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.
Transaction Engineer – 3 Ways To Make More Money In Your Wholesaling Business With John Smith
I have the opportunity to be here with somebody who has become a very dear friend to me. A lot of investors sometimes will get intimidated about working with real estate agents because they don’t know and understand some of the lingo and things that real estate agents are thinking. I do believe the future of real estate is this meshing together of the investor side of the business-like, “I want to sell my house now,” and the agent, the more retail side of the business so that people have options.
What technology has provided us is options and speed. When we can 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 being thrown away because everybody has been staying in their own silos. Our goal is to bring a top, high-level thinking real estate agent so that we could 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. With that said, John Smith, tell us a little bit about yourself.
I’m glad to be here and glad to have found a way to serve people and work with investors so that both win. I’m excited talking about that.
John has an incredible history serving people through ministry and then getting into real estate. He has an awesome family. He is a former college Lacrosse player. He knows how to compete and loves to compete at a high level. That’s one of the things that I have found and 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. If you like to compete, there’s that little edge. It doesn’t have to go back to sports but the people that like to compete get that edge. Those are some of the folks that you are looking to run with, these people that like to compete.
The people that make the most money are the people that solve the most problems.
Things To Look For In A Real Estate Agent
We are going to be talking about working with a real estate agent. John, I have had a couple of folks that have reached out to real estate agents and they are like, “It’s not my wheelhouse.” If somebody were to call you that was an investor, what would you be looking for? You are a high-level agent, somebody that can change the monetary trajectory of an investor. What would you be looking for in a relationship where you both could win and serve together?
One, I’m looking for an investor that I can solve their problem. A lot of them are leaving money on the table because they don’t monetize every single possible lead. We have found a way to monetize every single lead, whether that’s now or later, there is a way to monetize all of them. If an investor is not doing that, then the first piece is I can solve a problem. The deal is that you are not closing the clients. You are not enrolling because they don’t want to sell for a discount or don’t prioritize convenience as much as price or return. We can step in, add to the top line and help them expand their reach there, not only that local market center but maybe elsewhere. That’s number one.
Number two is an investor who wants to partner together and knows that in doing so, we solve more problems and 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 suit. Three, someone that once they see the value and the level of skill that we have, there is a certain, “Go do your job. Don’t pester me with everyday questions.” It’s on me and us if you are 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, strategies that work and strategies that don’t. It is a different game than most people know how to play.
There are a couple of things there that you said. I want to make sure everybody doesn’t miss this. First, somebody that likes to serve and help people. That’s so important in the real estate agent that you would choose to partner with. Number two is the more people you serve, thinking big. Not just saying, “Let’s think in this little bubble.” It’s, “Let’s expand and grow our footprint together.” That was the next piece. Number three is the compensation piece. We are all going to make more money if we serve and help more people. Those are some of the things that I want to make sure that you don’t miss.
Learning New Ways To Go At It
Here’s the next thing. I have talked to so many investors. I was talking to one that does a massive amount of wholesaling deals. He kicks out his stuff through a real estate agent and said it’s rare that they get paid on deals that they kick over to real estate agents that he’s so shocked when it happens. Even though he’s sending them to a high-level agent in their area, they don’t quite get it.
One of the biggest differences with the whole REI Revive Program and sending it to a good real estate agent is that they understand their seller is calling to talk to an investor. John, when you are 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 ran across a friend, somebody on your kid’s soccer field or somebody that says, “I’m thinking about selling. Would you come and meet with me?”
It’s knowing the difference between the mindset, the frame that somebody is thinking in. Most of my job is teaching, coaching and leading people. If they will let me think accurately, it’s that simple. Often people that want to go with an investor are prioritizing convenience and velocity. Someone that wants to go more retail is not as convenient or velocity-driven. They are driven more by the end price point and the net return.
There’s a combo of those and 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 are multiple ways to get to Florida from here, it’s the same thing with real estate. I find that most “realtors” have 1 or 2 places. You can be a transaction engineer, what I would call it and that’s all based on what somebody wants and what somebody wants to avoid.
There are so many different ways you can help somebody sell a home, whether that’s a forecasted deal, a short sale, seller financing. There’s a whole lot that you can do. I find that most agents don’t know how to think that way. They have a presentation and a pitch. It sounds no different based on the house they go into. 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.
I want to bring down what John said in a different light real quick. As you can tell, he’s a smart and sharp guy but one of the things he said is that most agents go one way and have one pitch. They have the way they have always done it. If you do what you have always done, you get the results you have always gotten. They have been talking to certain kinds of clients. One of the things that John said without saying it is he was willing to learn new ways to go at it.
Remember, anytime you think about people you want to partner with, they have to meet these criteria, happy, hungry, humble and smart. I’m saying that because what John is saying is, even though he’s smart, sharp and good at what he does, he’s still willing to be humble. “I can look at this from a different angle. I’m 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.” That is why my friend that keeps sending him off to these agents is not humble enough to learn.
If you are not looking to partner with somebody that is humble as well, they have to fit all those other goals and pieces but if they are humble enough to learn, then you are never going to monetize those needs. That’s one of those key pieces. I want you to get that from what John was saying. You can tell he’s sharp but he’s also a learner and that is the most important thing when you are looking to partner with somebody. Are they going to run hard but are they also going to be humble enough to learn? Let’s move on here and talk about dollars. In an average month where you are just going at it, how many closings could you expect to do if somebody is feeding you like crazy? When you are in your group and you are getting fed by investors, how many other contracts you should be expecting?
6 to 8 pending, eight closed a month, that’s a lot of gross commission income. You are talking about $120,000 right there.
GCI is the realtor term. It means Gross Commission Income. It means how much of the total amount before any splits come in. You are looking at $120,000. We are in the DC area. The price point is slightly higher. With the price point in the areas like Baltimore or some of the other areas that bring our price point too close to the nationwide average, you are still looking at close to $100,000 a month in an average area. Even an area with low price points like Baltimore where you can charge flat fee listings, which is one of the things we are doing where you walked out with a minimum of $3,000 to $5,000 on any deal, even for a $12,000 listing, you are seeing that there is so much money as an investor.
If the top line is $100,000, 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 are not partnering with a high-end agent who is willing to be teachable and grow like that. I want you to understand the kind of money you are leaving on the table by not doing this right. I always say this, “You pay for speed.” There’s too much money being left on the table to try to figure it out on your own. Many people try to do that.
I will tell you. I pay over six figures every year in personal development and coaching for myself because I pay for speed, to learn and to cut their learning curve. Why would I not want to learn from people where I can compress decades into days? That’s why when you are looking for somebody, you also want to find somebody that is being coached, who’s learning and has a high understanding that their business will grow to the extent that they grow.
The more people you can serve and the better you can serve them, then your compensation follows suit.
Realtor Vs. Transaction Engineer
With that said, let’s bring it home here. John, can you tell us any last thoughts? Maybe I’m a brand new investor and I have never worked with a real estate agent. I’m nervous because I know real estate agents have gone through some schooling and training. I don’t know what I’m going to say. You are 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?
Coming at it from the investor’s mindset, look for the following. Number one is there is a distinction between a “realtor” and then what I would call a transaction engineer. Most realtors will not know the creative options to provide solutions to sellers they want. A good example is so many of them that we meet with think they have to go cash throw because they don’t want people in and out of the house at all times and have to be inconvenienced throughout the week.
One of the things we have done is an open house over the weekend to two-hour slots. That’s all we have done. I can’t tell you how many people have made more money and yet we have met the inconvenient solution. Not that they wanted to avoid the inconvenience solution. Everybody wins. The investor is happy and so is the client.
I would say for the investor, you are 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 are looking for someone who truly knows how to engineer transactions so that it meets the desired outcome of the seller. That’s one.
Number two, you are looking for someone who wants to grow their overall listing pipeline but thinks that way and in so doing can help you also grow your footprint and grow together. Once you find that partnership, it can be a solid world where you’ve got that much more production because you are connecting with 2 or 3 individuals than you were before. Find the right person and work on that relationship here so that you can both grow your business and do more together than you could separately.
I’m going to circle back to where we started here. If you can get to the fact that you can make more money with this agent relationship without even going in the house and meeting with a seller than you do in your wholesaling business when you understand that, it’s going to be life-changing for you. The future of where real estate is going is this offer where you could have multiple offers for people so that you could solve their problems.
John said, “The people that make the most money are the people that solve the most problems.” With that said, I’m so thankful for you, John. Thanks for being here with us and for giving us a little insight into what a high-producing, high-level agent would be thinking when chatting with an investor, how you think and how we can partner together because your upside will always be determined by the people you run with.
If you are thinking about looking for ways to monetize those dead leads, 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, dive into your business and see if there’s a way to monetize those leads. Whether you are doing one deal every other month or one deal every other day, I will tell you, we have seen so much success with these people that can monetize leads so that every time somebody calls and says, “I want to sell the house,” you can make money. That’s the key there. I would love to see if I can help anybody. Until then, get out there, kick butt and take names. Talk to you soon.
About Chris Craddock
A nationally certified Life Coach in Leadership and top 20 in all of Keller Williams Realty International, Chris Craddock is the host of the Uncommon Real Estate Podcast, a Realtor, and entrepreneur who runs multiple successful businesses in the Washington DC Metro area (and Richmond, VA).
Chris and his companies consistently bring in over 5 Million in revenue year after year.
His team, The Redux Group, sold just over $160 million in volume in 2020. Chris has been married for 20 years and is the proud father to six beautiful children.