Join me as I interview my friend, business partner, and one of the most successful wholesalers in America…Jason Lewis.
Mike: [00:00:00] Welcome to FlipNerd live discussions with and training from America’s very best real estate investing professionals. We meet lives twice a month to discuss what’s working now and get your questions answered. We broadcast live inside of a private online community, which you can join for free by visiting flipnerd.com/live.
Let’s start today’s. Hey, everybody. Welcome to our very first FlipNerd live show of many. Uh, this is a new show. I’ve been doing podcasts at this point for eight and a half years, over 1500 video podcasts. Uh, and this is the first one that we’ve done live in quite some time. I’ve played with live shows before, uh, and we built out a studio and I’m tending to and bring to you.
My intention is to bring to you amazing guests like Jason Lewis, or we’re going to be talking to you today. We’ll be high volume folks or folks that we have a tremendous amount to learn from, and we’re gonna do that twice a month. And so make sure that you’re inside of our FlipNerd [00:01:00] Facebook group, which is where we broadcast these two.
So, uh, Jason, how’s everything going? My friend
Jason: Going great. Thanks for asking.
Mike: Awesome. Awesome. And so some of you guys watching this might know that Jason actually is also my business partner, so, uh, not only are we recording a podcast and I think this is our third Dean officially today.
Yeah. Yeah. But today I’m going to, I’m not going to talk to you as a business partner necessarily just talk to you as a real estate investor. And glean some insights from you. So, uh, I’ll tell everybody, Jason runs a high volume wholesale shop out of Utah and as a highly respected person in our industry.
For sure. Uh, Jason, maybe you could take just a moment and tell us a little bit about what your business looks like. I mean, kind of.
Jason: Yeah. So I’m started my, uh, I spent my first five years working for somebody else, uh, growing a big flip company. Um, and then, uh, September, 2017 started out on my own doing a few deals and then grew that to where we are now.
We’re [00:02:00] on pace this year. 4 million in assignment fees last year was in the last two years, previously was 3 million, um, full built out team, CLL, acquisition managers, dispositions, relationship, uh, and, uh, you know, lead managers, all of the above, having an amazing team that largely runs the show here. So I can spend most of my time focused on investors.
Mike: Awesome. Awesome. And for those of you that are watching live, uh, ultimately this is gonna be interactive. We want to answer some of your questions. If you’re watching a recording of this, uh, you may not be watching it live so you can go to flipnerd.com/live and register, and we’ll notify you of each new upcoming show.
And you can actually see our previous recordings, uh, as well as upcoming shows as well. So this is show number one. So Jason, I w what I really want to talk about today is what is. To run a multiple seven figure a year wholesale business. And what kind of dive into different sections of the business, kind of starting off with what it takes from a team standpoint, you just mentioned that you have a team that runs a lot of this for you.
You can’t run a [00:03:00] business at your level and still be involved in a lot of the day-to-day stuff, acquisitions and all those things. So tell us a little bit about not just what your team kind of looks like per se, but what it takes to run a multi-billion dollar wholesale business from a team structure.
Jason: Yeah. And I’m glad you started there. Cause in my opinion, that’s probably the most important part, uh, in terms of running a business of this at this size and scale, it’s all about having the right team of right. People and things like that. So, and I mean, I will say. Um, having a bit, building a team and finding good candidates and everything else in this market is as hard as finding good deals in this market.
Um, and having the ability to recognize and identify them and then keep them through the great resignation and everything else. It is a challenge. So, um, I will say. I was pretty intentional about it. Um, when I first started, uh, I felt like there were three skills I needed to master in order to become successful.
The first was setting goals. The second was [00:04:00] habits and the third was, uh, being able to hire and retain people. My favorite book on goals is Darren Hardy’s living your best year ever. My favorite book on habits is atomic habits. And my favorite book on hiring is who the AMF. Um, but so the biggest, most important part, uh, with hiring there’s two out, out the gates, number one is you need clarity on who and what you’re looking for.
Uh, like Alice in Wonderland with the Cheshire cat. If they say, where are you looking to go? She says, I don’t know. They say you can take either path and same thing very much so applies with hiring. And actually I was just talking to a. A friend of mine, uh, Tahani about this. Um, I tried really hard to hire and have continued to try really hard to hire for the growth that I’m anticipating having.
So for example, my first ever acquisition manager was my first ever lead manager and
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Jason: help you. So I hired him to be a lead manager, and then he grew within the organization. To be able to be, uh, the acquisition manager and did, did a great job and everything else it’s much easier when you’re, you know, the, the thing, the challenge that we have as real estate investors is most people think we’re a scam, right?
Whether that be sellers or whether that be potential employees tonight, I’m going to dinner with an acquisition manager’s candidate and his wife, because his wife is like, we’re, we’re hiring for another acquisition manager and we’re making progress on the interview. And this is, this is a high level person, right?
Like they work for. He’s the top sales guy at a venture capital backed sales company that does education, uh, stuff down in Provo. Uh, and you know, they’ve got benefits, they’ve got regular schedule and everything else, you know? And so the idea of coming and working for a wholesaler, it’s like, you mean the guys [00:07:00] that post.
We buy houses signs on the side of the street, those guys like that’s a scam. Um, so even at the stage where I’m at now of a big organization and everything else, it’s really hard to initially overcome those obstacles. And so one of the best ways to do it is to get people at more of the starting phase of their career.
So in my early stages, I got people much more at the starting phase of their career and then had them grow. Uh, within the organization. And I feel like we did the same thing with investor machine too. Um, you know, like the person over our account management, the person over our production, they were our base level people initially, but they were the type of people.
Local US-based super smart with the ability to grow. I mean, the, the guy that we had preparing our first, uh, mail orders for investor machine, like it literally like making sure the lists are done right. Putting the mailers together, et cetera, has an MD. Um, you, you would, you would think that the person putting together the mail order [00:08:00] wouldn’t have an MBA, but we’re hiring for where we were looking to go in the growth and things like that.
So hire for growth. That’s one, um, hire early emerging talent, especially when you’re small, don’t necessarily be looking for the proven talent. They may be hard to afford and they may not. Completely interested in you, you, you, you know, as much as anybody, I love virtual assistants, we have a huge virtual assistant base with us at investor machine, but for any type of sales role and voice, if you can, I really like hiring local so they can continue to do.
In the organization. Sure, sure.
Mike: Talk a little bit about that. Hiring for scale hiring for where you’re going and hiring more talented people. Like I think as real estate investors, a lot of times, um, we’re, we’re kind of, kind of ingrained in us to be cheap. Like I’m looking for, you know, cheap leads. I want cheap houses.
I’m trying to find cheap contractors and I want everything to be reliable too. Right. It’s just, it doesn’t really work that way. So talk about, uh, the fact that a lot of real estate investors will go [00:09:00] find somebody. Appears to be cheap, but it ends up costing them a lot more in the long run. And I guess in the context of being willing to invest in your business and pay a little bit more for somebody that can help you hit those goals in the first place.
Jason: Yeah. So a great, great question. So I will say a lot of it really depends on what season of business that you’re in. Right. Um, you know, in our both companies, early investor machine, my Mike and I, I grew the Utah company first and then Mike and I grew industrial machine together. And there’s definitely similar.
Strategies involved early on it’s bootstrapping it. And you’re definitely getting more. You’re definitely being more budget conscious early on because you don’t want. Um, completely run yourself out of capital small, unless you’re, again, a venture capital backed company that raises a hundred and a hundred million dollars.
Pre-revenue right. Most of us aren’t that. Um, but that said a general principle, the place, the last place you want to cut corners is on the quality of your team [00:10:00] and, and an a player. Somebody that’s really good will always pay for themselves, but sometimes when you’re young and when you’re small, As a company is kind of hard to attract some of those expensive a player, uh, you know, like transition those types of people.
Like, you know, the, a lot of our most recent hires, right? Like the guy that’s over sales with us, the guy that’s over technology with us, uh, in investor machine, as well as my recent acquisition manager hires three years ago, none of those people would have talked to. Uh, you know, even if I would have found them and even if I would have offered to pay them when I’m paying them now, I hadn’t proven myself and I didn’t have enough of a type of system structure, business, et cetera, to, to have them be willing to leave the jobs that they were working at.
I mean, they worked at McKesson six largest company, uh, in the nation and, you know, like big, big companies, things like that, get, [00:11:00] get people to leave companies like that. You kind of have to earn that. Right. So when you’re selling. It’s hiring your more younger, emerging talent with, with potential. And the advantage to that too, is if the, if you get it wrong, you can let them go quicker without quite the same amount of damage overall to your company, but you still don’t want to be cheap.
Um, and you want to be hiring, hoping that there’ll be able to grow into the leader that you want them to be like. Yeah.
Mike: So a couple of things that you said, I want to recap on kind of related to the team before we move on is upfront. You said you wanted to get really good. You knew if you got good at setting goals.
At creating habits and hiring and retaining people that that would take care of a lot of the business. Right. So usually people would say setting a goal. That sounds like that’s easy. That’s just something I do on a napkin at launch. Right. So, but, uh, maybe just kind of clarify there, like why, why is that important?
Because a lot of us set goals and it doesn’t have the context for how to get there necessarily, but talk about the importance of setting a really.
Jason: Yeah. So, um, [00:12:00] goal setting for me is a much more thorough process than it is for most people. Um, uh, Uh, and again, following the workbook, living your best year ever, uh, I go through a whole process of figuring out, you know, what am I grateful for?
What have I done in the past? What were my greatest gains? And then a whole visioneering process of where am I looking to go that boils it down into just a few most important goals. But the most important part in all of this is then every Sunday night, I go over my weekly rhythm register to see where am I at compared to my.
Um, and, and make sure that I’m on track weekly, monthly, quarterly, et cetera, this idea. Sure. Anybody said thinks they’re good. At setting goals, they sit down at new, year’s throw out a couple of pipe dreams, write them down, throw them in a drawer and look at them again. Next year. That’s not setting goals.
So setting goals is, you know, you could even set smart goals back then, too. That’s great. But do you have a process of continually sticking to the [00:13:00] measuring re-evaluating as well as setting goals for your overall team, uh, having KPIs for your team that, that you’re tracking and it’s Gary Keller calls it, setting goals to the now.
You want to do a million dollars in wholesale revenue? That’s awesome. What does that mean you need to do today? Does that mean you need to do this week? That means I need this much revenue this week. That means I need to make this many calls this day. I know that if I want to do a million dollar. I need to spend this amount in marketing.
I needed to do this, this, this, this, and this, and getting it all the way down to the indicators of today. Because when you look at a million dollars, it’s like, oh, that’s a big mountain to climb. Like it’s like, you’re standing at the bottom of a great pyramid thinking that’s really far. But when you set goals all the way down to the now that’s not so bad.
Now I was just one step. What does this one step look right? This one step, this one step. I mean, maybe dead with investor machine, with the goals in our monthly town hall earlier today, we need to add, you know, we need to [00:14:00] increase our net active members this much and average spend for everybody this much, much more attainable and feels like a step that all of us can go on attack.
Mike: So one last question on people. So talk about, um, the importance of, you know, I know that some of the people that we’ve attracted and some that you’ve attracted, they have an interest in real estate investing. So they’re in maybe high level corporate jobs or jobs that sometimes, you know, seem like can we even afford that person, but they sometimes have an underlying interest in doing what we do.
Right now sometimes, sometimes, you know, at the same time, I think a lot of real estate investors are afraid to hire people that are like, am I just creating competitors? So maybe talk about that balance of using the leverage. You might have to hire talent that wouldn’t go to somebody that’s your size company, $4 million, a very respectable wholesale company, but compared to McKesson, it’s like, right.
So. And a proven path versus kind of unproven and certainly much smaller, relatively [00:15:00] speaking, but there’s always, sometimes there’s an interest in like I really want to do what it is they’re doing. How do you balance between using that as leverage to attract somebody but not, uh, creating competitors, if you will.
Jason: That’s a great question. Or having
Mike: the fear of that, by the way, any of the questions, guys, this is a, this is how our role is
Jason: making it up. That’s interesting. Um, to heinie, who I was talking to just before this, uh, and I were having a very similar conversation. She was talking about creating competitors and this as well.
So, um, I have never worried. About creating competitors. Um, and I, and I also, coincidentally have never created a competitor, uh, in the five years. I am a competitor now to, uh, my last boss. So, I mean, I do know that it can happen. Um, I was, I was that guy, but in five years, I’ve I’ve yet to do it. So I guess I’ll, I’ll share first, some things that I do that has been, not create [00:16:00] competitors one, um, In the hiring process, I look for the highest amount of talent period, and I don’t necessarily fear creating competitors because I feel like my, my, my goal is to create an opportunity bigger.
Bigger within my organization for them and without, so it’s constantly casting the vision, making sure they’re being paid appropriately. And really ideally, I like to give them as many of the advantages of entrepreneurship, especially these we’re talking the A-players here. Right? So this, this may not necessarily, I will say this overall applies company-wide, but especially to like, you know, your acquisition managers, your people making six figures, things like that, like.
High-level freedom of schedule. Um, I make sure that their potential and their earning capacity isn’t capped and I’m constantly investing in them and their growth, um, and everything else. So they’re, they’re getting to have the benefits of [00:17:00] entrepreneurship. You know, the incredible rollercoaster that comes from entrepreneurship, right?
Like over the last few months, I’ve had a month where I net six figures and I’ve had a month where I lost a net 80 grand. Right. That’s not fun to ride that rollercoaster. And I make sure that in my conversations I’m talking about not just all the benefits and glory of being in the entrepreneur, but also talking about the negative.
Uh, and the not fun parts of being an entrepreneur as well.
Mike: Um, you’re an entrepreneur. You might not know it, but there’s a ton of right.
Jason: That’s right. Um, we, we have a structure where we could all invest together and rentals, uh, basically be for a certain amount of money that they make. They get ownership and rentals, which again, gives them the benefit of long-term appreciation and rentals and everything else without the negative.
Um, getting the phone call on Christmas Eve to go fix the toilet and dealing with property management and everything else. Yup. Yup.
Mike: Awesome. So let’s, let’s dig [00:18:00] into,
Jason: I don’t know that I answered that one all the way. So go for the best talent. Don’t worry that oh, everyone does signed paperwork. Non-compete paperwork as well.
Uh, but I actually tell them, Hey, I gave my last boss five years on year five. I will tear up the non. Um, and at that point, if I haven’t created a good enough opportunity for you to not become my competitor, you gave me five years and I’m thankful for all you did. And I hope we can work together after that.
Mike: Yeah. One thing early on, I was always afraid with acquisitions people like I had, I think they just have this inherent fear because a lot of us started small and worked super hard that somebody’s gonna like take that away. Right. I mean, I think. Drives us as entrepreneurs early on as this, uh, just a little bit of fear.
Isn’t a bad thing necessarily, but it might be unwarranted because like you said, most people can’t go do everything that it is that we do. But I started to shift it towards saying, look, if you do this with me for a couple of years and you want to go out on your own, then we can partner together. I’ll help fund your deals.
Like you can sell to me, things like that. [00:19:00] Even if it never happens. I think for a lot of people, at least it shows them a path that like, Hey, I could start here. There is a path for me further down the line. If I want to, if that’s what they really want to do with the majority of people do it. No, but it is, it may maybe helps with recruiting people that there is some longer-term path for me.
If I wanted to go out of.
Jason: Absolutely. Yeah. And I like that to, to say, Hey, there is a path long-term along the way. And I will say like over time, the more I’ve grown, the more abundant I’d become. Um, you know, there, there’s plenty. There’s plenty to go around. And here’s the thing. If anybody wants to become a real estate investor there’s courses, there’s podcasts that like everything you need to go do this, you can find online with or without me.
And then I guess the other part of that probably helps. Other than my COO, I would say I don’t give anybody like the acquisition manager is great at acquisitions, but they’re gonna have no idea how to drum up a lead. [00:20:00] Right? The marketing manager is good with me and drumming up leads, but they would never be able to actually go and close a seller.
Right. The disposition manager knows how to disposition properties well, but would have a heck of a time generating leads and closing sellers. So like nobody has the whole. Picture either, which I would say also probably contributes. Yup.
Mike: Yup. Um, so next let’s go into kind of lead gen. So, so run a shop like you do, you have to generate a lot of leads.
It never, and obviously you and I are partners in a Legion, uh, business investor machine, but it never fails. To surprise me that there are so many real estate guys that are, let’s just say, they’re doing two deals a month and they’re like, I’m going to double my business over the next year. And you find out, well, they didn’t raise their advertising budget at all.
It’s like, okay, well, how’s that going to work out for you? Right. So you have to be willing not only to invest in people, you have to be willing to invest in generating leads. That could be systems. It could be direct mail. It could be processes. It could be relationship managers. It for you. I know it means all of the above.
Right? So talk about like what it takes to operate at a high level, [00:21:00] from a lead gen perspective. Let’s dive in.
Jason: Yeah, a lot of money, especially in this market. Um, as the, as the market has gotten tighter and tighter cost per contracts continue to go up, but revenue per deal also continues to go up. So my ROI is as high as it’s been, but my marketing spend is by far the highest it’s ever been, uh, in order to get, um, you know, the same amount of deals, but those same amount of deals are also worth significantly more in revenue.
Right. And so, uh, I, I’m a big believer in a diversity of strong marketing. Um, so I do with I’m an investor machine client. I do direct mail, uh, and skip trace lists through investor machine for the texting and the cold calling. Um, I do, uh, PBC, Facebook. Uh, I do networking and relationships. Each of those are good, solid legs of my company, which, you [00:22:00] know, matters a lot in terms of having an overall stable company, because all of those marketing channels are going up and down and up and down, um, in terms of their effectiveness, um, I’m a big believer in done for you and letting the experts do it.
Uh, I don’t do my. Male and lists, even though I’m really good at it, I let investor machine do it because they’re even better at it than I am. Like as good as I could be at pulling my own lists and running my own direct mail because of the software. Uh, and everything else that we’ve developed at investor machine, I couldn’t do it at the level that investor machine does on my own.
Um, I don’t do my own pay-per-click I don’t do my own Facebook. I don’t do my own SEO. I find the best companies out there that aren’t taken by someone else in my market. Um, and I work with those specific companies. The one thing that I do in house though, is I do manage my own. Textures and cold colors. I have yet to be able to find that outsource cold calling, texting company that does really, really well.
If someone has one that [00:23:00] they absolutely love, I would love to hear about it. Um, so multiple strong marketing channels, and again, like, you know, right now direct mail crushing it. Uh, and my online is crushing it. My texting cold calling is just, okay. My relationships is poor two years ago. My relationships were amazing.
Last year, my texting was amazing. Um, so. Every quarter, they’re all doing this up, down, up down. Part of it is what I focus on because what you focus on and put energy into gross. Um, but part of it is just market timing as well. When the market’s as hot as it is, my relationship deals don’t work as well as they do a little bit, not as hot a market, but if you only have one track, uh, you’re gonna be.
Mike: Yeah, cause somebody that’s not going to work. Right. I mean, that’s what some people don’t realize. I think you even said this and I w we’ll just, uh, as a owners of investor machine, put ourselves out there that your Q4 sucked, but your last year, but your Q4 one was amazing, but you have to ride that storm.
Right? I mean, I think with every [00:24:00] channel there’s ups and downs, there’s noise, whether it’s, uh, elections or holidays or things like that. And it’s amazing to me having played the game a long time, it could go from like this isn’t working. To your most profitable deal ever. And you like fall in love with it.
And it just takes, it’s kind of like the lottery. If you hate the lottery, if you can’t win, if you don’t play. Right. So you gotta be playing the game and stick with it consistently to be able to prove that that, that, that channel works or.
Jason: Yep. Absolutely. And I’ve had some channels that I’ve tried, that haven’t worked.
Um, I have a ton of friends that crush it and TV, Utah TV weren’t meant to be. Um, I’ve had, most of my competitors have tried TV and TV and YouTube. Don’t get along. Well, uh, I respect the heck out of the TV service providers that I’ve worked with. And again, a lot of people do well, but just didn’t go well for me, I tried a cold company called cold calling company.
It’s not like everything you touch in this space turns to gold, but you’ve got to [00:25:00] consistently be trying and scaling up those channels and having the patience to let them see it out and make sure you’re picking the partner with the right provider that has an established track record of working with a lot of other people.
Mike: Yup. Yup. Yeah, somebody said that to me a couple weeks ago, they said everything you touch turns to gold and in my mind, No, it doesn’t like there’s nobody sees the mistakes and the errors and the tests that didn’t work and all that. Right. I think for entrepreneurs that are listening to this right now, like, don’t expect even talking to somebody like Jason here he’s failed a lot.
Right. I mean, that’s part of the process. That’s part of the, that’s part of how you learn how to move forward. So for a lot of folks, They, their expectations are just wrong. They get into business or you’re doing a couple of deals and you’re like, I tried direct mail for like six weeks and that didn’t work or I tried this thing and it’s like, you, you have to be constantly testing things and trying things.
And you can’t give up quickly because we have long sales cycles in this business. Right. There’s people that you could be marketing to [00:26:00] for 10 years. And eventually they pick up the phone. They’ve been getting your letters or your senior ads or whatever it is forever and ever, and ever, and they just weren’t.
Right. And then something happened. It could be a health issue. It could be a tax bill. It could be something that they’re like, I’ve been seeing this ad for a while. Today’s the day. Right. But you have to play the long game in order to see those things, right?
Jason: Absolutely. Yep. My, uh, my favorite definition out there of a successful person is a persistent failure.
Um, so, um, I, uh, Um, at that comes from a guy named Mitch, Mitch, whom he paid his little sister to read every success book known to man and they read them all and they, what they came back and she read them all. And I said, I want you to find a successful person. And she came back with a persistent failure.
And I agree with that. I’ve got lots of little failures again, that cold calling company that I mentioned earlier, $35,000 loss, no deals. Uh, but it’s okay. I call it the R and D fund. [00:27:00] Like that one didn’t come together. Even though I was in-house calling and texting from that exact same list and it was producing great.
But, you know, I, I followed my formula. I had other people that I knew that had success with it. I researched into it. It overall made sense and the money was spent, obviously I would’ve rather had a Tesla model three with that 35,000, but, but it’s okay. That’s the cost. It’s the cost of business. It was one failure and there’s constant little failures, but to be successful, you gotta be able to roll through those failures quickly, uh, not get discouraged and.
Um, and there’s a lot of risks that I’ve taken that I got it right on, which is why the business is successful.
Mike: Yup. But she has to be willing to fail along
Jason: the way for sure. Right. And we’ve had the advantage this last few years of what I call the wind, the wind at our back, right? Yeah. Market’s been moving up.
It’s it’s been overall, you know, the tide’s been high. Um, it’ll be interesting to see over the next few years as we don’t have quite that [00:28:00] same amount of tailwinds to see, you know, how how’s everybody does. Yeah,
Mike: the lessons I think to be learned are, you know, people that are paying top of market seemingly overpaying for deals because they’re estimated in ARV, that’s higher than what the cops show.
Cause while the market’s been going up, like people that are are. Basically expecting the stars to continue to be aligned in every aspect. Value is still going up, interest rates being low. Um, all those things are the ones that are going to get hurt first. So this is kind of a market where you turn a little bit to conservatism, right?
You have to be careful because you don’t want to miss out on deals either. But if you’re the guy that’s trying to set the new high bar for comps in your market with like high end rehabs and all that, like you’re the one that’s going to get hurt. So be safe out there, right?
Jason: Yeah. I, I will definitively say.
If you are buying based on appreciation and you’ve done that historically, and it’s gone well for you right now, today is the time to stop that, uh, look at what’s happening in the stock [00:29:00] market. Look at what’s happening in the crypto market. Uh, even like, you know, in the real estate market, Utah has been fiery hot.
I just listed a flip, perfect flip, perfect neighborhood and everything else. Uh, in two months ago, if I would have listed that flip out, I had 40 showings and. 15 offers. Uh, this last weekend I had six showings and two offers. They were great. They were still above asking price. I’m still doing great on it.
Right? Look at the trend, uh, with that and be safe out there. Uh, my, my rule of thumb is I will only ever buy a flip if I am content to hold it as a rental for at least 10 years, um, which you’re going to have to look at because interest rates are higher now. Uh, and it’s harder to have a properties cashflow and the buyers are feeling that too.
We’re definitely in a time of transition, right? Um, I’m not a doomsday yest. I don’t think we’re headed for 2008 or anything like that. But I’m [00:30:00] saying if you’re banking on rapid appreciation, um, now’s probably not the, I would suggest changing your point of view. Yep.
Mike: So Jason, you’re primarily a wholesaler.
I know you do some, you do some rehabs, you know, you have some rentals, some Airbnbs and things like that, but what are you changing anything from an exit strategy mix or an approach with the market? Just anticipating what you just said at all,
Jason: or I’m not because I’ve always been super conservative. Um, my, you know, my, my goal is when I’m sitting in my rocking chair, when I’m old, I want to look back and say, you know what?
I played it just a little too concerned. You have yeah. Three, you have four choices. One, I was way too conservative. I kept my money in bonds, my entire life and gold too. I was a little too conservative, three. I was a little too aggressive and four, I was way too aggressive. Right. I dumped it all into angel investing in crypto, uh, or, or, uh, you know, stock options that were highly leveraged, shorting Tesla, whatever.
Right. Um, So my goal [00:31:00] notice an option. I did not give on there as I successfully did it exactly. Right. Right. I was exactly the right amount of aggressive versus conservative. I timed the highs and lows. If that’s your dream, give it up. That’s the fastest way to fail is to shoot for that. So my rule of thumb is I want to be a little bit too conservative, so I’ve lost a lot of money.
In the last three years over. Not doing big. Cool, crazy awesome. Flips. Craig clay Rockwood. One of my good friends, one of my competitors. He did a flip in park city. I think he made like multiple six figures on the one flip. It was awesome. I was super happy for him. Don’t want that money. That’s dirty money for me is.
Million-dollar flips, not me, never not interested. Uh, someone else can have that money. I only flipped at the bottom of the market. So no major changes. I’ll still keep my two construction crews busy. Um, And still keep the one change I will say though, is I’ve been keeping everything as rentals for the last couple of years.
And I’m switching back to [00:32:00] flipping because with the interest rate increase, it just has the rentals looking so bad right now. By the time you hit the debt coverage restraints, it winds up being like 50% loan to value. So, um, um, that I would say that’s the only change, but I’m still buying the bottom of the market and I’m still flipping, but anything that I flipped, if I had to keep as a rental, I’d be totally fine with, and I still do more wholesaling ones.
Because I’ve I grew up, you know, I started in this industry 10 years ago, 2012, which was the bottom. So I still, you know, I still kind of have seen what that looks like. Uh, and I’m seeing the devastation of people and everything else, and I’m probably a little more conservative than most. So I kind of always had a strategy around if it goes that way.
I want to be.
Mike: Right, right. I think it’s just easier to streamline to a wholesaling business. So I was, as you know, I was heavy on the rehab side. We were primarily a rehabber, which we made more money doing and [00:33:00] all those things, but it definitely was harder for me to outsource a lot of the tasks. Like I, I still looked at every house cause I was borrowing money.
That was in my name. And so I wanted to make sure it was going to happen. Uh, that it was a safe bet. If you will, I would still go out to meet my contractor more because we’re friends and it was almost just like a sign of respect that I spent a little bit of time with the property there. And at the end, a lot of your time, right.
It’s hard to outsource those things, ultimately, because you know, it’s just going to take your time. So awesome. So, Hey, give some advice. If somebody is watching right now and they’re listening to this and they’re stuck doing a couple of deals a month, we talked about setting up the right team. We talked about lead gen.
We’re talking about a little bit about mindset in there and kind of setting the right goals and all those things. Um, if they’re stuck at a couple of deals, And they want to scale up and get there. Uh, what’s some advice you could give. I know that’s a broad question, but what’s some advice on how to go from two to two or three deals a month to 5, 6, 7 deals a month.[00:34:00]
Jason: Um, I mean, it’s got to lead with more lead generation, you know, like sometimes it can get down to simple math. What’s your cost per contract? Um, Can you double that marketing channel, right? Like if your cost per contract is five brand in texting, let’s say, can you double the amount of texts that you’re sending?
That’s a lot harder today than it used to be because of, you know, supplier constraints, hiring additional people, things like that. So one of the reasons why I love online and direct mail is because those knobs are so easy to turn, uh, you know, my investment machine, I just increased my budget, seven grand.
I just sent my account manager an email and said, Hey, I’m want to go up seven. That was it. That’s all I did. And then, you know, the lead flow went up from there. Same thing with pay-per-click. You can just turn the knob. Um, but, uh, so, you know, figure out what your cost per buy, uh, you know, make sure it’s in line with what other people in your market or similar markets are.
And [00:35:00] if. If you increase that if you double the marketing activities, you should double the total number of deals. If you don’t, you better go back and figure something out. But if you do, then you do it again, then you do it again. Um, I mean it really, if you’re a largely marketing based business, it can be that.
Yeah. Um, and there’s things you can do. You can get more deals out of your pipeline. You can be better at leading leads, follow up. You can be better at conversion. You can be better at the appointments. You can be better at your dispositions, which would allow you to then pay more to buy deals. I mean, there’s a hundred different things that you can do if you don’t want to.
The easiest thing to do is it’s honestly, the easiest thing to do is to increase your marketing budget. The harder things to do is to get so operationally. That you get more out of the marketing budget, which you already have, which basically everybody I know myself absolutely included.
Mike: Yeah, it kind of goes hand in hand what we talked about with the team, right.
At the end of the day. And if you’re doing two deals a month, let’s be honest, you have a job and not a business, [00:36:00] right? Because you, you, you can’t afford the overhead of additional staff to do all those things for you. You’re not going to hire an incredible salesperson. That’s going to get paid on two deals a month.
They’re just not going to make the type of money that they could make doing something else. So those things are critical to make sure that that’s really kind of the case for scale here is how to get yourself in. Business owner’s box instead of the self-employed or you’re doing everything yourself box is to scale up and it has to be done through ultimately lead generation, uh, maybe better dispo, like you said, but, and having a team in place that can handle that.
Jason: For sure. Yeah. You have to have enough revenue to be able to afford the quality and quantity of staff to run the business on your own. Right. That’s. It can be smaller than you think. My business largely ran. I started in September of 2017 and by may of 2018, the business was largely running itself off of one acquisition manager, one lead manager, one disposition manager slash [00:37:00] project manager, and then an office person.
So you can get there pretty small, pretty quick, but, you know, imagine this is the basketball. Who was the first off, I was still somewhat involved in all of that. I didn’t have to work a ton, but I was still somewhat involved of all of that. And in a basketball game, who do you think was the guy sitting on the bench for every one of those positions and they all had, they all had the same name.
His name was Jason, right. If the acquisition manager left, I was the acquisition manager, the disposition manager went on vacation. I was the disposition manager. So it’s nice when you get a company big enough that you can have a couple of people in each of those roles. Um, that way, you know, like right now, We have one acquisition manager, we just lost one of our acquisition managers.
We’re working on a second. One asked me how many appointments I’ve been to in the time since we lost our acquisition manager, not, I haven’t been to an appointment in years. Um, and even losing an acquisition manager, I didn’t go to an appointment because we had an acquisition manager who was able to increase.
I mean, last [00:38:00] week he did, this is a lot of appointments for us. He did 15 appointments last week, our one acquisition manager, um, My CLL was an acquisition manager previously. So if any overflow was needed, I think he did at least one appointment that was needed last week. And if more was needed, he would be able to step up and cover for those specific appointments until we get the new acquisition manager hired, which has me, you know, one of my rules of thumb is you don’t ever want to be the motivated one, right?
As a wholesaler, I make a business out of finding a motivated seller, getting the property under contract, and then finding a motivated buyer and selling it to. Our entire business model is based around not being a motivated one. So the same thing applies with hiring. You do not want to be the motivated hierarchy or you’re likely going to make an equally smart financial choice to selling to a wholesaler, not that selling to wholesalers.
Isn’t great. Isn’t great for a lot of people, right? We provide value. But it’s an exchange for convenience. [00:39:00] Same thing. I don’t want to be a motivated cell phone owner with a dead bet with a battery dying in the airport. You know, I’ve got 3% battery and I have no cell phone charger. I’m paying 60 bucks for that phone charger that I know cost them 50 cents to me, but I do it because I’m.
Mike: Right. Yep. So Jason, any, any other things that are kind of working now or advice you could give to folks that are looking to scale up this really, this show is intended to be about scaling up, learning from your lessons of, uh, building a high volume business. Anything that we haven’t really covered yet that you could share?
Jason: Um, I mean, on dispositions, you don’t want to just have. Otherwise, everything’s going to look like a nail. If all you are is a flipper in these zip codes, uh, you’re going to miss out on a lot of opportunities. So, you know, have the ability to, uh, disposition as many opportunities as possible. Um, have agents, you can refer stuff to have wholesalers that you work with and [00:40:00] they can bring you deals and as well.
Being able to squeeze as much juice as humanly possible out of every single lead. Um, you should never, never, never pocket wholesale unless it’s, to me, um, don’t like if you’re wholesaling and selling a deal, you should always be talking to multiple people and getting the best bid and deal. Um, and I would say I would probably want to re-emphasize to the importance.
Your systems, your processes and your lead management and follow up and everything else. And I will say too, if you’re not good, I’m, I’m fortunate in that I can come up with ideas. Well, and I can implement ideas. Well, most of the time people sit in one camp or the other, if you’re in one camp or the other, you need to find.
The ying to your yang, uh, like if you’re amazing at ideas and have a heck of a time implementing them and see them seeing them through go find someone that can help you implement that will definitely, that’s one of the most [00:41:00] important things you can do to, uh, move, uh, move the process along and forward.
Mike: Yep. Awesome. Hey Jason, thanks for sharing your insights with us.
Jason: And thanks to whoever the Facebook user is. That was really,
Mike: yeah. Yeah. We’ve got to be able to say Facebook user. I don’t know who they are. Exactly. Somebody said Jason’s a business genius. Listen to what this man has to say. So good stuff. Um, everybody that’s watching the show today.
This is our first show I’ve been doing the FlipNerd real estate investing secrets show. Uh, for eight and a half years, he’s done over 1500 podcasts on the flipping her network and kind of rolling back out with a live version of the show. The intention is to bring you high performers, people that are doing high volume that have learned a lot of lessons that have a lot of arrow wounds in their back.
Right? A lot of war wounds along the way that can share those lessons with you. So we’re gonna be doing this, uh, twice. A month going forward. Uh, if you haven’t registered to make sure you get notified. We only stream this inside of our FlipNerd group and you can register at flipnerd.com/live to see our live show.
In fact, we have our [00:42:00] first six guests scheduled, so you can see who they are out there as well. Our next one, I believe is Eric Latshaw, who runs a high volume shop. Uh, out of the Pennsylvania market also happens to be an investment machine, uh, member as well. And so we’re going to keep high volume. Coming at you people that have a lot of talent that you can really learn from.
So if you have any ideas for guests that should be on the show, you can let me know. I have a lot of these folks that are in my investor, fuel mastermind already, and a lot of friends in the network from having been in the business for a long time. But we’d love it. If you recommend guests and refer people to flip your.com/live so they can join us on the shows too.
So appreciate you guys a ton. We’ll see you on the next episode. Thanks Jason. Thanks for. Thanks for joining me on today’s. FlipNerd live to get access to our upcoming interviews with experts and get your questions answered and join our free online community. Please visit flipnerd.com/live. Thanks again to our sponsors.
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