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Posted on: June 15, 2022
WI 973 | Real Estate Licensing

 

Do you need a real estate license to start wholesaling? Chris Craddock has the answer to that and more on today’s episode with Grace Mills. The real estate industry is changing and you have to be ready for it. Grace and Chris also have a conversation about community and how other business owners can help you get better. Some of the things you don’t know will be explained in depth once you get around the winners of wholesaling.

 

Take your wholesaling career to the next level by visiting WholesalingInc.com/radio.

Real Estate Licensing Secrets ft. Chris Craddock

Episode Transcription

I want to pull on a guest to discuss a topic that initially came up on a coaching call that quite a few of you can relate to. I’d love to add as much value as we possibly can on here for you. If that means helping you maybe challenge the way that you’re looking at your business and looking at the way you’re handling leads, I want to be able to do that.

I find that when you have limited knowledge or network, it’s super easy to start deading out certain types of leads because you’re like, “I don’t know where to go with this,” which is the money going down the drain and a waste of an opportunity. you’re like, “You already spent money generating this particular leap,” or, “I don’t know where to go with it at all.” That topic is going around retail. Specifically, how to handle your retail leads.

Since we’re going into a topic discussing retail, this will differ from state to state and what’s happening legally and where you need to be in order to be compliant. Every state has its own things. The information, recommendations, and opinion from the guest are of the actual guest. I always recommend that you do your due diligence follow-up to make sure that you have a full understanding of what’s going on as it relates to wholesaling or real estate in general and the market you were doing business in because again, it’s going to differ state to state.

We wanted to dive into helping you maybe get a better understanding of how you can handle leads that you are already getting and that is retail. You’re going to have some people that are looking for astronomical ridiculous that you owe some radical transparency too, to say, “This is where you stand in the market and work with what’s realistic for your actual property.”

However, there is the fact that when this person is leaning retail, you feel like you’ve bumped your head and potentially deading it out. Not knowing that maybe there was another lane for you to play in. The great thing about real estate is your ability to be creative. I pulled on a fellow coach as a guest and that would be Chris Craddock. Let’s go ahead and dive in.

Welcome. I know I’ve connected with a number of folks. I’m here in the Rhino Tribe Community. To give a little background about myself, between my retail team and then also the investment stuff, we’re going to close about 700 transactions in one year. We’re averaging between 60 and 80 transactions every month. They’re going through both retail and investor-related. We’re doing a lot of business on that front.

WI 973 | Real Estate Licensing

Real Estate Licensing: There are ways that you can take your dead leads and give them to real estate agents, and that’s what we do with REI Revive.

 

I also have a number of other streams of income, title, insurance, construction, lending, and a number of different streams of income as well. Looking at how you grow a business is one of my favorite pieces there, but one of the best ways to do that is to make more with what you’re already made. I’m excited to talk about how you make more money with what you’ve already paid for. If you get people calling you that you can’t wholesale or you can’t fix and flip, is there other ways to make money from that. That’s the only way to scale a business. You can either get more clients from each person that calls.

You have heard me say this before. I hate missed opportunities. I see that a lot. Honestly, most of the missed opportunities boil down to maybe limited knowledge and network for some of the students. I’m sure some of you are out there. We always have a mixed audience of some a little bit more seasoned and some people looking into this for the first time.

Either side that you’re on, this show is still extremely helpful for you. Even if you believe that you’re a little bit more seasoned, it’s always helpful to have someone else explain it from their side. Maybe there’s something that you could be doing to maybe tighten their system. If you’re completely new to this, this is a perfect opportunity for you to start putting your thinking hat on and going, “I’d never considered this. I didn’t even know that this is something I could potentially run into.” Either way, there are tons of gems that I believe are going to end up coming out of this episode for you.

With that, Chris, I’d love to get your feedback on this. As I was explaining, I have a couple of students, again, maybe a little bit newer to wholesaling and limited knowledge on understanding what they can play with, therefore missing opportunities or flat out deading out leads. When I hear about it, I’m like, “No, please don’t do that. You’ve already paid to generate it. You’ve already got some person.” That’s the thing about radio leads as well, once they call in, they’re already motivated, even if it’s a service you don’t provide, they’re always game and ready to jump in and play. They’re looking for someone to connect them to a particular solution for their actual situation.

On that one side, it is people who are going, “I’ve got a couple of people calling in and maybe they’re leaning retail. I’m throwing my hands up and deading this out because I have no way of potentially playing with this.” On one side, I want to explore licensing, so that’s coming up. For those students who are like, “I’m a little bit gray and I don’t have a license,” what are some of the ways that maybe they could take advantage of lead, even if that is maybe reaching out to an agent?

Here’s the interesting thing. Licensing is coming across the country for all wholesalers. Wholesaling is literally signing a contract or selling a contract. However, what’s happening in five states already is that those states have decided that selling a contract in real estate activity requires a real estate license. It means if you wholesale without a real estate license, they call that selling houses without a license, which is a criminal act and will prosecute you criminally for doing that. That is what’s coming. You don’t want your state to say, “This has to happen and you don’t have a license.”

There’s a reason why big, massive, behemoth companies have a real estate license. You don’t have to understand that reason right off the bat, but we want to follow the clues that success leaves.

The other thing too that we need to look at is this is part of the progression for the biggest wholesaling companies in the country. It was so funny. I was having a conversation with Brent Daniels. I had no idea whether he was licensed and I mentioned that all of the bigger wholesalers or bigger folks have a real estate license. Brent’s like, “I’ve got mine. I don’t do much with it all the time.” I’m like, “That is the progression. That’s what’s happening.”

If success leaves clues, if there are footprints that you can follow in for success, you’d say, “With all the big, massive, behemoth companies have got a real estate license, then there’s a reason why.” You don’t have to understand the reason why right off the bat, but we want to follow the clues that success leaves. I’d say right off the bat, that’s what I should go ahead and work on.

The second thing is this. If you have a real estate license, you’re able to get referral fees. There are ways that you can take your dead leads and give them to real estate agents, and that’s what we do with REI Revive. We teach you how to partner with real estate agents. Basically, in America, you’ve got to have a real estate license to get a referral fee.

It goes from one agent to another. Let’s say somebody calls in, I’ve got a property that ARV is $300,000 and they want $250,000 for it and it needs maybe $20,000 worth of work. There’s no money to be made in a wholesale deal. After commissions, fix-up, and everything, there’s no margin there. That’s a retail deal. They want retail prices for it.

Let’s say Grace has a license. There’s a whole process to do it, but the easy version is, “Go meet with these folks and give me anywhere from 35% to more of what you make on that.” If they sell it for $300,000 and you make a 3.5% commission, you’ll make right around $10,000. If we have a 35% agreement, then Grace sends a referral of $3,500 to me for sending her a dead lead. That’s why it’s easier like that.

There are states or places where you can have marketing agreements, where Grace pays me a marketing fee for leads that I send over to her. That is getting complicated. There are some gray areas and you have to make sure that you do it on that. There’s a lot more to it. For me, I’ve found, even though getting licensed is a pain because of the fact that’s what’s coming, the military has the acronym KISS, Keep It Simple, Stupid, I’d say, “Get licensed.” That’s the simplest way and that’s what’s coming in probably all states.

WI 973 | Real Estate Licensing

Real Estate Licensing: There’s probably going to be some other investor out there who’s willing to pay more than they should. We all have a bit up against that word where people are paying more than they should.

 

With a mixed-bag audience, I like always to make sure that they have a full understanding from this of what this looks like for them when they’re walking away. He is correct. This is also affecting radio advertisements as well. There are a couple of these states that are going, “You do need your license to do this.”

This affects what they call public advertising. If you are publicly advertising this real estate service, in some of these states, they’re going, “You also need your licensing in order to do that advertising.” The state of Illinois does this. The rule is something around if you are doing two or more transactions per year, especially if you were trying to get on the radio, you’re going to need to get your license to do it. They won’t let you run an ad on the radio saying, “I buy houses for cash,” without a license and depending on the number of transactions.

That’s liable to change because this is state by state. I highly recommend you do pay attention to things like that. Chris is correct. The five states are where it’s going to start, but that’s not the end. This isn’t even quite the tip of the beginning, but this is going to flow across the United States. Pay attention to your state laws around that. As I said, Illinois has something like that, but they could have even thrown in something extra there. Feel free to double-check that if you do live in a state like that as well.

For those that are a little bit newer, if this is like a starting place and they’re like, “Maybe I do need to check into this,” if there is one place for them to quickly check if they even operating in a state that is already requiring that, how would they check? Secondly, what is their first step to being able to jump in and get their own license?

The states that are operating like that are Illinois, Oklahoma and Nebraska, and South Carolina is coming through with it. Michigan has a rule that if you wholesale more than five, you have to have a license, but they have not enforced it, but one day they will. You don’t want to be caught as a guy or girl that they make an example of. That’s the deal there.

There’s a lot more coming. If anybody’s looking at PropStream where the data was coming from, all of a sudden, the data disappeared because NAR got wind of what they were doing and came after them to take the data away. NAR is the National Association of Realtors. There’s this battle going on to bring these two sides together. Wayne Gretzky said he was the greatest because he didn’t skate to where the puck was but where the puck was going to be.

REI Revive teaches you how to monetize your dead leads and make the most of everything you’re doing.

This is a chance for us to get ahead of where the puck is going to be on that. We, as Wholesaling Inc., are building a tribe. If you are looking to get licensed, the easiest way to do it is you can do it online. It’s called The CE Shop. You can do it right there. The cool thing is if you’re looking for a place to hang your license, most of the Wholesaling Inc coaches have all joined us here with eXp.

eXp is interesting because you can’t sign up for eXp and then be associated with the people you want to be associated with. eXp incentivizes people to build a community and a culture in one group. They incentivize us as coaches to give extra massive value, and then they would incentivize you to give value to other people. They give you a financial reward. We’re like, “If this is what’s coming, we need to get out in front of it and make this happen.”

I love your point there about eXp pushing for that community piece because that’s so important. You can hang your license at a brokerage, but that doesn’t mean that you’re hanging it there, but it doesn’t feel like a family. There’s no real culture there. There’s no real community. If you’re new to this, you’re going to want to be a part of a community. That’s super helpful for you to know that there is someone you’re attached to and someone that you can play off of. I want to go back a little bit to what we talked about in the beginning and that was REI Revive, your program. Some people that are reading may not be super familiar with that. I am curious to pick your brain on that as well. Can you walk us through your program?

REI Revive teaches you how to monetize your dead leads and make the most of everything you’re doing. If you want to scale a business, the business needs the lead with revenue and earns the right to build out its org chart. If you’ve paid $5,000 last month and you brought in leads. Maybe twenty of those have raised their hand and said, “I want to sell my house in the next six months.” Of those 20, my guess is about 16 of them want closer to retail value. There’s no real pain. There’s no reason why they’re going to sell at $0.65 on the dollar.

You’ve got sixteen people and then maybe you got four that are willing to sell it at a discount. Three of those four probably want more money than what you want to pay. There’s probably going to be some other investor out there that is willing to pay more than they should. We all have a bid up against that where people are paying more than they should. Maybe you lock up 1 out of those 20.

If that’s what happens, that means that you get paid on one deal and there are nineteen other people that are getting paid on the other deals. How do you basically get yourself in a place where you’re getting paid every time the phone rings? That’s what we teach with REI Revive. We teach how do you tell when somebody is retail versus an investor. If somebody is retail, how do you partner with a great agent or build out an agent community within your own organization and how do you get an agent out there.

WI 973 | Real Estate Licensing

Real Estate Licensing: eXp is interesting because you can’t sign up for eXp and then be associated with the people you want to be associated with. eXp incentivizes people to build a community and a culture in one group.

 

I promise you this. If you ask people, “Do you want to talk to a real estate agent?” nine times out of ten, they’re going to say, “No,” because their brother’s uncle is a real estate agent. There are more agents than there are houses for sale in America. They don’t want to talk to a real estate agent. You’ve got to be able to get them out there.

Here’s the big key. I’ll share this with you right off the bat. Set the appointment for them and get your “valuation expert” out there, get it going, and then that agent will get out there and show them how they can sell the house better than their brother’s uncle, who’s a termite guy and a real estate agent.

You can hear it in their voice when you throw that out there. They’re like, “You’re not interested.” They might have an idea of wanting retail, but when you forced their minds to remember all of that’s going to tell, like the showings and dealing with the realtor, you can tell people are like, “They’re not interested.”

The massive pain there. That’s the key and that’s what we trained with REI Revive. Also, we have our weekly support calls. The support calls typically moved from that to everybody starts making a whole heck of a lot more money with the leads they’re already paying for. We then say, “With this money, how do you take that and scale your business?”

That’s what REI Revive gives you the ability to do. It gives you a ton of extra cash. That extra cash allows you to scale your business so that you can build it out and get to a place where you have a business, not a job. When you go on vacation, your income goes on vacation. How do you get a business that you can leave and it’s still making money for you?

Lastly, before we wrap up, I do want to touch on this. That is the money piece. When I talked to David Dodge, what I threw out to him was, “How much money would you say people are leaving out on the table?” I always like to do that. You can say all day to everyone, “You’re missing opportunities,” but some people can’t quite put it into perspective unless you can paint the numbers for them. I don’t know if this is something that you have or if you have like general range, but how much money would you say people are leaving on the table when they’re deading these leads out?

Keep It Simple, Stupid. 

It depends on your marketing budget and how many people you’re bringing in. I’ve seen new wholesalers that have not been able to get a deal and then jump into our program and within the first 45 days, they’ve got $4,000 or $5,000 coming back to them. The group that we built this with, with my retail team, we’re sending an average of $65,000 a month to them. They’re a big organization, but still, we’re sending $65,000 a month. When you’re getting close to three-quarters of a $1 million a year off of leads that were being thrown away, it is a game-changer. If you get a quarter of that and you get $200,000 to 250,000 a month, it pays for your entire marketing budget and leads that you were throwing in the trash.

Leads that you already paid to generate. You didn’t put any extra money into it.

It is painful. My buddy who we’re sending three-quarters of $1 million a year, when I was talking to him, he was like, “I think about all of those years that we were trashing those leads, the millions and millions of dollars over the years that we were throwing in the garbage. I couldn’t even believe it.” It’s literally the equivalent of taking a suitcase or bags full of cash and using it to start your fire.

Early on, we had quite a few acquisition managers that were doing that and I’m like, “Did you dead that lead?” As the marketing director, I have a personal connection. I take that very personally. I’m like, “Did you dead that lead I generated? Do you know how hard that was? What are you doing?” For all those that are reading, maybe they’re interested in knowing a little bit more about eXp or even REI Revive, how did they contact you? How do they find out more information about the program?

If you want to get info on Revive, we’re doing special promos for those that ended up coming over to eXp. We’ll help you scale your business. If you want to join our tribe and also have some exclusive access to some of the coaches as well, go to ChrisCraddock.com and we’ll take a look and see the best way to do to get in touch and help you get where you need to go.

Also, you can get in touch with me. The easiest way is I’m pretty regularly checking my Instagram. I’d get behind a couple of days, so give me some grace there, but I’m personally responding to all my Instagram DMs, @CraddRock. It’s not my last name but a cheesy high school nickname. Send me a DM and I’ll get you everything you need to do so that you can get moving forward. If you already have a real estate license, which a lot of people do, that’s a fast easy way to move over and start getting access to how we can monetize those dead leads and build that community and tribe together.

Thank you so much, Chris, for hopping on. I always love to be able to provide value to you. When I can pull in an additional guest for that expertise to challenge your thinking, provide you with maybe some knowledge you weren’t aware of, help you look at the way that you’re trying to grow your business or the best ways you should be going about it, I’m always happy to do so.

If you are still curious about looking into the marketing channel everyone knows about, but no one’s using, there’s always money to pull out your dead leads, but you have to have a marketing channel in place. Feel free to hop over to the Wholesaling Inc. site. That’s WholesalingInc.com/Radio to find out a little bit more info about REI Radio 2.0 Program, but I’m always happy to provide you with value and we’ll catch you on the next episode. Thank you so much for reading.

 

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About Grace Mills

WI 943 | Motivated Seller Radio Ads

Grace Mills is the coach of REI Radio. She has worked side by side with Chris Arnold during the initial program rollout, coaching & fulfilling student needs. For almost 8 years she’s managed and directed all marketing channels and split-tested every element of Radio to help investors set up Radio in any market they choose. She has worked with investors & agents all over the United States and has helped many investors make thousands of dollars using Radio.

 

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