Real Estate Investing Ups and Downs

Mike: This is the Flipnerd.com “Expert Real Estate Investing Show,” the show for real estate investors, whether you’re a veteran or brand new. I’m your host, Mike Hambright. And each week, I bring you a new expert guest that will share their knowledge and lessons with you. If you’re excited about real estate investing, believe in personal responsibility and taking control of your life and financial destiny, you’re in the right place.
This is episode number 353 and “Big D,” as we call him, Darrin Collins, joins us today. Darrin operates, currently, in seven North Carolina markets and he has historically done a ton of deals. He’s currently doing over 10 deals a month. But has been through some incredible highs and some debilitating lows. Today, Darrin is going to share his basic principles for success in business and life with us, which includes some very powerful lessons for all of us, as business owners. Darrin’s been in this business a long time, long enough to learn what he would do differently, in hindsight, and what he is doing differently to run a profitable business.
Real estate investing is a tough business that provides us with incredible opportunities like no other business. But, to be successful for the long haul and to maintain your sanity, it’s important that you follow principles that allow you to ride the rollercoaster in this industry up and down and not only survive but thrive in up and down markets. It’s a great show, some great lessons in here. Please help me welcome Darrin Collins to the show.
Hey, Darrin, welcome to the show, my friend.
Darrin: Thanks, Mike. Man, I appreciate you having me, man. It’s great to be here.
Mike: Yeah, good to see you. Good to see you. So, hey, you and I have known each other for, I think, about three years now if you can believe that, it’s been that long. Probably been the happiest three years of your life, I’d assume, right?
Darrin: Obviously. Without doubt. Obviously.
Mike: Well, hey, so why don’t you take a couple of minutes and tell everybody about your background, about how you got into real estate investing? Because I know you didn’t start there. Very few of us did, actually. And then we’ll kind of dive into . . . I want to discuss that you’ve been through a lot of transitions over the past year that I think will be a great lesson for everybody to learn. So tell us, first, a little bit about you and then let’s kind of get into how you’ve been transitioning over the past year.
Darrin: Okay. Awesome, man. I am a North Carolina native, obviously. I know it’s hard to tell from my dialect, but I am a North Carolina southern boy. I grew up in the construction industry. I’ve been doing that since I was probably 10 years old. My father was a [inaudible 00:02:53] guy so he put us on the truck really early. So we got to learn the lessons of hard work, the benefits of hard work as well. And just kind of processed my way through life, construction, the family construction business. When I graduated from high school, that’s what I jumped into. I was doing college on the side and construction during the day. I probably was a [inaudible 00:03:25] was a late-married guy. So I only got married when I was 29, had our first kid at 30. And I think the construction background kind of processed me into the real estate investing side.
So when I got started into real estate investing, I found a great mentor. He kind of showed me a couple of tricks and trades. And he got me onto the right path. I started doing what we would call turnkey flips back in those days. That’s been, I guess, almost 15 years now. And we just kind of progressed through there. So that was . . . what was that? Fifteen years ago, right, 2002, 2001, 2002. And went through the crash, got through the crash, lost everything we had. Had to reboot back over again in 2009-10 and today, we do fairly well.
I mean, today, we built something back that’s way better than what we had before. So we went through the crash and have had to start from ground zero twice in my life. It was a good scenario for me. So that’s kind of how I got to where I am today. Today, we do a lot of home sales all over North Carolina. We’re in seven different cities in North Carolina and with the ability and potential to branch out to more cities in South Carolina and Georgia as well. But we’re mostly a wholesale business right now. We are just now getting back into some turnkeys again. But we do mostly wholesales. We’re probably double-digits every month in wholesales. So our business is going fairly well at this time.
Mike: Yep. And, hey, for those of you listening, we realize we’ve got some audio issues here, but just bear with us. Darrin’s got some great stuff to share. Darrin, you’ve had some ups and downs, right? And a lot of us have. And I think one of the things that you see in a market like today with real estate investors is a lot of people want to be a real estate investor now because the market’s hot. In every market cycle, there are always a lot of real estate investors that have never been through other cycles. That’s all they know is that cycle.
And you know, as a real . . . we talk a lot in my training, people that I coach or mentor, even people on the show, we talk a lot about treating your real estate investing business like a business, not a hobby. And so one of the tried and true . . . I guess one of the definitions of being a business is that you can survive and even thrive in up and down markets. You can roll through those cycles because we all know they’re going to happen.
So what can you share? You’re like an old sage. You’re like Yoda over there for us. But tell us a little bit about some lessons you can . . . maybe minus the ear hair. I don’t know. I don’t want to get too personal here. But, hey, share some stories with us about how people can learn from up and down markets and crashing and succeeding again, and just the importance of being able to pivot and move fast. And maybe share some of your lessons that could benefit people that are listening right now.
Darrin: Yeah, sure. So, for me, going through the . . . I actually entered into a real estate market that was the best market America had ever seen. In 2005, I could sell a house to anybody with any credit score. It was the easiest thing that I’d ever done. So my assumption was I was brand new and my assumption became, “This is just the way real estate is.” So I would tell everybody out there, “If you get into the game right now, this is just the way real estate is and it’s always going to be this way.” [Inaudible 00:06:51] mistaken yourself and fooled yourself into getting it [inaudible 00:06:55].
And one of the three principles for me that I live by in business and life is honesty. I think the first key principle to building a successful business is being honest. And that means not only being honest with everyone around you, I don’t mean, “Hey, we don’t lie.” That’s part of it, but what I mean by that is to be able to look in the mirror and analyze yourself and your surroundings with integrity. That is my key lesson. If you’re a type-A personality like I am and you are, it’s easy to be optimistic about everybody, just everything. So if you’re going to build a sustainable business, you have to be optimistic, yes. You have to believe, but you also have to be honest. So, for me, honesty is the key principle.
And one of the things I was going to talk to you about was I’ll talk about three principles if we have time. One is honesty. [Inaudible 00:07:58] honesty is an intangible factor, Darrin. So how do I measure that? In science class, back in the day, my science teacher taught me, he said, “In order for science to be science, it has to be three things. It has to be measurable, it has to be observable and it also has to be repeatable.” So measurable, observable and repeatable. All you’ve got to do is remember MOR. Memorable, observable and repeatable.
So, in business, it’s the same. So when I look at honesty, I go, “Okay. Well, how do you measure honesty? How do you measure that?” So it’s one thing to be an intangible substance. But how do I measure the honesty that I’m living by? And the only way I can measure honesty is by having accountability. I have to be accountable. So that means I have to be relationally connected to someone other than myself because if I become the loudest voice in my head, then I become too optimistic and I miss the curve. Because there’s always a curve in real estate. In any business, there’s always a curve.
So honesty has to be that key factor for me that I can call somebody like you and say, “Hey, Mike, what do you see the market doing? Because my market’s on fire and I don’t want to get caught into something where I spend all my money again and then the market turns. And when it turns, I’m stuck out there with all of my assets on the ground.” So, for me, the key factor for me, every cycle and every business is building it on honesty. And in order for me to measure and observe honesty, I need to be accountable to someone other than myself so that I can measure that. Does that make sense at all?
Mike: Yeah, absolutely. That’s great. And I’ll say, truthfully, even you and I, not that you’re accountable to me or I’m accountable to you, but even you and I have had conversations where we’ve called each other and checked. Usually, it’s you putting me in check. Like, “Are you sure you want to do that?” But, hey. I see exactly what you’re saying. When you drink your own Kool-Aid, then bad things happen if you drink it for too long.
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Darrin: So that’s a key factor for me, is to make sure that somebody’s in my life that I can just ask the questions to and say, hey, “Look at my business. Look at my world. Look at my life and make sure I’m not missing something.” Because everybody driving on the interstate has blind spots. And the problem with the blind spot is that you cannot see your blind spot.
And the second problem with the blind spot is that a tractor-trailer transfer truck can slip into that blind spot. And if you’re not looking and you try to change lanes at the wrong time, then you get smashed. So for me, honesty is the key factor in building anything sustainable. And, to me, if you have a business, it should be sustainable. It should be something that goes on and it’s not just a hobby. So that’s a key factor.
And number two is consistency. And I don’t know that these are in order, Mike, but consistency is everything. You know it and I know it. In order to man the curves that real estate and any business throws to you, you have to be consistent. The only way you can eat an elephant is one bite at a time. The only way you can build a successful business is to keep doing over and over and over. And everyone gets tired and everyone gets frustrated and every person alive, from the best to the worst, gets just inundated with the stuff that we do. But you have to be consistent. You have to take a break. You have to recharge your batteries.
All of that stuff is great. But if you’re not consistently chopping the tree on a consistent basis, whether it’s every day, every week, every month, whatever that is, marketing is the same way. We put out a million mail pieces last year in North Carolina. We do a lot of mailings. And our key to success, that’s our key to success is just consistency. Staying in the client’s face, getting in front of them over and over and over so that when they go to their marketplace, they go to the grocery store and their neighbor is talking to them about selling a house, they remember, “Hey, I know a guy named Darrin Collins. I don’t know, but maybe you should call this guy.” And my mailer is there with them in their brain. It’s consistency.
So it doesn’t matter what you do, if you’re a wholesaler, rehabber, whatever. You have to be consistent. You have to keep swinging the ax, chopping the tree every day, every hour, every year, whatever it is. Because true wealth is built over time. You may win a lottery ticket. You get a lottery ticket and you hit the Powerball, that’s one thing. But you don’t have wealth just because you have money. And that’s two separate entities. For me, [inaudible 00:13:37].
Mike: Yeah. Yeah, such an important thing, too, for this business, the consistency part. And I was thinking about this. Actually, I woke up late last night and I won’t get into a lot of details. I’m probably going to be starting yet another podcast here soon and I’m starting to come up with lessons and ideas and stuff in my mind to share. And one of those was . . . I’ll tell you a quick story here. We have a nine-year-old son and we’re starting to see he just . . . everybody wants everything on demand. Everybody just wants to take a pill and lose 50 pounds. But you can see how that rolls into our kids now.
So, for example, truthfully, we order probably . . . I bet you we order between 10 and 20 orders a week on Amazon. Just whatever I need for business or home or whatever. I just pop on Amazon and I order it and it’s there in a day or two. There’s a distribution center not far from our house so sometimes, stuff comes the same day. It’s crazy. But, for my son, we noticed now he . . . I think when we were growing up, and I’m not going to date either one of us. I know you’re quite a bit older than me, Darrin. No, I’m joking. Either one of us.
But you used to have this anticipation. You work hard for something and then you earn it or you get it or whatever. Or you wait for it. But now, we’re so reliant upon things that happen immediately that it’s just started to question with our son that’s about to turn 10, how is this impacting him? He just expects everything right now. And I do too, but I remember what it used to be like.
Anyway, my point in telling that little story is that in this business, we buy houses months or sometimes even years after activities that we’ve done, lead generation things. And I think that consistency is important because if you’re not consistent . . . even if you are consistently advertising, in this business, you get inconsistent results. But I think it’s critical to do those things over time because, otherwise, you’re going to struggle and have a hard time being successful. Do you agree with that?
Darrin: Yeah. And let me . . . 100%, man. Let me say this because you brought up the point of consistency and marketing. In our business, we’ve closed houses that were three years old in my CRM. The person had been sitting in there. And we talked to them hundreds of times over the past 36 months. But time and circumstances finally changed for him and now, all of a sudden, he’s ready. And the reality becomes if you’re not consistent with follow-up and marketing, because he was still getting my mailers, he was still getting our phone calls, he was still getting our emails, he was still getting all of those things, even though his circumstances haven’t changed at all. But, when they did change, he remembered us and we got on the phone, we got the deal, we closed out the deal, made $25,000. Whatever that is. I don’t know the numbers.
But it’s that consistency that we commit to. And one of our core values in our business is consistency. We follow up until we’re done, until we’re completely dead because that’s the reality of life in business. If you fail in those measures, you will fail in the long-term because a lot of us, especially starting out in real estate, it’s easy to get a fat check and then get a little lazy. You get a $30,000 wholesale check, it’s easy to lay back a little bit. But that’s when I teach all of my people, when you do start to get ahead, that’s when you push harder, because it’s that consistency that’ll get you to the next level. Because it’s one thing to make a check. It’s another thing entirely to sustain that lifestyle. And in order to sustain that lifestyle, you have to pay for it to become completely consistent in all that you do.
Mike: Yep. Absolutely. So, in terms of . . . I know that your business has changed quite a bit. And I know we talked a little bit ahead of this, even, to where . . . another thing that happens with a lot of real estate investors is they get hung up on volume. And I saw it even before I was a real estate investor, in corporate America, because I worked for a company that was doing . . . it was a startup that got to a point to where it was doing about a half a billion, $500 million in sales, but they weren’t profitable.
And there was just this feeling that they were going to make it up with volume. “We’re going to make it up with volume.” And so I think a lot of real estate investors tend to get focused on doing a lot of deals, start doing thin stuff and if the market changes at all, or even if it doesn’t, that’s a hard business. And I know you kind of made the decision to say, “Hey, we’re not going to do this skinny stuff. We’re going to go after the deep stuff.” And maybe share that lesson a little bit as well.
Darrin: Yeah. Sure. So the third point, just to be really clear, honesty, consistency, but the third point of success in life and business is flexibility. You’ve got to be flexible. So if you’re not flexible and you get into something, you start getting into . . . so I’ll give you a for instance. A year, 15, 18 months ago, we were doing 15, 20, 22 contracts, 24 contracts, 28 contracts. I remember one month, we sent out 32 contracts. And that’s really cool and that’s really sexy to a lot of people. But, to Darrin, it became mind-numbing. I just got a lot of paperwork going to and fro. I’ve got a lot of deals that are closing out. And then I started looking and I’m like, “Well, I’m not making any more money.”
So last year, I made a conscious decision last year to say, “All right, guys. We can do 20, 25 deals a month, but we’re not going to do small deals anymore.” Because I figured out that $10,000 wholesale deal, if something goes wrong, it becomes a $5,000 deal. And if you stay in this business long enough, you start to realize that, man, 50% of our deals have hiccups. That’s just part of being in the game, that you have a hiccup. Something changed. So this guy decides he wants another $2,000 because he wants to buy his girlfriend a Gucci watch or whatever that may be. So the reality for us, Mike, I think I said, well, for me, I’m not going to do small deals anymore. We’re going to go from . . . because our margins used to be that we need to make $10,000 a door, we started shooting for $10,000.
So I said last year, “Look, we’re not going to shoot for $10,000 a door anymore. We’re going to shoot for $25,000.” Because if we mess up a $25,000 deal, we can actually make, still $17,000, $18,000, $19,000. And so when we did that, we lost money for six months. We had all of these contracts and I just started cutting them out. I said, “I’m not doing this, I’m not doing that, I’m not doing this.” And everybody’s mad. You know how it goes. You know this game. Everybody’s upset, going, “I can’t make any money anymore, Darrin. I don’t know what I’m going to do.” So, anyway, long story short, we lost money for six months. And that’s part of that consistency as well.
So when you get into this, you’ve got to realize that there are times, if you’re going to build a real business, that you’re going to go through some loss. That’s just part of living. You’re going to go through some loss. And you’ve got to know in yourself that you’ve been flexible enough to build something better for yourself and for your future so that when you get to where you actually want to go, it’s what you had envisioned. So, for me, when we made the shifts last year, we decided we weren’t going to do those small deals anymore and we lost money for six months in a row.
But a couple of months ago, probably two or three months ago, we started to see the results of that consistency and now we’re closing . . . like this month, this month, I’m closing two deals over $60,000 apiece. Two deals. And I’m in North Carolina. I’m not in San Francisco. I’m not in New York. I’m not in LA. I’m in North Carolina, dude. And we’re closing two deals. And both of those deals are over $60,000. We’re closing a lot of deals, but we’ve got two monster deals this month. I just closed one last week over $40,000. So it’s that flexibility to look at your scheme. Look at your system and your strategy and go, “Man, this is sexy to other people.”
But one of the things that I found out, Mike, is if I make $5,000, it costs me just as much brain power to make $50,000. I have the same administrative costs, the same brain loss, whatever that looks like. So I just decided. I said, “Forget this. Let’s do big deals.” And now, we’ve cut down our volume. We’ve cut it in half, if not more. We probably cut it by 60-70%. And we’re building that back up. But, right now, I think in this month, we’re going to close out 13 deals. But our deals are enormously larger. And I’m learning through [inaudible 00:22:45] that the bigger deals, even though you may have a hiccup here or there, it makes you smile a lot more when that check comes across, dude. A lot more. So it makes it worth it. Does that make sense?
Mike: Yeah. So talk about the fortitude to be able to do that. I know you have a large team. You have a lot of salespeople, things like that. So my guess is you probably had some turnover during that period, people that didn’t like the new model, didn’t want to stick with you, all that stuff. But talk about . . . a lot of people that are listening to this show right now are probably one-man bands or a couple, two partners, something like that, a smaller team where not only is it harder to make that decision, but you’re the one that’s executing it as well. And it’s really easy to second-guess when you see that skinny deal come across. You say, “Well, it’s better than nothing so let me just stick with it.” So just talk about what it takes in your heart and in your head to overcome that issue.
Darrin: Well, I think the biggest piece to that is that I’m really, really stubborn. I mean, once I make up my mind, I go, “No, dude. We’re going to do this. We may not be right at the end of the day, but we’re going to do this.” So, for me, that’s part of the honesty, where the honesty comes in, Mike. I looked at my model and I was going, “Man, everybody thinks I’m so whatever. Great, sexy, your business is awesome, you’re doing 20 deals a month.” That’s really, really cool. But that’s part of that honesty. That’s where honesty comes in, to where you can look at your thing and go, “Hey, man, we’re doing 20 deals, but we only made $150,000, $180,000.” I’d rather do five deals and make the same amount of money.
So, for me, it was about fortitude, but it’s also about just knowing what you know. So when you know what you know, you have to go with that. So one of the things, for me, is that I don’t let everybody give me influence. And I don’t let everyone in the world influence my life. I have a few people in my world that have some say-so in, “Hey, Darrin, just check this piece out.” And so I let those people talk to me. And as we discuss that, in honesty, I go, “Man, I can’t keep doing 100 deals in 30 days or 30 deals a month and make $5,000, $7,000. It just doesn’t make common sense.”
So I think for us, we did have turnover. We did have a loss of personnel. But, for me, I just made a conscious decision that it was better for me in the long run to do . . . I would rather do five deals a month and enjoy those five deals, especially when those wire transfers come through, than to do 15 or 25 deals and just be fighting every day of my life.
So it is about fortitude, but that honesty comes into play with that so that you can really, really objectively look at your model and go, “Is this really working? Is this really working?” Because one of the things . . . I read a book, Mike. You might want to get this book. It’s called, “From Impossible to Inevitable.” I forget the author right off the top of my head, but, “From Impossible to Inevitable.” This was part of my change because, in the book, the guy says you cannot build a sustainable, long-term business with small deals. And he’s not a real estate guy. He’s just talking about whatever kind of business you’re in.
So that kind of triggered me. It triggered my brain to go, “That makes sense.” Because we have the potential to go to 13, 14 states if we choose. And I don’t want to go to 10 states and be doing $5,000, $6,000 and $10,000 deals. If I’m going to drop $40,000 in a city or $10,000 in a city for marketing, I want to see that fruition come out. So, for me, it was just an honest, integral mindset that said, “I can’t make this a large business and do little, bitty deals.” That’s all it was for us.
Mike: Yeah. And I went through that quite some time ago now where we were doing maybe 70 deals a year at the time. And about 50% of those were assignments. But I had access to capital and I had a good rehab crew and stuff like that. And I was like, “Well, I could . . .” You get to the point in your business where . . . and I’m not saying everybody should be 100% rehab. And I was never 100% rehab, but we just started to realize we could double our advertising, double our staff and do all that and do more assignments. Or I could just turn more of those assignments that are in pretty safe areas where I’m really comfortable rehabbing them. Instead of $10,000 or $12,000 deals, I could turn them into $20-25,000 deals and essentially make more money doing less volume.
Once I kind of figured that out, not that I haven’t had more challenges, but at the time, there was a year where we did 20 or 30 deals fewer, but I made more money. And I was like, “Man, I like this. I like this.” So I would say to those out there that are wholesalers, and I’m not saying that you should take a bunch of unnecessary risks and rehab something that isn’t a fairly predictable deal, but when you’re hustling for those deals, if you realize you could hustle less and make more money by rehabbing some of those deals that are in a perfect area, personally, I believe you need to take advantage of those.
Darrin: I agree. For me, it’s about maximizing the dollars that we spend. That’s what it becomes. So if we’re going to spend marketing dollars, then let’s maximize those dollars to their fullest extent. So whatever that is, let’s just maximize, let’s stretch it out. So if it means rehabbing or if it means whatever, let’s just stretch it out.
One of the things that we started to do is bird dogs. So instead of getting people to bring me deals, I’m starting to take my smaller deals and say, “Give it to this guy and let him give us whatever. Just give us 10%, 20% of whatever you make. If you make anything, send it back.” Because we have so many deals.
So we can focus. Focus is everything. Focus in business is everything. Whatever you focus on, you move toward. So, for me, if we keep focusing on the smallest of the small, that’s what we’re going to attract, that’s what we are. So, for us, it was just to make a change, make a mental shift, start to focus on larger deals. And I promise you, man, I promise everybody out there, my people were freaking out at me. They were like, “We can’t find those deals every day. We’re in North Carolina.” It took us months for them just to believe me. And once they started to believe, they started to see the results. And now we’re in that thing and it’s starting to really turn over. So it’s becoming great for us.
Mike: Yeah. And maybe you could share some insights on this because I suspect I know what you’re going to say here, but we’ll see. When you get this mindset, when you get this number in your head, like, “We need to be able to buy it at this so we can make $10,000,” let’s say. So sometimes, just by asking . . . I’m talking about the same house, same seller, when you shift your mindset that, “They said they need to have this,” because we’ve all bought houses where they said they needed to have something and you end up buying it for a lot less. So just share some experiences about how the same seller that said they wouldn’t sell it for any less than X ended up selling it for a lot less after the mental part changed and you just had your guys or gals, your salespeople say, “We can’t do that,” and holding out for more. And, sometimes, they come around because it’s just a negotiation tactic.
Darrin: Yeah. And, for us, you know me, Mike. I’m a sales training freak. That’s everything I do is sales training. I mean, I love it, I love it, I love it. That’s everything in my business model.
So, for us, one of the things that I’ve done is I’ve kind of made our process . . . and I don’t like the word, but I’ve made it idiot-proof. So I have everything in the system. If you put in the specs of the house, the CRM tells you what we can pay for it. And we’ve had people from every walk of life go, “Well, man, this house is worth $300,000. I’ll sell it for $250,000.” Well, Podio is telling us we can pay $150,000, $170,000. So we’re $100,000 to $75,000 apart. And I have reps that come to me and say, “Hey, Darrin, what about this?” And I say, “No, you stick to the number and let’s just let this thing unfold.”
So there’s a belief set in there. There’s a belief set in there that . . . I teach my people that money doesn’t exist at all. It doesn’t exist. It’s only an exchange of value. There was a time in America where we traded chickens for a house or whatever that looks like. So money doesn’t really exist. It’s only a value changing. So I said we live in a psychological world. So I train my people. I say, “You have to get to the root of what they’re trying to do.” Because that guy can say he needs $100,000.
I’ll give you an example. I had a seller at $30,000. I didn’t do the contract. One of my reps did. Well, we finally get the house sold. As much as I could get was $28,000 for the house. So, all things being equal, I’m losing $2,000 on this house. I go back to my seller. Now, he’s at $30,000. And I personally took the call. I gathered all of my reps around me and I said, “I need you guys to listen to me do this.” I get him on the phone and I say, “Mr. Seller, I can’t get to $30,000. It’s impossible. I need to be in single-digits, all said and done. I need to have this somewhere around $7,000 to $10,000.” He had a fit. “Oh my God, I can’t do that. That’s way too low.” I said, “Well, Mr. Seller, tell me what you’re trying to get accomplished.”
And this is really good. Somebody who does this would really appreciate this. I said, “Tell me what you’re trying to get accomplished.” “Well, my sister has lived in the house for three years and I’ve been paying the taxes on it. I need to get my money back.” I said, “Well, Mr. Seller, tell me how much the taxes are.” Well, at the end of the day, Mike, the taxes were a total of $2,500. I said, “Okay. So you just want to get the taxes back. What’s next?” “Well, I had to do this at the court. I had to pay an attorney and all this other stuff.” I said, “Well, Mr. Seller, how much was that?” He said, “That’s another $2,000.” I said, “So we’re at $4,500. What else?” He said, “Well, I want to make a little bit of money on it.” I said, “So if I make you $3,000, that’s a great ROI. You’ve got $7,000 in it. I’ll make you $3,000. That’s $10,000. How do you feel about that?”
At the end of the day, you know and I know I got the contract signed at $10,000. We sold it for $28,000. It’s a small deal, but he was at $30,000. He was at $30,000. “I can’t take less than $30,000. There’s no possible way. I will not sell this house for less than $30,000.” But what I did was I just kind of analyzed it to try to figure out for Mr. Seller, “What does $30,000 actually mean to you?” Because, most of the time, your seller doesn’t really know what they want. And I’ve found this out, Mike. I’m in the people business. I’m not in the house business, I’m in the people business. Most people have no clue what they really want in life.
And here’s all the successful people that I know in my world. They actually know what they want. Right? And so, for most of our sellers, they’ll tell you a number just because their cousin said that’s a good number. But, in reality, they have no idea what they’re going to do with the money or what they actually want to get out of the house. So you have to get down to the deep root of that. Because we lead them to a logical conclusion, but you have to get down to the root of it so that you can actually take them to that logical conclusion.
Mike: Yeah. You, ultimately, are just trying to solve somebody’s problem. So if you don’t really understand their problem, then you don’t know how to solve it. And, a lot of times, I use this analogy all the time. When I walk into a store, I’m sure everybody can relate to this, sometimes you’re going into a store and you know you’re going to spend some money. You’re going to buy something, you just don’t know what yet. Do you ever have those days where you’re like, “I’m going to buy something today. I don’t know what it is, but I’m a consumer. I’m going to buy something”?
But you walk into a store and a salesperson says, “Can I help you with anything?” “No, I’m just looking.” You know you’re going to buy, but that’s our defense mechanism. And that’s a defense mechanism of a seller to say, “Well, I need $30,000.” There might be some room there, but they’re just not going to open up yet unless you really start to understand what it is they need.
Darrin: And the reality is, for us . . . here’s the reality. If you realize that you’re in the people business and that real estate is just a part of that, then you start to ask different kinds of questions. So when Mr. Seller says, “I need $30,000,” you say, “Mr. Seller, what do you need $30,000 for? Where did you come up with that number?” Because most of the time, 90% of the time, “My cousin told me that was a good number,” or, “I looked online and that was a good number.”
And you just have to walk them through a logical conclusion to say, based on all of these facts . . . like this guy that I’m talking about, in particular, he didn’t need $30,000. He needed $7,000 to get done what he was trying to get accomplished, which was to get his money back and to make a little bit extra. Well, I gave him $10,000 for the deal and he was ecstatic about it. So, for me, it’s about finding the real issue for this person and not just going by what they say. Because, again, most people have no idea what they really want or what they need. So you’ve got to get down to the root of it.
Mike: And in that process, you would say . . . this is one thing. I respect a good sales process. When somebody is a good salesperson, even if it means sometimes that I have to pay more, I kind of want to work with that person. And it’s usually because if they’re a good salesperson, because they took the time to understand what it is I wanted. So would you agree with that, that sometimes people are willing to accept less because you took the time to understand what their challenges were and helped solve their problem instead of keeping it at a level way above that?
Darrin: Yeah. Here’s the fact for my business. I hate negotiating. I refuse to let new sales reps negotiate. You’re in the people business. I don’t care about the house. I don’t care about the house. I care about the person. So when I care about the person, I want to find out, what are you trying to get accomplished? And let’s see if I can help you get that goal accomplished. And then everything goes out the window. All the numbers move away. You don’t have to worry about any of that other stuff because it’s about, “Mr. Seller, what are you really trying to get? I know you say it’s $30,000, but what are you really trying to get done here?”
And here’s what you’ve got to get comfortable with. Here’s a lot of newbies, they’re not comfortable with this, Mike. They’re not comfortable with, “Well, Mr. Jones, I don’t think I’m the right person to help you with this.” And letting it go. That’s the big deal. Sometimes, you’ve just got to let it go because, man, I tell my folks, the new people that come on, you’ve got to talk to 400 to 500 people before you make $25,000. Four hundred to 500. Now, that’s our numbers. We’ve got 17,000 people in our CRM. But 400 to 500 people before you get a deal.
So you’ve got to learn in this business that just because you’re sitting in front of somebody, it doesn’t mean that that’s the right person. So, for us, it’s more of, “Tell me what you want to get accomplished. Tell me how I can help you to get there. And let’s work this thing together.” Because my whole model is built on being a coach and not a negotiator. If you’re a coach, then you try to find what the client is trying to get accomplished. If you’re a negotiator, you’re trying to get what you want to get accomplished. So that’s just a different mindset that we approach it with.
Mike: Yeah. Awesome. Awesome. Well, Darrin, just a couple of final things here. Maybe you can share . . . like I said, there are a lot of people that are listening to this that might be new. There are a lot of new real estate investors right now. Some of them will be successful in their venture and some of them will not. Unfortunately, not everybody will be successful, but it’s just the reality. Maybe one more question here for you. What’s going to separate those two?
Darrin: I think for what I can see, from my past and what I’ve looked at, and I have a lot of people that call me and say, “Hey, Darrin, can you help me become successful?” consistency is a huge, huge factor in becoming successful at real estate. I had one guy call me not too long ago. And he was saying, “Hey, I think I should hire a sales rep.” And so we started processing it and I started having the conversation. I said, “Well, how many calls did you make today?” And he said, “Well, I made three calls.” And I said, “Well, if you made three calls, you don’t need to hire anybody. You’ve only got 40 people that you could call. I could call 40 people in two hours.”
So just consistency. Don’t believe the hype. Here’s the big thing. Don’t believe the hype. Just don’t believe the hype. Just build a business. Be consistent and take your time. Don’t get overwhelmed. Don’t try to be Mike Hambright tomorrow morning. Just be consistent and let that thing happen.
That’s the biggest thing, man. That’s the biggest thing. You see someone on a podcast or on a late-night talk show or whatever it is and you think you can get there tomorrow. You can get there. It’s just going to be impossible to get there tomorrow. So be consistent and don’t stop. But don’t get overwhelmed with, “I should be farther along.” So that would be my biggest thing.
Mike: Awesome. Awesome, man. Well, hey, I know that you’re not in any info marketing. You don’t have a lot of websites or anything. But I’m going to ask you, if people wanted to learn more about you, where can they find you? I know you’ve got your nose to the grindstone, cranking out deals. But anywhere they can look you up, at least?
Darrin: Yeah. My personal website should be under construction right now and back online in the next probably 30 days. It’s darrincollins.com. You can get me there. We’re going to be putting on some stuff there. You can always hit me on Facebook, any of those things will work. If they need some help or information, I’ll do what I can.
Mike: Sounds good, man. Hey, thanks for spending some time with us today. Good to see you.
Darrin: And it was awesome. You too, Mike. I appreciate the time, brother.
Mike: Am I going to see you in a few weeks in San Diego? Will you be out there?
Darrin: Yes. I’ve already scheduled everything. We’ll see you in June.
Mike: Awesome. Awesome. All right. Darrin, thanks for joining us today. Everybody that was listening in, joining us today, I appreciate you. This was episode number 353. We’ve been cranking through these things. So we’ll keep some more coming at you. So everybody have a great day. Take care.
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