Many people who got into wholesaling are not experts in the industry. What they often have in common is the willingness to take massive imperfect actions. In most cases, they learn about things as they go.
However, every now and then, learning from others can make a world of difference to your wholesaling business. Moreover, learning from a really successful wholesaler and real estate investor like Cody Hofhine can go a long way towards accelerating your success.
If you’d like to learn from one of wholesaling’s best, you’re in luck! In this episode, Cody answered seven of the most pressing questions every wholesaler should have an answer to. Ensure you have a pen and paper handy. As always, you’ll have plenty of wisdom, tips, and insights to take note of!
- Which is best, cold calling or direct mail?
- What should I do when I start gaining traction?
- Should I skip a week of mailing to manage all the leads coming in?
- How do I handle motivated sellers who want to sell but don’t want their tenants to know?
- What are the top 3 marketing channels?
- What do I do when I have calls coming in but no motivation?
- How do I price land?
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Hey guys, Cody Hofhine with Wholesaling Inc, the number one wholesaling coaching program. Super excited to be with you today because we’re going to go over just some frequent questions that I always get. And I’m going to answer them live with you right now. So I have students that ask these questions. I have people maybe that are calling in wondering if they want to get into wholesaling, wondering if they want to have our mentorship at Wholesaling Inc, to just general questions that I get from YouTube, from Facebook, from all the different social media channels. And so I’m going to go over these questions to help you guys understand. Maybe many of you are thinking these same questions and you’re wanting these answers. So let’s get right to it. Our first question is cold calling or direct mail?
Now, many of you know us here at Wholesaling Inc. We got Brent Daniels teaching cold calling, and you’ve got us teaching direct mail. So which one do you do? Do you do the cold call approach or do you do the direct mail approach? Let’s break it down. When does direct mail work good? When does cold calling work good? For those that are working a nine-to-five, majority of the people I talk to, they’re working a nine-to-five job. They don’t really have a whole lot of time to put into marketing, being very active. They want something to do the heavy lifting for them. For that reason, I would tell you direct mail. Direct mail is something that while you’re at your nine-to-five work, to your full time job, you can send the mail out so that simply all you do is just wait for the phone calls to come in of the motivated sellers.
So that’s one way to look at it. Cold calling is a very proactive approach. Meaning if you have time during the day, you have plenty of time, two, three, four, five hours during the day where you can actively create your own leads, then I’d say do cold calling. Direct mail is something you got to look at as they will do the heavy lifting for you. Yes, it may take a little bit more money too. Cold calling typically will have a less spend on the pockets so you can spend a little bit less but you’re going to be very proactive. So depending on your job, depending on your lifestyle, that’s why I say depends on which one you want to go. So quickly, break it down. If you’re full-time, my guess would be go do direct mail. That’s what I did. I had a full time job.
I couldn’t just really just go out there and start calling people. I didn’t have that time. It wasn’t available to me. So direct mail worked good for me. For those that say, “Man, I do have plenty of time,” go the cold call route. Cold calling is still a great channel that you can start developing your own leads, but you’re going to have to proactively go after it. So there’s the breakdown. Second question. What do you do when you start gaining traction? This question is asked all the time, because what happens is we start getting into wholesale, we start to get this traction, this momentum going. So now you’re out there, you’re getting maybe a deal a month or maybe two deals in one month. And what you start to do is you start to really feel overwhelmed because now you’ve got a deal under contract that you’ve got to see through to closing, but then you still have to send out the direct mail.
You still got to do the followup. You still got to go on new appointments. There’s all these moving parts. And at the beginning, many of us are wearing all the hats of this business and we have to do everything. We have to fulfill the whole portion of this business. So what happens really quickly is I’ll have even a ton of students that will call me, say, “Man, I’m getting one deal a month, two deals a month, three deals a month or one deal between one and three deals a month,” what they’ll do though is they get overwhelmed really quickly and now they’re looking at it and they’re like, “Man, now this is just like a glorified job. Really I’m getting paid well, but I’m doing everything. And I’m working a ton of hours.” That’s where you got to really, really consider putting some little simple systems in place.
The best one you can do is your CRM. Keep it very simple, but keeps track of all your followup. Something that you can do instantly is bring on a virtual assistant, someone from the Philippines that starts to manage your marketing. So if you’re doing direct mail, start to pawn that off to a virtual assistant, you can get a great virtual assistant for three, four, five bucks an hour that are from not in this country, but can do this because everything’s done over the internet. Everything’s done over by computer and they’re reaching out to the third party mail houses. That can be done by someone else. You don’t have to touch that. So as long as you’re crystal clear on what they need to do, someone can do that for very, very cheap and take that off your plate so that you’re able to focus on all the moneymaking or the money producing activities.
So when you gain traction, don’t lose hope. Don’t lose focus. It’s not worth giving up. Don’t give up. It just means you’ve got to simply start getting some of these things off your plate and bring it on either a system or a team member. And if you’re going to bring on a team member, there’s so many things you can do right out of the gates with a virtual assistant. So that it’s very, very cheap. Very, very cost effective. Another favorite thing that I like to do to send over to a virtual assistant is not necessarily have them take my phone calls and call the people back. I don’t want that. I want to be able to do that. But what I will have them do is listen to the voicemails that come in from the direct mail. We always ask for three things, we ask for their name, their number and their address.
If they leave all three of those items, then they’re going to be a category one or a hot lead. If they forget something, it’ll be a category two or just a medium warm lead. And then if they don’t leave anything or hang up, that’s going to be a category three. So have your virtual assistant go through the voicemails and start to mark out all the voicemails that she listens to, are they a category one, two, and three, put them on a spreadsheet so that right when you’re ready to go to work, you’re calling all the category one’s first, category two second, category threes third. We got to go back to this because part of that is wondering if I should skip a week in mailing, “Man, I’m so overwhelmed that I don’t know what to do, and it’s making me just take the low hanging fruit and I’m not spending quality time now finding motivation in these calls because there’s so many calls coming in. Should I just take off a week of mailing so I can handle all this stuff coming in?”
No, no, no, never, ever, ever. I’ve never heard of a business that grows with their foot on the brake. It’s impossible. You’ve got to keep that gas going. You’ve got to keep pushing that gas pedal, and the gas pedal is marketing. Never slow down your marketing. Keep that going and just figure out what systems and what team members can I bring on so that you can keep going. Okay, next one. How should I handle motivated sellers that say they want to sell the property, but don’t want the tenants to know about it? This is something that I you’ve gone through. And a lot of people go through. The seller may have a family member and most time it usually is a family member. “Hey, I want to sell my home, but I don’t want the tenant to know.” And then you asked about who the tenant is and it’s usually a son or a daughter or a family member.
And that’s why they don’t want the tenant to know is because they don’t want them to know that they’re kicking them out of their house. So what do you do? On those, this suggests that I’m going to get it at a deeper discount if that really is the fact that they won’t let me go in this home, because they don’t want the tenant to know about it. Then that’s where you’re going to have to say, “Listen, you’ve got right my back against the wall. I’d love to help you out. I’d love to buy this home, but if I can’t see it and I don’t know what the inside looks like, and I can’t just simply go off. Again, I get that you’re probably a trustworthy person, but without me personally seeing these things, I don’t know if there’s anything I can do other than I would have to get it at a deep discount.”
So when someone doesn’t want you to go look at the home, then you got to act almost like you don’t care. “I’d be glad to help you out, but if I can’t see the home, I don’t know what I’m getting into. I don’t know how many cans of worms I’m going to open up. So for that reason, I can only offer this…” And it better be gut check low where your gut’s like, “Oh, I’m going to get punched if I tell him this price.” You want it super low because they’re not letting you see the property. Then maybe they’ll either say yes and now you just got a deep discount property or they’re going to say, “Oh, okay, let’s line up a time that you can go see the property.”
And now you got past the hurdle. So try those two things. Next one. What are the top three channels for marketing? So we’re going through these quick. Top three marketing channels for me currently right now in Utah, and this will translate in most markets, but the three areas I love are direct mail, PPC or PaperClick, so web leads and then cold calling. Those three channels are my trifecta, my Holy grail, and they’re the ones that continue to produce consistent deal flow. We do on average anywhere from about 10 to let’s say 13 deals a month. Next one. I have calls coming in, but not much motivation. What do I do? So I want you to think about this. Take just a second and think about if this is you. If this is going on, “I have so many calls coming in, but I just don’t think there’s much motivation going on.”
I want to ask you guys, what do you think motivation sounds like and what do you not think motivation sounds like? Most times when I ask the question, what does motivation not sound like? Usually I get the answer that, “Someone that just wants full price.” Now guys, here’s what I’ll tell you. You got to think of the seller and you got to think of the home. I don’t care about the home. So when asking questions, if the answers have to do with the home, it has nothing to do with motivation. It has all to do with the seller. So you got to think of just questions about the seller. So when someone says, “Oh, they just want full price.” Is that attached to the seller or is that price attached to the home? It’s attached to the home. So I don’t care about the price, the price doesn’t reveal motivation.
What reveals motivation is a simple question, “Hey, this looks like a great place. Why are you considering selling it?” So I want you to write this down. ‘This looks like a great place. Why are you considering selling it?’ And let them start to open up and tell their story why they’re going to sell it. Why is it that they called on a 37 cent postcard? Or why is it that they answer the phone from your cold call and they’re ready to sell their home? What is it that’s allowing themself? Because I want to know why, why are they selling? Not for how much, I just want to know why, why are you selling your property? Why did you respond on a 37 cent postcard when every one of us know five, six, seven, eight, nine, 10 realtors out there. Why are you selling your home? And when they throw out their first answer, I want you to dig deep because usually that’s not the real reason.
That might be a byproduct reason of what their true motivation is behind it. So you’ve got to just keep asking that question and stick on that question until they get open with you and tell you why they’re selling the home. You have to understand motivation right out of the gates. So the first question when you asked that, “Looks like a great place. Why are you considering selling?” When they say, “Oh, it’s because my kids, we want to put them in a new school district. They want to go to this new school.” After I went through this question and kept saying, “Oh, new school district. Tell me more about that.” “Where are you going to live? Is it in state? Is it out of state? Is it in the same city or is it out of the city?” “Oh, it’s out of the city.”
“Oh cool. Do you family and friends that you’re moving by?” “Yeah. actually my parents.” “Cool. Are you living by your parents? Are you going to live pretty dang close to your parents?” “Oh, actually right now we’re going to be living with their parents.” And I was like, “Oh,” now there’s some motivation. Moving in with parents. And so what you do is you can do what I call assume the best, they’ll tell you the rest. So think about this. If I asked you how much money do you make, you’d be like, “That’s none of your business.” But if I said, “Hey man, you look sharp today and you’re always driving a nice BMW. You got incredible clothes on. You must make a quarter million dollars a year.” You’d be like, “I wish that was the case. I actually make $150,000 a year.”
By assuming the best they’ll tell you what actually is reality. You can do this with your leads as well. Awesome. Instead of saying, “Hey, why do you live with your mom and dad?” They’d be like, “That’s none of your business.” But if I say, “Oh, you must be living with your mom and dad because you’re having a nice home being built. Is this the case?” And they’ll be like, “Oh, I wish that was the case. I’m actually living with my mom and dad because my husband lost his job.” Boom. Now we just found motivation. Now we can go on that appointment knowing that this is a motivated seller. So those are key things to think about. “This seems like a nice place. Why are you considering selling?” And just stick with that question and keep going after it and keep helping them unravel why it is they’re selling their home.
Not for how much, but why. The last one that I come across all the time is how do I price land? So at what price point do I need to get land at? This is something that you will frequently come across where you’ve sent out mailers, or you send out your marketing and someone calls in and they have a piece of land, raw land that’s not been developed. At what price point do you need to do this? What you need to do is because this is going to be a niche buyer, not all of your buyers on your list care about land. They just want to get a home, rehab it, put it back on the market or keep it for a longterm buy and hold. Many people don’t know about the developing process and don’t want to work with the cities on the permits and all that stuff or rezoning.
So it’s going to be a niche buyer. And so if you want to have any action with land, you got to get it at a deep, deep discount. You want to buy homes at 40, 50, 60 cents on the dollar. You’re going to want to buy land at 10 to 20 cents on the dollar. So if the land’s worth $20,000, you’re going to want to buy it for two to $4,000. That’s the difference that you need to have so that you can really find a cash buyer because cash buyers might change their mind if it’s a smoking hot deal. If the price point is something that like, “Yeah, I don’t mind trying this out. It’d be something that I’d be willing to try out.”
So if you’re going to get land, 10 to 20 cents on the dollar. Other than that guys, get out there, take massive imperfect action. If you need help building your real estate business, head on over to wholesalinginc.com, fill out a short questionnaire, get on the phone with our team because we would love to get you in the game. We would love you to get out there and start finding these off-market deep discounted properties that you can then turn for a huge profit. God bless you guys and all your effort. Stay safe out there, but know that you can do deals. You just got to get out there and know what action to take. And we’re here to lead and guide you step by step. Take care, guys.