Todd Toback Shares How He’s Wholesaled 1000+ Properties With Spreads Sometimes $200K+

Steve Trang: Hey, everyone. Thank you for joining us for today's episode of Real Estate Disruptors. Today, we have Todd Toback that with the Get It Done House Buyers, and he drove in from San Diego to share the mindset necessary to get to a thousand plus wholesales and sometimes even a 200 k assignment fee, which is astronomical. I haven't broke 6 figures yet. If this is your first time tuning in, I am Steve Trang, broker and owner of Stunning Homes Realty, founder of the OfferFast Homes app, the only, MLS for off market properties.

And I'm on a mission to create 100 millionaires. So if that's something you wanna do, please let's connect 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 your friend below, or tell me 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 Todd to answer. You ready? I'm ready. Let's go.

Alright. So first question, softball, what got you into real estate?

Todd Toback: So back we talked a little bit about this before, we went live. But back in 2000, '3, I believe, I was working for a corporate job. Mhmm. And, really, really, really good job. I was 23.

I was making about 100 k a year, company car, and, all the benefits. And what happened was I actually got one of my friends hired from a competing pharmaceutical company. Mhmm. And so they came in. And by the way, I was I was kicking butt and doing really, really well.

And so they came in, and they brought him in at, like, a 10 or $15,000 higher salary than I was already at. And, again, like, I was really thankful for the job, by the way. I had a great mentor and and and really, really thankful. So I went and I was living in Santa Barbara at the time, by the way, and the prices over there were astronomical killer place to live. But I'm like, hey.

You know what? That made me reanalyze everything and recalibrate where I was. Right. And I'm like, to be able to to afford any kind of real estate here, I'm gonna have to be having to make, like, a buck 50 or $200,000 a year. Mhmm.

And so I went to my boss, and I'm like, hey. You know, like, the I have to make more money. You know? I want a raise. And and and he's like, well, you know, you're doing a great job, but, you know, this is the way the corporate world works.

I can ask for a raise, but the max that you're gonna get is, like, maybe 2 or $3,000. Mhmm. And so he kinda put his arm around me and wanna protect me from, like, looking bad and getting too aggressive. So he's like, I'm not gonna submit the request that you asked for. Right?

Because I'm just trying to protect you. Mhmm. You know? And this is like, you know, papa bear with his arm around his shoulder. Right?

And and well meaning. And so I got my car and I was, like, really humbled, you know. And, I was depressed and I'm driving on the 101 Freeway. And I'm like, I don't wanna do this. Like, I've gotta find a way out.

And so something something inside me said, hey, pull over. And I looked to the right and there's a Barnes and Noble bookstore, to the right right hand side. It's in Oxnard, California. And I pulled over three lanes of traffic. And literally, I remember there was a guy behind me who gave me the finger, like, as I pulled over.

And I I no joke. I crossed three lanes of traffic into the parking lot, into the bookstore. And right in front of me was the real estate section. And there was a book by Robert Allen, silver cover, blue and green writing. This has multiple streams of income.

Great book. Great book. Right? So, I I buy the book. I read it cover to cover in forty eight hours, and it says, of course, you gotta find motivated sellers.

And one of the way one of the ways to do that is to, look people who look for people who live out of state and send them letters. And so me being totally naive and hungry and scrappy, I go down to the county recorders. And literally, there's, you know, there's no list source, no online accounts. You can't buy names. I'm calling title companies like you can't get it.

Steve: Yeah.

Todd: And so I bring some donuts and some, bagels down to the lady who works there, and she literally hands me a book of the people who live in my condo complex that I'm living. Great location right across from the beach. And, you know, it's funny because I have I'm not jaded at all. No misconceptions. I'm like, I believe I can do anything.

Right. So I write down manually. I think, you know, it's between, like, thirty and forty five names of people who lived out of state. Everyone who lived in my condo complex, hand wrote the letters, just well, I wrote one and then photocopied the rest. I remember, I'm dating myself here, but I literally had this fax machine.

I put it in and I hit the the copy thing. Uh-huh. And it slowly spit out 40 copies of my letter. I hand wrote 40 letters and it was actually, like, too small of an envelope. Mhmm.

So I maybe that probably helped me. Right? And I folded them all and I stuffed them in there, and they're all lumpy, and I hand stamped them. And I I put them out there, and I prayed over the letters before I sent them out. And I got, you know, two phone calls.

And one was like, screw you. And the other one was like, yes. We're interested. We wanna know what's going on. Mhmm.

You know, like, how do you know we were thinking about selling? And it was an elderly couple. They live in Bakersfield, and that's about, like, I don't know, three and a half hours away in the desert. And, like, we're not gonna be down next weekend. Why don't we meet with you?

So I met with him at the condo, and it was literally, like, right across I was living in this condo complex as a and I was renting a room, from my roommate who owned the place. And I and I rented the other room as an office. So I rented two out of the three bedrooms, but this condo was literally our garages touched. So I walked over there, and we agreed to they were gonna sell me the condo for $2.85. And so, you know, I didn't know the value.

Didn't have a contract. I basically wrote it up on a napkin, send it over to the title company. Didn't know how I was gonna pay for it. Mhmm. You know, like, I think Didn't

Steve: know how you were gonna pay for it.

Todd: Didn't know how I was gonna pay for it. And I call, like, three title companies, and I'm like, hey. You know, Robert Allen says this thing about a double close. Like, ever read multiple streams of income? Yeah.

You know, it's like, no. So I was like, alright. Well, I'm gonna have to come up with the money. Maybe this guy is full of it. So I started asking around.

It's in escrow, and I asked my dad, to lend me the money. He says, I don't know. The real estate market's about to crash. By the way, this is 2002. You know, I start calling my brothers.

They all say no. Friends, friends say no. And then I call my brother-in-law, by the way. Thank you, John. I love you.

And he says looked at he looks at, looks online, and he says, oh my gosh. I'm all over this. So he put the 20% down. We got a loan from Washington Mutual Mhmm. Which is now Chase.

Steve: Yeah. Before they got bought.

Todd: Before they got bought. And so, we bought the we we bought it, and then, we just stuck it on the market two days later, got multiple bids, sold for, like, $3.86, I think.

Steve: Oh, wow. That's a great first deal.

Todd: It was a great first deal. And so after closing costs and the loan, I think, you know, I cleared, like, $38,000 and John cleared $38,000. So I'm like, okay. This It's real. Is awesome.

Yeah. Yeah. So that's what got me started. You know? I I got a I got a taste of it, and I said, hey.

This is this is what I'm gonna do.

Steve: I'm glad you brought up multiple streams of income because that's one of the first books I read. I completely forgot about it.

Todd: You know?

Steve: I've read Rich Dad, I've read all these other ones, but multiple streams of income was actually given to me by a mentor.

Todd: Mhmm.

Steve: Completely forgot about that book. So that's a great book. So a lot of people that are getting into it, just a different mindset.

Todd: Yeah.

Steve: Because that was your first wholesale deal. After that deal, I mean, that was really easy, like, for all intents purposes for a first deal.

Todd: Yeah. It really really came easy after that. Well, it's really funny. So I mentioned, like, hungry and scrappy Mhmm. Right at first.

And I was like, I was really jaded because of my boss and, like, that got me, you know, like, going. Right? So through one circumstances or another, Pfizer was going through some changes, and I actually got a job in device sales making more money. Right? And so I was making, like, a buck 70, buck 80.

Steve: So you got the raise you wanted eventually.

Todd: I got the raise that I wanted. Right? And so, actually, that made me a little complacent and a little soft. Mhmm. So for the next couple of years, you know, I was just getting traditional loans to buy some rentals out of state.

PS, they don't make any money. Yeah. And I was, learning about lease options and started doing some, like, lease options on the side. Right? And so, you know, why did I change from what I'm doing from that first deal?

I have no idea. You know? But sometimes we do that when we're newbies. Right?

Steve: Right.

Todd: So, you know, I I go in education mode, and, I'm working my job at the same time, and I'm doing all these, you know, creative deals and generating money. And so at at some point, right around 2000, mid two at some point, right around 2000, mid two thousand five, I decided I'm gonna quit my job and go into real estate full time.

Steve: Making a 170?

Todd: Making a 170.

Steve: Yeah. That's a tough jump.

Todd: It was a tough jump, but, like, I was feeling stuck. Yeah. Right? I was feeling stuck. I was feeling complacent.

And I've gone through these periods in my life, right, where and and if if if anyone's listening to this, whenever I've, had, had, like, a dip in performance, it was always when I was getting complacent, and I was losing my my flavor for the job. There's also some things going on, like, all the products we're selling were were going on back order. Mhmm. And so I kinda saw the writing on the wall. And this is, like, the second time in my career when I'm like, I even though if I'm doing really well, I can't control the outcome a 100%.

And so that was the jump. You know, my wife was, ready to have our second or third kid, and she was like, do it. So I just made the jump.

Steve: Yeah. Very cool. So, I mean, you've got some astronomical numbers. You've been you're very seasoned. Right?

I I would say even, you know, well known in the industry. So how is your operation today different than a lot of the other people that are wholesaling today?

Todd: Sure. Well, I think the one of the things that I think I can bring to the show is that I've done it all. Yeah. Right? I mean, I've been the one man operator keeping all the profit.

And, hey, sometimes that's fun. Mhmm. Right? I've I've had the the boiler room, and I filled that place up with salespeople in way too small of a space. And I and I and I made that profitable.

Mhmm. And then I've had to get actually lean because the the market's changed. So right now, we've got a couple acquisition specialists, and we have a a marketing director who handles some of our dispositions, also with our title company and then a VA. So right now, that's all we're running right now in San

Steve: Diego. So let's talk about that. So how many acquisition people? Two acquisition people. Two acquisition people.

One marketing person?

Todd: One marketing person.

Steve: Who also does disposition?

Todd: Well, so I'll we'll talk a little bit about how we do dispositions. Okay. It's really, really changed the game for us and anyone who's listening, by the way. I think a lot of times we get caught on what's going on in Facebook. So someone says, hey.

This is the way Mhmm. It's done. Right? And so Shiny

Steve: object syndrome.

Todd: Shiny object syndrome. And so I wanna share one tip with everybody here. Something that I've learned that will save you a couple $100 a year, and if you do it the right way and a lot of aggravation, a lot of complexity, in your business. So we'll get to that in a little bit. So, we have our title company handle most of our dispositions.

So so we'll get into that. And then we've got a really, really, really strong VA

Steve: Mhmm.

Todd: Who works for us. And, again, we don't treat them I I I even hate the term VA. Right? A really, really strong executive assistant who's overseas. Yeah.

We do have a third acquisition specialist now who's who just started, who's working exclusively mobile home parks,

Steve: for us.

Todd: But in our wholesaling business, two acquisition people. No no lead manager, in front of the acquisition specialist. I know people are really, really big on that. Yeah. But, we've always operated direct to acquisition specialist, and it's worked really, really, really well for us.

Steve: So are the direct acts acquisition specialists cold calling?

Todd: No. They're not. So what we do is we do direct mail.

Steve: Mhmm. And

Todd: then it goes directly to a twenty four hour recorded message. Mhmm.

Steve: And

Todd: that's one of the ways because in San Diego, the market's crazy. You know, direct mail. I, it's funny. Sean Terry, I think you're gonna have on the show here. Hopefully.

Hopefully. I remember he was like the first person, k, to start any real estate podcast. He was also the first person to like mail on any kind of scale. Mhmm. And so, we were we were friends at the time, and I remember him doing a podcast about sending out 30,000 pieces.

Well, like, I'm a super competitive guy, so I was like, well, I'm gonna send out a 100,000. Mhmm. And so from there, I started, like, mailing more and more and more and more. Direct mail was my thing. I just loved it.

At one point, we sent out 200,000 pieces in LA as, like, our first drop. And that was I don't I do I do not recommend doing that. It's amazing that we made our money back. I think we we we broke even. If we did that today, it probably wouldn't have this was back in 2000, like '12

Steve: or '13. Yeah, you didn't test

Todd: the market. You just went all out. We just went all out. Yeah. But, you know, direct mail has always been my direct mail has always been my favorite.

Okay. And so as the market's changed, we've we've done different tactics, you know, fine tuned our postcard. Mhmm. Although, it is it is getting more challenging, but it still works. Yeah.

And then we do some text message marketing. We do also, work with realtors, texting to realtors. That's a a really, really strong channel of ours.

Steve: So you mentioned a moment ago there there's one tip that you wanna that will save people out of aggravation.

Todd: Sure. So back in, oh, 2014 or '15, you know, the, we from 2011 to 2015, I used to have my assistant just run disposition. We used to email it out. And so, we hired a sales manager. And he knew nothing about the industry.

And sometimes, this is really, really healthy. Yeah. And so he looked at us and he was actually, working with Tony Robbins at the time as his sales manager. So he was kinda doing some consulting Mhmm. With us also.

And so he looked at this and he goes, what is the disposition position like? You know? He's like, this looks mostly administrative. Yeah. He's like, well, you're just like sending out an email, and you're you're you're you're getting everyone at the property at the same time.

And and we had a bidding system. And he was like, this looks like, you know, like, why are you calling this sales? Mhmm. And I'm like, I don't know. You know, this is like how everybody does it.

Yeah. Right? And and so we're looking looking at this, and he's like, why don't you just, you know, like like like, why do we need one person to handle this? This is the process. You know, you send out an email.

They're they're fully trained. Offers come in. Like, what's, like, what's the big deal? Mhmm. Right?

And I was looking at our disposition manager, and she was constantly, like, running around like a chicken with her head cut off. Right? I mean, she's talking to the buyers beforehand, and all the buyers are calling her, like, where do I need to be? Where do I need to be? Mhmm.

You know? And it was, like, the title there was a title issue. She was, like, all over that title issue. And she was calling the seller and saying, hey. You gotta get this piece of paper in.

Mhmm. And he was like, why doesn't the title company do this? Like, why don't you set the expectation that your title company needs to handle everything Mhmm. From getting the contract to getting a close. Any contact with the seller needs to happen.

If the deal's falling apart, they need to happen. They need to verify the EMD is in from your seller. They need to hold that together. If the EMD is not in, they send out the cancellation without you having to know about it. Like, why don't you set that expectation on

Steve: what's going on?

Todd: You know, I'm like, that's a lot of work. He's like, what are you paying them for? And I'm like, well, we only pay them, like, you know, like, $6.06 50 on our transit on our side. And he's like, well, what does the other side pay? And I'm like, well, they pay, like, $8.50 a side.

So it's 1,600. He's like, so they're making, like, $2,400. Mhmm. And you're saying they're not gonna do this work. Yeah.

Right? Totally opened my eyes. Right? By the way, thank you, Rich, for that recommendation. Yeah.

Steve: That's brilliant.

Todd: So we sat down and we wrote down standard operating procedure for, our title company. And they were exact, just like they were an internal employee. Mhmm. And we brought this document to them and and we're like, hey. Are you willing to do this?

They're like, sure. The game totally changed. Completely changed. Our disposition manager, we kept her on for a while. She eventually she eventually left, so we never rehired that position.

Once we got rid of that position Mhmm. Closings never fell out of escrow. Sellers never got cold feet. Deals were easier. The communication the lines of communication was actually reduced.

Steve: So that makes sense on the seller side. Mhmm. But the people that you're selling it to Mhmm. So the purpose the person you're buying from, right, the title is communicating with them directly. Correct.

Person you're selling it to Mhmm. Is title also dealing with them.

Todd: So what we do is we send out an email. Mhmm. And so we indoctrinate our buyers from day one. We're like, this is the way that we do this. Right?

In addition, we also list our properties on the MLS. So we've got an agent who works for us. So we work both sides. Right? Offers come in.

We do highest and best. So like I said, we have our marketing person who has who understands that. Right? And so, basically, the realtor calls and says, hey. This is my highest and best net with us.

This is the highest and best from our cash offer. Doesn't come to me. Right? He the document goes out. Escrow just sends an email and says, here's the contract.

Make sure it gets signed in the EMD. So it's just an email. Yeah. Right? And so there's no need to have an additional position for that and create that additional complexity.

I think some before, we used to complicate this process. And a lot of times when we had this disposition position, the buyers used to call our disposition person and try to, like, find out where they needed to be. Yeah.

Steve: A lot of a lot of negotiation, a lot of haggling.

Todd: Right. And so the the Plain favorites. Plain favorites. Right? And so what they would do is we found out that they would work our salespeople.

Mhmm. Right? They take them out to lunch or, you know, to give them things, and then they'd call and they'd give them, like, the inside scoop. Right? Sounds like pharmaceutical sales.

It sounds like pharmaceutical sales. Yes. A lot like that, ironically. And so, you know, we saw a lot of conflict of interest. So long story short, we found out the more separation, the better.

Yeah. Ironically, our buyers started coming in higher. We said, hey. This is it. One shot.

No haggling.

Steve: Mhmm.

Todd: And everyone came in their their, you know, highest and best first time around.

Steve: Wow. That's a huge nugget. Yeah. Okay. And then you mentioned that there's been a a little bit of a shift for you very recently where you're trying to start building a portfolio for mobile home parks.

And you did one thing that made a big change for you. Mhmm. Can we elaborate on that?

Todd: Well, so one of my coaches, Dan Sullivan, I'm a strategic coach. Mhmm. Their 10 x program.

Steve: I got into 10 x program.

Todd: I was

Steve: in the, signature. I don't know what the first one was, but Signature. Signature. There. Yeah.

That was a signature.

Todd: A lot of the same things, but they talk about the who, not how. You know? And he says, like, whenever you're procrastinating something, you know, there's a good indication that you probably just shouldn't be doing it at all. Like, it needs to be done. Mhmm.

Right? But you shouldn't be doing it.

Steve: I'm not the guy.

Todd: Right? And so, you know, for right now, I I've got a 10:31 exchange. I'm like, hey. We gotta start buying some parks. You know?

Like, obviously, this one 10:31 exchange I've I've got a deadline on. And so it just wasn't happening. Mhmm. And I said, you know what? Like, why don't I transfer this immediately?

It's outside of my comfort zone. I'm not ready to do it. I'm not fully trained. But you know what? Like, I need to make this higher.

Right. And so, we just hired someone just to focus solely on mobile home parks. And, of course, you turn on that switch. We and just we we spoke about this before, but, we're really, really, really close on a couple. You know, the purchase contracts we're at, we're haggling over $1,020,000 dollars.

Yeah. On we're really, really close. And so, you know, I wanna really encourage everyone. For me, the biggest game changer was a lot of times, I thought I could do stuff better Mhmm. Right, than people on my team.

Well, actually, I wasn't getting anything done. Yeah. Right? And so a job a job done by somebody else is a 100% better than the job that you will never do because you're spread too thin.

Steve: Mhmm. Well, I think it's it's it's critical. Right? You got the the what component. Like, what needs to be done?

Mhmm. Right? And you can maybe explain to someone, and you can explain how it needs to be done. Mhmm. But, really, you find the who and let them figure out the how.

You give them the what. Right. You give the what to the who, and it's up to them to figure out how. Right. And your life just changes.

Todd: Just changes. Just changes. And, ironically, this person that I found knows, like, four or five times more

Steve: Yeah.

Todd: Than I do, right, about this topic. You know? And it was funny. Like, I'm like, how did I find this person? I'm so lucky.

Well, you know, I think once you open up your mind and you're saying you make that commitment, that person will appear.

Steve: Yeah. So the other thing we were talking about earlier is the mindset. Right? Because, you know, you're saying that we have too much BS between the ears. Yeah.

Can you elaborate on that?

Todd: Well, what, what specifically? So in terms of BS, like, are we talking about hiring? Are we talking about deal size or all of

Steve: that? We're talking about, hiring someone before you even feel like you're ready.

Todd: So it's funny. So, I have a coaching program called the next level wholesaling coaching program. Mhmm. And so when we said, okay, we had everyone go through all our financials and quiz themselves. We got this assessment that everybody takes.

And so we're like, okay. When you've got 50 k in the bank, right, and, you know, your your your cash flow is is steady, that's when you start hiring the acquisition specialist.

Steve: That's when everyone wants to hire.

Todd: Right. That's when everyone sorry. And so we were going, and so we have, like, a lot of people, like, okay. I'm trying to get there. I'm trying this was, like, the first three or four weeks of of the program.

And, you know, a lot of times, like, we know things, but we don't realize we know them. I'm being cautious with everybody in the program, you know, like, kinda like treating one of the kids' gloves. Well, long story short, I remember this. You know, I've wholesaled, a little over a thousand deals.

Steve: Mhmm.

Todd: And the truth is, I had never purely, purely wholesale the deal before I actually made my first acquisition specialist hire, and I forgot about that Mhmm. Like, mid mid our coaching program. Right? And so do you mind if I tell a story here? Yeah.

Please. Tell you. So so this was back. I when I was doing everything myself, I quit my job, and I was making it, but I I looked over at my wife. I was in bed, and I remember, like, sleeping late.

And I looked over at her and I was like, I don't wanna go to work today. Right? But I was working for myself. I already quit my job. Right?

And I remember we had got an argument last night, and she was like, your mind is elsewhere. You're working too much. You know, like, our marriage was like, you know, we're just arguing short with each other. Mhmm. You know?

Steve: And so

Todd: that's when I hired this consultant, knew nothing about real estate. And he's like, you should just do the one thing that you can make easily repeatable. So it was like, get rid of this. Stop doing lease options. You know, these owner carry deals.

I probably should have done more of those. But Mhmm. He's like, you know, get rid of that. Don't don't don't do that. He's like, just focus on this, and this is how you get a repeatable business like flipping pancakes.

Mhmm. So okay. He goes, so go out and hire somebody. And this is before anyone was hiring that the word acquisition manager was even cool. I hired some I started looking, around and spreading the word, and I got a referral from my really, really good friend, Evan.

Mhmm. And Evan says, hey. I got my friend. He wants to get involved in real estate. Why doesn't he come, like, learn from you?

Yeah. And so, again, I'd never done a true wholesale deal before. Mhmm. Right? But I knew that this is what we wanted to do.

And so I wasn't even ready. Yeah. You know, like, we're just coming out of the market crash. I, you know, I didn't have nearly as much money in the bank. I remember the year prior, like, I did, like, pretty much nothing.

Right? And so I was feeling bad for myself and the market was changing. And it was like, I I made, like, $36,000 the year before. And I had all this fear. And and at one point, the switch just came on and said, I'm committing to this.

And I'd never done direct mail before. And I said, I'm gonna send out, 7,000, letters. Mhmm. And Brian is going to, answer these from a twenty four hour recorded message. And I'm just gonna work with him till he gets a deal.

Steve: Right.

Todd: And I wasn't ready. And so the first week went by, and he was horrendous. The second deal, I had this, selling system that I had that I learned from a majority of mentors. Most of it was NLP. Mhmm.

And I said, hey. I gotta get what I have out of my head and on a paper. This is what my coach did. So then I started formally coaching him. And then the third week, we had a seller, and it was hot.

You know? It it was it was smoking hot. 800 square feet house on Finch Street in El Cajon. And, the house was vacant for, like, twenty five years, and the seller's like, meet us down there.

Steve: Mhmm.

Todd: So we I go down there with Brian, and the no electricity. We sit in, like, a 103 degree heat, with the lights off, and we lock up the contract. Yeah. And so after that, it was, like, game on.

Steve: You know,

Todd: Brian and and by the way, all those voice mails, you know, like, not everybody who's listening to this probably has the same personality as this, but I think the the vast majority of people listening to this podcast were, like, revisionaries, and we're totally scattered. Yeah. And calling back with a bunch of voice mails gets, like, oh, like, really, really, really quick.

Steve: Yes. It does.

Todd: So, Brian, by the way, here's another tip. I personally I used to hire a lot of those crazy DIs, entrepreneur, like, crazy in type and those people are really good for a couple weeks, but then they burn out. Yeah. Brian was, like, more the steady and systems based until his voice mails used to come back. And he used to just, like, call them really, really steady.

Not too high, not too low, not too high Yeah. Not too low. And it's one of the best hires that I ever made. So, long story short, I did that before I was ready. Brian worked with me for four and a half years, made me millions of dollars.

Single handedly made me millions of dollars. And so my mindset shift for everybody here is, there will never be a perfect time to expand. Right. Right? If you're a one man show, and I'm assuming the vast majority of people have either never done a deal Mhmm.

Or they're a one they're doing deals.

Steve: They're just getting started.

Todd: And they're just getting started. But my my my challenge to you, if you're listening to this, is if you're not getting stuff done. Right? And it's because you're too busy or you have too much going on. Mhmm.

Right? You can hire somebody.

Steve: Right.

Todd: Right? And I remember when I hired Brian, and this is crazy because I I and I know I'm getting the, like, the the minutia here, but my goal is to inspire. So literally, I had this office. I had to get out of my house. I would never I would have been working in the bedroom of my house.

Right? But, you know, I think my I think it was my third kid. My wife had just had our third kid, and I got pretty much kicked out of my office. And I got this junky, junky, junky office in the worst part of town. And I remember I negotiated a six month lease for $275.

Right? And there was a homeless guy in the back who threw up every single day. You know? I mean, it was like nasty. Yeah.

Right? But it was my place. Yeah. Right? And I and and I got this picnic table from Costco, and I put in there, and that was Brian's first desk.

Mhmm. Brian showed up. I opened it up, and there was literally a barbecue stain on Brian's desk. Right? And so it was funny though because, all you need all all you need to do this is passion Mhmm.

And the willingness. Because I I had that and Brian saw that, and there's a little sink in there. I grabbed it, and I washed it off really quick. I was like, bam. I was like, we bust through barriers.

You know? I was like I was like, that's what we're gonna do. Right? And he fed off that. Yeah.

He and and he knew that, like, I didn't know what I was doing, and this is my first hire, and I was here. But he believed in me because I believed Right. In what we were doing. And I didn't hide anything from him. It was right there.

So, he also, by the way, worked on a 100% commission. No base salary. No nothing. And so my my challenge here is you're like, well, I need this, and I need that. No.

You don't. Yeah. Well, I think this

Steve: is a great challenge, right, for a lot of people that are getting started.

Todd: Mhmm.

Steve: And I I liken this when I'm talking to some other friends is that there's no perfect time to get married. Mhmm. There's no perfect time to have kids. There's no perfect time to quit a job and start a business. Right.

And an extension that there's no perfect time to hire. Right. Right. You need to hire as soon as things start falling. As as soon as things aren't going the way they're supposed to be going

Todd: Yep.

Steve: It's time to hire. Right. And, one of the great lessons I got from Darren Hardy was that you're not hiring you're not paying someone $30.40 k or whatever. Right. You're financing talent.

Yep. Because once they're not good, you get rid of them. It was a $2,000 expense, whatever. Yep. $3,000 expense.

It's not a $40,000 commitment, which I think a lot of people have in the back of their mind. I don't have $40,000 to pay this guy. Right. So, yeah, if they're not producing an ROI right off the bat, then

Todd: Well, you said something just really awesome. And that was, like, if you actually take a look at your risk Mhmm. Right, is that if even if you pay something like $2,000 a month, right, by by weeks, six, week seven, you're you're gonna know.

Steve: Right.

Todd: Right? And so you're you're only out that portion. You can have a hard stop, stop, you know. And and if you think about, like, okay. The risk here is $6,000.

But if I do this and this worth if this works out, this is what this will give me. Mhmm. Right? Like, you know, that's so right. Yeah.

Steve: So we had some questions here. It was Daniel Barbosa wants to know, are you still doing business in Santa Barbara or or or California Central Coast?

Todd: No. Mostly San Diego, San Bernardino, and Riverside. We've expanded out there the last five or six years. But Yeah. Really, we're doubling down on San Diego right now too.

Steve: Yeah. And then see. How many total people are on your team again?

Todd: We've got our two acquisition specialists or marketing director on our VA. That's just on our wholesale business. Right? So

Steve: and then Brandon also wants to know, if you could pick only one from marketing to use for the next twelve months, which would it be and why?

Todd: The one that's if if you're if you already have one, that's producing. Right? Number one thing, do not get shiny object syndrome. Right? Focus on what, focus on what you can do.

So I tell people our next level coaching program is everyone's like, oh, how much mail do I need to send out for my new acquisition specialist? Another story. Mhmm. Okay? Because right now well, I'll tell the story first.

So we had this guy work for us, Sterling. And I said to him it was like a second or third day, and we had all these leads in here. I go, right now, there is, like, 2 to $300,000 sitting in your database. Alright? So the first day, he was calling our database.

He was getting a lot of dead wood and getting nowhere. And he was like, if you say so. And I was like, this might not work out. But I'm like, I'm telling you, it's there. And I transferred this energy, got him really excited.

Steve: Mhmm.

Todd: And I was there with him. And literally and then we can get into also deal size here. Mhmm. So he's got this, seller he's talking to, and I'm looking at the the ARV, and it's like $6.70, yeah, $6.06 80. And I'm like, I think we can wholesale this for, no.

I'm sorry. 7 sorry. $7.80, $7.90. I'm like, I think we can wholesale this for $5.90. Mhmm.

So he comes to me, and I'm like, the the sellers had this, house vacant for two years. And he talks to her, and she doesn't sound that motivated on the phone. Mhmm. Right? Like, I would say, like, if you're listening, you're like, hey.

I give her a 4 or five. She's like, yeah. I'm thinking about listening to the realtor, and, you know, I've had it vacant. I I, you know, I might keep it vacant for a couple years. I might rent it.

I might sell it. No pain. No pain. Right? But sometimes people let's go back to mindset.

Right? Sometimes people keep calling you. And so you look back in the notes, you saw that you called in two or three times.

Steve: Mhmm.

Todd: Right? And, like, why is this house still vacant? Right? And so you call and they you get these little voice inflections. And I'm like, there's something here.

Now the beauty of this is I would never would have had the patience or time to follow-up with it because he called up. He's like, hey. I have these three leads. This is what I'm working on. Right?

Never would have touched it. Mhmm. So he comes in. I'm like, there's something here. I want you to work this.

So he goes out there, and he's like, hey. You know, I'm going. And he's like, there's gonna be a realtor there right behind me. Right? Should I even go?

So I said, okay. I said, call her up and say, hey. Listen. We're gonna be if you list this, you're gonna get more money. Mhmm.

Right? I just you know, is there a reason for me to come out? She says, yes. So he was still cold on the deal. I said, I said, Sterling.

I said, why did she say yes? Right. Why? There's something there. He's like, okay.

So I I go with him down to the property because I'm like, something weird is going

Steve: on. Mhmm.

Todd: Right? And she shows up with her son. And, like, I see them, like, chatting in the background and kinda, like, arguing. And then the realtor the the realtor literally is right behind us. And I'm like I'm like, this is either really, really, really good or really bad because I've seen them, like, yelling back and forth, like the the mom, the son.

Steve: Okay. Yeah.

Todd: And so we walk out of there, and she's like, let me think about it. So we offered her about $4.15 for the place. Mhmm. And so, I said and this is the other thing I want you to do. I want you to you know, she was talking about Zillow.

So I said, hey. You know, like, why don't you tell her what she she can list it for? And That way, we can really understand. That way, you'll you'll anchor her and say, hey. Listen.

If you list this, right, you're like, you could probably get, like, you know, somewhere in the 6 hundreds. Mhmm. Right? And so, he did that. He's like, you're crazy.

So we walk out of the place. And long story short, she calls him back the next day, and she's like, I'll take it. And so literally on the purchase contract, we wrote down Zillow value, like, $6.20 or $6.30. Like, he literally wrote that on there. Got the thing wholesale.

I let me, like, a buck 75 on it. Buck 75 from a leads in the database. So going back to your original question, if you've got a database, I think it's really, really, really important to focus on that database. So you so you're like, well, Todd, what does that have to do with your marketing channel? Well, I think a lot of times, if you're talking to anybody, keep talking to them.

Number two, don't get distracted with the shiny objects. So every time that you add another marketing channel, you're adding complexity. Yeah. Right? So I know, like, cold calling right now is, you know, really, really, really big.

Well, you're gonna have to hire cold callers or or outsource it, and there's gonna be a lot of unqualified people there. So I'm not saying it's bad. It's just like an entire new set of problems and challenges in your business. Right?

Steve: Yeah. More things you have to, take care of.

Todd: More things. Right? Same thing with text messaging. Right? Same thing with with with PPC.

So my recommendation to you is if you're already using one and it's proven, right, stick with that one and make it work.

Steve: Yeah. Even double down on it.

Todd: Even even double down on it. I still really, really, really, really love direct mail. You know, it's very, very simple. You could run it to a twenty four hour recorded message without having a lead manager. And, eventually, if you send out 10,000 postcards, it's gonna cost you $3,900.

Max, it should be 33 if you're selling small postcards. Calls will come in, but it's really, really important that you not look at your 30 or 60 day return. Now that might be hard if you're totally broke. Right? If you got a job, you gotta work a job for a period of time.

Steve: Yeah.

Todd: But you gotta look at the ROI over a two year period, and that's actually how we make it in San Diego. Mhmm. Is if you look at our ROI on direct mail over six months. Okay. I mean, it is like nasty.

Yeah. Right? But you can imagine how that $175,000 deal that we just talked about Replenishes a lot. Replenishes a lot. And so that's where really understanding your numbers really works comes into this.

Right? Now if you're a one man show, you're not even there's no room in your brain to even think about this stuff. Yeah. Right? So now my my challenge here is a lot of people think that's the chicken or the egg.

Start thinking about what the real numbers are. Not thirty, sixty, or 90, but what the the numbers look like after six months and a year and and stick with that. So I know that is vague. Right? But pick one and stick with it.

And if you work it, you'll probably make it work.

Steve: Yeah. Is there any message on your direct mail piece that, you know, you think gives you an advantage over some because direct mail is not unique. Right? Mhmm. People do direct mail.

A lot of people do direct mail. Yep. But it's obviously working for you. Is there something in there that you think gives you an advantage over other people?

Todd: So this is pretty controversial. A lot of people disagree with me, but it's really, really worked for us. And so what we do is we, send out large postcards, and it says exactly what we do. Mhmm. But it's got the, Chris Chico, call twenty four hour recorded message.

Mhmm. No one will answer on there. So we do that to boost our response. That doubles our response rates. Mhmm.

Steve: So, like, a +1 800 hotlines?

Todd: Well, it's not a +1 800 number, but it's a, 619 number. Alright. And so, we'll squeak out a point 67% response rate with that. If we don't use that, it takes it down to about a quarter percent.

Steve: Okay.

Todd: So with this, we get a lot of garbage calls. Mhmm. Right? But with that, you get people who would have never have called.

Steve: Mhmm.

Todd: And so 40% of our deals come from hang ups and missed calls. Right? That deal, that was the buck 75. I remember that specifically. That came from a missed call.

Steve: Okay. Right? And so it was there was no voice mail. You just called her back.

Todd: Well, somebody else called her back, but that had gone through two acquisition specials. I think he was the third. Yeah. Right? And that lead was, like, over two years old.

Steve: Yeah.

Todd: So, and, again, that never would've happened if I didn't have somebody else, you know, doing doing that. There's so much dead wood in your database, but there's also diamonds in there. Right? So if if you're not able to do that, you're throwing away money and and the numbers won't really, really work. I think the same thing in cold calling.

I think you've had Brent on the show before. Yeah. You know, it's it it's tough as a solo operator.

Steve: Oh, it's a nightmare as a solo operator. It's just way too many moving parts.

Todd: If I

Steve: didn't have a partner, there's no way Right. That this would work for me. So we're talking about the 200 k spreads.

Todd: Mhmm.

Steve: Well, I guess we'll start with a fun tidbit. What is your biggest spread you ever done?

Todd: 237,000.

Steve: Alright. So on that one, where did that come from?

Todd: Well, pretty much, you know, again, direct mail is, like, our one and only. You know? Okay. Again, we we've run PPC before. Mhmm.

But in San Diego, for us, it's not really profitable. Mhmm. Mhmm. But that came from direct mail. And that one was that one was a lay down.

Okay? Yeah.

Steve: Now I

Todd: don't I don't wanna set any, like, crazy expectations.

Steve: I'll send mail. You'll do $2.37.

Todd: Yeah. That one was a lay down, but, one of our acquisitions specialists picked it up. And believe me, like, again, I would have never have picked it up. Right? So let's talk about mindset for a second.

Steve: Yeah.

Todd: Okay? So the one thing that has to happen for you to do, $200,000 wholesale deals is you have to have the mindset of you now whatever you're doing, you have to double it Mhmm. Right, in terms of of of your assignment fees or double closings. Right? So I think a lot of people, they have this thing, like, I wanna make 5 or $10,000.

Right? When I first started wholesaling in San Diego, I remember talking to a few people and like, oh, don't wholesale. You can only make 5 or $10,000 Mhmm. A deal. That that was the expectation in 02/2012.

This wasn't like a respected profession. Did not exist.

Steve: Very different today.

Todd: Very different today. Yeah. So, you you have to set that expectation because a lot of times, especially when we hire acquisition specialists inside of our organization, we always have to train them. Mhmm. Right?

On look. You're really, really, really going for big deals. If you're getting in there just to try to lock up the contract and you're getting this bidding wars with people and you're gonna scrape out making five to 10, well, it cost us $8,000 to do a deal in San Diego. So if we're making $10,000, well, we're gonna be out of business. Yeah.

So you might feel good in that moment. Right? But the way that we pay you, right, you're only gonna make, you know, $1,200 on that deal. So would you rather make $1,200, or would you rather make 12,000? Mhmm.

Right? And so we're always challenging to expand their mindset, use the sales system that we have in our company. And don't mention numbers. Don't be scared of losing a deal. Right?

If you're using the sales system, if you go too low, you can always recover. Yeah. You can always recover. And so I think a lot of people when they negotiate scared I know we're we're all over the place today. Mhmm.

But when we negotiate scared, ironically, you're more likely to lose the deal and make less. Yeah. Right? When you when you show up reluctant and you come in to make those kind of spreads, then, you're gonna win.

Steve: So what is your targeted fee? Do you guys have

Todd: Yeah. So, I mean, you know, I'm, like, even scared to tell our acquisition specialist this. Right? Because once you tell them, they start, like, automatically shooting out offers and going for that. Right?

Versus like, hey. Listen. This is a conversation. Don't do the talking. Ask questions.

If you if if I if you're on the phone and I hear the seller speaking through your speaker phone and you're just nodding and making strange sounds, you're winning. Mhmm. Right? Like, that's it. Right?

Right. If I see you in front of a computer and I hear you clicking on your mouse, right, and you stare at your computer screen analyzing, you're losing. Yeah. You lost. You lost.

Right? And I'm like, you're always thinking about the most you can pay. I'm like, when is the time when, you know, when when you're in front of your computer screen and you're sitting there for ten or fifteen minutes, why are you sitting in front of it? Right? And I'm like, think about that.

And they're like, I'm like, why? You're sitting there trying to rationalize why you can pay more. Right? The seller had told you they need x y z. You stop negotiating, and now you come all the way up.

And now you're gonna pray that you're gonna make $10,000. Yeah. So now when we hire people, comping and valuing a property is like the very, very, very last thing.

Steve: Right. Or

Todd: like, bring a problem, bring a challenge to a meeting, and let's go from there. And so we try to eliminate the whole value conversation of what can we pay as much as possible. Yes. We do have to train them. Yes.

They do have to have an understanding

Steve: Yeah.

Todd: Of this. But we try to make it, like, the least important factor.

Steve: But for your organization, do you have, like, a targeted fee?

Todd: Yeah. So we're trying to target at 50. 50 k and everything. Yeah.

Steve: Yeah. That's pretty good. I mean, we're at let's see. Our target our target's 18.

Todd: Okay.

Steve: Yeah. Which is not I mean, when I first got started, I was targeting three.

Todd: Right. You know? Is this in Phoenix, by the way? Yeah. Yeah.

So So what does it cost you to get a deal?

Steve: It doesn't cost us that much.

Todd: Okay.

Steve: I mean, I think we're we're we're in, like, 300 to 500.

Todd: Oh, that's awesome. Even you do a text messaging? Yeah. Okay. Then Yeah.

Steve: It doesn't cost us that much to do a deal here. Okay. So

Todd: And by the way, text messaging is bringing that down for us. Yeah. And, like, it's not not that I'm saying any of this is bad, by the way. Direct mail is not, like, you know, is is not the one and only. Right.

Steve: Okay. So you were talking about your your acquisition guys. Compensation, they're all 100% commission.

Todd: Mhmm.

Steve: What do you pay them? Like, you have, like, a graduated tier? Like, how do you

Todd: Yeah. And so, now we're able to do this, but you don't need to start out this way. Right? We give everybody a a $2,000 a month draw Mhmm. To start out with the first three months.

And so that's gonna be a draw against commission. And then we pay between 1218%, and that's a a sliding scale every single month. So every month, you're at zero. Mhmm. And so we have have it, twelve and eighteen.

Zero to 40 is the low end and then all the way up to a 160,000. Once they're above 160,000, they can get up to

Steve: that 18%. Nice. Makes sense. Daniel Prita wants to know what script are you guys using when you're cold calling?

Todd: We we don't cold call.

Steve: Oh, that's right. So then what's your message then on your postcard?

Todd: There's nothing really that original about it. I mean, you know, you know, we'll buy your you know, the the same thing. Right?

Steve: Same as

Todd: the other one. Same as the message. We we try to change it up. We try to answer every objection. Like, we'll cover all the repairs.

You know, we'll we'll make it really easy. You can stay in your house. So our our unique advantage is to call 24 recorded message and it'll answer. Maybe after this podcast, it won't be that, you know, unique anymore.

Steve: So so you were saying that was controversial. So what's everyone else doing? Everyone else just takes the takes the live call?

Todd: A lot of people go to live calls. They have the lead managers or the even if it goes to voice mail, they don't tell people that it's going to a

Steve: recorded message. So on your card, on your on your on your direct mail piece, it says going to a twenty

Todd: four hour line. It says call twenty four hour recorded message.

Steve: No one will answer. No one

Todd: will answer.

Steve: Yes. Okay. So it's clear.

Todd: It's very clear. So they're calling because of that. Right? They're also when they call and they don't get a live body, they're not disappointed. So why do they want to do that?

Well, we say, hey. We, we've recorded a, a we've recorded a special message for you. Gotcha. And so they wanna hear it and what we have to offer to find out more information.

Steve: Perfect. Right? That makes sense.

Todd: So, then, again, like, we've tested all kinds of postcards. You know? I mean, you named it. We've we've we've tried it. So this is what's working for us and has produced the return.

Steve: Okay. So as far as the direct mail piece, who are you targeting on a direct mail piece?

Todd: So we I mean, we target all the usuals. I mean, we target the code violations, the, the tax liens, the, 65 and owner owner occupied. Mhmm. Tax defaults aren't performing anymore for us in San Diego. Other places, they'll work really well.

Right?

Steve: Why do you think that is?

Todd: I think people just pull data. One of two things. Here's here's my theory. Is that, either one, it's getting hit really, really, really, really hard. So, like, NODs, known as defaults in San Diego, like, no way.

You know? Yeah. They're they're getting killed. I think tax defaults are the same way or the data's pulled Mhmm. Differently.

But in San Bernardino and Riverside, tax defaults, were great. Yeah. You know? And so it's and by the way, like, before I didn't before I hired someone from my marketing, it was like I loosely kinda knew these things. Right?

Versus now, you know, Brett on our team. Like, I don't even schedule any of the mail. I have nothing to do with it. He's like, hey. These are the lists they're performing.

These are the lists they're not. This hasn't performed the last three times. Can I ask these? Mhmm. Right?

And I'm like, well, you know, now that you told me that, what do you think? You know? And he's like, yes. He's like, oh, I'm just checking. Okay.

Great. You know, like, you know this, like, three times better than I do.

Steve: Right.

Todd: But because I think He just

Steve: wanna get fired for it.

Todd: He just wanna get fired for it. Yeah. No. No.

Steve: So then it's bright tracking your KPIs. Yes. So what are the major three two or three KPIs you're tracking that were critical

Todd: ROI and marketing, we found out is, because you can, it's really easy to feel great about the deals that you're doing and the deal sizes. Mhmm. Right? So you gotta look at your ROI on your marketing. That's one of the number one KPIs that we look at.

We also look at, leads per deal. Those are the the main two. And, of course, the most important number is the net profit. Right. So those are the the three Yeah.

Steve: You mentioned that when we were messaging before on Facebook. So you said, like, net profit

Todd: is one of your big things.

Steve: I felt like there was a rant about that.

Todd: Yeah. So it's funny because, like, in the land of Facebook, so I get a lot I I I look at a lot of p and l's. Mhmm. Well

Steve: Oh, through your program.

Todd: Through my program. Right? Or prior. Mhmm. And so, you know, a lot of people, they'll say stuff on Facebook.

Right? And then all of a sudden, you dig into the p and l's. You ask about the p and l's, and it'll give you a totally a different answer. Mhmm. And so a lot of people have this I mean, the market's changing, so I'm gonna be really real on this podcast right now.

It's getting more challenging. There's a lot of competition in the market. I don't know if you guys have talked about that Mhmm. On the show.

Steve: We haven't talked about it a lot, but it's it's reality.

Todd: It's reality. Yeah. Right? And so, you have to get better. Mhmm.

Right? If if you were gonna make this work and if you're just coming in, I wanna encourage you, you can be done and you can make money. But the market is maturing. So when I first got in and I talked about those 42 letters, right, that I got a a $80,000 deal that I had split two ways, that was awesome. But the market was very forgiving.

Steve: There was no competition.

Todd: There was no competition. Yeah. Right? So now we're at a spot where, podcasting and YouTube and Facebook lives and, you know, everybody is marketing. Right?

And so you're gonna have to get better and understand those numbers. And so real like, more mature industries, like one of my friends, he has a a, like, a, it's a $20,000,000 mortgage company. I mean, this guy, you know, it's so competitive.

Steve: It's brutal.

Todd: It's brutal. Right? Yeah. Well and I'm like, well, how do you, you know, how do you outbeat your competition? He's like, I know my numbers.

I know I know exactly what works. We're all over everything. If something is not working, right, he's like, we turn the dial. We turn the dial. He's like, as soon every time I've got in trouble, I've taken my eyes off the numbers.

Mhmm. Right? And so if you're new and you're trying to prove this real and you're trying to get that first deal, like, I get it. Like, that's what you should be focusing on spreadsheets when you're trying to just get your first deal. But in very short order Mhmm.

You gotta know if you're making money. And so I think a lot of people don't know that. And they set up their businesses based on ego. So they're like, you know, they're like, hey. I've got, you know, four lead managers and, you know, 10 acquisition specialists and my local administrative assistant and my operations manager and all this.

And then you ask them how much money they're making, and they're not.

Steve: You know, it's really funny, because I I come from the traditional world. Right? I'm still in the traditional world. Yeah. But, you know, I added wholesale into it.

Right. And I thought it would be different and that there wouldn't be as much ego and that, you know, people run businesses based off profitability.

Todd: Right.

Steve: Because that's not how it's done in the traditional world. The traditional world is about how many transactions you do, how big your team is. Yeah. And I I I thought in going wholesale, like, oh, yeah. You know, it's you've got more money per deal.

Your margins are higher, so it should be a more profitable business.

Todd: Right. And

Steve: that's not necessarily the case.

Todd: That's not necessarily the case. Well, the other part about this is people will spend if you're not paying attention to those numbers, you will spend this money in your business accounts. Mhmm. Right? And so, and this is really true with mobile home parks, is that you have to you have to change these dials, right, and these little dials.

And if you change these little small little dials in the business, right, you raise rents a $100, you bill back the water. Right? There's three or four vacant spa spaces. Right? You fill those spaces.

You ask and it's it's it's not one thing. Yeah. Right? It's all of these little things that come together, right, and change everything. And so you mentioned one of my all time favorite authors.

Well, he's, one of my who wrote one of my all time favorite books, and that was the compound effect. Yeah. Right? I mean, if you did nothing else, right, forget the show, forget all the real estate. You just read the compound effect and read it, like, four times a year.

Mhmm. Right. You'd really, really, really understand how these small things in your business

Steve: Right.

Todd: Really add up. And so for a while, I got, you know, in my businesses when there was no competition, like, and I mailed that 200,000 postcards. A lot lot of people like, Todd, oh my gosh. You have such big balls. It's like, no.

I was sloppy, and I was lazy. Right? I didn't wanna I don't wanna sit there and say, okay. What are the important ZIP codes here? And how am I gonna handle the calls?

And how am I gonna do it? You don't

Steve: wanna be strategic. You just

Todd: don't wanna be strategic. I just wanted to do it. And I wanna say, okay. I'm gonna spend, you know, you know, $70 for these postcards, and I'm gonna pray, you know, 30, $350,000 comes back. Right?

Yeah. And so, it's a miracle I made that money back.

Steve: Okay. So we talked about, so how many deals are you doing right now in in in San Diego?

Todd: 70 a year. 70 a year? 70 a year.

Steve: Yeah. Okay. And then, like, running, you know, all these direct mail pieces, that's not a cheap business. How much are you spending a month on on advertising?

Todd: Just like through direct mail or PPC?

Steve: All of it.

Todd: So last year, we and again, we really, really, really, really focused on pulling as much money out of the database as possible. And answer your question here in a second. And so it's important again to look at that two year look back. Yeah. So in 2017, we're like, we're not really sure direct mail is gonna even be working Mhmm.

At all. Does that make sense? Yeah. You know? And so that was like we're, like, really, really looking numbers.

And so, Brett, he's like my counterbalance. You know? He's like, listen. You need to do a two year look back, you know, on on what we're doing. Right?

And so we agreed that we were gonna send out five leads per day per rep. That was our that no matter what, every single week, five leads per day per rep. That's all they were gonna get, and they're gonna have to pull that out. So last year, we only spent a $170,000 on marketing.

Steve: Oh. Yeah. I mean, for the grand scheme of things, that doesn't seem that much.

Todd: Doesn't seem that much.

Steve: Yeah. I mean, it'd be crazy. I mean, I couldn't do that today. But the the deal size and the volume guys are

Todd: Are you saying you're saying that's smaller a lot? That's a lot. So for us, that was a lot less than what we're spending. I know. Yeah.

I know.

Steve: It's improvement for you.

Todd: Yeah. For us, like, man,

Steve: I couldn't I couldn't move that deal. No.

Todd: So we would have gone totally broke. Right? So, I mean, we were, like, making a ton of money, more money, more money, more money, and then all of a sudden just started, you know, 2016. It was, like, cratering. Mhmm.

You know? We're like, what are we gonna do? Right? And that goes back to to getting better. So, it is a lot of money.

But when the business is up and running, right, and now you're paying attention to number, that just gives you more confidence. Right. You know, it gives you more confidence. And so, ironically, it was exciting when you could just spend and spend and spend and spend and get that money back. Right?

And then the market was very, very, very forgiving. Right? So for now, we're like, hey. How can we spend less? How can we spend less in getting more?

So we're spending a lot of time on sales. You know? We're looking at text messaging right now and experimenting with it on a small scale. And, you know, one of the things that can happen with that is you have too many leads and the guy stopped closing because their their mind is totally flooded.

Steve: And that's the challenge that we're facing right now.

Todd: Okay. Because we

Steve: have two people handling all the text messages.

Todd: Oh, man. And they

Steve: can't get through Yeah. All of it. Yeah. So in in your program, you're you're talking to I mean, how many students are in your program right now?

Todd: Oh, between forty and fifty.

Steve: Okay. So when people are coming in, what are you typically seeing as far as profitability goes when they're coming in?

Todd: All over the gamut. All over the gamut. You know, it's funny. So, you know, we have one person who came in who was profiting about half $1,000,000 a year and, you know, just took down an apartment building that's gonna be in $2,000,000 in equity. Right?

So, you know, there there's one. And their profit margin's like 70%, something, you know, something crazy. Right? And they're doing all the acquisitions themselves. Right?

So now they're they're bringing somebody on that's there. Right? And then I had somebody who had a, who's who's hired and fired, hired and fired and had, like, all you know, like, six cold callers, and they were in, like, seven markets. And I'm like, well, how much money did you make? And they're like, I don't think I made any.

Mhmm. So we have a, you know, we we had a requirement, like, hey. You had to be, you had to be grossing a certain amount. Right? And then, like, quickly and short order, we're like, well, this is does this is not relevant in, like, any way, shape, or form.

Yeah. So, you know, now we've had to do at least 10 deals to get into the program. Mhmm.

Steve: And

Todd: then we adjust your profitability from that point. But it's it's it's all over the gamut. You know? And, again, like, we now we have people on the tail end. Right?

You know, we have one person who's netting, like, 1.4, $1,400,000 in some small market. Won't won't let us use his name or give a testimony or anything. Super, super, super private. Yeah. Doesn't even have a Facebook account.

Yeah. So, you know, and then we have, you know, students in the Carolinas now netting 3 or $400,000, with a full fully functioning team.

Steve: But as far as, like, percentages, like, what what is a good targeted, you know, for you? Like you said

Todd: Yeah. So for, like, for me, my size team right now. Right? I mean, only two acquisition specialists is going to, you know, the we're we're we're limited to what we can mail right now in certain lists in San Diego. So for me, we're targeting 42% Yeah.

You know, for our own business. Mhmm. But, you know, I tell people, look. If they have, like, a three man team or a four man team, they should be targeting definitely above 40%. Right?

You know, anything above if if if you've got three or four people and you are in that 10 or ten twenty range, there's a problem. Mhmm. Right? There's this no man's land. And the no man's land, and I learned this from scaling up, is between 1 and 2,000,000.

Right? So if you're if you're at, like, 1 and $2,000,000, you can run at that 40% profit margin fairly easy with a very small my size team. Yeah. You take out the disposition manager like I spoke about. You go you work on your deal size.

You have an agent list your properties. And so all of these things, these little levers that we've used to tweak that. Once you start filling offices with cold callers and you have the disposition manager, I don't think there's anything wrong with that, but you've gotta be committed to go to 10,000,000. I mean, they talk about this. Right?

There's this valley of death. Mhmm. And so, you know, you might be able to run that thing at 25% profit margin. Right? But and you're gonna net $2,500,000, and and there's nothing wrong with that.

Steve: Right.

Todd: Right? But you just gotta be really committed. If you think you're gonna run at $4,000,000, you know, $5,000,000 and run at 40% profit margin, it's gonna be

Steve: really challenging. Are you finding in the people that come into the program, the bigger they get, the smaller the profit?

Todd: Yeah. Probability. Yeah. Well, the bigger they get right now Mhmm. That that happens.

However, like, one of the things that we focus on that's really helping that is focus on the acquisition specialist. Mhmm. When you hire the acquisition specialist, not a lot of overhead, make sure they're squeezing out leads. Right? You don't need, again, all these pieces.

So everyone's like, hey. I need this. And I'm like, do not be impressed by the size of the the the people in your office. Right? You want profitability, so really, really focus on that.

Now at some point, disposition will get crazy if you're doing, like, you know, 20 deals a month. So let's go back to deal size for a second. Mhmm. Right? So a lot of people, like, they're like, I've done a thousand deals.

Right? And by the way, that's 70. Like, you know, that's projected for this year. Right? I mean, I've done you know, the last few years, I've done 200 in a year.

Right? In 2017 No. 2,000 last year, we only did, like, 40 deals.

Steve: Mhmm.

Todd: But our deal size was huge. Huge. This year, we're trending at 70. Yeah. Right?

So, you know, the the number was was was going down what we said focused on the deal size. And that's the number one thing that matters. And so people are like, hey. You know, I'm, you know, I'm doing a 100 deals a year or 200 deals. Well, what what's your deal size?

Right? And then what's your profitability? And then, like, are you JV ing Mhmm. These things. Right?

So someone doing a 100 k, you know, 100 deals a year could be making a $150,000 a year in their life is a nightmare. Yeah. So hopefully, that didn't take us too far off topic. No. Not at all.

Steve: I mean, I think that was something that was really important to to, discuss because there's there's for a lot of the people that are newer into the business, they kinda see this, like, and it's, like, inspiring. It's like, is it you know, it looks amazing. Mhmm. Right? I I I'm fortunate to be jaded Yes.

Across the traditional world.

Todd: Mhmm. Right?

Steve: I see something that's like, it doesn't matter. Yeah. What what what I'm seeing there, it just doesn't matter.

Todd: No. Yeah. You know, it's funny. Like, so, for me, I mean, I've got the small team. Mhmm.

My brother, Tom, he has our little brother. Right? So our shared little brother, it's a one person operation. One person. He takes all the calls.

He does all the disposition. He does everything. And that thing's highly profitable. So he that little company, one employee, is probably more profitable than, like, 9099% of wholesaling businesses

Steve: Yeah.

Todd: Out there.

Steve: Well, and that's something I always ask people. Right? Like, I wanna get, like,

Todd: I wanna

Steve: get bigger. I wanna do this. I wanna do that. The question is always why.

Todd: Right. Why? Why? Why do you wanna do that?

Steve: Because it doesn't mean you're gonna make more money. Right. You might do more sales. Mhmm. Doesn't mean you make more money.

Todd: So, I mean, if you wanna get bigger, you're just gonna have to commit. It's a whole new skill set. Right? You're gonna have to become a leader. You're gonna have to be you're gonna have to be able to handle stress.

You're gonna have to be able to see your profitability go down the short term. You can get it back up. But it's a commitment. You know? It's like when when at at at every level, there's another devil.

You know? And, that wraps. That's good.

Steve: So Douglas Kim wants to know how often are you funneling new chunks of leads into your system, and how long are you marketing to them till you turn off the marketing?

Todd: Great question. So, for me, like that time I told you I mailed that 200,000 postcards, you know, that was like pure ego and emotion and sloppy and lazy. And so when you do that, the calls come in. So one of the worst things that you can do for anybody is give an acquisition specialist too many leads. Because here's what happens.

And and I'd really, really, really like to focus on acquisitions here for a second Mhmm.

Steve: Because this

Todd: is where most people get tripped up. So what happens is that when you have someone working for you, they have these leads come in, and all of a sudden, they start getting nervous when there's too many because they're not able to get get to them fast enough. Mhmm. So we talked a little bit about the text messaging here. So when this comes in, the leads start piling up.

You've got Podio. You see red everywhere. Right? And all of a sudden, they start just looking for the low hanging fruit. Mhmm.

And anyone who's not ready to jump off a cliff, right, to sell their house right now, 50% on the dollar is click and they're off the phone.

Steve: Right.

Todd: Right? And so basically more leads equals zero deals.

Steve: Yeah.

Todd: And so we learned, you know, in addition, before I hired someone to do this and you could have a VA do this. It just takes four hours of discipline for you to systemize this for that. Is slow and steady wins the race. It's really hard for us visionaries to do that. We always think more is better.

Yeah. Five leads per day per rep is way, way more than anyone can handle. And I'm talking hang ups, take me off your list. That's on a twenty four hour recorded message. Just think about this for a second.

Is, you call five. Out of those five, right, three say, you know, you you won't you never gotta hold the two. One says take me off your list. One is completely not motivated, and one's retail, and one is like a maybe. Mhmm.

Is that fair to say? Yeah. Right? So now you got one person as a possible. Well, at the end of a week, you've got five possibles that you need to follow-up with.

Right? Well, the next week, you've got 25 new ones. You gotta do all that over again, plus your five possibles. Right? So at the end of the month, you've got 25 people that that you need to follow-up with on a regular basis on top of the five that come in.

By month three, you're toast. Yeah. Right? If you've got too many leads coming in here. So five per day per rep is is where I found that sweet spot over the long term.

Steve: So when you call when you call a lead, it's just a a a call into the into the IVR, into the system, and that's it. That's that's a lead.

Todd: Right? A lead. Any call. Hang up. That's it.

If they say if they say don't call me back, we're not gonna call them back. Oh, of

Steve: course not. But you but you say in your system, in your metrics, that's a lead.

Todd: Yep. It's lead. Okay. We try to eliminate telemarketing calls, over time. Like, they've got they they they got us, so we're having a real challenge with that right now.

Yeah. Yeah. That's the one one thing we're working on. Yeah.

Steve: So, real quick, guys. We're wrapping up here. Tomorrow, we got Quentin Flores and Gary Tigranian. So we're gonna do two episodes tomorrow. That's gonna be the first time.

So, hopefully, I can survive that. What last message do you want to leave the listeners with?

Todd: Well, here's my my two messages. Number one is, if you're brand new, number one, start out totally don't listen to anyone else and go for big deals. Life is my my number one thing. Right? If you get one deal for $7,000 and, you know, I don't know where you live, but if you spend $3,000 to get it, you're in trouble.

Mhmm. Right? So go for the really, really big deals. Open up your mind. Don't get scared.

Don't negotiate scared. Make it happen. Right? A lot of this is gonna happen on the follow-up. If you've been talking to a seller for for six months and no one else, you've got the advantage.

Go for it. Make it happen. Second thing is hire before you're ready. Right? If if all of a sudden the leads are falling behind, everybody in our next level wholesaling program, by the way, we always say, you guys are the worst acquisition specialist I've ever seen.

Right? Like, we should all you should be fired. Right? And so once they do

Steve: Boot camp.

Todd: Boot camp. But But I'm like, once you once you realize that you're really bad at your job Mhmm. Right, you know, as locking up these deals, right, then fire yourself. Hire someone, and it'll be the best decision that you've ever made. If it's okay, I've got an assessment.

Is it give can I give somebody a website for assessment? So if everyone goes to nextlevelwholesalingmhmm..com. Nextlevelwholesaling.com, there's an assessment that you can actually take. And I wrote this for myself to rate myself in the four core areas of my business every ninety days. And it goes to all the way where you're like running around like a chicken with your head cut off, right, to all the way down where it's fully, fully operational, stress free without you.

Right? That's, like, the ideal. Right? Mhmm. You're never gonna be at that Right.

You know, high end. But, the four core areas are marketing, acquisition, disposition, and your cash flow. So if you go to nextlevelwholesaling.com, you could download it and take it. It takes like two minutes and it's it's completely eye opening. Every time I, you know, Brett, my marketing manager, he's just like, hey, you know, like, we need to take this again.

Yeah. So, download it and, it's gonna give you that next step that you're gonna need to take.

Steve: Awesome. And if someone wants to get ahold of you, is there a way for them to do that?

Todd: Yeah. So they can, check out our YouTube channel. It's Lion Pride Real Estate Investing or if they Google Todd Toback YouTube, they'll probably find it. You can reach out to me on Facebook or, nextlevelwholesaling.com. They get on my email list if you take down the assessment.

Steve: Awesome. Perfect. Thank you. That was incredibly helpful. I think helped a lot of people for for mindset and even answered some of my questions.

So Awesome. This is really awesome. Thank you guys for watching and thank you.

Todd: Thanks, Steve.