If you are starting in the wholesaling industry, there is one crucial thing you need to do first: build a solid and powerful foundation. That’s what you’ll learn how to do in today’s awesome episode!
In this episode, Chris Arnold, one of the most successful real estate investors and coach of REI Radio, talks to his Chief Operating Officer (COO) Sierra Ford about the 5 most important things you should cover during your first year of wholesaling.
If you are just starting out or considering getting into wholesaling, today’s episode is exactly what you need to hear to set yourself up for success!
The 5 Most Important Things To Do Within Your First Year Of Wholesaling Real Estate With Sierra Ford
I know we have a lot of people reading that have been in the business for 1 or 2 years. There are so many things you could consider trying to execute or implement in your business. I thought it’d be a valuable conversation to come in and talk about the five most important decisions or things that you should do within your first 12 to 24 months of being in business. How do you like that? That’s what you’re going to get by the end of this show.
I’m going to do it with my Chief Operating Officer, Sierra Ford, coming in from her perspective as we sat down and talked about this. She talks to a lot of visionaries and business owners all over the country. She deals both with seasoned people, as well as people that are newer to the business. We get this question that’s asked to us quite a bit and that is, “Should I or should I not within the first 12 to 24 months of my business?” That’s what we’re going to talk about. Sierra Ford, welcome to the show. I’m glad to have you on. How are you?
I’m good. How are you?
I’m awesome. For those that might not know Chief Operating Officer Sierra, give a little bit of background. How long you and I have been working together? What you’re responsible for as a COO?
I’ve been here for years. We’ve been doing this for a long time. I am responsible for all systems, operations, hiring, firing, making sure the day-to-day is functioning and everything is running the right way down to technology to people.
The Most Important Discipline
You pretty much run the show is what I say. You keep everything together. Anyone that knows our business and knows you, Sierra really understands the day-to-day operations. Let’s get to the meat on these five most important. Here’s the first one. Sierra, what is the most important discipline to get down within your first 12 to 24 months of being in real estate as an investor? What do you think it is?
It’s getting in the habit of lead auditing. That’s an important piece. A lot of people overlook it. They feel like if they have leads coming in, that’s enough. It’s not. You need to make sure that you’re properly tracking those leads. You’re looking into if they’re being contacted, notes are being updated, schedule follow-ups are being set because if you’re not properly watching them whether you’re the one making those calls, an acquisition manager or a prospecting assistant, you need to make sure that each lead is being touched and you’re not wasting important marketing dollars. Making sure that somebody is in there actively looking at the system and the leads coming in. It’s going to save you money and make sure that you’re getting everything out of the leads that are coming into your system.
Auditing the leads, another word that we might use for that would be making sure that the leads are being managed well. How does somebody practically do that? If someone says, “Sierra, I hear what you’re saying. I understand it’s important to make sure that we are maximizing and capitalizing on all the leads that are coming through but what does an audit look like? What would I be auditing if I’m brand new to the business? How do I do that?”
A lot of people think that this is a full-time position. It’s not. It’s somebody that goes into your system that is going to go 1 to 2 hours max a day and look through each lead to make sure that there is a follow-up date set, that there are notes on each lead that has come in, that its status is proper and that the source is marked properly. That is auditing in a nutshell.
Making sure that when you’re looking at that lead, anybody could come in, take that lead and know exactly where it stood from the notes to the follow-up dates. That’s also going to ensure that you’re jumping in the system and contacting leads that have said, “Not now,” but you’re not wasting that opportunity. It’s a huge difference when you’re actively going in there and making sure that those leads are not left untouched.
What if I’m just a solopreneur? I’m reading this and going, “I’m doing some marketing. I’m generating some leads but I don’t have anyone that’s auditing these leads. Do I audit them myself? Can I trust myself to do a good job of that? Do I hunker down and maybe pay someone to do it? I know this is important but can I hold myself accountable to a process that needs to be held accountable? How do I do that as a solopreneur?”
It’s something that you should bring somebody else in to do. It’s 1 to 2 hours and even if you’re the only one calling those leads. If your intention is to grow your business, somebody is going to have to come in there and take that role from you. If your system isn’t properly updated and those leads aren’t properly status and notated then how are they going to take those leads over?
If you have to, you can do it yourself but I don’t necessarily think that it’s going to be the highest of priority for somebody to go and audit themselves in a system. It’s 1 to 2 hours a day, if not bring somebody in for maybe two hours a week, just to pop in at the end of the day, touch some liens, look through the system, make sure that it’s updated and move on.
If you do insist on doing this yourself, just make sure you’re holding yourself to it. That you’re setting yourself some type of schedule to look in that system and make sure that all your I’s are dotted and your T’s are crossed by the end of the day and everything has been updated. When you are ready to move on and to pass this position over to somebody else like acquisition or prospecting, they can come in and see where you left off with each individual lead and you’re not wasting any opportunity there.
Set the standard for yourself, your sellers, and your team.
I go back to the first coach that I had Sierra. His name was Bob Corker. He’s still around. That guy has been coaching people forever. He said, “I can tell you that the number one problem that I see working with people at all levels within real estate is the mismanagement of leads.” I’ll never forget that because that was one of the first lessons that he taught me being the first coach that I ever hired and that was one thing that always stuck with me.
He’s right. What you’re talking about is to understand that the discipline of auditing, managing your leads is so important. Sierra, I would guess that the longer you put this off, the harder these disciplines probably would come back and do. Would you agree with that? You do it like a habit like, “I’ll get to that.”
Not only that but it’s creating a mess. You’re out of the habit but also when you finally decide to bring somebody into that, it’s a lot of backtracking. That’s a lot of potential wasted opportunity there. If your follow-up date isn’t set and you have somebody that says, “Call me back at the first of the year.” How are you going to remember that? That’s a wasted opportunity.
You’re going to have to go back to the beginning of your system to look through all of these leads and potentially try to contact again but you’re also potentially making some of those leads upset that you forgot about them. You wasted that opportunity. You’re trying to go back and they know that you didn’t follow up. It’s setting the standard for yourself, your sellers and your team. You’re making sure that you’re doing what you need to do in your system with every lead.
I’ve never even hired anyone out in that process. We’re talking about a couple of hours a day or maybe even five hours a week where someone’s popping in the system for an hour a day. When you have the ability to hire overseas at $3, $5 an hour, if you decide to go that route, there’s someone at the stateside. Sierra, I know you would say you could probably pick up someone for maybe about $12 per hour. We’re talking about a low cost for you to have a lead manager like this for just a handful of hours per week. On the practical side of hiring or paying this person, Sierra, anything else for someone that’s going, “I get this idea. I’m just not quite sure what my first couple of steps are, even finding or paying somebody like this.”
For this type of position, honestly, I would go even lower than $12. This is an admin position. It’s auditing. You’re not making this person a salesperson. They’re not going to be communicating with people. They’re going in and looking at the data. They’re looking at the lead itself and making sure that each lead was followed up with.
They’re not calling or prospecting. It’s a very simple position to hire for. It’s somebody that could do this in their living room each night while their kids are running around. It’s something that you could find somebody for a very low pay, even probably under $10 an hour to jump in a couple of times to make sure everything is done. It’s a simple hire for sure.
The Most Important Hire
Let’s go to number two. Number one, we talked about the most important discipline. What is the most important hire that a real estate investor will make within the first 12 to 24 months of being in the business?
Number one, people would assume you’ve been a lead manager but it’s not. You can be a closing manager, somebody to take on those responsibilities of dealing with title, carrying the title, communicating with the seller and the buyer on the back end and making sure that they’re showing up to the closing table.
The reason we say that this is the most important hire within that 1st to 2nd year is you want to be focused on generating contracts. I see a lot of investors will bring in an acquisition manager before a closing manager, which is crazy because you’re doubling the contract from the front end but you’re trying to close even more contracts on the backend yourself. That’s not going to work. It’s because you have more contracts doesn’t mean you’re going to have more closings if there’s not somebody in that position.
It’s having somebody solely focused on closing those properties so you can start to get some additional help whether it’s a prospecting assistant or an acquisition manager. To generate more contracts, you need that person closing them in order to do that. Having that one individual communicating, learning and understanding title is huge.
I’ve talked to so many investors that spend their additional time chasing sellers and buyers to get them to a closing table. It’s not the most effective use of time for them to be chasing on the backend. Get your contracts. Even on the disposition side, meet your investors but don’t be communicating to the title. Somebody can do it better. Somebody will make sure that the closing date or time is down if their sole focus is on closing title and properties communicating with both sides. That would be number one for sure.
I go back before you and I ever met. I’ve been doing real estate for years. This is when I was on the brokerage side. For those of you that don’t know, I did retail and became a broker before I started on the investment side. That was the route that I went down. My very first hire was a closing coordinator. I can go back and tell you that one of the biggest significant jumps in my revenue was when I hired her. When we started the investment company, the first hire that we made on the investment side was a closing coordinator and that was Taylor, who’s still with us. She’s been with us forever. It’s a significant jump in revenue.
I’m going to speak from a revenue standpoint on this and that is the fact that if you’re wanting to increase revenue, if you can focus more on getting more contracts, focus on income-producing activities, get rid of shuffling paperwork, dealing with the title company and getting a property to close, you’re going to be able to double down on what you do best. I saw two jumps in my revenue, both on the retail investment side when I did this in 2021. I don’t know if we ever talked about that but that’s true.
I don’t think we have but it makes sense. A lot of people think it’s just about the contract. Contracts mean nothing if they’re not closing. You can have a million contracts but if you’re not getting them to the closing table and funded, they mean nothing. It takes somebody that can focus. You mentioned Taylor. I will have conversations with her where she blows me away just knowing the terminology. It’s because she’s been able to focus on learning the terminology and understanding how to cure specific title issues. I would have never been able to do that. I don’t think you would have either. You really need the time to figure that stuff out. She had that skill and time required. She’s a closing manager all the way.
Contracts mean anything if they’re not closing.
The Most Important Piece Of Technology
What is the most important piece of technology that an investor should pick up within the first 12 to 24 months of being in the business?
This one’s a no-brainer. It is 100% a CRM. I hear these investors all the time telling me they’re working off of an Excel sheet. You got to get it into a system. It’s where everything starts. It is very difficult to continue to track off of an Excel sheet after the first month of leads coming in. You need something that can house all of your data, that you can make sure that follow-up dates are set, that there are notes there.
Think of it from the view of expansion. You’re not going to be a single person forever in this business. Hopefully, everybody will get to the point where they’re building their teams and somebody needs to be able to jump in there and know where you left off just like the lead audit. Having something on in Excel, it’s doing you a disservice. You’re losing the opportunity. There is always going to be a time where your notes are not there or a follow-up date isn’t set.
Get yourself a CRM. They’re not expensive. You can do something like REsimpli that blows everything out of the water. It’s under $100 and you can have everything in that system. That’s the key. Getting something that you can hold contact. It doesn’t need to be some fancy system but is a must. It’s a mistake I see a lot of people making. You can’t run a business out of Excels and notepads.
I go back to me sitting in my cubicle the first year that I was in business. This is before where people even understood the value of CRMs because the technology was still getting there. There weren’t CRMs specifically for the real estate industry at that time. They were brand new but I had Post-it notes. I would take the sticky post-it notes and line them on the back of my cubicle to keep up with all of my listings and price reductions. I had a moving post-it note system on the back of my cubicle.
I remember myself at the time thinking I was being great about being organized. At least I had everything written down and I had this nice system of moving them around but I was so far off on how organized, automated, efficient that I could be by utilizing technology and getting away from Post-it notes but that’s where I started. That’s how bad it was.
It’s funny because I hear people say all the time, “I’m not big enough yet to have a CRM. I’m not there yet.” That is such a mistake. If you start to have it now and you start building that system, not only is that marketing money. You’re going to get a return faster because you’re going to have an appropriate follow-up system but also if you wait until you’re big to get a CRM, that’s going to be a huge mess to import and get into that system. It’s going to be time-consuming and a heavy list. Start now, start fresh and make sure that you’re taking advantage of every lead that comes through your system. It’s not an expensive price point for a good system. You can incorporate something quickly, start now and not have to have a mess to clean up later when you intend to expand. It’s never too soon for CRM.
This is a true story. You can go back and look at my P&Ls years back. I can remember when we did this. We utilized this when we use Podio. It’s like the CRM system for real estate. You can go back and see a spike over a three-month period in my revenue in the middle of the year. I can remember a financial person looking at that going, “What did you do during those three months that gave you that spike and that increase moving forward?”
I go, “That’s when we implemented our CRM into our business.” That’s a true story because we weren’t dropping leads and making mistakes. We were keeping up with the contract process. We had systems and started utilizing automation. With all those things, we’re making sure that we weren’t dropping balls. Fundamentally, what you were seeing us was getting everything we could out of everything we had because we have a CRM system. That was a huge jump for us as well.
What we’re telling you is if you’re reading, it doesn’t matter if it’s Podio or whatever system that you want to use. We just want to encourage you to utilize CRM. I know people always ask us what we use. We use REsimpli. We liked that system because it houses everything you could ever need in one spot and they do it for $100. Rather than needing ten different pieces of software, this software does what’s called an end-to-end user experience. If you’re interested in REsimpli, you can check that out. Everyone always asks us for a promo code for stuff that we talk about that’s been valuable for us.
The Most Important Skill
Go to REsimpli.com/chris. That will give you all the discounts that go with that but just hear us out. It doesn’t matter if it’s REsimpli, we don’t care what it is. Just make sure within the first 12 to 24 months or probably sooner than that, get into a good CRM. Don’t wait that long to get that done. Let’s go to number four, Sierra. “Most important skill that I’m going to develop in the first 12 to 24 months.” What is that skill?
It is tracking your KPI. It’s a huge piece of the puzzle. It’s making sure that you understand what your numbers are in your business, what your metrics are, your KPIs. I see people make this mistake. They’re putting so much money into marketing and then they’re like, “I don’t know if it’s working. I’m going to try this and that.”
You wouldn’t ask that question if you were checking your KPIs. You would know exactly what your dollar-per-dollar return in each campaign was. You would make sure that all of that information is clearly in one place whether it is a spreadsheet or a system like Klipfolio. You need to make sure you have that information.
The most important tip I could give people for this is tracking numbers and making sure that each marketing piece that you have has a designated tracking number associated with it. That’s a phone number for each marketing campaign, which will help you know how many leads you’re getting from each campaign, how much money you are spending that come out from your bank. You’ll be able to associate that with that tracking number and you’ll be able to clearly see what you’re getting for your dollar-per-dollar return for all of your marketing.
When you say a great way to describe not tracking your KPIs is that you’re just flying completely blind. You’re spending money but you have no idea what that money is producing. I call it flying blind. It’s crazy to me that you would spend money on marketing and not track your KPIs, metrics or returns. How would you describe it?
You’re throwing money away. If you don’t know where that money is going and how it’s benefiting your company, you might as well start burning it because you’re going to start to make mistakes in investing in campaigns that you think are working. It happens to us all the time. We’re like, “AB and C marketing stream is working.” At the end of the month, Chris, myself and our marketing director get on a call and we look at the numbers on paper. I will tell you, probably 9 times out of 10 it’s completely opposite of what we think. It’s the whole fact versus feel thing. It’s factual information at the end of the month. It’s what we feel in the beginning of the month because the numbers are telling the true story.
What I like you saying is at least put a separate number on all of your marketing sources or if you’re utilizing online, do a separate URL. At that point, you can at least go back at some point and know that the information is at least being tracked historically and then you can start to organize it. Even if you’re not pulling all the data together, at least get a system going that’s tracking it and you can come back and make sense of it a little bit later. That’s a valuable tip as well.
We see people make this mistake, even newer students that come in. They’re all running their marketing to one central phone number that’s ringing. Deciding if that’s coming off of a Google Ad, radio or direct mail, it’s impossible to do that. You can’t do that if it’s all running to the same phone number. Getting a couple of separate phone numbers for each campaign is going to tell you what is working and what isn’t. Each dollar you’re spending is going and being accounted for so you know if you’re making the right decision each month when you spend those marketing dollars.
The Most Important Investment
You got to track your metrics and your KPIs. Let’s go to number five. What do you feel like the most important investment that a real estate investor will make within the first 12 to 24 months in their business?
It’s growing and maintaining that buyer’s list. You need the buyer’s list in order to sell properties if that comes down to just a simple marketing system like ActiveCampaign, for example. You can blast out all of your properties within ActiveCampaign but you can also house all of your buyers in that system. You can link it back to your website so the lead is feeding into that spot so you always have a system with up-to-date buyers and you have a way to market to them. You can also segregate the list.
It’s not even just ActiveCampaign. There are multiple systems that do this but what I hear people telling us is they have all their buyers in Excel and they’re using Constant Contact. Constant Contact can be an effective system for specific marketing. I would never recommend something like MailChimp or Constant Contact for marketing your properties. The spam rating is so high.
It’s important to not only have your buyers in a central location but also have a system to blast properties out that aren’t going to increase that spam reading so your buyers are seeing it. Those two go hand-in-hand. Growing and maintaining that buyer’s list in a proper system that you can market at it so you’re selling these properties, not just getting them.
Your buyer’s list is one of the only proprietary things you’ll have in your business. It will separate you from every other investor in the area. Whoever has the best, most-highest quality buyer’s list in any city, I guarantee you it’s going to be making the most money. You’re selling your properties more efficiently at a higher price because you’ve got a good buyer’s list, you’re then JVing with other people that don’t have buyer’s lists and you’re making money off of co-wholesaling, which is another example of how to do that. There are lots of ways to make money.
Let’s give a couple of tips here. You’re saying that the most important investment is my buyer’s list and on top of that, making sure that I have a great system like ActiveCampaign to blast that through so I don’t get shut down. What would be a couple of practical tips on how to get started on building a good buyer’s list like baby step 1 and baby step 2? What would you say?
To not track your KPI is to fly completely blind.
My recommendation is to start scrubbing Facebook whether you’re doing this yourself or you find somebody to bring on to help you do this a couple of hours a week. Have them go into the Facebook groups or you go into the Facebook groups and start scrubbing Facebook for buyers. It’s practically free besides if you decide to pay somebody to do this but it’s going to help you build that list.
It’s going to help you start to get buyers in your area. You can also use utilize Craigslist by looking through investment properties that are listed and grabbing email addresses from that. BiggerPockets is another option. Scraping is the first step. Get in there, start to scrape the systems and try to get as many buyers as possible. In order not to spam people though, it is important that you don’t just throw them into a system without their permission and start blasting them.
We don’t do that. It’s not okay. It’s going to create a spam score that is way higher. There are two kinds of steps you could take. You can contact each of those buyers before you put them in the system individually and ask permission or you can put them on a smaller campaign to send a blast to, to ask them if they’re interested in being a part of the targeted list where they’re going to get more properties.
We’re not throwing them into a system and just shooting properties at them. We’re taking time with them. We’re putting them into a system, any separate list specifically and then we’re marketing to that list and asking them if they want to be a part of our ongoing campaigns. If they raise their hand then we put them on our targeted list and they would start receiving properties. If they deny then they’re just removed. We take them off and we don’t bother them again. It’s about taking time to look in these avenues like Facebook, Craigslist, BiggerPockets and start gathering these aims but also making sure that you’re separating them from your massive targeted or name list so you’re taking time with each person.
Let’s do a recap here. Sierra is saying, “Based on my experience of being a Chief Operating Officer, talking with a lot of different people around the country, the most important discipline in your first 12 to 24 months is lead auditing. Your most important hire is your closing manager. Your most important piece of technology is your CRM. Your most important skill is learning to track your metrics and your KPIs. Your most important investment in the first 12 to 24 months is your buyer’s list.”
It’s a great topic. Sierra, this raised the priorities of the business because there are so many things. It’s like a whirlwind going on in that first 12 to 24 months. There are a lot of shiny objects. This show pulls out and says, “There’s a lot to focus on but here are five of the most important things to focus on as well.” It was great stuff to share.
To the rest of you reading, you know that we are helping people set up radio all across the country. Sierra, we’ve been doing this for years. It’s been crazy to see the results with a lot of the students because you’re involved in that with me. We’ve set up more than half of the country at this point, something like 55% of the United States.
We’re getting up to that 60%.
It’s been super cool to know that we’ve got the data that this radio works in small markets, mid-markets and large markets. The most rewarding part for us is the students that we get to talk to that come back and go, “This was an absolute game-changer for the business.” That’s the rewarding piece of what we’re doing.
If you’re interested in 2021 to jump in on the radio before we end up selling out the whole US and getting what we consider. I don’t even consider, I know at this point mathematically that radio has been hands down the best marketing channel for us over the last years. Go to WholesalingInc.com/REIRadio. Book a call. We’d love for you to become a part of the family and what we’re doing.
Not only will we help you set up radio. We’ve got some cool stuff on the alumni side in which we will be doing things as we did on this show, showing you how to take what you’re doing and build it into a business as well because we love to help people get from working in the business to on the business too. Sierra, thanks for coming in, as always, sharing your experience and your knowledge. To the rest of you reading, thank you so much. Until next time. We will catch you soon when we add more value. Talk to you later.
About Chris Arnold
Chris Arnold is a 15 year Real Estate veteran who has closed over 2500 single family real estate transactions in the DFW metroplex. Chris is the founder of multiple companies that are managed by a US virtual team, which allows Chris to run his organizations while living in Tulum, Mexico full time. His passion for leaders has led to the creation of Multipliers brotherhood which serves the top 5% of real estate entrepreneurs out of the US. Most recently Chris has launched his REI Radio coaching program. This program is designed to teach real estate investors the marketing stream that everyone knows about but NO ONE is doing!