Full Version: Scaling & Growing Your Real Estate Wholesaling Business
Building Mission, Vision, and Goals
When I first started my wholesaling business, I had no vision, no purpose and no WHY. I didn’t have a deep purpose of why I was doing business. I was solely focused on numbers and making money for security, notoriety and recognition.
I stopped focusing on impact, and I was ultimately chasing money with no end goal in mind.
Mission and vision statements are critical to strategic planning when you’re first starting your business because it helps create your company’s identity and will serve as a guide when making company decisions.
In this Simple Guide, I want to spend some time talking about the importance of having a clearly defined mission, vision and goals to positively affect the success of your team, your team members and the people you service.
Defining Your Mission and Core Values
To start this thing off, I want to be completely transparent with you guys. For eight years, I conducted business without a clearly defined mission and core values.
I want to encourage you guys to sit down and really think about the reason why you started your wholesaling business and think about the impact you want to have on others.
Core Values
Let’s first discuss core values and their importance.
Core values are the fundamental beliefs of an individual or organization that helps drive your mission, vision and goals.
It wasn’t until roughly two years ago, I decided I needed to make a change in my wholesaling business. So that’s when Simple Wholesaling was born and I hired a business coach to help me define my company’s vision, core values and goals.
Here at Simple Wholesaling we have five core values:
Simple and Smart Systems
Leaving a Lasting Impression
Mission Minded
Faithful Servanthood to People
Enjoy the Ride
Now that we have defined our core values, we ensure that everything we do as a company and every person that we hire aligns with our core values and if I have to let someone go, it is typically because they didn’t follow our company’s core values.
Keep in mind that you don’t have to have a lot of them, so I would recommend having between 3 to 7 core values.
Here at Simple Wholesaling we always want to be mission minded. It’s no longer all about money and how many deals we close. It’s really about our mission which is to spread the Kingdom of God through empowering our investors.
Once you have your mission, vision and core values in place, the next thing you’ll need to do is set company wide goals.
Setting Goals
When I hired my business coach, he took me through a book called Scaling Up.
This book studies the Rockefeller family’s business habits and how they used those habits to scale their businesses and become the most powerful family in the United States.
The book includes a One-Page Strategic Plan which walks you through various aspects of your business from defining your company values, purpose, strengths, weaknesses and goals, and there is a section called the BHAG which stands for Big Hairy Audacious Goal.
A BHAG is a clear and compelling goal of where you want your company to be in 10-to-30 years.
Now keep in mind that your BHAG may be so huge that you might not be able to see how you’re going to obtain at that very moment but this will become your company’s focal point to ensure your team remains focused on the end goal.
Once you have your BHAG defined, you’ll want to work yourself backwards and clearly define your 5-year goal, your 3-year goal, 1-year goal and then your 90-day goal which the book refers to as ROCKS.
Breaking down your BHAG into small steps will help you not only define your goals but this allow you and your team to know and understand the role they play into achieving the company’s goal.
Now let’s dive into a few strategize we use to keep our team focused on the end goal.
Measuring Your Goals
Have you ever played a pickup game of basketball? Did you keep score?
You probably did because someone has to win right? Well the same concept goes for business.
If you are setting goals but you aren’t keeping score, how do you know if you’re winning the game?
Setting Metrics
This business is all a numbers game so it’s important that you have keep metrics in place to help you reach your goals.
Let’s use this scenario as an example…
Your goal is to make $25,000 a month. Here’s an example of things you might want to keep track of:
How much money you’ve made each week in wholesale deals
What’s the average amount you make on each deal
So you’ve figured out that you make an average of $5,000 on each deal so you will need to close 5 deals in order to make $25,000
How many calls and people talk to close 5 deals
Just continue to break down each metric and then once you have the math figured out, you can communicate these metrics to your team so that each person knows which metrics they have to hit order to reach $25,000 a month.
Company Scorecard
Here at Simple Wholesaling we review our monthly scorecard and metrics to help us evaluate our goals and staffing needs.
Having a scorecard is a great opportunity to hold your team accountable because it gives everyone specific metrics they have to try to hit each week.
If we are trying to increase our leads by ramping up our direct mail campaign, we know only one person can handle mailing our 5,000 letters a month, if we want to double the amount and send out $10,000 a month, then we know we’ll need to hire another person.
Team Meetings
Have you ever played football or watched a football game?
Have you ever observed how the team gathers into their little huddle before the play and the quarterback tells the team the next play. Now everyone on the field knows what they’re supposed to do on the next play.
We do something similar here at Simple Wholesaling called the daily huddle where we quickly gather on a 15-minute phone call every morning and each individual shares what they are going to do to move the needle.
We also have a weekly meeting where we discuss various things going on within our company and we also talk about our scorecards during this time as well.
During our team meetings, at least once a month, I mention the core values in our meeting just to remind our team of our team values.
We also take the time to congratulate team member living out our core values during our team meetings as well.
Building Systems and Strategies
When first starting your wholesaling business, you’re more than likely balancing multiple roles within your business from acquiring properties, listing properties, managing properties, transactions and more.
You’ll want to have systems in place early on so when your wholesaling business begins to grow, you’ll have the infrastructure in place which will allow you to maintain structure throughout your organization.
In this Simple Guide, I want to share few tools and resources that will help you create systems and maintain organization within your business.
Map Out Your Process
The first thing you’ll want to do is map out your sales process from start to finish. Grab a whiteboard and spend a day walking through what happens from the time a letter is mailed to when the deal is closed.
Mapping out the process will help paint a clear picture which will aid in determining which roles and tools are needed to help from start to finish.
Tracking Team Productivity
I remember reading an article about how Charles Schwab wanted to evaluate how to increase his team’s productive. So he hired a consultant to help create a process that would allow his team to be more productive with their time.
The consultant first advised Charles Schwab to have each team member write down the top six tasks they were going to complete for the day.
Then once they had their top six tasks written down, he instructed them to prioritize each task from highest to least importance and then have them work their way down the list starting with the highest priority.
Our Simple Wholesaling team adopted this productivity strategy and we call it the Stick It Six.
Nowadays we are so distracted with emails, texts messages and social media that we can’t ever get anything done so the Stick It Six allows our team to stay on task and prioritize what’s most and least important.
The system is quite simple…
Each person on our team lists their six most important tasks they are going to tackle for the day on a spreadsheet.
Is this system flawless?
No, but it gives me a clear picture on what the entire team is doing especially since our team works remotely.
Now let’s talk about a few tools and software we use to help create systems.
Business Tools
Here are a few business tools that will help you keep things organized.
One of the most important systems you’ll need is some type of customer relationship management software (CRM).
A CRM is essentially some type of technology businesses use to manage and analyze customer interactions. CRMs help real estate wholesaling companies keep track of motivated seller phone calls, track leads, add in details about phone calls, add in property details, schedule appointment reminders and schedule follow-up tasks for individuals within your organization.
We first started using a CRM called High Rise HQ which is a great CRM if you’re just starting out. The software is very simple but doesn’t have many advanced technology features such as follow-up systems and automatic tasks however it does give you the capability to add in notes about motivated sellers, leads, schedule appointments and things of that nature.
A lot of wholesalers use Podio but we use a CRM called Insightly which helps us manage some of our administrative tasks involved in real estate such as maintaining our contact records, transactions, purchase agreements, calls, appointments and calendar reminders.
We also use Call Rail to track calls and track where our leads are coming from to allow us to achieve a better return on investment for the money spent on lead generation marketing campaigns.
Here’s an example, say we send postcards to a list and receive 100 motivated seller phone calls. The following month, we decide to send yellow letters to the same list and receive 300 motivated seller phone calls.
Call Rail allows us to track the calls received from postcards and yellow letters which helps us determine that yellow letters perform better than postcards.
We all use this tool to track lists. Say you mail out an absentee owner list and then the next month you mail out the same letter to a tax delinquent list, you can use Call Rail to track your calls from each list to help determine which list generated the most motivated seller phone calls.
We used to use Google Voice which allows you to have multiple phone numbers routed to your cell phone to help keep business and personal phone calls separate but it doesn’t allow you to track where the lead came from.
Guys, there’s a lot of great CRMs out there. I would encourage you to research on BiggerPockets to see what other investors are using and try out the CRMs for at least 30 days to figure out which CRM best fits your needs.
Marketing Tools
Here are a few marketing tools we use here at Simple Wholesaling to help generate leads.
Direct Mail
Having a good direct mail provider is also important.
There’s a lot of direct mail companies out there and if you go to BiggerPockets you can research and find which direct mail service other investors are using.
We use a local company called Offset House here in Indianapolis but we’ve also used Yellow Letters as well.
In future Simple Guides, we’ll dive deeper into direct mail campaigns.
Bandit Signs
Bandit signs are also a great way to attract motivated seller leads at a low cost.
We use Sigs 4 Cheap but once again, there are lots of bandit sign providers out there so I would strongly recommend conducting your own research for the best prices.
We have tested many products and services so I would like to encourage you guys to visit our recommendations page on our website for the best tools and resources available for real estate wholesaling.
Building Your Team and Defining Roles
So we’ve talked about defining your goals, core values, creating processes and tools to help you keep things organized, now we’re going to transition into how to actually build a team; from how to recruit, selecting the right team members, defining roles, and creating a company culture.
Having a process documented from start to finish will help you determine your staffing needs from acquisitions, marketing, dispositions, administrative work, transactions and so on.
I can’t express enough how it important it is to have your process documented before adding on new team members. It simply makes the transition much smoother for everyone involved.
How to Build Your Team
If you want to know if an individual is the right fit for your company, give them a personality test.
There’s two personality tests that we here at Simple Wholesaling use during the selection process.
The first personality test we use is called the Kolbe Test, which essentially tells us what that specific individual’s strengths are.
We also use the DISC Personality Test which helps you understand the candidates work style and how to build more effective relationships by using the DISC factors: Dominance, Influence, Steadiness, and Compliance.
When I took the DISC personality test, I learned that I’m a quick starter. I get into things very quickly without really thinking about it but I’m not very detailed oriented and I’m not very good at research.
So essentially, I’m a quick starter and bad at everything else! But guys, that’s totally okay because thanks to the DISC test, my team knows that we need to hire someone who is detailed oriented since I lack that personality trait.
How to Find People
When recruiting new team members, I would recommend starting with your network first. Look at your inner circle and ask people you know personally for references.
Just about every person from my team has come from a personal reference. I’ve hired my friends. I’ve hired my team’s family members. Even my business coach came from a reference.
So don’t over think it by spending money ton of money on ads early on. Start with your inner network first to find your strongest candidates.
Now if you can’t find anyone in your inner circle, invest money into an advertisement prospecting the type of candidate you are seeking for your company.
Now once I’ve found a potential candidate, I ask them to send me a video submission because I personally don’t care for resumes and I want to get a feel of who they truly are through their video submission.
Who Do I Add First?
When I first got started, there were tasks I enjoyed and there were tasks I did not enjoy and that comes with every business.
Here’s a quick story…
I sat down with a guy who is a golf pro the other day and he mentioned that he was starting to get into real estate because he didn’t have much work to do during the winter.
He explained how he enjoys going out and teaching others how to golf plus he enjoys being able golf himself while giving out lessons.
But there was a part of the job he didn’t enjoy…
He didn’t enjoy sitting behind the desk at the golf clubhouse taking orders and processing transactions.
So in summary, in every job and business, there will be tasks you enjoy and tasks you do not enjoy.
So when I began to expand my team, I honestly looked for people to fill the jobs or the duties that I don’t enjoy which was answering the phone and handwriting letters for direct mail campaigns.
One of the other tasks I don’t like is putting lock boxes on properties, taking pictures and cleaning out properties so hiring a property manager was top priority for me.
When you guys are looking to build a team, I would consider filling the positions you don’t like doing first.
Some people aren’t very detailed oriented, hate talking to people, hate negotiating, some people don’t like dealing with all of the paperwork…
So it depends on whatever you don’t like.
Begin to build your team by hiring people who are good at fulfilling a task you don’t enjoy doing.
Hiring Virtual Assistants
I went through most of my business (nine and a half years) with no virtual assistants because I felt like I didn’t know how to utilize them. I just didn’t know where to start and how to communicate with VA’s.
At the time, I felt like it was more work than what it was worth but I was very wrong.
We’ve hired a few VA’s and I personally feel that VA’s are a huge extension of yourself. Our VA, Roxanne handles our administrative work and she has been with us for about 6 months and she is awesome!
We have 11 people total on the team and she is by the far most detailed oriented person I’ve ever met which is really amazing because I’ve never met her face-to-face and she lives in the Philippines.
Outside of hiring a virtual assistant to work directly for you, Pat Live is an amazing phone answering resource that answers motivated sellers live.
This, my friends, is a game changer and I strongly believe this will help set you apart from other wholesalers out there.
So people may disagree and say to let the call go to voicemail and then call them back, but guys you must remember, competition is extremely fierce so you have to answer the phone live or you risk that motivated seller calling another investor instead since you didn’t pick up the phone.
Here at Simple Wholesaling we have an acquisitions team member answer the phone live during his work hours, but what about the weekends and the hours between 6 pm and 8 am the next day?
Are you just going to let those calls go to voicemail?
What if your acquisitions guy is talking to someone else on the other line?
You can’t talk to multiple people at once so there’s an answering service called Pat Live and you can actually structure this through Call Rail to where if you’re talking on the other line, after 5 seconds of not answering, the call will be transferred to Pat Live where a trained representative will take the phone call on your behalf and capture all of the information needed.
We used to miss about 50 percent of our phone calls because we received a lot of calls either on the weekends, after hours or while we’re on the other line. Now thanks to Pat Live, we miss 2 percent of our phone calls.
I believe it is worth checking into a call service if you want to answer above 40 percent of your calls.
Defining Roles
When defining roles, keep it simple and play on each other’s strengths.
In a wholesale business, the most important role that could make or break your business is in the acquisitions role because you make money when you buy the deal, it’s not when you sell the deal.
When finding someone to fulfill your acquisitions role, you must have someone who is good with people, good at negotiating, someone who is humble and hungry, someone who is going to go out on a Saturday to meet someone when it’s 30 degrees.
That’s the type of person you need in the acquisitions role, and those traits aren’t going to fit everybody but that’s the most important role within your wholesaling company so choose wisely.
When we were looking for someone to fulfill the acquisitions role, we were looking for someone who was a little more aggressive and could influence and persuade others.
When we were looking for a transactions coordinator, we were searching for an individual who was more conscientious, steady, detailed oriented and had no problem doing the same thing over and over again.
I remember when our team member Gary was our closing coordinator and our property manager. He was just overwhelmed because he couldn’t get it all done. We were increasing volume and closing on a lot of properties he just couldn’t keep up. So we took the property management role away and gave it to someone else and played into his strength of being our closing coordinator instead.
So if you have a team member who is wearing too many hats and is feeling overwhelmed, give them hope that help is on the way and work on trying to find someone who can help assist some of the duties.
Here’s another great example on how to play on your team member’s strengths…
Alex works for our team and he started off answering calls on our acquisitions teams, now if you meet Alex, he’s a great guy but that isn’t his gift. He didn’t enjoy answering calls but I felt like he did it because he wanted to be a part of the team and wanted to pay his dues. Alex is more detailed, so now he makes sure the purchase agreements are accurate and photos of properties are taken care of. He’s also really good at systems and he’s already created an entire direct mail campaign for 2018.
Building Team Morale
I read this book called The Dream Manager and this book was about a janitorial service who was having trouble retaining their employees. There janitors only lasted less than a year, so they started to wonder why their turnover was so high.
Now it’s easy to think that it was due to the nature of the business because nobody wants to be a janitor and clean up after people their entire life. After hiring a Dream Manager, they found out they were totally wrong.
The dream manager sat down with the janitorial service’s management team and ask what was it that the janitors really wanted.
Was it more money?
More benefits?
What do they want?
They conducted a survey with all of the janitors to pinpoint their wants and their dreams.
The Dream Manager then met with each janitor individually and asked each of them to write down their goals and dreams and what would help them achieve their goals.
Most of the time it wasn’t about having more money, it was things along the lines of sending their kid to college, home ownership, buying a new car, having a nice Christmas or buying their daughter their first bike.
That book reminded me that everyone has goals and dreams, and it influenced me to set individual appointments with my team members to allow me the chance to get to know them outside of work.
Now I try to have a lunch with a different team member every Friday to learn about their personal life and any goals and dreams they may have because it’s really about building rapport and showing my team that I truly care about them. I want them to success in their personal lives as well.
So guys, remember that not only do you work with your team members but you do life with them as well.
Building Your Reputation & Brand
I want to be honest with you guys, wholesalers have a terrible reputation!
In more recent years, wholesalers have developed a poor reputation because there are literally thousands of horror stories where wholesalers have backed out of deals or took advantage of someone.
My heart is to put an end to all of that and show you guys there is a right and a wrong way to to do business.
In this Simple Guide, we’re going to dive into how to build up your reputation by building relationships with other investors and lenders, how to market your brand and how to build a positive online presence.
Let’s get started!
Building Your Reputation
Real estate is all about relationships so having credibility and a good reputation is huge and sometimes you will have to make decisions that will cost you money to save your reputation.
Here’s a personal example…
We have a buyer who has bought a lot of properties from us and he was having a conversation with another investor about wholesalers they trust in Indianapolis. The other investor had just gotten ripped off by another wholesaler and our buyer referred him to us and said, “The only wholesalers I trust are Brett Snodgrass and his team.”
That meant a lot to us because there were times I had to tell this buyer things that would hurt him as an investor.
For example, he really wanted to buy a particular property. It was a very nice property but I had to be upfront and tell him that although the property is very nice, there is a super messy eviction going on. I wanted to give him a heads up so that he didn’t run into any messy surprises after purchasing the property.
There were also times I had to send money to him because we had promised to clean out a property but our cleaning guy was unable to get to the property in time.
Even though it costed us a couple extra thousand dollars to cover the property clean up, it made our relationship with that buyer stronger and now how he’s more likely to buy five properties a month instead of three because he trusts us.
Reputation is king in this business so don’t be afraid to go the extra mile even if you lose money because trust me, it will pay off in the end.
Here’s another topic that gives wholesalers a terrible reputation…backing out of deals!
Never back out of a deal no matter what!
Many wholesalers out there will just put $10 down for earnest money so in the worst case scenario, if they have to back out of the deal, they’ve only lost $10.
When I hear those type of things, it leaves me with the impression that the investor is selfish and all about themselves.
Here’s why…
Yes, the investor only lost $10 from backing out of the deal however think about how much the motivated seller is will lose.
They’ve lost time, excitement of selling their home, they’ve lost their moving arrangements and everything. Backing out of a deal leaves your motivated seller in a bad situation when it’s our job as a wholesaler to serve them by purchasing their property to them out of their situation.
So yes, you the investor is out $10 but you have let your motivated seller down and you must take those types of things seriously.
Networking with Sellers, Buyers, other Investors
Along with your reputation, branding is huge in real estate and networking with other investors is huge.
Real Estate Investors Association meetings are where all the investors hangout and I’ve met many buyers at my local REIA meeting.
So always attend your local REIA meetings because you never know who you’ll meet and what you’ll learn.
I wish I would have learned about the importance of attending these meetings because I didn’t start attending until I was seven years into my business.
Now we host a monthly meetup where we teach other investors how to wholesale properties which has allowed us to strengthen our brand and credibility in the wholesaling community.
Just think about it…
If you attend a college class, who do you feel is the smartest person in the room about that particular subject matter?
Probably the professor.
If you are teaching something, people look up to you as an educator or an advisor. Even though you actually may not be the smartest person in the room about that subject, you appear to be because you are standing in the front of the room talking about the subject.
That’s why we teach wholesaling. Plus we enjoy teaching and helping others.
People ask us, “Well why would you want to share your secrets?”
Well there’s really no secrets and I believe that if you give enough back, you will receive and now people are asking us to speak and give presentations which is all branding for Simple Wholesaling.
Marketing Your Brand
In my first seven years of business, I didn’t really have a brand and I had a couple companies with terrible names.
My first business, Kaylin-n-Kompany, which was named after my daughter but it was a pain because I had to explain the name to my title company every time I was closing on a property.
Kaylin is my daughter and that’s awesome that I would want to name a company after her but like what the heck? It was a terrible idea and I just didn’t know any better.
The second company was Indiana Luxury Homes, Inc.
Now-a-days I just sit and think about what did I do with most of my day back then. Did I just sit around and come up with the dumbest names possible for my business?
Yes, it would have been a cool name if I was selling million dollar mansions but I was selling $30,000 houses!
So a few years ago, I decided to keep things simple because I hate complicated things, and that’s when Simple Wholesaling was born and I decided to run with it and brand that name.
Building a Presence Online
It’s important that you utilize your social networks to build an online presence for your wholesaling business.
There’s Facebook, LinkedIn, Twitter, Snapchat, BiggerPockets, Instagram, YouTube, the list goes on.
BiggerPockets is the Facebook of real estate investing so I would strongly recommend branding yourself by asking questions, answering questions, posting properties.
It’s critical that you network on these sites with a giving mindset by constantly asking yourself, “How am I going to give?”
Before stepping into your REIA meetups and onto BiggerPockets, keep this in mind.
Don’t constantly suck information from people so be intentionally about adding value to conversations and discussions as well.
If you ask a question on BiggerPockets, make sure you answer two questions on there.
Give twice as much you would ask.
Fostering Relationships with Lenders
Although branding is extremely important, sometimes you have to pay your dues as well in order to build up a solid reputation.
People want experience, including lenders.
Checkout this scenario…
I’m a lender and an investor wants to buy a house for $100,000. So let’s say they were going to wholesale the property and they have a buyer who couldn’t come up with the money until two weeks later. So I say yes and lend them the money for two weeks but I’m going to charge them three points ($3,000) on the loan and 12 percent interest.
Now some people would hear, three points and say what a crook!
Some people would hear 12 percent interest and freak out but if you really equate 12 percent interest for two weeks, it honestly isn’t that much if you do that math.
So sometimes you have to pay your dues. I’ve paid 2 points, 3 points, 4 points, 15 percent interest and I’ve even paid 18 percent interest.
You just have to get your foot in the door with your lender and then once you build that relationship by doing a few deals with your lender then you can sit down with them a negotiate your interest rate because now you have skin in the game.
Don’t worry about some of those rates and risk losing your deal especially if you have a good deal on the table.
Build a solid relationship first, negotiate later.
Where Do You Go When You Need Help?
So if you’re brand new, I would recommend finding someone who has walked down that road before.
I have a business coach. Now although he hasn’t walked down the wholesaling road before, he has walked the road of building a business.
And don’t just send them an email saying, “Hey, I’m a new wholesaler, can you help me?”
Check out of previous Simple Guide to learn the best way to approach someone for help.
If you’re in a different market and you’re reading this, please reach out. Humbly speaking, I probably know the top wholesaler in all of the major markets and they are always looking for deals opportunities to partner on deals, I can help link you to the right person.
So if you guys needs help and you’re in Indianapolis or any surrounding areas, you can send your deals to us and we would love to either buy it or partner on it with you.
There also lots of resources and recommendations on our website as well.
Conclusion
Although we talk a lot about wholesaling strategies such as lead generation, networking, finding buyers, closing deals and the list goes on, I just want to stress the importance of having a good reputation because once your reputation is tarnished, your wholesaling business will end rather quickly because no one will want to do business with you.
So as we continue to share wholesaling and business strategies, keep servanthood at the front of your business.
If you approach your business with a heart of servanthood, your reputation will mirror that and your business will flourish.
God bless!