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In this episode, David and Mike introduced their newest book, the Three Pillars of Wholesaling Real Estate. Mike and David referred to these three pillars as “the money-making activities”. The first Pillar is Marketing to Motivated Sellers, the second pillar in wholesaling real estate is Making Offers and Pillar three is Following Up. Listen to this episode to know more about wholesaling Real Estate! The newest book is now available on Amazon Print, Ebook & Audible!
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Things that will cover in this episode:
- The Importance of 3 Pillars of Wholesaling Real Estate
- First Pillar – Marketing to Motivated Sellers
- Ways of Marketing
- Second Pillar – Making Offers
- Third Pillar – Following Up
- The difference of Following Up and Chasing People
Mike: Welcome back guys. Your host Michael Slane and co-host David Dodge.
David: Hey guys.
Mike: How we doing David?
David: I’m doing awesome man.
Mike: Awesome man. I am excited to get back to podcasting. Dave and I have made a New Year’s resolution to start putting out more content because again, we’ve done so much in real estate. Real estate has given us so much that we want to give back. That is one of our big things and we want to produce more content on- in the podcast, for the podcast out there on YouTube. Both of us have YouTube channels, we’ve got the discount property investor YouTube channel, then we’re just trying to produce more content and you know, more quality content. Stuff that you guys actually get stuff out of. In that spirit, we’re very excited to announce what we’ve done is put together another book.
David: Another book.
Mike: All right guys. What’s cool about this book though, it is available, you can find it on Amazon. It’s called ‘The Three Pillars of Wholesaling Real Estate’. It’s a very quick read and it is again, it’s kind of like the cliffs notes- cliff notes of wholesaling.
David: Oh yeah.
Mike: That’s what- that’s kinda the way I’m talking about it and saying you know, it’s a short book, it’s a quick read but it’s the cliff notes of wholesaling real estate. Again, it is for purchase on Amazon, you can get the Audible version. We’ll put all those out there as well that we’re working on getting those published right now.
David: You know what I like about this?
Mike: You can also get it for free.
David: Oh yeah. Ooh, let’s talk about that real quick.
Mike: Yeah, this could be very limited. We’re giving away the three pillars of wholesaling real estate book 100% free on our new website. We’re gonna talk more about the new website in another episode.
David: In another episode, right right.
Mike: Yeah, but on discountpropertyinvestor.com, if you create an account, you’re able to then access- it’s called a course.
David: And it’s free to create an account by the way.
Mike: Free to create an account, you’re able to access a free copy of this, you’re able to download it so you have it forever 100% for free. So again, that is again what we’re talking about, free stuff. We’re kind of the inventors of giving stuff away for free, the free wholesale course.
David: We like to do free stuff.
Mike: The free landlord course, we’re giving away a free book. Again, it’s not the best business model. Let me tell you: it is not the best business model but hey, it works for us man. We really like-
David: You know, I get so many people reaching out to me though Mike on Instagram and Facebook. I mean I’m talking daily saying hey I just took the free wholesale course, I just took the free landlord course or I just headed over to the new website discountpropertyinvestor.com which we’re going to talk about in the next episode and people are loving it. They’re loving the free content and you know, it just makes me really happy to get these messages from people. So guys if you’ve taken one of these courses or you know, let’s say that you’re new and you haven’t, go check them out and send Mike and I a message after you take them.
Mike: Yeah, leave us a review, leave us a comment.
David: Leave us a review or a comment because-
Mike: Share the course.
David: We really want to make it better too. So sometimes I’ll get feedback and I’d be like you know what? That was actually really good feedback.
Mike: One of the- one of the things that I think probably came from feedback Dave, is that cash offer contract.
Mike: So we had a free- we had a contract in the free course. We’re getting off topic here man, we’re supposed to be talking the three pillars, let’s get back to it.
David: That’s right.
Mike: We had a free contract and we decided or Dave did, he said you know what? I’m gonna make this a little bit cooler and at cashoffercontract.com and that’s also in discount property investor, it’s going to forward you over here. cashoffercontract.com, you can actually generate and send a cash offer to your seller from your email. So we’re using our systems to generate a contract for you, sends it out to your seller. Guess what? Pillar number two is- in the three pillars Dave.
David: Ooh, that’s right.
Mike: Pillar number two is make offers. So again, had to tie it back in, alright?
David: That’s right.
Mike: So let’s talk about the three pillars. The first pillar of wholesaling real estate is what?
David: Oh hey, before we jump into that.
David: I really like this book because it’s only 50 pages guys. It’s kind of a booklet, right?
David: The last- do we have other books here?
Mike: Yeah, we do.
David: Give me those.
Mike: Oh man we got a bible.
David: So- yeah, these are bibles, right? So the first one that we wrote ‘The Ultimate Guide to Wholesaling Real Estate’. This one is 274 pages? 273 pages.
Mike: That was our first book.
David: This was our first book, right.
Mike: Very exciting you know.
David: And it’s a great book. The next one that we wrote ‘The BRRRR Method’ ended up being 300 and 72 pages.
Mike: Yeah, massive.
David: We gained a hundred pages basically.
Mike: Massive books so yeah, I mean you can see- if you’re watching the video, I mean you can see the first two are very very thick and the third one in the center there.
David: Oh yeah.
Mike: 50 pages but it’s the ri- it’s the cliff notes.
David: But see here’s the thing: I like this better because it’s more to the point and the three pillars are what we- are what Mike and I like to refer to as the money-making activities, right? So, you know, and that’s another thing, you know, I was on this club house call- I don’t know if I was talking about this in this episode or the previous one, right but – and I had a lot of people that, you know, were-
Mike: Hey Dave, what’s clubhouse?
David: Clubhouse is an app and it’s this kind of a new social media so it’s really-
Mike: Perfect, that’s all. I just wanted- anybody who hasn’t heard of it.
David: Anyway, I was on there the other day and there’s a lot of people that are just doing all this stuff with their business and they’re in analysis paralysis, right? They’re kind of stuck between trying to figure out what to do next and that’s kind of where the three pillars, you know, came into play for Mike and I because we have a lot of students that- they don’t know where to start. So the three pillars, let’s basically tell everybody what the three pillars are. Pillar number one, marketing to motivated sellers guys, it’s where everything starts and if you- and if you are basically sitting around thinking well I need to get a website, I need to get a business card, I need to get an LLC, right? These things are I would say necessary but they are not something that you need to do deals, right? If you want to operate a business, then you definitely want to have these things.
Mike: They’re almost not even necessary.
David: Yeah, necessary is maybe the wrong word, right? They’re things that I would recommend, put it that way but you don’t need a website, you don’t need business cards and you definitely don’t need an LLC to wholesale houses, right? And people get caught up on this and they want to get their logo and they want to do all this stuff, right? That doesn’t put a motivated seller on the phone with you or get you in their house, right? It doesn’t get you on the appointment. So we’ve tried to basically simplify the process for the beginners, right? For people that are kind of getting into the space or even people that you know, are just having trouble doing more deals right? Focus on these three money-making activities. So number one was marketing to motivated sellers and we have a couple different chapters in that particular pillar.
Mike: I would say that that is probably the bulk of this book guys.
David: It really is.
Mike: Is the first pillar, marketing to sellers because it’s so important, it takes up a good portion of the book and we’ll go into a bunch of different ways that we market to sellers and what’s working right now, so Dave, you want to hit on those real quick? or do you wanna [inaudible].
David: Yeah, so there’s just a couple strategies guys. There’s you know, driving for dollars, we talk about that and how you can get started and how awesome it is and how easy it is to get deals and literally Mike and I’s three biggest deals to date have come from driving for dollars. We talk about-
Mike: Yes, they have.
David: We talk about bandit signs, we talk about cold calling and cold texting, we talk about direct mail and we talk about referral marketing and here’s the thing, there’s like probably a hundred different ways to go about marketing to motivated sellers and if we were to give you all hundred ways, it’s just gonna create analysis paralysis. So we kept it simple, we just use 5 of the strategies that Mike and I used the most, basically the ones that give us the highest return on our investment, right? So that’s pillar number one. Mike, pillar number two, you had mentioned it, make an offer.
Mike: I did man, it’s make an offer so we’re talking about our cashoffercontract.com, the-
David: Talk about the MAO which is a big deal.
Mike: Hundred percent, so we do, we go into detail about- well we didn’t talk about cash offer contract in the book. I don’t think we put that in there. Oh we did? Great.
David: We did, it’s in there.
Mike: So this is- this book was published 2020. So again, I’mma call it January, let’s call it 2021. I mean again, we’re literally just launching this right now. So this is brand new so hopefully we’ve got all of our stuff updated and we’ll still edit and update, you know, as we see errors. So the second pillar- so first pillar, David mentioned marketing to motivated sellers. So what do you got to do next? Again, this is getting out of analysis paralysis, this is getting out of your own way and what do you do to make money? You have to make offers. If you talk to someone on the phone, if Dave and I are talking and Dave say hey I got a property I want to sell, I say oh cool. He’s like yeah, I’m not quite ready yet, maybe in a couple weeks or whatever and I say oh right on, well maybe I’ll follow up with you and I don’t make Dave an offer, guess what? We made no progress.
David: None. Zero.
Mike: We- I literally just- Dave just raised his hand and I said oh cool, well see you later.
David: Literally said I do want to sell, not today but at some point in the future but I do.
David: Soon, right and no offer was made boom terrible, terrible idea.
David: So you always got to make those offers.
Mike: And we always recommend putting them in writing because then that seller has something to look back at. People keep stuff, you’d be surprised. We send out marketing pieces, Dave and I to this day get calls on our personal cell phones from marketing we did what? five, six, seven years ago.
David: Yeah. People put it in a little junk drawer, right? They put that postcard there or I’ve even been on appointments Mike where our postcard is magnet to the fridge.
David: Like it’s on the refrigerator.
David: It’s really fun walking to the house seeing your marketing message on somebody else’s fridge and I’ll often ask them you know, when did you get that post card and sometimes it’s like 3-4 years ago, just saved it.
Mike: Like I don’t know, it’s been up there.
David: It’s been up there, right?
Mike: So again, marketing to sellers then you’ve got to make offers. So again, if you’re spending time or money generating those leads to talk to sellers, you’ve got to make offers. This is the thing that is going to make progress in your business so that you can get deals under contract and then sell them.
David: That’s right.
Mike: So you can cash a check and make money. So that’s it, I mean I don’t think we need to go too much more into making offers
David: Well that’s number two, that’s pillar two. And pillar three guys, the final pillar.
Mike: This is the secret sauce.
David: And this is the secret sauce, is just following up, right? I mean, it’s that simple but these pillars again, I’m going to reiterate, is the money-making activities guys. So, you know, there’s lots of other things that you can do, but they might not be money-making activities. These are the top three money making activities that Mike and I have used basically to wholesale like 600 houses give or take, right? So marketing to sellers is where it starts, it’s where it begins. You’re going to have a lot of trouble finding a motivated seller if you’re not marketing directly to homeowners, right? You know, we bought about a hundred houses last year, give or take. The year before was give or take about a hundred as well, I think they were both in the 90’s. In the amount of deals that we bought off the MLS, like meaning that they were on market, listed houses, with an agent or broker, for sale, was like three or four, maybe five guys out of a hundred so you’re talking less than 5% of the deals that we buy in our own market were listed properties on the market. The other 95% were direct to the seller and the beautiful thing about going direct to the seller is you are able to exchange a bunch of convenience for discount from those individuals. Now, the thing about real estate agents, you know, I love working with real estate agents if they are able to bring me a pocket listing or let’s say that they just have a listing but they know that the sellers willing to take a discount, it’s great. Love working with agents however, I don’t want to be negative.
David: However, agents are typically selling their services to a homeowner and what does that service look like? Well, it’s hey I can get your house listed up on the MLS and we’re going to be able to get you retail or close to it, right? So you know, often times these agents or these brokers that are working directly with sellers, you know, they’re kind of promising that they’re going to be able to help these people and get them as much money as they can and that’s really why we don’t do a whole lot of or I should say spend a whole lot of time you know, trying to buy a houses off the MLS because it’s kind of counterintuitive right? We’re looking for discounts guys, the name of this podcast is the discount property investor, right? That’s what we do, we buy properties at a discount and the best way to do it is to go direct to the seller. So that’s really the marketing right? That’s where it comes in direct to seller is going to give you the best chance of finding somebody that’s motivated and here’s another thing, you know, I said it earlier, we trade convenience for a discount. You guys have probably heard me say this before. What does the convenience look like? Well typically it’s cash, doesn’t mean it’s our cash, it’s rarely our cash but it is cash. Quick is a big one because agents don’t typically get deals done quick. They may get it sold right away, but then you still have 30 to 45 days typically of contingencies or financing, so on so forth and then last but not least, as is, that’s the last piece of convenience that we typically provide. Now there’s other things of course, but those are kind of the main. It’s like the 80 to 90% of it, right? Cash, quick and as is, and when you list a property that needs a ton of work on the MLS, you know, you’re going to have a lot of buyers that are going to be getting a loan from a bank and the bank may not land on those properties that need a ton of work, right? So we do have a lot of convenience whenever we are approaching these individuals but marketing to them is the name of the game and I don’t really care if you’re driving for dollars or using bandit signs or you’re cold calling or texting or using direct mail or you’re doing referral marketing or a number of other things cuz there’s about a hundred different ways to go about marketing for motivated sellers at the end of the day though, right? At the end of the day, the goal is to get the seller on the phone. If you- excuse me- if you send a postcard, they’re going to call you or they’re going to go to your website and they’re going to fill out a form and then you’re going to call them. Let’s say you’re doing Facebook or Google AdWords, right? Those are typically web forms or they’ll drive you to your website and they fill something out so that information comes to you. Well, what do you gotta do next? You got to call them, right? If you’re doing bandit signs, you’re putting your message out into the universe to say hey, I’m looking to buy houses and you know, we’ll close quick and they call you. So don’t forget though that at the end of the day, all of your marketing efforts are designed to get a seller on the phone with you. Do not forget that, that is very very important. Alright, moving on. Pillar number two, making offers. Guys, Mike said it the best earlier, right? If you’re on the phone with somebody and they have interest in selling, make them an offer. I mean, this is like one of the things that I feel like most of the students that you know, that come to us are lacking. It’s actually kind of funny, most of the students that come to us, they already know most of this business, right? But they’re not making offers and that’s one of the things that Mike and I do to help people. We say hey, you know, we had a student that came on board a couple months ago and he hadn’t made an offer yet and he had been through- he had read several books, he had bought multiple courses online, but he hadn’t made any offers and one of the things I remember saying on our intro call is you know, dive into the coursework, let’s get you started there to kind of get you the basics of, you know, what wholesaling is and kind of how this business works and you know, let’s circle back in a day or two once you’re done, let us know and he went through the whole course and he was like man, I didn’t really learn a whole lot. And I said well then what the hell are you doing hiring us? And he goes: because you guys are doing deals and I just want to do deals and I said okay cool, well you know obviously we’re happy to have you but let’s talk about this. So what kind of marketing are you doing? And he wasn’t doing any marketing and more importantly I said, how many offers did you make today? And the answer was 0, how many offers did you make this week? The answer was 0. How many offers did you make this month? The answer was still 0 and I said how many offers have you made this year? And it was still 0. So making offers is super important guys, you know, you can do all the marketing in the world but if you’re not making offers to people, all of that time and money that you spent on that marketing is worthless so you got to make offers and there’s a really simple way to go about making offers. We have example contracts in freewholesalecourse.com or over on discountpropertyinvestor.com, but we also have a really really cool tool called cashoffercontract.com and this is basically a web form that you can fill out that will generate an offer and email that offer to your seller from your email address and CC you on it. Go check that out, it is a game-changer, right. And then last but not least is the follow up. Mike, I’mma let you take over with the follow-up and we can actually pull up some statistics here that will really help-
Mike: Dave loves this stat about follow up.
David: I love these.
Mike: He loves this stat about follow up. So, follow up is our sales advantage because both Dave and I are super super persistent I would say. Neither one of us is a typical salesman, like I don’t think either one of us comes across- I mean, look at the way- if you’re looking at the video, like we wear t-shirts most of the time, we’re comfortable, you know, we don’t-
David: I’m not wearing a suit, that’s for sure.
Mike: We don’t dress to impress, we don’t- we’re not flashy, we’re not- I don’t think we’re, what’s the salesman, you know, stereotype?
Mike: I mean, it’s not us man.
David: Typical stereotype.
Mike: Well, I think of like nicer sales, you know.
David: Right right.
Mike: But whatever. We’re not that kind of- we don’t come across like that. Both of Dave and I, our approach to sales is how can we help you? Because again, we’re buying a house from someone so our objective is hey what can we do to help you out of this situation or this problem that you’re in with this property? How can we help? Here’s what we can do for you, if that works, we’d love to help you and again, that’s what we do but we follow up. That’s the difference between us and everybody else. Again, we probably lose deals because we’re not closers you know, we don’t- well, I’m not going to say we’re not closers, we are definitely closers but we are not high pressure, I guess would be the right way to say it. Our objective more so than I’d say even making money for ourselves is to find win-win solutions for us and the seller so that we can all win and we do that by following up and trying to solve problems. What you got-
David: We need to edit the page numbers, they’re [inaudible].
Mike: Yeah, I don’t know how to do that.
David: That’s alright, we’ll mess with that later. So one thing I do want to mention before we wrap up guys, there is a difference between following up and chasing, all right? I just want to highlight this just for a minute or two here. Following up means that you are going to call, text, email, maybe even go knock on somebody’s door that you know that’s interested in selling. It is somebody that you’ve either been in a- been on a call with already or you maybe have been on an appointment with already or maybe you even sent them a contract already and you’re following up to figure out you know, what’s holding up the situation right? Are you still trying to get inside? Well follow up to get that appointment. Are you trying to get that contract signed and you maybe already sent it to them? Follow up, see if they got it, see if they have any questions about it or just in general if you’re just trying to get ahold of somebody, that’s following up, but I don’t want that to be confused with chasing people, right? So you know, one of the things that Mike and I are really good at is you know, we let people know that we are investors and that we don’t pay retail. It saves a ton of time and I don’t want to basically be following up with individuals that aren’t motivated, right? If somebody’s asking full retail for their property, you know, is that really worth the follow-up? Well maybe but maybe not right? So, definitely one of you know, just to highlight that there is a difference though between following up and chasing people. What ends up happening when you start chasing people is, you know, they’re not- they don’t need to sell, they may just want to sell and there’s a big difference there and if somebody just wants to sell and you’re not able to get a good deal on it, you’re just going to be spinning your tires and I know in the beginning, you know before I had done a bunch of deals, I was chasing people left and right just saying hey, I’m looking to buy and I wasn’t really on the phone with motivated sellers. I was just on the phone with people that had interest in selling guys, so I just definitely want to highlight that before we wrap up here. Follow-up is very important but do not confuse follow up with, you know, chasing. There’s a big difference there, you know, I like to say or I guess I would define it as follow up with those people that have interest in selling to where you see that they need your convenience guys. Simple as that. You want to talk about these sales statistic real quick before we wrap up Mike?
Mike: Dude it’s your favorite quote man, I’m going to let you- I’m not gonna steal your thunder, you love this one bro, you love this one.
David: I’ll wrap it up. Alright so basically look at it this way guys, 50%- the real statistic is actually 48, 48% of sales people, they never follow up with a prospect, not one time. That’s half. 25% of sales people make a second contact and stop so they basically follow up once, and only 12% of sales people make that three contacts, right? So they make the first call and they follow up twice, you’re talking about only 12%. Only 10% of sales people make more than three contacts guys, that’s it. So if you follow up with somebody three times, you’ve basically eliminated 90% of your competition. Let me say that one more time. If you follow up more than three times with a seller or a property owner, only 10% of people are doing that so you have eliminated 90% of your competition. Now, let’s talk about the number of contacts that it typically takes to get a deal, right? So you know, typically 2% of sales are going to be made on that first contact, 2% and by the way half the people stop after that so you know, kind of crazy. 3% of sales are made on the second contact, so it’s only 1% higher. It went from 2% to 3% from the first contact to the second contact, and here’s another crazy statistic guys: 5% of sales are made in the third contact. So if you call once, you have a 2% chance. You called twice, you have a 3% chance. You call 3 times, you have a 5% chance of closing the deal. 10% of sales are going to be made on that fourth contact, all right? And 80% of all the sales are going to be made between the fifth and the twelfth contact so if you can take anything away from this at all, follow-up is extremely important and if you follow up more than three times, you’ve basically eliminated 90% of your competition and if you continue to follow up and you get somewhere between- really I would just stay over five, right? You can maybe follow up 7, 10, 12 times, right? 80% of the deals are going to take that much follow up. So, just to kind of reiterate that, you know our average deal takes us about 4 months. It doesn’t mean that you know, every deal takes 4 months, it just means that the average time frame between a seller calling us of us calling them the first time to the time that we’re actually going to be able to close on that deal, get a contract, find a buyer and close on it, it takes about 4 months and the reason that it takes 4 months is because we are consistent. We are persistent in our follow-up.
Mike: Well said Dave. I’m going to go ahead and wrap it up today guys. The three pillars of wholesaling real estate like we said before, we give a lot of stuff away for free, but I’m going to end with an ask today. I’m going to ask you guys for something for us. If you like the book, if you go out there and download it for free even on discountpropertyinvestor.com, you download it for free on our website or you buy it on Amazon, if you like it, if you got anything out of the book at all, please leave us a review on Amazon for the three pillars of wholesaling book. It’s going to help us reach more people which is our ultimate goal.
David: That’s right.
Mike: So again guys, thank you so much for listening to the podcast today. Check out the three pillars of wholesaling real estate and please, if you get anything from it, leave us a review on Amazon.
David: Signing off.
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