Don’t just make more money in 2020: make more profit. This is the year you need to simplify your business and focus on the right things that will help you navigate any change coming your way. I’ve given a lot of thought to this, and I have over fourteen key things that you should focus on in 2020.
First thing’s first, forget the hustle. Spend more time thinking and reading and planning this year so that you can spend the time you actually work operating at high peak efficiency. We are not in the real estate business, regardless of what you may think. We’re in the marketing business. Never stop marketing because leads are the lifeblood of your business.
As the market shifts, you’re going to need more cash on hand. If you want to survive a slowdown or a recession, you need to protect yourself from being overleveraged. Don’t take on too much debt right now. Take some time to focus on profit and in order to make that profit, you have to make offers, make offers, make offers! It is the number one rule in real estate. You may need to be flexible on the kind of deals that you’re making. Don’t be a one-trick pony! Lease options, land contracts, owner financing, and other kinds of deals all help you find and close deals when you come up against houses that don’t have enough equity. Stay focused on cash flow and have an exit strategy.
If you want to stay relevant in 2020, you need to learn how to sell. Take some courses on selling, join a mastermind, create a mastermind, and get some accountability going on in your life. Keep your skills sharp so that you can adjust with the market, wherever it ends up going. If there’s something you’re just not good at, find a partner that’s an expert. Work together on deals and grow your business together.
I really think we’re going to see some exciting things happening in 2020, and if you take some time to prepare now for a great year, you’re going to be ready for whatever’s coming down the road for us.
Watch and Learn:
Listen and learn:
- Sit down and figure out your numbers this year so that you can capitalize on profit.
- Find partners, talk to people, join a mastermind and get out of the house to keep your finger on the pulse of the real estate market.
- 14 specific and actionable items that will transform your 2020 real estate game.
- Plan now for success this year by keeping more cash on hand and protecting yourself from taking on too much debt.
Mentioned in this episode:
- Joe’s Book: REI Secrets
Download episode transcript in PDF format here…
Hey guys, how you doing? Joe McCall here, welcome. This is the Real Estate Investing Mastery podcast and, on this podcast, I’m going to be talking about the important things that you need to focus on in 2020. If you want to be successful in this business, real estate investing, if you want to do deals, if you want to succeed and make a lot of money or just, you know, what… Simplify your life, maybe not make as much money but make more profit. Do you understand the difference?
So, these are things that I compiled a list just recently and I wanted to share them with you. I think this is really, really critically important that we learn as a group of entrepreneurs and investors. It’s easy to chase all these shiny objects, you know, to get excited and chase this thing and then chase that thing. We need to simplify our businesses, right? And be focused. And I want to just challenge you. Maybe that’s the word for 2020 is focus, right? Let’s make sure we’re focused on the right things. And so, in this podcast here, I’m going to share with you the things that you need to be focused on.
First, number one, forget the hustle. Okay? We need to spend more time thinking and reading. Alright? I think it was Lincoln that said, you know, give me four hours to cut down a tree and I’ll spend three hours sharpening the ax and one hour cutting the tree, right? Where most people are just like, give me the ax and we start going for it. So, we need to spend more time thinking, reading. And really, you know, everyone’s all about the hustle. I think that’s so 2018, 2019, right? We really only have about three to four productive hours in a day. Even people that are working 10, 12 hours a day, they really are most productive during three to four hours. And that’s like proven through, you know, university research and studies and stuff like that.
So, I have found in my own personal life when I step aside and like plan my day a day in advance, you know, or the night before. And if I just look at one or two things, I got to get done the next day, I may only get one or two things done that day. But I feel like I’ve accomplished so much because instead of being in this rush of putting out fires all the time, I’m focused on getting the most important things done. So, and that kind of relates to the next thing I’m going to be talking about. But forget the hustle. Alright? Let’s, let’s think about being productive and working at our high peak efficiency level, right?
So, I want to encourage you guys take a breath. Alright? Keep things simple and this is where you will make the most money when you are focusing on which relates to the next thing I want to talk about. If you want to have success in 2020, focus on the simple things. Okay? I want to encourage you to think about focus and simplicity. Learn to focus on one thing at a time. This is a challenge for me, okay? Focus on one thing at a time.
I was reading a book EntreLeadership recently by Dave Ramsey and he talks about 5/3/1 and the night before… It’s really simple. Okay. It’s a real simple productivity hack. Write down like the five things you want to get done tomorrow and then highlight the three things that you’ve got to get done tomorrow. It’s like are most important. And then circle the one thing that you’ve got to get done. So, 5/3/1 my to do list.
If you’re like me, it’s just out of control, right? It’s huge. It’s monstrous long and one of my big goals is to, I’m not going to worry about keeping this, keeping a small list like, cause that’s for me, like I, I just like to brain dump and so everything goes into my duty list. But my goal going forward is every evening or the first thing in the morning, write down like five things I want to do that day and then only look, highlight or circle three things and then have only one thing that you underline that you star or whatever. That’s, that’s the one thing.
So, like the five things just kind of helps you. For me at least it helps me just get it down on paper. Right? But the three things that are most important and then the one that’s most important, right? Does that make sense? I’m saying five things. Three things that are important and the one thing that is most important that if you just focused all your energy, first thing, getting that one thing done. Now sometimes you know what if you’re like me, you just want to do the easiest things first, right? And then many times the end of the day you’re totally discouraged because you didn’t get the most important thing done. So, think of it really simple. Five things that you want to get done. The three important things and the one most important thing you got to do.
So, there’s power in simplicity. One strategy at a time, one offer at a time. Like, what I mean by that is like there’s a lot of different strategies that you could be doing in real estate and you know, like there’s, there’s wholesaling, there’s lease options, there’s owner financing, there’s buy and hold and fix and flip and the BRRRR strategy and all of this stuff, right? Land investing, whatever. Like, but I want to encourage you, pick one strategy and focus on that. Okay? Pick one, offer one script, one contract, like one marketing channel. Stop trying to do it all. You just can’t do it if you want to make the most money in your business.
And I know this is true for me and all the different businesses that I’ve done in the past, when I’m hyper focused on one thing, that’s when I make the most money. It’s scary because you think like, man, I want to like have many different ways or opportunities to make money. But when I have a hyper focus on just one thing, then I usually will make the most money. So, I want to encourage you to focus on one marketing channel, master one marketing channel, and remember to be brilliant at the basics.
This comes back to simplicity, right? It’s so easy to think and, especially the longer you’ve been in the business, to forget about the basics, but the people that make the most money are brilliant at the basic things. I wrote a book about that few years ago, but brilliant at the basics… come back to the basics. Be good at that in 2020. Alright.
Related to that, again, is you got to know your numbers, you gotta have a marketing plan. You gotta have a marketing plan. Cause we know, guys, we’re not in the real estate investing business, we are in the marketing business, right? So, you need to have a plan of simple marketing things that you can do, right? To keep the to keep the lead flow going in your business.
So, get some accountability to that marketing plan. Either a coach or a friend or other investors. Get your VA’s, your virtual assistants, get them accountable to that marketing plan, create a scorecard, you know, so you can track your numbers, your VA’s can track their numbers and you can track them for them or with them. Double down on what’s working, ditch, what’s not working. Cause as you’re doing your marketing plan, you may have a couple of things that you’re doing on, that you’re working on, right? But like don’t go to the second or third thing until the one thing that you’re trying to implement is fully 100% built up.
Like, you know, I’ve called this before “the silos”, right? So, you need to break down your marketing plan into silos where you’ve got, let’s say direct mail. Well that’s too big of a silo. How about yellow letters? Well, that’s still too big. How about yellow letters to expired listings? Okay, that’s a good silo. And I learned this from Rob Swanson. Simple system scale. So, build something, you know, design it where it’s really, really simple. And then build a system around that and then scale it. Simple system scale. Keep it simple, build a system and then scale it.
And then when that’s up to a hundred percent then move onto the next silo. Okay? Then if you have a scorecard for each of those silos, it allows you to be held accountable. You can hold your VA’s accountable and stuff like that. So, then when you do that, you’ll figure out what’s working and what’s not. So, I would encourage you in 2020 to double down on what’s working and ditch what’s not, and focus with extra intensity on what is working.
Final thing I’ll say to this is, never stop marketing. Leads are the lifeblood of your business and you can never stop marketing. Now related to focusing on your numbers in 2020 it’s important for you to focus on profit in 2020 and this is really important, especially as the market starts shifting and changing. Forget about top line revenue, right? It’s not what you make, it’s what you keep. And I see this all the time with realtors, for example, and other wholesalers that you see on Instagram and Facebook and whatever it is, you know when they’re showing, they’re flashing their checks and their cars and all of that stuff.
Listen, that’s not, that doesn’t tell me success. When I look at that, it’s like you’ve heard the saying don’t go broke trying to prove to broke people that you’re not broke. Don’t go broke trying to prove to broke people that you’re not broke. So, when I see a lot of flashy stuff that I just think high expenses, high overhead, high debt, high leverage, like that’s not a profitable business. That doesn’t impress me at all. So, it’s not what you make, it’s what you keep. So, you need to look at your expenses, you need to be knowing your, you need to know your numbers, you need to look at your expenses and included in that are all the subscriptions that you’ve got.
I’m constantly, every couple, three months going back through my QuickBooks and looking at the things that I’m subscribed. Do I need the ESPN plus subscription? Right? Do I need, Oh, it’s ridiculous? Don’t get me started on all the TV subscriptions I have. I think I have Netflix, Amazon prime, VidAngel, which is awesome. I love VidAngel, Disney+, now Hulu something. I mean I cut the cable, cut the cord just to not pay so much with cable and I’m probably spending just as much now with all the different streaming services.
But you know in your business I’m talking about, right? Mainly here, what are the software that you’ve been subscribed to for the last two years that you barely ever use? Do you really need that? Alright, now you need to know your expenses. And so, some for me, I didn’t know what I was spending until I hired a bookkeeper. I got an assistant and I made, I trained her to become my bookkeeper. Right? So, you should not just know the numbers but on a per unit or per product basis and also like a per marketing channel basis. So, if you’re doing different types of deals, if you’ve got different marketing channels or different products or services that you’re doing, you need to look not at just the bottom-line profit number, although that’s important. But you need to look at like the margin, your profit margin per each of your marketing channels or types of deals or services. You know what I mean? I did that recently in my own business and I was blown away. There was one segment that I thought was the biggest profit but it wasn’t. It was my highest revenue but my lowest profit margin per client and per deal. And when you look at that and you think, oh well it’s not as profitable as I thought it was.
And when you look at like this thing caused me the most headache and stress and I put most of my attention and focus into this and it was the least profitable. Well it’s the whole 80/20 thing, right? What if we focused on the 20% that brought us the 80% of our profits and results and you can’t do that unless you know your numbers. So, you’ve got to focus on profit and not just big picture profit, although that’s important. You need to focus down by in the business unit. Do you understand what I’m saying?
Look at your wholesaling deals, your buy & hold deals, your land flips. If you’re doing land flips, are you wholesaling them or are you selling them with owner financing on terms, for example? Right? And which is giving you the highest ROI. Is it better to make a quick nickel or a slow dime? Sometimes that slow dime doesn’t stay a diamond. Sometimes it becomes a slow nickel or a slow penny. Sometimes it’s better to get the quick nickel fast cash profits. Alright. Something to think about.
Related to that is your cashflow. Cashflow is going to be super important in 2020… Be careful with debt and leverage. Okay? Start stockpiling cash. I would encourage you to start getting rid of your debt, lowering your debts, and collecting cash because as the market shifts and it’s going to continue shifting, who knows?
I mean, we’re five years, many are saying, overdue on a recession. On average, historically every seven years we have a recession. We’re coming onto 11 or 12 years now. So, it’s coming. It’s not a question of if, it’s a question of when. And so, if you want to be ready, you gotta be really careful with debt and leverage and you’ve got to have a lot of cash.
Now, I didn’t meet one person during the last of ’08-’09 who got in trouble, who had a foreclosure, who had a short sale, who had a bankruptcy… I never met one person who had any of those things, who was in debt. The people that survived was a couple of things, but one of them, one of the big reasons why is because they were very, very careful with their debt. They weren’t overleveraged. Okay. Does that make sense?
So, there’s good debt and there’s bad debt probably, right? I mean, you can go down that whole argument, but for me, I got really burnt because I had too much bad debt and it’s a whole nother story. But as the market shifts and change changes, you need to be well positioned in cash. It’s my opinion. Okay. And don’t count on future appreciation. Future appreciation is just icing on the cake. When you’re looking at deals and evaluating deals and looking at your profit potential on a fix and flip, man, do not figure, okay well this will be done in five, six months and the market will appreciate so much by then… That is a recipe for disaster. You should never ever, ever do that.
So, when you… Always base your offers, because you make your money when you buy, not when you sell, always calculate your profits from when you buy it, not from when you’re selling it in the future. You want to be ultra-safe, especially now on the higher end properties. If you’re doing fix and flip, if you’re going into buying big multi-families or whatever it is that you’re doing right, like be conservative. Always underestimate and overdeliver on your projections. If you, you know, if the cash flow is going to be $300 to $400 a month, plan on $300 a month. If the expenses are going to be 40% to 50% of your revenue per month, figure on 50%… does that make sense?
So, don’t ignore… The fundamentals are super important. You got to know your numbers. And here’s the key of everything I’m saying here of, of knowing your, what did I say before here? Focusing on your profit for per business unit. You know, if you don’t know your numbers, you do not have a real business. You’ve got to know your numbers. If you don’t know your numbers, you do not have a real business. This hit me really hard when I was in a mastermind probably five, six years ago, and there was a guy with a really successful business there and he was sharing with us what’s working for him. And then he said this and he pointed to everybody in the room and I knew like there was like a sword pierced my heart. If you don’t know your numbers, he said, you do not have a real business.
And I got guilty. I thought, man, that is me. So, got to know your numbers. Focus on profit. Focus on cash flow. Doesn’t matter how much equity you have. Equities do not pay. What’s the saying? You can’t eat equities. Okay. Equities, like Wheaties? Anyway, sorry, you can’t eat equity. Equity will not pay the bills.
You know, what if credit tightens up, you know, you can’t refinance. Do you have multiple exit strategies on a deal that you’re taking on? What if you can’t sell it? Right? Can you still, is there another way you can get out of the deal? You’ve got to have multiple exit strategies. You’ve got to conserve your cash flow. Be very, very careful, careful with leverage and debt. That’s going to be really, really important for you to focus on in 2020.
The other thing that you need to focus on in 2020 if you want to succeed is make offers. No, this is true for every year. No matter what it is. And this is something I learned from books that I used to read that were written back in the nineties—make offers, make, offers, make offers. It’s the number one rule in real estate. It’s not location, location. The number one rule of real estate is to make offers, make offers, make offers, and make all the offers you can. Verbal offers, written offers, follow up offers, terms offers.
If they say no to your cash offering, make them terms offers, this is really going to be important and it relates to something. Another point I have later on is being you gotta be open to creative type of deals. You can’t just be a one trick pony and only do cash deals. You need to be ready and willing to do terms deals.
So, and this is the thing you know, relates to another thing that I have later on is following up. You got to follow up with your offers. Make an offer every 30 days. Don’t just make one offer and forget it and move on. Make an offer every 30 days. Verbal offer, written offer, text, email, physical mail in the person, whatever it is. Like do it all over and over and over and over and over again. If you look at your deals that you did in 2019/2018… We’re doing ours right now.
We’re looking at it in 2019 but the last time we looked at this, of the 58 deals that we did in 2018, 54 of them came from the follow-up. Only four of the thousand leads that we got. Okay. We were doing a lot of cold calling, but only four of the thousand or a couple thousand leads that we got came from the first phone call that we had with the seller, 54 of the 58 came from follow-up. That first conversation was, no, I’m not interested, but we made the offer anyway and we followed up.
The wholesaler that we’re working with, Melissa, down in Alabama. She’s amazing and the reason why we started working with her, the reason why I decided we did want to work with her is because we were talking to her about a particular deal and we said… Gavin was talking to her and she, he said, look, what are you going to do now? And she said, well, I don’t know, but I’m just going to keep on calling him until he does decide to sell it either to me or somebody else and we thought, boom, that’s somebody that we’re going to work with because that’s what it takes in this business. That’s the tenacity you got to have, especially as we come in to this new decade. As the market starts to shift, you need to be hyper focused on making offers.
Alright. What else do you need to focus on this year? The phone. Listen, the phone is the fastest path to cash. Getting on that phone. If you were to, I’ve said this all the time, like if you were to drop me off on a deserted Island and they had cell phone coverage and internet coverage hopefully. Right and I had to make five grand to get back to my family. This is exactly what I would do. I would get on the phone and I would make 50 to a hundred phone calls a day and…
Related back to the whole offer thing: when somebody will have a client that we’re working with or student that’s bought one of my courses and they’re calling and saying, man, I’m struggling. I don’t know what’s going on. What’s the first question I ask? How many offers have you made in the last 30 days and without fail every single time that somebody is struggling, it’s because they’re not making enough offers and they’re not getting on the phone enough?
So, if you want to make money in this business, it’s really simple. You got to make offers and you can’t make offers unless you talk to sellers and you can’t talk to sellers unless you pick up the phone and you talk to sellers. Does that make sense? And I’m not talking about outsourcing that to virtual assistants.
Eventually you can do that. You know, eventually you can hire an acquisitions manager, but I mean gone are the days of trying to, I don’t even know if we even had these days right, of being able to like do deals virtually where you, you send a postcard to seller, they go to a website, they fill out their information.
Maybe you have a VA that you know prescreens them, calls them back and prescreens them and then you create an offer and you just email it to them and they sign it. Like, that has never worked. Maybe it works once in a while. Right? But like here’s the point. Don’t be afraid of the phone, answer it, answer the phone, be accessible. Call people back, text people, then call them. Then Sly Dial them. Sly Dial is a way that you can send personalized voicemails one at a time to people. Do all three right now.
The other thing I want to relate to that is, be careful with automation and you got to stay compliant. If you’re doing the texting and the voice blasting or whatever, it’s gotta be personalized. You can’t be selling anything. You got to do it just one at a time. So that’s it. The other thing I want to tell you, if you want to be successful in 2020 is learn how to sell. So, take some courses on sales training. Read some books, you know, go through like, not all my courses, I’ve got at least a third of the course is talking about selling. You’ve got to learn how to sell.
Alright now, what else? Don’t forget direct mail. This is one thing… If you want to succeed in 2020 don’t forget direct mail. It is not dead. And this is why it’s becoming more and more important. Ringless voicemail, SMS broadcast, text blast, voice blasts, cold calling, triple dialers, you know, all of that stuff. Don’t just rely on that stuff. Now we’re still doing some of that, right? But it’s getting harder and harder and harder to stay compliant and to stay under the radar and not get threatened with lawsuits. The States are clamping down on this. Even now, the carriers like AT&T, Verizon and Sprint and all of them, they are, you know, you’ve seen it, you get the phone calls or the texts and they’ll say fraud risk or spam risk or telemarketer or whatnot. So, you know, unless you want to change your phone number like every day and it’s getting harder and harder to do this.
So, what do you do? Well, I’m not saying don’t do it. Okay. Sly Dial like one at a time. Ringless voicemail works still really well. Sending a text that’s personalized to somebody still works really well, but like you gotta be careful. We’re going to see this working less and less in the future of these big automated spamming tools that blast out voicemails and texts and in emails and all of that stuff, right? Now, there is a right way to do it and there’s tools that you can use that keep you compliant. Like REI Simple, the tool that I use that was built by FreedomSoft so that like that stuff is still good. That stuff is still is okay, but you still even then like you could abuse that and you could get in trouble if you’re not careful.
So, don’t just rely… I’m saying like you gotta be on the phone, right? Don’t just rely on phone marketing. Look at direct mail. Direct mail is working really well. It’s still working well. In fact, I see it’s coming back up again. Starting to get more and more leads. We’re doing direct mail right now with our land business that we’re doing. I’m doing this with my sons. We’re getting up to a 10% response rate. It’s insane with letters, like typed letters, not even handwritten yellow letters, typed letters in window envelopes. I’m not even talking about handwritten envelopes and not even, we’re not even using live stamps. This is like what you…
We’re targeting though, small niche lists and resending it over and over and over again. So, if you’re going to be looking at direct mail, make sure it’s a long-term commitment. You’re not just going to do like, Oh, I’ll try it for, we’ll try a thousand postcards and see if it works. No, don’t do that. Like, you gotta be committed to it in the long haul. Alright?
The other thing that you need to be really focused on in 2020 if you want to be successful are creative deals. What do I mean by that? Lease options, owner financing, subject tos, things like that. You’ve got to become good at learning. You’ve got to learn how to do it. If you want to do deals, it’s getting harder and harder to buy properties with big fat discounts because there’s so much competition. Sellers are having a harder time selling and so now instead of throwing all those leads away that don’t have enough equity, well what if you could make the same profit if not more by being open to doing something creative? Okay?
We’re also starting to see, I’ve seen this recently, especially in the last three to six months, a really sharp increase in the rise of pre-foreclosures, notice of defaults. People are getting behind on mortgages and stuff like that. So, you know, sometimes on those deals, you know there’s not enough equity to pay cash, but there is enough equity that we could take it over as a lease option or owner financing or land contract or something like that. So, you cannot be a one trick pony anymore if you want to be successful in this business. That’s my opinion. You need to learn lease options and land contracts, owner financing, subject tos and things like that.
And while you do that, don’t forget the fundamentals of cashflow. You have multiple exit strategies. You make your money when you buy. So again, don’t count on future appreciation when you’re making an owner financing or lease option offer. Focus on the important fundamentals. You’ve got to have cashflow, you’ve got to have equity, you’ve got to have multiple exits.
Does that make sense? Alright. Creative deals, buyers. This is so important. I remember when the market was crashing last time as we were going through this cycle, right? And the people that succeeded… I could go through example after example after example. This is when I was first getting started, just kind of studying this stuff. The people that did really well were the ones that had the best buyers.
There will always be people buying something, right? The key then is to find out what they are buying, where they’re buying, at what price are they buying it for? Like what do they want? So, especially in this market, as it starts to shift, okay, you’ve always got to know what your buyers want. What do they want? I remember when the market crashed before in 2007, 2008 and 2009, like there was a lot of wholesaling activity in Florida and almost virtually overnight it dried up.
Alright, so what are the people that still… Like Chris Chico is one of the guys I know, he created virtual wholesaling back then when nobody even heard of that, nobody thought you could do it. But it was really simple. He went to see, okay, well people, investors aren’t buying in Florida anymore. Where are they buying properties at? And he started doing some wholesaling in Texas and Oklahoma where properties were cheaper, where you could still get cashflow and the prices weren’t falling as dramatically, or there’s still a strong demand.
So, there will always be little pockets around the country with deals that are good to buy. So, find out what the buyers want and sell it to them. It’s always easier to sell buyers what they want than what you have. So, if you think you can go and buy a house that’s going to be a great rehab and you’re going to, it’s going to be, you’re counting on, you know, you’re expecting the market to stay the same and six months later, all of a sudden if you were budgeting for six months to sell it and then it’s taken nine months, that can almost, that can cut into a huge chunk of your profit.
So, you got to know, and then buyers may not… This is where I fell into trouble when the market crashed because I had two big rehabs going in areas that were not on the right side of town, that were way too expensive. It’s just a long story. But like I was not focusing on what the buyers wanted, what the buyers wanted in St. Louis at the time when I was wholesaling, these deals were the $150k to $200,000 houses right in the good areas of town. Not 35-50 minutes away as a couple of them were not out in the sticks, not out in the real expensive McMansion areas where you know they were, they were selling for $600,000 and now you know, within a year’s time they were selling for a hundred to $200,000 less.
So, anyway, make sure you know what your buyers want and go find what they want. That’s just simple Wholesaling 101 and that works across any industry in any business. If you find out, you know what, they’re not buying properties in California anymore, where are they going? Where are they? Where are these investors in California looking to buy properties? Maybe it’s Indiana, maybe it’s South Carolina, but you know what I’m saying? Go find out what they want and go get it for them. There’s a great book Who Moved My Cheese? I’d encourage you to read that if you’ve not, but your buyers will tell you where the cheese is moved to. Okay, cool.
The other thing I want to talk about if you want to succeed in 2020 is focus on partners. Now, I don’t mean business partnerships. That’s a whole nother animal. And I’m talking like partnering on deals. Like I’ve heard it said, I think it was Tom Kurl that said this to me or somebody, don’t fix your weaknesses, outsource them. Some of you are really good at talking to sellers, but don’t have money for marketing. Some of you have money for marketing, but you don’t have the time or the skills to talk to sellers. So, why not find somebody who is good at on the phone, who’s good at talking to sellers, and then you can then spend the money or invest the money in the systems into the marketing and maybe you can partner together on deals.
This is what I did a lot when I was traveling around the world with my family. I was good at marketing and systems and getting leads, lead gen. I was a rainmaker and I found other people that were just good at talking to sellers and negotiating deals and finding buyers. And so I said to them, listen, what if I pre- screened the leads? Did the marketing, pre-screen the leads? Give them to you and you’d close them. Do you want to split the deals 50/50? Yeah.
So, I started doing a lot of that in about three or four different markets at one time. And I started doing a lot of deals by just partnering with other people where I was weak at. We’re doing the same thing with land investing right now and doing the same thing with lease options and owner financing deals. I’m finding people that are good at that stuff and I’m know what I’m good at. And so then I will approach them and say, Hey, let’s just partner on a deal by deal basis.
So, I kind of got to that point by making a list of everything you got to do in a deal. And I just asked myself a simple question, how can I do none of this? Right? And I thought, well I can get a VA to do this and an assistant to do this and a direct mail company to do this or a software to do this. And then a local wholesaling boots on the ground partner or somebody maybe like for example with land, right?
Maybe you’re good at doing the direct mail and getting the leads and sending the offers or whatnot. Right? And but then there’s somebody else that’s good at the marketing of the property. Once you get it under contract, you know, putting it out on all the websites and putting it on your website and then, you know, taking the calls and handling the money and all of that process that goes in on, on closing the deal and then selling the deal and all that.
Well there’s, there’s people out there that are good at that, that like doing that, but they don’t like doing the marketing/making offers part. So, find out who those people are and partner with them and do it on a deal by deal basis. And if it works out, then maybe you could form a more of a business partnership or something formal after that. So, don’t think that you have to do it all yourself or that you have to have a huge team. So, keep your overhead low. And try to find partners. Something to think about. Okay.
The other thing I want to tell you about, it’s going to be important in 2020… Focus on the small towns, small towns. I’m seeing this, I’ve been seen this for the last couple of years, but especially, you know, as market is going crazy now and there’s still tons and tons of competition, there’s hardly any competition in small towns right now. Okay? Competition is not going away anytime soon. There’s a lot of opportunity in the small towns. Start looking outside of the big MSA. The MSA is like metropolitan statistical area.
So, if you were to say St Louis, if you were to look up St Louis, it’s just a little dot, you know? But then there’s the big, all the suburbs and all that. I’m talking about going out to the counties, two or three counties out surrounding the big MSA. There’s a lot of opportunity there and you’ll be surprised the huge discounts you can get. We’re seeing anywhere from two to 3% response rates in our direct mail to absentee owners with equity in the small towns. We’re seeing two to 3% response rates in those areas. Okay. And about half of 1% response rate in the big MSS. So, we’re seeing three to four times the response rate out there and there’s not as much competition.
You can get bigger discounts and there is still a demand for people that want to buy houses. I won’t to go into all the details of that, but don’t ignore the small towns and also out in the small towns, what do you have? A bunch of vacant land. We’re buying vacant land super cheap right now. 10 to 15 cents on the dollar. And my boys are helping me with this. They’re 16 and 14 years old, but like vacant land, there’s a lot of opportunity.
Now, I would encourage you this to be careful with vacant land. As the market starts shifting, it might become harder to sell the land. I don’t know, maybe, maybe not. If your objective is to sell vacant land on terms, I don’t know, financing, you’re probably going to see a higher default rate on the land. But when you’re buying this land at 10-15 cents on the dollar, you’re breaking even. You’re getting all your money back in three to six months. Like it’s not that big of a deal, but just be prepared for that.
Does that make sense what I’m saying? But vacant land right now, it’s, it’s going crazy. It’s doing really, really well for us now. What else? If you want to succeed in 2020 communication, communication, this is true in any year, but especially now going forward as your business grows, you need to become good at communicating with your team. I’m speaking this to myself because I don’t like communication, right? I mean, I just want to work and everybody leave me alone. But here’s the thing. If you want to grow in your business and do a lot of deals, you need to have a team, right? And you need to communicate with them.
The people that I see that are really successful, and I can name tons and tons of guys, they’ve got a great team, right? And they’re not just an absentee business owner. They’re talking with their team every day. It’s not like they’re putting out fires, but they’re just talking, right? Communicating the vision and saying, alright, this is what we would need to accomplish. This is our marketing plan. This is our scorecard. Let’s talk about it. How many leads came in yesterday by marketing channel? You’re like, you don’t have to be the one creating these reports. Have your team come up with the reports, figure out what are the critical things that you need to be tracking in your business. Create a scorecard around that and communicate with your team. Have them explain to you what’s, why didn’t we meet our targets? What could we do better? What are the bottlenecks? How can I help you do your job?
So, like you’ve got to be communicating, especially with your virtual assistants. You know, it’s so easy for me and, and all a lot of entrepreneurs is like, I’m just going to give the menial stuff that I don’t want to do. That’s, you know, hard labor. I mean like menial tasks or whatever. I’m just gonna give that to the VA and you create a little video and you tell the VA to do it and you just like forget about it. And two or three, four weeks later, you’d come back and look at it. It’s all done wrong and it’s nothing’s right and you get mad and you fire them. And like, why did that happen? Nine times out of 10, the problem is poor communication, a lack of communication, not good enough communication, not regularly updating them and all of that stuff. So, the key, again, be a calm and good communicator. Okay, super important.
Final thing here, I want to share with you. If you want to succeed in 2020, you’ve got to get a good coach and a good mentor, right? Everybody needs a coach find or create a mastermind. I’ve done this before and it was amazing. I just started a mastermind of other wholesalers and investors in the St Louis area. We would meet once a month and it was fantastic. We did that for almost two years and I just got too busy. I didn’t want to lead it anymore. But it was a great time. I’m creating a new coaching group right now for people that are in the publishing business that create podcasts and courses and consulting for, in the real estate space.
But like I am either in, I’m always in a coaching group or a mastermind, or I’m creating one. And so that’s going to be really important for you to either join one or create one, get some accountability, give some accountability out. So, why is this so important? Well, number one, it helps you stay in tune to what’s working in the market and what’s not. And I can’t tell you like when it comes to like in a coaching group, when I’ve coached people or, and I’ve been in the coaching group and been the one getting coached, it’s amazing how much I learned from other people. I wish I could remember this quote like, wise people, smart people learn from their mistakes. Wise people learn from the mistakes of others or something like that. Right?
So, you know, I’ve learned a ton of stuff from my students, from people that have taught me what they’re doing or when I’m trying to teach them something. I learn it better myself. So, I’d encourage you, if you’re already experienced and you’re doing deals already, become a coach to someone else who needs your help, right? That’s sometimes the best way to learn. It’ll sharpen your saw. It’ll help you become better in this business. Does that make sense? So, get a coach or become a coach or do both. That’s probably the best thing, right? Unless you’ve not done any deals and you don’t have a lot of experience, don’t become a coach yet, right? Get a coach to help you to get a lot of deals under your belt. Make sense?
Alright, final thing I want to share with you guys, get my book. I have this book called REI Secrets: Daily nuggets of real estate investing wisdom to help you get more leads and close more deals. You can get it for free at REIsecrets.com. REIsecrets.com.
The feedback I’m getting is crazy. It’s really awesome. Like one guy just told me it’s the tools of Titans for real estate investors. Now I know, I don’t know, that may be going a little too far, but Tim Ferriss wrote a book called the Tool of Titans and it’s an awesome book where he interviewed a bunch of people. This is a book I just, there’s each chapters two to three pages long and daily nuggets of real estate investing wisdom. So, I wanted to keep each chapter super short so you could read it in one sitting and it’ll give you wisdom and inspiration, some guidance and some things to think about in regards to your real estate investing business, getting more leads, closing more deals. And you’re going to get, it’s a lot of incredible value out of that book.
It came from my REI In Your Car podcast that I’ve done for years and years. Things that I learned or things that I discovered and I turned them into a podcast. I got them transcribed and turned into readable chapters. It’s kind of like a devotional or a diary or some sorts of tips and tricks for the real estate investor. Get it right now. It’s free. Just pay a little bit of shipping and handling and REIsecrets.com, REI secrets.com.
Alright, so, Hey, that’s all I got, guys. I hope you’re doing well and I hope that your 2020 will be super successful and prosperous. Remember, guys, keep it simple. Focus on the basics. Become brilliant at the basic things. Okay, we’ll see you guys later. Take care.
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