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!
7 Questions Every Wholesaler Should Have an Answer To
I’m super excited to be with you because we will go over some frequent questions that I always get. I’m going to answer them with you. I have students that ask these questions. I have people maybe calling in, wondering if they want to get into wholesaling or have our mentorship at Wholesaling Inc. to general questions that I get from YouTube, Facebook, and all the different social media channels.
Cold Calling Or Direct Mail?
I’m going to go over these questions to help you understand. Maybe many of you are thinking these same questions and wanting these answered. Let’s get right to it. Our first question is, “Cold calling or direct mail?” Many of us here at Wholesaling Inc., we’ve got Brent Daniels, teaching cold calling, and you’ve got us teaching direct mail. Which one do you do? Do you do the cold call approach or the direct mail approach? Let’s break it down.
When does direct mail work well, and when does cold calling work well? The majority of the people I talk to are working a 9:00 to 5:00 job. They don’t have a lot of time to be very active in marketing. They want something to do the heavy lifting for them. For that reason, I would tell you by direct mail. Direct mail is something that while you’re at your 9:00 to 5:00 working your full-time job, you can send the mail out. All you do is wait for the phone calls of the motivated sellers to come in. That’s one way to look at it.
Cold calling is a very proactive approach. If you have time to create your leads actively during the day, I would say do cold calling. Direct mail will do the heavy lifting for you. It may take a little bit more money, too. Cold calling typically will have less spend on the pockets. You can spend a little bit less, but you’re going to be very proactive. It will depend on your job and lifestyle which one you want to go to.
If you’re full-time, my guess would be to do direct mail. That’s what I did. At a full-time job, I couldn’t go out there and start calling people. I didn’t have that time. It wasn’t available to me, so direct mail worked well. For those that say, “I do have plenty of time.” Go the cold call route. Cold calling is still a great channel to start developing your leads, but you’re going to have to go after it proactively. There’s the breakdown.
What Do You Do When You Start Gaining Traction?
The second question is, “What do you do when you start gaining traction?” This question is asked all the time. What happens is we start getting into wholesale and get this traction or momentum going. You’re out there. You’re getting maybe 1 or 2 deals in 1 month. You begin to feel overwhelmed because you’ve got to deal under the contract that you’ve got to see through to closing, but then you still have to send out the direct mail, do the follow-up, and go on new appointments. There are all these moving parts.
In 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. What happens quickly is I’ll have even a ton of students that will call me, saying, “I’m getting 1 deal a month, 2 deals a month, 3 deals a month, or 1 deal between 1 and 3 deals a month.” They get overwhelmed quickly.
They’re looking at it, and they’re like, “This is a glorified job. I’m getting paid well, but I’m doing everything, and I’m working a ton of hours.” That’s where you got to consider putting some simple little systems in place. The best one you can do is your CRM. Keep it very simple, but keep track of all your follow-up.
Something that you can do instantly is bring on a virtual assistant, someone from the Philippines that starts to manage your marketing. If you’re doing direct mail, start to pawn that off to a virtual assistant. You can get a great virtual assistant for $3, $4, or $5 an hour from not in this country, but you can do this because everything’s done over the internet and computer. They’re reaching out to third-party mail houses.
Never slow down your marketing. Figure out what systems and team members can help you keep going.
That can be done by someone else. You don’t have to touch that. As long as you’re crystal clear on what they need to do, someone can do that for very cheap and take that off your plate so that you’re able to focus on all the money-making or the money-producing activities. When you gain traction, don’t lose hope and focus. It’s not worth giving up. Don’t give up. It means you got to start getting some of these things off your plate and bringing on either a system or a team member. If you’re going to bring on a team member, there are so many things you can do right out of the gates with a virtual assistant so that it’s very cheap and cost-effective.
Another favorite thing that I like to do is 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. I will have them 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 will be a category two or a medium warm lead. If they don’t leave anything or hang up, that will be a category three. Have your virtual assistant go through the voicemails and start to mark out all the voicemails that she listens to.
Are they a category 1, 2, and 3? Put them on a spreadsheet, so when you’re ready to go to work, you’re calling all the category 1 first, category 2 second, and category 3 is third. We’ve got to go back to this. Part of that is wondering if I should skip a week in mailing, “I’m so overwhelmed that I don’t know what to do. It’s making me take the low-hanging fruit. I’m not spending quality time finding motivation in these calls because so many calls are coming in. Should I take off a week of mailing so I can handle all this stuff coming in?”
I’ve never heard of a business that grows with its foot on the break. It’s impossible. You’ve got to keep that gas going, keep pushing that gas pedal, and the gas pedal is marketing. Never slow down your marketing. Keep that going and figure out what systems and team members to bring on so that you can keep going.
How To Handle Motivated Sellers Who Want To Sell Property
The next one is, “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 so something that a lot of people and I have gone through. The seller may have a family member. Most times, it usually is a family member, “I want to sell my home, but I don’t want the tenant to know.” You ask about who the tenant is, and it’s usually a son, a daughter, or a family member.
They don’t want the tenant to know because they don’t want them to know if they’re kicking them out of their house. What do you do on those? This suggests that I’m going to get it at a deeper discount. That’s where you say, “You’ve got my back against the wall. I would love to help you out and buy this home, but if I can’t see it, I don’t know what the inside looks like. I can’t simply go off. I get that you’re a trustworthy person, but without me seeing these things, I don’t know if there’s anything I can do other than getting it at a deep discount.”
When someone doesn’t want you to look at the home, you have to act almost like you don’t care like, “I would be glad to help you out, but if I can’t see the home, I don’t know what I’m getting into and how many cans of worms I will open up. For that reason, I can only offer this.” It better be gut-check low where your gut’s like, “I’m going to get punched if I tell them this price.” You want it super low because they’re not letting you see the property. They’ll either say yes, and you got a deep discount property, or they’re going to say, “Let’s line up a time that you can go see the property.” You got past the hurdle. Try those two things.
What Are The Top Three Channels For Marketing?
The next one is, “What are the top three channels for marketing?” We’re going through these quickly. The top three marketing channels in Utah that translate in most markets are direct mail, PPC or pay-per-click web leads, and t Those three channels are my trifecta, my holy grail. They’re the ones that continue to produce consistent deal flow. We do, on average, anywhere from about 10 to 13 deals a month.
What Do I Do When There’s Not Much Motivation?
The next one is, “I have calls coming in, but not much motivation. What do I do?” I want you to think about this. Take it a second and think about if this is you. If this is going on, I want to ask you guys, what do you think and not think motivation sounds like? Most times, when I ask the question, I usually get the answer, “Someone that wants a full price.”
You can do deals when you get out there and know what action to take.
Here’s what I’ll tell you. You got to think of the seller and the home. I don’t care about the home. If the answers have to do with the home, it has nothing to do with motivation. It has all to do with the seller. You got to think of questions about the seller. When someone says, “They want full price.” Is that price attached to the seller or the home? It’s attached to the home. I don’t care about the price. The price doesn’t reveal motivation.
What reveals motivation is a simple question, “This looks like a great place. Why are you considering selling it?” Let them start to open up and tell their story of why they will sell it. Why is it that they called on a $0.37 postcard? 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 them to sell?
I want to know why they are selling, not for how much. Why are you selling your property? Why did you respond on a $0.37 postcard when everyone knows many realtors out there? Why are you selling your home? 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 of what the true motivation is behind it.
You’ve got to 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. The first question when you ask that is, “It looks like a great place. Why are you considering selling?” When they say, “It’s because of 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, ” Tell me more about that. Where are you going to live? Is it in the state or out of state? Is it in the same city or out of the city?” “It’s out of the city.” “Do you have family and friends that you’re moving by?” “My parents.” ” Are you living with or live pretty close to your parents?” “We’re going to be living with their parents.” I was like, “There’s some motivation, moving in with parents.”
What you do is what I call, “Assume the best. They’ll tell you the rest.” Think about this. If I asked you, “How much money do you make?” You would be like, “That’s none of your business.” If I said, “You look sharp. You’re always driving a nice BMW. You got incredible clothes on. You must be making $250,000 a year.” You would be like, “I wish that were the case. I make $150,000 a year.”
By assuming the best, they’ll tell you what reality is. You can do this with your leads as well. Instead of saying, “Why do you live with your mom and dad?” They would be like, “That’s none of your business.” If I say, “You must be living with your mom and dad because you’re having a nice home being built. Is this the case?” They’ll be like, “I wish that were the case. I live with my mom and dad because my husband lost his job.”
We have found the motivation, and we can go on that appointment knowing that this is a motivated seller. Those are key things to think about, “It seems a nice place. Why are you considering selling?” Stick with that question, keep going after it, and keep helping them unravel why they’re selling their home. Not for how much, but why.
How Do I Price Land?
The last one that I come across all the time is, “How do I price land? At what price point do I need to get land at?” This is something that you’ll frequently come across where you’ve sent out mailers or your marketing, someone calls in, and they have a piece of raw land that has not been developed. At what price point do you need to do this?
This will be a niche buyer. Not all of the buyers on your list care about the land. They want to get home, rehab it, put it back on the market, or keep it for long-term buy and hold. Many people don’t know about the developing process and don’t want to work with the cities, permits, rezoning, and all that stuff. It’s going to be a niche buyer.
If you want to have any action with land, you got to get a deep discount. You want to buy homes at $0.40, $0.50, or $0.60 on the dollar, and you’re going to want to buy land at $0.10 to $0.20 on the dollar. If the land is worth $20,000, you’re going to want to buy it for $2,000 to $4,000. That’s the difference that you need to have so that you can find a cash buyer. Cash buyers might change their minds if it’s a smoking hot deal. If the price point is something, they’re like, “I don’t mind trying this out. It would be something I would be willing to try out.” If you’re going to get land, buy it for $0.10 to $0.20 on the dollar.
Other than that, get out there, and take massive imperfect action. If you need help building your real estate business, head on to WholesalingInc.com, fill out a short questionnaire, and get on the phone with our team. We would love to get you in the game, get out there, and start finding these off-market deep discounted properties that you can then turn for a huge profit. God bless you in all your efforts. Stay safe out there. Know that you can do deals. You just got to get out there and know what action to take. We’re here to lead and guide you step-by-step. Take care.
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About Brent Daniels
Brent 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!