Some investors get intimidated by real estate agents. However, in an industry that has a great potential for high returns, an affiliation between the two is necessary to generate deals with massive profits!
In this episode, REI Revive’s Chris Craddock talks with his friend, John Smith, who is a high-level-thinking real estate agent. Together, they analyze the best practices so that investors and real estate agents can work together. John also shares his perspective on how to effectively deal with sellers and his criteria for the perfect business partner.
- What to look for in an investor
- The 2 mindsets of sellers
- What a transaction engineer is and how they differ from realtors
- Be willing to learn and improve
- On gross commission incomes
- A breakdown of some of John’s deals
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Welcome, everybody. This is Chris Craddock with REI Revive, and I have the opportunity to be here with somebody who has become a very, very dear friend, with me today.
A lot of investors sometimes will get intimidated about working with real estate agents because they don’t know, they don’t understand some of the lingo, some of the things that real estate agents are thinking. And I do believe the future of real estate is this meshing together of the investor side of the business … the right now, I want to sell my house now … and the agent, the more retail side of the business, so that people have options. That’s what technology has provided, is options and speed.
And so when we’re able to bring these things together, that is one of the things that we can learn from REI Revive. What I’m teaching, is how we can make mountains and mountains of dollars from deals that were just being thrown away because everybody’s been staying in their own silos.
So, today, a goal is to bring just a top, top, high level thinking real estate agent so that we can get inside of his mind and understand how the investor and the agent can play in the same sandbox and make a lot of money together. So, with that said, John Smith, the man. Tell us a little bit about yourself, brother.
What’s up boss? Glad to be here. And really glad to have really found a way to serve people and work with investors, so that both win. Excited about talking about that today.
Brother, that is awesome. John has an incredible, incredible history, serving people through ministry and then getting into real estate. And, yeah, just awesome family, former college lacrosse player. So he just knows how to compete, and loves to compete at a high level. Which, I’ll tell you, that’s one of the things that I’ve found. You don’t have to have played sports at a high level, but a lot of times when you find people that have played sports at a high level, it shows that they like to compete.
And so, a lot of times, if you like to compete, there’s just that little edge. And again, it doesn’t have to go back to sports. But yeah, the people that like to compete, man, that you get that edge. So that’s kind of some of the folks that you’re looking to run with, these people that like to compete.
So we’re going to be talking about working with a real estate agent. So John, if somebody were to call you that were an investor … Because I’ve had a couple of folks that have reached out to real estate agents and they’re like, “Ah, it’s not my wheelhouse,” or whatever. If somebody were to call you that was an investor, what would you be looking for? Because you’re obviously a high level agent, somebody that can really change the monetary trajectory of an investor. What would you be looking for in a relationship, where you both could win and you both could serve together?
I think, one, looking for an investor that I can actually solve their problem. I think a lot of them are leaving money on the table because they don’t monetize every single possible lead. And I think we found a way to monetize every single lead, whether that’s now or whether that’s later, there is a way to monetize all of them.
And so if an investor’s not doing that, then the one first piece is, I can really solve a problem. The deal is that you’re not closing the clients, you’re not enrolling because they don’t want to sell for a discount, or they don’t prioritize convenience as much as, say, price or return. Then we can step in and really add to the top line and also help them expand the reach there, in not only that local market center but maybe elsewhere. So, that’s number one.
Number two, is really an investor who wants to partner together and knows, that in so doing, we solve more problems, we can serve more individuals; which compensation directly flows. The more people you can serve and the better you can serve them, then your compensation follows in suit. So, somebody that wants to partner.
And then three, just someone that, once they see the value and they see the level of skill that we have, there is a certain, “Go do your job and don’t pester me with everyday questions.” I think it’s on me, it’s on us, if you’re working with an agent, to provide you with appropriate timely updates to what’s happening with the different individuals and leads that they sent you. But also, there is a game to be played and strategies that work and strategies that don’t. And it is a different game than most people I think know how to play.
So there’s a couple things there that you said. I just want to make sure everybody doesn’t miss this.
First, somebody that likes to serve people, help people. That’s so important in the real estate agent that you would choose to partner with.
Number two, and you said this in passing, but the more people you serve. Thinking big, not just saying, “Hey, let’s think in this little bubble. But let’s expand, let’s grow our footprint together.” That was the next piece.
And three, the compensation piece. We’re all going to make more money if we serve more people, if we help more people.
So those are some of the things that I want to make sure that you don’t miss.
So, here’s the next thing. I have talked to so many investors … I mean, I was just talking to one recently, one that just does a massive amount of wholesaling deals and he kicks out his stuff through a real estate agent. And he said, it’s so rare that they get paid on deals that they kick over to real estate agents, that he’s so shocked when it actually happens. Even though he’s sending them to a really high … it’s a high level agent in their area, but they don’t quite get it.
So one of the biggest differences, I think, with the whole REI Revive program and just sending it to a good real estate agent, is that they understand their seller is calling to talk to an investor.
So John, when you’re in the house belly-to-belly with a seller, do you mind speaking to the difference between an appointment where they called an investor versus an appointment where maybe you just ran across a friend or somebody on your kid’s soccer field, or somebody that says, “Hey, I’m thinking about selling. Would you come and meet with me?” Do you mind just talking about the difference in the psychology of those two different appointments?
Yeah. And that’s it, it’s just knowing the difference between the mindset, the frame that somebody’s thinking in. Most of my job is teaching people and coaching people, leading people, if they’ll let me, to think accurately. It’s really that simple.
Often, people that want to go with an investor, they’re prioritizing convenience and velocity. Someone that wants to go more retail, they’re not as convenience driven or velocity driven, they’re driven more by the end price point and the net return.
And so I think there’s a combo of those, there’s a middle ground that most people don’t know how to operate in. But it’s a completely different strategy, in the same way that there’s multiple ways to get the Florida from here, it’s the same thing with real estate. I find that most “realtors”, they just have one or two plays. And then I think you can be a transaction engineer, is what I would call it. And that’s all based off of what somebody wants and then what somebody wants to avoid.
There’s so many different ways you can help somebody sell a home, whether that’s a for cash deal, a short sale, seller financing, there’s a whole lot that you can do. I just find that most agents don’t know how to think that way. They have a presentation, they have a pitch, it sounds no different based on the house they go into.
And that’s why most agents, I don’t think, can enroll a lot of clients when it comes to this. Because if you do that, that’s what people typically don’t want when you walk in. And most agents, I don’t think get that.
So I just want to break down what John said in a different light real quick. Because as you can just tell just listening to John, he’s a really smart guy, really sharp guy. But one of the things he said is that most agents go one way, they have one pitch, they have the way they’ve always done it. And if you do what you’ve always done, you get the results you’ve always gotten.
Well, they’ve been talking to certain kinds of clients. So one of the things that John said, without saying it, is he was willing to learn new ways to go at it. And so that’s one of the things. If you’ve listened to me, you’ve heard, anytime you think about people you want to partner with, they have to meet these criteria: happy, hungry, humble, and smart.
So I’m saying that because what John is saying, is even though he’s really smart, really sharp, really good at what he does, he’s still willing to be humble and say, “I can look at this from a different angle. I am willing to learn from people that have done this at a high level, and learn from there. Rather than go with my one tool that works with certain types of people.”
Which is why, like my friend that keeps sending them off to these agents, they’re not humble enough to learn. So if you’re not looking to partner with somebody that is humble as well … they have to fit all those other goals, those other pieces, but they’ve got to be humble enough to learn … then you’re never going to monetize those needs.
So that’s really one of those key pieces. And I just wanted you guys to get that from what John was saying. Because you can tell he’s sharp, but he also is a learner. And that, guys, is the most important thing when you’re looking to partner with somebody. Are they going to run hard, but are they also going to be humble enough to learn?
All right. So let’s move on here and talk about dollars. So in an average month where you’re just going at it, how many closings could you expect to do if somebody’s just feeding you like crazy? When you’re in your group and you’re just getting fed by investors, how many other contracts do you think you should be expect?
Six to eight pending, eight closed a month. That’s a lot of gross commission income. You’re talking about 120K right there.
So 120K. So GCI is the realtor term, it means gross commission income. And it just means how much of the total amount before any splits comes in. So you’re looking at 120,000. So if you are looking in a metro area, just an average area … We’re in the DC area, price point is just slightly higher. But with the price point in the areas that we’re in, Baltimore, some of the other areas, that bring our price point to close to the nationwide average, you’re still looking at close to $100,000 a month in an average area.
And even an area with low price points, like Baltimore, where you can charge flat fee listings, which is one of things we’re doing, where you walk out with a minimum of 3K to 5K on any deal, even for a $12,000 listing, you’re seeing that there is so much money as an investor. If the top line is 100K, I mean, at least, at least $25,000, $35,000, $50,000, somewhere in that range, is what you are leaving on the table as an investor if you’re not partnering with a high-end agent who is willing to be teachable and grow like that.
So I just want you guys to understand the kind of money you’re leaving on the table by not doing this right. I always say this: you pay for speed. You pay for speed. There’s too much money being left on the table to try to figure it out on your own. So many people try to do that. I’ll tell you, I pay over six figures every year in personal development and coaching for myself, because I pay for speed. I pay to learn. I pay to cut the learning curve. Why would I not want to learn from people, where I can compress decades into days? And so that’s why, when you’re looking for somebody, you also want to find somebody that is being coached, is learning, has a high understanding that their business will grow to the extent that they grow.
So, with that said, let’s bring it home here. John, can you tell us any last thoughts on, if I’m an investor, maybe I’m a brand new investor and I’ve never worked with a real estate agent. I’m nervous because I know real estate agents have gone through some schooling, some training, and I don’t know what I’m going to say. Can you just give us some insight? Because, obviously, you’re very good at what you do. Can you give us some insight? If a brand new wholesaler that has a handful of leads calls you up, what are you thinking and what should they be thinking, as far as that conversation goes?
So coming at it from the investors mindset, I would say, look for the following.
Number one, there is a distinction between a “realtor” and then what I would call a transaction engineer, like we’ve just said. Most realtors will not know the creative options to provide solutions to sellers like they want.
A good example. So many of them that we meet with think they have to go to the cash route because they don’t want people in and out of the house at all times and have to be inconvenienced all throughout the week. Well, one of the things we’ve done is we’ve done an open house over the weekend, two two hour slots. That’s all we’ve done. And I can’t tell you how many people have made more money and yet we’ve met the inconvenient solution, they want to avoid the inconvenient solution. And everybody wins, the investor’s happy and so is the client.
So I would say, for the investor, you’re looking for somebody who knows how to provide multiple solutions to a seller, not just your typical listing where they go on and tell them, “Do this, do that.” You’re looking for someone who truly knows how to engineer transactions so that it meets the desired outcomes of the seller. That’s one.
Number two, you’re looking for someone who’s really wanting to grow their overall listing pipeline, but thinks that way, and can, in so doing, help you also grow your footprint and grow together. Once you find that partnership, I really think it can be a solid world where you’ve got that much more production because you’re connecting with two individuals, or three, than you were before.
So, I’d say, find the right person. I’d say, work on that relationship here so that you can both grow your business and do more together than you could separate.
That’s awesome. That’s awesome. Guys, I’m just telling you, I’m just going to circle back to where we started here. If you can really get to the fact that the agent relationship, you can make more money with this agent relationship without actually even going in the house and meeting with a seller, than you do in your wholesaling business. When you really understand that, it’s going to be life-changing for you. And it’s the future of where real estate is going, is this offer, or you could have multiple offers for people, so that you could solve their problem. What John said earlier, the people that make the most money are the people that solve the most problems.
So, with that said, so thankful for you, John. Thanks for being here with us. Thanks for giving us a little insight into what a high producing, high level agent would be thinking when chatting with an investor. And how you think, how we can partner together. Because, again, your upside will always be determined by the people you run with.
So if you’re thinking about looking for ways to monetize those dead leads. What I would just say is this: go to www.wholesalinginc.com/revive, and then schedule an appointment. Either myself, or somebody from the team, will jump on a call with you, we’ll dive into your business, see if there’s a way to monetize those leads; whether you’re doing one deal every other month or whether you’re doing one deal every other day. I’ll tell you, we’ve seen so much success with these people that are just able to monetize leads so that every time somebody calls and says, “I want to sell the house,” you can make money.
So, that’s the key there. Again, wholesalinginc.com/revive. I’d love to see if I could help anybody. And until then, get out there, kick butt, take names. Talk to you soon. Bye-bye.