You’ve finally found it! The formula for real estate success: The Seller Lead Optimization.
Whether you’re new to the industry or a seasoned pro, what we’ve outlined below is an innovative process that can skyrocket your business to the next level. At its core, it’s about making the most out of every single lead, every single time. This is a simple, streamlined system rooted in optimizing, maximizing and monetizing ANY seller lead that comes your way. Think of this as your “no lead left behind” strategy — a strategy that, done right, will drive more revenue to your business. Just imagine whenever any kind of lead crosses your desk, hits your inbox or calls your office, you can immediately spring into action and take that homeowner from unknown entity to potential deal fast.
Sounds pretty good, right?
This simple, yet comprehensive system works whether you’re a startup or a seven-figure real estate investment business. It works if you’re a one-man show or a 30-person operation. It works whether you’re wholesaling, holding, flipping, lending or something in between. It just WORKS. It’s built on a very basic business principle… that principle? That there are two ways to grow your business:
Increase the number of leads
Increase the net value of each lead
So how do you achieve both?
How do you get the most of out every single lead you generate through your ongoing marketing efforts? And how do you know that you’re squeezing every bit of revenue out of every lead that crosses your desk — every lead you spent hard earned money to generate?
By leveraging a method that monetizes those leads with absolute precision and total certainty. This is the system.
The Seller Lead Optimization System (SLO)
Seller Lead Optimization is a five-step process anchored in a few key best practices —namely, developing a solid marketing plan and having an effective lead manager in place to work the leads that come pouring in. This lead manager will, then, analyze potential investment properties and bucket them based on next steps. It’s simple, it’s effective, and once the pieces, processes and players are all in place, it’s fairly turnkey — BONUS! It also doesn’t require an increased marketing budget. As we’ll delve into this a bit further, you’ll discover that the issue is rarely ever with the number of leads — you can always GET leads. This system, instead, focuses on optimizing all the leads that are already coming through your pipeline. By converting more of those leads into profitable deals, you’ll make even more profits without having to spend more money filling the funnel. Put it all together, and this is how you create wealth as a real estate investor — not just by making more money by flipping more deals, but also by gaining the cash flow you need to grow and evolve your real estate investing business. It’s exactly what the power hitters in this industry do every single day. They don’t obsess about quantity; they focus on what to do with them all. The SLO system works for small and enterprise level businesses just as well as it works for mom-and-pop shops, multi-million dollar investors and everyone in between. And it works whether you are wholesaling, holding, flipping or lending. Now, back to those step…
5 Steps to Seller Lead Optimization
This is an overview of the SLO system in action and, specifically, how each piece relates to the next. Don’t worry — we’ll break it all down further.
This map — learning it, following it, moving through the steps one by one — is essential to success with SLO. Download it, pin it to your wall, distribute it to members of your team — do whatever you need to do to ensure this isn’t just read and committed to memory but, also, implemented starting NOW.
So fill up your coffee cup and get ready. Because what comes next is going to change your real estate investing business forever. Again, THIS is the exact process and strategy million-dollar investors are using to buy and sell real estate in every market from coast to coast. Wholesalers, rehabbers, landlords and now, YOU. Let’s do this.
Like any business, success in real estate investing hinges on LEADS… both seller leads and buyer leads. Leads are what, ultimately, become those deals, which has the potential to satisfy both business-growing principles outlined above. More leads typically equal more deals. And more deals open you to the possibility of more high-value deals. Check and check. So here’s the interesting part about SLO — while many real estate investing systems are anchored in selling you more, more, more on the lead front, we’ve got an entirely different view. And it’s one that might shock you.
You DO NOT have a lead problem.
That’s right. You. Don’t. Have. A. Lead. Problem.
Why?
“This is a real estate driven economy from top to bottom.”
– Christopher Thornberg
The leads are there — you can always turn that faucet on and off with a few hours and a few dollars. Depending on your budget, you could send dozens, hundreds, even millions of leads this week by leveraging simple, turnkey resources like Listsource, Audantic and Rebogateway just to name a few. These businesses are lining up to sell you leads. Your SEO agency wants to send you more traffic and bump up your rankings. Your PPC administrators would love to get you more clicks.
But all of those resources are worthless if you don’t have a system or process in place to convert them into deals. And, chances are, you don’t. That’s why you’re frustrated — because you have no system.
Generating The Best SELLER Leads
All in all, most real estate investors and real estate investing businesses don’t have a system. They don’t have — or don’t need to have — lead problems. Leads aren’t the issue. The issue? Maybe it’s a team problem, or a system problem, or an implementation problem. But leads? That’s a non-issue 99% of the time. If I told you that every time your phone rang you would make $10, you’d get your phone to ring, right? You see? No lead problem. You have a problem converting those phone calls into deals — in making those calls equate to that $10. But that ends now. That ends with SLO.
NEED HELP WITH THOSE LEADS?
If you’re already saying, “WHOA! Tell me more about those LEADS… ” then STOP HERE, just for a minute. IVAS can teach you how to drive leads through systems like Agent Enrollment, Craigslist and other social media resources, as well as through professional marketing services and strategies. Learn more about building a complete marketing plan here.
Why Even The Best Problem Solvers Fall Short. At the end of the day, real estate is pretty simple. You, the real estate investor, gets paid to help homeowners get from where they are right now to where they want to be. It’s so much more than buying and selling houses, really — it’s problem solving in a way that benefits both sides. Those sides? You and the seller. The very best real estate investors are the ones who can maximize this give-and-take, ensuring they and the seller walk away with the most value possible. Same goes for marketing — the best investors use their standout problem solving skills to help communicate their message to buyers and sellers. Again, everyone wins.
NOW THE PROBLEM: Some real estate investors just can’t connect the dots. They’re good communicators and good problem solvers.
However, they fail to:
Create a consistent marketing machine
Convert the leads they generate
You could be the best problem solver in the world, but if you don’t have the problems to solve — AKA the leads — then you’re going to fall short. The same goes for poor conversion stats — maybe you’re great at solving those problems, but something happens that keeps you from closing the deal. So either way, you’re stuck. And either way, it’s going to hold you back from achieving your goals in the industry.
That’s where SLO comes in. This system takes your powerhouse problem solving ability and ensures you’ve got the pieces in place to make the most of every lead opportunity, every time. But while you’re working through this system, don’t lose sight of what makes you a great real estate investor or what will make you a great investor, if you’re just starting out: your ability to solve problems with confidence, ease and an eye fixed on delivering value.
But first…
Figuring Out Where To Start
Like Michael Masterson writes, “Ready. Fire. Aim,” in that order. If you wait and evaluate; assess and obsess, you’ll never get anywhere. So just take a shot, then improve and enhance and do it all over again.
Strategy will never make money. What does? Execution. And that means execution wins every single time.
Because you need LEADS — any successful investor knows quantity beats quality. While mom and pop shops spend countless hours analyzing what to say on a postcard, top investors simply get their message out to as many people as possible. So your goal? Cut through the clutter and get down to business. And the easiest way to do that is…
Become a master of a single, steady traffic source. Stay focused on that traffic source and, once mastered, add a second and third traffic source. Before choosing that initial lead generation source — and the one after that and after that — ask yourself a few questions:
Who am I targeting? Absentee owners? People with tax liens? Properties in probate? What’s the message I want to share with that audience? Why a Single Lead Source is All You Need…A perfect example? Our client, Brian “Mr. Probate” Sapp from Novus Properties, LLC. He became a single lead source master and it’s enabled him to build his business in a very big way. So what’s his story? Brian’s Alexandria, Virginia-based business wholesales lots of properties. His core lead generation tool? A probate mailing system. He buys and builds lists of properties in probate, a rock solid resource with seemingly endless potential for a wholesaler. Brian sends formal letters to these homeowners, packed with benefit-rich information and insights, helping paint a picture of how he can solve their problems — whether they realize they’ve got a problem or not. With this simple system, Brian is able to help people get rid of unwanted properties quickly and easily — properties he then resells to rehabbers or landlords. By choosing a smart, strategic audience for his business, articulating the right message through the right platform, and shoring up a good strategy, Brian has been able to make lots of money wholesaling. It’s powerful stuff.
CLICK HERE to learn more about the Unstoppable Marketing Machine.
Once you have your lead source, what marketing medium will you use to get those sellers to call you? Is it postcards? PPC? Yellow letters or zip letters? Social media? Whichever one you choose, make this your initial marketing channel and go from there.
Building Your CASH BUYER LIST (AKA Finding Buyer Leads)
In order to maximize your SLO integration, you need to build a buyers list — and you need to build it now. Why? Because when new leads cross your desk, you’ll want to scan your buyers list and see what kind of potential you’ve got — in other words, is this a property that you (potentially) already have a buyer for?
To simplify things, as you build your buyers list, you’ll want to organize your leads into four categories:
Wholesalers
Rehabbers
Landlords/Buy and hold
Retail buyers — these are people who are buying a property to live in, post-purchase
Within those categories, you’ll want to make note of what that particular buyer is looking for — the type of properties they’re interested in, locations, timing, budgets and other specifics. This will make your life a lot easier once leads start pouring in. You’ll be able to fire off a quick email to your buyers list or, even segments of your buyers list, and land a seller in minutes.
Really — that’s how important your buyers list is to SLO.
So, for the big question…
Where do you find these ready, willing and able buyers?
For starters, some will find you. Many rehabbers will see your ads and other outreach targeting sellers, and they’ll simply check in. Rehabbers and landlords are always looking for great wholesalers. If they see your name over and over again online, on bandit signs and in investor groups, they’ll likely take notice and want to try and find you. When they call, be sure to get all of their info and the types of leads they’re looking for, then add them to your buyer list. As new deals come up, keep them in the loop. But don’t just sit around and wait for leads to find you — you’ll also want to be proactive and seek out quality buyers and buying prospects. Here are a few options:
Online searches
MLS Cash Transaction Search
Craigslist
Other wholesalers
Networking (both online and off)
Events
At this stage, bigger is better when it comes to your buyers list. Again, when a new lead comes in, you’ll be able to immediately dig into your list and see if you’ve got someone who fits the bill — a buyer who’s definitely looking for this property. If that’s the case, then a lot of the heavy lifting will already be done! Putting It Together: What To Do When You’ve Got the Leads
Next, you’ll need to ask yourself: What am I ultimately trying to accomplish? Am I wholesaling? Rehabbing? Buying and holding? Something else?
3 Real Estate Strategies You Need To Know
At the end of the day, there are three major real estate investing strategies that the majority of investors tap into. That’s not to say this is it — this certainly isn’t an exhaustive list — but this is where most real estate investors start, and where they stay for the bulk of their deals. You’ll need seller leads for all of these methods, so this first step won’t vary all that much, if at all. What varies, though, is what you do once you have accepted offers on those leads. While that’s still a few steps away, understanding your strategy going in will help you plan and ensure you can hit the ground running once you’ve got a deal on the table. Those strategies?
1. WHOLESALING
This is always the strategy to fall back on, and what I’d recommend starting with if you’re new to real estate investing. It’s the easiest way to make lots of money as a real estate investor — and to make it fast. As a wholesaler, your job is to get a property into contract then “assign” that contract to a rehabber or retail buyer for a fee — think of it as a reward for doing all the leg work. That buyer assumes the terms you and the seller originally agreed to, and moves forward with the close. And at that close, you get an “assignment fee” for your services, built into the buyer’s final purchase price. You never actually take possession of the property, and you don’t have to do any rehab work to flip the contract. The alternative to an assigning your contract? A double close. A double close is what I call a A-B, B-C transaction. Basically, all three parties wrap up their deals at the same time — you close with the seller first (A-B), and then immediately close with your buyer (B-C). In both instances, you don’t have to do any rehab work to flip the property. That’s what makes wholesaling so appealing to many real estate investors. It’s simple, it’s straightforward and it’s very quick.
2. REHABBING
If you’ve ever watched one of those house-flipping shows on TV, you’ve probably got some sense of how rehabbing goes. You buy a property that needs some serious TLC — it’s older, it’s distressed, it’s outdated, there’s severe damage — and spend the time and the money to get it market-ready. That could be anything from slapping on a few quick coats of paint and changing out some fixtures, or it could be taking a property down to the studs. It all depends on the market, the property, your timeline and your budget. But wherever you land, the final step in a rehab is flipping that property to a new buyer — usually the end buyer or a landlord. If you can buy low, there’s a lot of revenue potential in a rehab project — think five and even, possibly, six figures. But at the same time, rehabs can take much more work, more time and more out-of-pocket than wholesaling. It’s a balance — where are you now and what are your short- and long-term goals?
3. BUY AND HOLD
A buy and hold tends to follow the rehab route — you find a property, you fix it up but, instead of selling it, you rent it out. While you won’t make the same level of profit right off the bat, buy and holds are great ways to build a steady income stream and, ultimately, long-term wealth. The challenge? Keeping your buy and holds filled with reliable, long-term renters who PAY. Whether talking about wholesaling, rehabbing or buying and holding… all of these methods should be anchored in the SLO system. While your final destination varies, the five steps to SLO shouldn’t — you’ll still need to market your business, manage your leads, analyze and inspect potential properties, and ultimately, get the deal done. This system is for every investor every time. So, you have your leads in place? Lead generation system in place? Focusing on that single source marketing outlet — and starting to get pretty good at it? Good. SLO’s rooted in leads and, especially in the beginning; you’re going to want to have as many as possible at all times. If you do, you’ll make STEP TWO even easier…
Why is this even important? Picture this: the phone is ringing, but no one is answering. It’s evening and you’re starting to wind down for the day. But that’s not why you aren’t answering. You haven’t been able to keep up with the incoming calls all day — and it’s been going on for a few weeks, at this point. This is a good problem to have. But on the other hand, you constantly feel guilty. You aren’t servicing your clients or engaging your prospective sellers and buyers the way you should be. You aren’t managing your leads in a way that’s productive to your business and your business growth. That was me not too long ago. I can’t tell you the number of nights I went to bed feeling guilty. I was spending money to generate these leads and it was clearly working — the phone was ringing off the hook day and night, but I wasn’t answering — at least not as much as I should have been. I had too much to do, and as a result, I was dropping the ball left and right. And no one — not me, not my business and not the people who wanted to work with me — were winning. Don’t be that guy. Don’t go to bed feeling guilty. Seller leads are your business’ lifeblood. You already know that driving lots of leads is essential to your success. But it’s equally important to manage the leads you’ve got and will get in the coming days, weeks and months. Because having endless leads doesn’t matter at all if you can’t manage and maximize them — and that’s why you need a seller lead management system.
And you need it RIGHT NOW.
You need to have multiple buckets and multiple ways to monetize every single lead. Do this, and you’ll make more money as a real estate investor. Again, this is central to SLO — it’s central to excelling as a real estate investor. But the big question: you have this powerful marketing strategy and the potential to monetize every lead. However, can you really accomplish that on your own? When It’s Time to Tap a Pro…The short answer? Probably NOT — at least not successfully. And that’s why the crux of step two is hiring a top-notch lead manager. When you turn up your marketing budget and have all those incredible leads pouring in, this is the person who’s going to handle them like a pro, steering them towards a successful close. This is the person you’re going to hire and train to run this critical piece of your business and manage all the bumps, twists and turns that come with solid lead nurturing and conversions. You could try to go it alone. I did. And I was successful, to a point. But soon enough you, like me, will hit a wall hard. Soon enough you’re going to be just like I was — listening to opportunity ringing — literally — and knowing you can’t do anything about it because you’re too busy to think let alone answer and move the ball forward. So you do nothing. Not a good feeling.
Here are a few key traits your lead manager will need:
Outstanding communication skills
The ability to build relationships fast
Emotional intelligence
Thick skin — there are some less-than-pleasant homeowners out there…
For my money, this is the most important piece of the SLO workflow – finding and integrating that lead manager. It’s also the most difficult position to hire — it’s tough to find someone who can manage everything that’s thrown at them, and react with professionalism, knowledge and, always, an eye on getting that deal done. This is the person who will be answering those live calls, setting appointments, drawing up comps and setting appointments to see potential investment properties. But don’t worry — we’ve taken the stress and the hassle out of the process. IVAS can help. Our VA’s are trained lead managers, with the insights and expertise to help assess and activate every prospective seller. You’ve got the leads. We’ve got the rockstar VA team.It’s a perfect match!
Relationship Building and Your Lead Manager
So what, exactly, will this lead manager do? Build relationships. They’re going to make homeowners feel comfortable and heard, book appointments to see properties and, overall, help tee sellers up for the next step — potentially selling their house to you. And because of this — because of the foundation your lead manager is laying — the value of this role can’t be oversold. Our VAs are experts in cultivating positive, high momentum relationships from “hello,” ready to act on every new lead and implement a forward-moving strategy to keep prospective deals moving forward. These lead managers will also be able to weed out sellers and determine which bucket they fall into:
Motivated sellers
NOT motivated sellers
While you may be able to convert a less-than-motivated seller to your side, it usually takes a lot of work and a lot of effort — resources that could be better spent scooping up more low-hanging fruit, like motivated sellers. This is exactly where your lead manager will place his or her focus. Before your lead manager hangs up the phone, they should always have the appointment set with a motivated seller. Keep in mind, it doesn’t mean you’ll necessarily follow through with the appointment. We’d still have to do some more digging and further analysis when we get to step three — and you may discover the deal just isn’t worth your time. But it’s better and easier for the lead manager to get back in touch with the seller to cancel, than to try to initially get something on the books.
Understanding Motivated Sellers
Motivated sellers are, as the name suggests, motivated. They want to sell their home. Often, they need to sell their home. And, as a result, many are willing to move mountains to get a deal done. They’ll lower their asking price, they’ll move out on your timeline and they’ll accommodate any pre-closing requests you may have, all in the name of selling that property fast.
So how do you know if you’ve spotted a motivated seller? Ask yourself or your lead manager these three questions:
Why does this person want to sell?
How quickly do they need to sell?
What will they do if the property doesn’t sell?
If you’re working with a motivated seller, you’ll likely hear a lot about uncertainty and other unexpected challenges that have led them to this point — the point where they need to sell their home now. Like Benjamin Franklin said, “In this world nothing can be said to be certain, except death and taxes,” and that couldn’t be more apparent than when you start investing in real estate. You’ll no doubt hear stories from motivated sellers, from job loss and relocations to divorce, death, health problems, age and other bumps in the road. By understanding a seller’s unique situation you’ll be able to best understand their motivation, and can help create some value from what’s, often, a less than ideal situation.
Trying to understand motivation is also important because it helps build trust between you and the seller. No matter their situation, most sellers want to work with someone they like and trust — someone they feel like they have a real relationship with. And that starts by building rapport from the very first call. Remember, first impressions are made in the first seven seconds — so make sure that initial encounter is as positive and engaging as possible.
LEARN THE SECRETS OF ENGAGING SELLERS. CLICK HERE for the Ultimate Seller Lead Script.
Perfecting Your Seller Lead Management System
But, like lead generation, building relationships with motivated sellers won’t mean much in the end if you can’t convert them into high-value deals. And that depends on — once again! — your seller lead management system. Even if you’re the very best real estate investor out there, you’ll still only convert a small percentage of your leads to deals — we’ve heard numbers as low as 1%-2% depending on the market. It’s pretty jaw-dropping, isn’t it? So what keeps deals from happening? Some sellers ultimately decide to hold onto their property. Others wind up in foreclosure and fall off your radar. Some will, simply, find other buyers. Of course… you won’t want every property that lands on your desk either. The price isn’t always right, the terms aren’t always right and, sometimes, the home itself simply doesn’t fit your business model. If that’s the case, you can find other ways to monetize those leads. Just always keep in mind that there are plenty of fish in the sea — if a deal doesn’t pan out, just simply move on to the next. But in order to do that — you need to have leads lined up. This is where your seller lead management system comes in. You’ll need it packed with potential properties with a process in place that includes seven or eight follow-up calls per lead. If you don’t do that, then you’re 100% leaving money on the table.
“Not following up with your prospects is the same as filling up your bathtub without first putting the stopper in the drain.”
– Michelle Moore (IVAS Client)
So pick up the phone — then pick it up again and again and again. Stop up that drain right now.
CLICK HERE to access the complete Seller Lead Management System and never lose another deal again!
Property leads are in and leads are bucketed — so now it’s time to analyze those properties and determine if they’re right for your real estate investing business right now. It’s time to dig in and see where the potential lies. While, at the end of the day, this process is fairly simple and straightforward, it’s also the step way too many real estate investors overcomplicate. That’s not to say you can race through this step — accurate property analysis is important. But should it take up all your time? Nope.
Download the Complete Analyzing Deals checklist HERE. This is a relatively easy process because, while most aspects of real estate are dynamic and complex, coming up with a quick idea of value isn’t one of them. Instead, it’s just a simple two-part process that looks at:
Tax Records
Comps
Delving Into Tax Records
Every property is assessed a value for tax purposes. By digging into that assessment, you’ll be able to uncover a wealth of information about a prospective investment property, including:
Square footage
Bed and bathroom counts
Lot size
Legal name
Permitted building size
School district
Owner’s name
Owner’s address
And that’s just the tip of the iceberg.
These records are easily accessible online. Simply Google the county name of the property and you should come up with a searchable tax records page. Input the address or owner’s name and voila! All of the info you need at your fingertips.
PRO TIP: While most sellers will give you accurate information about the property, some can’t, don’t or won’t. That’s why it’s important to verify everything they’ve shared against the property tax records. Make sure everything is in line, and if not, call the seller and verify. This is also a good time to gauge a seller’s understanding of the property and its value. Often times, homeowners assume “Tax Assessed Value” is the same as the value on the open market — but that’s just not the case.
After you review the tax records, it’s time to check out the comps.
Running Comparables (AKA “Comps”)
Identifying recent property comparables, or “comps” will support or challenge the information you uncovered from the tax records and your conversation with the seller. By looking at comps — similar properties that have recently sold — you’ll be able to better determine a property’s after repair value (ARV). This is the dollar amount a property could sell for in today’s market, if the property were in quality condition.
There are many different ways to run comps. If you have access to the Multiple Listing Service (MLS), that’s the best place to start.
No MLS access? No problem.
Websites like Zillow.com work with MLS providers and county tax offices to gather information, and make it available to the public. Beyond Zillow though, you’ll find many syndication sites with a few quick clicks — so do a little investigating and see which is best for your market. A few options may include:
Zillow
Cyberhomes
Redfin
Trulia
Propertyshark
Sitex
Realquest
When looking for comps, look for properties that are closest to the property you’re considering in terms of size, location and condition. Pay close attention to:
Same neighborhood (½ mile radius, if possible)
+/- 10-20% square foot (size)
Similar style homes
Bedrooms
Bathrooms
Similar condition
Days on market
Some elements are more critical than others — you’ll want to align more closely with your property to ensure you’re getting an accurate estimate. For example, location is critical — be sure you stay within the same neighborhood as your prospective investment property.
Square footage is also important. Be sure you’re staying within +/-10% for comparison purposes. If you need to extend to 20%, be sure you’re accounting for this in your assessments. You also want to make sure the square footage aligns with the property’s overall structure — for example, compare single family homes to other single family homes, duplexes to duplexes, and condos to condos. Apples to apples, mangoes to mangoes — it’s the only way to get an accurate assessment of a property and its value.
Like Carly Fiorina said, “The goal is to turn data into information, and information into insight.” That’s exactly what we’re doing here.
PRO TIP: Half-mile can make a big difference in some neighborhoods. Google Maps can help ensure you stay in the right neighborhood. Type in an address, then scroll up and down streets to see a detailed view of every house. It’s one of the best tools out there.
All in all, make sure you have a few comps before you call it a day — more than two but less than 10 is usually a good range. Once you’ve identified your comps, look closely at their status. Properties will be listed as:
Sold
Pending
Active
So what does each status tell us? A lot.
Sold comps represent today’s value. Wholesalers and rehabbers need to know what properties trade for in the current market so they can determine strategic next steps.
Pending properties represent the next two to three months. What will properties will be selling for then? A pending status also represents what could potentially go back on the market (in other words, your competition) in the not-too-distant future.
Active properties are still on the market. These properties are important because they give you a sense of where holes exist in the market, as well as where there’s already a glut.
Congratulations! The research is done and the data is available. You now have a comprehensive list of comps that are very similar to your subject property. And, believe me, there’s truth in those numbers — those numbers will steer your real estate investing business in a big way.
With everything in place you’ll be able to decide if you want to move forward — in other words, if you want to move ahead with the appointment your lead manager booked. If everything in this step checks out, you’ll likely want to keep moving forward and get some eyeballs on the property. And that means you’ll want a home inspector to head to those appointments and see what’s what. That’s exactly where we land in Step Four.
Armed with our in-depth analysis and assessments (plus information from the lead manager), it’s time to get someone onsite.
Your home inspector will pick up where the lead manager left off, taking the appointment and the analysis and physically walking through the property. This is the person who determines what next — the offer price, if there’s an offer and everything in between. This is the person who gives the final ruling — deal or no deal. And this is another role IVAS can help you fill.
So a quick side note. What’s incredible about the SLO system is, by step four, about 60% of the process has been done by phone or computer. Sixty percent! It’s amazing and it’s incredibly efficient. And, because it all happens by phone and computer, virtually anyone with some basic real estate training can take over these roles — it doesn’t have to be YOU.
That, too, is powerful stuff. Not only will this free up your time so you can close and flip more deals, but it will give you the kind of freedom you’ve, likely, always wanted. We all want to spend more time with our friends and family.
And this system is something that real estate investing can provide. Every day you wake up in total control — of your day, your life and your destiny. It’s very compelling, and it’s what drives many to this unparalleled industry.
Inspecting the Property
When you conduct your home inspection, it includes:
Driving the neighborhood.
Walking the property.
You or your home inspector should grab the comp sheets, plot the address in Google Maps, and then hit the road. Drive through the neighborhood and check out the comps first. Drive by your potential property. How does it look and feel compared to the rest? Good? Bad? The same? This is, believe it or not, critical as you’re determining value. In many ways, value is dependent on the other properties in the neighborhood, just as much as the property itself.
Once your drive is complete, it’s time to meet with Mr. or Ms. Motivated Seller. Don’t be nervous. Just be sure you have a camera with a flash and go. Walk through the property with confidence and look for the “The Big 6” — these are the six areas that, often, are the most costly and problematic to repair.
THE BIG 6
Roof
Electrical
Plumbing
Foundation
HVAC
Cosmetic Condition (rank from 1-3)
You don’t need to be an experienced contractor to conduct a successful walk-through. Most of these issues can be spotted easily, and even immediately. Walk the roof, feel the foundation, test the HVAC system — see anything? If so, take pictures and make notes. If you have a home inspector with you or if they’re walking the property solo, they’ll be able to assess any issues further. If not, be sure to call one in — or to tap a licensed contractor — if you spot anything that seems off.
PRO TIP: Spot some Big 6-related issues? That doesn’t necessarily mean your deal is dead in the water. Think of these issues as your primary negotiation tool. Because this is where money will need to be spent, it’s not uncommon to ask sellers to come down on price or make other concessions if these major repairs have to be made.
Cosmetic Repairs — What They REALLY Mean
While the Big 6 are usually the biggest and most costly repair issues, many new real estate investors focus on cosmetic repairs. And I get it. Cosmetic repairs are obvious — they’re what you notice the minute you set foot on the property. So you really feel those — they’re hard to ignore.
Cosmetic repairs are also a big deal because it’s tough to get an exact estimate early on. The scope of the work depends on you or, if you’re a wholesaler, the rehabber you sell to. And not only does that have serious cost implications, but it can also mean major time considerations — cosmetic repairs can take days, weeks or even months to tackle, depending on the needs and wants.
A quick 3 tiered ranking system makes cosmetic repair estimates a breeze!
TIER 1: “Pre-hab” with light to minimal repairs; mostly curb appeal and clean up
TIER 2: “Medium rehab” including new flooring, paint, light bathroom updating, curb appeal and exterior clean-up
TIER 3: “Full gut” — you’re taking it down to the studs and starting over
This will help you create a basic scope of work for each property. After you’ve walked through a few and worked with contractors to build out estimates, you’ll start to refine a price per square foot that you can use for each tier going forward.
And when that happens — BOOM! — suddenly one of the trickiest parts of the process becomes the easiest. Which means moving onto the final step — executing your strategy — happens even faster.
The Seller Lead Optimization System
“It is not often that a man can make opportunities for himself. But he can put himself in such shape that when or if the opportunities come, he is ready.”
– President Theodore Roosevelt
Now that you’ve got the deal on the table and are ready to close, it’s important to revisit the exit strategies we talked about in step one — and to get your buyer list out and at the ready.
For my money, I’d focus on wholesaling, at least in the beginning. It’s a good foundation for any real estate investing business. But it all depends on the property, your buyer list and your cash flow needs.
WHY WE’RE HERE
Contrary to what many believe, real estate investing isn’t about Ferraris and yachts. Do lots of people make lots of money investing in real estate? No doubt. But, for investors, it’s more about control over lifestyle and business — that’s the reason the majority of us started investing.
And if you are in it for the Ferraris and yachts, know this: SLO is powerful but it isn’t a get rich quick scheme. Ivy League tuitions aren’t paid overnight. Private planes are expensive — you won’t be pulling up in one anytime soon. So be prepared to put in the time, the effort and the energy. You’re going to need it if you want to reach lofty goals like these.
Real estate investing is dynamic and complex — and that’s what makes it so great. Success and long-term wealth come from consistently executing SLO — that consistent, forward-moving action is what will tee you up for lasting achievement and lasting financial freedom. While you hear stories about million-dollar rehabs that happen without putting a penny down, and $100,000 wholesale fees from a single flip, that’s not the norm — that’s not what success as a real estate investor is built on. It’s not built on the home runs. It’s built on the base hits.
SCORE & SUCCEED
I love the scorecard Matt Theriault at Epic Real Estate uses. His has a ranked and ordered point system. Daily tasks are ranked and ordered by a point system. Revenue generating activities are worth more points while administrative and maintenance activities are worth fewer. It’s a powerful accountability tool. It also makes you realize that, if you complete enough high value tasks each day, you’ll succeed.
Quarterly, the IVAS team is fortunate enough to sit in a room with the top 1% of real estate investors in the country. These are wholesalers who casually turn 30-50 properties per month. These are the rehabbers with 100 properties under construction right now. They’re turnkey operators doing 800-1,200 deals in a year. They’re all different businesses and all different strategies. But still, they use one winning formula: SLO.
Despite their diverse business niches, the formula is the same: generate leads, evaluate the information, and execute the strategy. They set up their marketing machine and they GO.
Want to learn how the most successful real estate investors drive HUGE lead volume? Click here to download the Marketing Machine Blueprint.
SO, WHAT COMES NEXT?
So back to your exit strategy. Do you wholesale the property? When is rehabbing the answer? Do the numbers make sense to hold? What about other possible avenues, like selling the lead, or even listing the property for a referral commission? Honestly, we could spend hours discussing which strategy would make sense.
The answer is, it just depends…it depends on your needs and goals.
Do you need piles of money (wholesale and rehab)? Or do you want a long-term stream of passive income (buy and hold)? Are taxes a concern? What’s your experience level? Regardless of your answer, the formula will still be the same.
Generate leads. Evaluate the deal. Execute the strategy. Get paid.
Remember, there’s going to be a ton of follow up and you’ve got to commit to getting it done. That follow up is why the big boys get so many more deals done than anyone else. They dump all their resources and best efforts into these steps and understanding how to best move the needle with their leads. Follow up is a vital part of SLO, and way too many real estate investors drop the ball here — even the good ones.
And THAT’S IT! You now know exactly what’s powering the best of the best in this industry.
Your Path to Success…
While many investors have spent months and even years looking for some mysterious method to drive success in real estate, it’s always been right there in front of them. SLO — these five simple steps — have always been the easiest, most seamless path to success.
But it’s not just committing to them — it’s building your business around these five steps and these core professionals. Each step needs to have very clear, clean handoff guidelines as well as strong managers ready to take the ball and keeping running with it.
From marketing to lead management and nurturing to setting appointments to inspections, each needs crystal clear parameters and expectations so information can readily flow and steps can always lead in the right direction. Done right, you’ll be able to monetize more leads more often. When the phone rings, everything will look a lot different, from how that lead is engaged to how it ultimately moves through the funnel, through the five steps and straight on to close.
Many see the properties as the vehicle.
In the SLO system, the properties are the tools — the people are the vehicles facilitating the deals and helping everyone come out on top. That human element is so essential — and in many ways, it’s what separates this system from the many others floating around in the industry.
And the best part? By integrating IVAS into the process, you’ll always have the system and people you need when you need them, at a fraction of the cost of hiring full-time or even part-time talent.
It’s the ultimate solution for today’s high momentum real estate investing business.
So back to the big question: NOW WHAT? And, equally importantly, how do you scale SLO? It’s simple. You hire a dream team, one team member at a time. Here’s who you need and what they need to be doing:
Step one: you need to understand this streamlined business structure and how it will help boost your real estate investing business. You have to understand why you need a lead manager, a home inspector and, even, a closing coordinator to help streamline these critical final steps. In the beginning you might just have a lead manager, for example, As your business grows and scales, you’ll add more to the team, no doubt. You may wind up with multiple lead managers, for example, or home inspectors in different markets who can be deployed at a moment’s notice. This will enable you to close more deals more quickly, and make MORE money as a result.
Step two: write job descriptions and KPIs for each of these new and potential hires. This will help you understand how the pieces fit together, while ensuring you’re communicating effectively and efficiently with candidates and hires from day one. Make sure each job description includes:
Title
Reporting structure
Job function/purpose
Responsibilities
Goals and KPIs
Desired characteristics and personality traits
Not sure where to start, or don’t have time to dedicate to hiring and scaling? Stop, take a breath, then call IVAS for a free consultation. Hiring your team, integrating new members and scaling efficiently and effectively is THE most important thing you can do for your real estate investing business. Your hires can make or break your business and your financial future. You don’t want to roll the dice. You want experts on your side who can steer you to success.
The IVAS team can help you leverage the best possible talent to help manage leads and analyze potential deals. Integrating the right people and the right steps carried out by the right people will ensure your real estate investing business maximizes every lead. And with that simple goal and clear-cut path in place, you’ll no doubt reach your goals and BEYOND.