EarlToms Podcast - Wholesaling Real Estate

Wholesaler Etiquette and Relationship Building

November 16, 2021 EarlToms Episode 43
Wholesaler Etiquette and Relationship Building
EarlToms Podcast - Wholesaling Real Estate
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EarlToms Podcast - Wholesaling Real Estate
Wholesaler Etiquette and Relationship Building
Nov 16, 2021 Episode 43

In this episode EarlToms discusses how to make good impressions and build relationships with investors

For more information to help grow your business visit https://EarlToms.com


Show Notes Transcript

In this episode EarlToms discusses how to make good impressions and build relationships with investors

For more information to help grow your business visit https://EarlToms.com


Welcome to another episode of EarlToms Podcast. 

Today, I want to kind of go over what I would call basic professional standards, business ethics, business etiquette, things of that nature. The reason that I do is because I see a lot of wholesalers that are doing things in a way that is not beneficial to the, to start with, what I want to bring to your attention is basically just something that I consider common sense. Maybe it's been, maybe it's because I've been in business for a long time, and I've already paid that price to learn that lesson. But it's something that, to me is super simple. So I think, you know, other wholesalers should be doing it, I'm not sure why they're not, but most of them do. But I just I want to bring it to your attention. Want to start with whenever, whenever you're getting in this business, it's a good idea to have goals and have dreams and you know better for your life and for your family. That that's, that's an honorable, that's an honorable thing. What people do, to try to get to that point is something that I think is completely different. I don't know if maybe they're they're just not taught that whether it be in school or from a mentor from a guru what it may be. 

One example I want to I want to give is, is basically a a way to approach a new investor, whether it be an individual or institution, like a hedge fund, something like that. One of the easiest ways because I know a lot of people are in the generation that grew up with, you know, less text, everything, because supposedly, it's faster, I'll be honest with you, you're never going to get an actual relationship doing that. And texting actually takes longer than it does to just simply pick the phone up, make the phone call, ask the question, make the statement, whatever it is, 30 seconds later, the the phone conversation is over, you're sitting there sending a text or an email, you've got to wait five minutes, 30 minutes, whatever it may be to get that answer or to get that heard. So a lot of people aren't really processing the, the timeframe that it takes. And to be honest with you picking up the phone and hearing that person's voice is something that is a relationship builder. Because one thing that you always hear in sales is that it's harder to tell someone no to their face. So when you're sending a text, that's the easiest way in the world, or an email, that's the easiest way in the world to say no, the second is over the phone. The third is face to face. So you're looking at a law of averages basically, to be able to build a relationship. Because even though you're not able to necessarily put your face in front of the client, that voice is a match. So the example that I was that I was gonna give is, and I've got a couple of them, because they've all happened within the last week. I got a I got a contact request, whatever you call it from LinkedIn last night, from a wholesaler that basically said, you know, Hey, I saw you posted that you're looking for properties. You know, I've got one in your market, what's your contact information? What's your email address, so I can send you the details. Number one, I don't know you. You can make up an online profile. And next thing I know, you're somebody you know, in Ghana for all I know that, you know, you're the beneficiary of this estate, send money or come in and you know, hack my account, whatever it may be. So I accepted their request, but I didn't respond back to them. Because, number one, that's not how you do it. Because you don't just come in and say, Hey, I've got a deal. Give me your email address, and let me send it to you, you have no idea what I bought, you didn't take the time to figure out what my box is, in order for me to, to send it to you. So I don't respond to you. Because until you actually put the work in, to figure out what's going to benefit the both of us, instead of benefit you. We're not going to work together. So what I'm waiting on from this person from LinkedIn, is to actually pick up the phone or send an email, because both of those are basically sitting, right, they're on my LinkedIn profile, they have full access to it's not a private, my Well, my email is but my, the the company phone number is very visible. On LinkedIn, it's public for the for the world to see. So if you want to do business, you begin by building a relationship, because it's, it's what they call is a first impression. Whenever you're trying to establish business with someone else. It's a first impression that person has never talked to you before, doesn't know who you are, has just seen, you know, whatever, whatever you send them. So it's important that you make a good first impression. Now, when this person calls, you know, I'll talk to him. If they ask what your buy boxes, I'll tell them. I'll also relate to them. If it's not in this box, please do not spam me, do not send me every deal that you get that does not fit. What I'm looking for, because I go through a lot of emails, a lot of phone calls, look at a lot of houses during the week. I mean, I know I might not be the most patient person in the world. But I'm looking for people that want relationships that are beneficial to the both of us, not just one sided. That is very, very key to what you're doing. 

Another example that that I want to give. And for the life of me, I can't understand how this happens. But I get a text message from basically the lead generation site, the one that is kind of an information capture, enter your address, you know, we'll call you We Buy Houses type website, they send a text message to that phone number. They don't say the name. They don't say anything other than a simple short question. That question was, are you a wholesaler? I don't know you. I don't know your number. never talked to you before. You didn't introduce yourself. You sent me a text message with your first contact that asked me if I was a wholesaler. Why would I answer you? I don't know who you are. You did not make a good first impression. You took the easy way out. That's not good business. Understand we're in that lets in the text, everybody, things like that. There are still some things in business that are you do not do now when you get to the point to where you know, these person send all the text messages you want. But there's a reason there is a law that says unless you have granted permission, you are not allowed to send a text message. If you send a text message without permission, you can be fined $10,000, for every single text that you sent without permission. A lot of people out there are sending these mass text. Hey, would you like to sell your house, you could potentially face a $10,000 fine for every single one of those texts that you are sending because you did not have permission to send those that was passed two, three years ago, but people continually do it. There is a reason that it was passed is because it's not right. It's not good business. It's harassing people for the most part because a lot of these companies that are out there, they basically spoof your phone number, make it look like you're calling because we've all gotten those phone calls that say I just missed a call from you. Who is this? And you think to yourself, I didn't call you. Sorry. But, you know, I think somebody just made their color idea appear as though it was my is my phone number. So whatever you do, the first time you try to get in touch with someone is you do not send a simple text that says, Are you a wholesaler, that's not gonna get you many places. 

The way that the deal should be done, like I said, is to pick the phone up and to call and say, Hey, what's going on. And I'm going to give you two concrete reasons why I'm trying to tell you that the relationship is the absolute most important thing that you can do. Whenever you go into a market, you do not go into a market and decide I'm going to put this house on the contract but have no buyers. That's not good business. The reason that it's not good business number one is if you've made a promise, you don't know that you can keep by putting a house under contract. Number two is you are now once you're under contract, you are now in a in a deadline, you have a timeframe with a deadline to meet. So now you're under the gun, so to speak. Whenever you go into a market, you contact investors and you say, Mister Miss investor, I'm thinking of entering the market, what would be deals that you would be interested in. So if I come across any like that, then I'll know I can, I can send them to you. And we can potentially work together. And then that way, you'll also find somebody that's local to kind of bounce things off of so to speak. So what you're what you're doing is is somebody calls you and says, Hey, this is my address, I'd like to sell the house. You do your research, you say, Okay, guess what, as soon as you do that, pick the phone up, call whichever investor you were talking to get their insight and say, Where would you like to be on this house. If I can get it under contract, Let them guide you in the very beginning. And then when you wind up getting it under contract for that price, it's sold, it's easy. Now you're going to come across some investors that will tell you something, and then all of a sudden, they might try to go and get the deal from you. Or whenever you get it under contract, you find out they're basically a fraud came by everything that happens. It's part of this business. I don't know why it's part of this business. But it is you have to take the good with the bad if you're going to be a part of this business. But you're still trying to get out there, do it the right way, build relationships. And then that way, once you have something under contract, it becomes easy to get it to get its own. So what winds up happening is the stress that you're under, you can't that kind of goes away so to speak. 

The reason that I say do it that way is because even here lately, a lot of people are trying to virtual wholesale the market that I'm in, and I don't I still I've said it from day one. I don't know why. But to people that are not here, it winds up being a difficult market for them to virtual wholesale. Again, I still do not to this day understand why it is but I get phone calls all the time. From the lead generation website that we buy houses website that say hey, I've got this house under contract and I'm sitting there looking at the number and it's an out of state area code. So what basically goes into my mind first is overpriced. What goes in my mind second is as if you're calling these we buy houses, websites, you have a house that you cannot get rid of. So now you're actually just sitting there going through trying to find the one person because true story all you need is one person to to buy your deal. You're looking for that one person that will buy that deal. There's nothing wrong with that initiative. But it's misplaced. That initiative should have been done before you ever put that property under contract so that that way you can put houses under contract that you know, you can get sold, instead of just going out there and randomly putting houses under contract. And then when you can't get it sold, having to turn around and call these WE BUY HOUSES websites, because by that time, when you get it closed, you're likely working for minimum wage. You're not maximizing your time or your money, because you're not working smart. 

To give you another example, I had a wholesaler call me Thursday. They had out of state area code. So already kind of had an idea. Hey, I've got this deal under under contract. Okay, what's the address? You know, I went through them went through the process with them, what's the address, because when I'm sitting in front of the computer, I can just pull it up, you know whether whatever program I'm using at the time, I can, I can pull it up to see what I'm working with. And I've been in my market for close to 20 years now. So you can give me a zip code address odd know where it's at, because I get around. And the next thing I ask is okay, how much do you want for it? He comes out with double what the best house of the neighborhood should ever even sell for completely renovate. And I just told him, I said, Look, I'm gonna be honest with you, you need to get out of this contract as fast as you can, because you are not gonna find anybody in this market. That is going to pay though, you're asking double what a completely renovated moving ready house should be. And there's not a single house in this area that you're going to need that you're going to go into, that doesn't need some repairs. So by the time you get into this house, you're going to be two and a half times what the highest sell should be in this in this area. He thanked me, okay, thank you for you know, letting me know that. And I'm thinking to myself, if you're calling these these, we buy houses websites, you've already been told that five times 10 times 20 times, take the hand, people are trying to tell you something, it's not the simple fact of let me go find that one person at that point, when you have more than three or four people tell you the exact same thing, it's time to cut bait and run, get out, you made a bad decision, you're not going to get that deal sold, that one person does not exist for that house, you have exhausted what you can do as far as that goes. So again, they took that wrong approach to come in. And instead of trying to find people that they can push houses to when they get them under contract that meet their criteria, they go into the market, they put something under contract that they will never get sold. And now they're stuck. Now they have to call that owner and say, hey, you know, title didn't come back clean? Or, you know, my inspector did this, or my partner didn't want to do this, you know, that those are just miserable conversations. The good conversations are you call that homeowner and say, Hey, closing is scheduled for this day, what are you able to be there so we can put some money in your pocket, or get you out of the house, relieve you of the stress of that house? Those are the conversations you want to have. Doing it the wrong way or the the way that's backward is not going to lead you to many of those conversations, if any conversations like that. So the the way that you do this is very important, because at the end of the day, you're trying to maximize your time, and you're trying to maximize your money in order to be successful. And the reason that, that a lot of people miss this is because just as a sports analogy, they go straight to the game, instead of practicing, calling these investors ahead of time and getting their borrowbox getting their criteria building a relationship. That's the practice. So when you go into the game, you know how to execute that play. You know how to win. When you go straight to the game. You get blown out because you didn't practice you didn't know what you were doing. It's not a it shouldn't be a difficult process. But a lot of people I think are just not used to putting the work in to have the opportunity to have success. down the road. But that's where that's where you either succeed, or where you fail, is being able to put the work in upfront, to have the opportunity to have success down the road. 

The two examples that I was talking about earlier, I'll give you one, and then I'll give you the other. The reason, and these are the examples of the reasons that relationships actually work. And why you need to build. And they both involve hedge funds. There's one hedge fund that I built a relationship with them years ago, now they go through different acquisition managers, things of that nature. But I still make sure that I build relationships with whoever is in my market. And, you know, the people that are in the in the C suite, and in the, in the in the fun, I make sure I do that. Because it benefits everybody down the road. I've carried on with this Acquisition Manager since probably January of this year, 9-10 months, because the previous Acquisition Manager left to start a start their own fund. But we were carrying on Saturday, giving each other hard times about, you know, their football team, this and that. And he asked me, he said, Is there something wrong with me? And I thought to myself, What are you talking about? And he said, You know, we've known each other, you know, these 910 months, and you haven't, you know, we haven't done a deal together. And I basically just told him, I said, You know what, don't take that as a as an insult. I'm not doing that much this year, because I know we're down, you know, we're on a downward trajectory as far as the market goes. So whatever I would wind up selling to you right now. And a year, six months, whatever it may be two years, is going to be worth less than what I'm selling it to you today, in a lot of ways, I'm protecting you. Even though that may not be what you want to hear, I'm not just sitting out there sending you every deal that comes across my desk, because I want you actually have the opportunity to have good deals that I come across, that are not something that I want to actually do myself. And they understood that. But their relationship, we give each other hard times bought each other's football teams, you know, call each other just to give each other hard time, you know, have the guy talk, it's just one of those one of those scenarios to where the relationship, I put man 10 months worth of work into this relationship. So whenever I come across a deal that I think will actually benefit them. The likelihood of me getting that deal closed immediately is through the roof. Because that person is sitting there thinking to themselves, this guy has taken the time to get to know me to build a relationship. And at the end of the day, he hadn't made any money from this relationship at all. So that tells me that this is one of those people, that it's not all about the money that I can sit there and kill known to give them a hard time about the football, whatever it may be. They've taken time to build a relationship that is not all about business. So that in itself makes it almost proves a point of why relationships are so important. Because I've got a business contact, asking me why we have never actually done business. Because they don't understand that. And it shocked me because I was kind of thinking to myself, that's the way business is supposed to be done. But obviously it's not because this person is used to only talking to people in business when they won't something that's not how good businesses don't. 

The second example is basically an extension of of the the previous the person that left the fund that started their own fund has had a lot of success. I've stayed in touch with them because you know, same relationship. We give each other a hard time about everything. But a couple of weeks ago, they called and actually not take that back, we're to that point to where they can send a text message. So a couple of weeks ago, he sent me a text message and says, look, I've got a harebrained idea, I need to start bringing in the ringers. Okay? You typically don't have many harebrained ideas, but what are we talking about? Call me tomorrow, we'll talk about whatever this is. And he called me. And basically, what he asked me to do was the new markets that he's going into his, he wants me to basically go in, help him to establish his footing in these markets. Basically, he is going to bring me leads that I don't have to pay for, I don't have to work for he has a data center that does all of the marketing does all of the initial phone calls for him. But he wants me to go into these markets, before they go through the process of hiring someone spending a lot of money to see if that market is going to fit what they're trying to do. Before they enter it financially, with a decent sized investment. And this is a fund I think their initial round of money raised was somewhere in the neighborhood of $100 million. They've got the, they've got some decent financial backing, to say the least. But all he wants me to do is whatever leads come from this data center, whatever it is, he wants me to actually be the one that kind of screens it. And if it winds up looking like a deal that's in their box, to put it under contract, and then turn around and assign it over to the hedge fund. But they need somebody that they can trust to go in to these markets first, to see whether or not it's going to be profitable for them. To see what type of competition is in the market, because of a hedge fund that you know, is dealing in the hundreds of millions of dollars, doesn't want to go into the market, spend a million dollars and be stuck. So for them to call me and say, Hey, I trust you to this point to be able to do this for me, would you be interested in it?

I'm still considering it. I don't know if I'm going to do it. Because you know, I have my own thing that I do. I have to make sure that it makes sense for me to do it. But at the same time, what I'm what I'm trying to get across to you is that you have one client that says hey, why don't you talk to me when we haven't ever done any, any business. And then you have another client that started a fund from basically the same company that comes in and says, Hey, I trust you enough to kind of be my God, when we go into these new markets, that's not going to break me financially and cause the fund to have a problem. So you have you have both sides of the of the spectrum. But what those relationships weren't gonna wind up doing is benefiting everyone, because the first scenario, whenever I find a deal for the for the hedge fund, they are going to jump on it because they want to do business with me, because I took the time to build a relationship that no one else takes the time to do. The other example, have built that relationship to the point of that person, trust me enough to be their guide going into new markets, to basically screen it to see if it's worth them making a hard entry into because they can go in and buy 10, 20, 30, 50, houses and then turn around and sell it to another hedge fund. But having to go through and train somebody for acquisitions, things like that. Takes a lot of capital from from a company. So they need to make sure that the numbers that they see demographics, everything that they see in there analysis actually makes sense when they enter it, before they make a large financial investment into doing it. So I hope you've understood what I'm trying to get across in this in this episode. It's, it's not that you're doing anything necessarily, that's wrong. It's just that you could be doing things that will actually get you the business. It's not something that that you may see tomorrow. And I know we have a lot, society has really turned into that instant gratification scenario. But if you ever look at people that are actually really successful, none of them are actual instant gratification people when it comes to business, every single one of them are people that put the work in did the practice, and then when when the lights turned on, and it was time to play the game. You know, they knew how to play, they knew how to execute and they win the game. That's the way that you have to do business. 

So like I said, I hope you you kind of understand this, and start taking a more professional approach. Start actually putting effort into build relationships that are business driven, but not always about business. That's what's gonna benefit everyone. Because a lot of times in business, you just need to be able to exhale. Because business is stressful. So when you've got somebody that you're supposed to, or normally talk to during the day, that you can pick the phone up and call and you know, kind of exhale, laugh. Whatever you need to do to call that moment, that's going to take you very, very far in business. If you can't be that person, then you almost kind of turn into that old saying, I don't even know if people say it anymore, but they did when I was growing up. But that old saying is is wham bam, thank you, ma'am. You get in and you get out. There's this you know the one night stand type thing. It's not business development, business success. 

With that, we're going to draw it to a close. I hope you've enjoyed this episode. We'll see you again with another episode and in a couple weeks. 

Thanks for listening