The Business Process of Wholesaling

In this episode EarlToms discusses the process of establishing a successful wholesaling business.

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

https://earltoms.com/earltoms_blog/episode-38-the-business-process-of-wholesaling/

Transcript

0:00  
Welcome to another episode of EarlToms podcast. 

0:04  
Today we're going to discuss what I refer to as the process. I know that, you know, if there are any football fans out there, you're probably thinking, you know, Nick Saban, Bill Belichick, those type people that build that, which is true, but at the same time, I want to, I want to turn it over to the business aspect of it, because a lot of things that, you know, in sports that these coaches do translates over to the business aspect of life. But if we start and we just kind of look at, you know, say, what Bill Belichick and Saban have done, if if you, if you look at their process, they have a certain way of doing things, the people that they hire, the players that they that they have, they get them over, to be able to do things the way that they want them to do them. You'll have a lot of players that buy into it, that are successful, but it's not a fit for everyone. So when you look at at what Belichick and Saban have done, and you go out there as far as the business aspect of it, it correlates super easy if you just think about it in a very simple way that you look at Belichick and Saban, for example, how many titles Belichick is one how many championships Saban has won. Some would argue, and it would be a good argument that Brady was the key to Belichick success. That could very well be because the Patriots didn't have a good year last year. But Tom Brady went on to a new team and you know, won the Super Bowl. You look at Saban, the same thing, he takes different assistance, they move on every single year, he puts in new assistance, and winds up having the you know the same success that he's had in the past. So their system, their process works for them, because it It fits what makes them the best at what they do. So when you come over to the business side of it, I see all the time. And there's there's nothing wrong with with copying what someone else is doing. And you need to to a certain degree. But if you take say, Saban, for example, and you look at his success, versus his assistance, then he's hired this move going to different jobs, and you know, head coaches, assistant coaches, those kinds of things. He's actually never lost to any of his assistance before. Now, that could very well change. Because, you know, there's always a first time for everything, but his system and his process worked so well for him, that if you look at it in that way, his other assistance that he's played against his new head coaches have never beat him. So what those assistants do, or take his process and try to try to put it in their own team, but it doesn't work. Because if it worked, they would have beat it. 

3:54  
So what I'm saying when I, when I, when I say this is you take pieces, you don't take the entire process and completely copy it. There are certain things like I said before that that are good, you know, marketing, those kind of things, those work for certain people. But when you get into the actual nuts and bolts of what actually makes your company operate, those have to be individual. A lot of people are going out there now and they're and they've done it for years, and they wonder why they're not making any money. When when I first got in the business, I started in a lot of ways, copying what I had learned as an appraiser. And some of that worked to an extent. But the appraisal profession was a very slow profession. You go in and you pretend that it takes you a long time to do an appraisal, when in actuality it doesn't take you long at all. We just wanted you to think it took that long. So We can charge you what we did. So when I go into when I started going into wholesaling, and investing, I was taking that same mentality, do the process slow, do those kinds of things. And I was missing deals. So after a little bit of time, and a little reflection, I realized that I can still operate slow, but I don't have to rush it, so to speak. Because if I rush it, then I force things. And I make a mistake, I do it out of emotion, not out of a good decision. So what I wound up doing was simplifying my process, the appraisal part of it, I let that go, I sat there and did the exact same thing that I had always done, as far as you know, determining the value, coming up with a renovation cost, those kind of things that that analysis stayed the same. But that's the only thing that I left, slow, everything else, I had to change and adapt to the new aspect of real estate, because what works for one aspect of real estate doesn't always work for the other aspect. What I wound up doing was, as soon as I would get a lead, I would look at it and go, you know, are they in the ballpark? A lot of times and you know, this, people will contact you. And you won't have, you know, an asking price or something like that, if they opt in on your website. A lot of times, they won't, they won't give you an asking price. If they if you call them, you have some sellers that say make me an offer. And I'll honestly, very rarely just make an offer. Because I always tell him, I'm not gonna compete against myself, you have a number in mind, or you wouldn't call me. So when you want to tell me what your number is, feel free to call or let me know. But I'm not going to compete against myself. So have I lost deals because of that? Sure, I absolutely have. But I'm not going to go into a negotiation on the losing side, right off the bat. And that's what if you go back to what Belichick and Saban, it comes over to the business side as well. Because they don't go into a game on the losing side, ever. They outwork them, they know exactly what the other team was gonna do. Now the other team may have some surprises for them, they have to adjust. And then they get it under control. But they never go into a game not prepared. So that, in my opinion is the same as going in someone saying, make me an offer. You're not prepared, you just lost. Because it goes back to that he who speaks first loses. And if you do that, you're not gonna you're not going to be in the driver's seat of that deal. So do I want to go down that rabbit hole and chase it, because if someone says make me an offer, and I wind up saying, Hey, I'll give you $100,000 no one I've could, you know, in their mind, they were expecting $75,000, I would have never known that. But that's still $25,000 that I could have put towards another deal, or renovation or whatever it may be kept in the bank. Because I spoke first. So that part of it, you have to sit there and kind of figure out what's gonna be the best way for you to do it. Because if I had continued like I had when I first got into it, and somebody said, make me an offer. And I'm an appraiser. And I go out there and I say, Okay, well, I'll give you $100,000 for the appraisal mentality, that's me goes, that's good deal. The investor side of me, says I just gave away $25,000 that's not a good deal. It's a mindset change that you have to do.

9:26  
So what a lot of people do that, and I can't blame them, because everybody's just trying to get in the business and try to understand it. But when you go in and you look at certain things, I mean, I can go into my market, and go online to Google and type in we buy houses, and pretty much the first page of the search results. Every time I click on a website is going to be the exact same. They're all coming from investor care. So when you put that towards a seller that's out there that needs to sell their house and they see the exact same form The exact same websites across the board, what's going to go through their mind, list the same company, I'm not gonna keep putting in my information, the same company looks the exact same, it's just a different name. Because you all know, you've done it before you think you're going and shopping somewhere. And then all of a sudden, it takes you to a new website. Because I put these foreign websites out there, this company buys this company, whatever it may be. And I just ran out the website, you know, to, to the main company out there. So a seller sits there and looks at and goes, the same company. So you have to think to yourself, and you know, when, whenever you're whenever you get to that point, you think to yourself, how many deals am I actually losing every single month, because I'm in I'm the I'm the fifth result on the first page. And by the time this seller has gotten to the fifth result, they've seen four other pages that look identical to mine. So they don't type in the information on my website, because they think I'm the exact same company. And I think they're getting getting scammed. There's a reason that people applaud the indifferent when you get these, these gurus and these templates, and these automations. And these things like that, that are that are out there for everyone. It's good for their business, but it's not good for your business. Because you can sit there, whether it be Google ads, Facebook ads, everybody, hey, copy my template, run this ad. So when somebody's scrolling on Google or Facebook, and they say the exact same map with the exact same picture, you start getting lost in the crowd, and you're you're losing leads, because you're you're looking at the exact same company, if you're a seller. So as the company, they always say that the branding part is the most important. Any, anything that I have with any of my companies, whether I send the postcard out, I always put in No, make sure you put the logo on the car. never send the card without the logo. That's part of the branding. Because when they may not give you a call, right then they really might not. Everybody's experienced it. But when they go searching, and they see that logo, they will remember something subconsciously in their mind. They're going to remember that logo when they're gonna go they've reached out to me before let me let me get in touch with them. So when you look at like I said, the process of things. That's the brand that goes into it, because one big one big thing is you look in the NFL, I would argue the Patriots, you can sit there and put them in the top three, a lot of people put them number one, name recognition. They know the logo, they know the colors. They know the couch, they know Tom Brady, is the brand. A lot of people still don't even put Tom Brady with Tampa Bay because of what how long and what he did with the Patriots. When you look at Alabama, same thing people know that a no Nick Saban. I mean, it's it's a brand they put it out there, and people recognize it. Both of those programs are arguably, you know, the most hated in professional and college sports, but it's still a brand it's still recognizable without even any thought most people can tell you at least one thing about every one of those teams. So what I'm getting at when I when I say the the branding part out it stand out, don't follow the crowd. Don't follow the gurus. do your own thing. Put your own process in there. Because what worked for Belichick & Saban isn't gonna work for Bill O'Brien.

14:26  
I mean, it's just not. You look at the different different coaches that have gone through the Patriots. They go on to be head coach or somewhere else and don't have the same success. They try to take what they learned and implement it the exact same way. Some of them will add new wrinkles and do a little bit of their own way. But you know, Bill O' Brien, for example, goes to Penn State and then it goes to Houston and he wasn't successful at all. So that's not a way of doing things, you have to have your own way that works for you. 

15:08  
When you when you're in business, you have to go through, say, if you're, you know, say the website, for example, again, if you're spending $1,000, a month on the website, the SEO, whatever you may be doing with that website, go back over a year's period, because if you try to get a, an indicator of an ROI out of a website that is brand new, so to speak, and then try to figure out whether or not you're gonna make any money off of that in two months, you're not doing yourself any favors, because they have that a B testing. So you're setting it up to where what works, what converts those kinds of things, you have to figure that out. And it takes a good, a good year to do that. So it's an investment in what you're doing. When you're doing these ads and things, things of that nature, it's the exact same thing, you have to do the testing, you have to put the investment in there to figure out what's going to work for your company. When you're, when you're following what these gurus say is as the gospel, it's not going to wind up benefiting you. Because I've said it many times in these episodes, they're giving you just enough to give you 50% 75% success, but they're there, they're leaving enough out to make you come back to them to spend more money. Because every time you come back to them and ask them the question, they still control you and your business. It's okay to ask questions. But ask it to peers, not gurus, ask others in the industry, what's working for them. Take that idea. If you get that idea enough, it may work. And then you test it, to see if it works for your business. When you go in for your business portion of it. A lot of people out there hire a VA do this, you know, cold call those kind of things. That may work in Los Angeles. But it might not work in Virginia, I have no idea. But the way to figure that out is to test it. 

17:26  
So when you're looking at your business as a whole, you put in in place the the key aspects of it, the process that works best for you, this is not an overnight success type business. No business in the world is an overnight success. You have to put the work into it, you have to reinvest in your business. And you have to constantly evolve because things are constantly changing, to be able to stay ahead and stand out to be successful. So when you go through when you hear these gurus and you're following everything that they're saying to the to the letter that's successful for them, because they may have the best VA in the world, or they may have an employee in there that doesn't ever want to go out on their own. They might have an employee in there that says, You know what, I'm fine with making $5,000 while I'm watching make $100,000 a month. So you may get employees in there that go, hey, I've been here six months, I think I know everything, I'm gonna go out on my own and do it myself. That's how, most times in real estate that it works. People get into real estate because they see the potential of the money. So they get in, they learn a little bit, then they move on try to do it themselves. Some are successful, some are not, but the people that are moving on from your company are gonna wind up trying to copy what they saw you doing in your company. So if you're having success, they're going to you're going to become the biller check in the Save into the room. And they're going to be one of the assistants that goes out and tries to copy exactly what you're doing thinking they're gonna have overnight success.

19:13  
It's a process of putting the right people in place, having long term stability. Because when you're constantly having turnover in your company, your your success is going to be limited because it's taken time it's taken time and it's taking money away from you closing deals, to constantly have to focus on training new employees, or figuring out you know, hey, I've ran these Facebook ads for three months and they didn't work. Did you change them? Did you try new ad? Did you test them? Did you figure out why it wasn't working. Some things are just not going to work. But if you're testing and you're trying to figure it out, eventually you'll get to something that works. And unfortunately, in real estate, those lessons, that research cost a lot of money. But it's possible if you do it the right way you plan for it the exact same way that you would anything else. So when you get your, you know, when you were working a nine to five job, you had a budget, you understood exactly what you what you made every single month, you understood what your mortgage or rent was, you understood what your car payment was, what your insurance was, how much extra you were going to have every month. Now that you're in business, why is that different? It's still the exact same, but a lot of people have a difficult time putting those two together, because I don't realize this the same. Everything in the business has the budget, everything in the business has the process. So whether it be your brand, your marketing, your advertising, the people you surround yourself with the people you listen to for advice, it's a process, you have to get trust in every single thing that you do. Because if you don't trust your website is going to get you leads, why would you do it? If you don't trust that advertising? Whether it be online or direct mail is gonna get you leads? Why would you do it? If you don't trust cold calling is gonna get you leads? Why would you do it, if you don't trust your employees, to close deals for you or not steal from you, or whatever it may be? Why are you going to hire, you have to get to that point in business as an owner, to realize you're the umbrella, and everything that your business does falls under that umbrella. So you have to protect everything involved in that business, and be able to be successful by keeping it protected, keeping it dry, so to speak. When you're looking at the employees, especially trust, there's only so only go so far. Because I mean, like I said before, if you're in real estate, most people get in real estate, you know, they get wiped out because they see the money involved and think they can do it for themselves. But honestly, real estate is not for everyone. 

22:38  
So if, if you're one of those people that kind of scared of taking risk, or you know, something like that, just go in, do what you do, and do it very well. And then that way you can become an asset to, you know, whatever company you're working for, negotiate a, you know, more money, whatever it may be. Because one thing that a lot of people don't realize is that you can promote in your company. And you can promote yourself to incompetence, because every single person has a ceiling of their capabilities. So if you take yourself, you're really good at acquisitions, but you're terrible at selling it, or you're really good at selling it. But talking to somebody you know, cold isn't is not something that you excel at, made sure that you don't do it. I'm not saying don't try it to see if you can get better at it. But if you're not good at it, stay away from it. It's hurting you. If you're sitting there in your company, and you've got someone that is good at talking to people, like if you got a cold caller, or you've got somebody in there that that's good as acquisitions. Let's say that the person running the company, or you For example, steps away on a day to day are you you think you need to put somebody in charge of everybody that can manage the office, if you take that person that's in this in charge of acquisitions, and then turn around and hire them to be able to manage everybody. That can be a good call, and it can be terrible, because that person could be good at acquisitions, but terrible at managing people. How do they get along with everybody in the office? Are they an actual leader? Do people respond to them, things like that. So you could have actually just destroyed your business because you took a very good asset away from your business and acquisitions that brought the leads in you know, got the contracts on, put them in charge of running the day to day, let them hire someone to do acquisitions. Now, that is not as effective as they were. So you have just promoted within your company to the level of incompetence, you have to keep everything on a level playing field, so to speak, let everyone do exactly what they're best at. And you'll be successful that way, if you have a company, as far as you being, you know, the owner, not every owner is a CEO. Some are just entrepreneurs. And you have to recognize that I'm an entrepreneur, I'm not a CEO, never have never will be. It's not my strength. So I actually just let everybody else do it. But that's because I recognize my strengths and my weaknesses. my weaknesses cost me money, if I try to make them my strengths, and I don't focus on my strengths. 

25:59  
So what I'm trying to get across to you to everybody here is figure out your own process. Don't sit there and copy what you hear to the letter, because it's not going to work for you. Some of it will work. But if you copy it letter for letter, it's not going to work for you have to build your own brand, your own business, your own way of doing things, for your own success. It's just how life works, whether it's personal, or business. You know, some people are better at waking up at six o'clock in the morning, some people are better waking up at nine o'clock in the morning, whichever one works for you do it. You don't have to be like everybody else and wake up at six o'clock in the morning. If that's not gonna, if that's not what makes you productive, don't do it. Let's not go mean you're lazy, you're just maximizing your productivity. I hope that has made sense to a lot of people because I see a lot of a lot of people out there that could be successful, that haven't opened their eyes and open their mind to expansion to be able to see what's actually out there what the possibilities are. Because they're basically just sitting there cheating off a test because they go when they hire a guru or they see these ads or whatever it may be, and they go Okay, well, I got a copy this word for word doesn't work. It's never gonna work. The easy way never works. Build your own, build your brand. Put the foundation down before you build the sticks and the bricks. There's a reason why you put the foundation down before a house before the sticks and the bricks. Without it, it's not gonna hold itself up. 

27:51  
With that, we're gonna draw this episode to a close. Like I said, I hope I hope this has made sense to a lot of people hope it helps you. We'll we'll be back in a couple of weeks with a with a new episode. 

28:03  
Thanks for listening.