James Hodges & Alan Biel Share How They Built a $1.1M Wholesale Company in Their First Year

Steve Trang: Hey, everybody. Thank you for joining us for today's episode of Real Estate to Disruptors. Today, we have James Hodges and Alan Beal with Awaken Real Estate, and they've flown in from Midland, Texas to show how they went, or how they made what was it? A million? In their first year 1.1.

1.1 in their first year wholesaling. If this is your first time tuning in, I'm Steve Trang, broker and owner of Stunning Homes Realty, founder of the OfferFast Homes app, the only MLS for off market wholesale properties. And I'm on a mission to create 100 millionaires. If that's something that you wanna join, please disconnect on Instagram. If you're excited for today's show, please give me a wave, give me a thumbs up.

And as a friendly reminder, I do not charge a dime for this show. I don't make any money doing this. So here's all I ask. This is what it costs for you to listen to the show. If you get value today, please tell a friend.

You can share this episode right now, tag a friend below, or tell your best takeaway from the show later on. That way we can all grow together. And don't forget, this is a live show, so please post your questions for James and Allen to answer. You ready?

James Hodges: Ready. Let's rock it. You are

Speaker 2: a machine on that, Steve.

Steve: Thank you. Got a few reps. So, first question is what got you guys into real estate?

James: We'll try to make it as short as possible.

Steve: We got a few reps.

James: But, so I'll take it back to my entrepreneurial journey because that, has had a massive influence on the real estate journey as well. So my entrepreneurial journey started when I was actually living on the mission field. My wife and I got married in 2013. And then, about eight months after we got married, we went to, the mission field. We just felt a calling to go help people that were in need in other countries.

And we just left. We left with backpacks on our back. And we went to some of the poorest countries in the world. Wow. In 2015, we were in eight different countries.

So we ended up in South Africa on an orphanage. And we were serving there, teaching kids there. And, I was doing that work, but really felt unfulfilled. And I knew that there was something more that I was supposed to do in my life.

Steve: Mhmm.

James: So I saw this girl who was working with us on that base. And she had a web design company. And she was making money, serving people, doing what she loved doing. And she was in Africa, but she was from New Zealand.

Speaker 3: And so

James: I was like, you know what? I've got value that I can add. I've got other values that I can bring to the world. And at that point in time, I, had just graduated. I ran track and cross country at Texas A and M University.

I was a all SEC athlete there. So Oh, wow. I was like, if there's anything that I am an expert at, it's health and fitness. Mhmm. So I started my journey of becoming a, personal trainer and health coach.

So we moved back to The States. We had our first daughter in South Africa. So I have a true African American

Speaker: daughter who's white

Steve: As you can see. Yeah.

James: I have a white, African American daughter. Yeah. And, so we moved back to The States, but we were completely broke. We had zero money. Mhmm.

No car. No money at all. Had to start from ground zero. And I started, building my personal training business up. And, eventually, that led me to, starting an online personal training business, an online fitness company.

And it was just, it was just a struggle, struggling with low margins. You know, in 2017, I made $17,000 total for the entire year. Tax return. Yeah. I've got the tax return for free.

That's a tough show anybody.

Steve: Tough, tough industry.

James: I think that's

Steve: I mean, wholesaling is competitive. Wholesaling is tough. But health and fitness, I mean, everybody is

Speaker: Yeah.

James: Just go to Instagram and scroll through the fitness section Yeah. And see how competitive it is. So I was struggling to make, make money there. And there was one point where my wife went to the grocery store, and we had our first daughter at this point. She was almost two years old.

And she, called me and she said, James, I can't buy buy groceries. We we don't don't have enough money in our account. We're actually overdrawn, and I think we need to go, apply for food stamps. So at that point That's

Steve: an eye eye opener.

James: Yeah. Super eye opener. At that point, I I just read the the book Rich Dad Poor Dad. And, he was talking about how he was selling the Xerox machines. He was working as a salesman while he was building his his real estate business.

So, reading that book was what initially got me interested in real estate. And, so right after I read that book, one of my buddies reached out to me and said, hey. I'm starting a trucking company. Do you wanna come help me start this? I was like, dude, I have no desire to to do trucking, but what's the pay?

And he was like, it's gonna be $6,000 a month. I was like, alright. Done. I'm in. A little bit better.

So, and ended up moving across the state of Texas to help my buddy start this this company. And right before I moved, I saw a webinar for wholesaling. And I had been wanting to get into real estate, and I was like, this strategy requires marketing and sales business, which was all the online fitness business was as well. Right. So, I was like, I'm going to do that, and this trucking thing is going to be a means to an end in order to start my real estate business.

So when we moved out across the state of Texas, the trucking business actually never got going. Oh. Never got going. Did you

Steve: still get paid?

James: We still got paid.

Steve: Well, that's good.

James: And But less

Speaker: than less than expected.

James: Yeah. Much less than expected. So I had to get something else going. And I talked to my wife. I was like, we're either gonna go all in on this fitness thing or I'm gonna start this wholesaling thing and take the risk and go for it.

Steve: Sounds like you made the right choice.

James: And, so we started I started wholesaling. I decided to start decided to start wholesaling. I got my brother to to do it with me, talked him into it. And we started putting out bandit signs and started doing driving for dollars. And within our first three weeks, we had three contracts.

Weeks. Three properties. Three three contracts.

Steve: Insert That's unusual. Insert the disclaimer here, Steve.

Speaker: Yeah. Which is results are not typical what's the

Steve: Oh, there you go.

James: Yeah. These are not your typical results,

Steve: but it Very abnormal results.

James: That's what happened. Within our first three weeks, we had three properties under contract. We were just going pedal to the metal. And I went to my first RIA event and, met Alan.

Steve: Mhmm.

James: And, I'll let him tell his journey in real estate, but that's where we initially met.

Steve: And which webinar was that?

James: It was a RIA event. Event. Oh, which webinar? Yeah. It was, a clever investor.

Steve: Clever investor. Gotcha.

Speaker: Alright. Yeah.

Steve: So you're how did you get into it?

Speaker: I don't I don't know how to follow that story. But, I am I go back a little further with real estate. My wife and I, almost accidentally got involved with real estate. My wife jokes about the fact that, I didn't own we didn't own a hammer and certainly didn't have any nails or a screwdriver when we got married. But, we got married in 2003, bought our first house in 2005, and kinda got lucky, did an accidental flip.

Had worked on a little bit. The market had gone up a little bit, and we were getting people wanting to to buy our house, and it wasn't for sale. And we've and so, finally, one day, we just asked somebody, well, how much how much could we get for it? And it was a friend of ours

Steve: that was a realtor, and

Speaker: he said, I think I could get you this much. And, I mean, I remember it. It was a that I'll never forget. We were at a Valentine's Day party, and I just smiled. And I looked at him and said, how much do you think we could get?

And he said what he said, and I thought there's no way. And, sure enough, we said, you know what? We'll give it to you as a pocket listing. We didn't know what that meant at the time. We we said whatever we said.

Steve: Yeah. Use use the lingo. We said something,

Speaker: and we

Speaker: just said, Britt, show us the money, And, yeah, second second person that looked at it, bought it. And so in in about a year in about a year, we kinda accidentally made money. And, of course, I say that. You know, we had bought a house in a good location. It was it was we got it for a good price, and and we had done some good, you know, minor renovations on it to to make it how we wanted it.

So that's how it started. And then, we didn't really know what to do. I I read Rich Dad, Poor Dad in the 1999. I was a freshman in college. Got real really fortunate to to meet some they were actually multilevel marketing people, you know, network marketing people, and they were, you know, giving me books and and audios to listen to and all this stuff.

And that was one of the books, that I read. And so I've been a fan of of Kiyosaki's, work, at least his early his early stuff

Steve: Right.

Speaker: For a long time. And so I had I had that sort of training, financial training. And so we knew enough to know. We thought, okay. We just made a decent chunk of money.

I think it was about $30. It's sitting in the bank. We moved back into an apartment. You know, my wife, who's a saint, said, you know, I'd we just made some money. I don't wanna blow it.

We don't wanna go buy another house in a high market. The market was very, very high. So, anyway, so we set on the money and and waited for about a year. And in, 2007, we actually purchased two properties, one for us to live in, and one became it was gonna be a flip. Mhmm.

And, and I'll never I'll never forget it, Steve. We we got this great deal in this off market house, like I said, that was gonna be a flip. Found it at a garage sale. Just got to talking to the lady at the garage sale, and she said, well, I'm gonna sell the house too if you want that, jokingly. And I said, show it to me.

And, so that's that's, that's how a lot of this started.

Steve: We Right.

Speaker: Stumbled on that, and I I said, I'm liter I stuck a for sale sign in the yard the next day. Did nothing to it. Just stuck a for sale sign in the in the yard of that house. And every people would come and look at it, and I would send them off to a lender that was a great lender. Everybody that saw it wanted it, and then I would never hear from them again.

And this went on, you know, week after week, month after month. And, I remember I went to work one day. I worked as a tennis professional. It was actually that was my day job. I'm a a tennis pro.

Wow. Wow. And,

Steve: Got track star and a tennis pro.

Speaker: Yeah. There you go. And my buddy at work, Scott, he said he said, Alan, do you not watch the news? Do you not know what's going on? And I said, said, you know I don't watch the news.

I don't read the newspaper. I don't Mhmm. Put my I don't put that stuff in my head. You know, I don't want I don't want that stuff bouncing around my head. And he flipped on the TV in the pro shop at work, and it was just every channel you

Speaker: went to. It was financial collapse. It was and I I mean, I honestly,

Speaker: I just had my head in the I mean, I honestly, I just had my head in the sand. I guess, I had no idea. Mhmm. So we basically got stuck with the house. And we I so badly did not wanna be a landlord and rent it out that we just ate, two mortgage payments.

And, again, my my wife, who's a saint, was not so happy with me after after that went on long enough and started getting credit card debt and other things trying to trying to keep it going. And we we eventually said, you know what? Let's lease it out. Started making some cash flow. The cash flow this is despite all the years of Robert Kiyosaki training about about cash flow and and building you know, acquiring assets and building equity, and we just, you know, didn't wanna be a landlord.

But it worked, And we we said, well, that wasn't so bad. After I went through all the stuff that you go through with tenants when you've never had tenants before

Steve: Yeah. Your first time.

Speaker: Learned all those lessons the hard way. And and, a few years later, we said, well, that wasn't so bad. Bad. Let's do it again. We did it again.

And we basically started accumulating kinda higher end rental properties, in our own town. Ended up keeping it because the cash

Steve: So you have it?

Speaker: Cash flow was good. So I finally sold it in that first one, I finally sold it. I re rehabbed it and sold it in 2017. So I had it for I had it for ten years. For nine years, we re leased it out and made all kinds of money.

Steve: So reluctant landlord, but it it was okay.

Speaker: It all worked out. It it eventually worked out. We lost a lot of money for a couple years. And it was painful, as you, you know, as you can imagine. Anybody that's been in real estate.

Steve: But it was part of the growth. So Exactly. When did you start wholesaling?

Speaker: So I I started flipping about three years ago Mhmm. Full time. And then, was doing it the wrong way, was doing everything myself. And I I got to the 2017, and I I said, I need to change. You know, something's gotta change.

And so I joined a a mastermind group. I started listening to all kinds of podcasts from all kinds of different people and, just started surrounding myself with people that were working smarter than I was. And so, soon as I did that, I remember the first time I even heard the word wholesaling. I had no idea, Steve. Been in real estate for, you know, a decent amount of time.

Had never heard of it. And so I went to trusty Google and, Googled it. Mhmm. And as soon as I read it, I thought I know exactly if this is what I remember thinking, and I told my wife, if this is what I think it is, if these people are doing what I think they're doing, this is brilliant. It's brilliant.

It's so much better than what I'm doing. And, and I was making money flipping, you know, do doing pretty well. But, so that's that's when it started. So, we met in at the February at that RIA. I mean, I joined that mastermind group trying to learn as much as I could learn and just jumped in and started

Steve: started So you made your transition, and then you were like, there's gotta be a better way than you guys hooked up.

Speaker: And then

James: Then we met.

Speaker: And Steve That's the only

James: Ria. Like, right when he decided he was going to start wholesaling, I went to that first RIA. It was his his first RIA meeting to ever go to as well. And we connected there. Yeah.

And we knew we were kinda on the same wavelength. So we met up for coffee. It was about a week later. And we were talking about our vision with real estate. And we're in a you know, at that point, we were like, you know what?

We can we've got a really similar vision. We can either team up or compete against each other. And so since we had an, similar vision and we were both at the beginning of our wholesaling journey, we decided to team up. And we we had a good connection as well. We we had an idea that we would work really well together.

So

Speaker: Okay.

Steve: So then what were some of the early struggles when you guys first started?

James: So when we first started, he was still flipping his last house, and I was doing most of the the wholesaling work. So

Speaker: when

James: we first started, I think some of the early struggles were wearing too many hats. We're sitting in so many seats and taking on so much responsibility. Because when we decided to partner up, we had a big vision and we knew we wanted to hit the ground running. We knew that we wanted to not dabble in it. We were all in.

And we were going to create a business and create a company. So that was where our sites were set. And so we started marketing like that. And so I was taking the phone calls. I was going on acquisitions appointments.

I was running the comps. I was doing the the title, title work as well. Yeah. So, we were sitting in so many different seats when we first got started. So Bandit Signs

Speaker: Mhmm.

Steve: Was what you guys were doing at that time.

James: We we we started doing other marketing methods as well. That's what I started with initially.

Speaker: Mhmm.

James: That was what got our first deal, my first deal ever, and then driving for dollars as well. And I was doing PPC as well on my own. I just taught myself how to do PPC Awesome. And, got deals from that. So we I come from a marketing background.

Because Right.

Speaker: You were

Steve: already doing sales and marketing for health and fitness. So this is just an easy transition for you.

James: Right. So, with a marketing background, I want to do as many marketing avenues as I can efficiently. And so that was the the mindset and the perspective that I had. So I was like, I don't wanna just go all in on on one thing and just do that. I wanna be able to do, multiple marketing channels efficiently.

Steve: Yeah. Which we don't normally advise. We normally say, like, go deep on one, do well on that one, and go to the second one. But you just went deep on all of them.

Speaker: He James is an action taker. So and and when we met, that's why we partnered up. I thought, you know, we met at that rear. We talked for a few minutes afterwards, and I thought, he's an action taker. And we we know that.

Right? Like, how many people do we meet? Oh, I've I've always wanted to do real estate. Uh-huh. Yeah.

I'm I'm thinking about doing real estate. You know what? Someday, I'm gonna do real estate. There's they're everywhere. Yeah.

Absolutely. It seems like it's almost everybody that you talk to.

Steve: Mhmm.

Speaker: I met I met him and and by circumstance, you know, by fate. And, we he had already been taking action. And and a month before that, he didn't know what wholesaling was. Right. So he's an action taker.

So he he did a few different methods of marketing. We immediately started doing direct mail, figured out how to play that game, and then it went from there.

James: So And I I don't just just to clarify, I don't recommend that people start off with a a bunch of different marketing channels. No. I actually recommend the opposite. Yeah. And, you know, whenever we teach people how to do it, I actually recommend starting with one to two and going deep into that as well.

Yeah. I I don't recommend how I started. Right. It just it worked, though. I I really Throw mud

Speaker: on the wall. Just throw mud

James: on the wall. Able to get traction.

Steve: It sounds good. It worked.

Speaker: No. That is not what

Steve: we recommend to to people. So how is your guys' operation different than some

James: of your peers in your market? So I think that, like I mentioned before, I have a marketing background.

Speaker: Mhmm.

James: I feel like I really understand marketing like a marketer and not somebody who just bought a wholesaling course. And the the course said, hey, send some postcards. Hey, put out some bandit signs. I understand the principles of marketing. And I think that a lot of people in the wholesaling industry don't.

They don't truly understand the principles of marketing. They don't understand, marketing stamina. And I feel like we really grasp that. And I've been been able to bring that to the table in our company. And I think it's made a huge difference.

Steve: Marketing Sam, and I've only heard that from Dean Graziosi. Is that where you get that from? Yeah. Yeah. He he really likes that term.

James: Yeah. But it's true.

Steve: That's absolutely true.

James: It's how it's how real marketers think. Yeah. And a lot of people, they get started in real estate and wholesaling, and they they try a couple of different marketing avenues. And they may try to go they may try to spread their self too thin, and they're like, oh, this doesn't work.

Steve: Right. Or they can only afford, like, a month and a half. Right.

James: Right. Exactly. And so they don't have the stamina to stick in there and do the activities that are going to be, income producing activities. They don't have the stamina to stay in there until they reap the rewards from their activities.

Steve: And sales and marketing is actually something I'm very passionate about as well. So like you, I did my own pay per click. So one of the guys I like studying a lot was Dan Kennedy.

James: Dan Kennedy? Alright. The god like, the godfather. Make them laugh and take their money. Isn't that him?

Steve: I don't know if that's him, but he's got some really good he does have some really good quotes though. He got

Speaker: some one liners. Yeah.

Speaker: He

Steve: got some really amazing quotes. So, I'm just curious. Who are you learning from?

Speaker: So, I learned from a lot of people. I actually learned from,

Steve: Dan Kennedy as well. You know, Russell

James: Brunson, you know, Russell Brunson, all all kinds of people. Yeah. Frank Kern, you know, there's there's genius. Yeah. Yeah.

Speaker: So and we Steve, we don't what I've gathered from our short time in the in the in the world of real estate is I see and then James references we see a lot of people who are real estate people who wanna learn how to wholesale. Mhmm. Or they're real estate people and they wanna learn how to flip. I I what I've learned is we're we're sales and marketing guys

Speaker: who've learned

Speaker: how to wholesale.

Steve: Well and I think that's true. Well, like, every industry, and everyone misses it. Right? We're sales and marketing people It

Speaker: should be that way in every industry.

Steve: Happens to be in wholesale.

James: Yeah. This is just the vehicle. Yep. Absolutely. The vehicle.

Steve: You've learned the times. People don't

Speaker: Yeah. They don't get it.

James: Yeah. You learn the inner workings of this industry, and you apply your skill sets and your knowledge to this industry. And that's where you see guys who are serial entrepreneurs that are able to take marketing and sales principles, and they're able to duplicate that across multiple industries and multiple businesses. So Right. You know, if you take skill sets and knowledge knowledge base like that and apply it to this industry and you really learn the inner workings, then you can see massive growth.

Steve: Absolutely. Max Menas, my business partner, he wants to know, what marketing channel is working best for you guys? Max?

Speaker: Are we gonna say hi to Max while

Steve: we're here? Did you guys reach out to him?

Speaker: Hey, Max.

James: I don't think we did.

Speaker: Yeah. Oh, okay. Sorry, Max. We were supposed to reach out to you. So What marketing channels are working the best?

James: We are getting a lot of good results from direct mail. That's something that has always worked well for us. PPC works well for us. Cold calling works well. I I think any marketing channel can work well for anybody if they stick in there long enough to figure figure it out and figure out how to how to make it work.

Speaker: And if they look at the analytics of because we've operated in several different markets around Texas. Large markets, medium sized markets, smaller markets. And each market has its own little things about it. For whatever reason, it's apparently the way it's always been. Different things work better in different markets.

So there's markets where our VM works great, and there's markets where direct mail is fantastic. But to have the the wherewithal to try things and stick with it long enough to run your numbers is part of it. And then also to be at maybe to be able to predict, okay. Based on what we know, this will likely be very, very good. That's where I think the experience comes in.

Steve: Are you guys finding the same marketing channel as working in one medium sized market, working in another medium sized market? Or is or does it still depend

James: on Not necessarily. Not necessarily. Honestly. And we've been in we've been in several different markets around Texas. And that's something that we have noticed is that you you've gotta test the market.

Each market is different. And, you know, one one marketing avenue, like direct mail in one market, could work great. And it could be the same market size.

Speaker: Same demographics. Same purchase price, you know, same medians price,

Steve: all that.

James: And then you try it in another market, and it's it just didn't work as well.

Speaker: Yeah.

Steve: I know for sure. For us, we've been, we canceled, RVMs this week. Yeah. You canceled. We canceled.

It's just a dud in Phoenix. It worked. It worked. And now it doesn't. Last can't remember the last deal we got from our VMs.

Speaker: And if you're not following your KPIs, if you're not if you don't have those spreadsheets, if you don't have your your weekly meetings, I'm sure you guys do.

Steve: Oh, yeah. We do. We track. It's like, here's how much we spent on our VMs last week. Right.

Here's how many leads we got. Here's how many conversations. Mhmm. Oh, six straight weeks is zero. Well, maybe.

Right. Maybe it's time to turn that

Speaker: off. Right. We also do text, I'm assuming. Text still working well?

Steve: That's our best. Number one. Hands down. Noel Challenger wants to know, is there any good books or courses that have helped you guys with your sales skills?

Speaker: Is it Noah? Noel Challenger. Alright. Hey, Noel. What's up?

Oh, I love sales. James knows sales is my sales is my, my hot button issue. So I know James likes greatest salesman in the world, little old school augmentino.

James: Greatest salesman in the world.

Speaker: So check that out.

James: How I raised myself from success to failure in failure to success in sales. Frank Boettcher.

Steve: Mhmm.

Speaker: Old school, but I think how I raised myself, from failure to success is Fantastic. One of the all timers. Everybody talks about never split the difference, which is which is good. But I think if you don't have the bigger picture fundamentals of how to deal with people, it's some of the techniques are harder to apply. So Can you elaborate on that?

So I think people who if you haven't spent time, if you haven't read How to Win Friends and then influence people, you know, two, three, four, five times, not not in

Steve: a row, but over the course of

Speaker: time connecting. Connecting with people, how to just how to talk people. What to maybe what to say, what not to say. Interestingly, you wrote the book a hundred years ago, and yet it all still applies. Right?

Steve: Even more so probably now. Yeah.

James: So Exactly. Because people are becoming more and more surface level. And if you know how to connect with people, you stand out even more Yep.

Speaker: In today's society. I think the foundation for people, in my opinion, should be and depending on the situation that they're in, should be more of that that the the fundamentals, the the basics of human behavior. So I would start with those, and then I would get into the newer newer school stuff.

Steve: Yeah. You know, that's what's fascinating to me. Right? Because I started in real estate 2007 as a real estate agent, as a former engineer. So for me

Speaker: You had to learn to talk

Steve: talk to people. Had to learn how to connect people. And, like, yeah, you you said you wanted a three bedroom, two bath under a 175,000 square you know, a thousand dollars. What is the problem here? What's what's your problem?

Like, you said you wanted it. Like, what's stopping you from moving forward? So where's your checkbook? So there is definitely connecting with people where it makes a big difference. Right.

James: I think, another great sales book because there's a connecting with people, and as a salesman, you you also have to have the perseverance. And I think Fanatical Prospecting is

Steve: a great book.

James: A great book, by Jeb Blunt. Yeah. He talks about the the perseverance and knowing your numbers as a salesman and knowing that if you talk to 50 people and you get one contract, then how many people do you need to talk to to get three contracts? And finding out how to reverse engineer your numbers.

Steve: Yeah. It's a great concept. I think definitely people should be paying attention to that. One thing that we were talking about before offline, I don't know how much you guys wanna talk about it, is disclosure versus non disclosure states. So this is a new concept I've never even heard of.

Speaker: So we visit with a lot of people. Right? We have friends in real estate. I don't know if in all 50 states, but we have friends in, I venture to say 40 out of the 50 states. And we're consistently amazed that, people haven't heard of disclosure states versus non disclosure states.

I would say just Google it Yeah. And see. But one of the things that we've we've learned is so when we pull lists in the state of Texas, which is a non disclosure state, you know, we're not there there's a lot of data that is not reported because it's not required to be reported. And in fact, apparently, it's not allowed to be reported because it's not ever. So, for example, purchase prices, of course, you can get that from the MLS.

If you have MLS access, you can you can learn what purchase prices were if it was an on market deal. But as far as tax records, which is where virtually all data is pulled from, right, in every state, there's so little that's disclosed. The only time that any numbers are even disclosed, it's really not even on the tax records. It's just filed at the courthouse on the deed if there was a loan, and it's how much the loan how much the lien is on the property. And that's you know, again, you you cannot hop on list source and get that information.

It's it's written on the deed that's filed at the courthouse. So it's just I think I guess

Speaker: the principle is, you know, learn your market, learn your Yeah.

Speaker: Learn the rules, and learn, Learn your learn the rules and learn because one of the things, if you don't know if you don't know that, you're gonna be buying lists and pulling lists. And you may wanna, for example, pull unknown.

James: Include the unknowns.

Speaker: Including the unknown.

James: If you're

Speaker: in a

James: if you're in a nondisclosure state, you have to include unknowns in a lot of your lists.

Steve: Right. So that's a If

Speaker: you can nugget for If

James: you can afford it.

Speaker: Yeah. And I would say you you said in Arizona, if you pull unknowns, it's virtually there's none.

Steve: Yeah. So I pulled an unknown unknown list this week. Because someone's like, oh, you gotta pull unknowns. You gotta pull unknowns. Alright.

So I'll pull an unknown list. It's a thousand people. I can get that in a day. Right. We can get through that list in one day.

Speaker: And get you know.

Speaker: Right. Yeah.

Speaker: Yeah. So, again, I think it's know your market. Yeah. Don't don't waste your time. If you're in a disclosure state, it's not gonna matter.

Everything's gonna be disclosed. I think that's one of the differences between markets and between states. So yeah. It's just or or talk to someone who's familiar and and ask them, you know, how do I apply that? And for you know, what's what's the deal?

Steve: Neither of you guys are licensed, I assume. Or so it's funny. I was actually having a call. It was a a consultation with someone in Texas. He's like, oh, this isn't gonna work in my market.

He's actually the one I was telling telling you. He's like, yeah. Austin's tough. Yeah. He's like, it's not gonna work in my market because I'm a licensed real estate agent.

He's like, what does that mean? And he says every single call, you have to disclose. I'm a licensed real estate agent. You do. Which is it's crazy that you don't disclose the purchase price, but the real estate agents have to disclose that the real estate agents

James: Right.

Speaker: Yeah. The the Texas Board

Speaker: of Realtors

James: requires you to to disclose it.

Steve: Yeah. Because we've had people we cold call. And, like, you're a real estate agent. You need to disclose that that's illegal. I'm like, I don't know what you're talking about.

I'm a broker. Yeah. I've been doing this for a long time. I don't know what law you're referring to. But then we learned recently.

It's Texas requirement.

Speaker: Yep. You know Texas, I mean, we they they think that they can just, you know, do all kinds of things. So, yeah, apparently, they're and, again, I would recommend just go state by state. Right.

Steve: Know your market.

Speaker: Know your market. Know what applies and what doesn't, and don't just listen to everything that you hear.

Steve: Yeah. It's a good lesson. I'm I'm butchering this name, but, Wookie, asks, do you think that since more people are cold calling that those who are doing direct mail are getting a better conversion

James: rate? I think that you need to test it in your market. And, yes and no. I think that direct mail, gets great rate great response rates in some markets. And I think that in other markets, it gets a horrible response rate.

So I think that you have to test it in your market. You can't I I can't throw a blanket generalization over any marketing avenue.

Speaker: It's market specific. And and and we can if if he or she I don't wanna offend anybody. I don't know. I couldn't understand the name that you said. But if they wanna, you know, reach out, we'll give our contact information at the end and

Steve: Right.

Speaker: We can give our opinion on, you know, maybe the numbers. So there's response rates. Right? So if you spend a couple thousand dollars on mailers and you just very simply track how many phone calls you get and depending on, the response rate, you know, if it's 3% or 2% or 1% or half a percent, apparently, there's markets like here where you get a point point 2% Yeah. Callback rate, then you may wanna reconsider, your choice in spending money.

Steve: Right. Absolutely. Lucas Orozco wants to know how many hours per week are you guys cold calling? We'll start with that question.

James: We're cold calling about fifty hours a week. And between all your guys

Speaker: Just total man hours. Yeah.

James: Yeah. Total. Mhmm.

Speaker: Yep. So pretty pretty pretty small amount, I would say.

James: Yeah. Pretty pretty small amount. We're not the the markets that we're focusing on, the the list sizes aren't big enough to support more than that.

Steve: Yeah. And he also wants to know how are you guys recycling your lists for cold calling?

James: So, yeah, we just alternate between, between lists. So we try to hit one list about every two or three months.

Speaker: Okay. Steve, I love these questions.

Steve: Oh, I mean, this is from the audience, so it's awesome. I love it when we get active participation. Carlton Hooks wants to know. He's one of the studs in my office. Do you guys both visit the home, or do you both go visit the home, or do you guys lock it up over the phone?

Speaker: Okay. Here we go. Can I handle this? This is a sales question. Alright.

So Carlton, what's up, my man? Is he acquisitions?

Steve: Yes. So Acquisition or listing, depending which way the seller the seller appointment is. Oh, cool.

Speaker: Okay. Cool. So we actually prefer to we we're we're boots on the ground. And we, coming from a sales background, you know, my thinking is get me in front of somebody. Get me into a conversation with somebody.

And we've found that our margins on deals are a lot better when we're in person. We actually are doing acquisitions and dispositions mostly in person. You know? I'm on Dispositions in person. We we are.

I'm not saying that everybody needs to do that. Depending on your market, depending on your situation, we are we are grossing a lot more profit, I think because as far as what are what are the differences between us and other wholesalers Mhmm. We we are we go deep with, with the in person. Yeah. So now we're able to do we've done we've gone virtual.

We've done things every which way. A lot of our properties sell sight and seen. Mhmm. But if they're if it's going sight and seen, they're going above asking price and, if they want it that bad, badly. Right?

Otherwise, we're gonna get we're gonna show it, and and we're gonna try to get the the most for it. Again, that's market specific. So not not saying everybody needs to do that. That's what we do.

Steve: Awesome. And then, solution services wants to know, do you guys pull any of your deals or do you guys put all your wholesale deals on the MLS?

James: We actually don't put any on the MLS.

Steve: Okay.

Speaker: Yeah. Good question. Check-in check on the rules in your in your area. There's states where you're allowed to do that, and there's states where you're not allowed

Speaker: to do that.

James: And there's markets that that work better for that as well. You know, some markets, especially if you're in a smaller market, may not be a great market to do that in because word gets around quickly. And some markets that we've we have operated in, the, agents don't even know what wholesaling what wholesaling is. Title companies Even this market. Yeah.

The title companies don't know what wholesaling is. Yeah. So there are markets that that may not be as good of an idea

Speaker: Yeah.

James: To do in.

Speaker: And we've invested a lot of time and and effort into our buyers list. So a lot of times, you know, knock knock on wood. I'll say this in a humble way. A lot of times we're outperforming the MLS, with our the prices price per square foot that we're selling things for.

Steve: So can you elaborate on dispositions in person? Because it was the first time I ever heard anyone do it this Really? I've heard people do it over the phone. Right? Instead of doing, like, an email box, text blast, I'm gonna call you.

Hey, James. I got this property locked up. Sure. Calling you first. Right?

Everyone wants that first call.

Speaker: So there's a lot of different ways to do dispositions. Right? So one of the ways, that you can do it is we so so we have a full time dispositions person who has a sales background. He's done acquisitions. He's done dispositions.

In fact, all of our people are cross trained. Yep. And he gets the business enough to where we're comfortable with him. So if it's an occupied house, we'll schedule it. We'll try to make sure that the people living there are gone are out of the property.

Mhmm. If it's occupied, we don't typically put a lockbox on it. But we do we we want him over there. You know? I want him showing the property.

We'll try to get three, four, five, six buyers there. You know, not not a million buyers or anything.

Steve: But Create an auction effect.

Speaker: A little bit. And so we'll have so little little nugget for for you guys that are considering doing this. You know? We have a, it's kinda awkward, but we have a no talking policy. So just just nobody talk to anybody, please.

And it's we're all we we kinda we kinda we kinda joke about it, but we we're really not joking about it. Like, hey.

James: And we're very direct and upfront about that with the buyers. Like, hey. No words. No words spoken.

Speaker: Just as like if you just have no

Speaker: Yeah.

James: The silent game.

Speaker: It is. Yeah. Put what's the put your hands in your yeah. My my kids do this at their preschool. Right.

Makeup bubble. They do you have kids.

Steve: Oh, yeah. They do the make a bubble. We need

Speaker: to have a make

Steve: a bubble rule with our

Speaker: with our buyers. So no no talking to other buyers. No talking to tenants. No talking to anybody that you see. And, in fact, if you even see me, we'll make eye contact, but no words will actually come out of our mouth.

And it's awkward. Right? Yeah. But the we joke about it to to make a point, you know. And and we don't want anybody talking to I don't want anybody bashing the house.

I don't want, oh, man. This is this is in rough shape. You know how buyers are. Oh, yeah. I'm an investor.

I'm I'm a buyer too. I I would do the same thing. When I go to MLS listings and it's bad, I may or may not be back in the back of the house, you know, bashing the bashing the house to to the other legit buyers that are there. So no no talking. And, of course, we don't want them talking around our our tenants or sellers.

Yeah. So, anyway, yeah, no no talking. Get in. Get out. Fifteen fifteen minutes.

We've had people show

Steve: up late. Buyer shows up late.

Speaker: Dude, sorry. You missed it. Yeah. You missed your chance.

Steve: And we'll

James: we'll schedule we will schedule times with the seller right when we lock up a contract. Right when we lock up the contract, we're scheduling times to go view the house, and we're scheduling viewing times for these buyers to show up. So they've got, like, one or two times time time slots that they've got to show up, and that's it. That's brilliant.

Steve: You just send that expectation upfront.

Speaker: Mhmm. Absolutely. Yep. Sure.

Steve: Yeah. So that's two huge nuggets. So blow bubble. Blow bubble. And set the schedule.

Oh, we

Speaker: tally we don't have a a light board. We can

Speaker: tally up

James: the Yeah. And so, like, that that's part of the issue with owner occupied houses. Vacants, we try to get a lockbox on the property immediately. Yeah. But we still try to do the same thing.

Because whenever you are controlling the process, it helps, to increase the demand. Right. So Absolutely. Yeah. So so we whether it's vacant, occupied if it's occupied, though, schedule the showing time right when you lock up the contract, and make clear expectations with that homeowner immediately, what the process is going to look moving forward.

Speaker: The the acquisitions person Yeah. Obviously, does that while they're signing the contract. Yeah. Whether that's, in person signing the contract or they weren't able to lock it up in person, so they're on the phone taking them through the DocuSign. That's another, big, big one that we didn't do at first.

We don't just send DocuSigns randomly and hope that sellers sign them. We're actually not sending the DocuSign until we're on the phone with them. Okay. Do you do you have your email opened up? Okay.

Click click the inbox button. Do you see the do you see the email from doc okay. Click on that. Right? It's, to me, this is sales.

Right? Like, that's sales.

James: You control the process.

Speaker: Lead the process. And, so from that moment right there, all the way through the signing of the contract and then explaining, okay. Here's how this is going to work. And it goes through the the point of, okay. I'm gonna put a lockbox on the property so my guys can get in there.

And so, yeah, we like to lead the process all the way through. And then the, of

Speaker: course, acquisitions will hand it off to to who they handle.

Speaker: That's brilliant. Lots of lots of gold nuggets there.

Speaker: Hand it off.

Steve: That's brilliant. Lots of lots of golden nuggets there. Jeffrey Smith wants to know, what does your team look like today?

James: So our team

Speaker: is just,

James: myself and Alan. And I run all of the marketing for for our company. Alan helps with sales training. He's also we were doing some flips. We're not doing as many flips now.

So Alan was overseeing that. And then we have a lead intake manager. We have an acquisitions rep and dispositions rep. And our lead intake manager also helps with transaction coordinating.

Steve: So, the lead intake manager. Explain to me what exactly this person's role is.

James: So all of the inbound leads, charge of, managing the inbound leads. And then we we do have, cold call leads that come in as well from our cold caller.

Speaker: Mhmm. And

James: those go directly to the acquisitions rep. But the lead manager makes sure that the cold call information is input into our CRM and documented.

Speaker: So Inbound versus outbound. I'm not I don't come from a marketing background, so I literally I don't know. You do, probably, but I have to stop and think through. Okay. Inbound means mail.

Is it anybody that calls us? Right?

James: Yeah. Anybody who is responding to a marketing message that

Speaker: we have

James: put out. Yeah.

Steve: Yep. Are they sales trained, or are they just input?

James: Great question. Mostly just input. They they do they are relationship trained

Speaker: Mhmm.

James: And, people train, but they're not necessarily sales trained.

Steve: Gotcha.

Speaker: Gather gather information, get a good rapport, put it in the CRM.

James: Make a clean handoff

Speaker: to the action options. Right? And and they do and they schedule an appointment. Mhmm. If it's in any way even a potentially qualified lead, we go ahead and schedule the appointment.

If it's a if it's a colder lead, based on the criteria that we've we have specific criteria that they're trained on, how to qualify a lead. If it's a cold lead, they'll book it out, you know, a week and a half, just to get something on the calendar so the acquisitions guy can really analyze the deal. If they feel like it's a warmer lead, they'll schedule it for three or four days out. If they feel like it's a hot lead, they'll schedule it as soon as possible, and they immediately hang up the phone and call the acquisitions guy and say, I I got one. I got one.

Right? So, there there's a little a little bit more to their job than, than maybe a lot of people realize.

Steve: Gotcha. And then he also wants to know what's your biggest challenge over the last few months?

Speaker: Is this Jeffrey again? This is Jeffrey again. Man. Oh my goodness, Jeffrey. So, you know, speaking of our team, I mean, we guys, we've we've wholesaled several different ways.

There's a lot of different ways to do this. And we've grown our team from just James and I, up to four people, eight people, up to 12 people in, you know, in six, seven months from scratch. Up to 12 people, we've then, in into multiple markets. So three, four markets simultaneously, and then we've scaled back down. Now we're back down to, I guess, six six or so people.

So I like the word challenge, opportunity. Our biggest Jeffrey, we're gonna call it opportunity. Our biggest opportunities, lately, I really think it's, it's probably that. It's probably the personnel, getting getting the the systems and the people doing what we need them to do and documenting it the way that we need them to document it and making those like, making the personnel just how do you grow your team? Yeah.

Right. How how do you

James: Making sure that

Speaker: you're managing

James: efficiently as efficiently as possible. And whenever we we scaled back, we actually our our gross profit went through the roof whenever we brought our team in. We went from 12 people down to six people. And we just did $204,000 last month Mhmm. In gross profit and wholesale fees.

And that and that was our highest month ever. And it was with a smaller team. And it's the power of focus.

Speaker: Yeah.

James: So it's getting everybody focused on what they need to be doing, what their responsibilities are, what their outcomes are for for the day, for the week, getting everybody laser focused on what they need to be doing and what their outcomes are.

Speaker: And can we if I could drop drop something here that we've learned, the hard way. For those of you out there that are that are setting goals and you wanna you wanna so what we teach people that that we're, scaling their business, we tell them, you know, be specific with your goals. So so, for example, we set a goal. We said, we want to gross $500,000 in profit by a certain date. It was a goal.

It was specific. It was realistic. It was measurable. It was attainable, and it had a time frame on it.

Steve: It was a it was a goal. Right.

Speaker: We we weren't we got all those things right, except it wasn't specific enough. We said we said, gross profit. We probably should have set a net profit goal. Yeah. So so get specific because you guys you can make all kinds of gross profit.

Steve: But that's not what you take to the bank. Right. It is not

Speaker: how much you make. It's how much you keep. Yeah. Yeah.

Steve: Ally Berry wants to know when you're assigning the contract, how are you explaining to the homeowner that the sell to another investor for higher than your offer when it's time to close? So how do you explain the assignment to the new one?

James: We actually don't assign hardly any deals. We double close almost everything that we do.

Speaker: Yeah. We we're we're actually double closing.

Speaker: So, we chose to go the route of

Steve: double closing. And, typically,

Speaker: you know, double closing and, typically, you know, typically bringing money to the table, closing on it, and then simultaneously a double escrow.

Steve: When you guys do double close in Texas, you guys have to bring funds?

Speaker: Legally yeah. Legally, you're supposed to bring funds

Speaker: to the table.

Speaker: That's not

Steve: the case in Arizona.

Speaker: Really? Yeah.

James: Yeah. There there are some times that we have not had to, but, technically, you're supposed to. There are more and more title companies going away from that in Texas. Mhmm. And there are fewer tie title companies that will do a a true title pass through.

It it's just becoming rare, more rare and more rare every day.

Speaker: So, yeah, what we're talking about is there's an a to b transaction. There's a b to c transaction. And and what we're talking about is using the funds from the c transaction to fund the a purchase. Right. The a to b purchase.

Right?

Steve: So Sounds like I need to go down there and and be a transactional You

Speaker: need to start

James: a title company in Texas, Steve. We already got

Steve: one here.

James: So might as well Yeah. Congratulations. Thank you.

Speaker: How's that going?

Steve: It's going good. So it's it's not as easy as I thought it was

Speaker: gonna be. But

Steve: that's that's kinda how it always goes with

James: every business.

Speaker: Let's talk about the 10 x.

Steve: We we

Speaker: need to talk about the 10 x rule.

Steve: Let's see. So has another question. You tell seller that you're bringing okay. So you tell every seller you're bringing potential buyers through. We already talked about that.

We don't.

Speaker: Do you

Steve: tell them that you're what do you tell them? We we coming through the house? We don't we do not tell

Speaker: the seller that. We we do things on a need to know basis. So

Steve: So how do you explain these randos going to the house?

Speaker: So our our, yeah, my acquisitions guys are trained to to tell them, you know, look. We've got we've got my boss that needs to see the property. We've got my my boss's business partner that needs to see the property, and then we've got contractors.

Steve: The way that we're able to do what we're able to

Speaker: do, is we move we move quickly. So on Wednesday, when we're back, we'll be back here on Wednesday at 02:00. He'll say we, even though he is an acquisitions person, is not gonna be back. But he'll say, he'll say, you know, Jacob's gonna be here. He's in charge of all of our contractors.

He's in charge of all of our our operations. And Jacob's gonna be here on Wednesday at 02:00 like we talked about. We're gonna try to get you know, this is this is great for you, Steve, because we're gonna try to get everybody in there at the same time. My goal and Jacob's goal is to get everybody in there. We're gonna get in.

We're gonna get out. It's gonna be about thirty minutes. You're gonna go to Starbucks. You know, you're gonna get a coffee. Mhmm.

It's gonna be great. You're gonna take your you're gonna take your kid. That's great. Yeah. You're gonna take your kid to Chick fil A.

It's gonna be perfect. We're gonna

Steve: we're gonna we're gonna buy you

Speaker: a Chick fil A meal, and, and we're gonna be in and out in in thirty minutes. And, that way, we're that's how we're able to do this. That's how we're able to throw around cash. Like like, we don't take that lightly. You know, I want all my ducks in a row.

I wanna get everybody in here. I want everybody on the same page. We'll get the scope of work. You know, we don't we may not say scope of work, but we're gonna get everybody knowing what needs to happen as soon as possible, and that's how we're able to close so quickly.

Steve: That's awesome. Let's see. I got other questions on this side. So we got

Speaker: By the way, Steve, while you're pulling up the next question Yeah. Our goal is not to be deceptive or anything like that. Again, when I say things are on a need to know basis, the the seller, what they really wanna know is, are you gonna close on my house? Are you gonna close on this deal? Are you gonna get money in my bank account?

Are you gonna get this done? And they need to know from us that we're going to. And so we're very definitive about that. Like, this is how this is going to work. This is the next step.

This is what's gonna happen. And this is this is all they all sellers wanna know is, do I have certainty here? You know, can I trust you? And I think explaining it like that brings a sense of certainty. And it almost it almost most of our sellers, it actually calms them down a little bit Right.

To realize, hey. This is just how this is gonna work. Yep. So our goal is not to be not to be deceptive, but, and by the way, we flip houses as well. So Yeah.

We do need to get we you know, there are times, actually, literally, where I'll go to the showing if it's a house I'm I'm thinking about buying, which happens quite frequently, and I'm gonna buy it, say, from my from my wholesaling company, then I literally will go with my contractor. In fact, I do that quite a bit. So, that I think that needs to be your mindset. I don't think look at things like I'm a wholesaler, and I need to trick people into, look at every property as if you were gonna buy it. And maybe maybe you need to bring your contractor every once in a while.

James: Right. And that's why our dispositions process looks the way it does as well is because it it benefits the homeowner, tremendously whenever we do it that way. Instead of having a bunch of different showings, we wanna keep them, having as much peace as peace of mind as possible. Chaos. Right.

Yes.

Speaker: Yep.

Steve: So Sawyer Swagger wants to know, do you was your contract read by by attorney off the Internet, or where did you guys get your assignment?

Speaker: Oh my goodness. James, tell them the story about our contract.

James: So we got our contract from a course that I bought. Oh, nice. And then we had revisions made before James and Alan met. Yes. So I bought a course, and that's how I learned how to start wholesaling Mhmm.

And got a contract from the course. Mhmm. And we have made several revisions to it over time.

Steve: Every time we learn a lesson? Exactly.

Speaker: Well and and I don't know if we're gonna get into this, but so one of the things, for example, we've we've dealt with a lot of different title companies. Each title company I'm sure you have too. Each title company that you deal with, a lot of times, you end up talking to different closing agents. Sometimes, you end up talking to their attorneys just not because anything's wrong, but just through that relationship. Right?

Yeah. We've also learned things from those relationships, and they'll thank God, you know, they'll say things like, hey. Just so you know, I noticed that you didn't have a such and such clause in there. Or just so you know, other investors do such and such. So that's how it came about.

I think it's a great contract. I think that people should go state by state when it comes to contracts.

Speaker: Yeah.

Steve: I've heard in Texas, a lot of guys like a lot of investors like to use the TREC contract.

Speaker: Yes.

Speaker: The TREC forms.

Steve: Yeah. But you guys know?

Speaker: We don't. The TREC TREC form is, like, between ten and ten and fourteen pages long. Mhmm. We've thought about using it. Now keep in mind, we're not licensed.

Steve: Right. I don't think these guys are either there. They're telling me about it.

Speaker: You don't

James: you don't have to be. You don't have

Speaker: to be.

James: The truck form.

Speaker: Yeah. Interestingly, no, you know, no You have to be the Arizona one. Yeah. That's what it really

Steve: have to be. In Arizona, you have to you have to be. It's a it's a it's a trademarked document.

Speaker: Okay. I think

Steve: ours are trademarked. But they may not enforce it.

Speaker: That that may be what it is. And that, again, guys, we're not giving legal advice or anything. But and I think Steve's on a good, a good point here as far as the there's the realities and the technicalities of it, and then there's the you know, those are two different things, the reality and the technicality. Did we answer that?

James: Yeah. You guys did your own,

Steve: and you you had multiple people give you advice on how to update and tweak your contracts.

Speaker: Yes. Wow.

Steve: So you guys have one cold caller. Right? Or was it two?

James: One cold caller.

Speaker: One because that's all we need. If we needed two, we would have two. If we needed five, we'd have five. Right.

Steve: Let's see what else was there. I'm trying to go through all these questions. Some of these were retracted. Goodness.

James: Aaron Aaron Brown's asking me to start

Steve: a title company in Fort Worth. Digital Cash wants to know, what percentage of the deals that that you guys lock up do you close?

Speaker: What percentage of the deals that we lock up actually end up closing? So it's it's above 70% that actually close. I would like to say it's, like, 99 or a 100%. But we in our in our opinion, there's really just a couple of reasons why deals don't close. Mhmm.

Too many title issues to where it's almost not unsolvable, because we don't shy away from unsolvable ones. When you're in smaller or medium sized markets, a lot of times, you need to take every deal you can get. And if it's gonna take two or three months to close and a lot of paperwork needs to happen, then you're gonna do that. Yeah. Especially early on when you need to make some cash.

But, anyway, un unresolvable an unresolvable title issues. And then

James: That's pretty much the the biggest reason why deals don't close for us is unresolved title issues. Most of the time, it's not because we bought it too high. Mhmm. Our our acquisitions rep is extremely good at what he does, and, we've got a great disposition side as well. And most of the time, we don't have a trouble moving the property.

It's because of title issues that are just a mess.

Steve: Yeah. Quentin was on the show last week. Mhmm. Quentin Flores. And he was talking about how what's up, Quentin?

He was talking about how there was a time where there was a great fear that the government was gonna start taking all these properties from the, African American community. Yes. And have and then they started adding everyone on the title. Are you guys did you guys run into that when you guys have more criminal issues?

Speaker: I listened to Quentin talk about that. And I gotta tell you, I had never thought about that from that perspective before. We haven't seen that. Mhmm.

James: We've had a couple of we've had a couple of cases, buying houses from, a couple of afro African American, families where it was either in an estate or they had so many heirs on the property. I can think of two instances specifically where that was the case. Yep.

Speaker: Yeah. Yeah.

Speaker: But it wasn't I think that was more so because they had somebody had passed away without a will thirty years ago. And I remember there was a point where we were gonna need about 17 or so, affidavits of leadership.

James: 17 people had to sign. And we were just like, we're not gonna mess with it.

Speaker: But I didn't think that it was because of that. I think it was just the multi generational. Uncle Carl does those deals.

Steve: He said that's where the money's at.

James: Sure. Uncle Carl is he is a beast. He is a I am. Animal

Speaker: Haven't texted him well.

James: He does. And I don't think that it's for everybody, what he does. I I don't think

Speaker: that it's for everybody, what he does.

James: I I don't like doing that kind of work from a marketing background. Properties churning. I don't wanna have to spend a ton of time digging and digging and digging. I wanna I wanna have predictable numbers Right.

Steve: That I can track. Clements Bordeaux Bordeaux, wants to know how are you handling earnest money with your sellers?

Speaker: Okay. So earnest money, we have them okay. With our sellers.

Steve: With our sellers, we we turn it into the title company. We turn in a very small,

Speaker: you know How much do you guys do? We we typically well, we'll do whatever needs to be done. Right? We have cash reserves, for that purpose. We've never actually even had sellers.

Our report with them is so good. We don't have sellers that pitch a fit about earnest money.

Steve: Yeah.

Speaker: So if we can do $10, we'll do $10. It's not really they they trust us. They know. And we've built a reputation now. I mean, we've done

James: a hundred, two hundred fifty, even 500 before. But most

Speaker: of the

James: time Yeah. Yeah. Most of the time, it's not very much.

Steve: So you guys mentioned that, you know, with Texas being a nondisclosure state, there's some challenges there. So what are you guys using to pull data in Texas? So

Speaker: it it's just it's just a bit more challenging. I think we use probably what most people use. So we use list source.

Speaker: Mhmm.

Speaker: Just, again, a nugget for those of you not just in Texas, but, anywhere when you're pulling data, when you're pull if you're pulling it, say, from list source or just make sure you're pulling the unknown. So if you're gonna say, alright. Livable square footage, I want, you know, 2,500 square feet or smaller is one of your criteria. If you notice that there's an unknown option, add the unknown option and look to see how many more leads it is. Yeah.

And how many normal amount.

James: How many names are added to the list if you check the unknown box? And you'll see you'll you'll be able to see the the difference between, a disclosure area and a nondisclosure area. Because if you click the unknown box and there's a ton of names added, then you are in a nondisclosure area, probably. Right.

Speaker: Right. And what that leads to, of course, is watered down, you know, less less high quality results. But in in our opinion, the more hurdles there are to success, the better for us. Right? Absolutely.

The greater version. Right. We've said from day one, you know, we're not one of these fly by night, here today, gone tomorrow operations. We're building this out. We're gonna dominate our markets that we're in.

And we we we can have a runway that we're gonna see this through. And if you know, a lot of people will get a watered down list like that, and it's got thousands and thousands of people. You don't know if they're good leads or not. You're getting calls that are coming in, maybe aren't good. You know, can you stick it out?

Can you figure this out?

Steve: Well, it goes back to the marketing seminar you mentioned earlier. Yeah.

James: I have a I have a marketing, a piece of marketing advice that I got from one of our mentors, who I was telling you off off camera, he this marketing mentor of ours has, done marketing for Tony Robbins. He has advised Dean Graziosi in marketing. He's advised Russell Brunson. So he knows his stuff, and he has, three keys when it comes to increasing your income with marketing. And it is, provide goodwill and value to the marketplace, make offers every day, and increase the size of your audience.

Yeah. If you're doing those three things consistently, then you're going to increase your income. And it's pretty much impossible not to increase your income if you were doing those things consistently.

Steve: Yep. Deal flow. How are you guys doing? It's like, how many are you you know, you guys talk about how's it? A 100 last year?

A 102 last year?

Speaker: How many? Deals closed. So in alright. So to give you an idea of kinda where we're at. In January, we closed ten ten deals.

In February, we closed 10 deals. In March, I don't remember if it was maybe eight or something. Yes. That was right about when we started scaling back Mhmm.

Speaker: In

Speaker: order to get bigger. Now we're back up. So we're between seven and ten Seven and ten. A month, which is pretty good for the size of markets that we're in. It's steady, though.

Right? Like, if you're if you're doing one or two and then you have two or three months and, hey, guys, we've been there. We've been through that. Yeah. Where you have, you know, do one or two, three, four deals, and then you have two or three months where you don't do don't close any.

Your your pipeline is not full enough.

James: Yeah. We we try to focus on our pipeline on a weekly basis. So we wanna make sure that we're having, you know, two, three, four contracts a week so that our pipeline stays full. And I think that whenever you are focusing on your your pipeline, condense that time frame down that you're you're looking at your time line or your pipeline. And what what are you doing today?

Setting number set number target numbers for your daily activities, for your weekly activities. And if you go a week without a contract, then I think that you start to start to push the pedal to the metal at that point. Are you doing enough activity to produce a contract a week? Or if you're just getting started a contract a month, but what activities do you need to be doing to produce those kind of numbers? Right.

Steve: What is your guys' targeted, assignment

James: fee? So our goal so I I'll preface this by saying when we first started, we thought that $10,000 was a good assignment fee.

Speaker: Because that's a lot of money. It is a lot of money.

James: Right. So we that that was where our expectation was, and that was where our mindset was. And this is a this is a huge key for, you know, addressing mental barriers because, typically, we get anchored on specific numbers. Any any kind of number that comes across our life, we can get anchored, with with those numbers. So when we first started, we heard these podcast people or these, webinar people talking about a $10,000 assignment fee.

And that was where we were anchored, and that was where our mindset was. Well, when we started going a little bit further, we were averaging $15,000 for our assignment fees. Well, we brought on our acquisitions guy.

Speaker: Started building out our team.

James: And started started building out our team. Our acquisitions guy was so driven and so motivated. When we brought him on, our assignment fee went our average assignment fee went from 15 to 20 Wow. Right off the bat. And, just recently, we experienced a similar a similar change.

And we started hearing about people that were doing assignment fees that were $50, people that are averaging $30. And we were like, why do we have to average $20,000 for an assignment fee? Who says we can't average 30,000? If we put that out there, if that's where our mindset is and that's what our expectation is going into these deals, could we possibly average $30,000

Steve: Yeah.

James: In assignments? Assignments?

Speaker: And then, coincidentally Last month the average season used to go up.

James: Last month, we did seven deals, and, that was for a total gross profit of 204,000. If you do the math on that, that's $29,000. $29.08. Average for the assignment.

Speaker: Yeah. That was that was several months after James and I started asking the question. So I know this may not have been what he asked, but, you know, the answer is check your expectations, check your you can run your numbers and and and bake in a, say, 10 or 15,000, whatever number you wanna bake in as your as your fee that you think you're gonna get. But, or or sorry, as the minimum fee that you that you think you need to get. But but then you get in on that appointment, or you get on the back end with your buyers.

And if you can get it for a couple thousand dollars cheaper than you thought, and if you can sell it for a couple thousand dollars more than you thought, maybe you could, then you can literally take your averages from from 10 to 15 or from 15 to 20.

Steve: Yeah. Some of our biggest deals is often because we screwed up the initial ARV.

Speaker: The power of what's what's in your mind.

Steve: Yeah. Absolutely.

Speaker: This thing about anchoring is a real thing. It affects all of us. If you're out there right now and you're thinking that 10,000 is is really big in your head, then it will be. Yeah. It will be big.

Steve: Digital wants to know what's your average

James: or not what's your average. What's your biggest wholesale deal? Our our biggest pure Pure wholesale deal was 62,000. But our biggest profit on a deal that we prehabbed was Wholesale base. It was it was essentially a wholesale deal.

It was a 100 what was the

Speaker: the exact deal? The net. This is after paying a realtor, everything, was a net of 130. So now, you know, we're talking take ownership of the property, do a quick clean the trash out, throw it on the market, wait Worth it. Wait thirty, forty five days, sixty days.

Right? I'm not saying it's not worth it. I'm just trying to clear

Speaker: it out.

James: Full blown rehab. It was a it was a prehab, just cleaning it out. Making it a little

Steve: Yeah. It was a little So going to the marketing person here, how much are you guys spending a month in marketing?

James: So our marketing budget sits around $15,000 a month. Yeah. And so last month when we did 204,000, we spent $15,000 in marketing.

Steve: And then if you were to break that out, where is that the most where is that spent the most?

James: Most of the marketing cost is on direct mail because it's the most expensive. Yeah. I mean, cold calling is really cheap. PPC in some of the markets that we're in is actually pretty cheap. It's not one of the most expensive ones Yeah.

Because they're smaller markets and there aren't as many people just clicking on the ads. Yeah. So it, you know, I could have a I could have a budget set for $8,000, but only spend 15 However much we spend. Yeah. Not even close

Speaker: to that. Not much.

James: So, anyway, direct mail comprises most of the the marketing cost.

Speaker: I think, again, to go back to what we've learned, I think it's so market specific. I think that our the reason that we're spending that much that's a lot of money to be spending. Is it? We're having to mail we're having to mail to a lot of people, and And and we don't necessarily know how great that data is Yeah. Because of this non disclosure issue.

Right? This non disclosure state issue. That because of all those unknowns. So unknown equities, unknown square footages, unknown how long have they owned the property. I mean, it it is amazing probably how much money we're spending marketing to people who again, it could be terrible data.

Yeah. But, again, can you stomach that? You know, can you can you handle that? And are you okay with it? And at first, we were not making two we were not having $200,000 months.

You know? There's months where we had a lot of overhead, and it was not even not a 100, not 80 coming in.

Steve: That's the fun of owning a business.

James: So what monthly overhead total? Some total monthly overhead.

Speaker: Not paying not paying us a salary, or anything. Mhmm. We pay ourselves a salary, and we reinvest all the rest of the money that our company makes. So if you don't count paying us as the owners, it total overhead off with office, is right under 30.

James: I think so. Yeah.

Speaker: Just under 30, I believe. Is that right?

James: Yeah. 30 to 35, I think.

Steve: And then Rick wants to know, how do you guys determine what markets to get into?

James: So I think that's a great question because especially, you know, we were operating in four or five different markets around, Texas. And there were markets that we went into that were horrible markets and other markets that we went into that were great. And so we've kinda learned, what to look for in our markets and what makes, a good wholesale market. So if you're wholesaling, you want there to be up upside for your buyer. So that's where you're gonna be able to get better margins.

So if you're in a market that has a low price point on the median home sale price, then you're probably gonna have thin margins on your whole wholesale deals Mhmm. Because you're gonna have to get those properties. You know, we we were in markets that

Speaker: the You

Speaker: look in the home price. For the ARV and you're like

James: You're like, the ARV is like $50,000. The ARV. You're having to get these these houses for, like, $8,000. And you're having to tell this homeowner, I can pay $8,000 for your house Yeah. But your car's worth more than than your house.

That's that's in your stomach. Exactly. But but it's cash. So You're welcome. We look for a median home price around 250,000 to 300,000.

I think that's ideal for for your market. And if you're wanting to do a a good amount of volume as well, you wanna see a total market size around 500,000 for your for your area. As a minimum. For your area. If you're wanting to do a a fair amount of volume.

If you're wanting to do under four deals a month, you don't have to have that.

Speaker: But if

James: you're wanting to do more than that, you know, get up to seven, eight, 10 deals a month, I I think 500,000 or more. Otherwise, you're just gonna be hitting the same people over and over and over and over again. Yeah.

Steve: I got a friend in Spokane. He's like, I ran out of people. I I'm calling the same people over and over again. Exactly.

James: You're on

Speaker: a first name basis. Yeah. Hey, Johnny.

Steve: And just go to your point about, you know, buying buying their house for the price of a car. I there is I remember this is a long, long time ago, but I just bought, like, an Audi s four. You know? It was 35 k. I bought it used.

Steve.

Speaker: Oh, I was gonna say, are

Speaker: you big

James: timing this?

Steve: I know. I bought it used. But I show up at the house, and I offered this lady, like, 20 k for a house. Like, I just felt like such a jerk. Like, I just bought this car for 35.

I offered her 20 for her house, but, you know, it was worth,

Speaker: like, 65. That's what

Steve: the numbers showed. And it needed a

Speaker: lot of work.

Speaker: Sure. It happens. Yeah.

Steve: Any tools, systems, tricks, and you guys want anything you wanna share? We're getting close to the

Speaker: end. So Yeah. What's our

Steve: what's our time? What's our

Speaker: time frame? We're well past this.

Steve: Are we losing engagement? No.

James: We're over a

Speaker: 100 people. So Awesome. Awesome. Somebody ask a question again.

James: Give me some questions. So as far as tools Gary Del Harper says you guys are are Gary Harper is the man.

Steve: Gary, we Todd Swaggery was reaching out to you. We're trying to get you out to Portland. Anyway, continue. Hey, Todd.

Speaker: Todd Swaggery.

James: You're a great guy. I don't know about tools. I mean, I don't think we have any revolutionary tools that we're using.

Speaker: Uh-huh.

James: I will say that something that we learned and and this is just a a nugget that I wanna leave for everybody. Something that we've learned through scaling our business so quickly and going into multiple markets so quickly, is our framework for growth and expansion. And I was given this this piece of advice from one of our mentors who's an 8 figure business owner, and he said that every time I followed this, the stages and of the of this process, it works. And every time I violate this principle, it doesn't work out. So the principle is a principle for growing your company.

And it's three stages, stabilize, optimize, and expand. And if you follow those three stages, then almost every time it will work. Stabilize your your operations. Get a steady lead flow coming in. Get a steady deal flow coming in.

Start bringing on people. Get it to where they are doing deals consistently. Optimize your your processes. Optimize your marketing channels. So if you're looking to you have a vision of going into multiple markets, stabilize, optimize, and then expand.

So stabilize and optimize your your primary market first. Go deep in your primary market. Optimize each marketing channel that you can and then look at expansion. Because if you don't have your systems, your processes, your personnel stabilized and optimized first, then you're going to expand. And, eventually, you're either going to die or you're gonna have to retract in order to get healthy.

And then you'll have to expand after that.

Steve: Yeah. Probably something that Gary can help with. I think you tuned in right there.

James: It brings you right there. For systems.

Speaker: Can I mention this too, Steve? Another thing that I think there's some confusion out there, about this idea. There there is a lot of free information out there, like this podcast Yeah. That is absolutely in fact, the way that we met, the reason that we met is we were so impressed with what you're putting out, with the the value that you're providing. And, guys, you know, if you haven't shown love to Steve, please show this guy some love for what he's doing.

There's a lot of free content. There's YouTube University. Right?

James: Absolutely.

Speaker: But but there's a difference between content and coaching. There's a difference between information

Speaker: and

Speaker: true learning, true mentorship. Mhmm. Find mentors. Find coaches. Find a mastermind.

Find private coaches if you need to. You if you wanna scale you know, we have a lot of coaches in our in our lives.

James: To give you an exam like, to give you a perspective on that, we will have spent over a $100,000 in coaching and mentoring this year. Like, oh, and just that. That's how much we value it. And that's you know, you wanna know one of the the tricks to scaling a million dollars in your first year? Like, find a mentor who's done it.

Mhmm. Find somebody who's done it. Yeah. Find somebody who's currently running a 7 figure operation and have them mentor you, have them dive into your business with you, and teach the teach you the exact processes. Have somebody in your corner that is literally fighting on your behalf Yep.

To see you succeed whenever you come across that hurdle that you don't know how to overcome. Right. Because if you're finding this this battle solo, man, that's a lonely road. And it's a road to a disaster. A long time.

It's gonna take a long time.

Speaker: Yeah. How how long do you want it to take, and how painful do you want it to be? Right. I I did real real estate for, what did we say, ten ten ten, eleven, twelve years

Speaker: Yeah.

Speaker: In a somewhat profitable, but painful, painful way. And and yet, we've done what we've done in the last one year, because we surrounded ourselves with coaches, with mentors, with mastermind groups. We're willing to spend money. I think there's a I think there's just a a misnomer. I think there's a a miss, like, a a missed concept out there that you don't need to pay for anything.

You can do everything you ever wanna do for free. And I I I disagree. One of our passions is helping people. Yeah. One of our passions is pouring back into people and saying, you can do this too, and here's exactly what to do.

Right? Right. But but don't think that it's gonna be easy. Don't think you can just Google it and figure it out. When you need an answer, who do you call?

When you need, when you have a when you get into a sticky situation, who's on your side? Who

Steve: who can you

Speaker: send a message to?

Steve: That's the big thing. Right? So, there's so much information. And, you know, we put it out there. Right?

Speaker: Right.

Steve: And people there's lots of free information, and and you can use a lot of it. But that point you just made, when you get stuck, that information is not on YouTube, and that information is not on Google.

James: When you get stuck, when you hit that plateau Yeah. When when you when you spend so much and you're you're not profitable, which that's in a whole another tangent. You know, we've got a whole bunch of people that, as far as coaching goes, that teach people how to make a whole lot of money Mhmm. But don't teach people how to manage that money and how to stay profitable. And that's a that's a huge passion of ours as well, is seeing people actually keep a lot of money.

Don't just teach people how to make a lot of money. Teach people how to manage that in a way that they're gonna keep the money and be profitable for the long term.

Steve: Right. Absolutely. So we're gonna, leave in in just a second and do some last thoughts. So, guys, if you guys want a copy of our assignment contracts, we're constantly updating it. We've got some really strong teeth in there.

So if you guys want something to enforce your contracts, text assignment to 345345. Again, that's assignment to 345345. And next Wednesday, 02:00, we got Ryan Pineda coming in from Vegas. He's a type of how he runs his operation, in Vegas. So last thoughts I'll start with,

Speaker: Alan. Goodness.

Speaker: I feel like I

Steve: got I

Speaker: feel like yeah. I feel like I just shared my my last thoughts. The the most I I feel like the most

Steve: important thing.

Speaker: Best thought? My second best thought or at minimum, my third best thought, Steve. Guys, I think yeah. I think make sure you choose wisely who you surround yourself with. You know, the old sayings about you you your income's gonna be the average of the five people that you spend the most time around, which they say even includes your spouse.

Right? So there's one of your there's one of your five right there. So, like, be choose wisely who you spend who you spend time with, who you learn from, who you surround yourself with. And as as you're doing that, think about, you know, one of the things that I did when I got burnout at the 2017, I remember joining the mastermind group, and I showed up. And I remember, you know, I I remember just telling everybody that that I saw.

So, you know, I don't I don't know what I wanna do yet because I don't know what I want it to look like yet. I wanna decide what I want my life to look like a year from now. What do I want my life to look like two years from now, five years from now? And then surround yourself with people who have a similar vision for what you know, look at their life. Look at what their life looks like and what their results look like.

And and, surround yourself with those kinds of people.

Steve: Absolutely. That makes sense.

James: Yeah. And, the really, the last message that I wanna leave people with is find a mentor.

Speaker: Mhmm.

James: And I say pay for it because the more that you pay, the more you pay attention. It's just a fact. Yeah. It's a fact. And the reason why I'm so passionate about this, Steve, I was making $17,000

Speaker: in the

James: year 2017. A year and a half ago, I was making $17,000 and we built a $1,100,000 wholesaling company.

Steve: Well, that's less than some of your assignment fees.

James: Right. It's way less than our average. Way less than our average. Yeah.

Speaker: Oh, goodness.

James: I mean, I made that in my second deal ever. I made that total in our second deal ever. So and the only reason that I've gotten to this this level and that we've built the the business that we have is because we went out and found mentors. We have found mentors for every single piece within our business. Every department within our business, we have a mentor for, and we would not have been able to build this without it.

My first mentor that I ever hired my first business coach that I ever hired was, a personal training business coach. And I had no money at the time, and the the business coach was charging $6,000 for his program. And I just received a check from my wife's grandparents, to buy furniture, and the check was for $1,500. And they I talked the coach into accepting that as a down payment. And I said, I promise if you accept this, I will take action and pay for the rest of the program with the results that I get.

And it changed the course of my life. It changed my perspective on coaching. So we I mean, we we have a small mentoring group that we started. Mhmm. We've had a lot of people reach out to

Steve: us Yeah.

James: About mentorship because we've built this so quickly And they want to know how we've done it. We've learned from dozens of high level mentors in our life. So if somebody is interested in that, somebody resonates with it, go to reigamechangers.com and fill out an application there. We'll talk to you. But, yeah, reach out to us if you if you resonate with us.

You have any questions at all Yeah. Reach out to us.

Steve: So that was kinda goes to that last point. If someone wants to get a hold of you, how do they get a hold of you?

Speaker: They wanna probably the best way. Right?

Speaker: If they

James: wanna get a hold of me, yeah, you could go to reigamechangers.com, or you can, reach me on Instagram Mhmm. At the real James Hodges. Oh. Not the fake one. Oh, no.

The real one. So the real jameshodges on Instagram. Add me on Facebook. I truly believe that if you wanna make an impact, be available. Mhmm.

So, also shoot me a text at (940) 273-8022.

Steve: That's suicide. Woah. Woah.

Speaker: Woah. Woah. James. Okay. He caught me off guard with that.

Am I supposed to say my cell phone

Speaker: number right now?

James: No. You don't have to. I I just encourage that. I I believe that if you wanna make an impact, be available. And sure.

I think that

Steve: I believe that too. I was in response to you. I didn't know who you were. Yeah. When you reached out.

Exactly.

Speaker: Don't don't text James and be a weirdo. Okay? He's he's available, but not like that. Yeah. So we, yeah.

Find us at reigamechangers.com. And, it's literally the fastest way to to get onto our radar for sure. Cool.

Steve: Awesome. Thank you guys for watching.

Speaker: Steve, shout out to shout out to Steve, guys.

James: Thank you so much.

Speaker: Give him some love.

James: He does this. Guys, give this guys some love. Share every one of his episodes. He's literally making a massive impact on the world. And, thank you so much for what you do.

Speaker: Yeah. Seriously. Thank you.

Steve: Yeah. What we're gonna do, 100 millionaires.

James: I know for sure it's gonna happen. 100 millionaires. Oh. You're gonna do a thousand, man.

Speaker: You're gonna reset your goal soon, soon, I'm assuming.

Steve: Probably. Probably gonna have to.

Speaker: Reset your goal before you hit the goal.