Posted on: May 20, 2021
WIP 692 | Business Model

 

Not all leads turn into sales, even with your best efforts. You need a business model that will make something out of your dead leads and turn them into profits. Chris Craddock, the newest Wholesaling Inc. coach, joins Brent Daniels in this episode to fill in a specific gap in the businesses of listeners – turning dead leads to opportunities! Chris talks about the nitty-gritty of dealing with dead leads, turning them into massive opportunities for monthly passive income. He also shares his system and how he trains agents on how to go about his strategy. Chris shares lots of tips for the listeners on how to turn dead leads into life-changing money! Do not miss this episode.

The Game-Changing Business Model That Netted One Wholesaler $62,000 Per Month In Passive Income With Chris Craddock

Despite all the efforts that real estate investors are putting into working on the leads: talking, prequalifying, follow-ups, and yet only a fraction of those leads get paid because those are the only ones that are willing to trade equity in their house for speed and convenience, leaving investors with the question: what happens to the rest of the leads?

Episode Transcription

Let’s get started. We are about to change the industry forever. I’m serious about this. All this time, all these efforts that we, as wholesalers and real estate investors are putting in and all these leads that we are talking to, this pre-qualifying and lead follow-up and yet, we only get a fraction of the leads that we talk to we only get paid on. Those are the only ones that are willing to trade equity in their house for speed and convenience. What happens to the rest of the leads?

I am here. This interview is going to be absolutely bananas because my guest on the show is soon to not be a guest, soon to be a host, because he’s the newest Wholesaling Inc coach. I am proud to introduce Mr. Chris Craddock to the Rhino Tribe and the Wholesaling Inc coaches. You are filling in a very specific gap in every single person that is reading this, all of their businesses. That is this. What do you do with dead leads? Let me tell you a stat that I wrote down here. These are facts. What Chris is giving passively to his wholesale partner, his real estate investing partner is $62,000 a month that he is paying his investor from dead leads in this investor’s database or CRM that they were going nowhere. These are people that wanted to sell traditionally.

WIP 692 | Business Model

Business Model: Your business partner needs to be hungry because they’re going to fight to get better. They need to be humble because they’re going to learn to get better.

 

You know as well as I do, everybody out there, that we talk to people all the time and they say, “No.” They wouldn’t consider the price that we want to give them but they do want to sell. When I call somebody up and I ask them if they would consider an offer on their property and they say, “Yes,” and we start talking, and I start getting the condition, it sounds like the condition is pretty good and they are wanting and pulling the price out of them and more like retail. I can’t give them that price. I don’t want to list the property myself. I want to do wholesale deals. What you are saying is somebody could give that to an agent in their market that has been trained in your system to be able to grab those and give a referral fee, a commission to that wholesaler.

Obviously, the biggest thing that’s stopping everybody at this point from doing this was you have to have a license to receive a commission from sending a lead to a real estate agent. What do you do about that? How do you work around that? You are an agent and that’s great but a lot of the people reading are not licensed. It’s going to be more and more common that States are going to require you to be licensed to be able to wholesale but at this point, it’s not. How do people implement this if they don’t have a license, Chris?

There are three things. One, I would say one thing that I have learned in life is success leaves clues and as you look at some of the bigger wholesalers across the country, almost all of them have an in-house agent or they are licensed themselves. You just see it. You have to ask the question why. The reality is there is something to it. Also, if you grow a big business, people are going to look to you in your area as the real estate person. When they are buying and selling, you are going to be able to make money from your reputation alone by sending referrals out.

Any agent you get with needs to be happy, hungry, humble, and smart. That is what you’re looking for.

Two, let’s say you don’t want to get licensed. We see a lot of times people get somebody licensed in their organization and they run their license through the organization, their in-house licensed agent. In the organization I work with, one of their agents is licensed in the organization. He has a DBA, which means Doing Business As, with the state so he runs it through that organization. The third option and I teach this to my class is 25% of all licensed real estate agents do zero deals a year. They do not do any deals. You can find one of these agents. Call a local brokerage to find one. You bring them in as an in-house agent that handles your referrals. Do not give them your leads because that doesn’t fit with the model. You want somebody that’s going to go get it done but that person can handle your referrals, run their license through your organization, be your referral handler and pay them something to handle referrals for you.

I love this because it speaks to the question that a lot of people have in their minds. “Should I get a real estate license?” What Chris is telling you is he has step by step put together the plan on how to make money, referring these to other full-time agents. If you want to get your license and be a real estate agent and a wholesaler at the same time, you can certainly do that. It’s a little bit distracting. I have had my license since ’04. It’s a little bit of self-assessment and self-awareness there to determine if that’s what you want to do but if you do get your license, this opens it up to a ton of opportunities for referral income directly to you. What Chris is saying here is you can bring somebody onto your team that has a license and run it through that or you can go to a brokerage and find somebody that’s not doing a lot of business and pay them I assume a minimal fee monthly to be able to run these referrals through them and be able to get paid.

It’s interesting because you are a licensed agent, which proves that there’s a reason that people do that, and then the second piece with that is I agree 1,000%. Even if you are a licensed agent, if I go to you and say, “Brent, I could buy your house for $200,000 now,” and then for me to pivot and say, “If you want, I can list it for $400,000.” You don’t have the rapport to close at a high level. It isn’t going to work like that. That’s one of those other pieces. You should stay in your lane 100%, be an awesome wholesaler, and then you get a partner who is an awesome agent and each one of you stay in their lane.

WIP 692 | Business Model

Business Model: You’ve got to find somebody that’s doing at least 15 transactions a year minimum and is on a growth trajectory.

 

It also gives you the chance in sales. There’s something called the edification technique. I could say, “My name is Chris Craddock and I’m awesome. High five.” Everybody would be like, “You are a punk.” If somebody else says, “This is my friend, Chris. He’s awesome.” You are edifying them. You can set that agent up by edifying them from day one, instead of losing rapport by offering $200,000 for a house, then you tell them you can list for $400,000 30 seconds later, it’s a better model.

I have been doing this a lot of bits, Chris. I have been referring these out. I have a license so I can do that but I feel like maybe we overwhelm the agents that we send it to. Maybe we are not sending qualified leads to them, as qualified as they should. How do you do this successfully? You are on the other end. By the way, Chris is in the DMV area, the DC, Maryland and Virginia and there are wholesalers there a lot of time. This one specifically that he works with is really big. He gets a lot of leads. How do you take those leads or teach somebody in our current market? How do you teach them how to convert those into closed listings or closed buyer sales? Mostly listings, I would assume.

There are a couple of things here. The first thing that I will throw out is this. Any agent you get with, they need to be happy, hungry, humble and smart. Honestly, that’s what you are looking for. If you ever get a business partner, that is who you want to be in business with. Here’s the deal. You are going to break their business, which is why they need to be hungry because they are going to fight to get better. They need to be humble because they are going to learn to get better. Those two things, because you are going to break their business with all the leads and all the deals that you send them, 100% of their business will break.

The second piece is you’ve got to make sure that your scripting is great. I do a lot of sales training as well. In the sales training, one of the things I teach and I know you teach the same thing, is that if you ask the right questions, everybody is going to teach you how to sell them. They are going to tell you their pain point and one of the examples I always use in sales is that we are like a doctor. I have had four shoulder surgeries. I played Rugby in college and destroyed myself. I went in because my shoulder was a little jacked up and the doctor did all these things, asked all these questions and then did something called the crank test. It caused a lot of pain and then he did it again. He found the pain and then he pushed on it again. He was like, “I had a feeling I knew what the issue was but I wanted to go through all my stuff here.” He wrote me the prescription and told me what I was going to do.

That’s what we are doing here with these sellers. We want to be able to know the pain point so that we can get that over to them. Here’s the thing. Every single seller is calling an investor or talking to an investor about selling their house for 1 of 5 reasons. One, they want to save on commission. Two, they want to sell quickly. Three, they think their house is too messed up for the MLS. Four, they want privacy. Five, they don’t want people coming through their house all the time. If you have the answer to those five questions and you can answer that quickly as an agent, you can solve their problem. The people that make the most money are the ones that solve the most people’s problems. You are solving their problems.

Here’s one example. They don’t want people coming through so one of the things that we teach the agents because we teach the agents the scripting on all this. They are saying, “I don’t want to sell because of this.” You answer the question before they verbalize it because you have asked them during the pre-qual and got the answers to this. You say, “One of the things we do in our hybrid model is we have an investor to an open house. We only let people come in 1:00 to 3:00 on a Saturday so nobody will be coming through your house.” Let’s be honest. If you are a wholesaler, you do these open houses for contractors and buyers as well. It’s what we are doing and they have already agreed to this. It’s how we are framing it.

The people that make the most money are the ones that solve most people’s problems.

How does this work? A wholesaler gets a lead, it’s not working out. What happens? Do you get an email? Do you get a text message? Are you connected in their CRM? How do they make sure that once they pass it over to you, you take care of these leads? Do you know what I mean?

Yes, absolutely.

I’m asking you this. For everybody out there reading, you’ve got to think about this in your own market and business with an agent that is like Chris. I’m not talking like send your leads to Chris. Chris can only do things in his market. I’m talking about locally, the real estate agent. I’m trying to build in my mind the perfect agent that would be great for taking all these referrals and making sure that they are going to work them so that we can get those consistent. Maybe it’s not $62,000 a month but $5,000, $8,000, $10,000. The people in the TTP program and the TTP family, we are getting leads all day long because we are proactive and calling people all day long but those leads aren’t necessarily aligned with the price that we need to get these properties at.

This is game-changing. I’m not joking around here. I know the power and the potential of this. This is absolutely bananas if you can implement and put it into your dead leads but I’m wondering the biggest factor to me is who’s that person and that agent? How do they get the lead and how do I keep them accountable so that I know that they are working them? They’ve got their own book of business, priorities, referrals that they are getting and listings. How do I make sure that I’m a priority?

What you do is you pass it off. One of the things I don’t do in my course is to tell you which CRM to use because there are a lot of great CRMs out there. Everybody has their own piece. What I do recommend is either you or you have a VA do it. If you are scaling, the VA is the better option. You put it in a Google sheet and have a VA call and check on every state and go through every single one. For $4.50 an hour, they can spend 1 hour or 2 hours a week just checking in with the agent and say, “I need an update on 123 Main Street, 123 Banana Street and every single one of deals here,” and you are going to get that. That’s the easiest way to scale that. That’s the deal there.

I also want to say this. As you are saying, how do we choose the right agent? Getting the right agent is really important here. You’ve got to find somebody and I teach how to find somebody that does at least fifteen transactions a year minimum and is on a growth trajectory. I promise you, if you are growing, you are going to break their business. My business broke so many times through this process as we’ve got to where we are. The reality is you’ve got to have somebody that’s humble enough to learn and reinvent themselves. Think about yourself. I heard this phrase. They are like, “If you look at yourself three years ago and you are not slightly embarrassed by who you were, you haven’t grown enough.” That’s the whole thing.

To give some people perspective, how many deals do you do a year? How many did you do in 2020?

In 2020, my retail team did 501 transactions.

How much of that were referrals from investors?

I have to go back but it’s under 50% of that.

There is so much opportunity here. You can change the life of a real estate agent and their team if you partner up with the right people and send them referrals on the leads that are dead and don’t want to trade speed and convenience for equity, the people that don’t have a major problem. We call and try to filter out and find the six. This is the stat. 6% to 10% of the real estate market is in distress at all times for whatever reason. There are a ton of different reasons, financially, emotionally, the structure of the property and the actual condition of the property. There are maybe a couple of dozen reasons why people have stress with the ownership of the real estate.

WIP 692 | Business Model

Business Model: If you grow a big business, people are going to look to you and your area as the real estate person. When they’re buying or selling, you’re going to be able to make money from just your reputation alone.

 

When we talk to the other 90% to 94% of the population that is not in that little box, this is a blue ocean. This is where you go after opportunities for real estate agents to be able to close on those. What you are saying is you put together a program and I love it because we have been working together. You and I have been talking about it and it’s absolutely phenomenal but this is a huge opportunity to go after the 90% to 94% that we are ignoring and throwing into the trash can. All we have to do is partner up with the right person, send over the information, keep them accountable and we get passive income.

I want to share one quick story, too. There’s a guy who signed up for my program and he had signed up for Chris’ program, REI Radio. He was getting leads there and his wife was an agent. He said to me, “Chris, I think I’ve got the retail thing down.” I was like, “Let’s go over your numbers really quick. How many wholesale deals did you sell last year and how many retail deals?” I listened and I was like, “You are leaving a fortune on the table.” He’s like, “Are you sure? It’s because we are doing all right.”

It was 2.5 months after starting the program, he called me and he’s like, “Chris, I have to tell you, this has changed my life. We have $90,000 coming into us in found money. This is an extra $90,000 by following this program in 2.5 months. We are not even ramped up and scaled yet, and we don’t even have a massive organization like other folks. It’s a mid-sized organization. This is life-changing money for us. It’s crazy.”

I have dabbled and tried. That’s the issue. You find a real estate agent that’s happy, healthy, hungry and smart, and you start giving them all of these leads, and then it’s almost like overwhelming them. Do you have to have one relationship? Should you have multiple relationships? In your case, you’ve got a whole team. You’ve got enough horsepower to be able to handle a lot of leads but should we be going after teams? Should we be going after individual agents to build that relationship? What do you think there?

You are looking for somebody that’s massively hungry because you can build very quickly $1 million net retail business from these leads. One of the things that I always teach agents when I’m coaching agents is business makes babies. Listings make babies. If you do that right, they can build a massive organization. You want somebody that’s a big thinker. Here are the two phrases that I have heard it called. It’s called cul-de-sac talent, which is smart people but they are not going anywhere or capacity talent, the ones that have big dreams like their butts are always burning and they are ready to go. Those are the people that are going to build around you.

They are going to learn how to take their team and hire new listing agents and other people that are going to close like they are. From all those listings, they are going to hire buyer’s agents and other stuff. They are going to make a fortune if they see this relationship as what it is. They won’t make as much money because they are giving a massive referral fee to you as they would if they were keeping the whole listing but if they have a big picture vision, they are going to say, “I can make a fortune here by growing this out through this relationship.” It becomes the biggest win-win in the history of time. The investor and the agent make a fortune and they all go celebrate together in Hawaii.

This plays perfectly into TTP and being proactive. Let’s be honest. If you are spending money on marketing, whether it be direct mail, bandit signs or internet leads, you’ve got to spend a lot of money to get leads. You are not getting a tremendous amount. The amount that you can pass over could be good but who knows? When you are being proactive and calling people all the time, you are adding leads every single day. They might not work out but you are getting way more leads for the cost than traditional marketing being proactive.

You are telling me if we call these people up and they want retail and their timeline is reasonable, they do want to sell the property but they want more than we can give them, you partner up with a good real estate agent. Now you can get a percentage of that commission with everything lined up that you have in your course. This is a no-brainer for the TTP family. I will tell you that. It’s bananas. I’m blown away and trying to think of where the holes are in this thing. It all makes sense.

The only thing that I can think of is making sure that the agent is good and really hungry. You got to find the ones. I’m thinking in my head of finding a team that’s got all the systems in place, does a good job and knows how to close deals. They are pushing to be the top in the market and starting that relationship. People could have a whole career around this. People cold call to get leads for agents that close them and get paid. They work three hours a day to get leads, making calls, send them to agents and get commission checks as they come in. It’s fantastic and incredible. This is how you built your business and now you are coaching us on how to make more of you.

You’ve got to have somebody that’s humble enough to learn and reinvent themselves.

That’s exactly right. I built a business that nets me well over $1 million a year and it was through this. If the agents don’t see that they can do that, while at the same time, the investor that I’m working with loves me because I’m helping them make a lot of money, I’m making a lot of money. It’s the biggest win-win ever. That’s the big, huge piece of it. You’ve got to be able to see how it can win across the board. Here’s one other thing that I will throw out. Just because an agent is a high-producing agent and does a lot of business, you’ve got to realize I have had a couple of students where they picked an agent and they didn’t go through the happy, hungry, humble and smart criteria.

They picked somebody that was a high-producing agent and the problem was the humble part didn’t work on that agent. I’m thinking of one agent, in particular. I don’t want to sell them out but they literally would not follow the model. They wouldn’t set up the Calendly so they could have the appointments set for them. They wouldn’t do the things they needed to do because they thought they had everything together and it caused a breakdown in the relationship there and it didn’t work. That’s the other piece. Even if they are a big team, they’ve got to be willing to say, “I’m willing to be humble enough to set up our system in a way that works and do it,” and not just say, “I’ve got this figured out. I’m going to do it my way.” Make sure that they are willing to follow the system.

In the course, you break down how to find these people, how to get them trained up so that they know how to pass off between my company and them, and all that stuff. That’s all in that program. This is going to be game-changing. This is going to be crazy. Before we let everybody know about where to find it, you get leads. Most of them don’t work with you. What do you do with the ones that don’t work with you? Chris has shown that he’s got a proven plan for that, and not only that, you can help an agent build an incredible business on that other side that is going to be super unbelievably loyal to you. It’s a win-win all the way around. How do people find out more about it?

Go to WholesalingInc.com/revive, click the link there and get it done. If anybody wants to reach out to me, I try to be available on my Instagram @Craddrock, an old high school nickname and I try to answer every DM that anybody sends me. If you want to send me a message, I will try to respond but if you want information and consultation, whether this is right for you, definitely go to WholesalingInc.com/revive.

TTPers out there that are reading this, you see the opportunity. I know the TTP family is going bananas. Everybody on the YouTube channel that is doing business knows how many deals want retail. The mind is spinning. My mind is spinning and I already know about this. Breaking it down like this, it’s really encouraging and this is a great way to add a ton of extra income to everybody’s business. This is what the big-time guys are doing around the country and you’ve got a blueprint here in front of you. You can tell this guy’s got incredible energy and incredible opportunity for everybody. Thank you, Chris. This is incredible. As always, I encourage you to talk to people. Until next time. Love you, guys.

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About Chris Craddock

A nationally certified Life Coach with a Doctorate in Leadership, Chris Craddock is the driving force behind REI Revive, the host of the Uncommon Real Estate Podcast, a Realtor, and an entrepreneur who runs multiple successful businesses in the Washington DC Metro area (and Richmond, VA). Chris is a consistent NVAR multi-million dollar producer who produces over $4 Million in commission each year.

In 2020, his team, The Redux Group, was #20 in all of Keller Williams and sold just under $160 million in volume. Chris has been married for 20 years and is the proud father to six beautiful children.

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