Today’s episode is full of pure nuggets of awesomeness – you’ll get to hear Tom Krol conduct a Q&A session with one of his students about creating a list, the challenges of living in a small territory, and the real purpose of a script.
IN THIS EPISODE YOU’LL LEARN:
- How to set your list criteria
- What you can do when you live in a small territory
- Why it is so important to stick to the script
How to Set List Criteria
When you are creating a list of properties using Find Motivated Sellers Now, there are two important search criteria:
- Vacant Property
- High equity (or free & clear)
Wholesaling in a Small Territory
Even in a small market, it’s helpful for a new Wholesaling business to first get a good foothold locally. After you know how to Wholesale, it is easier to get into virtual wholesaling or extension markets.
The Real Purpose of the Script
The more you read your script, the shorter your phone calls should be. If your phonecalls are getting longer, that’s not a good thing. You will improve your lead generation process if you stick to the script.
Your script is not to build rapport – the purpose of your script is to separate the good eggs from the bad eggs.
We’ve been working on a new concept to improve your lead generation process:
- Assume that, if they call, they have some level of motivation.
- Try not to spend too much time on the phone – get through the script, classify them, and then figure out what you will do next. Don’t make too many assumptions about how motivated they are from the phone call.
- If there is equity on the property, or if the owner owes less on the property than you’re willing to pay, go out to the property.
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Welcome to another episode of the Wholesaling Inc podcast, the number one podcast for all things wholesaling. And today is going to be a nonstop action packed episode filled with nuggets galore. I’m talking about nuggets of awesomeness here as Tom does a Q & A session with one of his students today. And it is just a rapid fire session here with some great answers to some really, really good questions like, how to set your list criteria, very, very important thing to know how to do it, how to do it right. Otherwise, you’re just throwing money out the window, and what to do when you live in a very small territory. A lot of wholesalers out there have this problem, so what do you do when you have a really small list to mail to? How do you deal with that or how should you deal with that?
Should you think about doing virtual and when is it a good time to be thinking about doing virtual wholesaling? So Tom is also going to, he’s going to be talking about that, but he’s also going to be going into, digging deep on this, the real purpose of the script and his views on this really might surprise you. And of course he’s going to be talking about why it’s so important to stick to the script, not to stray from that script, but his views here on the real purpose of the script, really might be a little bit surprising to you and even seem a little counterintuitive, but trust me, you are going to love this. And if you don’t have a script out there, well that’s another conversation for another podcast. Okay. Enjoy the show.
Tom Krol: All right everybody, it’s two o’clock. Let’s get started. We already have a few people on the line. Some people already have their hands up. We’re going to have a great call today. Let’s get started with Richard. Richard, let’s see. Can you hear me?
Student: Yeah, I can hear you Tom. How you doing?
Tom Krol: I’m doing great. How are you? How can I help you this morning? Afternoon. [inaudible 00:02:51]
Student: I’m doing great man. I’ve got a few questions cause I’m working this thing full time and I’m really excited. I’m having a lot of fun at it.
Tom Krol: Okay, good. I like it.
Student: Let’s see. Where are my questions? I have gotten so many lists now that I’m mailing, I’m almost mailing every Monday now, so that’s exciting. I finally got, Find Motivated Sellers Now. I got that last week.
Tom Krol: Perfect.
Student: Got a question on that list because I just pulled up the list. And I just pulled up vacant properties, and that’s all that I flagged. And when I pulled it up, I started checking these properties. Some of these properties had just sold last month. So I called tech support and they said, yeah, put it back 10 years. But I’m wondering how far back would you recommend going? Cause it says sales date prior to… And so that means they’ve owned the property a while longer. Well, since they bought it and it’s vacant, so-
Tom Krol: Are we talking about Find Motivated Sellers Now?
Student: Well, how are you doing that? Yeah, Find Motivated Sellers Now.
Tom Krol: Yeah. So what you’re finding is, what is the 10 years represent? 10 years of ownership?
Student: Yeah, that’s right. Because when I just pulled the list up without selecting that, I was getting a lot of properties that had just sold last month or a month before. And after I went through, and when you actually download the list, there’s a column that says the sold date. Then you can look right down it every month. It has a sold date.
Tom Krol: Are you selecting vacant as a criteria?
Student: Yes, vacant properties, direct seller. I’m leaving out banks. I was just selecting vacant property. I do not select high equity, free and clear.
Tom Krol: Okay. So when I do it I select vacant and high equity.
Student: Oh you do? Okay. All right.
Tom Krol: So that might be why you’re having that issue.
Student: Yeah cause I think they mean 100% equity when they do it.
Tom Krol: Well we tested Find Motivated Sellers Now we decided to add it to the list. The criteria that we use, let me just, because I see it here, I can’t log into it, but I can tell you from my notes here, we choose, we select high equity and vacant. Those are the two criteria pieces we choose. So that may be why you’re having that result.
Student: Yeah, it could be. Because you know I went in and I actually searched for, I went back to sold before 2011 and that way they’ve owned the properties at least four years or five years now.
Tom Krol: Sure. So length of ownership would be key if you can search for that, that would be key. But I’m just thinking out loud here. You know, so when I do it, I didn’t get too granular with my search. Really the only thing that I can speak to is we chose high equity and vacancy and that’s the only criteria that we use to test it.
So if you’re finding that with that criteria, you’re still getting recently purchased properties and I wouldn’t, you can put in a date, that would be fine.
Student: Gotcha. Okay.
Tom Krol: Just know, I don’t do that so I can’t really talk too much about it cause I haven’t fooled around with the date.
Student: Gotcha. So I just pulled up my entire (bleep) the way you said it with high equity and I’ve got 1476 so just under 1500 leads now. Okay. That’s another thing I want to talk about is that all my lists are small here. So I hear all these guys talking about 30,000 leads on their list and stuff like that. And I’ve got 3000 or 1500 so I’m a little bit, I don’t know what to think about that. If I’ve got enough [inaudible 00:06:38], surely it’s a smaller market, but less competition. Surely I can do this, this thing will work here, even though my list is small, I would think.
Tom Krol: It’s not really a question of competition. It’s a question of having a bigger footprint in a smaller area. So for instance, my area is small, my entire equity list is only about 20,000 so, and you know, we run a very large corporation here, so it’s certainly feasible. What I would say to you is that, there are things you can do once you have a lot of depth and breadth in a small market, you can either increase the radius of your service area, or you can start to get into virtual. But I always recommend even in a small market, always get your footing locally and then go to step B. But don’t jump straight to step B because only you are going to know how to do those deals once you know how to wholesale, it’s easier to get into things like virtual or to expand your market. But to start with it is certainly a challenge.
Student: Gotcha. Yeah. Cause it’s like I was saying my list was small, the garage sales, you know, I’m getting like 20 garage sales per week, 20 to 30 a week. And the code violations, I’m adding about 10 or 20 code violations a week.
Tom Krol: So how big is your full equity list?
Student: The full equity list? Whenever I searched for that equity list and I’m using, what was the criteria? Is a 40% or better, or 60% better? Yeah, something like that. My equity list was 2900.
Tom Krol: So that’s a smaller area. So what I would do is I would get my first three deals out of the way, set up a consistent lead flow, and then I would either grow the area or then go into virtual.
Student: Gotcha. Okay. Yeah. Cause you know, I’m getting leads, I’m getting calls, I’m getting like two to five calls pretty much every day.
And, it’s a numbers game. So I’m calling these people back and most of them are not a candidate, they’re not in a motivated situation.
Tom Krol: Okay.
Student: But I have been on three or four visits and we just haven’t come to terms they want, they want more than I can pay for the property at this point. So I’m learning the system. And as far as the work in the script, in the beginning I went line by line on the script, but now I kind of know what I’m- I develop a rapport right off the bat when I start talking to people and we’d get into a conversation. And so then I try to remember the items on the list and I had to try to get them into the conversation.
But usually very quickly on, I find out they’re not a candidate. And so I have a little conversation with them and say, “Hey, well listen, I know it’s not going to work for you, but if you see anybody in the neighborhood that needs to sell, would you give them my card?” And so I kind of wrestled like that.
Tom Krol: There’s a few things I want to say about that. One thing that you should find is the more you go through the script, what you should start to notice is that your phone calls should get shorter and shorter. If you’re finding that your phone calls are getting longer, that’s not necessarily a good thing because the purpose of the script is really not to build rapport. The purpose of the script is really like good egg, bad egg, right? Think of it like Charlie and the chocolate factory, right?
The thing of the script is you’re classifying, it’s like, okay, bad, bad, bad, bad, bad, bad, bad, deal, bad, bad, bad, bad, deal. So I’ll normally know within 30 seconds if I have a deal with these guys, right? Because you pick up on certain patterns after you’ve done it a thousand times, but you shouldn’t be finding that you’re- you shouldn’t be finding that you’re building rapport and getting longer phone calls and you should be getting shorter phone calls. And I would actually recommend trying to stick to the script. So when I hear my guys kind of going off script, I don’t like that. I’ll usually, you know, come up behind him. I’ll say, “Hey, this is the script.” I don’t like it cause I’ll talk right over them while they’re talking and they get frustrated, but I don’t care. That’s what I would recommend, is that just try to stick with the script because you have to remember that it’s a good egg, bad egg thing.
The other thing too, I want you to consider, and this is kind of a new concept that we’ve been working on, and it comes from my buddy Sean Carey, is really assume that if they call, they’re pretty much motivated. If they call, there’s some level of motivation.
What we’ve been doing is, if there is equity, we’re going out to the property and for anybody who’s listening in who doesn’t know what equity means, equity is very simple. It just means that they owe less on the property than what you want to pay for it. By doing a few of these, you should have a general idea of what you want to pay and then just go out to the property. But try not to spend too much time on the phone with these guys. Try to get through the script, classify them, and then figure out what you’re going to do. You know, at the end of that call are you going to go out and see them, send an offer. You know, what is the game plan?
Student: Right. And that’s kind of what I mean, is that by the time I get to the third item on the script, I already know that they’re not a motivated seller. They’re not going to, we’re not going to cut a deal. They’re already telling me they were on full market value for the house or something like that.
Tom Krol: Yeah. So that’s what I would be saying is you want to wrap it up, but also be careful that sometimes when they go into negotiation mode, and this is why, and I like you said that you met with some people because I really want, I want to encourage you initially to meet with people who, even though you wouldn’t necessarily consider them to be motivated, I would still encourage you to go and meet with them.
And the reason being is that, sometimes people have a tendency to hold things closer to their chest, right? Yeah. So sometimes you’ll think you have somebody who’s not motivated, but they are kind of just in negotiation mode. If you have a seller who you put into, even not intentionally, you put them into negotiation mode. What’s happening is, “Well, I want full price” is really not meaning, that doesn’t really mean they’re not motivated. You know, everybody wants full price, even people who bring a piece of jewelry to a pawn shop, right, “I want full price.” Okay, great, I can give you twenty-five bucks. You know what I mean? It’s like, that’s my full price. It’s $25 for this Rolex. Right. Just be cautious about making too many assumptions on those phone calls too prematurely.
Student: Gotcha. That’s good advice. I’m glad you told me that.
Tom Krol: Sure, sure.
Student: Let’s see, what else did I have here? The other thing on the Inheritance List, US Lead List, I’ve got that from my territory. It’s a small list. It’s only 175 names.
Tom Krol: Okay.
Student: But do we send them the same white postcard we send everybody else, no changes to that?
Tom Krol: We continually, and continually, and continually test that against other mail pieces. As a matter of fact, we just ran another batch and we did a pink postcard one with a different type of a voicemail and it was whole thing that everybody was raving about in our mastermind and they said, “Oh, this is the greatest thing since sliced bread.” We ran it with ourselves and with some other tribe members. The handwritten postcard, the hand handwritten index card rather is absolutely still well tested back. It still beats it in every split test for every lesson.
Student: So not treating them any different because they just inherited the property. Okay.
Tom Krol: No, and I know that’s counterintuitive and you would say, “well no, that doesn’t make a lot of sense, Tom.” I can tell you that I agree with you, but a lot of things in wholesaling are illogical right from the beginning of process, right? Just like code violations, why are the closed violations more hotter? Why are they hotter than the open when you would think the open ones would be hotter? It makes no sense. So all I can give you is the data and the data is telling us that the index card is absolutely crushing it on every list.
Student: Okay, cool. I know the mailing sequence, I’ll go back and read that, how often we mailed that. The other question I was going to ask you, I asked it on the forum the other day and I mentioned about my WordPress site and what my real question was, is it a distraction to give them two options, two call to actions. Call this number or go to my website and I’m just wondering if that’s a bad idea because if they go to your website and you don’t know that they went there and you don’t have any way to track that unless you make them put in their email address, the [inaudible 00:15:24] page. So I mean, what do you think using the website? I mean you don’t know if they posted or not, but if they called the number you got it tracked.
Tom Krol: We put the website on ours and the website, if you choose to have one, should be done by Trevor at InvestorCarrot. There’s not even a question about that. You know, he’s the best. I know Trevor personally, and what makes Trevor the best is that, he has the data, he is tracking the data from across the entire country, all of the SEO points that are making his product and his service the best. He already has templates that are done. People say, “Well, I don’t want to look like everybody else.” I’m trying to be opposite. I’m like, I don’t want to be a trailblazer. I want to look just like everybody else. So to me it’s a numbers game. If you are going to have a website, don’t try to do it yourself or anything like that, just hire the best guy.
I think it’s a very cheap service and just use Trevor at InvestorCarrot, then if you’re going to try PPC, of course it would be our other guy, Dan Barrett I would recommend for sure. And as far as pointing them on the postcard, yeah, absolutely. I would do that. The leads will definitely come in, so it’s worth it to do that in both cases, SEO and PPC.
Anybody who doesn’t know what that means, SEO is search engine optimization. It just means your website and how it ranks when someone says, sell a home in Los Angeles say, for instance, or somewhere else, Rhode Island, your website will come up naturally. PPC means pay per click, which just means that you’re paying for advertising. So it’s a little bit different. But yeah, I would say absolutely. I mean, I do it and my mentors that I learned from do it and they still do it. So I would say it’s definitely worth it to do it. Absolutely.
Student: Awesome. There we go. I think we [crosstalk 00:17:16] list of questions. Thank you, Tom. Appreciate it.
Tom Krol: Awesome. Anytime, Richard. All right, we’ll talk to you soon, brother.