This is episode #346, and my guest today is Erik Stark. We talk more today about getting started in real estate investing, specifically on the topic of building a business vs. a job, and how to avoid ‘shiny object syndrome’….which distracts us from staying focused long enough to see the success we’re looking for.
You’re going to love this topic, and I hope it helps you whether you’re getting started, or growing your business.
Help me welcome Erik Stark to the show!
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 346, and my guest today is Erik Stark. We talk more today about getting started in real estate investing, specifically on the topic of building a business versus creating a job for yourself, and how to avoid Shiny Object Syndrome, which is real easy to do in the real estate investing industry or space. But that distracts us from really staying focused long enough to see the success we’re looking for. Sometimes we move on to the next thing when that is usually the wrong idea. You’re going to love this topic.
It’s a great discussion today with Erik, and I hope it helps you whether you are just getting started, or whether you’re trying to grow your business or trying to navigate some of the challenges we’re seeing in this new sellers’ market. Please help me welcome Erik Stark to the show. Erik, welcome to the show, my friend.
Erik: Hey, man. Thank you so much for having me. I really appreciate it.
Mike: Yeah. Great to see you. We’ve been talking for a long time about getting you on the show and glad that’s finally happened.
Erik: Yeah. No. I apologize for maybe evading you for so long. I’ve just been so busy with [inaudible 00:01:33] and things like that.
Mike: Everybody’s busy, man. I get it. Hey, before we get started, this is going to be a great topic, because I think we were talking about this before we started recording here. A lot of real estate investors are seeking financial freedom. They’re seeking a kind of freedom, lifestyle freedom to be able to travel and do things with their family, and all that. But I would guess, they say something like 90%, 95% of people that try to get started in real estate investing fail. So they don’t even get started. They do one deal and get wiped out, or they never do a deal and give up.
Then, if you take that last, let’s just say 5%, probably 90% of them that are successful really just created a job for themselves. They never kind of get out of the way of themselves. They didn’t really create a business. They’re self-employed, and they’re the boss. Right? But they have to kind of continue. So this is going to be a great conversation. Before we get started talking about that stuff, though, tell us your background and kind of how you got started.
Erik: Beautiful. Well, again, first thank you so much for having me. You have such an awesome community and I really appreciate you dedicating so much of what you do to educating and helping other people. I kind of just show up at the easy part. So thank you for putting on an awesome show and running a great community.
Mike: Thanks, man.
Erik: My name is Erik Stark. I’m 34 years old. I’ve been a full-time real estate entrepreneur since 2000 . . . I got into real estate around 2006, did my first deal towards 2007, so it took me a whole year. Prior to doing real estate, actually, I’ve always kind of been a flipper and I really didn’t realize this until I kind of looked at my backstory. But before I jumped into real estate, I used to be half-partner and manage an auto detail shop, where before long I began buying cars from some of my customers off the streets, cleaning them up, fixing them. I was known around town as the “Cadillac and Corvette King”. That was my niche.
When I really look back at my flipping days, even before then when I used to buy and sell dirt bikes when I was a teenager. I always went after the two-stroke Yahamas and would go after the hill climb machines. But I became known as the “Cadillac and Corvette King” in Clinton Township, and I just began to go after those kind of deals, specifically. So I’ve always kind of had a knack for finding things that were maybe undervalued or undermarketed, maybe just weren’t performing at their highest and best appeal, and cleaning them up, making them appealing to the market, doing some really great marketing and advertising behind it. Then, profiting from that along the way.
So I had a little bit of a lifestyle shift back in 2006. My wife that I’ve been married to for 14 years, we had our son back in 2006. I just remember sitting in the hospital and I was making great money. I was flipping cars. I was half-owner in a detail shop. But I was working like mad, like 60, 70 hours a week. There were no weekends. While I was able to provide a great life for my family, they didn’t know who dad was.
Erik: I literally remember sitting in the hospital after our son was born, that same day, and I walked over, and I kissed my wife and said, “I have to leave. I want to go to this investor meeting and go to this event, and start venturing out into this path of real estate.” Here we are some odd years later and flipped a couple hundred properties. Life has changed drastically, and we’re very blessed.
Mike: Yeah. So let’s go back to that a little bit. So you had an interest in real estate investing. What was it that interested you? When you go to a meeting, I assume you mean it was a seminar or a sales pitch, or something like that, ultimately.
Erik: [inaudible 00:05:25] Yep.
Mike: But those things are always . . . I don’t know what to . . . they’re always kind of done in a way to where they give you the best-case scenario. Right? Like, “You could be free,” and you’re flying around the world on private jets and stuff like that. At that point in your life, that probably wasn’t your goal, was private jets or anything like that. Or maybe for most real estate investors, that’s never your goal. But it’s more of having that time back. It’s about making money, and it’s about having time to spend with your family. So what did you see in real estate that kind of attracted you at that point?
Erik: You know what? It was about two things. It was to become financially independent and to leverage our time. I’ve always been a hard worker. I’m not somebody who’s scared to roll up my sleeves and work. We worked very, very hard. I still do to this day. But I knew that I didn’t want to be the guy . . . I love my father, I love my grandfather, but they still work every day and probably don’t really have the ability to say, “You know what? If I don’t want to go to work no more, I can’t.”
Erik: They’re not in that position in life. So I knew that, again, I didn’t get into real estate just so I can not do anything. To me, that’s not my vision of success.
Mike: Sure. Yeah.
Erik: If I wanted to take 7 days, 10 days, a month off and go do my own thing, it’s . . . Let’s keep it simple. If I want to go to my son’s school at 11:00 and be a part of a program, I don’t want my boss to say, “No. You can’t do that because you have this deadline to meet.” So to me, it was all about leverage and that financial independence, and to make sure that I was available. If my son was sick and he needed his dad, I didn’t want to have to be the father that said, “I’d love to stay home and make sure that you’re okay, but I’ve got to go to work and make sure that I provide for my family.” So it was all about my big why. It wasn’t about the private jets and the cars, and all that stuff. Even though we don’t have any of that stuff.
Mike: Yeah. I agree with you. I mean, that’s one of the things that, sometimes I forget . . . because my wife and I left Corporate America to get into real estate investing in 2008. Sometimes we forget what it was like in the corporate world. Like we just got back from . . . we went on a Disney cruise, for example, for my son’s spring break. I take him to school every day. My wife picks him up. We work hard, but we have flexibility to do what we want, when we want. So we’re talking now about maybe getting an RV and leaving for the whole summer or a big part of it. There’s just stuff that we think about now that you never even kind of fathomed that that was an opportunity when you’re in Corporate America.
So you probably have friends that, now . . . I mean, we need to find some friends that can travel with us, and we were just having this conversation the other day.
Mike: Because we love to travel. Our son is nine. He’s an only child. So it’s like, he needs a buddy. He needs somebody to hang out with because he just gets . . . we’re kind of holding him back in some ways. So we were talking about, “We really need some more friends to travel with, but a lot of our friends don’t have the flexibility . . .
Erik: I can relate.
Mike: . . . or the time like we do. Now, we’re blessed in that way, but I think that that’s hopefully why a lot . . . I mean, folks that are listening right now, I’m not saying this to brag. Erik is not saying these things to brag or anything. But it’s just, that’s the goal, why a lot of us get into this business, is that type of freedom. It doesn’t mean you have to do it, but it’s nice to know that, man, if I just don’t want to go to work today, then I’m not going. I’m going to do something else, and to have that flexibility.
Erik: Yeah. I can relate, exactly what you say. I drive my son to school every single morning. I mean, we live [inaudible 00:09:05]. Just that time to be able to shine in his life and let him know that his dad was there. I didn’t have that when I was a child. So I’m very blessed to be able to be there with my family all the time.
Mike: Yeah. So let’s talk about . . . what we’re talking about here is how other people can have these things, and we want people to be successful in real estate investing. I know you and I, both, like to give back. So the premise of our conversation today is to kind of frame up how you can not forget about why you got into this business in the first place. I think a lot of people will try to get started and if they are successful, like I said, they end up creating a job for themselves more often than not.
Mike: Some of that is through distraction. Right? There’s a lot in this industry that gives us . . . it makes it easy for those of us with Shiny Object Syndrome to look at what that guy is doing. “Let me watch this webinar. Oh, this guy is doing something virtually. This guy is doing land.” There are all sorts of stuff going on. Maybe talk a little bit about kind of this conversation around designing your lifestyle and making sure that you kind of have your eye on the prize of why you got started.
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. . . around designing your lifestyle and making sure that you kind of have your eye on the prize of why you got started.
Erik: Yeah. Man, we could probably have a daylong [inaudible 00:11:21].
Erik: I think that’s where the rubber meets the road with anything, whether it’s real estate or whether you’re going to create an app, or whatever it is you want to do. For me, it was all about the big why, “Why is it that I’m choosing to go down this . . . ” When we were first starting, this was a treacherous path. This was uncharted territory, I was looking for anyway. The way that I found it easily was the local REIAs and the webinars, and the seminars because they just made it mass marketed and easily available for me to learn a way to get into this industry.
Erik: With that said, I think there are a lot of people that they don’t really know what they want at all. It’s very easy for those people to look around and say, “Well, yeah. I like that. I like that guy that’s showing me his lifestyle that he’s living,” and he’s giving a presentation on, “How I Became Financially Independent.” He shows the private planes and the cars, and it makes us say, “That’s what I like,” but it may not necessarily be what you want.
Erik: None of the things that I have on my vision board or my why have anything to do with real material possessions or items. It has to do with owning my time and us being in charge of the direction that we’re going to be moving in life. So I don’t know if that answered the question, or if I kind of strayed away from it.
Mike: No. I think, hopefully, for folks that are listening to this, I would encourage you to kind of stay focused. It’s hard to do in this business. I know we were talking before we were recorded here, and you were talking about how you had reflected back on what made you successful early on, and how you start to realize sometimes that you’re spending a disproportionate amount of your time chasing something that brings you a small level of results. You mentioned the Pareto rule, the 80/20 rule. Maybe it’s like, “Hey, maybe you’re spending a lot of your time on stuff that isn’t going to amount to a whole hell of a lot.” So stop doing that. Right?
Erik: Absolutely. Yeah. I’m constantly reminding myself and, actually, at my home office, because just for those people listening, I have a business that operates just north of Detroit in Michigan. It’s where I built my company with my business partner, Steve Mills. But I actually do live down in Florida, in Boca Raton, full-time, and then I travel back up here. But I have a big, huge printout right above my desk at my home office that says, “Stop chasing opportunity and work a strategy.” That revelation came to me when . . .
The foreclosure boom was here, and you could just call an agent, write a couple offers, and be able to have your choice on where you wanted to buy. Life was good. We had it on Easy Street. We were just buying 100 foreclosures a year, flipping, wholesaling, keeping rentals. It was great. But when the market and the economy started to change, we were looking for that next shiny object to say, “Well, where is the low hanging fruit in the industry that we can just jump into, get to work, and keep building our business?” There was no definite answer. Short sales were becoming a big thing. FSBOs were becoming very active.
We really had to sit down and look at our business, and say, “Where did we make all of our money during these times?” While it was foreclosures, largely, and the foreclosures were kind of disappearing, the next in line was our probate marketing, our driving for dollars, and doing developments and building new properties. So we really had to look at our business and say, “Let’s stop going after short sales and foreclosures, and all these different things, and let’s pick three very simple campaigns that we can focus on and jump into, and just dominate that sector of our marketplace.”
I’m not here to tell you guys that it’s very simple and easy. But it’s been very rewarding and profitable for us to focus on those niches.
Mike: Yeah. That’s great. I think one of the things that happens to a lot of real estate investors is . . . the truth is I don’t know what your conversation rates are, but when we’re in the direct marketing business, sending direct mail, pay-per-click, lots of other lead generation, historically, I mean, I’ve bought hundreds of houses. Our close rate, an acceptable close rate is around 5%. So in most businesses, a 5% success rate is not good. I mean, it’s not that good. Right?
Erik: [inaudible 00:16:03]
Mike: But in real estate, you can have a very profitable business with that. What that means is, 95% of the time, you’re striking out. Right? So I think what happens with a lot of real estate investors is they can’t stomach that. It’s like they just say . . . if you’re inexperienced, maybe your close rate is 2% or 3%, maybe it’s half of that. But it just means you need more practice and you need to really stay focused. But it’s easy to get distracted when you have a 95% failure rate, even though veterans know that, “Hey, man. That could be a great business.”
So it’s just real easy to kind of give up and say, “Well, this isn’t working. So let me try that, or let me just stay at my cozy job, because that’s at least safer.” Right?
Erik: To touch on that, I’m not a guy that takes . . . I don’t mean to use the word “losing.” But one of the things that I would always get, it was my pet peeve in business, is if we would lose a deal, I would cut off every other opportunity that we have to find out, “Why did I lose that deal? Was my offer not strong enough? Was it my attitude? Was it my ego? Did I have a problem? Why did I not get this deal, or why did they not say ‘yes’.” That became a real personal pet peeve of mine. Because when you talk about having that . . .
You’re operating on a 5% margin to try to build a business and support a lifestyle, and pay for a staff and marketing campaigns. There’s nothing I can do about the people who don’t respond. But to the people that raise their hand and say, “I’m interested in the services that you contacted me about.” Then, when they didn’t move forward with those services, I really took it upon myself, personally, to say, “Whenever I hear a ‘no,’ it doesn’t mean that they’re not interested. It means that I haven’t provided enough value.”
Erik: So I really began to look at some of the things that, again, a lot of it is my ego. A lot of it is just the way that I respond to people or interact, or react, or whatever it may be. But I really learned to focus on that failure to success rate and say, “If somebody is going to raise their hand, number one, we’re not letting them go.” We’ve put systems and procedures in place to make sure that we’re not just badger-marketing them. We are trying to provide more value to those people. So I know that I can at least sleep better because we did every single thing we possibly could to try to provide as much value to that person. I know that there’s nothing else within my control that I can do to get them to commit.
We did every single thing that we could. It still drives . . . I’m still the guy that’s trying to turn up every stone to say, “Why didn’t they call? Why aren’t more people calling us on our campaigns versus the next guy’s?” I just had a meeting with a lady. It was a probate call that I took when I was in town about 30 days ago, and we had a conversation, and I could already tell she didn’t need us. She had a very, very nice, clean home and she didn’t need us to buy because she could stick a physical sign in the front yard or stick it on the MLS and get over top dollar.
But she said something to me that said, “I’ve really got to take time out and go meet with this lady.” She said, “I received 14 mailers from other investors and realtors,” and whether this is true or not, she said, “You are the only person that I called because your letter was very genuine and sincere.”
Erik: I said, “You know what? I’m just going to go meet with this lady, have a conversation, find out what’s going on.” I ended up building enough rapport during that meeting, where that lady mailed me all 14 mail pieces that she received from our competition.
Do you know what that does for a guy like me that can sit down, and look at my marketing and say, “Why aren’t we getting better response rates? Well, I can see what everybody else is mailing, how often they’re mailing. Is there anything that we can do to increase or maybe take a little bit of this information, or change the way that we’re communicating? We already were told that we had the most genuine and sincere. Do we need to do more follow-ups? Do we need to change the way that we’re coming across?”
So things like that are very, very crucial to making sure that I’m watching the metrics, so I can increase that gap between the 5% and 95%.
Mike: Yeah, absolutely. A very small change in performance could be a substantial change financially. Right?
Erik: Absolutely. Man, absolutely.
Mike: We talk about kind of a 5% close rate. Well, what if you could get 6%? I mean, that’s a 20% increase in your business.
Erik: There’s a couple zeros on the end of that [inaudible 00:20:38].
Mike: Which usually is pure profit. Right?
Mike: I mean, those things didn’t cost you more to do that. It all goes right to the bottom line.
Erik: Right. Absolutely.
Mike: Let’s talk about, in terms of building a business, you were talking early on, before we started recording here, about the importance and I agree with you completely. I think a lot of folks in the same line of talking [inaudible 00:21:04] been doing here with a lot of people end up creating a job for themselves is they’re still focused on that short-term money. If you kind of think of your business as, “Hey, I need to make so much a month to pay the bills, cover my advertising costs, pay my staff, cover my rent, whatever. This is my short-term money, and then the rest is kind of long-term wealth-building type stuff.”
So back to the whole job thing, a lot of people end up doing stuff and they’re like, “Man, I made $20,000 this month,” or whatever. It’s like, “Okay. But you’ve got to start over next month, or the next day, or always.”
Mike: So that’s inherently how some of this business is. But I mean, I know you’ve done it through rentals. I’ve done it through rentals. So over time, we keep one here and there, keep a rental, keep a rental, and next thing you know we have a portfolio of rentals that cash-flows really well. But you have to kind of strategically plan for, “I have my short-term business, then I have my long-term, kind of short-term money, long-term money.” Maybe share your thoughts on that and offer some advice.
Erik: First and foremost, before I really jump into that, the way that I really look at . . . again, I’m very lifestyle driven. I do real estate because it’s just the money side out of my life that allows me to focus on the things that I’m really, really passionate about. But when Steve and I first began our business back in 2008. We officially began in April 2008. We wholesaled 35 bank-owned properties our first year, and life was good. We had made more money than we ever really knew what to do with. When 2009 came, we did 84 deals.
I’ll never forget how awesome and healthy it was because Steve began to see the bigger picture of things. Where again, for me, it was all just about, “Get the quick cash, assign the property, make the money, so I can go pick my son up from school, take him fishing, be a dad.” Steve was like, “Let’s focus on building a business, so if you really don’t want to have to come in and work leads, you can really focus on being a dad.” So we would get these leads all the time, and Steve would go there and he would have the scope of work created. He was like, “We’re going to flip these two, wholesales this one, and keep these two as a rental.”
He would have this all strategized and created. We used to have a little contest all the time, where if I could take a contract on a property and sell it at 25% plus margin, then it was off the table. Steve couldn’t go after it no more and keep it as a rental property. Now, if he had the scope of work, everything lined up, the long-term money in play, I had to back off and not wholesale that property. But I think it’s very, very easy for wholesalers, especially, because you really are only as good as your last month. The problem where people get caught up in the investment income side of it is passive income is not that passive, especially at first.
Erik: It is property maintenance and relationship management. I know people just say, “Well, we have a property management company.” But when I look at my business, we are maintaining properties and managing relationships. That’s what you really have to be an expert at if you want to create a lifestyle based on cash flow. So I think it’s very, very easy to get caught up in the instant cash riches of wholesaling and assigning a good . . . I still love a good wholesale deal. I love it, even though it’s not the main focus of our business model. But again, the rentals is what allowed us to really . . .
When we were restructuring and repurposing our business, and changing the way we did our marketing campaigns, we had to stop doing so much of the on the business work, or vice versa, I should say. The rentals is what kept us going when we were changing over the marketing platforms, redoing our websites, because we were like, “We need to make this transition fast. If we take our time and just bleed it out over the next year, it’s not going to go as quick as we want. So how can we do what’s going to take us to the next year, and do it in three or four months?”
Well, in order to do that, we had to kind of turn off our marketing systems and have all hands on deck inside of our business making sure we were making the changes. The rental income is what allowed us to stay afloat during those times.
Mike: Yeah. Then, as cycles change too, it’s one of those things that really helps people transition, I’ve seen. In fact, some more veteran real estate investors that I know used to . . . So for me, before I got into real estate investing . . . So I have a finance undergrad, and it was focused on investment. So from a young age, I was really interested in investing, not in real estate, but in the stock market, which now I don’t want anything to do with the stock market.
Mike: I want it all in real estate because I can’t control it and it just seems so rigged now. But anyway, you would regularly hear from people that say, “Hey, the market is overheated right now. I’m going to sit on the sidelines for a while.” So they would kind of pull back and [inaudible 00:26:10] cash, or some safer investment or whatever. But I never heard anybody say that until this last market change. From a real estate investment standpoint, though, you have the ability to just kind of pull back and sit on the sidelines. But you can only do that if you have rentals or some way to have revenue keep coming in. Right?
There’s nothing wrong with wholesaling. I mean, I wholesale a lot of stuff, and I have historically too. But if that’s all you have, you can never stop doing deals. Otherwise, the payday stops. Right?
Erik: Right. Yeah, absolutely. One of the strategies that . . . when people do come to me and they’re like, “I’ve been a wholesaler my . . . ” We have a lot of local people that come to us and it’s like, “It’s so strange, because you guys aren’t mainstream. You’re not at the REIAs. I never see your marketing. But I know that you guys are killing it. I see your houses. I see your multis.” Even the building that I’m sitting in, we own the whole building and it’s on one of the most prestigious avenues in all of Michigan. They’ll come in here and they’re like, “How did you guys go from being high-volume flippers and wholesalers?”
A lot of it just had . . . it’s one simple thing that comes down to how you position yourself. Within the last five years, I think the smallest wholesale deal that we did was like $25,000 and I think we’ve done them all the way up to like $107,000.
Erik: All that comes down to is . . . I don’t say that to brag. I don’t care about the bragging rights. The reason I say that is because we would have never been able to command that kind of fee if we weren’t positioned as the guys that have the money to close, the team to repurpose this deal, the ability to sit with the zoning board and create a higher and better use for this property. When you’re coming to these deals as a wholesaler, I know what it’s like. You’re going from the buy side today to the sell side tomorrow, and you’re frantically fighting to get a deal. Then, when you get it locked up, you’re frantically fighting to sell it. You’re making these little $2,000, $5,000, $7,000 wholesale fees, and you’ve got to do it all over again.
Erik: If you just changed the way that you operate in your business and say, “I’ve got a half million dollars in private money to close. I brought a builder on my team that’s going to help me redevelop this multi-family property to its highest and best use. I’m ready to go forward with my plan. However, if you want this deal, it’s not $7,000. It’s $40,000.” The people are like, “Well, I know exactly what you plan on doing with it, and there’s a big margin there. I’ll give you your $40,000.”
Erik: It’s all in the way that you position your business inside of your marketplace.
Mike: Yeah. I know for me, we do a lot more wholetailing now. So I really don’t assign that much anymore, unless it’s totally ghetto and there’s no way I ever want to own that. But it’s because we can take down a property in 24 hours if the title work is done. So we can move fast, and that’s because of private money and some other things. So it’s actually made my life a lot easier because the assignment, you’re right, you’re like . . . By the way, there’s nothing wrong with this, guys. It’s how everybody started. But as you kind of look to expand and turn more into a business than a job, I think it’s important to have options.
A lot of times, people get into wholesaling and say, “Well, I don’t need money. I’m not taking a lot of risk.” It’s like, “Yeah. But if you have money . . . ” Like I know that if I take down a deal and I put it on the MLS the next day, for example, which I do a lot of, I can get more money than if I assign it to another real estate investor.
Erik: Market exposure.
Mike: Because it pulls in a whole different class of “real estate investor.” I’m kind of using air quotes here. It just made my life a lot easier to not have that fear of, “What if the seller finds out that I’m trying to mark it up?” I know you can navigate those waters. I mean, I’ve done it hundreds of times. But it’s just so much easier to say, “We’ve got it under contract. We’re going to take it down. It’s going to be nice and clean.” Then, you could do little things like . . . sometimes if you spend a thousand bucks trashing out a house, you might add $5,000 in value, just because some people can’t see past that. Right?
Erik: Absolutely. Absolutely. It’s so crucial. Like you said, you’re redefining the way that you’re positioning your business and it’s crucial, especially in today’s economy.
Mike: Well, Erik, we’ve got a few more minutes here. Maybe you can share some thoughts on folks that are listening to this and want to get started, or maybe they’ve kind of struggled. They’ve been trying to do it a certain way for a while. How they can maybe step back and reposition the way they think about their business, and maybe eliminate some of the things that are kind of cluttering their mind and how they spend their time. What are your kind of final thoughts on how somebody can take this information today and go do something with it?
Erik: I actually have several podcasts recorded about working a strategy and stop chasing opportunity. But I think to dig a little deeper into that, so many people are searching for, “Where do I begin? How do I begin?” They’re likely going to turn to the next banner add that they see that promises everything that they’re looking for. But the problem with that is, so is everybody else in your market. One thing that you really have to wrap your head around is fishing in ponds that other people just don’t have access to. The only way that you’re going to find those is by walking a little bit farther, where most people don’t want to walk or can’t walk.
Erik: But if I were to give people the simplest, easiest advice and I still do this myself. I’m a street-level investor. I can only use . . . I love data. I love data, GIS stuff, public record. I love that stuff. But where I really excel is at a street level, having daily face-to-face conversations with buyers, sellers, and lenders of real estate. So many people are focused on their business cards, their postcards, their website, and [inaudible 00:32:08]. Again, those are great. Those are necessary. But if you’re just beginning or you’re in a little bit of a slump right now saying, “I’ve got to change something and I’ve got to change it fast,” eliminate every possible barrier that you can that keeps you from getting in front of sellers, buyers, and lenders on a daily basis.
Learn to ask questions of proposition. People come to me all the time and they’re like, “We looked at 30 houses this week.” I’m like, “Well, how many offers did you write?” “Well, we didn’t write any, because they were having a realtor come over, or they already accepted another offer.” The fallout rate of today’s investor market is insane. Deals fall apart at an astronomical rate. I know one of my really good friends, Mike Cantu, who’s bought over 3,000 houses in his life told me that over 50% of the deals that he bought were simply because he’s the guy that writes an offer.
Erik: Even when somebody says, “Oh, I’m just going to list it with a realtor. I accepted another offer,” “Fine. Here’s my offer. Here you go.” So stop chasing opportunity, work a strategy, eliminate the barriers that are keeping you from having daily conversations with buyers, sellers, and lenders, and ask questions of proposition that will get you to the next phase of your business. Don’t just meet with somebody and build rapport for three hours without wrapping up your conversation and say, “Oh, I forgot why I even stopped over today. Will you sell me your house? [inaudible 00:33:35] this property.” Ask those questions of proposition. If not, you’re just doing a lot of expensive entertainment.
Mike: Yeah. That’s great stuff, man. I teach and I have for years, the importance of kind of networking and building relationships. I think this day of age with social media, it’s like people want to just sit back and try to interact online. Which obviously, we’re online right now. I’m not trying to discredit that. It’s a way that I can get out to a larger audience.
Mike: But it’s much easier to build an intimate relationship, not intimate.
Erik: [inaudible 00:34:04]
Mike: But you know what I mean, a business relationship with somebody . . .
Erik: [inaudible 00:34:06] that word “intimate.”
Mike: . . . unless you’re face-to-face. Truthfully, the biggest opportunities that have ever happened to me in my life and I’ve got one kind of happening right now, was through building a friendship with somebody, and then they had a friend and they connected us. It was like, “Oh, this is the biggest opportunity I’ve ever had in my life.” If I look back at kind of my top five things like that that happened in my life, it was all through making those efforts to build a relationship with somebody or a company, or something that ultimately paid dividends. You just can’t discount that. I think a lot of people try to hide behind social media or texting and stuff like that, and that’s not how the real world works.
Erik: Let people keep running in that direction. Because when everybody is doing that, I’m the guy that’s out in the streets giving people that human interaction that they . . . especially, the baby boomers. The majority of our clients don’t really have access to social media. They don’t play on Facebook. They’re not going to go to a website and type in their address. They’re going to pick up the phone and call because that’s their era. That’s their generation. They’re going to pick up the phone and say, “Come over and have a cup of tea, so I can find out who you really are.” They’re not online. My market is not largely online.
Mike: Yeah. You’re right. You’re right. I mean, you still go into a house and see somebody’s got a stack of phone books, and that text message you sent didn’t get through to that rotary phone.
Erik: Absolutely. That’s right. Absolutely. You’re so right. I can’t stress that enough. You’re absolutely right.
Mike: Yeah. Awesome. Erik, for folks that want to learn more about you or want to get in touch, where should they go?
Erik: You guys can find me online. I really don’t go to Facebook. I’m on Instagram a lot more. But you can find me on social media @theerikstark. That’s Erik with a K. So the word “the,” Erik Stark. You can go to therealerikstark.com, which is my blog, and then I also have a business website which is selfmanagingfreedom.com. I just put a lot of my rants and podcasts, and resources, and books, and stuff like that on there. So my blog site, The Real Erik Stark, and then my business site, which is selfmanagingfreedom.com.
Mike: Awesome. Awesome. Hey, thanks for spending some time with us today. For those of you that listened in, thanks for joining us. This is Episode 346. We’re going to keep them coming, so keep on listening. We appreciate you all out there. I hope you have a great week.
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