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Jack and Michelle Bosch - Here’s How and Why You Should Be Investing in Tax-Delinquent Land Today
In this episode, Alex and I talking with two of the nicest and smartest investors in the business – the husband and wife team of Jack and Michelle Bosch.

The Boschs new podcast, the Forever Cash Podcast, is all about building forever cash through tax sales and tax-delinquent real estate investing – with houses and land. For the past 13 years Jack and Michelle have been specializing in this small niche (with very little competition) and have done more than 3,000 deals, becoming self-made millionaires. Amazing!

In today’s episode, Jack and Michelle are going to cover why they like to invest in land; how to buy land for pennies on the dollar; why there’s not much competition; the market they choose to wholesale houses in; how they do their marketing; awesome tips about hiring team members; and so much more.

Seriously, Jack and Michelle are the real deal, they’re super smart, a great team and I always learn new stuff from them. I’m really excited we have the opportunity to have them join us and share their knowledge.

Away we go…

Listen and enjoy:

What’s inside

  • 2:45 – Alex tells us about his latest projects
  • 14:10 – Jack and Michelle talk about being married and working together
  • 21:00 – Jack and Michelle talk about why they flip land; one of their specialties
  • 29:15 – Where Jack and Michelle choose to invest
  • 35:00 – Drawbacks to investing in land
  • 42:55 – What Forever Cash is
  • 51:27 – The market Jack and Michelle are wholesaling houses in
  • 1:02:34 – How to hire an Operations Manager

Mentioned in this episode:

Tweetables

Transcription:

Download episode transcript in PDF format here…

Joe:      Hey guys, welcome! This is the Real Estate Investment Mastery Podcast. I'm Joe McCall. I just wanted to do a quick introduction to this podcast before we play the recording of the call that we did because I was having some serious technical problems with my mic. And unfortunately, I can't go back and fix that. So right at about minute 12, I started losing audio on my mic. So, it’s a little annoying but it only lasts for maybe about five or six minutes, okay? And then, after that, we quit the call and then we started it up again. So, my apologies for that. I just wanted to let you know when you start hearing my mic go out, don’t worry, it gets better. It only lasts for a few minutes, and then we get it fixed. So, my apologies again and enjoy the show guys!

Hey everybody, welcome! This is the Real Estate Investing Mastery Podcast. We're recording live from Alex Joungblood and Joe McCall Studios in Hollywood.

Alex:    In two different places.

Joe:      Yeah! I almost said Hollywood, California but nobody would believe us. But, this is kind of live. We're recording this live but you're probably listening to this later on. And, I'm excited about this show guys because I have a good friend of mine on the show, Jack and Michelle Bosch, and they live in Phoenix. We're going to be talking to them about their new podcast called the Forever Cash Real Estate Investing Podcast. I’ve been e-mailing my list about it trying to introduce as many people as I can to get them over there to listen to it. It’s a really good podcast.

I've known Jack and Michelle for a couple of years now and they're just really, really cool people. I like them a lot. I mean, they're the real deal. And, they’re one of those few people that you meet that you're just like, “Man, I can't believe I'm calling… They’re friends.” Like, they really do deals. They do a lot of them. They have a very successful business and they really give back in tremendous ways to a lot of people and making a big difference in a lot of people's lives. So, I'm glad to have them on the show. Alex, how are you?

Alex:    I'm good. I'm good. We're really ramping up here as we're hitting the spring with the deals and the new construction and all the good stuff like that going on right now. So, looking forward to a big spring time.

Joe:      Now, you are rehabbing a lot of houses but you're also doing your own.

Alex:    No! No, no, no. For some reason… Well, I should say we just bought one and in the process of buying another so that will be two different rehabs and the rest is all new constructions. So, there are another ten projects there that are new constructions. So, it's kind of been the way things have gone just the way my team is set up. And then, also wholesaling along the way too in three different markets.

Joe:      Three different markets now.

Alex:    Yeah! Yeah! Well…

Joe:      But, you've always done that.

Alex:    Yeah.

Joe:      Are you focusing more on that now than you have in the past?

Alex:    No, I really… It's kind of geeky, but I really like the data side of things and I like being able to pull lists using my secret sauce, if you want to call it that, and seeing how it works in different markets. And once you really nail it down, you can put it in any market and see results. So, that’s the way that I’ve been doing now.

Joe:      So, you're experimenting…

Alex:    Yes.

Joe:      …In other markets.

Alex:    And making money.

Joe:      Well, that's a great way to do it. Now, are you sending those leads to other wholesalers there that you know or do you…?

Alex:    Yeah! Well, that’s the way I have always done it. I have another wholesaler in the area. And, they're on the ground and they know the area well. And, they appreciate somebody that can make it to work by putting the marketing in place and having all the infrastructure and the CRM and the VAs and all that good stuff to where they just get leads on a silver platter ready to go. So, that’s the way I've done it. Even before you came out with your big fancy dancy course, I was doing this.

Joe:      Ah, I got all of my ideas from you.

Alex:    Oh, you see that now? Now, you owe me royalties.

Joe:      You taught me everything I know. But, I tell you what, man, I call it “Automated Wholesaling.”

Alex:    Yes.

Joe:      Because if you set it up right, you really don’t have to do anything.

Alex:    Well, you got to send the marketing out.

Joe:      But, you can get some else to do that. I have…

Alex:    It's good if you trusted them.

Joe:      That’s the difference between me and Alex. I'm too trusting of people sometimes and Alex is too. But, I just have my assistant do it.

Alex:    Yeah.

Joe:      And, I bet you though, if I paid more attention to it and I did it, I'd probably get better results because I know what lists are good. And, I have given her general directions and she does a great job.

Alex:    Yeah.

Joe:      But, you're absolutely right. Because if your VA makes one mistake, you're just…

Alex:    Oh, it's the list. The list is everything.

Joe:      Yeah.

Alex:    Thousands of dollars on the list sometimes.

Joe:      You could get the phone number wrong on the postcard. You could have the website wrong or maybe it just doesn’t go for the…

Alex:    I did that once. That was one of my first campaigns I ever did. I had the phone number wrong, but the thing that saved me was I had a website on there.

Joe:      Right! But this idea of automated wholesaling and I think… Now, this is something I've helped Jack set up, I think.

Alex:    Oh, nice.

Joe:      Maybe we can talk about that Jack.

Jack:    Absolutely! I would love to.

Joe:      But, it's about… Because we're all marketers and we talk about this. If you're going to be successful in the business, you got to understand that you're not in the real estate business. You're in the marketing business. No matter if you're flipping land or notes or wholesaling deals, whatever it is that you're doing, you're in the marketing business. And, it's about setting up those systems and the marketing so that the leads can come in, right? And, you've got a system that prescreens the leads, and then takes those leads that have been prescreened and giving them to another wholesaler to go do their magic with.

Because you're always going to close more deals if you can get to the sellers house, meet them in person, build the rapport, that type of thing, right? I have had some students lately telling me that, “I have talked to a couple of wholesalers and they don’t want to work with me.” And, I'm scratching my head thinking, “Well, something is wrong because you're not explaining it right.”

Alex:    Uh-huh.

Joe:      What wholesaler in the right mind would say no to you paying for the marketing and giving them prescreened motivated seller leads, right?

Alex:    Yeah.

Joe:      Now, unless…

Alex:    That’s a head scratcher.

Joe:      Well, yeah, unless they were already doing a ton of marketing themselves and had enough leads coming in. There's logic to that.

Alex:    The more leads, the better.

Joe:      Right! But see, when you're approaching other wholesalers to set this kind of business up, it's important that you offer something of value to them, right? And, for you Alex, you're providing them the VAs that are prescreening these leads. You're paying for the marketing. You're providing the VAs that are prescreening the leads and you probably have the systems in place to do all the following.

Alex:    And the infrastructure. Absolutely!

Joe:      And the money to close on the deal if they needed it, right?

Alex:    Exactly.

Joe:      And you're doing the follow up, correct?

Alex:    Yeah.

Joe:      So, it's a win-win-win. I really love the way this business is working out. And, I love teaching and coaching people. I've done probably three of four different courses in the past and this is by far my favorite right now. And, it's more of a group coaching model. I'm really excited about it. Those of you that have no idea of what I'm talking about, if you go to either RealEstateInvestingMastery.com and download our Fast Cash Survival Kit or join our mailing list somewhere on the website, you'll get e-mail notifications on the next time I open it up and the next time I do a webinar on it.

But, it's really, really good. I'm doing less and less one-on-one coaching and more group coaching in this automated wholesaling model because I'm seeing a tremendous success and a lot of people doing cool things with it.

Alex:    Awesome!

Joe:      Hey, listen real quick. We talked about Real Estate Investing Mastery just a second ago, but go there if you want our Fast Cash Survival Kit. And, one of the things, if you go in and you look at our show notes, you'll find a previous episode and I think we called it “Leave a Review, Get Cool Stuff.” And, if you leave us a review on iTunes, good or bad review, we're going to send you a couple of books and send you some online video courses that we've done and it's really cool. We really appreciate the reviews. I get excited. I'm going to read a couple of them here. We really like to see that you guys are getting something out of the show that you're listening to this. We're probably over a million downloads right now, Alex.

Alex:    Wow! That’s awesome.

Joe:      We have listeners in over 150 countries. And, I don’t know what exactly our downloads are because we have a lot of listeners that listen to us from apps like Stitcher where they don’t give you the stats on that stuff. But, let me read this review from Hector. He gives us a five-star review. He says, “Awesome and informative.” Hector says, “Hands down. This is the real estate podcast filled with the most practical and actionable ideas and recommendations. The guest cover topics which educate the listeners all about the varieties and nuances of real estate investing. It is also the podcast where I can hear about the latest hacks as far as marketing and technology. I've been a fan from the start. And, the one suggestion I would make is that I would like to hear more from Alex.” Come on, Alex.

Alex:    You want to hear from me, huh?

Joe:      He's saying, “I talk too much.” It's basically what he is saying.

Alex:    Oh, man.

Joe:      “However, the podcast is easily the most awesome and informative!” We have 250-something reviews and that's the first person who has ever said they want to hear more from you. How does that make you feel?

Alex:    Maybe we need to do a one-on-one podcast so that you can just hear from me and Joe and I'll say as much possible just to make Hector happy. How about that?

Joe:      That’s a great idea! In fact, you should just start doing your own episodes.

Alex:    Alex episodes.

Joe:      Yeah.

Alex:    Okay.

Joe:      Okay, one more review. “Can't wait for the next one” by Kona East. By the way, thanks Hector for that. I appreciate it. Kona says, “Awesome podcast. Love the detail of the content. As a beginner, much of the content concerns getting started in the business. It makes me think I can actually do this. Thanks, guys!” We appreciate it Kona East. Five-star review. So again, thanks guys for leaving us reviews. If you go to RealEstateInvestingMastery.com, check out the show notes and look at the episode in the search box called “Free Stuff.” And, you'll see a podcast there where it gives you instructions. Leave a review, good or bad and we'll send you a bunch of free gifts, okay? Just our way of saying thank you. Cool! So, Alex, we need more stuff from you, man.

Alex:    More stuff, okay.

Joe:      You need to chime in more. And if I…

Alex:    I will hog it more.

Joe:      If I'm hogging the mic too much, I apologize.

Alex:    I need a button that pokes you or something.

Joe:      All right. So, we've got some cool guests on the show, Jack and Michelle Bosch. How are you guys?

Michelle:         I have the solution for you guys. We’re doing great and I have the solution for you guys.

Alex:    What's the solution?

Michelle:         The solution to getting Joe to let Alex speak more is for Alex to go ahead and kick him under the table. Unfortunately, since you guys sit in a studio…

Joe:      A big virtual table.

Alex:    Yeah.

Jack:    You need some text message where Alex can say like, “Hey, stop talking. Let me talk.”

Alex:    I appreciate Joe and I appreciate all the knowledge he spews. And, as he spews it, I just soak it all in and become a better person.

Jack:    And, we do too! We've also known Joe for just a couple of years and Joe is a wonderful guy. We're really honored to be on your podcast here. Yeah, Joe is a great guy. He has helped us a lot. Yes, indeed, you have helped set up our virtual wholesaling of houses and we absolutely love it.

Michelle:         Yeah, absolutely! You are a systems genius.

Joe:      Well, I appreciate that.

Alex:    Yes, definitely! Definitely, a systems and spreadsheets genius.

Joe:      Yeah, you can make a lot of money with spreadsheets.

Jack:    You can. You can.

Alex:    Yeah, you literally can. You could make a spreadsheet. It may not be in your bank account but you could see how it works.

Joe:      Right, right. So, Jack and Michelle, you guys, the reason why you're mentioning kicking under the table thing is because you guys have a podcast and you guys are in the same room because you're married probably. I'm assuming, right?

Jack:    That’s correct.

Michelle:         Uh-huh. Yes, to each other!

Alex:    Ah! So, do you have like black and blue shins from her kicking you?

Jack:    No, it's actually quite reasonable. I get the stare sometimes if I talk too much. But, that is quite effective and leaves fewer bruises.

Joe:      If we had our spouses on this show, Alex, it would be a much better show.

Alex:    Wow! That will be interesting.

Joe:      It will probably be a lot shorter too.

Alex:    Well, if she could really… Well, no, I'm not going to say that.

Joe:      We're not going to say anything bad about our spouses. But, I…

Alex:    No, that wouldn’t be a bad thing.

Joe:      Oh, okay. All right. But, I think it's so cool that you guys can do that, Jack and Michelle because not a lot of people can work together as well as you guys do. I'm sure you have your squabbles, right? But, I think it's pretty awesome you guys can work together. How hard is it?

Alex:    My house would blow up if my wife was on a podcast. We'd have to hire a babysitter first for both of us to be on a podcast.

Joe:      Oh, yeah. Yeah.

Alex:    Probably pieces of my house would just be falling off. Crazy!

Jack:    But, it works quite well for us because we have maintained over the years. We have been working together since 2002 or so. We're talking since 2002.

Michelle:         Yeah, over a decade.

Jack:    Over a decade. So, Michelle and I, we do our real estate investing together. We spend 24/7 together. And, we love it because we have different personalities and different strengths. So, we're working in a sense in different parts of our business.

Michelle:         Yeah.

Jack:    And, that really makes it work. When we occasionally have the need to decide in the same area of our business, that’s when the sparks fly.

Michelle:         Absolutely, yeah.

Joe:      Hmmm.

Michelle:         I think you need to set those boundaries way at the beginning and rules on basically agree and how to disagree, and then everything turns up fine.

Jack:    And then, have rules on how to remind her that she'll agree to disagree.

Joe:      So, what part of the business do you do Michelle? And, what part do you do Jack?

Michelle:         Okay. So, I mainly take care of whatever crazy idea Jack comes up with. And, I make sure that we can basically implement. I'm the strategic planner of the two. He is the visionary and innovator. And, I think that combination has really worked well. So, I'm in charge of day-to-day operations, making sure everything is working out smoothly and if we're on target. I'm the one that loves to measure and looks a lot at metrics and Jack is basically our marketing-end genius and our visionary.

Jack:    So, yeah, for example, when we decide to go in a certain area… As you know, for years, we only flipped land and when we decided to also flip houses, I basically went out and figured out how we're going to go about that and what we need to do. Basically, I talked to you, Joe. You talked to us about the virtual wholesaling and how to do this because we're using the exact same technique that we used to flip land and also to flip houses.

Michelle:         To flip houses.

Jack:    But honestly, the house process is a different process than the land process. So, we kind of figured out what's the best way for us to do this. We did a couple of test runs. We flipped a bunch of houses. Then, we sat back and it's like, “Well, here are certain pieces that we don’t really enjoy doing. And, how do we systemize those pieces?” Well, I basically looked at… I said like, “Let's do house flips.” I got the list. I processed the list. We basically came up with a letter and sent the things into direct mail and so on. But then, Michelle took it from there with all the organization in place. She made sure that these letters go out and that there's a system in place on how the phone calls are being taken and so on and so forth.

Then, we sat back and said like, “Well, how do we organize this search so that it doesn’t take our time anymore?” And together, we came up with ideas and then Michelle went and implemented those ideas while I went out and started something new again.

Joe:      That’s great.

Michelle:         That's been how the dynamics works. Yeah, definitely! That pretty much summarizes it.

Alex:    Yeah, houses and land are different ball game. And, a lot of the times, with wholesaling and stuff, we come across land deals. In fact, my biggest wholesale deal… Well, I guess it's not the biggest anymore. But, a really big deal that we did or I did back in the day came at a very opportune time when I took on my first rehab and it almost killed me literally financially. A big, huge wholesale deal came along and it was land. There was one house on it, but I saw the potential to divide it into four. And by doing that, I mean, it turned into a $75,000 wholesale deal.

Joe:      And, that was land. How did you find it?

Alex:    Oh! It's just regular. It was just regular marketing. There was a house on it and the rest of the land was attached to the house. And, it was already… I believe the lots were already divided as well. And, if I was in the situation where I'm in at now, I'd definitely would have kept it and I would have probably have made four times as much on that deal. I'm not joking.

Joe:      Right! Okay. All right. We're back. So, Alex, you were just talking about your flips on land. And, how much money did you make on that deal?

Alex:    Yeah! That deal was a $75,000 deal. It was funny. Really, my virtual assistant… I give him all the credit on that one because the lead came in and I think like the house that had the land was first assessed at $160. And, he run the whole numbers on it and I was like, “$160 times 0.70 minus a guestimate of like $30,000 in repairs.” And, it brought the number down to $80,000 which the seller accepted. I went back and I was looking and I was like, “Oh, man, this doesn’t look like a deal.” But then, when I went out there and saw all the lots that were attached to the house and made sure that those were in a legal description which is everything…

Joe:      Yeah.

Alex:    …And found out. I was like, “Wow! I mean, in this, we tear one house and put four up in its place.” And again, at the time, I really had no experience with new construction and development and stuff like that. But, I found one of my friends at the time who was doing a lot of new construction and offered to him for $160 and he took it within a second. I mean, I guess it was an $80,000 deal but after closing cost and double closing and all that stuff. He turned around and sold one of his lots for like $80,000 to one of the premier development companies in there and then developed the rest. And, I was like, “Argh!” But, I needed it. I needed at that time. I needed that deal or else I think it would have been bad.

Joe:      Jack and Michelle, you guys are known for your stuff on flipping land. You've been teaching that and doing that for years. We don’t have to talk much about that because the first four episodes, I believe, of your podcast… Again everybody, go to iTunes. Do a search for Forever Cash Real Estate Investing and you'll find your podcast. But, on the first four episodes, you talked about how to flip land, right?

Michelle:         Yeah.

Jack:    Yeah, I guess. We talked about our particular niche which is actually more about tax delinquent real estate investing than land. But, for the first 10 years of our real estate investing career, we've basically just applied this to land because we love land because it's just simple. We refer to the three “Ts” that don't exist on land, which are no tenants, no toilets and no termites.

Joe:      Yeah.

Jack:    So, as a result, it's really simple. Plus, in the land area, there is no competition. There is almost no competition. There is a huge amount of sellers out there. There is also a huge amount of buyers out there, but the buyers typically don’t go and they are not real estate investors. They are end buyers. So basically, if you are a real estate investor going after land, you can get tremendous bargains.

We buy most of you properties between $0.05 and $0.25 on the dollar. And then, when we turn around, we get close to market value because there is already a buyer pool waiting out there. And, just like you just said, Alex, if they're attractive areas, the builders are on the pool. But, even if you are buying out in the outskirts of town or rural areas, there is a ready buyer pool waiting for those. They really want to buy in the path of growth or they're just recreational buyers. They just want to have something where they can go and put up their RV and their tents and have a bunch of fun on the weekend. So, we have first applied this to land only, but now, for the last few years, we are also going out to tax delinquent house owners and we're flipping houses exactly the same way as we're flipping land.

Michelle:         Yeah! If I may add, like Jack said, we originally started in the tax lien and tax deed world. I'm actually attending auctions. And then, we had this “Aha!” moment when we're like, “Okay!” Really, our goal here is to go after the property and these people that are losing their property to the auction have made a decision years back to let go of these properties. And so, why not crank at them way before their properties come for auction? And, that's kind of where we started our own methodology of going after tax delinquent real estate.

It also served a purpose back then. Jack still had a J-O-B. I did too. And, we were looking for freedom of time and money and we thought, “Okay, this could really be a good vehicle to accomplish that.” And, from that, we redeveloped our financial philosophy which is composed of three types of cash.

Joe:      Yeah.

Michelle:         One-time cash, temporary cash and forever cash. And land was a great pathway to achieve one-time cash and temporary cash. And, Jack can explain a little bit more of what those mean.

Jack:    Right! And, that's the name of the podcast, Forever Cash Real Estate Investing Podcast.

Joe:      Well, can you talk a little bit about how you make cash flow with land? Because you are not dealing with tenants and rentals, right? How do you set that up?

Jack:    No rentals, no tenants and no cell phone towers on the land. Although, if you come across something like that, that's obviously a great cash flow source. But no, our principle or the way we work is really very simple. I even call it the simplification of real estate because what we go after are pieces of land that the owners don’t want anymore. In many cases, they've stopped paying property taxes. We use the fact that they've stopped paying property taxes as an indicator that they don’t want the property anymore.

As Michelle just said, they made the decision to not want this property anymore. So, stop the property taxes. Stop the bleeding, right? Because what everyone says about land is that it doesn't cash flow. On the contrary, it sucks money out of your pockets through property taxes. So, there is a lot of people who don’t want that anymore and they'll put a stop to paying property taxes. So, if you contact these people by direct mail, they will gladly sell their property to you at steep discounts.

So, this is the premise of what we do and what we've done for 13 years now. Just the last few years, we've added houses to it. But then, we started this with $3,000 for a name and basically no real estate experience. The first deal that came our way was a land deal and we didn’t know anything about real estate, nothing about houses, nothing about land. So, the land deal was the easier deal to do because we didn’t have to know anything about real estate because it's a just a piece of dirt.

You don’t have to estimate repairs or anything like that. You just buy cheap and sell it more expensive. But, after a while, after doing like 10, 20 deals, basically somebody came to us. We were selling a property for about $25,000 and we had bought this property for about $2,500. And, this person basically says, “I don’t have $25,000. Would you allow me to give you a $2,000 down payment and make monthly payments of $400 a month?” Now, we are talking 2003 in this very moment. And, our knowledge of real estate back then was so little that we haven’t even heard about seller financing or about the concept of seller financing. And, we were like, “Sure, why not? Is this legal?

So, we're kind of like, “Okay, yeah. As long as it's legal, we can do this.” So, we went to an attorney, drew up some paperwork and we basically had the guy give us $2,000 down and then make $400 a month payment. By the time he has made his second monthly payment, we had all the money back that we had we put into this property including closing costs.

Joe:      Yeah.

Jack:    So, all of a sudden, we were like, “We like this.” We looked at each other and we were excited.

Michelle:         A light bulb moment.

Jack:    It was like a dead moment because I had a car payment that was $350 a month plus an insurance of another $50 or something dollars a month. So, I was like, “This monthly payment from this piece of land, that by the way is going to last for 10 years now, just pays for my car payments and my car insurance.

Joe:      Nice.

Jack:    Let's do this again!” So, we did it again and again and again and put the pedal to the metal. And, within a matter of couple of years, we had built this up to over $75,000 a month coming in.

Joe:      How much again? Say it again.

Jack:    $75 grand a month.

Joe:      From your notes on your land.

Jack:    From notes on land without any tenants, toilets, termites, without any hasles and basically with them just sending checks in the mail or by a credit card or by direct deposit or by…

Michelle:         ACH.

Jack:    …ACH and so many different ways that it's coming into. And now, of course, the thing is that all these monthly payments will end sometime. So, it's not what we referred to as “Forever Cash.” It's not cash that comes in forever, but it is cash that comes in for a long time.

Michelle:         Because yeah, they're 10 or 15-year notes.

Jack:    Because depending on the kind of amount of the sale, you might have a five-year note, but the majority of our notes are 7 to 12 years. So, that's a pretty stable long-term cash flow. And yeah, that's how we make land cash flow…

Joe:      That's fantastic!

Jack:    …With seller financing.

Joe:      That's fantastic! And Alex, how much cash were you getting from your land holdings? None?

Alex:    None.

Joe:      I'm not either.

Alex:    Yeah, it sounds really, really awesome. Now, you guys are in Phoenix. Is there a certain…? Are you buying land on the outskirts of Phoenix or do you have a little certain pocket out of the country where you are like, “Oh, yeah. We buy there.”? Because I'm trying to think around here what we would…

Michelle:         Yeah, we do this all across the U.S. Of course, the Southwest is our backyard. So, that's California, New Mexico, Colorado, California and Washington.

Jack:    And, that's our backyard because that's where we got started.

Michelle:         Yeah!

Jack:    At the beginning, we were under the illusion that we actually have to go and look at all the properties. So, we started in Arizona. We started within an hour and two hours driving distance from where we live. And, we spent our weekends looking at these properties. And then, we were expanded from there little by little. And then, at some point in time, we realized that we don’t have to actually go look at these properties because…

Alex:    Oh, yeah.

Jack:    …They are just dirt. With Google Earth, Google Maps and a couple of maps, you can see everything you need about these properties from the comfort of your home. And, in that moment, we really started expanding nationwide or literally from Hawaii to Florida. We have a tendency to stay in the southern half of the United States just because the winters are milder. There is more people left and there is snowburst there and so on. And, it's easier to sell properties in winter in the southern half than the northern half. But, having said that, we have students now that do this in Wisconsin and do this in Washington.

Michelle:         Pennsylvania.

Jack:    In Pennsylvania and New Hampshire and so on and so forth. So, you name it. We just tend to like land that's year around snow-free.

Joe:      Well, that makes a lot of sense and it's one of the reasons why I love automated wholesaling like we were talking about before. I'd like to talk to you guys more about that.

Jack:    Sure!

Joe:      But, still coming back to land, I'm still as passionate about that because you are creating or you are taking something that's not very competitive. And, it's easier to systemize and automate, right? Because, I think one of the things you guys do, and correct me if I'm wrong, but you send out mail regularly, but you really don’t sit down and look at your leads and make offers but once a week, is that right?

Jack:    Yes, that's correct. Yes.

Michelle:         Yeah, the element of that time urgency that you have in homes because of the high levels of competition really doesn't exist in land at all.

Joe:      Right! So, on a Thursday or whatever, you are just sitting down looking at all the responses that came in. And, in your mail, are you actually sending? Is it just a letter or are you sending a contract making an offer right there?

Jack:    No, we're sending out a letter. There are different ways you can do it but we prefer sending them just the letter and having them call in. Our phone calls are taken by a call center and our virtual assistants if you want and they enter it into a database. And then literally, we only look at that database once a week. And, there is a cutoff time for that thing or kind of day and everything that comes in after the cutoff time on that day will go in to the next week's offer making. And, that is really a beautiful part about the land flipping because there is so little competition that you can have somebody wait for their offer for two weeks.

Michelle:         Yeah, we set the expectation.

Jack:    And, we set that expectation because the chances there that they are going to get another letter from somebody else in a matter of that week, if they haven’t received a single letter in the last 20 years, is extremely low.

Alex:    That's definitely true! I know exactly how that works. In fact, you got to accept this offer now before that next post card comes in or you're there sifting through 20 postcards and they also most have a roller decks now of investors to go to.

Jack:    Exactly! They don’t in the land area. And, that's why when we added houses to it internally, we moved over to the virtual wholesaling model because we have gotten used to a pretty comfortable life in the sense that we really like to schedule our things out that on Thursdays, we make offers or on Thursdays, we look at the properties and do our value analysis. And then, on Fridays, we make our offers. And then, on Mondays, we go and enlist these properties up for sale and do new promotions and things like that. And, on Tuesdays and Wednesdays, we go play with our daughter in a sense.

But, when we added the houses, all of a sudden, we found ourselves having to react much quicker. And, the moment we added the virtual wholesaling to it, that's where we basically generated the leads with our methods because the tax delinquent property owners are really some of the most motivated property owners in the world because most of the properties are free and clear. Because if they would have a mortgage on them, the bank would pay the property taxes for them once a year because the property taxes are escrowed in to the monthly payment.

And so, it's either the people that don't pay the mortgage or the people who are also motivated, or the people who don’t have a mortgage can get to pay their own property taxes every year. So, the list is full of high equity leads.

Michelle:         Yeah.

Jack:    And, the fact that they're short or that they only have a certain amount of time before their property goes for tax deed sale or for tax lean sale or foreclosure on the tax lean sale means that they are highly motivated to do something or to sell their property. So, you have a very highly motivated list with high equity, but you have to react quickly. And, the moment we added the virtual wholesaling part where we have a co-wholesaler in the local markets that we can send the leads to, it really took care of that urgency factor because now we could train a virtual assistant…

Michelle:         We transfer the jumping around to somebody else.

Jack:    Yeah, we transfer the jumping around to somebody on the ground who is used to that and who loves doing that and we could maintain our fairly calm lifestyle.

Joe:      Excellent! Well, you mentioned all the benefits. Are there any drawbacks? Anything that are challenging, maybe in land, that you don't get in other types of deals?

Jack:    Sure, there are. And, one of them is you have to be a little careful in what you buy. This is particularly in the low, low, low price segment. For example, if you go outside of bigger cities into more rural areas, there are pockets. And, if you live in New York or San Francisco or Los Angeles, you can't even imagine that being true. But, there are areas in the country where you can literally buy five acres for under $5,000. The market value is $5,000.

Where are these parcels where the acre sells for $400 and you are buying 10 acres for $4,000? So, 40 acres for $6,000 when the acre price is $130 or $150. In those areas, you got to be really, really careful with what you buy because you can buy these properties a dime a dozen, but selling those is a little bit more of a challenge. So, in those areas, you have to really look for larger acreage like 40 acres and more because even in the middle of nowhere, cheap acres sells well. For example, there is an area in Nevada that we like buying 40 acres parcels of land. We are buying a 40-acre parcel of land for $2,000 and we are selling that thing for cash for about $6,000 to $7,000.

It’s not a huge profit but it's a $4,000 to $5,000 quick cash profit that we can do all day long. But, if we would buy 5-acre properties in that area, we would probably have to pay $1,000 for them and we would be able to sell them for $1,500 or $2,000. There is not enough margins in those deals so you want to stay away from these kind of super, super low-priced areas unless they are a large acreage. But, other than that…

Michelle:         Sometimes, comping value analysis could be a little bit more challenging.

Jack:    Sometimes, particularly if you are dealing with odd-sized properties.

Michelle:         Yeah.

Jack:    What Michelle says is absolutely correct. If you have like 300 acres somewhere and there is just not another 300-acre parcel that is being sold…

Joe:      Yeah.

Jack:    …Then, you got to fish around a little bit. You got to find for some 20, 40, 60 acre parcels. If you find anything like that, what we say is you got to basically then calculate them by the pound or by the acre and so on. But, other than that, I mean, the land market right now is a seller financing market. So, you can sell those deals that I just explained for quick cash for $5,000, $6,000, $4,000 to $6,000 quick cash profits. But, a lot of the deals are… And, we focus on the deals below $80,000. Usually, our sweet spot is the value between $10,000 and $50,000 in value. That’s the sweet spot of the pieces of land and there is a lot of seller financing in that market going on right now.

So, it means you might not get a big bunch of cash right now for your deal. But therefore, it builds that cash flow that provides the ability. And, as I said, if you charge $400 a month and you do that 20 times over the course of a year, you got $80,000 or $96,000 a year coming in and you have to do nothing for that for the next five to ten years.

Michelle:         Infill lots though would be a quick source of cash for flipping.

Jack:    Yes! And, the closer you get to the deal that Alex described earlier, or the closer you get into the city, the infill lots and things that Michelle just mentioned, those sell very quickly for cash. But now, there's not that many disadvantages.

Joe:      Well, you stay away from those lots, the empty lots in the inner cities. Is that correct?

Jack:    No, we don’t stay away from them. Actually right now, we're running an initiative. We're kind of starting holds for an initiative to actually go after them. And, we have filled up a nice little list of builders that are looking for lots like those. But, that's a little bit again a different ball game because depending on where you are, you are getting closer to the characteristics of a house sale because just the competition for this land or for this infill lots is a little bit steeper. And, the moment you go outside of the city, in like in the path of growth or within an hour driving distance from the city or into a recreational area, an attractive recreational area perhaps an hour or two hours away from the major city where people like to go out for the weekends and have cabins and things like that, that's the moment where you start dealing with almost zero competition.

Joe:      Well, okay. But, I'm thinking of markets or areas in Saint Louis right now where, I mean, you can't even give away a house for $1,000, right?

Jack:    All right. Yeah. Yeah, those are areas that you need to stay away from. Those are war zones, as we call them. You want to stay away from those because I mean, I know in Chicago it's the same thing. You can buy infill lots for $50 bucks in a neighborhood that you would have to pay me to go into.

Joe:      Yes, okay.

Jack:    Right, sometimes.

Joe:      You can do… You can buy these lots and get to cash full inside of your IRA, right?

Jack:    Oh, absolutely! Land is a great tool to be doing inside the IRA because by its nature it's passive and there is nobody that runs around on it and breaks stuff and so on. And, there is no property management that has to be paid out of the IRA and so on. It's great for flipping and it's also great for holding on pieces of land in the path of growth because we have some pieces of land that we bought for $3,000 to $5,000 or $3,000 to $7,000. Right now, they are worth between, let's say $15 and $50,000. But, the city is moving in that direction. So, in the next ten years, it might be that these properties are probably or are hopefully… I expect them to be worth anywhere from $100,000 to $500,000 a piece and those are obviously great pieces to put into your IRA.

Yes, you have to pay the property taxes on an annual basis for them. That's a disadvantage if you hold them and there is no income coming in if you hold them. But, it’s a great buy-and-hold placed on the IRA for properties that are highly likely to be in the path of growth to be worth much more down the road.

Michelle:         Yeah.

Jack:    But, you can also hold the note in the IRA. So, you buy a property and you sell it with seller financing. Now, the IRA becomes the bank and that's absolutely allowed in a self-directed IRA.

Joe:      Now, that's funny. I'm looking on the MLS right now for areas on the outskirts of Saint Louis. And, there is a lot of lots for sale right now on the MLS. You're not going after lots already listed for sale, right?

Jack:    No, we do not go after MLS properties. We don't sift through the MLS. We get the list of properties with back taxes from the county offices.

Joe:      Yeah.

Jack:    And now, of course, it happens that these listed properties are also going to be in those county office records. So, every once in a while, it happens that we send somebody a letter who has his property listed with a realtor. Now, when they call us they are going to tell us that. And then, immediately, we ask for the realtor's information and then we submit our offer to the realtor, but it doesn’t change our offer. We don’t let ourselves be confused by the fact that they have their property listed for $50 grand. If we think we can only offer $6000 for it, we’ll make the offer for $6,000 and we have done properties like that.

Michelle:         Yeah.

Joe:      Fascinating! And, I really like the idea of the cash flow aspect of it. You can create great passive income, but that’s still not the Forever Cash that you talk about. Will you talk about…? What is Forever Cash? What does that mean?

Alex:    What is the Forever Cash? I’m sitting here waiting for it?

Jack:    Well, you have to go through Amazon and buy my book “Forever Cash.”

Alex:    Oh, okay.

Jack:    That’s the solution here. It's available on Amazon for only like $14 or so. Obviously, you can also go to ForeverCash.com and look at the details there. But, Forever Cash is really a terminology that we came up with in our household. We basically look at every activity that generates money and categorize it in three different buckets. Bucket one is if it's one-time cash. Basically, it's when you work for it once and you get paid for it once. So, it's basically a job or if somebody works on an hourly rate, they get their work in an hour and will get paid an hour. And, if they don’t work, they don’t get paid. So, that’s one-time cash.

Michelle:         Flipping also falls…

Jack:    Flipping is one-time cash. However, it's a much better quality one-time cash that flipping burgers for $8 an hour because you’d work a few hours…

Alex:    Great point.

Jack:    …And, you'll make $5000. But, it's still one-time cash. That means if you stop flips, the income stops. Temporary cash is the second one which is what we do with our land. We sell it to seller financing and now we get cash flow for the next 5, 7, 10, 12, 15 years or whatever the length of the loan is and then it stops. But, in that 10, 12, 15 years, we get a nice and steady temporary cash flow. And, “Forever Cash” therefore, logically, is the extension of it. It is when you work once and you get paid forever. And ultimately, that then comes from rental. I mean, if somebody puts a cell phone power on a piece of land, that would be “Forever Cash” because they strike with you a 25-year agreement or a billboard to a 25-year or 20-year agreement, and then they'll probably extend it afterwards. So then, that is truly “Forever Cash” or obviously a rental house.

Michelle:         Or commercial property.

Jack:    Or commercial property and multi-family and those kind of things. And, that’s ultimately the reason why we transitioned over to houses after doing lands for 10 years. Because, first of all, we realized that our technique of finding tax delinquent property owners works for houses just as well as for land. But, we are using this technique in two ways. Number one, we are doing flips on houses in order to generate cash, onetime cash.

Michelle:         Uh-huh.

Michelle:         But secondly, when we find the gem of a property in our backyard, we also hold on to it. We pay for it usually out of the profits of our flips. So, we're turning our one-time cash into “Forever Cash” every time we hold the property and we pay it off.

So, for example, just this last year, we bought a condo that we got $6500 that rents for $500 a month. That’s a pretty good deal, right? So basically, one year rental pays for the property.

Michelle:         Yeah.

Jack:    And, we got a tenant in there that paid two years in advance rent. So, we got $12000 when renting to them. Now, that means that we don’t get cash flow for the next two years, but still it's a pretty good deal. And then also, using that same technique, we found a car repair shop that we bought for $95,000 that pays $1600 in rent every single month, triple net, and it's a very cool deal. The guy is very happy and it's basically three walls and a roof and he is paying $1600 for that.

So, we use the money from the flips to then pay for a property that we decide not to flip, and then we decide to keep. And therefore, we're building up our portfolio of “Forever Cash” properties using the exact same technique that we also use to create one-time cash and the exact same technique that we are using to generate “Forever Cash.”

Joe:      So, it's important to be thinking about not just cash now or not just cash flow but cash later.

Jack:    Right.

Joe:      And, that’s the great thing about real estate. There's probably no other investment that I know of that gives that kind of consistent predictable income. People are always going to need housing. If you look at the population trends in the United States, I think they are expecting the population of the United States to double in the next 50 years. But, I'm maybe wrong on that. Don’t quote me.

Jack:    That’s awesome.

Michelle:         Yeah, the time horizon that real estate provides is just incredible.

Jack:    And, that’s why I’m buying in the United States and not in Germany because the German population is expected to be cut in half in the next 50 years. So…

Michelle:         They are not making any babies over there.

Joe:      I know. That’s what liberalism will do for you. This is not a political show.

Alex:    No.

Jack:    No.

Joe:      I’ve been to Germany several times and I think I can safely say that they generally leaned to the left politically. Am I right?

Jack:    Oh, yeah. Absolutely! Yeah, absolutely.

Joe:      We are not saying that there is anything wrong with that except maybe we are…

Jack:    And, everyone in the country and most people bought into it than they buy into it and that’s fine. As a collective, they are very quite happy, but that comes at a certain cost. But yes, it's not a political show. So, the last thing I wanted to say about… I mean, you said it's not a political show. I’ll go with you wherever you want to go. It's your show. But, what I wanted to say is, “Yes, it's not all about making money right now.” My thinking some time goes, “What if I get hit by a truck some day?” or “What if somebody, not I…?” I'm not the main breadwinner here. We’ve worked together. Michelle is certainly capable of running this thing same or better than I am. But, what if somebody is the sole breadwinner and something happens? All of a sudden, that income is gone and if they were really good at providing the family with one-time cash, they are going from a really nice luxury lifestyle to almost zero overnight because one-time cash will not allow you to retire.

Joe:      That’s very true.

Jack:    It's used to pay off debt. It's a great source to build up cash on the sidelines. It's a great source for a great lifestyle now, but it will not provide for the future. And, that’s when we started shifting our things over into “Temporary Cash” and “Forever Cash” which doesn’t mean we don’t do flips anymore. What that means is that now we have a portfolio of rental properties that if I get hit by the truck or we get hit by a truck, our daughter can live off for the rest of her life and is being taken care off through college and everything down into the future.

Joe:      Excellent! Excellent! So, I… Well, okay. I won’t go into that. I was going to go down the whole path of annuities and life insurance. But, I’ve liked this so much better. You know what I am saying?

Alex:    Oh, yeah. You get the cash now to live on.

Joe:      Right.

Jack:    Yeah! You get the cash now, and you get the appreciation, and you get the tax benefits, and you got the lower tax rate if you ever sell these properties. Plus, you can roll them over in a 1031 exchange and so on and so forth. So, it's full of benefits with a very little downside. Obviously, whatever downside that comes with rental property is you having to deal with tenants, but there are ways to pick really good tenants. And, we have to say that we have very little issues with our tenants.

Michelle:         Yeah.

Joe:      And, it's all about where you buy your properties at too, right?

Jack:    Right, where you buy them and how you select your tenants. We got some properties in pretty mixed, I won’t say shady neighborhoods, but borderline shady neighborhoods and we still don’t have many problems. We had problems at the beginning, but we learned over the past few years to really do a much better job in tenant selection.

Joe:      Right! Now, if you don't mind, I’d like to go back a little bit and maybe we might have to break this up into two episodes. I don’t know yet. But, I’d like to ask you a little bit more about… You’re doing some wholesaling of houses and we’ve talked about this before and I think I helped you a little bit with that. And…

Michelle:         You helped us a lot!

Joe:      Well, that’s cool. I’d like to talk about more about that. That’s kind of where my passion is right now and I’m seeing a lot of success with students that are doing this. What market did you choose to go in and start marketing in?

Jack:    Actually, it's very funny. We picked our own market…

Joe:      Okay.

Jack:    …Because of the reasons that I mentioned earlier. We don’t want to have to deal with jumping into the car when somebody calls when he seems to have a great deal. I don’t want to jump into the car and drive down there to meet with somebody and negotiate the property when I have plans to go to the playground with my daughter. I’m not even good at negotiating because again, in the land area, you don’t have to negotiate a whole lot.

Joe:      Yeah.

Jack:    So, I identified that I don’t even want to do these things in our local market ourselves. So, we looked for…

Michelle:         Three wholesale parkers.

Jack:    And, actually found three different wholesale parkers which we valued against each other. We each gave them a bunch of deals, a bunch of leads and so on. And, over time, we identified which one of those is the best, the most trustworthy, the one that is most professional and that follows at least the best way. I’m totally happy to basically split a deal or we're extremely happy even splitting the deal even in our own backyard with a virtual wholesaler or with a wholesale partner on the ground so that I can maintain the life the way I want it because we really are big about designing our business around how we want to live our life…

Joe:      Yeah.

Jack:    …Versus having our business decide how we are going to live our life.

Joe:      Yeah.

Jack:    So, we even chose our own market and we are about to expand. We were thinking about to expand. We have a couple of good friends, wholesalers and a couple of other markets that we want to go after. We just haven’t gotten around doing that yet.

Joe:      So, you're doing the marketing. And, are you prescreening the leads as well?

Jack:    Yes, we are. We are doing the marketing. When the form comes in, we set up the entire system. You talked to us about like longer numbers and things and systems. And, on it, we can track and use Podio…

Michelle:         We’ve just added RingCentral to it.

Jack:    …And different phone systems like Ring Central and so on. And then, when somebody calls, it goes through our virtual assistant who is a wonderful lady in the Philippines who speaks perfect English and works our hours.

Joe:      Yeah.

Jack:    And she works… She’s very…

Michelle:         And, Ivy is always happy.

Jack:    She is always happy. And, she costs us $600 a month on a one-time basis.

Alex:    I love VAs. Good English speaking VAs. They make your life so much easier.

Joe:      Yes.

Jack:    Absolutely! And, I think $600 is a high price to pay for a VA considering what other pay. But, we are happy to pay that because she is really good. She picks up the phone. She takes all the questions. And, if they call and leave a voicemail, she calls them back. She asks for other questions. She puts it in there. She runs the comps. She does all these…

Michelle:         She does a lot of the research, yeah.

Jack:    She does all the research in the county and fills it all in. And then, she sends us a notification. In that moment, I do look at it. It's either I plus our right-hand man, Alex. It's not Alex Joungblood here but another Alex in our office. He looks at it and then, either Alex or I, we make a decision on what do to do with it. If it's a land deal, we keep it in-house. We add them to the list to make offers and so on for us once a week. If it's a house deal and if it looks like it could potentially be a deal, it goes instantly to our wholesale parker locally who then is also set up in Podio. He then also gets a notification. And then, he jumps right on it and does all the things and locks the deal up.

Michelle:         Meets the seller.

Jack:    Meets the seller and so on. And, if for some reason, he can’t get the deal to work, we will take it back in and we’ll schedule up the next follow-up letter and so on to keep that lead warm and try to convince that lead to change its mind over the next couple of weeks or couple of months.

Joe:      Good. So, you are doing the follow-up as well.

Michelle:         Yes.

Jack:    Yes, we are.

Joe:      What kind of numbers are you doing? How much mail are you sending? Do you track that? How many calls are you getting back in? Things like that.

Jack:    All right. So, I don’t have my exact numbers here right now. And, it's kind of off and on sometimes. Sometimes, we kind of…

Michelle:         Go on shopping sprees.

Jack:    We go on shopping sprees and so on. But, I think the last month, we really consistently and nicely did this. We sent out how many letters?

Michelle:         We sent about 4,000?

Jack:    Yeah, we sent about 4000 letters in that month and that’s one set of letters. Now, that’s all three touches included, right?

Michelle:         Yes.

Jack:    We sent about 1500 letters and then we sent…

Michelle:         Yeah, we do three touches. We do a letter, a postcard and a letter.

Jack:    Yeah, a letter, postcard, and a letter.

Joe:      Okay.

Jack:    We do three touches and they are about 10 days apart. And, each of them has a different phone number on there that we do for tracking and so on. And, based on those, we ended up getting… I don’t know the number of phone calls, but I think we ended getting two house deals, a commercial deal and then a couple of two, three pieces of land that we ended up working with then. I think one or two of them fell apart, but the other ones actually went through and we've made very good money with it.

I think we've made… One of them was only $5000. We ended keeping the other one, but we had an instant $20,000 offer on it. Basically, the moment I had another contract, somebody else wanted to buy that from me for $20,000 more. And, the land deals, one of them we currently own. We haven’t sold it yet. And, with another one, I think we made like about $5000 on there too.

Joe:      Excellent. And that’s… Do you have to split those profits or is that your half?

Jack:    No, that’s our half.

Michelle:         That's our half, yeah.

Joe:      That’s fantastic! In a competitive market as Phoenix is, you're still able to do that.

Jack:    Sure, yeah.

Joe:      That’s really cool! That's really cool! Now, you've guys talked about Podio. Have you found that Podio has been helpful for you? Do you like the flexibility of it and how you can work it?

Jack:    Yeah, I like the flexibility. I mean, I wish it would be a little prettier but then…

Alex:    It doesn’t have to be pretty. Come on now.

Jack:    But, it's very, very flexible. It's really an empty canvass where you can do whatever you want with it.

Alex:    Oh, yeah.

Jack:    Which also means that if you don’t know what to do with it, you probably won’t find much use to it.

Michelle:         Yeah, it's maybe just like Word.

Jack:    You really want to hire an expert like Joe and this goes to you guys. You guys were so much of a help in setting this up because we just looked at it and it was like, “What in the world are we supposed to be doing here?”

Joe:      Yeah.

Jack:    So, we called you and you basically showed us what we need to do with it and helped us and it made so much more sense doing it that way.

Joe:      I am working with a new partner in my Podio part of the business. His name is Dan Schwartz and I am really excited about the future of this and what's going on. I mean, we are doing some things now where you can actually send text messages to sellers from inside of Podio and it keeps track of the conversation in the comments section. So, you can actually send the seller a text message after you leave them a voicemail, “Hey, I got your call. Do you have a house that you need to sell?”

And, any response that that seller gives back to you is also kept track off in Podio right there in the record. And, we are also doing some things right now. We’re real close in probably within a month or a two where we are working with a third-party company that actually prints and mails letters and postcards for you. And so, if you click a button in Podio, it will actually send the letter or the postcard to wherever you want to send or to this company and it will print it and mail it for you…

Alex:    Oh, nice.

Joe:      …For less. I mean, for a ridiculously cheap price depending on how many credits you buy upfront. And, it's pretty amazing. The technology is already there. It's just getting the communication and the bridge between the two providers. That’s something we are working on. But, the stuff you can do is crazy. Right now, you’ve got to set up where you put in an address and Podio will automatically give you the Zillow link to that property. We got some other things that we are working on.

Workflows are really big right now. We're setting it up where when a property gets under contract, you click the “Under Contract” button and it triggers a bunch of events, workflows and tasks so that nothing falls through the cracks. And, that’s kind of what this is all about. It's making sure that when you are getting all these leads coming in, that every single lead is being followed up with and every single lead, as humanly possible, is getting an offer. I think that’s huge and Podio certainly helps to do that.

But, awesome. I wanted to ask you guys something. And, I also kind of wanted to make an announcement to our podcast list. I'm getting ready to shoot out an e-mail to my e-mail list and also to some different masterminds that I belong to and some Facebook groups that I belong to. I am looking for an operations manager. From an executive level, I am looking for somebody that can help me on the coaching side of my business. And, I wanted to ask you guys a little bit about this. You don’t have to share too many details about whatever you feel comfortable with. But, I love the coaching business. I think all of us here we make very good money doing deals and we also make good money teaching and coaching how to do deals. And, I really find a lot of fulfillment and joy in helping other people grow their business and do deals and stuff like that.

But, I’m going to need help. I need help actually implementing all of these ideas and funnels and marketing systems that I want to start implementing and putting in place. And, Jack and Michelle, we’ve been talking a little bit offline about this. But, what would you say? I mean, I think there is a lot of people out there listening to this podcast who are kind of in the same boat. Their business is going well. It's growing. And, they need some help with just kind of implementing all of this cool stuff that they got going on. And, you guys have been really successful in your business because you are a great team. What advice do you have or could you give to folks like me who are looking for that kind of operations manager? It's not somebody who is like a project manager but somebody higher up or somebody who’s going to actually take a portion of your business and run with it. Does that make sense?

Jack:    Sure, absolutely. It makes sense. Well, what I would say to that is yes, absolutely. As a matter of fact, in a lot of businesses, that’s a role that’s crucial. There are the exact skills that have taken the business from zero to whatever the level is. Let’s say in certain businesses, it's a level of $0 to $100,000. In other businesses, it’s $0 to $1 million or $0 to $3 million. These exact skills that's taking the business from $0 to whatever that limit that one person can still basically kind of do or oversee yourself, the creator of the businesses, those skill set is exactly the opposite skill set of what it takes to take the business from that level to times ten or to like whatever that is–to $1 million, $10 million or something like that.

A lot of business owners find themselves at the point where they basically started the business because they love… You've read the book “The E-Myth”? They started as a technician and that’s not a bad word. That’s basically a person that does it. They like setting up systems, likes talking and likes doing those things and producing content. And then, all of a sudden, they find themselves doing 15 different things and that’s when stuff starts falling to the cracks.

And, in that case, what that moment need is somebody that is different than them. He's somebody that is actually good at what they’re not good at to take care of these pieces because those things that are falling through the cracks is not necessarily the pieces that person doing most, but it’s the pieces that the person doesn’t love doing. And so, the business owner gets freed to do what he can do best continuing on and take the business to the next level.

At that same point, what also comes in is the delegation. But, it's not just delegation in terms of where you’re still in charge of it and it's just somebody else does it. But, it's that you have people come in that you empower to actually take their own decisions within obviously a certain spectrum of responsibility and so on. So yes, there’s a crucial spot for that. In order to actually find the right person for that though, what you want to do is you want to kind of identify clearly which areas of your business you want to continue being in charge of and in which areas of your business do you want somebody else to run.

And then, you want to think about not hiring somebody that is just like you. Because if you have somebody that’s just like you, then you have two people that love doing what you love doing and you still don’t have anyone that wants to do the other area. But instead, you want to then look at the areas of your business that you do not want to do yourself anymore. What kind of personality characteristics does a person need to have in order to enjoy that? And then, look for somebody who’s good at that stuff and who loves that stuff. And, there are some tests. For example, I know we talked about our plan for that. You just have that test called the Kolbe Test.

Joe:      Yeah.

Jack:    That’s a test that basically shows you how somebody takes action. What is the first thing that they take action? This Kolbe Test costs about $50 bucks to do. But then, another thing I like asking people in interviews is what they like to do as a hobby. What do they like to do after hours? And, what I’m ideally looking for is somebody who does the exact same thing after hours as to what I want them to do during office hours. Because that means that what they’re doing after hours is they’re going to be doing what they love.

So, if we can have a job where they get to do exactly what they love, they’re going to excel at it and they’re going to be really good at it. So, for example, I have one person in our office. His name is Alex too. When he goes home, he works on websites. He creates marketing campaigns. He hacks websites. And, he basically works on technology and he writes new software.

Joe:      Wow!

Jack:    Well, guess what he’s doing in our office? He wrote a CRM software for us. He works on our websites. He hacks all websites. He puts in things in there. Then, he helps us with marketing. So, the guy does exactly what he would love to do after hours and also with me during the time. No wonder, he’s with us over eight years and he loves it. And, he a rock star in performance.

So basically, to think about it, that’s a couple of points. Because what a lot of people do wrong is that they hire people that are like them. And, when you hire somebody who’s like you, then you hire somebody who is good at what you’re good at. But, you're already good at what you’re good at. You don’t need a second one of you. In a sense, you need somebody who's the opposite of you so that they can be good at what you’re not good at.

Joe:      That’s really good.

Alex:    Wow!

Joe:      And, I've not looked at it that way.

Jack:    So, I hope that helps.

Alex:    That was a good advice right there.

Jack:    And actually, Michelle had to actually run out because our daughter got of school three minutes ago. And, Michelle left seven minutes ago and it takes her 15 minutes to go to school. So, she practically run out.

Alex:    You must have gone long, Joe.

Joe:      I know we are. I know we’re still in the time. We have a lot of time for this, I think.

Jack:    Yeah. Yeah, you're fine. We had just forgotten it.

Joe:      I hope it wasn’t our fault.

Jack:    No. No.

Joe:      We apologize. That’s really good. Alex, why did you think that was so good? I heard you say…

Alex:    Well, he just had a ton of information there with finding the right person using the Kolbe Test and finding person that loves to work outside of their environment as well as inside their environment. I mean, that’s what you want.

Joe:      So, if you're looking for an executive level type of person that I’m looking for, Jack, that just executes and gets things done… I’ll be just transparent here. One of my problems is I’ll start something and it does really well, and then I’m on to something else. And, I‘m looking at this trail of successful projects that aren’t doing anything anymore. And, if I would have just stuck with some of them and kept on advertising and marketing or doing that stuff, then I’ll be doing a lot better right now. I’ll be making a lot more money. So, I think I’m looking for somebody who implements this kind of stuff, which is one of the strength indicators in the Kolbe.

Jack:    Right.

Joe:      So, if I’m looking for somebody who is not going to be a follower and is not going to wait around for me to tell them what to do next but is going to take my ideas. And, if I give them, “These are my goals. This is my expected result. Take this campaign and copy it,” where do they need to score well? What are some of the strengths they need to be at in their business? Does that make sense?

Jack:    Yeah, absolutely. If you want to talk about the Kolbe part, again Kolbe is Kolbe.com. They have an assessment called the “Kolbe A Test”. It costs about $49. And, after you're done with it, if you read that entire thing afterwards, they give you like a 20-page analysis of yourself, an inner self analysis of yourself, of what it means and so on. And, it’s categorized into four categories. One of them is “Fact Finder.” The second one is “Follow Thru.” The next one is “Quick Start” and “Implementor”. And, you can score between one and ten. One score is not negative. It just means different things.

So, for example a one score in back finding means you only need an overview about the fact. You don’t need all the facts. If somebody comes to you with all the facts, you're bored to death. Well, Kolbe is one to three in that area. While, for four to six is you need the essential facts, but you still don’t need all the details. And, a Kolbe of seven, eight, nine or ten is you need as many specifics as possible. One is not better than the other. But, it helps you understand how people act and how people behaves. Even in your own coaching program, why is it that somebody perhaps doesn’t take action when you want them to take action? It's because they’re probably a very strong “Fact Finder.” They first need to have all the facts before take action and so on.

So, in this case, on the implementation side, for example, you probably need somebody that’s going to be at least a five or six in implementation but also somebody that probably has a decent number i “Follow Thru” because “Follow Thru” means like how organized is a person. How much structure can they work with? How do they work with systems and so on? So, if you have somebody that implements well and works with his hands well and so on, instead of just imagining solution, they work actually on solutions. And basically, at the same time, somebody in the “Implementor” with a score of seven, eight, nine, or ten constructs tangible solutions themselves. But, if they have a Kolbe score of four, five and six, they keep things the way they should.

So therefore, if you have somebody with a six or seven on the “Implementor” and at the same time, with a decent four, five, six or so on the organizational side, then you have someday who’s fairly organized and who can take or bring a project to the close because they want to see that thing to the close. They want to see it to the end. And, that's somebody who would probably fit your needs very well. Of course, along with the fact that they perhaps have their computer skills and all the other things and that they’re generally interested in the subject matter that you do because those are obviously prerequisites.

Joe:      There’s somebody that I’m talking to right now about the position. And, I’ve worked with this person before. And, she was a director in a large health care company and had a lot of employees under her or reporting to her. She just got tired of the corporate BS and quit her job and is now actually a full-time realtor. And, hold on one second, my computer is about to restart.

Alex:    Wow! Your computer…

Joe:      I'm download and installing an update. I just got this message that it’s going to restart in 58 seconds. I stopped it. So…

Alex:    Welcome back.

Joe:      Yeah. Okay. But, she is not technologically bent that way, right? I'm going to guess because I know her and I’ve worked her before. She’s a very, very good implementer. She just gets things done and she manages people well. She can manage a team. And, maybe I’m getting outside of the scope of this podcast, but maybe it’s helping somebody. So, maybe I should just shut up. I’m just wondering like, “Okay, that kind of a person, maybe they’re not technologically as smart as I am, but they’re probably really good at finding other people who are, and then building a team and hiring the people to design the websites or do the marketing. Does that make sense?

Jack:    Sure, absolutely. It makes sense. I don’t know what you think about that, Joe. But, one of the things is that when you hire an operations manager, it doesn’t mean that you turn in your computer and you go sail around the world and not be seen any more for the next five years.

Joe:      Right!

Jack:    When you’re hiring an operations manager, it just means that that person is in charge of the day-to-day business. Operations in itself is a job that deals with efficiency. So, that person is in charge of getting certain things done with the least amount of effort.

Basically, we’re using your resources well to get stuff done and to see things through and so on so that you can be off to the next thing. But, that doesn’t mean that you're outside or that you’re gone. Instead, you still love systems. You still love spreadsheets. You still love looking at these kinds of things. So, you can still be in charge of making sure that Podio and these other systems that you use are working well, and then you just train her how to use it. And, if she’s trainable on how to use that and has all the other pieces, she doesn’t have to come up with a new technology solution.

You still can come up with a new technology solution for virtual wholesaling or even for your coaching business or so.

Joe:      Right!

Jack:    And, she just needs to be able to operate in that world, understand the terminology and get the right people to do the right things. But, she does need to understand something. She needs to understand that part that she doesn’t have to be able to fix a website. She doesn’t have to be able to set up Podio or tweak Podio. She needs to be able to use those and understand how they’re being used and why they’re being used that way.

Joe:      That’s good. That’s good. Well, I apologize if I just lost half our audience because we're talking about some personal stuff. But, I also had an ulterior motive for doing that because if anybody out there is listening and they know kind of who I am and what I do, if you’re interested in applying for this kind of a position, go to the RealEstateInvestingMastery.com website and just go to the “Contact Us” page and put something in there. And, somebody from my team will get in touch with you and schedule something. But, cool! I’ll also be sending out an e-mail real soon about that to everybody.

I’m excited about this because I see this as something that can break me through this ceiling that I’m in what I want to do more. I want to grow and make even more money.

Alex:    There's nothing wrong with asking our listeners to help you out. Nothing wrong with that.

Jack:    And, by the way, that limit where you are right now, you used the right word. We use that and we call that internally as “Ceiling of Complexity.” And, every business will hit us. That’s not actually a term from us. It’s a term from Dan Sullivan from Strategic Coach. Dan Sullivan calls it the “Ceiling of Complexity” which every business hits every so often.

Joe:      Yeah.

Jack:    Because the systems that you have set up right now, they’re set up for the business in a certain growth, in a certain size. The moment you expand over or above that size, your system starts failing because they’re not set up for the volume of deals you do, for the volume of leads you get in and for the volume of whatever it is.

And, as they fall apart, it will always be your position. It will be always be your role as the CEO, as the founder of the company to come back in. And then, even if you have an operations manager, the work with the operations manager is to build a new and higher level of systems that you can grow again. But then, once these systems are maxed out, you hit the new ceiling of complexity and so on. If you ask, isn’t that something that a lot business owners face? I believe so. And, a lot of business owners think that once they've designed the systems, all worries should go away. But, that’s not the case.

It is something that is normal to every business that as you grow, you hit periodically new ceilings of complexities, which means that you have to rethink the way you do, put in different structures, put in different systems and put in different procedures that allow you to take that next level of growth. But, that is only a temporary fix. Even IBM, even Apple, even those companies, they hit ceilings of complexity that they have to break through and have to change things so that they can keep growing in an organic way.

So, it’s part of being an entrepreneur to expect those. And, when they come, it’s not like a day where it's like, “Oh, my God! Everything falls apart. I hate this.” No, it's a day where it's like, “Oh, it looks like we hit our next ceiling of complexity. Let’s figure out how we can change things around to increase the ceiling so we can continue to grow.” It’s something to be expected.

Joe:      That’s really…

Alex:    Good answer.

Joe:      That’s really good. I’m writing notes.

Joe:      So, man, I wish we could talk some more, but we’re probably going to break this up into two episodes. Maybe, I don’t know. I’d like to just keep it in one. We’ll see how this goes. But, Jack you’ve been really, really gracious with your time and please give a hug to Michelle for us, would you?

Jack:    I will. I will. She just have to step out to pick up our daughter from school. But, I'm sure she sends a big hello and a great time too.

Joe:      The cool thing about having Jack on the show like this is he’s got a ton of wisdom. He’s been in the business for a long time. And, you’re going to listen to and get to kind of pick his brain a little bit on his own podcast and hear more of the wisdom that he has just accumulated over the years with his wife. And, I can tell you, I am so impressed that you have your wife with you on the podcast. Excuse me, that’s very difficult to do! I mean, to anybody who can work with their spouse, I’m really impressed with.

Alex:    That’s a whole another dynamic.

Joe:      Sure.

Alex:    Because if you're not careful, you could be working all the time.

Joe:      Yeah.

Jack:    It is. It is. And, there are some aspects of that today. Even there, we have to put in some rules which we sometimes break like no business talk after certain hours. And, our wonderful seven-year-old daughter reminds us of that too. When we’re in the car driving somewhere and we start talking business from the back seat comes, “Hey, guys. No business talk.” And right there, we remember. We have a good laugh and we drop the business talk.

Joe:      That’s good. All right. So, your podcast again is called “Forever Cash Real Estate Investing Podcast.” Jack, do you have a website that you send people to from the podcast?

Jack:    We do. We do also give away a free mini course on tax delinquent real estate investing which we do on www.ForeverCashFreedom.com. And obviously, there’s the Forever Cash website that has content and things like that. And then, under ForeverCash.com/Podcast, there’s information there. But, for the people that are listening right here, the easiest way is to just go to iTunes where you’re listening to this podcast and just search for “Forever Cash” or “Forever Cash Real Estate Investing.” You’ll find our podcast. So, just subscribe to it. I really appreciate you mentioning it here, Joe and Alex. And, I’m looking forward to welcoming you people listening to this one over to my podcast too.

Joe:      Well, thanks!

Alex:    Thanks, Jack! Awesome to have you.

Jack:    Thank you very much.

Joe:      Your podcast has our seal of approval officially.

Jack:    Wonderful!

Joe:      Like that means anything. But, you do! Again guys, I’ve known Jack for a long time and I heartily recommend his podcast. Everybody needs to go listen to it. It’s really good. So, thanks again, Jack. We appreciate it.

Jack:    Thank you for having me.

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