Welcome to the Real Estate Investing Mastery podcast for another terrific episode. Today, Alex and I are speaking with an investor who really is an expert in his niche of REI, Jason Lucchesi.
Jason does loads of transactions by specializing in finding off-market deals. So today, he’s going to share with us what sources he uses to find these deals, how he reaches out to potential buyers and sellers and the simple tools he uses to ensure he’s always following up.
This episode has just about as much info as Jason does deals – in other words, it’s packed with actionable tips you can implement now.
Away we go…
Listen and enjoy:
- 4:00 – Jason joins the conversation
- 6:04 – Jason tells us why and how he transitioned from his mortgage industry job into REI
- 8:25 – The one REI course that Jason values the most
- 16:20 – The number of short sales Jason did when he was focusing on that one strategy
- 21:15 – The reasons why Jason got out of the short sale game, and the strategy he moved into
- 22:50 – What Jason means by the term ‘private sellers’ and why he targets them for deals
- 28:45 – Jason uses this one thing to find deals instead of using direct mail
- 30:10 – Jason’s simple messages he sends to buyers and sellers, and why he doesn’t send them to a group
- 34:24 – How Jason follows up on LinkedIn with buyers and sellers
- 42:55 – The 3 deal strategies Jason is doing now
- 50:00 – Jason’s key takeaways and action steps
Mentioned in this episode:
- Alex and Joe’s Fast Cash Survival Kit: Real Estate Investing Mastery
- Jason’s website and get his free books here: www.JasonLucchesi.com
Intro: Welcome. This is the Real Estate Investing Mastery Podcast.
Joe: Hey, everybody, welcome. This is the Real Estate Investing Mastery Podcast, glad you are here. Alex, how are you man?
Alex: I'm good, how about you?
Joe: Excellent! You've got your cell phone voice on today.
Alex: Cell phone voice coming from Lancaster Pennsylvania, yes, sir.
Joe: Lancaster, Pennsylvania, what are you doing there?
Alex: We are up in Amish Country doing a little family visiting Hershey Park. And the Amish Country and going for buggy rides, and all that good stuff.
Joe: And you are going to see the worlds famous Thomas the Tank Engine real soon, aren’t you?
Alex: Oh, yes, I almost forgot about Thomas. Yes, I'm going to go for a ride on Thomas.
Joe: I love Thomas. Yeah, my boy is 11 years old, and he grew up on Thomas, loves Thomas. He doesn’t play with it anymore, but when we are walking by a toy store and he sees a Thomas, he'll stop and look at it and sometimes just say, hey dad look at this, he…
Alex: Who doesn’t love Thomas?
Joe: Well, you know the cool thing is he loves trains, still does. And we are in Prague and there's a lot of trains in Europe, there's a lot of trams anywhere you go. So he is in heaven right now, he loves watching these trains and he studies the timetables. So he knows which routes go where, and what times and so many more. I have an app that gives you train schedules and stuff and like which tram to get on to go where, anymore I just ask him which one do we take again? And yeah, he will tell you, he knows which direction it go, it's awesome.
Alex: Kids love trains, they really do.
Joe: Yeah, so guys go to RealEstateInvestingMastery.com to get all of our show notes, to get the transcription of this show, we got a great interview scheduled here with Jason Lucchesi, and it's going to be awesome. We are going to be talking about finding off market deals and wholesaling them from a virtual standpoint. And we've got show notes, we've got transcriptions, we've got a Fast Cash Survival Kit, you can download on how we do deals. How we wholesale deals, how we use virtual assistants, the marketing that we use even though we did that a few years ago Alex, it's still something that we are doing today.
And I haven’t changed, marketing direct mails still works, I still use virtual assistants. We were talking about Craigslist a little bit offline ago… a few minutes ago. I'm still using Craigslist, and this business is really good. So go to Real Estate Investing Mastery, to get the Fast Cash Survival Kit. Hey, Alex.
Alex: Yeah, I am here.
Joe: Today is my last day in Prague.
Alex: You are going home, huh?
Joe: Well, we are going to Barcelona, Spain, and then we are going to southern France for about a week, but I'm kind of bumped, I'm sad.
Alex: Why, you don’t want to go back to St. Louis?
Joe: Well, I do, but I'm just going to miss Prague. But that’s, it’s all right.
Alex: Now I used to live on Prague's street.
Joe: Oh did you, really?
Alex: Well that was the name of my street in New York, yeah.
Joe: Okay, should we just jump into this interview with Jason?
Alex: I think we should.
Joe: Yeah, okay, normally… Jason, normally, our chitchat back and forth is a little more entertaining than this.
Jason: No worries, no worries.
Joe: So I apologize to everybody, but glad to have you on, Jason… Jason, I don’t know if we've had you on our podcast before, have we?
Jason: I don’t think so, but I'm glad we are able to get this on the schedule for now, and I'm thankful that you guys invited me to be a guest.
Joe: Well I am too because I have wanted to get you in a long time, I know we did a webinar with you a while ago. You had a system that you were promoting on finding deals through LinkedIn, it was called asset managers millions, great course, it's fantastic. Jason, you are a guy who does a lot of deals and you teach also as well. I'm pretty sure though that the majority of your income comes from deals, you do a lot of deals. And the cool thing, the reason I wanted to get you on is you are one of the like the nation's premier experts, and I'm not just saying that, but you are really-really good at finding off market deals. Finding those deals that nobody else is seeing until it’s maybe too late, right?
Jason: Right, yeah, these are deals that… And I know we just mentioned Craigslist, which I absolutely believe Craigslist is a great avenue. I was actually going over some Craigslist strategy yesterday with some private consulting students, and it’s a great tool. But we are going to be discussing today like these aren’t deals on the MLS, these aren’t deals on Craigslist, they are not circulated all over the internet. These are completely off market working through direct contacts.
Joe: Yeah, and this is fantastic because people sometimes get annoyed like I do with social media. But for the people that are using it, “It’s a gold mine. Oh, my gosh.” And after talking to you about it, I'm thinking I need to look more into it. But Jason, why don't you rewind a little bit? Talk about how did you get started in real estate?
Jason: Yeah, absolutely, well, my background is from the mortgage industry. I was in the mortgage industry from 2002 to about 2007. And I left Joe when everything started erupting in the mortgage business, because I was really high up with country wide home loans, everybody probably instead of good old countrywide. And I was doing really well, and we were closing a lot of deals, and then all of a sudden our president at the time good old Angelo Mozilo announced us some really negative news in April of 2007. It completely demolished our stock. And what happened was the subprime market tanked August of 2007, and I'm like oh crap, what am I going to do now?
I don’t have a college degree; it's going to be really hard for me to do something outside. I waited a little bit longer; I actually put in my two week notice on December 31st of 2007. And we were in New Jersey, I was in New Jersey for about six months, decided my wife and I don’t like it, so we decided to move back here to good old Indianapolis, we absolutely loved the Midwest. And I didn't really know what I was planning on doing, I know I actually, I took some stock courses, I thought I was going to start trading options. And I did buy some educational courses along the way for real estate investing.
Nothing really picked up until like probably April or May of 2008, and I really start focusing on short sales, and getting into that niche at that time because that was really, really big in 2008 up until 2011. It was kind of like the big thing to do. And I was doing that, I was really successful at it, and that kind of propelled me to where I am today with.
Joe: How did you start learning about short sales, whose courses were you buying?
Jason: Yeah, no, absolutely I bought a lot of courses, and the one that really kind of stuck with me was the one from Nathan Jurewicz called Short Sale Riches. And that was a great course, I probably spent my fair sharing courses and out of all of them that one kind of stuck out the most. And I read the manual probably three times, I went through the audios and I applied two three times. And instead of just continuing to read and listen to the audios, I just went out there and started making it happen. I was introducing myself to real estate agents, and seeing what kind of short sales they had for me, because I dint really have a budget Joe.
So to do direct mail was kind of something I wasn't able to do. I was at the court house once a week picking up new notice of default leads, so I could go and do door knocking. And that’s how I was able to build up my pipeline initially; I had like 40-50 short sales that I was working on. I started closing on them, and I was like wow this really does work. And I was super excited once I was able to get my first deal closed.
Joe: But I want to talk about this, because I'm a big fan of education right, I don’t just say that because I sell education. I have talked about this a lot in the podcast; I really believe it's important that you invest in your education. So you were buying some courses on short sales, and those of you that know Nathan Jurewicz, we've had him on the show before a great guy, really smart, the guy is brilliant. But sometimes he’s got the personality that rubs people the wrong way. Like he is got leopard print hair, and the cool thing about Nathan is he just doesn't care what you think of him, at least he will say that, maybe he does.
But real nice guy and a lot of people looked at his course and thought are you kidding me? But here we are talking to a guy Jason guys, who bought Nathan's course. And no matter what he thought of it because I remember at the time this was in 2008-2009, it was a very… What would you call it? Polarizing, he was a polarizing guy, and a polarizing course and people would look at Nathan, I'm not just picking on him, but would say things like… And look at the industry at large where people were selling a lot of courses.
And this is what's wrong with real estate right now; these guys they are hawking these courses and charging so much money for them, but you know what, the stuff worked. It worked and you may… There are a lot of people, and I'll bet you $100 bucks or I'll bet you a glass of ice tea, I'm starting to… I have a gambling… I don’t have a gambling problem just joking.
But I'll bet you a glass of ice tea that maybe of all the people that bought Nathans course only 5% actually made money with it. Does that mean that his course was bad, that it had junk in it? No. It was good because guys like Jason here took what Nathan said, and didn’t understand everything but just said I'm going to do it anyway, and starts calling up Realtors. And starts getting these short sales referred to him, I love it, that gets me excited.
Jason: And you know what Joe, and those numbers are very-very accurate, you and I know both know that from being educators in this business. To be honest with you I probably spent… Before I really started taking off with real estate, I probably spent close to $40 grand on real estate education courses. And the reason why I would probably say that those courses didn’t work was because of me. Jeez, I probably had like six-seven courses at one time, and you and I both know you can't be doing seven different strategies at once as a brand new investor to this business.
So what I ended up doing was I'm like you know what if I'm going to make this work, I need to focus on one strategy and just really focus on that one program. And I am a big believer on education too; I still invest in education today. I'm in masterminds, I'm in coaching programs, I want to work with people that are higher than me in a sense of they’ve been doing this business, and they are very successful, and that's the way you learn. That's the way you improve because if Joe and I were just to say hey, we are happy with where we are at right now, and I'm not saying we are not happy with our lives, but if you don’t continue to grow, it’s really hard for you to really improve your business, your lifestyle and really just have that sense of freedom.
Joe: Oh yeah, I totally agree. And I'm writing some notes here, because we interviewed Jason Medley, who we both know, recently. And we talked about on that podcast focus will make you rich.
Jason: Yeah, it will.
Joe: And bottom line, and this is another one of my favorite quotes, you can't go broke making money, right?
Joe: You can't go broke making money, and sometimes you’ve got to learn how to focus on one thing at a time. And I like the whole concept, because it's easier for me to get distracted, but when I was getting started in real estate, I had a ton of courses, and it wasn’t until I buckled down and I said you know what, I'm just going to focus on one thing. And for me that was Cris Chico’s course on virtual wholesaling. And Steve Cook’s course on wholesaling for quick cash, I think it's what it was. And Steve Cook took it more from a make offers on the MLS, and Cris Chico was postcards.
And I just said, I stopped looking at anything else and I just took what Chico said and I said I'm going to do this come hell or high water, and guess what, it started working. I didn’t like it; I thought that I knew better; I tried to… I wanted to change things, I wanted to change the postcard, I wanted to use a different script, I wanted to use a different contract that I thought I could figure out a piece together all these other things I was getting from these other courses put it together. But that just wasn’t working, and my story is very similar to yours, when I started focusing on one strategy, one course one strategy, guess what bam, I started doing deals, doing a lot of them and have never looked back since.
Jason: Yeah, it's amazing how that works, right?
Joe: It's awesome. Okay, so you were doing short sales then in 2008, right? 2009?
Jason: Yeah, that’s when things really started taking off for me, and it was focusing on short sales. And you know what Jason Medley was a part of that; he was funding my transactions with his company iVisionary. And that introduction came from Nathan; a lot of great introductions came from Nathan. Just from really doing the business and he really liked that, and that's how you and I met was through Nathan.
Joe: That’s right.
Jason: He was such a… He introduces people to other like-minded individuals, and I remember you and I started doing stuff in 2011, 2012 so…
Joe: That's right Nathan called me up, and I was shocked to get a call from Nathan, he is like, “Hey dude, check out this guy, Jason; promote his stuff; thanks, bye.”
Jason: That's how he was, he is really short, and to the point, but well that's what helped us to get to know one another.
Joe: Jason how many short sales did you do in those couple of years you were really focusing on?
Jason: We did and I say we because I had a negotiation staff, I had a couple of BPO agents. We completed close to 230-240 short sales transactions.
Joe: That's amazing, 230 and what would you say your average profit on each of those deals was?
Jason: Some of them were goose eggs, I'm not going to even say like every single deal was a home run, but on average I would say between $18,000 and $22,000.
Joe: Wow, so just run the numbers here. 230 times $18 grand, that is four… What?! Over $4 million.
Jason: Well the thing with that is too, the negotiators would get paid 20%, my BPO agents would get paid 15%, and then I would have obviously real estate agents who get their commissions as well. So that's not all mine, but you know what the great thing about that was Joe? Is I really took what Michael Gerber said in E-Myth, and I really set up a business to actually run while it didn’t need me to be in it. So the business was constantly running, new business would be coming in, we would have a system in place that okay, now it starts with the negotiator boom, then it goes to this, then it goes to this.
So we kind of McDonaldized the short sale business for us, so that I could eliminate myself just like how you are. You are in Prague right now spending time with your family; you are traveling a lot which is awesome. And you can do that because you have the right systems in place. And you’ve got the right tools working for you whether or not you are in your business or not.
Joe: So important, I just interviewed Than Merrill a couple of episodes ago by the time people were listening to this. And he just released a book with Michael Gerber the E-Myth for Real Estate Investors. And I bought it; it's actually sitting at home in St. Louis waiting for me. But you are absolutely right; you’ve got to have systems in place so your business could run. And that's why yeah; okay, you were maybe netting 30% to 40% of that $4 million. But how much…? Were you working 50 to 60 hours a week? Were you killing yourself to do that?
Jason: No, absolutely not. I wasn't even putting in fulltime hours, I was putting in maybe 30 hours a week, and that was at best. Because what I would do still is I would go around speaking mainly in the Midwest at real estate agent offices presenting to them what I do, and how I do it as a real estate investor.
Joe: Did you say you are putting in 80 hours a week?
Jason: No, no, 30.
Joe: 30, okay I misunderstood.
Jason: No, that would be a complete opposite of what I was just talking about, that would be… Yeah, I would hate myself.
Joe: No, no, so you were working 30 or so, but you were spending a lot of time talking to realtors and selling… Okay, so you were focusing on the revenue generating activities, the highest and best use of your time.
Jason: Yeah so I would be going around speaking at you know there was a lot of Keller Williams offices, there was a lot of code word banker offices in there. It would mainly be Michigan, Illinois, Indiana, I did Ohio and Kentucky, and I would speak at these offices, and they would typically have any order between 30 and 60 agents attend.
Jason: I would always receive probably 20% of the room, the agents would come to me, and they would want to start focusing on finding short sales for me.
Jason: For the business and that’s what really started taking things off, and all of those ideas came a lot from me learning from Nathan, and also expanding on top of it, because I know he was doing the presentations, but I wanted to take it a step further. I started reaching out to other spheres of influence and I just started doing these presentations at these offices, and it wasn’t that big of a hustle. I actually enjoyed it, and we were able to get a bunch of business from it.
Joe: Excellent, so okay when for you, when did the short sales kind of start dying in your business?
Jason: In 2011 there was a new legislation that came out with short sales, and it’s not like it was something that completely held me back, but it was the deed restrictions where they would put these clauses in that said hey you can’t flip it for 30 days, and then it started getting worse. It started saying 60 days or 90 days, and I wasn’t really doing a bunch of rehabs at the time, so I didn’t have a bunch of capital to where I could take these properties, rehab them, and then flip them, right? It’s just wasn’t something that was prepared for, so with the new legislation in process I needed to really kind of take a step back and see how was I going to proceed forward with doing this business still, because I really wanted to stay in the business.
That’s when started really focusing on finding off market deals through several different sources. Either it be banks, hedge funds, private equity firms, portfolio lenders, or even one of our biggest one is private sellers. We just reach out to people, and you’d be amazed, Joe, that people have these packages and that their own deals that they might have been… They might have had in their own portfolio for 10 or 15 years, and they want to now liquidate and sell off their private income producing portfolio. It’s pretty cool.
Joe: Now when you say private sellers, are you talking about people that own a portfolio of properties, would you be finding them through direct mail or what are you talking about, because you’re lumping in private sellers kind of with the banks, and then the asset managers and stuff like that. What? Clarify that a little more for me?
Jason: Sure, and one of the cool things that we talked about offline before we started was the Facebook groups with Alex. I find a lot of private sellers on Facebook groups, I reach out to them. We make a friend connection, then I reach out to them, I see if they have any deals that they’re looking to sell. I do the same thing with LinkedIn groups, and I can do that from wherever I want. I could do it here at my home office, or if I was with you right now in Prague and you were like Jason show me how to do this, we can do it and it wouldn’t matter where we would be.
The great thing about that is I don’t send out mail to them, I can, but I am reaching out to people that say they’re real estate investor either on LinkedIn or their face book profile, and I am sending them a message, we’re to getting in contact with one another, and I’m seeing if they have any deals or if they’re looking to buy deals. Either way I am either finding a new seller or I am finding a new buyer through the private seller or private buyer route.
Joe: You’re just basically networking and asking the questions, do you have any deals that you want to sell, or are you looking to buy any deals?
Jason: Yeah, absolutely and a lot of the… We’re finding a lot of private sellers; we’re also finding a lot of cash transactions. Yesterday a private coaching student of mine, we both got on the phone and I wanted to show her how easy it was to just pick up the phone and call this person, and they just rattled off everything that they were looking for, how much they were looking to spend. I verified that they were a real cash buyer, and now this student of mine has a new cash buyer just by using the LinkedIn and Facebook strategies that I showed her. It’s just absolutely amazing, she could have been anywhere, I am in Indianapolis, and that person was 300 miles away from me.
Joe: I love it, and I love the fact that you are actually picking up the phone.
Joe: Because so many people are just paired either terrified of the phone, or are just too lazy they don’t want to pick up the phone and talk to people.
Jason: No, it’s true and what I typically do is for a lot of our people is I’ll pick up the phone, show them what I say. Like I am not a public speaker, I don’t speak on a level like Tony Roberts or anything, I am not super polished, but I get on the phone and I just talk to them. I just ask them super basic questions that anybody can do, it’s so simple, and I just pick up the phone.
When people here me do that, I do my coaching calls once a week on Wednesdays, and I’ll typically, you know somebody needs me to call like a seller or a buyer, I’ll show them exactly what to do. We do a go to webinar, I’ll pick the phone, call the person, and when I am done with the conversation they’re like, oh, and it’s kind of like that was pretty simple. I may… I'm trying not to over implicate this, and it’s just, when you overcomplicate things that’s when you really get, you drive that fear into yourself and that’s when people like do not proceed forward.
What I try and give people, and you do this too, Joe. I follow you, you are a great educator, everybody that’s listening to this knows, or if they don’t you are an expert in this field, and you know this as well as I do that if you don’t start making that action to move forward you’re never going to get up from your chair, you’re never going to pick up the phone, and you just need to do it. That’s what I did; you did it, that’s just what happens.
Joe: You can’t steer a parked car.
Jason: No, exactly. It’s going to be really tough, but you’re not going to go anywhere.
Joe: Yeah I guess you can, but you’re not going to go anywhere. All right, so talk a little bit about LinkedIn, would you. You have this fantastic course, asset manager millions and in there you talk… And by the way you are still revising that, it’s still valid even though it’s been a couple of years since you created it, and you’re working on revising that and adding in even more components to it which I love. You’re not sending direct mail; you’re finding people that have deals, right? You’re connecting with them through online social media, and eventually you’re picking up the phone and talking to them, right?
Jason: Yes, absolutely.
Joe: Okay so you’re not doing direct mail, you’re not sending post cards or maybe you are, but that’s not what really what your main focus is right now but, so talk a little bit about your LinkedIn strategies and example of kind of what you’re talking about. You go to LinkedIn and you do what?
Jason: Sure, and the one thing I will tell you is I keep making the enhancements to the program because linked in is always changing up their user platform. If I am not staying up to date on that our people are going to be like dude how do I do this? You know they just changed this, so that’s why I am always staying in tune with it. I am constantly doing this business, so the way we do it Joe is you really have to have a really good profile to begin with. This is what I always tell our folks to make sure you have a picture, make sure you have a background. Three years ago you weren’t able to add a background. Now you can add a background, you could call either a background or a header. You just have to make sure you put in some of the proper key words in your title, okay?
What I tell people is start going into groups. Find the right real estate investing groups, and I tell people you can go on to my profile and you could enter and join all of the same groups that I am in, it’s not a big deal. It’s so simple to do, and there’s so many groups out there that have 200,000, 300,000, half a million plus members in this groups. Now you and I combined Joe even if we hired a bunch of virtual assistants, it’s going to be tough to reach out to that many people, but the cool thing is if you reach out to 10 people from what I am seeing right now, you’re going to get about a 40% response rate from you just sending out some simple messages to people.
Joe: That’s crazy. What are the simple messages you’re sending?
Jason: The basic one that I send in the subject line and what… The key is to only send this off to one person at a time. I don’t send pout group messages to people on LinkedIn when I am sending a message, because it takes away from you sending out a direct message to them that’s just for them. What I say in the subject line is let’s connect, okay? Then in the actual message let’s just say I was sending one to you Joe, I’d be like hey Joe, my name is Jason Lucchesi, I saw that we were in the same group together, real estate wholesaling mastery, and I want to reach out to you as I saw you are a real estate investor and I’m coming across a lot of off market proprieties. Let’s connect as soon as possible, and then I just put talk soon, comma, Jason, and the response rate is pretty big. Now…
Joe: That sounds really complicated.
Jason: Yeah, exactly.
Joe: Who are you looking for though?
Jason: I am looking for… So if I am looking for cash buyers I always recommend to people if they’re want to wholesale, make sure you have your cash buyers lined up first.
Jason: What I’m doing is I’m looking in these groups for real estate investors, and I'm going in there sending messages off to the real estate investors first within the groups. Once I’ve lined up three, four, five cash buyers then I will start going and looking for people that are directly at banks, hedge funds, private equity firms, portfolio lenders, and also private sellers. The way I do that, well let me rephrase, with banks there is several different terms for the titles that they go by. I’ll give you guys right now some of the titles.
Jason: You’ve got asset manager, you’ve got portfolio manager, you’ve got loan work out officer, you’ve got special assets manager. Then some of them to go by credit or some sort of a risk analyst so the… You could go by a credit risk analyst at the banks, because what they’re doing is they’re analyzing the type of debt that they have on their balance sheet to see if they would like to liquidate any of it. Those will be like the main top five titles that you can use. You can actually go and search for people that have that in their title, and I can tell you that it’s going to be a few million people. Just the asset manager and portfolio manager alone, there is going to be like three million, when you and I did that Joe the presentation about three years ago…
Jason: Asset manager was right around 550,000 people, now if you go in and type in asset manager in the title; it’s like well over a million.
Jason: The growth on LinkedIn has grown exponentially.
Jason: It’s really cool, but those are the titles that I would recommend people use if they would like to start finding those people on LinkedIn. You could also do the… You could also do that somewhat on Facebook, but the best bet for you is to go into the groups and start connecting with the right people.
Joe: Okay. That sounds like it’s pretty simple and straightforward.
Joe: You connect to people that either have deals to sell and a bank manager or asset manager would be somebody that will be like that, and then you can also find the buyers. Then I imagine once you get in touch with them, and you talk to them there’s more involved with that, I mean you have to keep on kind of reminding them that you’re still out there. Do you do any kind of follow up, do you keep in touch with them, what do you do there?
Jason: Oh, yeah, absolutely, you’re going to love this, because I know you’re big with using systems and so am I. LinkedIn now has a system set up on their own platform to where you can set up reminders for when you should follow up with these people. Say for Instance Joe you and I started talking today, and we started talking about all the things that we can work on, but you’re like you know what I need to kind of reevaluate what I’d like to sell these properties for. I’d be like “Joe is it okay, could I follow up with you in the next seven days?” And you are like, “Sure that's fine.”
So what I will do is that I will set a reminder in LinkedIn, and I would follow up with you because I would get a reminder to my e-mail, and I’d also get a reminder for when I would log in to LinkedIn, “Hey give Joe a call, he said he would be right here in seven days or he would be ready to talk more.” That’s a cool thing, because it's setting up reminders for you to follow up with the key individuals that you are either wanting to do business with, either from, “Hey cash buyer I've got these deals or mister seller, hey I can take those off your, I can take those off your lap,” type of deal. The reminders in LinkedIn are totally awesome. I absolutely love that feature that they’ve added.
Joe: I was thinking about while you were talking and reminding people, one of my business partners Peter Vekselman has done this a lot for years and still does it, where he just keeps a list of e-mails of everybody that he connects with and mainly in the Atlanta market. Now he's starting to do deals in Florida. This is really important. You guys listening should write this down. Just has a list of everybody that he connects with whether they are a buyer, an investor working at a bank, a lender, mortgage broker, property manager, wholesalers, realtors, and asset managers, and everybody else in between. Just keeps them all into one list.
Once a week, he sends an e-mail to everybody on his list and says, “Hey how are you doing? Peter here. Do you have any deals? I'm looking to buy. Do you have anything?” Just a simple one, two sentence e-mail he's always mixing it up. And every week when he sends that out he gets deals, every week. Because somebody just… Maybe it's a realtor or a property manager, and they just talked to some seller a few minutes ago, or an hour ago that sent them this property and it needs to much work or they are just too busy, they don’t want to sell it, work on it, and they get your e-mail and say, “You know what I just talked to Jack. I’ll send this guy over to Joe.” It's just keeping yourself in front of them. It’s a simple weekly e-mail that he sends out. I think it's powerful. It's incredible.
When I was working with a friend of mine, Rick Ian, I interviewed him on the podcast recently, that’s what we did. We started off with just building a buyers’ list. Just building a list of other wholesalers, and realtors and property managers and once a week, we’d send out e-mails, “Hey, do you have any deals? We are looking to buy in these areas.” We actually stopped doing marketing. We stopped doing direct mail because we were getting so many leads from the referrals, from these people that were bringing them to us. I love it.
Jason: And referral business is the absolute best. It's the highest and most quality type of business you are going to get in any niche within any business. It's awesome that you say that, and you know I learned early on within my career being in the mortgage business that you need to be constantly following up with people because you and I both know sometimes you are not going to close the deal on the first touch. I've always been told that it takes at least five touches for somebody to feel comfortable with you.
What I mean by a touch is either you are corresponding through e-mail. So there's some… So you send an e-mail, they send an e-mail back. I count that as a touch or you call them, they pick up the phone, you guys talk. Or maybe you send out a direct mailer, they call you from that. Those are touches in my opinion. And the more you do, the more that person is going to be confident and comfortable with you to do business with you.
That’s what I always learned in the mortgage business. Even if I had a mortgage going through my pipeline, I would just give a simple phone call to the person and just give them an update, “Hey I just want to let you know I just submitted everything to underwriting, I should have an update in a couple of days. I will give you a call.” That goes a long way because I had to learn the hard way Joe.
My first two deals ever, I was getting ready to close them and they went and closed with somebody else, and I didn't know that because I didn't call them in three weeks. So it goes to show that just by doing simple, simple little follow up that you can lose business to a competitor or you can lose it to another individual in the business. So that’s really important. You guys should definitely jot down follow up. The thing we started off with in the beginning when we talked about Jason medley “focus is huge.” Making sure you call those people and you focus on making sure that happens every morning.
What I typically do, Joe, is I love using the internet. I love using software and tools, but I still go back to the thing that really kind of helped me a lot with staying organized. That was every night before I shut down my desk for the day, is I write down the top five things that I need to get done for the next day. I put it on a yellow notepad, like a legal size notepad. I put the dates and I put what I need to get done for the next day. That helps out quite a bit with staying organized, because us as business owners, we sometimes get caught up in the three different hats of being the manager, the technical aspect and the entrepreneur, and we need to make sure that we are making sure that the hats are properly on and that everything is moving forward.
Joe: I like that a lot. I like that a lot. So really what you are talking about Jason is just going back to the basics. It's going back to the basics, and networking with people, and getting on the phone and talking to people. One of my friends calls it getting belly button to belly button.
Jason: I like that. That’s funny.
Joe: Maybe on the phone it doesn't have to be physical, it doesn't have to be physical. And for some of us that’s easier than others to get belly button to belly button. But that’s what it is. It's just with internet and technology today; it's easy to kind of hide behind e-mail. It's easy to hide behind Facebook or Twitter or Periscope. We were talking about Periscope earlier. But getting that kind of connection with people where they get to know you, and the more deals you wholesale you are going to find that it's just going to be a handful of buyers.
You may have a list of 2,000 buyers, but it's going to be like those four or five guys that are going to buy most of your deals that you can just send a text message to or make a quick phone call, and they trust you. They don’t have to look at the house, they’ll just say, “Yeah, I’ll take it.” That’s kind of the place where we need to be and focus. Again I was talking about Peter; he hooked me on this phase called “being brilliant at the basics.” Just keeping it simple and whoever is the most brilliant at the most basic things is going to have the most success. You can stick that in your pipe and smoke it.
Jason: I like it.
Joe: So Jason, what are you doing these days, what kind of deals are you…? I mean, we were talking about getting involved in short sales and then you are going into getting off market deals, is that your…? You are just doing regular wholesaling, or you are buying and holding, rehabbing? What are you doing now?
Jason: No, with all the strategies out there, I really have my business dialed in for three categories, and that’s wholesaling, fix and flips, and also buy and holds. And I focus on all three. And it doesn't really matter where I am when I'm doing the transactions, I've got teams in place to do the fix and flips, wholesaling that, that’s something that could be ran from anywhere as well. And then the buy and holds, is something I constantly, I'm always trying to build up my own portfolio, because the longevity of us being in this business is not from the two or three wholesales we do every month, it's what we do with the money, and how we invest in ourselves and within our business. That’s with the long-term wealth of actually owning real estate that brings in money, income on a monthly basis.
Joe: Talk about what are your goals with your long-term buy and holds. I mean, how many properties do you really want to own before you can “retire”?
Jason: Oh, goodness. That’s a great question. That’s a great question that I have not really put pen to paper on with what I would like to see. That’s… I would love to own a few apartment buildings. I would still love to own single-family residences. Do I have a number? I should. I really don’t. But since you put me on the spot with this Joe, I’ll probably venture to say I would love to have a hundred properties, and that could apartments included and single-family residences that I have completely free and clear that are generating a very good income on a monthly basis, because eventually I want my children to get in this business if they want to. I would like to obviously leave something behind for them that they can be able to have and maintain and have that income coming in on a monthly basis.
With anything that goal could change. A hundred properties could absolutely change and it could go up. I don’t know if we’ll ever eventually retire from this business. I think you and I both would get really, really bored. We’d get bored. Now trust me, taking a month or two off, I have no problem doing that. But I’ll probably get bored after a while. It's not like I'm super entrenched in the business right now. It’s fairly simple once you get everything up and running for yourself. So I kind of went a little long winded down that answer for you.
Joe: It's important for people to think about. Let’s say you only get 20% of your goal and you only have 20 properties free and clear, no debt. You are looking at $15 to $20 grand a month in passive income. Well, maybe not passive, because you have to manage those properties obviously, but you are looking at $10 to $20 grand a month in income. If you have zero debt, you can live very, very comfortably on that. The great thing about that when I look at that thinking, you know what, that’s really not that hard to achieve. If we start early, if we start now, even if you are in your forties and fifties, if you just started now, you could easily build that kind of a portfolio in five to ten years.
Jason: Absolutely, I agree.
Joe: And you can live… I mean, look at the numbers, you look down, you write down everything the essential things you have to have: water, food, Netflix, and…
Joe: What else? A $150 a month cell phone bill. The things you have to have and you just total that stuff up, it's not that much. You can live very nice, take a vacation for like four really nice vacations a year, and do that pretty easily on $10 grand a month if you have zero debt. How many houses do you need to make $10 grand a month? Twenty let’s say, I don’t know. Well, if you were to pay $50 grand for each of those 20 houses, that’s a million bucks, isn't it?
Jason: Yeah, let’s say if you needed $10,000 bucks a month, and let’s just say like a lot of average rent here in Indi is right around $750. So if we did $10,000 divided by $750 just take a guess at how many houses that is.
Joe: Eight, 10.
Jason: Close, close. Thirteen houses you will need to have $10 grand coming in on a monthly basis.
Joe: Now, obviously you are going to have taxes and property management and vacancies and stuff, so double that number, you need 26. So what's the average cost of a house in Indi right now that would get you $750 a month in rent?
Jason: I would say anywhere between $45,000 and $65,000 per month. Not per month, per acquisition.
Joe: Right, let’s say you get 25 houses. 25 times $50 grand, you are looking at $1.2 million to live very comfortably. Most people look at their portfolio in retirement and think, “I got to have like $5 million dollars in the bank and they got to be all invested, diversified and they’ve got to be in the stocks and they got mutual funds.” You really don’t. You just buy like one house a year. What if you buy like one house every three months? You could have those 26 homes in a few years. And then you just take the extra cash flow that you are making if you borrowed money, and you pay those down as quickly as possible. Anyway, how did we get on that? But…
Jason: No, it's a great topic. I absolutely love it. More people need to know about the strategies. Like the strategies I go over Joe on how to build up that real, that wealth that you can create for yourself on a monthly basis, is just like people need to realize like it's great doing flips, it's great doing wholesales and you make that big check, but to me what's more important is making sure that I have money coming in on a monthly basis whether or not I work or not.
Joe: Sure, absolutely right. So Jason what are some key takeaways people can get, we've been bouncing all over the place, but mainly we’ve been talking about finding these off market deals and networking, and building relationships with people. What are some things that…? What are some action steps that people can take after listening to what we talked about here?
Jason: Yeah, absolutely the thing I would recommend first and foremost is if you are going to be reaching out to people on LinkedIn and Facebook, make sure that you have a picture up there, and make sure you have your profile completely set up. Then what I would do from there, start reaching out to people, start getting a message out to these individuals either it would be individuals with real estate investor title, or some of the titles we went over with people at banks hedge funds all that type of stuff. Start reaching out to them and see what kind of responses you get, and see what kind of deals you could start formulating.
The big thing with me, Joe, is a lot of brand new people think they need to have a huge gigantic cash buyer’s list, and I say just start building like three, four, or five of them at once, and then we can start growing it from there. You don’t need a big gigantic list at once, so start doing that, make sure you are reaching out to people on the Facebook groups, okay? You may even want to form your own group on Facebook, and or in LinkedIn and start having people come to you as the expert, the authority figure. It's not hard to do, you could just create a group on either Facebook or LinkedIn, it's free, and you could just start inviting people to the group.
Joe: You don’t have to be a genius to do that either, I mean look at Alex Youngblood wholesaling houses full time.
Jason: Look at me I'm not a genius either, so I think my group has like 2,500 members on it. And I did absolutely… I haven't been doing any growing on it lately, and people are just seeing other people joining, and they are like, oh, I'm going to join that group too. It's really cool, the power of the internet, and what you can put together wherever you are at. Some people Joe say, oh, my market is not that great. It doesn’t matter which market you are in, because you could find the market that does work for you, so…
Joe: Oh, man yeah, I could go on and on about that. I was just talking to a client today in a really competitive market in the middle of the country. He is wholesaling houses at $0.80 on a dollar, okay? And guess what he is finding deals. How, why? Because he is answering his phone, and he is talking to people, “Hello…” that's it. He is answering his phone and he is talking to people, and he is got buyers, he is got good buyers, not a ton of them. He is focusing on a small little narrow niche, and he is got buyers there that want properties and he knows what they’ll pay for. So he sends out a little bit of marketing, he is not doing this stuff that we are talking about, but he is sending out some postcards and letters.
Not getting a very big response because it is a competitive area. But all of those calls are going to right to his cell phone, and he talking to them when they call, and he is just putting deals together. But it's really that simple, that's the point I want to make sure everybody gets… understands. I like it Jason, I like it a lot, and what's the good place where people can go and get in touch with you and to get more information about you and what you do?
Jason: Yeah, absolutely we've got some great books that we have for free that are going to be coming up on the site here soon for my JasonLucchesi.com. It's a blog, we are updating it as we speak, and it should be complete here soon, but you can go over there, enter your information. We've got some free books that we'll send to you on wholesaling, and some other information for how to get in direct with asset managers, hedge funds, all that great stuff. That's going to be something that I will have available just for the individuals that are listening to this podcast right now, or if you wanted to go to Amazon they are for sale, but if you go to the site because you are a listener of Joe's podcast you can just get it for free.
Joe: Jason Lucchesi, so to spell that is Jason L-U… Go ahead, you do it.
Jason: It's L-U-C-C-H-E-S-I, then .com.
Joe: Yeah, and we'll have that on the show notes at RealEstateInvestingMastery.com. But again, Jason L-U-C-C-H-E-S-I.com, Jason Lucchesi, and get these free books. What are some of the books that you are talking about?
Jason: Well one of the big ones is I just released a book on showing people how to get direct with hedge funds and the banks, the private equity firms. That's a huge one in there, you could get the messages I use, you can see how I get in direct contact with them. So it’s a solid book, it's not going to take you weeks to read, it's like maybe 20-25 pages at most. You could bang it out in a day and it's filled with what I like to call ‘aha moments’ and gold nuggets. So you are going to get a lot of great stuff out of it for sure.
Joe: I like it. Okay, again, JasonLucchesi.com, L-U-C-C-H-E-S-I.com, or go to our show notes, RealEstateInvestingMastery.com. Get a transcription of this podcast and get these links that we are talking about with Jason. I have known Jason for a good four years now, and he is a real deal, I have seen the deals that he is doing, I have seen the videos that he does, the education that he has, it’s top notch. And I'm really proud of the work that Jason is doing in the industry. And he is one of the good guys, I really believe that.
Jason: Thank you.
Joe: Cool, I think I'll see you sometime soon at the… Maybe one of the next masterminds, cool Jason.
Jason: Well, thanks for having me Joe.
Joe: All right, take care guys, see you all later.
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