Brad Grayson is a local Indiana investor who’s been buying rental properties for over 40 years now. He has truly come a long way—from someone who does not know a thing about real estate to someone who knows how to do landlording right. Believing traditional landlording is dead, Brad has developed a simple yet amazing system that gets the job done and helps landlords avoid stress and headaches for good. He’s also been teaching others techniques, strategies, advice, and tips on how to do landlording as a business.
Insight of the Week:
Apps and technologies Simplewholesaling is using to build better systems and better processes.
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He says, “Be still, and know that I am God: I will be exalted among the nations, I will be exalted in the earth.”
“Go ye therefore, and make disciples of all the nations, baptizing them into the name of the Father and of the Son and of the Holy Spirit.”
In this show, you’ll learn:
- How Brad got started in real estate
- The traditional way of landlording
- What he meant by traditional landlording being dead
- The traditional way of landlording versus the modern way of landlording
- Why he does not encourage talking with prospects on the phone
- Why he sends text messages rather than letters
- How he does background checks
- How he deals with late payments
- His advice to people when it comes to landlording
“Use money as an example of how sin affects your lives.”
“The person who doesn’t pay his bills is worse than an infidel.”
Profile: Brad Grayson
Thanks for Listening!
Brian: Ring ring ring.
Brian: Yes, is this Brett?
Brian: Hey, Brett. This is Brian. I did not receive your rent check yet this month. What is going on man?
Brett: I am sorry, I was eating breakfast and I accidentally ate it.
Brian: You ate it? Alright, well, I am going to need you to write another check there and get that over to me as soon as possible please.
Brett: Alright. Get it to you today.
Brian: Ring ring ring.
Brian: Hey, Brett. This is Brian again. I did not receive your rent check yesterday. I need it man.
Brett: Oh man, this guy came to my house and I was getting ready to put it in your mailbox and he hit me in the face. His name was Devo.
Brian: Wow. I am sorry to hear about that but I am definitely going to need your rent check or we are going to have some issues man.
Brett: You will get it. It is in the mail.
Brian: Alright, I need it today.
Brian: Ring ring ring.
Brian: Brett, I need your rent check or you are going to be out.
Brett: I am sorry. I had this like UFO come to my house and they actually intersected all of my checks plus my shirts. I do not know why they took those but that is where it is at.
Brett: This is the Simple Wholesaling podcast episode 110.
Welcome to Simple Wholesaling. A Christian podcast that supplies simple, yet effective content for real estate investors and business entrepreneurs. Get advice, tips, and tricks so that you can stay true to your values and achieve your dreams with real estate investing you can trust. Now, introducing your host, Brett Snodgrass.
Brett: What is going on all you Simple Wholesaling fans out there? Thank you for joining us again on another episode of the Simple Wholesaling podcast. My name is Brett Snodgrass, your host. I am with my co-host, Brian Snider.
Brian: What is up everybody and what is up Brett? How is it going man?
Brett: It is going fantastic. I am super excited for today’s show, everything that is going on. I cannot believe we are almost half way through 2018. I do not have my business or personal taxes in, we got an extension. It is still crazy when you are an entrepreneur and tax season comes. I feel like I am always doing taxes because I get them done and after my extension like in October and then I have to do them again. But things are good. How about you?
Brian: Pretty well, pretty well. Yes, going well. I just got back, we did a little trip out to New England, fantastic.
Brett: I have never been out there.
Brian: It was awesome, definitely recommend. I got to check out… We are in Massachusetts for a week then we did Maine for three days and then New Hampshire, Vermont, for a couple days of that too.
Brett: What is your three bring back there?
Brian: Well, number one, I would say definitely that it is just beautiful up there. There are just mountains, trees, everything. You have that part of just an awesome scenery but then you also have the coast of Maine too. Just all those seafood along the coast and everything like that. I just love like exploring like little small towns.
Brett: I love that too.
Brian: All the different places to eat so we ate way too much but it was delicious.
Brett: You guys stayed at a lot of Bed and Breakfast, right?
Brian: Yes, we did Airbnb’s the whole way. Yes, that was great.
Brett: That is cool. We had Elizabeth Sickles on the show, talked about Airbnb. I think that is such an amazing way to travel. Used to be have to book a bunch of hotels which is cool and you get treated really good, but if you are going someplace like that, Maine, and really just to heighten the experience, you get to do the Airbnb’s.
Brian: Honestly, they were like I mean I looked at hotels and stuff like in downtown Portland and they were like twice the price of what we paid and we were right there downtown like right by. We could walk to everything that we needed to and also the host, all of the host that we stayed with were just awesome too. They just gave us great recommendations of the local places that you wanted, the eat and check out and stuff.
Brett: So cool, so cool. I will have to take Karen out there some time. That is awesome. Well, welcome back. I am super excited to have you back. I know you are working a lot on your trip.
Brian: I did. I feel bad, I feel like I was more productive on my trip.
Brett: I know. You need to go back somewhere.
Brian: I came back here and I was like oh man, I do not want to work, this is not very fun.
Brett: We did really well when you are gone. That is how it goes but we got a great show for you guys today. We interview just an all around good landlord and amazing human being. His name is Brad Grayson and he is a local investor here in Indiana. He actually lives in Columbus, Indiana which he talks about. It is not your typical huge market like Indianapolis or some of the markets maybe you guys are from like Dallas or San Antonio or San Francisco, some of those big markets, but he is from Columbus, Indiana. But this guy knows how to get it done. He has been doing this business for over 40 years. He teaches other investors how to do this business.
He is actually teaching on July 28th, a local class on landlord walls and some creative strategies that they are doing. He actually goes into a few on this show. The theme of this show is traditional landlording is dead. You guys are going to really want to stay tuned about how he treats landloring as a business and he is a really amazing guy, a really nice guy, but he does not take crap from his tenants and he learned that the hard way, the School of Hard Knocks. Stay tuned for him. He owns, I do not think we got a number out of him how many rentals, but a lot.
Brian: A lot.
Brett: Yes, I do not know, it is in the hundreds somewhere.
Brian: He owns enough that he has his dream car, I do know that about him.
Brett: Yes. He says he is super surpassed his goals by a lot. Stay tuned for that. Amazing interview with him, getting so much out of that. Before we get into that, we want to know and what you guys want to hear. We want to hear from and one of the best ways that we can hear from you is by leaving a review on iTunes. If you like what we are doing at the Simple Wholesaling podcast please go right now to iTunes, leave us a positive review, we will read it on the air one of these days and we appreciate it so much.
Brett’s Insight of the Week
Now, simple tips and tricks that make real estate investing easier, faster, and better. Brett’s Insight of the Week.
Brett: On today’s Brett’s Insight of the Week, we are really going to hit on the theme of technology. The traditional way of landlording, like Brad says in the interview, is dead. Really the traditional way of doing anything in life is starting to die. We are seeing all these industries being transformed through technology and I am going to pinpoint some of the different apps and the technology that we use here at Simple Wholesaling to help us build better systems and better processes. One of our core values a Simple Wholesaling is smart and simple systems. Each day and each month, we have a guy named Alex on our team who is trying to make our business simpler and more efficient through some sort of process and we use technology to do that.
Just really point blank, let me go over some of the different things that we use in our business. I remember ten years ago, probably even five years ago, when I was buying and selling houses and I did not want to go to closings, they would typically overnight me a packet of papers and I would have to literally grab my blue ink pen, go to my local bank and sign them in front of a notary and then FedEx them overnight back to the title company. It was just a huge process.
One of the different things, and the same thing with purchase agreements right, we used fax machines, scanners and all that. Well, the electronic signatures has absolutely transformed their real estate industry. Here in Indiana, a lot of title companies, will be able to use on the buying side, electronic signatures. Now, what they do is they e-mail us the documents, and if we are buying a property, we can use DocuSign, which is the electronic signature platform that we use. We literally open up the documents in a PDF, we open up the website DocuSign, they even have an app too, so you can literally do it on your phone. Just do a few clicks and then reply back and send the document back to them. Super simple process, signing closing documents used to take me an hour driving to the bank, from the bank, electronic signatures, printing out a form, overnighting.
Now, it literally takes me four minutes. You save so much time with electronic signatures. Another thing is with purchase agreements. You guys are talking to a lot of motivated sellers out there. The traditional way is you would drive to the seller’s house, you would sit down with them, sign the purchase agreement in front of them, take it back home, scan it in, sends it to the title company. Well, you can also use DocuSign with purchase agreements where all they have to have is an e-mail address and then you would type in their e-mail, type in their name, e-mail it to them, a few clicks later they have a signed purchase agreement and you are good to go. That has absolutely transformed our business.
Another one that we are constantly working on is the platform of Podio. This is a customer relationship manager where we can manage all of our leads and we can manage all of our deals very very easily. I am not going to go really deep into this because our next episode is actually with the founder of InvestorFuse, Dan Schwartz, and he really dives into talking about Podio and what we have going on there. I am going to save that for that episode. You are going to want to listen episode 111, but Podio is transforming our business each day and each month, making things simpler and just a smoother process. Hope you guys enjoyed this Insight of the Week. Those are a couple of the technology pieces that we use in our business.
Do you dream of a life that is purpose-driven and makes a difference? Spiritual Foundations.
Brett: For today’s Spiritual Foundations, we always love to just take a moment here on the Simple Wholesaling podcast to really glorify God. We are a Christian company and we love to talk about what God is doing in our lives and in our business. Timeliness is so important because lately I have been feeling a little bit distant from God. Maybe you guys can relate to that as an entrepreneur and a father of four now. Things are always busy, I am always game on all the time whether it is with business or with my family. I do not get a lot of still time.
The Bible says, ‘Be still and know that I am God,’ and sometimes I forget to do that. It makes me more distant from the Lord. But my brother sent me over this today because sometimes I am constantly thinking about should I be doing something different, should I be missionary, should I be preaching the gospel and being an evangelists like Billy Graham or I am constantly thinking about these things on how I can glorify the Kingdom more. My Brother sent over this e-mail and it was a guy who is actually come in to Indianapolis. His name is Jordan Raynor and he is the author of Called to Create.
This article that he is talking about in this conference, that he is coming in Indianapolis for, which I am looking for the date and it is called the Multiple Conference in Indianapolis. It is coming this November. But he really goes into this. He said he struggled being an entrepreneur and being an author if that was enough, if that was enough for pleasing God, because the great commission talks about going to all nations and making disciples, right? He felt like he would need to fly 5000 miles away, live in a mud hut, and preach the Gospel in order to live out the great commission like Jesus says. But the one thing that really got me in this article because he says, ‘My understanding of the great commission fundamentally changed when I heard a pastor unpack the original Greek text pointing out that the word Jesus used for go in when Jesus says go and make disciples of all nations, literally means as you are going make disciples.’
When He said he heard that, that literally changed everything. It is just a little bit of an interpretation on the word go because what change for him is he says now, instead of have being to go 5000 miles away and live in a mud hut and preach the gospel, he says now as he is an author, as he is an entrepreneur, as he is going throughout his life and whatever he is doing, whether he is entrenched in his family or his entrepreneurship business or writing a book, whatever he is doing, as he is going make disciples of all nations. This just kind of hit me because it does not mean that I have to go be a missionary and to really live out that great commission that Jesus tells us to do. I hope this guy… I hope this helps you out today.
I know it really helped me. Just to kind of go in and instead of go and make disciples all nations, change that around, as you are going make disciples wherever you are at. With that, we are going to get in to the interview with Brad Grayson. You guys are not going to want to miss this. As I mentioned earlier in the show, Brad is from Columbus, Indiana. He has been buying rental properties for over 40 years. He has an amazing system, he is very very entertaining, very high energy.
His systems are very simple and he is a super nice guy but he gets the job done. He actually goes into a process, here is a pain point, if you are buying and holding out there and this is the reason why we had the intro in the show, people do not pay rent on time. He was sending out 26 late letters each month. He worked a system out where now he only gets four. He went from 26 late payments to four and he went from five or six evictions a month to one, right? He cut that so much and he cut the headaches and the stress that is not even measurable. If you are in this business or if you are a wholesaler selling to this, you are going to want to listen to Brad as he breaks it down as we talk about the school of landlording and we talk about the traditional landlording is dead. Let us get to the interview.
Brett: Hey, Brad. Welcome to the show today, how are you doing?
Brad: Well, good to be here guys. Glad to talk to you today.
Brian: Yes, we are glad to have you on. Super excited about this. Brad spoke at the CIREIA meeting a couple months ago and just actually absolutely killed it. Super excited to have him on here today and pick his brain about landlording.
Brett: Yes, definitely. Before we get into that Brad, I know you have been in this business for a little while and why don’t you tell our fans out there how you got started in real estate in bring us up to today and what you are doing today.
Brad: Well, my long sad tale starts 40 years ago when I graduated from college from Ball State with a degree in music, a lot of good that does you, and especially in real estate, any other business, but they were getting rid of teachers for music, PE, and art. My brother and I had a small store, we were scratching out a living, I was bringing home $632 a month. Our family home had been burned by a kid. An arsonist broke into the garage, stole a bicycle, and lit the garage and fire it to cover his tracks.
Brad: Yes, it is just like there come out of the ashes . This is the way God works sometimes, just a phase. Here we are, I am still in college, My dad got Nickerson’s book, by William Nickerson, How I started with a $1000 Became a Millionaire in My Spare Time. Classic book and it just explained how to do basic rentals really. He bought a little fourplex and then I graduated. He said, ‘Hey, this is kind of a cool little deal when you think about it.’ He showed me the numbers,
I learned about depreciation and appreciation and just took off from there. I had absolutely no training, I mean other than my dad showed me how to do the math, and then my grandmother heard that I had some interest so I borrowed $1500 from my grandmother and that was a down payment on my first property. Got to tell you this, the first property, I am looking through the newspaper and the guy just said, ‘Selling a home,’ I think the price was $11000 or best offer. I thought, well okay, he sounds like he wants to sell. I do not know what the term motivated seller meant.
We went over to the house, as my dad and I are walking up, understand I got a degree in music, fresh out of college, I mean like a couple of days out of college, and walk up to this house and my dad says, ‘Hey, buy it. Buy it.’ We walked in and the house is all trashy and like the landlord just did not want this anymore. I think we are talked it down to $9000 changed. I said so now what do we do? We reached on the floor and there was a spiral notebook, like an old kid’s notebook, we tore the paper out and you know how the edges are all fuzzy when you do that?
Brad: The corners of paper tore off too but my dad wrote down, ‘Brad agrees to buy from Joe, the house at this address, for this amount of money. Sign here.’ That was the purchase agreement.
Brett: That is awesome.
Brad: The next day I walked into the bank with that and the mortgage officer said, ‘Well, do you have any paperwork?’ I said yes, yes, I got this. I laid it on his desk and he looked at it and he laughed. He said, ‘Well, I guess it is all here.’ I am thinking what else do you need? Where to go? Where do I get the money? Do I go upstairs now and walk away with the money or what? Anyway, that is how we got started. Anyway, my wife and I got married a year later and she joined me in the business and we were working together ever since.
Brad: That is a short version of how we got started actually.
Brian: Very cool, very cool. Why don’t you bring us up to date today like where are most of your properties located and how many did you have and just kind of talk about what you are doing today?
Brad: Well, I live in Columbus, Indiana, which is the architecture capital of the world if anybody is interested in that stuff. It is the home of Cummins Engine Company, Tony Stewart, and Vice President Mike Pence.
Brad: We are really proud of some of our local sons. But I invest right here in this county, mostly in the city, there is a lot of action going on here. I do not need to go anywhere else. Maybe I should put a shout out. If you are from Columbus area, really all the deals are gone, do not come here. It is a waste of time, it does not work here. Anyhow, well to bring you up to speed, my goal at the beginning was we had three children and I thought one house per child.
Then in about, it was a 20 year mortgage, about the time they go to college the house would be almost paid off, I can it out and pay for college for that child. Well then I got five houses then we got eight houses and then we got eighteen houses and I thought well this is really easy. I just had a knack for it. I think I had about fifteen houses before I finally bought that horse in a car you on TV. I blew a whole $159 buying this horse on infomercial. Then I found out oh I have been doing this all along, I learned the term motivated seller. Oh, okay, anyhow, learned some of that stuff. I do not know, we were at like eighty five houses or so when the realtor said why don’t you get a hundred. I thought okay and I kind of turned around and we had already passed a hundred without realizing it.
Brett: That is funny.
Brad: Anyway, I am just really good at buying. But then when I hit this recession thing, I am worried about brand new investors because they do not understand what is going to happen when the next recession comes which is probably due any day now, I do not know when. But things do go down so you got to be careful with what you are doing. The recession, the great recession a few years ago hit us hard. We were just actually this close to losing everything. I can name you six local landlords who did lose everything and one of them even lost his own home because they were not prepared, they were still doing traditional landlording and the economy and the people shifted away from I would call tradional landloring.
With that, we had to get super creative in order to survive. I mean I was in survival mode. With that though, it was like the phoenix coming out the ashes again, we have blossomed and are making more profit than I could ever imagine. We have blown past… My original goal is to make X number of dollars per year, we have blown way past that. The reason we are able to do that is the creative stuff that we are doing. Right here is my slogan now. My slogan is, ‘Find what people want and let them pay you for it.’
Brian: There you go.
Brett: I like that, I like that.
Brett: That is right. That is definitely capitalism and I really want to dive in that. I really want to just carve out the theme for the show and I think you are the exact right person to talk to because you have been in this business for so long that you have seen that you have seen the traditional way of landloring and this is not my niche. We are more of a wholesale company but even that with the systems and processes and technology these days, it has changed so much just in the ten years that I have been doing in this business. But I really want to dive into landlording and one of the things that you said before the show is traditional landlording is dead.
Brett: I want you to explain that, what exactly does that mean?
Brad: Well, let me start back with what I did in the ’70s and ’80s and even into the ’90s, trying to just do what all the books said to do and what all the courses said to do. That was basically you put an ad in the paper, there was not Zillow and things like that back then to deal with, you put an ad in the paper that was a way to go. You poke a sign in the yard and you start taking phone calls. There were times when literally I would hang up the phone and it would immediately ring with the next call. Oh my gosh, I am dating myself because we are talking about landlines here.
Anyway, you talk to these people and you spent 20 minutes because the second you let them talk, what do they do? They start telling you their life story, right? The traditional way was to do that, to talk to these people, to get to know them, and invite them over to the home and of course you tell them all about the home. We got a new roof, we got a new water heater, your closet it has carpet, we did all this other stuff. I am just, I call it diarrhea of the mouth.
The landlord has this diarrhea of the mouth wanting to brag about how great this house is but you do not know a thing about the prospect who is calling in. Anyway, then we would set an appointment and run over and show the house and honestly back then most people did show up in the appointments, times have changed. But now we all know that people do not show up for appointments to show a house. I am leaving the dinner table because I have got a hot prospect who wants to see the house right now. I know nothing about them but I am leaving my family at the dinner table to go show this house.
Landlords are doing that still today, it is just kind of the way we were all raised and traditional which you think you have to do. Then we would take an application and believe it or not, please do not do this, any landlords listing do not do this. Just time had changed but these worked. My criteria to rent to them was did they fill out the application and do they have the deposit money? If they did, I handed the keys right on the spot. No background check, no nothing.
Brett: Like you said, they just put out the application so you could get their phone number, their information.
Brad: Yes, basically. Yes, yes. But I have to tell you it worked okay. Back a few years ago, that was okay and when I am just speaking and teaching to experienced landlords, yes in years ago that did work but people have shifted. People are not as honest as they used to be, people do not have money. It used to be a guy, did have $500 or $1000, they do not have that anymore. Then the traditional part was you would sit and wait and hope that they pay you. In the first month, I am sure they will drop off a check. Oh, by the way, I would have them come in my house, we would sit at my dining room table and we would have a cup of coffee and we would sign the lease inside my house. Can you imagine doing that now?
Brett: No, not really.
Brett: I do not know if my wife would entertain that. If I said, ‘Hey, we are going to have Joe Smith come over. He is signing a leased.
Brian: No, I do not know who they are. They will be okay though.
Brett: That is awesome.
Brad: Yes. Then during the tenancy where they had any kind of a problem, we would just drop everything and run over and take care because I want to have good service, get a good reputation. Then basically but we would sit and wait and hope that they paid. On the first, oh they did not drop off the check. Then on the second they did not drop off a check and on the third they did not drop off a check. They know that the rent is due, no, they will pay up. We would let people slide 30, even 60 days because they said they would pay. Finally when we call them and finally they would answer the phone and they promised they would pay. We will wait, so we would wait and hope. It just reminds me though like back in the 1950’s, in movies let us say the girl sitting next this home phone hoping Mr. Dreamboat was going to call and invite her to the dance, no.
Brett: He never calls.
Brett: If she does not get a go, she has to go snag.
Brad: Yes, yes. That is some of the traditional landlording that people are still doing it. I do not blame anybody for doing it because that is the way we were all raised and that is a way that is kind of expected these days. But like you mentioned, the technology and such, even in the last two years, I had to reorganize my class because of some of the technology stuff that I was talking about two years ago was already outdated and there was new stuff to replaces which was even better cooler.
Brett: Yes, definitely. I took down some notes here on some of the traditional ways landlording. I am going to just kind of fire off some questions on the traditional way, the old way that is dead, and then the new way and then I am going to ask you what you guys are doing now. You mentioned showing up for appointments people would actually show up and you had to leave your family at the dinner table to go show them this house. Okay, that is the traditional way, what are you guys doing now to show people because tenants have to come and look at the houses and walk through them and talk about them and all that?
Brad: Sure, sure. Well, hey. Let me take a second and plug the fact I am going to teach all this stuff at the CIREIA meeting on July 28th.
Brett: Just real quick on that. We will talk about that in a second too, just to kind of really pinpoint Brad does teach all of this. If you are local here in Indianapolis and you have not gone to CIREIA, that is the Central Indiana Real Estate Investors Association. Brad, on July 28th, is going to be teaching a class on the technique strategies, tips and advice on what he is doing now to grow a successful and landlording business on July 28th. That is all going to be in the show notes at simplewholesaling.com/episode110. Sorry about that, Brad. Let us go ahead, what do you guys do now instead of showing up for appointments?
Brad: Let us back up from the showing part and let us talk about the phone call, at least to the showing, right? What we do now is we do not answer the phone. A couple of reasons. The first reason is landlords get sued every day based on what they say to people. They make a casual comment or whatever and from that comes a fair housing lawsuit. One more thing is we do not answer the phone, everybody goes straight to the answering machine. But in addition, like our signs and our ads do not have a phone number is really, nowadays, I mean in this current culture with cell phones and and such, people do not really want to talk to a middle aged white guy. I mean come on.
Brett: I do.
Brad: They originally do not.
Brett: I want to have a coffee with you on a porch in weekend and talk about the old days.
Brian: Talk about the weather and the good old days.
Brad: Yes, yes. My son said it best, if I cannot do it on my iPad, I do not do it.
Brett: That is funny.
Brad: Though a phone call is a very ineffective tool in the landlord’s arsenal. Here is what we do now, here is our creative method now. If they do call, they get a recording and that recording points them to the website. On the website are photos of the home and a video walkthrough.
I will teach how to do that video walk through. It is really simple, you could post it on YouTube and it is really simple. They can drive by, we encourage them to drive by, we encourage them to look at the pictures, we encourage them to watch the video, from that that leaves out a whole lot of people who either do not like the neighborhood or it is not near the school they want or I really wanted a bath and a half and this house has only one bathroom or that kind of thing. We leave out an awful lot of people. I will call it self-weaving. If the house is not right for them, that is fine but let us find out now before I get up from the dinner table. Let me back up and say that a lot of what I do is based on my freedom, that is why it makes sense. Freedom.
Brad: That phone call interrupts my freedom so I wanted to find a way to help that person learn about house and become interested in my house, hopefully become a customer for good, without my freedom being interrupted, without my personal involvement. We point them basically to the website. Right now, even if let us say there is a small time mom and pop landlord who do not have a website set up, it is still free to post a video on YouTube and it is still free to post pictures on Zillo. There you go, you can show them the house like my son on his iPad, without having to go in person. A couple of the little things that we do is we leave at least one light on inside the house and we tilt the blinds level so that we can see through the blinds. They will peek and will get you back the time.
Brett: Do you leave a light on all the time?
Brad: Yes, inside. Interior light or two. Usually like the kitchen range hood, has a small little sixty lamp bulb in it. Let the kitchen glow during the night. I think they can get an idea what the kitchen looks like if there is a window they could pick in. Then maybe a bathroom light or two that can light up kind of the hallway and it is not hard.
Brett: Awesome. That is a great idea. You talk about your freedom and it is more important for you to have dinner with your family than to waste time to show the house and you only are able to really talk to really serious people out there after they have gone to the website, the video, and it really gives them a good idea of what they are looking for.
Brian: He is finding those motivated renters too, become customer’s list and that is a good start right there.
Brad: Yes. I will give you a tip here and will teach this to the class, for those who feel they really really must talk to people, they really must have that conversation, I have three and a half questions I ask people. What I tell people is control the conversation. If you have ever talked to a salesman or let us say you are going out to buy a car and you really want to understand what this car is or how much it is, you want the salesman to actually help you. What I try to do is control the conversation the way that you help the person who is calling. Let us say that you call me, ring ring ring, ‘Hello, Grayson Property Management.’ ‘I am calling about a house at 123 Main Street.’ I will say, ‘Thank you for calling. Let us see here. I do have a couple questions for you real quickly. Are you working?’ That eliminates half the people.
Brett: If there is any hesitation at all? ‘Yes, kind of.’
Brad: Yes, yes. Then my next question is when do you need a house? That eliminates honestly about another half of the people. I know my numbers, I can add up here. But honestly, good idea because well I do not need a house until August. Well, it is May right now, this house will probably be ready before then. You are welcome to apply, always do that, you are welcome to apply but it will probably be gone before you need it. Then the third question, I used to, this house is $850 a month, is that in your price range? Absolutely the wrong question, absolutely the wrong question. Because what are the answer? If you say is that in your price range, what are they going to say over the phone?
Brad: They always say yes. Is it true that that is in their price range?
Brett: Probably not, they probably have not run their budget in numbers yet.
Brad: Yes. The question that helps them and it helps me, the real question is how much rent do you pay right now? They will say, ‘Well, I am paying $475 a month right now.’ So great but this house is $850 so unless you had a big change in income this is probably not the house for you or you probably would not qualify for that but I am very careful I do not deny anybody over the phone. But again, see I am even having to be very very careful with my words as I explain this to you to avoid fair housing problems.
Brad: That is why we do not answer the phone, right there.
Brett: There you go.
Brian: Let us go back real quick to you said your process are basically there are check who used to be if they can fill out the application and they can pay the deposit. How is that? Why do you do that now? How do you do the background check basically behind your tenants?
Brad: Well, back then it was my guardian angel watching over me peeking back to these people. Now, what we do is our applications are free, I know a lot of people that could charge the applications. I want lots of applications because I am a cheapskate and I do not know that I would pay 20 or 30, one person here charges us $45 per person per application.
Brett: Especially if they do not know. I was always hung up on that too because they pay that money but there is no guarantee that they are going to get it and then they do not get their money back, right?
Brad: Right. That is what most people do. I have just made it really free, I will tell you why I could keep it free, I want lots of applications because we have multiple openings at any time. They may apply for the $850 house and they do not have enough income to qualify for that but they also have a $650 a month house that they do qualify for which they may not know about. Now that I know that they can qualify $650, I can call them back and say, or actually we text them, we do not call them, we text them and say hey we have got this one over here on Jones Street, have you considered that one? Have you done a drive by or looked at the pictures yet?
What I am looking for our customers not so much an actual renter for that one house. I am looking to build a customer pool so that as openings come up I can text back to these different people who have been approved and I can say, ‘Mary, you have been approved for $650 and we just had two openings that come up. Oh, I have got one that is opening up next week, are you still looking?’ I mean before it was just well here is the house, take application, when the house is rented, we just shut everything off. With that I have been able to kind of cool a little bit with other landlords. This is something that if there is a small mom and pop, one or two or four maybe and you know somebody else and yours are full but his are not, you kind of share applications maybe, just the thought.
Brett: Yes, all this is great. It really kind of goes along with wholesaling as we build our buyer’s list. It is kind of the same concept where you are building your tenant list and then pooling with other landlords too because bottom line you want to help out y your tenants and you want to help out yourself and that is awesome, that is a great idea.
Brad: Yes, yes. What do we with showings and such, we take the application and we go through it. We do what I call the free stuff first. We use Doxpop, court records online. The state now has a thing that you can use different areas. In a moment, we can look at their court records and that eliminates half of them right there. Again, I am back to the half. We only approved one and a half out of ten applications to come in.
Brad: One point five out of ten meet our approval. The process then is once they have been what I call pre-approved, so on paper they look good. Basic employment, court records look good, and the class all go over our 17 point before we rent to somebody. We have 17 points that they have to qualify for, by the way one of those is cooperative, and then if they qualify or are pre-approved, we shoot a text out to them because that is how they want to communicate and we get much better communication than we used to try to do a phone call people. Because at work, a lot of people can answer a text at work during the day.
I am amazed at the number of landlords who are still refusing to text their residents or their applicants. That is one thing, you got to get with the times. Your resident does not want a phone call, they want a text. Anyway if they are pre-approved we say, ‘You have been pre-approved. Are you still interested and do you have the deposit and moving money?’ Then we give them an estimate of what the moving money would be. If they say yes, then that point we will text to them the lockbox code on the house.
Brett: You have them go through this process. They go to the house, they look at your video, they are interested, they do a free application, and then if everything looks good on paper, that one point five out of ten applicants then you actually still do not go to the house and show them, you give them the lockbox code.
Brad: Do they need me to see the kitchen, can they find the bathroom on their own? Can they turn on the light?
Brian: Is that part of your criteria to make sure they can find the bathroom? Is that one of the 17 points?
Brad: Oh, that is good. That is good. I am going to add that, I like that.
Brett: Have you ever had any issues with that? Because a lot of times people are going to… I mean the biggest thing that people are going to say concern is what if they steal the stove, right?
Brad: Well, in the class we talked about some of the stuff that you do to prepare the house for this like no window air conditioners, those will disappear. First of all, I will tell you that the lockbox program is not for everybody and it is not for every location. Maybe downtown and in the hood or someplace like that, no, absolutely not. We are going to have to go to Plan B on showing that one. But in Suburbia, here in Columbus, I have to tell you the way I have started this, I have actually been doing this for over 20 years and we have got a lot of houses. At any given time, we have a whole list of houses that are open. It started because I forgot to lock the place one time. I left it open for the contractor to work during the day and I forgot to go back and lock it up. Next morning, nothing had happened. For years and years we just left the house unlock, all of it.
Brett: That is another strategy too, there you go.
Brad: Again, not good for every neighborhood.
Brad: Then the quick version of story is the police chief said hey it is not safe for guys to walk into a house if there is a complaint order so we started putting lock boxes on the front door but I used all zeros, I want it really easy. Zero, zero, zero, zero, all zeros. But then in just this last year with the opioid epidemic, we have had some issues with squatters over the winter, so I hate this but we had to shift to an individual number reach out house. We came up with a little code system that we use so we know what…
Brett: One, one, one, one.
Brett: I am just kidding. Real quick, before we go into the next section of the show there is a couple things that I want to really hit home. You mentioned a court record website, what was that again and what do you use that for?
Brad: Well, our organization, our local landlord association, it is like bartholomewlandlords.com. We have a group subscription to Doxpop.com, as in like documents. It has all the court records for Indiana with the exception of about four County so just stick with Doxpop. I can type in your name and look you up and see how many speeding tickets, divorces, I am looking at of course the evictions, bankruptcies, that kind of thing. I am sure he checked us out before he got on the show with us today.
Brett: That is true. I know, he saw all my speeding tickets.
Brad: Check out potential boyfriends for your daughter too.
Brian: There you go.
Brett: There you go. Hey, it is very versatile.
Brian: Brett is signing up today.
Brad: My daughter’s now husband will not mind me telling you guys we looked him up.
Brett: That is funny.
Brad: Yes, yes.
Brett: Real quick, before we go in the next section too, one last question about your traditional landlording is dead and the new ways is they do not pay, that is always an issue. Tenant does not pay, you are used to just kind of wait and hope and pray that the check would come in one day and what do you guys do now?
Brad: Oh my, that is huge, that is absolutely huge. That is one of the biggest things that we changed. Just a few years ago, and is has a whirl of difference and it is a most difficult concept for established landlords to understand. Here is the deal, who taught that resident that you can pay late? Who is the one that basically trained them by letting them be late so that now that you are their landlord they are paying you late? It was their previous landlord, right? Because the traditional landlording was they will eventually pay, no big deal, they will get caught up.
Besides, I have the deposit money and all that. No, absolutely wrong thinking. Here is what we do now. Very very simple, our stress level… I have to tell you what wade out. We were doing an average of 26 late letters a months. On about the 5th or the 6th or maybe the 10th, we would send out late letters giving them a week to pay, that kind of a thing.
Now, where are we on the calendar? We are at the 15th of the month or the 20th of the month by the time these times cycle around. I try to average, I do not have any true tracking on this but I figured that every one of those late was about five phone calls. ‘Mary, record show that your rent has not been paid.’ ‘Oh, I am sorry. I will get that paid. I get paid on Friday, I will drop it off. Friday passes, on Saturday we call Mary. ‘We have not received your check yet.’ ‘Oh, it is in the mail.’ There were five phone calls back and forth so 26 x 5 is how much?
Brett: That would be a 130.
Brad: Yes. Here is my wife, my lovely wife, my sweet wife is making a 130 phone calls a month chasing rent and talk about stress and frustration and people lying to you constantly and such. Here is what we did, here is a new way to do it, this is what he teach, zero tolerance on late payments. It is in bold print on the lease and when I go through a lease with a highlighted clauses and such initial list that just as management does not accept late or partial payment. If the rent is not paid within that three days, we will file for a sheriff’s order eviction. Then the thing is to do that, actually do that. Here are our numbers now.
We send them this text, if the rent is due on the first and it is not paid. On the second, we send them a three day text. Let me see if I can say the text right out because it is a cut and paste to help re-use it. Basically a reminder, if rent is not paid, please pay or vacate within three days to avoid Sheriff eviction. Please reply when paid or out. You know what? They pay.
Brett: You do not accept any late payments at all?
Brad: No, within this three day period.
Brett: Got you.
Brad: But on the fourth day we file for eviction.
Brad: How is that for you? Here are the statistics I can tell from careful tracking, 26 late letters a month is traditional landlord. Then we spend the whole month trying to get the money and then by about the 30th or the 31st, we finally have all the rent for that month. On the first, restart over again. Round and round and round. Now, if the rent is not paid, we send them a three day notice and here is the statistics, we have gone from 26 down to four just by putting ourselves in a different position and speaking different words. We run from 26 down to four people a month that we have a difficulty with. We sent out four text messages on average per month now.
Brett: You send out text messages, you do not send out letters, right?
Brett: It is interesting. Cool.
Brad: When I teach a class, I remind people it differs by court and by Judge. If they pay, you are not going to court, right? The goal is to get them to pay, the goal is not to be called by the court. Alright, now we are down to four people in a month that need a little bit of attention. We have reduced them from 26 down to four. Of those four, two of them just paid right away. ‘Oh, I forgot. My boyfriend has the money order. He forgot to drop it off or whatever.’ Now we have got two people to deal with and on average within the three days the third one gets their money paid and we are down to one eviction a month instead of four or five or six evictions a month that we just have to deal.
Brad: Talk about relieving stress. We have added more properties since then so these numbers would have been bigger.
Brad: There are what landlords should do. Just tell them, if you are not going to pay the rent, you got to get out or we will take you to court that is all. That is all.
Brett: I like that, that is great. That is good advice. There is so many good nuggets in here, just a new way of thinking about landlording. Sometimes we try to be nice and we just kind of walked on. These are just some great strategies to relieve headaches and the stress and to get more out of your tenants. Awesome advice and again I just want to send another shout out to Brad. Brad, when are you going to be at CIREIA? Where is it going to be and what is the date on that again?
Brad: Sure. Well, the date is Saturday, July 28th 2018. If you are listening to this recording after July 28th, sorry to relate this news. July 28th, it is a Saturday. Anyway, it is at Broadmoor Country Club up on Kessler Boulevard, the North side of Indi. It is all day. A guarantee meet. My list is 27 pages long. What is that commercial for farmers insurance? They say something, what is that slogan? ‘We know a lot because we have seen a lot.’ Something like that. When I make my presentation, I show this little kid outside in the snowstorm in his underwear. It is like what happened, why am I here?
Brett: That is so funny.
Brad: I want control, I want control over what is going on and my list has a whole bunch of stuff in it that has tease to make money like another thing we do is pay day plan. 70% of our people are not pay day plan which means weekly or bi weekly and with that we make extra money because there will be extra weeks and then I can do the math in the class. We make an extra $800 to $1000 per rental that are on this program because it is giving people what they want. They want rented bite sized pieces. The Buy Here Pay Here car people figured this out years ago. Why are we landlords still in the dark ages demanding that they pay the rent on the 1st? Got to have it on the first, got to have them on the on the first. They do not get paid on the first.
Brad: Why did a lot of landlords go collect the rent? Because the person is going to spend it, right? Well, if you set up it on a week right when they get a paycheck, they do not have a chance to spend it.
Brett: That is correct.
Brad: Another thing that we do is we do auto draft or we take the rent out of their account. We do not sit and wait for them to drop of a check or money order. We will see, you do have some people who cannot add one plus one, they cannot get a bank account, so we do have money orders coming on some people but for most of our people were set up on auto draft on the first of the month or on the Friday that they are due, we reach into their account, we take the money out, and there it is. We have the rent.
Brett: There you go. No cashing checks, no waiting on that, and it is already done. That is great. Well, Brad, we are running really short on time. We are going to go into the section of the show that Brian and I like to call Going Deep.
Brian: Going Deep
Brett: In this section of the show, we just like to ask a little bit more of a personal life faith questions. Talk about your faith a little bit, who you are as a person and how you feel that translates into your business today?
Brad: Well, you mentioned faith. Cathy and I are saved Christians, saved by the Blood of Jesus Christ and I try to apply that to my business. What does that mean? What are the biblical principles? Jesus spoke in the Bible about money more than he spoke about other things but I want to make sure by Spirit he used money as an example of how sin affects our lives. But I took those money things and I said well how does this apply to being a landlord? You mentioned in there that a lot of people are trying to be nice or wanting to be nice and they think that by letting people slide on the rent or obligations are being nice, well we are nice to our people.
We do not raise our voices, we do not yell at them, we do not curse or anything like this, but we do have a lease agreement and the Bible is very clear. It says that the person who does not pay his bills is worse than a infidel is what it says in some versions. It also says that if you do not pay your bills, your bed may be snatched from you in the night. Oh my goodness, does that sound like eviction? We based a lot of our business principles on thousands of years worth of wisdom through the Bible.
Brett: I love that and I just love who you are and just by the way you talk and speak. You are a great teacher. I have learned so much just from this episode and I know our listeners out there getting so much value and thank you for talking about Jesus and the blood of Christ and that is who we are here at Simple Wholesaling as well and we love to find that commonality in other entrepreneurs.
Touch of Randomness
It is time for a touch of randomness.
Brett: Before we wrap up this show, we are going to end on a segment called the Touch of Randomness. We are going to ask you two random questions, Brad. As we ask these, name the first thing that comes to your mind. Number one, what makes you bored?
Brad: Oh, my goodness. I am going to say maybe people or things that do not have a trajectory or a path or a goal they are head down.
Brian: I like that.
Brett: Yes. Okay.
Brian: Brad is very… Like if you ever see him speak in public, like he is very very high energy. I like that question man. Like you are just like kind of, no, I am a little board by this. I have one more question for you here. If you could ask yourself one question to yourself ten years from now, what would that question be?
Brad: Why did you sit and do this broadcast?
Brett: This could be out there forever, Brad.
Brad: That is right. I know 20 years from now my grandchildren will be listening to this. Ten years from now, oh my goodness, let us see here. Why did I keep… Stick to my list a little better. Again, I go back to that freedom thing. I am very selfish about my time. I lost a deal over the weekend. It is a sweet little deal, would have fit right into my 401K, because I was with my wife and her mother and others. We were doing a whole Mother’s Day weekend thing and in the process the deal slipped away from me.
Brett: But it was worth it, right?
Brad: [inaudible][54:35] there.
Brett: It was worth it. I mean but you are very establish by your freedom and specially in your business. Such is going to happen and you attached yourself where your priorities at and at that weekend it was with your family.
Brad: Well, I was really frustrated when I called the lady and said hey I am ready to come over with some paperwork. She said, ‘I am sorry. I just signed to somebody else.’ Rats. I was moping around the house a little bit and finally I realized, wait a minute, God is in charge of our business and apparently that was the deal for me.
Brian: That is right.
Brett: Love that. You said rats. My kids always say rats because they listen to Charlie Brown and everything, rats. So good. Hey, thank you for being on the show today, Brad, we appreciate you taking time out of your busy schedule to talk to us about the strategies that you are using in today’s market of landloring. But if someone wants to reach out to you, where is the best place for them to go?
Brad: My website is easiest? It is GraysonProperty.com. It is GraysonProperty.com. If somebody wants to e-mail me there or I invite people go look at our website, see how we do things. My phone numbers is on there, my office phone number is on there on the website. Call in and hear what the recording sounds like. Pretend you are a customer, a prospect, and see how it works.
Brett: Definitely. You have a section on your website about education and landlord seminars that you are going to be at which you have already talked about the July 28th but if you want to, I know you do some other seminars as well Brad, so they can also find that on your website, right?
Brad: Yes, yes. Yes, I do not do a lot of extra seminars but I try to do that where I get the basic stuff out there. By the way. the title for the July 28th is Landlord Law and Skills. We are going to go over landlord law. Attend and you will have a good education and understanding of where we stand with the law with what to do and what not to do and then we will get into some of these advance creative and crazy skills that we do.
Brett: Awesome. Well, again guys that is going to be on July 28th. Check out Brad, it is so amazing. When we heard him at CIREIA. Such high energy, such good content, check that out. It is all going to be on our show notes at simplewholesaling.com/episode110. Thank you so much, Brad. We wish you success in the future and God bless.
Brad: Thank you.
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