going to sit on the sideline and see what happens in 1 month or 2.” They are savvy. Number two is, “I can’t manage my rehab cruise, go ahead and get the option or the risk of getting sick and bringing that back home to my family.”

 

WI 422 | Cash Buyer Shifts

Cash Buyer Shifts: The avatar demographic of the new buyer we’re seeing is they’re newer and a little bit greener behind the years, but they’re hungry to get in the game, and they don’t care about what’s going on. They’re buying properties.

 

We started processing like, “How do we overcome that objection?” We were trying to overcome all those objections and then we realized, “There were ten buyers over here that have no problem doing deals.” You understand there are two buckets of buyers, those that have numerous objections and those that have no objections. The mentality was, “We’ve got to build that VIP buyer list back up to 50 with 40 fresh new VIP buyers that we didn’t have before.”

Rather than trying to overcome ten objections, what we did was go ahead and find people that had no objections when they were coming in. I will tell you who it is. They are new buyers. This is what they are thinking, “The big dogs have stepped out. This is my time to get some momentum. I’m newer and willing to take a little bit more of a risk. I might have brought in a handful of properties but I’m going to get in the game because all of the competition is out of the game.” That’s the avatar or demographic of the new buyer that we are seeing. They are newer and a little bit greener behind the years but they are hungry to get in the game and don’t care about what’s going on. They are buying properties at great prices, which is awesome.

We adjusted 10% to 15% lower on our numbers for everything. The deals we are giving out now, I couldn’t have given to anybody a month ago. There’s no chance. Sellers that wanted 400 now want 300. The sellers that wanted 180 are now taking $100,000. It’s incredible and because of that, you pass those savings along to the buyers. I have seen a little bit. We have been averaging $27,000 a deal.

It’s at $30,000 a deal because of that but most of that percentage and discount is going to our cash buyers. They are happy. Especially for somebody that’s either starting or has done a couple, they are like, “I’m getting these deals that I’m texting and emailing about that usually went to somebody else. It’s sold too fast because I took a little bit longer to respond. They are getting these deals and taking advantage of them. It’s huge.”

You’ve got to shift the backside buyer that you are marketing to and better build that list.

I want to make an announcement because it’s a huge amount of value. Chris has started his YouTube channel. You need to get in there, like, and subscribe to it. It’s going to be phenomenal. Chris is a staple in this industry. You could tell from this conversation that we are having that he knows his stuff. Not only that but he has an incredible heart for giving instruction. He’s not going to educate nor entertain you but he’s going to give you instruction on how to succeed. It’s Chris Arnold – Real Estate. Check that out if you are watching this.

We are going to cover everything to do with business, wholesaling, real estate, and running a virtual company. With all these years I have been in, it’s time for me to step out and start to put into communication the principles that have gotten us where we are at as a great company.

He lives in Tulum. He’s the only guy that you know or have heard of that’s truly transitioned his business to be the guy that sits on the beach all day and wears flip-flops. I don’t even know if he’s wearing pants. He’s living the life that a lot of people I have desired and thought about. He has an incredible amount of great content to give you. Check that out. What’s number four?

 

When looking at the future of wholesaling, you have to move at a rapid pace in the sense of your thinking, growth, creativity, and ideas.

 

The next thing is shifting the finance. That’s a big one. First was the wave. I had a deal and the financing partner, the hard money lender, I had pulled out. What we started hearing was like, “They pulled funds on me.” The second thing was, “I’m ready to do a deal and I can’t find anyone willing to fund it.” The next shift that we did was we went in and made sure that we built a list of lenders that are currently lending.

The second thing is, not only do we give that list, but we are making warm introductions. Like we replaced the buyer’s list, we replaced the lenders. Guess who the lenders are? They are the ones that are newer to the game. You are starting to catch on to what the shift in demographic is. They are going the same thing. The big boys that I have been competing with that have been doing lending were in Dallas-Fort Worth for 10, 15 years and have stepped to the sideline. “I launched my lending company years ago. This is the time for me to pick up market share.”

They are more than happy to lend on properties but the problem is your cash buyers out there are not doing this research. They are going, “The ones I work with aren’t lending, so I don’t know what to do.” Your responsibility being a great wholesale and a company, is to provide the resources that your cash buyers need by providing them a list and warm introductions. Once we started doing that, all these things have kept the momentum going. It’s another thing that keeps that flywheel spinning. What has been a critical thing is shifting our mindset around financing.

In Phoenix, I have seen, “You only had to put 10% down and they will give you the financing at 10% or 12%.” It shifted to put 30% down and they are still at about that 12%. I would expect the longer that this goes, the interest rates go up. What is your market? What have you been hearing around?

My team manages that. I philosophically understand the shift that we made but I don’t know what specific terms have changed. That makes me wonder. I’m going to call my disposition when I’m off and find out. I’m curious if it’s shifted. I do know that they are using them. We are doing deals and they are using those lenders, so it must not be too bad.

It’s important when you are adding cash buyers to your database as you are having those conversations that they understand that they have to put more into these properties. That might adjust the prices and the list that you go after. It’s critical to have conversations with your cash buyers and find out if they are buying sight unseen, find out what the requirements are for that, and then find the areas and the properties that they want to buy and cater your efforts towards that.

Some people call it reverse wholesaling. I call it being a smart wholesaler and finding out what inventory people are looking for. Have those conversations, find out what they are buying, connect with the private money, hard money lenders in your town, make sure that their lending, and see what their guidelines are and what they are looking for so that you can further educate your cash buyers. What’s the last one, Chris? This is on fire.

It’s a shift in thinking. Before you go, “He’s going to,” no. Let me tell you what’s happening. The question that has been happening is, “Is this our future?” All the shifts that we have made, our mentality, and our thinking have been, “We have not taken a step back but we have taken a step forward in our evolution of how we run our company.” We would not have pushed these ideas and moved to this virtual model at the level that we had if we hadn’t been pushed by pain and the market hadn’t come in to require us to correct and shift.

 

 

WI 422 | Cash Buyer Shifts

Cash Buyer Shifts: We have not taken a step back, but we’ve taken a step forward in the evolution of how we run our company.

 

Guess what the question is? Why haven’t we been doing this all along? That’s the shift in thinking, the power of pain, the mindset that looks at struggles, the things that we go through, and the sense of suffering and understanding, “I’m about to get super smart. We are about to grow at an entire level.” It’s going to be painful but can you imagine what it’s going to look like on the other side? We moved at a rapid pace in the sense of our thinking, growth, creativity, and ideas. We are looking at the future of wholesaling. That’s an awesome shift in thinking.

It’s beautiful because it’s putting a magnifying glass on all the cracks in our businesses or the processes that we have. We have been cleaning things up. It’s stuff that we knew. We pushed it to the side because we were doing deals. It’s funny. We are still doing deals and still have the same amount of time in the day that we usually do but all of a sudden, we are working even harder with our efforts. It comes top down. It starts with me. It goes to my lead manager, my acquisition managers, and disposition.

It all comes back to, “How much can we squeeze out of this time? How many little errors do we have in our business that we can clean up so that we can keep building, being consistent, and making sure that we can provide as much value to the home sellers, the distressed property owners in our market but on the flip side, making sure that we are matching them up with real, active cash buyers that are looking for deals?” People are looking for deals.

Rhino Tribe, this is the time. Do not slow down. If you are on the fence about getting into wholesaling, I am telling you, our contact rates for calls and our leads have doubled. The deals are coming through. We are getting great relationships with our cash buyers, attorneys, and escrow officers. We are building these relationships stronger.

Those five shifts on the disposition side have helped us to maintain momentum. In my opinion, that’s why we haven’t seen much of a drop in revenue for us on the backside. I was getting ready to brace for impact. We pulled the numbers for March 2020 and were looking at it. It was a great month for us. We can have this conversation in 30 days but I believe now, it’s like, “We don’t need to shift anything else.” We have set the stage for all of these changes. There are more other ones that we have done but it’s riding it out and making sure that we do it effectively. It’s more execution. It wasn’t crazy to do these mini shifts on the virtual side when you look back and go, “That takes a couple of weeks to change those things. We are good. Let’s keep going.”

That all comes from your leadership skills and from you having that good conversation with your team and getting on the same page. Don’t let the distance, if you work from an office or you’ve got some people that you don’t see every single day, get on a Zoom, FaceTime, get in front of them, pick up your phone and answer your text messages. It is the time to over-communicate with your team, cash buyers, and any of the past lead that you have had that had a long timeline. Those timelines are shortened, so you’ve got to get after that. Chris is known as the REI Radio guy. He gets a ton of his deals from the radio. If you are interested in that, check him out. Where should they check you out?

It’s WholesalingInc.com/reiradio. It is highly dependable. I love radio and stations are negotiable.

Chris, thank you. Those five shifts are incredible. None of this matters unless you take action on this. This is a step-by-step. Make sure that you take this seriously and make these shifts. This is what the top of the top when it comes to wholesaling companies are doing and thriving. These are not suggestions. This is a prescription. Make sure that you take action on it.

I love you. Stay tuned to this show. We are going to keep coming out with the absolute best when it comes to what to do during the Coronavirus situation. We are going to stay in front of this and share with you everything that’s working and not working anymore so that you can keep building momentum in your business. We love you. Chris, you are the man. Thank you so much for being on. As always, I encourage you to talk to people. See you.

 

Important links

 

About Brent Daniels

WI 480 | Critical Energy ShiftsBrent 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, “don’t-wait-around-for-business” attitude to help you CRUSH your wholesaling goals as quickly and easily as possible!

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