Wholesaling $500K Per Month at 25 Years Old

Joseph: Shout out to Steve Trane. Jump on the Steve Trane. We real estate disruptors.

Steve Trang: Hey, everybody. Thank you for joining us for today's episode of Real Estate Disruptors. Today, we have Joseph back with Rapid Fire Investments, and he flew in from Montgomery, Alabama to talk about how he's doing $500,000 a month in fees at just 25 years old. Now he did just turn 26, but this is already happening at 25. If this is your first time tuning in, I'm Steve Trang, sales trainer.

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Ready?

Joseph: Ready.

Steve: Alright. So first question is, what got you into real estate?

Joseph: Yeah. So I'll I'll bring it back, all the way to to growing up in in Lexington, Kentucky. Went to University of Kentucky. Didn't really know what I wanted to do. Actually started out in computer engineering, bounced around a little bit, ended up in the finance department, and and kinda had my heart set on investment banking, be able to, go up to New York City and, do an internship in investment bank up there between my junior and senior year, and I hated it.

Hated every second of it.

Steve: Hated the investment banking side.

Joseph: Yeah. It was it was rough. I mean, we're I was coming in at 8AM, leaving at, you know, 11:12PM at night every single day, sometimes even later. And, it wasn't just that, but also looking at the the managing directors was kind of the the highest up you can go in the investment making world. And, you know, these guys are making a million dollars a year, but they were still coming in at eight, not leaving till 10PM every single day.

And so kinda was lost after that. I didn't wanna know what I wanted to do going into my senior year, and, I was fortunate enough to, get into a class called intro to real estate at the University of Kentucky. And it was kind of a unique class because it wasn't taught by norm a normal professor. It was actually, taught by a guy by the name of, Jonah Mitchell. He's a, a junk professor, which basically means he's not a full time teacher.

He just teach this one one class and has a full time career outside of that. So he, we we met every Wednesday from 05:30 to 08:30PM. And, outside of of school, he actually was a, a full time real estate guy. So he owned his own property management company, owned his own brokerage, owned a large portfolio rental properties. And sitting in his class and learning from him, was the first time where I sat in a class and I inspired and wanted to be like the professor because by all means, he made it.

He lived in what I perceived as a mansion. He was his own boss. He's financially free, and it wasn't like he was some super genius. He just worked really hard on his craft for a very long period of time, and made it. And that's what sparked the interest.

I wouldn't say I necessarily wanted to go into real estate full time at that at that point, but I definitely wanted to invest part time at least. Mhmm. Started consuming a lot of content, education, mainly bigger pockets at that time, listening to their podcast. And, actually, in the the winter break over in my senior year, I was networking in some real estate groups and actually reached out and said posted my resume on, the Facebook group and said, hey. I, I'm really interested in real estate.

I wanna intern for somebody. I I feel like I understand the numbers side of the business, but I have no idea how to swing a hammer. I have no idea how construction works. I'll come mow grass paint for free if you suddenly shadow you while while you flip a house or renovate a house. Mhmm.

I had a a few people reach out, but the most compelling was actually, a guy by the name of Scott Pennebaker, who was a a successful entrepreneur outside of real estate, there in Lexington. Him and his partners owned a, a company that bought and sold, used college tech textbooks nationwide. They made a lot of money from that, and they were taking those profits and investing them in single family rental properties there in Lexington. And, up to that point, they bought all their deals just from realtors on the market, but they want to go direct to seller. And so

Steve: How long ago was this?

Joseph: This was, early twenty eighteen.

Steve: Early twenty eighteen. So before we we continue, I wanna ask you just a couple of quick questions.

Joseph: Yeah. Yeah.

Steve: So first, investment banking. That's what we're talking about. Right? So we're, like, going up intern for, like, Goldman Sachs kinda organizations?

Joseph: It it was a middle market bank. I applied to a lot of investment banks. Mhmm. Most of them do not hire from SEC schools. They're looking at the Harvards and, Yales of the world.

So I networked really, really hard. I mean, even that to get that position that I got Mhmm. I probably sent over three or 4,000 cold emails. I wasn't I wasn't brave enough to cold call people yet, but, I was sending cold emails and just networked my way into position.

Steve: So that but that was what you were studying.

Joseph: Yeah. Yeah.

Steve: And then when you got there, it wasn't the work itself, but the or the the the culture that was turned off?

Joseph: It was the culture, and the work itself was also just very not interesting. Okay.

Steve: You don't

Joseph: really get to get into the actual numbers until you're pretty high up in the organization. I was essentially a glorified PowerPoint creator. That's all I did all day was format and make PowerPoints look

Steve: Got it.

Joseph: The best they could.

Steve: And then the other thing you're talking about was the adjunct professor. Right? And it's fascinating because it's cool that you got to meet a professor who's actually doing it. And one of the complaints I have, right, with the least education side, is I have a bunch of people teaching us business that have never ran a business before.

Joseph: Yeah. Oh, very true.

Steve: Alright. So it was really cool to get the opportunity to learn from someone who's actually in the real world.

Joseph: Mhmm.

Steve: So alright. So you're going back. Okay. You're working with

Joseph: Yeah. So we're working, well, just interning for them. They started sending some direct mail, and I was the one, answering the phone calls, like, in between classes and, going on appointments with Scott to look at the houses. And, we actually you know, this is back in 2018 before it got extremely competitive, and we actually had a ton of traction for those those first few direct mail campaigns. And we had more deals sitting in front of us than they even wanted to to buy.

They know what to do with them. Like, these are good deals. We shouldn't let them go to waste since we're, like, try this wholesale thing. Mhmm. We download and assign a contract from some online website, and, we were actually able to close a few pretty good sized wholesale deals right before I graduated in June 2018.

And, up to that point, I I already had a position I I was planning to go to in wealth management. I didn't think there was anything here for me full time, in the wholesale side, but they sent me down. You know, those partners sent me down right before I graduated and said, hey. We we think there might be something here. We don't have a lot of time.

We're running managing this textbook company, but you wanna spearhead this and try to build something out of this wholesale business. You know, it'd be a 100% commission, but we'll we'll back you. We'll put the money behind the marketing. And so I jumped to that opportunity, and that's that's kinda how I got into real estate. I was building a business for someone else.

You know, changed a lot since then, but that's kinda how I got my

Steve: And they were buying predominantly from realtors, you said?

Joseph: Yeah. Yeah. Up until that point.

Steve: They were buying predominantly from realtors, had too many deals

Joseph: Yeah.

Steve: Yeah. Exactly. Started wholesaling.

Joseph: Exactly. So we and we sent this I mean, it was probably five or six direct mail campaigns, like, 5,000 letters. Yeah. And, I mean, we were getting two or 3% response rates and just a ton of deals throwing at us.

Steve: Slightly different time.

Joseph: Slightly different time. Very different time.

Steve: Yeah. Okay. So, who was who was handling the wholesale? They were or you were?

Joseph: I was. So, basically, they brought me on full time right after I graduated in June 2018 to to build a wholesale business. Got it. Because their their time was really invested in managing the textbook companies.

Steve: So let's walk through that very first deal that because, again, like, this is exploratory. Like, you're not you didn't even know if wholesale was gonna work for you guys.

Joseph: Yeah. So

Steve: let's talk about that very first transaction you guys did.

Joseph: To be honest, I don't remember. I because I was kind of doing it part time there for a little bit, so I would only see parts of each deal. I would either answer the phone call or go in the appointment, then they would handle it from there. When I think the really the first the first deal I really ever did was actually a rental property I bought. Mhmm.

That was literally the week after I graduated. And it was it was a pretty cool situation. A a burnout landlord had had posted a list of a list like 45 properties on this Facebook page saying, hey. I need some money to go renovate this big apartment complex. I wanna sell I'll sell any of these.

It was an Excel sheet with the address, bed bath count, what it's rented for, and the price. He posted it at, like, 06:00 on a Wednesday, and this is right when I I kinda figured out how I was gonna buy my first property after talking to some banks. And so that night, I dug in and basically ran my own little appraisal on all 46 properties. I was up till, like, 3AM because I wanna figure out if there's any of these worth buying because they were in good areas. I identified five that should right when you buy it, have at least 25% immediate equity easily.

And they were all, you know, right at the 1% rule or better. And I I came to my boss and Scott and said, hey. I think these are worth going after. I think if we try to buy five of them, we can maybe even get them for a discount than what he's asking. It's kind of a package deal.

Yep. And, you know, you all can have four of them because they're still looking to buy properties. Can I buy one? And he said yes. And so that's how I got my very first one.

It's a little four bed, one bath Cape Cod style house. It was awesome. Probably the best I've ever done. It was already rented for $850 a month, but it was the tenant was a 100% on Section 8, taking good care of the property. And we bought it for $70,000, and the plan was just to do an immediate refinance out.

We bought it cash. And what most people don't know is with Section 8, especially if the tenant's not really paying any of the money, you can, request a rent raise every year. Well, that landlord hadn't done it for four years. So even before we closed, I was like, I'm just gonna take a shot at it. Mhmm.

And then I sent a rent raise request to $1,150 a month even though the market rates over there, like, 900. And they said, no. You're crazy. You know, we'll do a thousand. I was like, awesome.

So I got a $150 rent raise, right before we even closed. And, that house bought it for 70. We didn't put a dime into it. Already had a tenant in place renting for thousand dollars a month. And literally the next week, I went to local banks and say, hey.

I wanna refinance this. I said, well, we'll give you 80% of what it appraises for, an appraiser go out and appraise for a $100,000. We could have pulled 10,000 out above what we had into it, but we're Mhmm. Gonna be a little conservative and It was very first deal. So that very first deal, I partnered with my dad.

Steve: So Got it.

Joseph: Being I was a 100% commission of October

Steve: This is before you got married?

Joseph: Yeah. Yeah. Way before that. Way before that. Yeah.

Steve: Okay. So you were spearheading this wholesaling operation? Yes. Those guys now, are they more wholesaling or textbook company?

Joseph: So the textbook company essentially went bankrupt in in in COVID. They relied on going and meeting with professors in

Steve: That makes sense. Yeah. To buy the textbooks from professors. Unfortunately.

Joseph: Very unfortunate. So they're very focused on real estate now. They do a lot of wholesale. They're a big competitor of ours in in the Lexington market.

Steve: Well, I mean, they they kinda saw

Joseph: Yep.

Steve: What was what was possible. Yeah. Okay. So you're you're helping them run this organization. How long were you in that seat, helping them with the whole selling before you said, you know what, guys?

Thanks for everything. I'm off on my own.

Joseph: Yeah. So I was with the start of June 2018 full time. Those first six months, we were just figuring things out, not doing much of anything besides learning what doesn't work. And then in 2018, we kinda figured out what works, and we hired a few people. And, you know, 2019 was my my only full year with them, and, we did just over a 100 wholesale deals, right, a million dollars in assignment revenue.

But towards the end of that, you know, I don't wanna see I I wanna be a partner in the business. I felt like I was the captain of the ship. Mhmm. But they weren't open to give me any sort of equity in the business as well as we kinda had some differences on what the next step was for growth. And that lined up with my then fiance, now wife, Kristen, getting into vet school, down at Auburn University in Auburn, Alabama.

So everything kind of aligned for me to to jump down there and start my own thing in Montgomery. So that's how I moved down there 2019.

Steve: Okay. So difference of opinion, difference in values, or difference in opinion of your value

Joseph: Yeah.

Steve: Difference opinion of the vision Yep. And you're moving anyway.

Joseph: Yeah.

Steve: Alright. Okay. So you go off on your own. So 2020 is your first full year.

Joseph: Yeah. First full year on

Steve: my own. Because I think I met you in Collective Genius.

Joseph: Mhmm.

Steve: I think I met you. I wanna say our first in person meeting was, like, maybe September.

Joseph: December 2020. Oh, it was a sep

Steve: well, that's right. It was December. It was right before Christmas.

Joseph: Water. Yep.

Steve: So that was your first you're wrapping up your first full year. Because I was like, man, like, this kid's got, like, a really bright future. Obviously, we're well past bright future. Yeah. You're living it, but I remember, like, just thinking like this because he had a really bright future.

So let's talk about that journey. What was your very first year like? Especially, you got to, you know, experience it during COVID.

Joseph: Yeah. Well, it's fun. We're in Alabama. So it

Steve: So the COVID

Joseph: didn't really happen. Three weeks long. But

Steve: That's pretty much how I was here in Arizona.

Joseph: Yeah. Yeah. Exactly. So it that didn't affect much, but, yeah, learned a lot going on my own. You know, it's very difficult going somewhere.

I didn't know anyone. I didn't know a single buyer, anybody at all, and, establishing those relationships right away. And then that first full year 2020, it was just me and, you know, me, Eric, and and one other employee who's acquisition sales rep. I think we did right at 65, 70 deals, right, 700,000 revenue. And, going into that December 2020 CG meeting, we were kind of, you know, thinking, I mean, we're the we're the the top dogs here in Montgomery.

We're gonna go in here. Maybe we'll learn some stuff from some guys, but we'll also probably teach some people too. Mhmm. And we walk in there, and it's feels like it's a room full of sharks, and we're this little minnow like, oh my gosh. But it also what that really did for us was, you know, we thought up to that point that the most deals you could ever do in Montgomery, you know, it's 400,000 metro population was, you know, maybe 85, 95, maybe a 100 deals in a really good year.

And then we go walk in there, and we see, you know, people like Eric Brewer doing 400 deals in York, Pennsylvania. Mhmm. You see doing a 100 plus deals in each of their small little markets, and it really changed our mindset of what's possible. And that is what empowered us to go back and say, alright. We are gonna turn the dial up on marketing.

We are gonna hire more people, and there's gonna be a return. It's not gonna be for nothing. And that's what allowed us to have a a really great 2021, and actually do a 152 deals just in that Montgomery office. Yeah. Yeah.

It was it was crazy.

Steve: Well and you talk about right? Like, you felt like you're the top dog. You went over there, and you got you learn a little bit of humility. Right?

Joseph: Oh, big time.

Steve: And, I kinda made the joke earlier. I was on a coaching call, and I kinda shared, like, well, you know, I won't we won't be doing any coaching calls next week because I'm gonna I'm I'm going to get humbled next week.

Joseph: Yeah. Oh, yeah. Alright? Every time I go, we get a big big, big slice of humble pie.

Steve: Yeah. I was like, man, they're doing what? How is that possible? And he asked. And so, like, it's it's really cool.

Like, for the guys that are listening to the show, right, you're hearing all these guys are doing really big things. We're sitting in a room, and, like, everyone's kicking our butts. Yeah. So it's it's always a good experience.

Joseph: It is.

Steve: It is. Okay. So then what were the big things that you guys did in 2020 that helped you guys a lot?

Joseph: In 2020?

Steve: In 2020.

Joseph: In 2020?

Steve: Or what lessons did you learn along the way?

Joseph: We we learned some lessons. At that point, I feel like, you know, we're we're a real company now. Back then, it just felt like, you know, it was three dudes just wheeling, dealing deals all day. No structure, hardly any process or systems. But we figured out who the players were in the market.

We figured out a few marketing strategies that worked in our market. That was about it for 2020. You know, just getting up and working hard every day was what empowered us to do those deals. It wasn't really any sort of structure or process for that.

Steve: Yeah. And then you said you went from 70 something to a 140 something?

Joseph: Yeah. So in just the Montgomery office, we went from just at 70 deals in 2020 to a 152 closed, in, 2020

Steve: Okay. So more than double your operations. So you already you felt like you were the big dog.

Joseph: Yeah.

Steve: And then you more than doubled your opera your your production.

Joseph: Mhmm.

Steve: What were some of the key things you guys did to help you grow so much in 2021?

Joseph: Yeah. I think, I like to say that we we came up with some some kinda cool new strategy or process, but it really was a lot of stuff that, you know, that we learned in those quarterly meetings and taking those back and implementing them. The number one one number one thing was really just having the confidence to because we already had a small amount of structure, a good CRM, a good a few good process and systems. But having the confidence to go in and actually say, alright. We are going to hire two more position sales reps.

We are going to hire a dedicated inside sales rep. We are going to hire a full time transaction manager, and we're going to increase our marketing budget from 10,000 a month to 40,000 a month. Mhmm. And learned a lot of lessons along the way by doing those things and had good fits, bad fits on the people side. That was the number one thing, just realizing that we weren't gonna hire these people and turn the marketing up and then just have to fire them all because there's no more deals to be had.

Steve: Right.

Joseph: Just realizing how deep you can go in an individual market. That was the number one reason I think we were able to have as much success as we did in 2021.

Steve: So, basically, seeing a similar blueprint as far as organization structure and going back and executing it and then also having the confidence slash courage because it takes a little bit of that Mhmm. To start spending 40,000 a month. Yeah. So realizing if, a, we need to hire the right people, and then, b, once we hire the right people, we need to increase marketing.

Joseph: Yep.

Steve: Okay. What were some of the big marketing things you guys are doing in order to scale? Because 40,000 is not Yeah. What's what's the word I'm looking for? There's a lot of different opportunities when you have that when you're spending that much.

Joseph: Yeah. What were

Steve: some of the biggest, most effective, marketing channels you guys are doing?

Joseph: Yeah. So some of the stuff we're doing today, direct mail always has been good for us, just turning up the amount and volume we're sending there. We started doing TV with with Darren and Bullseye branding, and that's worked phenomenal. And that that's a big chunk of that 40. And as well as just ramping up the level of cold calling and texting we're doing.

You know, before we had one full time cold caller. Now we have 10 full time co callers.

Steve: Mhmm.

Joseph: Well, five dedicated to the Montgomery market. So a lot of it was just taking something that maybe gave us, like, two leads a week and saying, alright. We're gonna ramp it up and make us actually be a a lead source that produces for us and not just something that's kind of a distraction. Yeah. But those are the big things.

It's TV, direct mail, texting, and cold calling.

Steve: Okay. And so it's 150 something transactions in Montgomery. Yes. And then what is you said Lexington is the other market?

Joseph: Yeah. Lexington is the other market right now. That's the market I already knew. I'd kinda build a business there. And, when my noncompete ran out, in late twenty twenty, I, I started that office and really, took a while for it to get going, get some momentum.

But in 2021, that office, did right at 50 deals, I think, 700,000 in revenue, and then they've they've been the big growth story this year. Yeah. And they're knocking it, they're they're crushing it this year so far. What do

Steve: you attribute that to?

Joseph: Again, it was up to that point, there's only one or two guys. Now we've got a full team up there. You know, we've got three acquisition sales reps, a disposition sales rep, a transaction manager, an inside sales rep, and an office manager. Whereas, you know, in 2021, it was two employees.

Steve: Okay. Because it was, we started 2020.

Joseph: It started late twenty twenty. We kind of you know, I was focused a lot in the Montgomery business. It was kind of I wouldn't say it was I would say it's on the back burner of my mind most of the time. And then once we got the structure and the people in place, in Montgomery, I was able to devote more time to building Lexington and and recreating what we had in Montgomery and Lexington, towards the the 2021.

Steve: Got it. So I know people are are really curious at how you how you did all this, and I wanna leave this part to the q and a session because we have a lot of people watching right now. So I guess, let me ask you the a different question. Most people that come on this show when they first, you know, are getting into real estate, they've got a lot of adversity, hurdles, getting, you know, hit getting hit with haymakers. Right?

It seems like this is really easy for you.

Joseph: Not at all.

Steve: So what were some of the early struggles you faced in in growing your business?

Joseph: Yeah. There's a a number of them. I think a a lot of people issues, you know, you you know, you when you first start, you don't know how to hire. You know you know, you hire someone that's similar to you that you get along with, that, may not be right for that position. And so it's a lot of uncomfortable conversations and a lot of bad hires.

You know, one of the biggest lessons I had was, you know, one of the guys that was that that third person in 2020, he was a rock star acquisition sales rep. And he just top performer, 2021, continued to be a top performer, started to notice, ego issues, some some things he was saying in the office that that weren't good. I mean, it got worse and worse and worse. I didn't really know what to do about it because he was still performing. You you what do you do about that?

And, you know, I learned from CG, but, I let that progress way too long and, you know, he was kind kind of like a little cancer that was infecting not just himself, but everyone. And it got to the point where we'd be on a train Phil's training call, and I would just see him rolling his eyes. Mhmm. And I I talked to him after, and he says, well, at least some people have to learn how to sell. Some people are just natural.

So they need to learn. I don't need to learn. You know?

Steve: Yeah. I love it.

Joseph: I it it comes natural. I'm just a natural salesman. I'm like, no. No. No.

And I stood on fire. I stood because he's performing, and it it really it hurt our culture, and that that was a really, really tough time for us. A lot of arguments in the office.

Steve: With include with with him in the argument or arguments about him?

Joseph: Oh, arguments with him with other people, him with me, me with other people about him. It's just a lot of drama.

Steve: A lot of antagonism.

Joseph: Yeah. Exactly. And and and, eventually, you know, despite him still performing, I had to let him go. And, you know, you're worried about that because he was also really good friends with some of the people on our team, some of the top performers on team that I didn't wanna lose. And let him go, and I thought it was gonna be upheaval, but it was thank you the next day.

And there's still some corrective action we had to take, but I just realized, man, I should've done this, like, three, four months ago. Why did I wait so long? That was a really challenging time for us. That was one of the big failures or kind of things I learned from. Times out, there's a there's been a lot of stuff here and there.

Steve: Well, I think for for that, there's a lot of, fear. Right? If this guy is our top dog. Right? Like, how much money we're gonna lose?

Yeah. And is that and is that I I believe it's an understandable fear, but, you know, like, was it Jim Collins talks about in from good to great is, like, the moment you let one of those people go, everyone else is appreciative. Yeah. Right? And you had you got to experience that.

Joseph: I did. And it happened just like they say it does, which just surprised me because I was I was so worried and so so much fear. But

Steve: Yeah. So just for perspective sake, what kind of volume was he bringing in? Because it's easy to say, like, oh, they're doing a deal a month. Like, we got we can let him go. Right?

Joseph: He, he was, like, going September 2021. September 2020 to just do September 2021, he had brought in over a million dollars in revenue.

Steve: Yeah. So that is a million dollars in revenue is kinda hard to walk out the door. And I I will I will share it, just me personally, in my, in some of the toughest conversations. Right? Is everyone's saying we need to let this person go.

Yeah. Like, this person's bringing a lot of money. Right? Yeah. And then, eventually, when you do have when you do let them go, everyone is there's a lot less stress, and it's more fun again.

Joseph: Exactly. That experience it firsthand. Yeah. It is difficult, for sure.

Steve: So, a lot of bad hires. So one thing that you kinda touched on, you know, just for everyone else who's listening, because everyone's in different seasons in their career here. You were hiring people that weren't a good fit for the role.

Joseph: Mhmm.

Steve: Is that accurate?

Joseph: That was accurate. Wanna get fit for the role. A lot of people that I got along with, and that was like, well, they don't they don't have the right predictive index. They don't have the right person. Like, I can just I could see it working.

You know, I I get along with them. Like, you know, I could hang out with this guy, and just doesn't work.

Steve: No. We can't hire people that are like you. Yeah. Because if they're like you, they're probably not gonna be good at the job.

Joseph: Exactly. It it's

Steve: it's hard. At least at least that's been my experience. If they're too similar to me, then they're probably not gonna be good at doing what I need them to do because I don't want them to do stuff that I don't wanna do.

Joseph: Yeah. It's very true. A lot of that happened. Yeah. But

Steve: Okay. So what did you do to improve that?

Joseph: Yeah. So I I still I mean, I I brought a lot of good people into the business. I think for me, big part of the problem was I did not have enough time to focus on it.

Steve: Focus on hiring?

Joseph: On hiring, specifically, and coming with a good framework and and how to do that and actually devoting time. You know, a lot of the bad hires we had was or we've had this Indeed posting out for two months. We need this person really bad. You know, everyone on zero to 10 has been, like, a three so far. This person's a five.

Like, maybe we should hire him. You know? There's never gonna be a 10. It'll it's because I wasn't putting the effort in because I didn't have time to focus on it. And and now the the it's been one of the biggest drivers to our, our growth here recently is we hired a full time director of human capital, and all he does all day is recruit and hire people.

And I think our team has doubled in size in the last six months since he's joined. So, not having focus on it was a big part of that.

Steve: Doctor of human capital. That sounds like something Ryan would say.

Joseph: Yeah. Yeah. I I learned it from CG. A lot of them have director of human capitals, you know, chief people officer, whatever you wanna call it. I mean, someone who's devoted to that full time, has been a big big help for us.

Steve: Awesome. Okay. So, hiring this person. So you didn't necessarily, execute the hiring part, but you brought in a person whose responsibility is to execute the hiring part.

Joseph: Exactly. Yeah. It's something I always hiring you know, processing job applications and talking to people and interviewing, it always felt like it stuck on my time. Like, it was draining to me. And now I'm just there for the very final interview.

Steve: Yeah. And

Joseph: that's it. And it's so much more it's so much better, and he's brought in great people every time so far. Mhmm. You know? His record's a 100% so far.

Steve: We'll see if that holds true. But, yeah. And so, I I I took strategic coach a long time ago, so that was something Dan Sullivan talks about. Right? It's, you know, hiring the right person.

And then, Ben Hardy, if you guys haven't read who, not how, I finally read the book because I've had people push it so many times. Like, I already went through the training, but finally, I read the book. Right? But it sounds like that's what you did. You you hired the right who, and now his job is find other who's.

Joseph: Yeah. Exactly. That's dead on. Who not now?

Steve: So alright. So that was personnel was your biggest challenge.

Joseph: Mhmm. One of

Steve: your biggest challenges. What other major struggles have you experienced going from, right, brand new to city you've never been before Yeah. Getting that 500, thousand a month. Yeah.

Joseph: I think, there's a lot of that's only a really big, hurdle. We we have small hurdles every day. We have deals that blow up. We have what seems like the end of the world happen, it seems, every month. But we we work through it every time.

I can't think of anything specific. I mean, it's just a lot of small iterations and changes and breaking things. One of our one of our core values as a company is We Kaizen. So Kaizen is a Japanese term. It means continuous improvement, and we really, really live that.

So we are never complacent. We are always trying to break things, and so we are just in a constant constant state of change. And I think that's been a big contributor to it so far.

Steve: So just real quick for, you know, reference. Right? Kaizen, k a I z e n. Yep. Alright.

And that's what, basically, what we learned from what the Japanese did with when their auto industry, improved. Right? When when Japanese auto, engineering surpassed American engineering.

Joseph: Yeah.

Steve: Right? So Kaizen. Yep. So you guys practice. So give me an example.

Right? So, like because it does feel like the world's always constantly falling apart. Right? So, like, someone's upset, process is broken. Mhmm.

What is the team's process then for for practicing Kaizen?

Joseph: Yeah. We'll we'll, after that, we'll have a meeting. Well, this is, like, for example, if a deal blows up. Recently, we had one of these. It's a big apartment complex deal that fell apart.

We're wholesaling, and we had an after action report meeting where all the people that are involved in that deal came together for thirty minutes. We list out all the problems that that we ran into. We list out what the key root of each of those problems are, and then we reach list out all of the, corrective actions or changes that we're gonna make, and then everyone spends the next thirty minutes going back and making those changes. Mhmm. This deal blew apart for a number of reasons.

Steve: Well, let's talk about that specific deal.

Joseph: Yes. This is a a a a 10 unit apartment building in Montgomery, that we're gonna buy and then resell to a buyer where he had locked up. The first thing was the seller was fairly difficult to work with. During the middle of our process our diligence process, he left and went to Thailand. He's gonna be in Thailand for two months, and closing in Thailand is difficult.

You can't doing there's no no reason in Thailand. You have to go to the US Embassy. You You have to schedule that. It's gotta be two weeks out. He's already really mad about that because he wanted to close today.

There's a lot of problems with, getting in with the the current tenants.

Steve: Mhmm.

Joseph: His property management was in shambles, and all that got put on to us. There's also confusion. Everything was separately metered, so we just assumed that it tends to be their own utilities. Well, we're so this is probably we actually closed on. We buy it.

The next day, our phones are blowing up because everyone's water has been turned off. The owner never let us know. He told us verbally we had notes in on the, you know, on the call that they pay their own utilities, but, no, we didn't have it in writing. So what what was the corrective action? We now have in writing on our contract, like, if a tenant occupied property, who pays utilities?

And it has water, gas, you know, electric, and they have to fill that out

Steve: Mhmm.

Joseph: Because that happened, and it was a nightmare. And the tenant's blowing us up, no water, no power. A lot of stuff like that happens all the time.

Steve: Alright. So guys out of the country. Right? So what was the root problem there?

Joseph: He was a difficult seller, and he wanted to close, like, right now. Mhmm. And he this was confused as far as he thought he could he thought, like, a a Thailand notary would work or or something like that.

Steve: Right.

Joseph: But in order for to do a closing with someone who's in in an international country, at least in Thailand, you have to go to the US embassy. You have to schedule it through their website, and they don't have many spots for that. So the earliest that they had, they were supposed to close on May 2. The earliest that we had, I think, was May 23.

Steve: But I guess my question is, what is the fix now? Right? Because we identified the problem. So next time you

Joseph: got next week, international seller. We our transaction manager just knows. It's not like something we really have on a contract or anything, but she knows that to expect that hurdle, we have it in because we actually had a few other ones happen like that.

Steve: Right.

Joseph: And she knows to expect that going forward Yeah. For that issue at least.

Steve: Okay. I was just curious because it is an interesting scenario. Right? Because you said, like, it's notary. He's like, no.

Of course, sir. You just go to the embassy. But now we know also that the embassy is two weeks out.

Joseph: Yeah. Or at least, yeah, you just gotta check. Yeah. It's it's ridiculous.

Steve: So we're talking about a 100, over time of the the volume. So you also own a 150 rentals.

Joseph: Yeah. Yeah. So, most of those are in Lexington. That's where it got started, and it's mainly single family and and small multifamily properties. And the largest I have is, like, a sixplex.

And almost all of those have been acquired, using the BRRRR strategy. So even when I moved down to Montgomery, I was continuing to buy properties up in Lexington, off market and burning them and keeping them myself.

Steve: Yeah. So you the birth strategy is working really well for you. Yeah. Okay. It's one of the things I'm envious of.

Right? And everyone that comes in from the Midwest Yeah. They get to do the birthing. It's not quite the same in Phoenix.

Joseph: Yeah. Well, Lexington prices are getting pretty crazy. I at this point, like, I'm just looking to make, like, $50,100 dollars a month cash flow on these deals. If that really, if they can just break even, they're kind of little forced savings accounts for me. Alright.

But it's yeah. It's not like it used to be.

Steve: So but this is how you're able to bankroll your your your all the your rental portfolio or how you're able to build your rental portfolio? Yeah.

Joseph: It's how I was able to build it. You know, doing the BRRRR strategy allows a small amount a small amount of capital to have a lot of velocity. Mhmm. We cycle over over and over and over again. And, you know, after a few of those, really starting to rely on private lenders.

So, really, all of these deals, I have no money invested in at all. We have relationships with a few, local private lenders there in Lexington, and they'll fund a 100% of the purchase and rehab. We'll we'll get the deal rehabbed, contact a local bank to get it refinanced, pay them off. I've got a property that's cash flowing a little bit, but the the real deal is I have no money invested in it too. So every month, that debt pay down as well as the tax benefits, really help out a lot.

Steve: So as far as what do I wanna ask? Shoot. Had a follow-up question for that. Oh, how what percentage of properties do do you have a strategy, like because you're sourcing deals, obviously. Mhmm.

Do you have a specific strategy for, like, for every three I wholesale, I'm keeping one. Is there, like if if we get a property and it hits these boxes, then for sure we're keeping it. What strategy do you have on determining what how what properties you're building around your rental portfolio?

Joseph: Yeah. That that's it's changed a lot over time. Mhmm. I used to be I just wanna buy anything that I can remotely afford and just buy buy buy buy buy. Bought a lot of stuff that was probably c c minus class stuff, and realized, you know, the numbers look really good on paper.

When you get those c minus class tenants in there and the damage they do and the the rent that they don't pay, you realize that what's on paper doesn't really add up to what's reality.

Steve: There's not a box for, like, how much you have to spend remodeling because the tenants are difficult. There's there's not that field.

Joseph: There's not at all. But you see it on the tax return. You see it on the bank account every month. Yeah. And so, you know, recently, actually kinda shifted focus.

Used to be just buying everything that I could, that that made sense that could potentially cash flow. And then anything that was more of a flip property, we'd wholesale. Now I actually recently after that last EG meeting with with Alastair, I and him kind of talking about where where the economy is most likely headed, I actually recently just sold off, 33 units that were all the lower class stuff that has doubled in value in the last three years despite still not really cash flowing.

Steve: Mhmm.

Joseph: And now I'm purely focused on buying stuff in the city limits of Lexington. None of the suburbs like I was before were, and b class or better properties. Yeah. And so I've slowed down the the amount of deals I bought a lot, as well as now that we've built the wholesale business up there where they really have a structure, I'm not allowed to steal deals from from the company. Right?

I've got to run every single deal that comes across my plate through the company. And, I follow the same policies as all the other employees in the company as far as being able to buy deals from the company. We have we have a policy that, we encourage our our our employees to buy rental properties. We want them to do that. A number of our employees have.

They get first access to any deal that comes through our system. And there's a discount policy where the first rental property they buy in a given year, they get a 25% discount, to the assignment fee of what we were gonna put put it out at and market it at. And then for every consecutive offer that, that discount declines by 5%. Mhmm.

Steve: And

Joseph: even if they bought five, if they wanna keep buying them, they still get first access. They set to pay full price, and that resets every year. So I follow that same strategy in Lexington, which also part of the reason that I've slowed down a little bit Mhmm. Because I've gotta tackle that assignment fee for myself as well. But, yeah, that's kind of strategy now.

Steve: Yeah. And then this someone in here was asking what CG was. So, yeah, CG is just collective genius. So we're both in the same mastermind, which we're gonna be hanging out again, actually, next week.

Joseph: That's right.

Steve: And we even play basketball. Yeah. I was gonna be I'm

Joseph: gonna I'm gonna come down and play a little bit more this time. It's a lot of fun.

Steve: So I don't know how it's gonna go. I hurt my knee a couple of weeks ago. So we're we're gonna see how that goes. Another thing too is, you know, this is totally selfish here on my part, but, you know, got a chance to talk to Eric last time. Right?

Joseph: Oh, yeah. Yeah.

Steve: And, he's he shared with me, like, the coolest story. He's like, hey, Steve. I wanna let you know I was able to buy the car I had my eyes on. So you know you know the story.

Joseph: Yeah. Eric Eric Martin, our COO, he's been dreaming of buying a Tesla ever since I met him back in college. It's his dream car. It's always been his

Steve: dream car. Back to college with

Joseph: him? Yeah. Yeah. He's yeah. I've been with been with Eric for a long time.

He actually interned at the the company I used to work at. So Okay. And then worked there as well. But he's always wanted Tesla. And, I remember the right first CG meeting.

We met Steve at the bar before the the first day that night, and, Eric was in awe because you owned a Tesla. And, I remember him making a comment. You were like, oh, it's you know, I'll just buy one. Just buy one. And Eric was like, he told us to buy one.

I was like, I don't know if I have the money to do that right now. And but now, you know, we've had a lot of success. A lot of that's because we're we're listening every single week to the the Steve training, sales training. We got our acquisition sales reps on it. We've got our lead managers on the new training.

And also just learning from the disruptors podcast. That's been huge Yeah. So far. And here here recently, he was actually able to, I think two months ago from a month and a half ago, bought his dream car. He's a freaked out, Model three Performance, and, it's pretty scary to be in because that thing flies, and now he's got the full self driving.

And he trusts Elon a lot more than I do. But, but, yeah, it's, it it was a dream fulfilled for sure.

Steve: Yeah. And it it's the exact same car I have. Right? So it's it's it's that car is incredibly fun. You know, I'm actually looking right now for another car because the supply chain issues, you know, my my lease ends at the end of the year.

Joseph: Oh, okay. So I

Steve: was like, I better start looking now.

Joseph: Yeah. Yeah.

Steve: Alright? And I've been looking, and the thing that's crazy is there's not a car I wanna buy. Like It's

Joseph: not the Tesla.

Steve: That that model three is the best car you can buy. Like, I can't find anything better.

Joseph: Yeah. It's pretty phenomenal.

Steve: So let's see here, guys. You know, let's definitely, jump in some questions here. And, before we jump into that, guys, we do have our, all day sales training come up in a couple of months. If you guys are interested in checking checking that out, go to disruptors.com/salesdisruptors. It's a day and a half to go over everything we just talked about here.

Right? So we go over our process that 60, of the top members, right, investors in the country are entrusting us to teach them. We go over that, and you'll have all the confidence, the mindset, the tools you're gonna need to be able to buy houses, at a higher margin more consistently, and they'll show up in the closing day. Because that's one of the biggest problems is they'll sign contracts, and they don't don't show up.

Joseph: We've had that issue a lot. We've had to get some large involved.

Steve: Yeah. So we go over how we do that. So, let's go and jump into this. So the first question, and it's gonna be a longer question

Joseph: Okay.

Steve: Right, is how are you doing 500,000 a month? So I I said that I wanted to leave this up to these to these guys. So what, like, what are the major two or three things that you're doing as effective to help you get to 500,000 a month? Because that's I mean, most people don't make that, in a matter of years.

Joseph: Yeah. Yeah. Well, that's top line too. You know, we're not netting $500,000 a month. The key really for us you know, Montgomery, this year is not necessarily growing much more than it did last year.

We have a little bit of growth, but, Lexington's taken off a lot. We're implementing the same structure and systems and processes that we had in Montgomery and Lexington, and they're kinda competing every month. So, you know, this last month was kind of a a rough month for Montgomery. I think we did, like, a 155,000. Kentucky went off and did three fifty.

And the month before, it was at two seventy five in in Montgomery and, like, a 175 in, Kentucky. So they kinda trade places, and it's been nice so far. There's not been one where they're both down. Mhmm. It's either one's down, one's up.

But really having that second market has been a a big, big reason we've been able to to achieve the 500,000. I'm wondering another big thing is, you know, we follow the, EOS and attraction. And, you know, the beginning of this year, we had a big annual meeting, and we laid out what our goals are gonna be. And our goals for this year is $6,000,000 in revenue and 400 deals. And we laid out exactly how that needed to what we needed to do to make that happen.

And one of the key things was to get the Lexington office up to the same scale and structure as Montgomery. So that was that was what our our core quarterly rocks for q one were tied to, and we made that happen. And now we're seeing those results, q two and q three with the Kentucky office really starting to to perform. So really just having proper planning. You know, that's another thing where we realized at the beginning of the year, if we wanna achieve the 400 deals a year and 6,000,000 in revenue, we're we're gonna be at 35 employees by the end of the year.

Steve: Mhmm.

Joseph: We had 12 full time employees January 1. I was like, I'm not hiring that many people. I'm horrible hiring. I hate doing it. So we really would need to hire someone who full time hires and recruits people.

And so just playing it out, knowing where you wanna be at the end of the year, and planning out on a quarterly basis has been the key to us being able to achieve the 500,000 a month.

Steve: Okay. So I'm hearing the sitting back planning and then executing that plan.

Joseph: Yep. Exactly.

Steve: Alright. So that's one thing. The other thing we talked about earlier was, you know, advertising on TV and, direct mail as a big piece of your success.

Joseph: Yeah.

Steve: So you're on TV in Lexington and Montgomery?

Joseph: Both markets. Yes. So both markets, we pretty much do all the marketing you can do. We have a we have two full time texters. We have 10 full time cold callers.

We're doing TV with Darren in both markets. We're seeing a lot of direct mail in both markets. You know, our overarching marketing budget's about 95 to a $100,000 a month, total between the two markets. So that's a big reason why we're getting to 500. If you're not spending the marketing dollars, it's hard to get to those those high revenue numbers.

Steve: Sure. Makes total sense. Is there anything else? Because that's two things. Right?

So marketing and and then the the planning and executing. What's the third thing that you would say was instrumental to getting the 500,000 a month?

Joseph: I think the last big thing is just, being a lot better about training and onboarding. Before it was kind of someone would come on and it would be like, alright. Your acquisitions, so this is our other acquisitions, guys. You're just gonna shadow him all day every day, and, hopefully, you'll pick it up. You know?

Eventually, we'll start throwing your own appointments here in a few weeks. But now we've got a whole build out system where we're we're from day one, getting them plugged into our, we use Trainual, the software platform to get people onboarded and trained. And we've got, you know, their first thirty days mapped out of, hey. You're you're listening to Steve Trainings, all of his modules. You're you're taking the, Chris Voss master class.

You're going through our internal training on running comps, running air v, and we even have an exam that they take at the end of those thirty days. And they're not allowed to go on appointments on their own until they pass that exam. This is just for the acquisition. So Yeah. Building out training a lot better so that those those acquisition reps can, come online and and start performing a lot quicker.

Steve: Yeah. Onboarding is so key. I I still remember, and it's embarrassing because there are times that we don't onboard very well. Right? It still happens from time to time, not as bad as it used to be.

But I still remember my very first day at Intel. Okay. Like, I like, they're paying me, like, a real salary. Right? And I show up, and I'm like, yeah.

I don't know where your boss is at. Right? Just sit in the queue. We'll figure this out later on.

Joseph: Figured out better?

Steve: No. Oh my goodness. Okay.

Joseph: Well, it's not just us. The big companies too. No.

Steve: The big companies have have similar challenges as well. So it's it's so key. Right? Because Yeah. It's also their first impression of your company for anyone that joins your organization.

Joseph: Oh, it's huge. And we we do a lot with that now after we, you know again, going back to CG, but, you know, here in Ren's presentation a few few quarters ago, we're talking about what they do. So do the same thing. We send you a if you're joining our company, you get a, a survey before you start. We found them all of your favorite snacks and drinks and everything.

When you start day one, you have swag everywhere, your favorite snacks, your favorite drink. We're taking you up to your favorite restaurant. The whole company is for lunch on that very first day. Just know everyone. We want that impression to be amazing, and we wanna make sure that you're immediately embedded into the team Right.

And the training right away.

Steve: Indoctrination begins from day one.

Joseph: Exactly.

Steve: So, Instagram, realtor Ilya, how do you find your deals? I think we already answered that one. How do you think this is Remington on YouTube. How do you think wholesale will be affected if the economy goes the way you mentioned it may go?

Joseph: It's definitely something I think we're all thinking about a lot right now.

Steve: Oh, it's gonna be fine.

Joseph: Yeah. That's what I hope. But, you know, we're you're seeing inventory levels starting to creep up. You know? Interest rates are continuing to rise.

You know? I think just today, the the Fed increased the, the federal funds rate by, 75 basis points. Point

Steve: seven five.

Joseph: The largest since 1994 of that large of a raise that had given given time.

Steve: It's a massive jump.

Joseph: It is, and it's scary. I personally I try not to think that I know too much in this space because I've only been in real estate in the good times since 2018. I really don't know. I try to talk to those that have been through the cycles, have have seen it. And the one thing for us is, obviously, real estate is very local, so we're monitoring our local MLS data, every single month, making sure prices are continuing to appreciate or stay level, making sure the inventory levels are are staying, staying low.

Both of our markets were still below two months of inventory, so we're feeling strong right now. But the one thing for wholesale, at least my theory, have not put it to the test yet, but we'll see here here shortly, maybe. And we're not flippers. We don't have a lot of inventory. So I like to think that we're gonna move with the market.

Mhmm. So if people were paying a 100 and we were getting it for 80, well, now they're only willing to pay 90, or we'll get it for 70. And so here recently, actually, we had we locked up a lot of deals in Montgomery, and we very rarely back out of deals. We had a lot of deals recently that were that were a little bit more difficult to move. We were pushing our our prices a bit, but, because of that, we we went ahead and, you know, now our whole team, we changed the formula for what they're offering at.

So they were you know, it was we think we can move stuff for 80% of ARV, minus repairs. Now it's 75% of minus repairs. So we're already making that adjustment. Hopefully, that our margins don't, shrink. So we're trying to take that action to make sure that doesn't happen.

But we're monitoring every month. Yeah. I think for me, personally, I think we've just been in a very hyper aggressive market in the last few years. And so now that things aren't selling for over asking in the first twenty four hours and not getting 20 offers, people are freaking out. But you just gotta remember that it hasn't always been that way.

It hasn't like, you know, 2016, 2017, 2018, it wasn't like that. The market was still fine. You know, you're still getting your asking price just took thirty days instead of thirty minutes. Yeah. So hopefully, it just normalizes, I think, is the term going around that we're all hoping.

Steve: Yeah. We might all have to work a little bit harder.

Joseph: Yeah.

Steve: But we're gonna be fine as long as we're running a good business. So I think it will be an interesting, meeting next week, though. I think

Joseph: it will too.

Steve: I think it's very timely.

Joseph: It is.

Steve: And, one thing I like to do, if you guys aren't watching our my other channel, you know, if you just go like, just the Steve Train YouTube channel, what I like to do also is interview people, SCG. Right?

Joseph: Oh, yeah.

Steve: Ask them questions. So if you guys have not been watching that channel, you guys are definitely gonna wanna check that out because that's gonna be the key question.

Joseph: Yeah. There's gonna be a lot of knowledgeable guys that have been through some cycles there. I would definitely pay attention to that.

Steve: So I get to play reporter in the scene over there too. Alright. The other question, Instagram, this is Zoram. Now the market shifted, we're on the way down. Were are you doing the pivot?

So I think that's probably more of a question for you than it's a question for me. So what are you doing to pivot?

Joseph: I think the pivot like we said, we're we're declining decreasing the, what we're offering in the front end, changing those formulas, so that when we do go to sell those properties, our margins aren't being compressed. So, like I said, we're trying to move with the market. Yeah. I have an art, but, that's

Steve: But you're right, though. Like, being a wholesale, we get to do that. Yeah.

Joseph: We don't have any inventory looming on the balance sheet.

Steve: Yeah. The biggest challenge we're gonna have is, the time it takes for the sellers to realize

Joseph: Yeah.

Steve: That the market has shifted. And we're the good news is we're hearing for the most part, sellers are aware. The new the bad news has started. Like, they're they're not protecting this present as much as they

Joseph: Yeah. Yeah.

Steve: Might have been earlier. Yeah. So I got I'm looking right now on YouTube. I see a 104 people watching, but only 25 thumbs up. So, guys, if you guys are watching, that's the cost.

Right? Just hit the thumbs up. Okay. So Isaiah on YouTube, what does your wholesale operation look like today?

Joseph: Yeah. So we've got, I think, about 20 employees, full time in the office. We also have some virtual assistants and and co callers, but I can go by office. By office Montgomery, we've got four acquisition sales reps, three inside sales reps. One of those is kind of gonna help they're gonna help with the Columbus office as well once it's open.

But four acquisition sales reps, three inside sales reps. We've got a disposition sales rep, transaction manager, office manager, and then, a director of human capital, COO Eric, myself, and up in Kentucky. We've got, three acquisition sales reps, a disposition sales rep, transaction man yeah, transaction manager, and an office manager.

Steve: Got it. Yeah. So, yeah, our challenge necessarily isn't necessarily when things, change the flipping side, but we still have a fair amount of overhead.

Joseph: Yeah. We do.

Steve: Yeah. Yeah. So what is your overhead, running those two offices?

Joseph: Yeah. I mean, this is just fixed cost. Not even including any commissions or bonuses for a lot of the reps. We're right around between $1.90 and 200,000 a month overhead.

Steve: Yeah. So there's that if things if the temperature changes, those are the kind of things that get kinda scary.

Joseph: Yeah. It's, it's funny because sometimes my wife will be like, you know, I know I know you talk about the comedy. He's like, not doing great. Like, do I need to stop spending at, you know, whatever, Lululemon or something? And I'm like, it just doesn't matter.

We have $200,000 a month overhead. Like, it's it's so scary because when we were smaller, like, it was like managing my personal finances did matter a lot.

Steve: Mhmm.

Joseph: But now it's like, you know, maybe I'm spending $810,000 a month. Personally, I've got a $200,000 a month, you know, overhead of the of the business, and that's the only thing that matters. It's very scary, but it's also, I think, necessary if you wanna grow. So I

Steve: mean, I have similar conversations with my wife. Right? She's like, are you sure we can spend $800 on this? I was like, I don't think she understands how much I spend Yeah. Every single month on my business.

Joseph: Yeah. It's not gonna make a blip on the radar. Like, it's yeah.

Steve: Yeah. So, so that follow-up question, this is from someone else. Who was it? But they're asking us, so then on that 500,000, like, what is your profitability

Joseph: on

Steve: a 500,000? Because we already heard, like, you know, your overhead's a 190. That's before cost of sale. Yeah. Right?

So what is like, what do you get to keep out of that?

Joseph: It varies a lot month to month. We are growing a lot, so we're spending a lot right now. Your target for the year is is right at, 35%. We're tracking pretty well close to that. Yeah.

Steve: That's pretty good. Right? Because usually, it's 25 to 30 range. Right? Like, an excellent operation, like, 45.

Yeah. But, like, 25 to 30 is, like, normal. And that's actually not as normal. That's a good company.

Joseph: Mhmm. Alright.

Steve: So you're 35. That that's phenomenal. Deal Garcia on YouTube is asking, you know, when you're starting out and you're getting out to local REI events, how can he present himself to be of value to other people that he wants who are successful already?

Joseph: K. It depends on who you're approaching. I think you need to, you know, just talk with them, figure out what their problems are, and see if you can provide a solution. You know, whether that be, maybe you're really good with, like, a lot of the people here at the train's office are with media, and you can help them, you know, build, a social media side of their business. Right?

There's a lot of pretty big organizations, you know, flipping and wholesale companies. They don't have much PR going on. Mhmm. We make a lot of efforts in that, but you can help with that. There's a lot of things.

You have to figure out someone's problem is and figure out how your skill set can fit in to fix their problem.

Steve: Yeah. And and and I think that's ex exactly it. Because I get people asking me. Right? Like, there are people out here that said, you know, make sure you're value adding value, adding value.

Right? Great advice. But I think it's not doesn't go far enough.

Joseph: Mhmm. Right?

Steve: I think you gotta go find out what it is that they're struggling with. Hey. Like, what like, let's talk about your business, get to know you, but then also, like, finding out, like, where are some holes. Yeah. Then you can say, like, well, you know what?

If I can help you with that? Yeah. Who was I talking to very, very recently? Well, let's just go back to your example. Right?

Like, I will go mow lawns for you or whatever if I could just shadow you.

Joseph: Yeah. There's a lot of people that'll take you up on that. You post a local group if you wanna learn how to flip houses. You know, I had a lot of people reach out. You tell someone that you're gonna you'll paint and cut grass for free, they'll take you on and let you shadow for for quite a while.

Steve: Yeah. Okay. So how do you know how much to pay yourself from the proceeds? Is Isaiah on YouTube?

Joseph: So that's changed over time. You know, back, back in the early days, we we ran on bank account accounting. So if the money was there, it's going into my personal account. If it's not, maybe I'm putting money from my personal account in. Yeah.

Now we have a lot more structure to it. So we you know, all the management, including myself, are on salary, and we only distribute, new distributions, quarterly. But right now, we're we're actually trying to keep everything in the business because we are growing so much. We wanna make sure we have a lot of reserves, as our overhead has grown a lot. And as the market is starting to shift, we don't know what's gonna happen.

So trying to just live off that management salary and, take quarterly distributions if if needed.

Steve: Got it. And then Steven Coller, on YouTube, super sharp guy. He's asking, will the timing fees drop with the market slowing down or there just be fewer buyers?

Joseph: I can't say enough for sure. I've not been through a cycle. I'd like to think that it probably will compress.

Steve: Mhmm.

Joseph: You know, I think the the one good side of the business right now, we have we have had such a a long run of appreciation that most homeowners have a good amount of equity. Montgomery is a little of unique market because up until here recently, we were locking up at just sellers payoffs. It did not experience the appreciation run that a lot of other markets across United States have. That's my only concern is is if the market dips enough to where we're touching those mortgage payoffs at a large scale, then it's gonna be really difficult for us to to make a profit, and maybe we have to go back to to doing short sales and and close your auctions.

Steve: But Or creative.

Joseph: Yeah. Or creative. That's true. Maybe a lot more it's a good pivot because they're gonna have those thirty year 4% rates, which are gonna be amazing or yeah. I don't know.

Steve: Yeah. On YouTube, Brian Luciano. Do you do you have any type of IT or custom software to streamline administrative tasks and automate reporting?

Joseph: Yeah. So we actually, recently, switched to, from from Podio for our c r our main CRM to, Salesforce. And, you know, after the first two or three weeks of of beating my head against the wall, just fixing problems, we're starting to build a lot of really cool integrations, automations, and reports and dashboards. But that's where the vast majority of our our company runs through. Every single task anyone has to do every single day is in Salesforce.

All of their KPIs are in their own personal dashboards that they can review in real time. They can see how they're doing this week, last week, this month, last month, as far as where they're tracking towards their standard, which is what's expected of them, and their goals, which they have rewards tied to. So Salesforce is the answer to that. That's what we we streamline everything through.

Steve: Makes total sense. And then another question from Matthew on YouTube. Looking for motivation, I can make 5,000 calls over the next two months of my work schedule. Do you think I have a good chance of getting a deal?

Joseph: Depends on who you're calling.

Steve: That's what I was gonna say.

Joseph: Where you're calling. If you're in Montgomery, you probably got a good chance. You're in Phoenix, not as high. Yeah. There's a lot of variables there.

I think you make 5,000 depends on you're making 5,000 dials on a, like, a 20 line dialer? Probably not. If you're making 5,000 dials manually, I think you'll get a deal.

Steve: Yeah. I was, I got a friend, Eric Sage. Right? He's he's done really well. He's been in the show before.

And we were talking, and he said, like, yeah. You know, it's really nice, moving my business to Alabama. Like, what's going on? He says, well, if you call the wrong number in Alabama, I say, well, this is not here, but I hope you find them. We don't get that in Phoenix.

Joseph: Yeah. The Southern hospitality is definitely there. It's, it's nice.

Steve: Yeah. A lot nicer people there. So Michael Lopez on YouTube. What makes you different in your market versus your competitors?

Joseph: I think a lot of it is going from just being what I would consider as a group of individuals wheeling a deal and, you know, just being little individual cowboys to actually having a structured business. There are not a lot of wholesale companies that really treat their business like a true business, instead of just individuals doing deals. I think having this this the I think, to be honest, the number one thing that's gotten us where we're we're at is being part of a mastermind group. When you're in a market like Montgomery, we were already the, you know, the largest wholesale player when we were at 65 deals a year. Wasn't a lot of people for us to learn to there locally, so we had to go out and find people that were doing four, five, 10 x what we're doing so we can learn from them.

I think that's the key is, you know, you're just bouncing off ideas off each other that are at the same level or the level below you. You're never gonna grow. But when you get in a room full of people doing 10 x what you're doing, that's when you're gonna learn what you need to do to get to that level.

Steve: Absolutely. And the same caller suggested to reach out to old buyers, give them a short close of news and insight, make them look to you for ideas of market. So, yeah, if you give them some information for them to reach out to you, have you be the expert, Definitely something that'd be helpful. You guys have any I mean, if if you have any more questions, keep posting them. Happy to answer them for you.

So, other questions I like to ask is, what is your motivation? What is your why?

Joseph: Yeah. I I I think, you know, I I start with that question. I I really do love this business. I love building a business. I I don't know what else I would do what else I would do with my life.

I think also just innately within me from a very young age, I've been extremely competitive. And I think that drives a lot of what I'm doing here in business. I think a lot of people yes. A lot of my friends, they don't wanna play board games with me because I'm not the nicest person to play with, take it way too seriously.

Steve: There's a monopoly board in in in their classroom.

Joseph: Oh, you wouldn't wanna play me. It will not be fun. We won't be friends after, unless I win, which probably still won't be friends. But, that drives me a lot. And, you know, so going to, like, CG and stuff, I'm there.

I'm learning, and I'm inspired, but I'm also like, oh, okay. You've grown that much. Okay. I've got some work to do. Mhmm.

It fuels me a lot that that that sense of competition.

Steve: Any concern about having that much that that much competitive fire?

Joseph: Maybe. Yeah. I'd definitely probably say maybe I I overwork. I don't know. I I I don't know I don't know any other way.

Yeah. I guess, definitely has his downsides.

Steve: Yeah. Because you kinda see, like, you know, you watch The Last Dance, right, with Jordan, like, there's a scene where, like, they had to cut the recording because he was crying. Yeah. Right? Because, like, he was really rough on his team Mhmm.

But because he really wanted to win. Yeah. So I was just curious if you've seen any downside from from having that competitor. I've got that challenge too. Right?

So

Joseph: It was a challenge. I don't think I'm that cutthroat, but Yeah. It came it came in terms of the challenge.

Steve: What is your biggest struggle right now?

Joseph: It kinda goes back to just not knowing where the market's gonna go. That's definitely our biggest concern. Making sure that we're I think for us, making sure that we're monitoring local data, but also staying in touch with our top buyers. I mean, eight 20% of our buyers by 80% of our deals, making sure we stay in touch with them, that we're communicating the data that we're seeing in local market to them. So despite them seeing headlines in the media that the real estate market's falling apart, hey, markets inventory levels are still their lowest they've ever ever been.

You know, we're still a very, very hot market, keeping them informed to make sure they continue to buy. Because if four or five of them pull out, it becomes very, very difficult, to wholesale. And so that's our our biggest concern and probably struggle. I think, the other thing right now is it's not a struggle yet, but I see it coming. We're doing kind of our first new market.

You know, obviously, we have a Lexington office, but I'm always in real estate there. Opening the doors in Columbus, Georgia, July 1. We've already got employees that are training right now that are about to go to that office. So I'm worried about that. I think that's what I'm gonna ask about at CG trying to learn from some people that have done that, like a cold open to a new market.

You know, what are the steps? What's most important, if they could do it over? So Seems

Steve: like Ren's got that figured out.

Joseph: Yeah. I'd say I don't know if I'm gonna I'll I'll I'll I'll I'll

Steve: I'll I'll I'll I'll I'll I'll I'll I'll I'll I'll I'll I'll I'll I'll I'll I'll I'll I'll I'll I'll I'll I'll I'll I'll talk to him.

Joseph: Yeah. You guys

Steve: don't know who I'm talking about. It's it's Wren Bartlett.

Joseph: The guy is just a secret assassin. Yeah. He is.

Steve: And even and even more fun in person. So planning to move any of the locations, where do you answer that? Marketing budget, we already talked about that earlier. What is your favorite list for Direct Mail?

Joseph: We have both Investor Machine and eighty twenty. I like both of them a lot. We get really good, returns. I used to do it all myself. I used to used to hire, I used to hire virtual assistants to to, build programs to scrape the whole tax assessor and then try to do it all myself.

And that used to work great, back before it got competitive. And when we when we started doing investor machine, I started noticing that my response rate and ROI on my campaigns was drastically lower than what they were able to produce. And so we shut that off, and we do everything from a Vacher Machine in 8020. And they're pretty neck and neck and and both, really good list.

Steve: Yeah. Well, Jason Lewis is a really smart guy.

Joseph: He's very, very, very

Steve: good. 700,000.0 last year in profit. So he's he he knows what he's doing.

Joseph: He knows what he's doing.

Steve: And then we got Jesus Toledo, another really super super sharp guy. We just started to sign we just signed up for $80.20 as well.

Joseph: Okay.

Steve: Yeah. We'll see how that goes. Yeah. Kendall, on, usually wants to know, they're getting a lot of leads, but their conversions are way down. No offers.

I'm sorry. 240 offers last week, but no contracts. What are you doing to improve the conversions on your team?

Joseph: Yeah. That's that's not good. 240 offers, zero contracts. We shoot for a 20 per a, 25% conversion on appointments to contract. I would say, when he says offers, are those written offers?

Are those just verbal offers? Is that all virtual, or is that in person? If you had 240 in person appointments with written offers and you get any contracts, you need to sign up for Steve Tring's sales training because that's real bad. I think, I I really don't know. I have to learn a little bit more about their situation, but I would say you you wanna shoot to convert at least 20 to 25% of your written offers into contracts.

And if you're not achieving that, you need to work on your your sales script and your sales training.

Steve: Yep. And then, miss Navarro, how do you find out what a successful investor needs when you're meeting them? Do you just ask? So if you're going out meeting other people, how do you know what they need?

Joseph: I would say, you know, you don't just come right out, try to build some rapport, get to know them. It may not happen that first meeting, but they're going to vent to you if you really get to know them and ask them about their business, how it works, what they're doing. Just be, be curious. Be positive and curious. And I promise you, if you ask them questions, they're gonna be excited to talk about their own business.

Yeah. And they're gonna tell you what the problems are. So I think just just be a positively curious person, and and you'll have no problem learning what their problems are.

Steve: Yeah. I would say that, you know, most super successful people, they're gonna be slower to respond to social media. That's just reality. Right? Like, they're pretty focused when they're working.

Joseph: Yeah.

Steve: But if you actually meet them at an event, approach them. Like, they're not monsters. Right? Like, no one none of them are rude. Right?

Joseph: No. Yeah. Like, I I I'm so nervous to, you know, you got, like, Stuart DeNier in PG. He runs New Western and so nervous. But he talked to me.

He's, like, the nicest guy. He's the nicest guy. So nice.

Steve: Right. Yeah. So yeah. I I would say, just go out go up and talk to him. Everyone's pretty approachable.

Like Oh, yeah. There's this idea that, you know, people are closed minded or not closed minded, but, like, closed off, whatever. And you'll and you'll find, like, the most successful people are the most open people.

Joseph: Oh, a 100% agree. I see it all the time with CG, for sure.

Steve: So Eric's asking. What's up, Eric? You know, who would win in a race, Lucid Air or a Tesla Model three Performance? So off the line, Lucid Air is gonna kill us. Right?

That's just the reality. But in a course, I will take the model three performance all day over over a Lucid Air. That thing's too big. Like, for me, like, this doesn't sound stupid. Right?

Totally off track. But you know how I'm measuring, like, which cars I wanna buy? Like, I actually have a list. Right? Like, here are all the cars.

Joseph: What's on it?

Steve: I'm looking at length of the car, width of the car, wheelbase, and skid pad, and zero to 60.

Joseph: Right? Not the things I think about.

Steve: Yeah. But I'm looking at

Joseph: That's the yeah. That's the point.

Steve: The kind of cars I like to drive are the cars that are zippy. Right? And they can can you know? If I need to navigate through traffic, don't need to anymore.

Joseph: Yeah.

Steve: But if I needed to, I wanna know that which car can can do what I need to do. So, Eric, to answer your question, on a on a track, I would take a model three, but off the line, I lose it. There would kill the model three. But the Tesla model s Plaid will still win. What is your superpower?

Joseph: I think I I have a really good ability to any kind of conversation or meeting with our team, any kind of conversation with the individual on our team to kind of clear the fog and get them focused on the one thing that they actually need to focus on, whether it be in, like, a a group meeting. We're all trying to just talk about stuff and getting off track. I'm really good at getting things back on the rails and getting focused on what actually matters. Obviously, that's my superpower.

Steve: That's awesome. It's a incredible superpower as a business owner.

Joseph: It's it's helpful.

Steve: And what is the greatest lesson that you have learned?

Joseph: I touched on the the culture issue and, you know, cutting out, an employee if they have a yeah. That that's my greatest lesson. I'll give you two, though. So one is if you have somebody that's a performer but doesn't uphold your core values or doesn't have character, cut them out. You'll thank me later.

It's a very expensive lesson if you if you don't do it early. Two is never getting emotionally attached to a deal. You know, I've I've lost money on deals before, and every single time it's because my ego gets in the way of the math. And I wanna own that commercial property because I drove past it as a kid or all that tenplex that needs $300,000 to bring it back to life. Like, that sounds so cool.

It'd be so cool to show the before and after. But but the numbers don't make sense by buying it anyways and and losing money on it. You know, making sure when you're buying properties yourself to remove the emotion from it and purely focus on the numbers. Just math.

Steve: Yep. You know what I liked, what I like a lot here? Because we we use more click baity titles. Right? Because we want the more views.

Right? Click baity. Sure. Please eyeballs. Makes sense.

So, you know, you're talking about doing 500 k a month, and we have Phil Green here. Right? And he's doing

Joseph: a month.

Steve: Millions. Right? Yeah. Yeah. A month.

And you know the same answers to the same questions. Right? Like, how did you do it? Right people? Right?

Like, number one.

Joseph: Yeah.

Steve: That's It's getting the people component. Right?

Joseph: Yep.

Steve: Then the second thing is being in a mastermind with the right people.

Joseph: Yep.

Steve: Right? So, like, it's kinda like was it, maybe possibly redundant, but reality is the people is the hardest part. Because marketing, we can figure it out eventually. Yeah. You can figure

Joseph: it out.

Steve: Sales, I teach that. I love that. Love teaching that. The the next stage is the people part. That's the hardest part to nail.

Joseph: Very, very difficult.

Steve: Yeah. We're a bunch of, crazy people, you and me included. Is there any failure that's you know, your favorite, best, or most interesting that we could talk about?

Joseph: I I can talk about one of those deals I I lost money on where I got my emotions involved instead of the math. You know? And it's it's I like talking about it because it's on the forefront of my mind because it's it's not closed yet, but I'm set to lose a lot of money on it. The property is a tenplex in a in a suburb of Lexington that it's in a good location, built in, like, 1900. Super old.

Need to stay away from that stuff. I needed a ton of work. The current owner had taken horrible care of it. He had all the tenants were paying weekly. Imagine the kind of tenants we had in there.

Immediately, we bought it, and, we could go with tenants out. But even before we bought it, the the first lesson was the contractor I used on it. I got multiple quotes, and his quote was, like, 50% of all the other guys' quotes. He'd done one, like, one job for me before, on a small job. I was like, oh my goodness.

It's we're gonna make so much money on this. You know, his quote's so low. And sure enough, we kick all the tenants out. He gets started on the work and, takes a large chunk upfront as everyone knows not to do and disappears. So Really?

I'm out, you know, about $50,000 to him, and he's nowhere to be found. That's the first first thing that's bad. And then from there, realizing that his quote of $210,000, was so low because never intended to do it, didn't know what he's doing. And the real, you know, construction budget on it is more like $3.50, $3.75.

Steve: Oh. So

Joseph: that goes from a profitable deal to not a profitable deal really quick, on top of, you know, the the people the other contractors that I was gonna have to do it are super backed up to where they can even get started for five or six months because they got work lined up. And, we're we're now we're just selling it as is. We've done a tiny bit of work to it. Tore off this rickety old deck and walkway that was gonna cause it to be condemned and put a new walkway up, and then we're just gonna sell it. And the deal we currently have goes through, I'll lose about $45,000 on it, which is very painful.

It's very painful too because it's not just like, I bought it cash and this money I'm not getting back. It's we use a local bank, and they've four they fronted all the construction money to us. So I wanna be writing a big check back to them at closing Yeah. And that's super painful. Yeah.

It was a big failure for sure.

Steve: Good lesson, though.

Joseph: Oh, yeah.

Steve: Chester's asking me what my superpower is. I would say my superpower is learning and being able to regurgitate what I've learned.

Joseph: Yeah.

Steve: Right? Taking the things that I'm learning along the way, applying it, and then teaching the lessons from that. Camden on YouTube wants to know, what is the hardest thing that you have ever done? Doesn't have to be business related.

Joseph: You know, I think one of the most difficult things was actually I was really dead set. I wanna become an investment banker. But, you know, I had really, really amazing grades, but all the investment banks don't care. They you know, half of them, you'll call the email, the email back and say, sorry. We don't recruit from SEC schools.

That would literally just be the response. They don't

Steve: That was a real response. That

Joseph: was a real response. That multiple sense that we don't that we do not recruit from SEC schools. Sorry. And so that was hard. I mean, literally, it was four or five, six months of cold emailing, getting rejected, interviewing, getting rejected, cold emailing, getting rejected.

It's a ton of competition for it because it's technically the highest paying job you can get out of undergrad with just undergraduate degree. But that was probably the most difficult thing I've ever had to do. But I was able to get in there and realize that all that work was for nothing because investment banking sucks. But it let me here, so it was all it's all good.

Steve: Well, at least you finished figured that out before

Joseph: Yeah.

Steve: A career there.

Joseph: That's true.

Steve: It took me working in engineering for a few years to figure that out. Yeah. What book have you gifted more than any other?

Joseph: Rich Dad Poor Dad for sure. I know it's kinda cliche, but I love that book, and I've I've given it to a lot of people.

Steve: So I was invited. It's not official yet. I was invited to a dinner with Kiyosaki in a couple of weeks. So I've I'm I'm waiting for it to be official because, like, it was the invitation, but, like, we'll see. Like, you know, a private dinner.

Joseph: Yeah.

Steve: But that'll be an awesome experience.

Joseph: That'll be amazing. Yeah. I'm sure he's got a lot to say about the economy right now.

Steve: He's got I mean, he he's no he's no different than Trump with his mean tweets. I mean

Joseph: Yeah. He's very, very, out there.

Steve: Very clear on where Very clear on where he stands. Yeah. Alright, guys. A few quick nice announcements again. If you like this content or if you found this valuable, please like, subscribe, share, comment.

It really helps us reach more people. Right? I'm very serious when I say I wanna create a 100 millionaires. Last night, we were able to give a plaque to Ryan Zola, and that was incredible honor of mine. We do have our sales master class.

If you guys are interested in checking that out, go to disruptors.com. And then we do have our live event as well, disruptors.com/salesdisruptors. And then we have par in the disruption. We got Eric Brewer, Chris Jefferson, RJ Bass. We're gonna be doing a live debate show next week.

So be sure to check that out. Alright. What are some last thoughts you wanna leave all the listeners with?

Joseph: I just like to let you guys know, and I'm I'm not some genius. I I don't have any sort of special skills. I'm just a normal guy that, get very dedicated to to building a real estate business, and you can do it too. I think all it really takes is dedication, taking action, and then putting yourself, like you said, in in a mastermind group where you can learn from those who've already done what you want to achieve. Yeah.

I think that's all I got.

Steve: Alright. If someone wanted to get a hold of you, how would they do that?

Joseph: You can message me on Facebook or LinkedIn. I have Instagram, but deleted from my phone, so I won't answer that. Or you can email me, Joseph@rapidfireinvestments.com.

Steve: Awesome. Appreciate it. Thank you very much.

Joseph: Thank you very much.

Steve: Incredible honor. Thank you guys. I'll see you guys in a couple of weeks. Next week, we got part in this option next week.