Many people would surely agree the past 6 months of 2020 has been one crazy ride. Undoubtedly, the COVID-19 pandemic has dramatically changed many facets of life, including how people conduct business. In today’s special episode, REI Radio’s amazing coach, Chris Arnold, talked to his chief operating officer and director of disposition to reflect on the last 6 months.
Apart from sharing the 3-legged revenue stool they are using, they also talked about the changes they’ve made to keep up with the ever-evolving times. In addition, they also talked about the tools that has made life easy for them and how radio has been very beneficial especially during these times.
If you’re looking for powerful tips that can help your business get ahead (especially now that times are constantly changing), this episode for you!
- The 3-legged revenue stool they’ve built their business model on
- What “direct seller” means
- How strong the retail listing is right now compared to before
- What they’re doing differently now in terms of the showing process
- What “direct to investor” means
- How COVID-19 has changed the wholesaling space
- What the “Amazon mentality” means
- What the ActiveCampaign tool is all about and why it has been a lifesaver for them
- What Rehab Estimator Pro can do and why it’s a valuable tool
- What an intake specialist is
- Hourly rate for intake specialists and where you can find one
- How radio has been very beneficial for wholesalers especially right now
- Free Migration in ActiveCampaign
- Rehab Estimator Pro (Promo code: reiradio)
- Chris Arnold – Real Estate on Youtube
- REI Radio Program
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Welcome to the Wholesaling Inc podcast. I am your host, Chris Arnold and, this is going to be a very unique podcast. Something different that you guys haven’t heard normally. If you’re staying tuned, this is what you’re going to get, six months and reflecting with my Chief Operating Officer, Sierra and our Director of Disposition, Krista.
What a crazy six months it has been from when we launched into January to where we’re at now. We want to have a discussion and let you guys listen in on some of the things that we’ve learned. Things we’ve been forced to change that all of a sudden we are grateful that we changed, because what we thought was a temporary shift have now really enlightening us to things that we want to continue to do permanently. Other things are tools that we came across, that we found to be valuable and are going to continue to use.
What have we learned in six months? If you have the right mindset around the past six months or any challenge or struggle in life, you realize, you’re going to learn a lot through pain. You’re going to learn a lot through challenge. I know Sierra and Krista can agree. We have learned a lot in the last six months about our business and about ourselves. Let’s jump in, let’s get to the meat. Let’s hit the five things we learned and Sierra, Krista, I’m just going to have a discussion with you guys and really just hit some of these main points.
The first point is this. We always understand the value of diversity and we have really grown into what I would call, a 3-legged stool approach when it comes to running a wholesale company and not relying on one stream of revenue. Since we’ve gone through what we have gone through, we are grateful. We’ve seen the value in having three streams. Sierra, what am I talking about? What is the 3-legged stool of revenue that we’ve really built our model on to make it much more stable
First is definitely about that direct to seller piece, that cash offer regular wholesale. We’re always going to do that. We always push for that. But what we’ve seen is there’s two other options on the table when it comes to converting these leads. One is, definitely the retail size. This is something that we’ve dabbled in, in the past. We’ve touched, but we really haven’t put a lot of focus on it. That’s really changed right now. We are able to take these leads and push for that cash offer or that retail.
Another piece of that three legged stool is that direct to investor, actually partnering with other investors and pushing the co-wholesale model. We’re able to bring in multiple streams of income. When things do happen in our world, like COVID or other things like that, we can rely on each of these streams differently. We’re setting ourselves up for a much more successful year.
Let’s break this down, particularly if you’re newer, some of this language, you’re like, “What are we talking about?” Let’s hit each of those points. We define direct to seller as, anything you’re doing to market directly to a seller to try to get an opportunity of an investment deal to wholesale, fix and flip, et cetera. When we say direct to seller, that’s including, Sierra, methodologies like cold calling or ringless voicemail, or texting or Driving for Dollars. It’s any method you use to go directly to the seller, correct?
If you’re listening, that’s one way, and you’re probably going, “Yeah, I do a lot of direct to seller and that’s actually all of my business, but I haven’t really thought much about these other two.” What we want to challenge you on is as you’re growing, realize that direct to seller is good, but it’s not completely diverse. It’s having all of your eggs in one basket.
Let’s talk about the retail size that you just hit on. We’re defining retail as when you go after and market direct to seller, some of those people call in, Sierra, and they don’t want to go cash. They want to list their property. Right?
Exactly. They’re looking for something that we just can’t do on the cash side. Either they’re not in a situation where they can take a cash offer because it’s typically a lower price point. They need market value they needed to move. Before we ran a referral process where we push those out. Now we’re really honing in on them and we’re having our Acquisition Managers push to get that listing as well.
What we’re communicating to you guys is you have two options on this when it comes to the revenue and that is either one, you can be licensed, maybe you’re listing and you are or bring in someone that’s licensed, et cetera, convert those internally to listings and get that commission. Or at least at minimum can refer this out. But what we’re saying is, when you have a challenging situation, like we just did, the retail side’s important and Sierra, this is what’s interesting, six months in reflecting, how strong is the retail listing side right now in comparison to normal,
It’s completely turned around. We were having a couple, a listing here, listing there at the beginning of the year, even last year. It wasn’t a big thing. Right now what we’re seeing is if people want to move, they don’t necessarily, again, want to go for that cash offer, but they still had plans before all this, where they’ve now have decided that they want to move out of state or, there’s so many different situations there. I would say that where we were getting one or two listings a month, we’re now getting seven, eight, nine listings a month just off of our regular marketing stream that we would do to get those cash sellers. It’s no more money that we’re putting into this system to get these real retail leads. It’s just turning into more profit on the other end.
Absolutely, and again what we’re saying is these are just the leads that we’re generating on the cash offer side that we’re flipping to retail. It’s interesting. I would not have thought going through what we did with the current environment, that retail would come out as strong as it did, but man, it kicked into gear and we’re grateful that we have that additional revenue and let’s put some math around that. If you’re listening, you’re like, okay, you took seven listings. Well, if our average sales price, Dallas is, 250,000, that’s 7,500 at 6% commission. Again, we’re going to take half of that, right? We’ll just call it around 3,500. Well, that’s just right there an additional 20 to $25,000 in profit for not doing anything additional on the marketing side that we’re able to kick to the bottom line in a matter of 30 to 60 days. That’s amazing.
Then lastly, direct to investor again, if you’re new, what we’re saying there is you want to look at partnering with other investors that have deals and maybe you’ve got a good buyers list, a strong buyers list and the other person doesn’t. What we’re talking about with this situation is creating a partnership where you do something like a 50/50 split and you help that person market and sell that property to the other side, being the cash buyer. That’s a really important piece for us as well, and here’s the great thing as more competition comes in the wholesaling world, the more competition there is, the more opportunity there is for Jv’s, whereas on the direct to seller side, there’s more competition with the seller that can actually challenge the business.
We want to nail that point because I think that that was a really big one on the 3-legged stool. What we challenge you to do is think about is most importantly, do you have more than one revenue stream in your wholesaling business?
Let’s go to number two. There’s no doubt Krista that we had to move over to a virtual showing process. We had to maintain social distancing. The question is what have we do? How has this changed our thinking? Are we now changing the way that we do showing processes both with sellers and particularly our cash buyers? What happened?
Well, we originally and we always try and pivot when we have a situation. We jumped on doing the virtual selling and then we’re like, “This works really well.” Our buyers like it and we’re selling properties before the showings. People are able to feel like they’ve walked the property. They feel confident to put in a sight unseen bid and we’re selling for over asking price. It has been a great tool to drive up our revenue and something we’ll continue to do. While we were trying to just fix a problem for the situation we had, now we have a really strong marketing tool, that maybe we wouldn’t have jumped on as quickly if we weren’t forced to by the current environment.
Would you say you’re surprised how much COVID-19 shifted people’s behavior to be willing to do more sight unseen? Would you ever think that would continue, that we’d be selling property sight unseen at the level we are versus always having to get people in to see the house?
I think it’s really changed the industry because people are worried about going out and interacting with others. They’ve adapted their business as well, and just being able to go through those five to eight minute videos, bit by bit, I think it’s changed the buyer’s business and how they’re looking to participate. They’re seeing that they don’t have to go, they don’t have to meet strangers. They don’t have to fight with dogs or weird tenants. They can do all of their fact gathering and make their estimates based on the information we’re giving them on our website in our flyer.
Here’s the analogy I think I’d give to that Krista. It’s like when we first started to convince, particularly tech did, people to buy clothes online or to shop on… You remember this? Are they going to buy a pair of shoes online without going to the store? But we understand Amazon. We realize now people don’t want to leave the house. Amazon has crushed retail industry as a whole. I think that thing that’s happened is we’ve ramped this up too now in the mindset that it’s similar, where people are now more comfortable making decisions about real estate without needing to do it. Fundamentally, what we’re saying is to make those decisions online, just like we make decisions now online with Amazon. Is that the analogy of what is starting to shift, that the real estate is following behind that model of Amazon and everything going online?
Yes. I think it’s also the fact, if you drive through the Metroplex, you have commute times, traffic, whatever. Now they can view, if we have five properties with videos, they see five properties in less than 30 minutes.
Without ever leaving their house, which is great.
Yeah. They see more properties, they buy more properties. It is that Amazon mentality, buy it online and get it as quickly as possible.
It’s going to be interesting, we know behavior shift. We’re not saying we know to what extent, but what we’re saying is, we’re starting to see some indicators that this is direction that things are starting to go, which is great.
Now, Sierra, real quickly if you’ll touch… I know that in order to support that process, we needed a new tool, which was ActiveCampaign. We were using a different system to blast out via email, which was Give Response. Some people might be using Constant Contact or something along those lines. Talk real quickly about ActiveCampaign and that tool being really a lifesaver for us.
Yeah. I was actually just going to bring that up, that another piece of this. With active campaign, the reason we even decided to look for another system is this virtual showing process, to be completely honest with you. I was trying to embed videos and increase our buyers list and it was just a disaster, another system we were in. When I was looking for a new system to replace that one, those were two pieces in the back of my head that I had to find something that was going to allow us to embed videos and import a bulk lists and ActiveCampaign with that thing.
It has given us the ability to embed those videos, without them having, our potential buyers, without them having to click through multiple tabs, just to get to a video on YouTube. This way they can click it right in their email. We just quickly put the video in the template and it’s done. They click it, they can view it, and it also gives us the ability to put in offer buttons and things like that. It really does create a full virtual process. They don’t even have to pick up the phone to call Krista, to ask her about a property. They can click a button, they could submit an offer, they can do multiple things just through that one email. That was definitely a huge piece of that virtual showing process.
Absolutely. We’ll throw that in the show notes, if you’re interested at the link on that. And again, we set up a deal with them once we started using them and we liked it. People always ask us, “Hey, can you give me some type of promo on that?” So the deal is they do a free migration with the link that we’ll add, which is meaning they’ll take the time to go into whatever system you’re using at no cost, and they’ll put that over into the new system, which few know, is really honestly a pain in the ass to do. That’s a valuable piece that we’re able to get them to do for anyone that’s interested in ActiveCampaign.
Let’s move on to the next thing. This was another really interesting tool that we came across Rehab Estimator Pro. Fundamentally, what this is, was a piece of tech that allows you within 13 minutes to be able to determine the repair amounts on a property. We know that the two things you have to get right on a deal in order to make money and not lose money is, the after repair value and the rehab amount. You get one of those two things wrong you’re in trouble. So, Rehab Estimator Pro is good for that. But, what we want to talk about is, why it became valuable even more particularly through what we went through. Krista, what happened with Rehab Estimate Pro? And, why was that valuable to us as we were reflecting over the last six months?
That’s one of the programs that we can share with the buyers. It goes back to that sight unseen. They can use that. We can talk them through it and show them what the rehab costs are going to be within quite a narrow margin. They’re feeling better about making those sight unseen offers and using that submit button to get us those offers quickly.
Fundamentally the cool thing about that is, if I’m going to buy a house sight unseen, it’s one thing to show me the video, but what we’re finding valuable with Rehab Estimator Pro is that we can also show them the repairs with a trusted system, because what Rehab Estimate Pro’s goal is to be the MLS, just like the MLS, is that for nationwide, for the after repair value. Rehab Estimator Pro is trying to be the system nationwide for how we determine the value of a property from a repair standpoint that we all agree on, so that everyone’s not all over the map. What are you seeing on that?
It’s easy for people to use, and again, it’s based on local zip codes. It’s not just me throwing out a number, “It’s going to be $20,000 in rehab,” and telling them that they need to figure out what that rehab is going to be. But, we can go in and say, “okay, you’re going to put granite countertops. You’re going to upgrade the bathrooms. It’s going to cost this and this and this,” and they have exact dependable number.
I think it’s something I wish I had in the beginning, Krista. I know it’s so useful for us now just being where we’re at in our business. But I know for me personally, in the beginning, when I was new, I had a lot of insecurity around figuring out repairs on a property. To be honest, I honestly still do, because that’s not my strength. I’m not an engineer type mindset. I don’t even like to fix things around my house. My wife does a better job than I do. A tool like Rehab Estimator Pro is really good, if it’s something that’s not your strength. It just simplifies.
But it also helps for those new people who don’t know exactly what they should be paying because it’s based on averages for your zip code, so less chance of some guy coming in and saying, “This is going to be $40,000,” but Rehab Pro can show you that maybe the cost really should be more 22 to 25. It helps the new person as well.
We’ll throw that in the show notes as well. Been a great tool for us. Again, we love to pass on any tools that have been good. We love tech. It’s what makes our life more efficient for sure. Rehabestimatorpro.com, and again, we have a promo code for 70% off a month on that, which is REIRADIO, one word case sensitive. That literally gets you 70% off per month moving forward, which is a heck of a deal. It takes it from like 97 bucks down to like $29.99. She said, “No plan, it’s super cheap.”
Let’s go to this Intake Specialist. This is a really interesting thing that we were reflecting on and grateful that we had. If you’re hearing that phrase for the first time, we define an Intake Specialist as, someone that works for you, that their main responsibility is to build your cash buyers list.
Think of it this way, if you’re listening, you feel like you’re probably responsible for building that right now, but imagine that you continue to build it, but then you also hired somebody and their job was to grow that list both from a quality and quantity standpoint at a faster rate than you could ever do on your own. That’s what an Intake Specialist does. And, we have a couple Intake Specialists in our company. That’s one of the reasons why we have one of the stronger cash buyers list in Dallas-Fort Worth area. And, of course, if you ever have a deal, let us know, we can help move it.
What I would say on the cash buyers list, when I get a call from someone that’s new and they’re like, “Chris, what are a couple of the most important things I need to start with?” I always say, ” Man, you got to find a good marketing channel to get up and going and stick with that and get it working. And, number two, you better start building your cash buyers list immediately because in the end, that thing is going to make you a lot of money.”
Sierra, talk to us about why the Intake Specialist? Again, it’s a great hire to have, but why did it become so important with what we experience as the last six months?
I think that we’ve put a lot of focus in the past on just really beefing up our buyers list and making it a solid list. If we have somebody that wasn’t really moving or purchasing from us, we weren’t focusing so much on them in the past because we had a VIP list that was just so strong. These are our targeted buyers that they’re communicating with Krista daily, to get our properties. When we saw COVID happen, what we saw as our VIP list, they started to get a little bit more reserved. They decided to back away and see what’s going to happen within this market. We had properties that we need to get rid of and we needed to switch our focus and broaden it a bit. And so, with our intake manager, what we are able to do is, build this massive list of investors in DFW.
Whereas before we were focused more on our VIP list. We were able to jump into that broad list and move properties just as fast as we had been doing in the past through our VIP list. We are still basically, she scrubs Facebook, she goes through bigger pockets, multiple things she’s focused on just grabbing people that raise their hand and say, “I’m buying and I want on your list,” We’ve been able to grow that list by, I think it’s 15,000 just on the non-targeted list. She’s put so much time and energy, but we’ve been able to move these properties faster because of it. We’ve been able to reach a broader audience, an audience that we really weren’t targeting before, but it’s allowed us to move the properties we need to move in the timeframe we need to move them.
If somebody is listening and go, “That sounds really cool.” What’s the hourly rate for an Intake Specialist? Where would you start somebody? And, are they state side? Do you get them internationally? Give some practicals, where would you find one? Someone’s like, “You know what? That’s a great idea. Give me the first three or four steps on what I need to understand to get an Intake Specialist in my company?”
I think the most important thing is, you need somebody that can research and scrub. There are certain personalities that do not have it in them, to sit there and just scrub the internet all day. But, when you find somebody that does have that personality, they’re really going to make a huge impact. I would say the first thing is, in terms of wage, I think you can find somebody for around $10 an hour to go in and put their all into it. The other piece is, there is some communication with the Intake Manager. It’s not just grabbing email addresses and contact information. There’s some communication, like reaching out, calling.
That’s something that we just started doing is, having the Intake Manager actually call through and ask people, “Hey, are you interested in being on our list?” They can’t be somebody that is going to put their heads down and just pull contact information. They have to have some type of relationship and ability to build that relationship too. That’s why I say $10, this is safe place to be, and then you can move them up from there. But, I don’t think you need to spend too much to get them started initially. I would say on average, probably 10 hours a week, is probably right where they need to be until they get a handle on it. Then you allow them to have some creativity and move their hours up a bit.
Let me challenge the audience. If we’re talking about $10 at 10 hours a week, we can do the math on that. That is a not very much per month. That again, roughly comes out to about 400 bucks. Do you think that investing in your cash buyers list, which is literally the most important thing and the only real proprietary thing you have in your business, because people will come and give you deals to help move if you have a strong enough one, worth 400 bucks a month to start investing in that thing? I think it’s a no brainer. That’s just my opinion and what amazes me is, I don’t hardly know anyone that actually has Intake Specialist. Even if you’re newer, that’s something, if you had a little bit of a budget, like $400, that’s something you could afford to be able to do.
Can you imagine being able to pull wholesales, we said go direct to investor faster and not be over there, just grinding it out on the phones or whatever you’re doing trying to do deals with sellers, but also start to network with investors and go, “By the way, I got a really good buyer’s list in my city. If you’ve got a deal, let’s partner on it, 50/50.” I want to challenge your thinking that you can move over to that co-wholesale side, that direct to investor JV, whatever you want to call it much faster, if you get to work on the cash buyers list.
Some great points here. Let me summarize that. Sierra, Krista, I’ll stop there on that last point, though there’s the 3-legged stool we recommend. We’re challenging you there to be more diverse. Don’t put all of your eggs in one basket when it comes to your investment business. Number two, understanding that the virtual showing process and what we went through has been really valuable and that we really are now going to continue selling property sight unseen, continuing to use and capitalize on technology like, ActiveCampaign. Rehab Estimator Pro is a fantastic tool. And, of course the Intake Specialist to really help build up that cash buyers.
I’ll be honest with you. If you’re probably listening, you’re not enjoying research. If you’re listening, you’re probably a visionary and you do not want to grind it away, trying to build your Intake Specialist list, the last thing that I would want to be doing as well.
As always, if you want to put a face with the name and so forth, go over to our YouTube. You can find that at Chris Arnold-Real Estate. There’s always some additional videos and stuff we do over there, that don’t go on this podcast. Great way to get some free education. Then lastly, again you guys know that we are massive advocates of radio. Sierra, last six months, and you didn’t know, I was going to throw this at you yet. All the students now that we’ve helped get on radio, what are a couple of things you’ve observed about the value? Or what radio’s taught you in the sense of “Man, we’re grateful. We’ve had that.” What have you seen on the REI Radio side with our students?
Consistency. REI it’s just consistent. It’s just one thing that honestly when you’re targeting, and I’ve heard this from the students as well, that when you’re targeting the demographic that we’re typically targeting and the wholesale world and all of that, radio is where they are. A lot of people here and these streaming services and these other marketing strategies, that’s not really where our sellers are. Radio really points to where the sellers are that are in pain and need help. It’s just consistent, even when volume drops, the quality of deals are still there.
I think that’s the most surprising thing we’ve heard from our students is, they expected a bigger volume, but they didn’t realize that it’s really quality of the lead versus quantity. They’ve started to realize that, within weeks of getting started, that the volume might not be as crazy as direct mail and these other sources, but the quality of lead is outstanding. These people are calling you. They’re ready to move. They’re ready to make a decision. They’re hotter leads, and it’s just consistent.
I agree. I’m glad we’ve had radio in place and I’ve loved for the students number one, to see them get up and going, and literally how many times have we heard executed anywhere from one to three transactions within the first couple of weeks. Whether that’s like Jay Estrada or Chris White, or I could just keep naming students, we had. That just got in and got up and started doing deals. Then the other thing I’ve loved, the window that we’ve had, that radio stations have been so hungry to gain new business, that we see students getting prices that we never realized you could go that low. And, they’re locking those prices in for a year. This isn’t just temporary and so it’s been awesome as our students, just got in there.
I think there’s probably rumors going around the country between all these radio stations like IHeart and Cumulus, and like “Where are all these students coming from and getting these prices and negotiating us down?” I’m sure we’ve made a stir out there.
Who’ve made this formula? Where’s this formula coming from?
Who’s doing this?
I wonder that.
We’ve definitely shaken things up out there. We have exclusivity in market. You need to book a call. We are literally selling out markets because we’re going to preserve radio and we’re not going to let it get oversaturated, like everything else has, as well. Stop being on the fence. You’ve heard all of the students talk about the success. I’m being honest, Sierra and Krista will tell you, radios without question, the best marketing channel we’ve ever put into place. Without question, nothing’s come close to it.
Go to wholesalinginc.com/reiradio again, wholesalinginc.com/reiradio, book that call, get your market up and going and get a great marketing channel set up for the rest of this year to make the rest of the year a great year for you.
Sierra, Krista I enjoyed six months in reflecting. It’s been a crazy year. It’s been interesting. I look forward to maybe getting to the end of the year and talking about what has transpired the last six months of the year and what we’ve learned. Thank you guys so much.
And to the rest of you guys, thanks for joining us. Until next time, when we add more value, we will catch you soon. Thanks.