Today’s REI Classroom Lesson
Danny Johnson explains how important it is to realize that build a team to help with the business is a positive thing. Get rid of fears and false beliefs that are prohibiting you from success.
REI Classroom Summary
You can’t do this business alone. Don’t worry about the fear of teaching your future competition and instead focus on scaling your business.
Listen to this REI Classroom Lesson
Real Estate Investing Classroom Show Transcripts:
Mike: Welcome back to the flipnerd.com REI Classroom where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
Danny: Hey guys. This is Danny Johnson. I blog at flippingjunkie.com and I’m also the founder LeadPropeller and REIMobile. Today, I’ll be your host of the REI Classroom and I can’t wait to talk with you about the topic of mindset shift that’s allowing us to do over 100 deals this year.
Mike: This REI Classroom real estate lesson is sponsored by the investormachine.com, FlipNerd’s private investor coaching program and your blueprint to investing success.
Danny: And it’s really a huge one and it’s one that’s been I guess about 14 years in the works and just to give you a little bit of background, we started flipping houses because we wanted to be our own boss. We wanted to be able to call the shots and take vacation when we wanted and for as long as we wanted. You probably started flipping houses for the same reason.
My wife, Melissa, and I have been in it together and we’ve run the business by ourselves for the first 10 years of those 14 years. And the problem became that we were working harder than we ever did and we got into the business for the freedom of it and we found that we were working way more than we did than when we had our jobs and we were also juggling raising five kids at the same time so you can imagine.
It got pretty interesting sometimes when you’ve got things going on, problems with contractors and closing is not happening, inspection is happening and the inspector, just tearing your house apart and the buyer decides to back out. And when you’re doing a lot of properties like we’ve mostly been doing 20 or 30 or more deals a year and rehabs, it’s a lot of work.
So what caused us to sort of have this mindset shift that I’m going to be talking about is that we had met other investors like my friend Justin Williams out in California through my blog at Flipping Junkie and they were running the business just a handful of hours a week.
And Justin, I think, mentions maybe five hours a week is what he spends typically on his house flipping business and he does a good amount of volume. So it really piqued my interest in wanting to find out more about how he’s doing that. And really what it boiled down to is just the fact that he had built up a team to run the business. So people in specific seats doing the different parts of the business and running that business for him.
And so, we had hesitation for a long time in hiring people. We had thought about it in the past and we had excuses and maybe you’ve had these excuses too if you thought about growing the business and decided to keep it small because of these things. And really what it boiled down to was these . . . were kind of false beliefs that we had and one of them was that nobody could do what we were doing as well as we could or care as much about what we were doing as we could. And I even held onto that up until about two and a half or three years ago where I felt like doing acquisitions, going out there and making offers for motivated sellers, I wasn’t sure that I’d be able to hire somebody that would do as well as I did at talking to these sellers and getting the house as a contract.
And whenever you’re spending anywhere from $200 to $400 per lead for these deals, you see how important it is to be able to close them whenever you get to the property. So I was real concerned with that and I held out for a really long time thinking that nobody would be able to do as well as I would.
And the other fear, and the other false belief that we had was that we’d be training our eventual competition. And I know that this was a very common one for people growing their flipping businesses and you do run that risk but I think it’s an acceptable risk and I think to realize that many people would actually prefer working on the team and doing a specialized part of it is more likely than somebody that’s going to run off and do exactly what you did. They’re working with you for a reason. If they wanted to do it themselves, they would try to do it themselves. And so, I think that was a false belief that that we had to get over and we were able to. I’m glad we did.
The other one that kind of kept us from hiring people was that we’d be responsible for them and we’d feel like we’d have to keep the deal pipeline full which would make it to where we couldn’t go on vacation for as long as we want and all those kind of things. But the thing was like we weren’t being able to do that anyway because we had so many things going on. We had so many things to juggle.
And I don’t know about you but we were wearing all the hats, is what my father would always say, is like we would put our marketing hat, we’d get the leads coming in, and then we’d had to put on our sales hats and go out and get those leads and turn them into deals and then we’d buy the house and we’d have to put on our hats to rehab the house, fix it up, and then we’d have to sell the house.
So we were doing all those things and as we move from changing hats from marketing, to sales, to fixing up, rehabbing, to selling, we wouldn’t be doing the other things. So the marketing would stop. So when we would sell the property, then we’re back to square one and we don’t have any leads. So you’ve got to crank up the marketing and it’s just like an endless cycle that was going on and on and kept us from having that real freedom that we wanted and we had these issues.
And now when we go on vacation, now that we’ve hired some people into the team, we get texts and messages saying that we’ve got new houses put under contract because our team is doing all these things. And believe it or not, they’re doing better than I did at these positions. And so, that false belief was definitely a false belief because they are focused and have that strong desire and they’re not bogged down by all the different tasks and not being able to do very well on one task.
So something that we did . . . so now the focus has become . . . the mindset shift is now to hire people to run the business and so that we can work more on our business. So if you’ve ever read the book “E-Myth,” it’s all about working on your business and not so much in your business because when you get bogged down in your business, you’re really just working a job and most of us didn’t start flipping houses to do that.
We recently set up a Facebook group so other people that are trying to do that can talk and share things and if you want to find out more about that, you can go to flippilot.com and if you’ve ever followed Flipping Junkie for any length of time, you know I’m really into aviation. So all the stuff that I do has this aviation sort of theme to it. The whole Flip Pilot thing is just that it’s a 30,000-foot view of your flipping business is what we all need to have to work more on our business and not in it. So when you’re down on the ground in the weeds, you can’t see everything. So having that high-level view is what it’s all about. So that’s the mindset shift and I hope it helps you to get the true freedom that you set out to get when you started flipping houses.
Mike: Are you looking to change your life through real estate investing? If you’re interested in either getting started or taking your business to the next level, please check out FlipNerd’s private program at theinvestormachine.com. This is the most robust real estate investor coaching, networking, and mastermind on the planet and designed for your success. If you’re ready to roll up your sleeves, ready to take personal responsibility for your own success, and ready to dive into a world-class instructional coaching program that provides you step-by-step instructions to help you achieve financial freedom, then you should apply today. Spaces are limited and candidates are only considered after an application and interview process. Our 12-month investor program is unparalleled. Think you might be a fit? Learn more today at theinvestormachine.com.
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