Alex Hormozi's $100M Advice on Wholesale Real Estate

If you're currently wholesaling or flipping, have you ever wondered if there's an easier way to do this business? Maybe you are cold calling or sending mail and waiting 5 to 9 months just to see a return. Well, I took Alex Hormozi's $100 Million Playbooks— this cost me $10,000— and I tested everything inside this box specifically to our real estate business. And I'm going to show you how I went from wasting $250,000 last year for mediocre returns to only spending half of that this year under $10,000 per month and still making $100,000 to $150,000 $50,000 per month. So in this video, I'm going to show you exactly what worked, what didn't work, and what Hermosi says about how to scale your wholesaling business the best way possible. And if you didn't know, Hermosi has a 23:1 return on advertising dollars, which is crazy. And in real estate, we're happy getting a 3 to 4x. So I have obsessed over how do we increase that, because we work way too hard not to make the money that we want to make. So Hermosi says that there's 4 ways to letting people know about our stuff, right? You're gonna have your one-to-one warm, which is warm outreach. You're gonna have your one-to-many warm, which is like free content. You are going to have your one-to-one cold, which is cold outreach, and you're gonna have your one-to-many cold, you know, with paid ads. And here's exactly how that plays out in wholesaling. With warm outreach, you're gonna have referrals, past sellers, agents, other investors, and basically your network. It can be great, you know, getting deals early on, but it's not consistent because you never know how many deals you're gonna get, or it's capped on the amount of people that you actually know. With cold outreach, you have cold calling, SMS, direct mail is scalable, but you're trading time and sanity because the typical, you know, return on ad spend on direct mail, it can be anywhere from 5 to 7 months. And with cold calling, you just need way too many leads and too many moving parts, you know, to get deals consistently. And you're looking at around $3,000 to $6,000 per closed deal. So for me, when I was doing mail and spending money on cold calling, I was spending around $10,000 on both, and I was getting you know, 3 to 6 deals. So my overhead was way higher and it was costing me, yeah, around like $5,000 to close a deal. And I was making like $20,000 average profit per deal. So I was getting like a 4x return on ad spend. So that's why I started thinking, hey, I need to find something better that's less moving parts and it's way more scalable. With free content, you're going to have YouTube, Facebook, Instagram. It's basically where you document what you do and you can educate sellers. Right? It compounds over 9 to 12 months. It's super slow because realistically, I mean, maybe a couple people are going to be watching you, and it takes a while to actually build a brand just posting free content. And then the last one is my favorite, paid ads using Facebook, Instagram, YouTube, Google. And this is exactly where I found the leverage. And when I switched to using Meta ads with a Hermosis-style system, I started seeing my cost per lead dropping all the way down to $20 to $40. It leads to contract of 20 to 25 leads to get one deal, and a cost per contract from $600 to $1,000 versus the standard $3,000 to $5,000. That's the industry standard. Now I'm gonna talk about the content plus paid ads flywheel system that Hermosi uses. So what we want is to avoid linear growth. What we want is exponential growth through the flywheel effect. So step one on how to do this is you need to create valuable content. You know, you need to share testimonials, deal breakdowns, objection handling, and then step two, you wanna run paid ads that drive traffic to that content, not just landing pages, but content that builds trust and pre-qualifies the leads. Step 3, leads that convert at higher rates because trust is already built. They've already seen you in the ads, they've seen your content, and you're talking about how you help them and showing them proof about how you do it. So step 4 would be to document new deals as proof content, and this just creates more trust. You build your brand at the same time that you're paying for advertising, and then you're just gonna have way more social proof than your typical wholesaler in the area. By the way, if you want a complete step-by-step framework on how to implement this paid system into your wholesaling business, I created a free course breaking everything down below. So click on the first link in the description and watch it right now. So why do I think that Facebook ads win? Because you get the best of both worlds. You get Google search intent plus Facebook lower cost per lead. And that's how we're getting a $30 to $40 cost per lead versus Google where you pay $150 to $400 per lead. So with PPC, there's a higher level of entry because there's way more competition, and typically big operations are going to out spend you. But the reason why I like Facebook is cuz you can get a lead at a fraction of a cost because it's all dependent on how good your ad is. And the better that you get at this, the easier that it'll get to get leads at a cheaper cost. So just because you're getting cheap leads, that doesn't mean that they are lower intent. And how I like to do it are founder-led authentic videos that specifically call out specific pain points and motivation. That way you just build more trust before the first phone call and you can show 'em exactly what do you do and how do you do it. And then the compound effect of this is when people click on your ad and then you, they see your organic content on your channel or your Facebook page, trust just multiplies. And if you are the one in the videos, if they like what you say, how do you say it? And maybe you're standing in front of a property that looks like their property or sharing a specific story about a seller that you help, they can relate to that. And that's specifically how you win, cuz you don't wanna run the generic stuff that everybody else is running. Like, hey, Sell your house fast for cash. We want high-intent videos that don't feel like an ad, but actually bring a lot of value to the audience. You gotta be able to call out the specific pain points. What do you do? How do you help 'em and what they need to do in order to contact you? And that brings us to Hermosi's Value Equation. You basically get your dream outcome multiplied by perceived likelihood of achievement divided by time delay and effort and sacrifice. So for dream outcome, you can be specific to each seller type. It may be if you inherit a property, you know, something like convert your inherited headache into cash without repairs or tenant. Or if you're targeting foreclosure, you can say something like, stop foreclosure, protect your credit, and walk away with money in 7 days. If you're targeting divorce, sell fast and fair so that both of you can move on. So basically, your specific dream outcomes is going to be dependent on the seller types that you're trying to target. Number 2, you get the perceived likelihood of achievement, which is basically proof that they can believe, hey, we bought X number of properties in this city in this X amount of years. You can also post video testimonials, so as you have help, before and after photos, case studies, and you can just basically do stuff that you do in your market that you have done well. The third point is going to come down to time delay, which is you want to compress the timeline and show them exactly how fast you can help them. Cash offer in 24 hours or close in 7 days. Four is going to be effort and sacrifice. So you want to remove all friction, something like, hey, we pay all closing costs, we handle junk removal, or we can help you with your next month's mortgage, you know, stuff like that, that you specifically handle and you can, you know, bake into the offer. And all these 4 things combined are going to be your value equation that show them exactly what you do. How do they do it without the usual factors that can be sacrificial or, you know, that can be an objection. And another point is going to be tracking the metrics that actually matter. So these are Humosi's KPI frameworks, and he is super obsessive about tracking. And here's what you need. So for us, our average cost per lead is $30 to $40. We know that we get 1 contract every 20 to 25 leads. Our cost per contract is anywhere from $600 to $1,000, and our appointment ratio is about 50% of the qualified leads that we actually get, right? So you got to be more than 50%, and we have a 25 to 30% closing ratio out of the offers that we send out. So we send out 4 offers, we usually are getting 1 contract. I know that our average deal size is anywhere from $17,000 to $20,000. And I'm gonna give you something that you can chew on. When I was not tracking my KPIs, I figured out that I wasted about $500,000 by not tracking my KPIs. So I found out that one channel was giving me 4x return on ad spend, and I wasted $150,000 in other channels that gave me like a 1 to 2x. So I could have put that money and made an additional $500,000. So if I would have tracked this earlier, I would have made way more money. But I know a lot of you don't want to track, but that's going to be the main thing that's going to separate you from being a hustler to an actual business. Owner. So what you want is to review your weekly KPIs on a weekly basis, hold the team accountable. And if for whatever reason your cost per lead spikes or your leads to contract double, you know that something is broken in your sales process. It may be your ads, your targeting, your follow-up, or your close rate. So you gotta figure out exactly what the issue is and actually dissect it in order for you to actually fix it. Next point is gonna come down to scaling on profit, not ego. So Hermosillo's rule is you need to actually, you know, care about the profit, not just the revenue. For our business in wholesaling, cash flow is the name of the game. You're probably never going to sell your business, so the target should be how much money you net at the end of each month. And I think a healthy operation, if you can net at least 50% of what you make, you're running a very lean operation. I wouldn't recommend for you to be seduced by $5 million in revenue. You can net the same amount of money with a linear $1 million to $2 million operation. Sure, I'd rather have way less moving parts and still net a lot of money without having to risk a huge amount of capital or having, you know, a huge team. So for us, I have 6 persons in my team. I have 2 lead managers, 2 closers, 1 DISPO manager, and I handle the marketing. And then we have a third-party transaction coordinator that helps us with DISPO, and we have agents that help us list Novations properties. And therefore, we are doing really good. We do anywhere between $80,000 to $200,000 depending on the month, and I know that I can net anywhere from $40,000 to $80,000. You know, that's with me only working 3 to 4 hours a week and handling the marketing. And that is my version of wholesaling nirvana. What I mean by that is everything makes sense, I'm netting what I want to make, and I don't need to have all these moving parts in order to scale this business further. Because like I was saying, it's all about how much money you net, not the revenue that you make. And if you've been doing this for the last 2-3 years, you probably know people that have lost a lot of money by flipping houses, or maybe you went through a down period like I have. And for for me, the juice is not worth the squeeze. So I'd rather have something that I feel comfortable in and that I actually like to operate. I'm gonna talk about why founder-led marketing is one of the most important things and why you should consider being the one in the ads. Why? Because you exponentially build way more trust than agency creatives. Your face and your story is what really differentiates you from the other people. And you basically want to think of pain points that actually work. Hey, like stop paying taxes on a vacant property, avoid foreclosure and protect your credit. Did you inherit a property that you don't know that you want to deal with? And what works very well is if you will do authentic selfie style in front of properties, or maybe you are with a seller or you share a testimonial where you just take out your phone and talk about the problem, how do you solve it, what they need to do and what they get. And just think of the value equation. If you could drop your cost per contract by 50% or be way more efficient with your marketing dollars, would you record your own ads? I mean, what is your story? What do you do? How do you help people? Every one of us has something that we do very well and we just basically want to spotlight the fact of How do we do things? And, you know, just show people that you're human and you're here to help. Because the current market reality is that we have a ton of inventory, we have picky buyers, we have unrealistic seller expectations from 2021. And the opportunity is that many wholesalers are quitting because it's getting hard, right? But the good thing is the people that stick with this, you're gonna have way less competition for those who actually stay disciplined. Because if you can make it through this year and this down period, you're going to be in a way better spot when things things, you know, get better with our market. So what challenges are you seeing in your market? I mean, what's the take on your opportunity? Because I know that over a long time horizon, there's no way that we don't win if we just stay consistent and disciplined. So, you know, think back of your last couple deals. What are you seeing? And is there anything that you can pull from to make you better in how you do things and how you help sellers? So that's Alex Ramos's $100 Million Framework applied to real estate wholesaling. Everything that I covered in this video is a high-level framework If you want the complete breakdown, the exact ad templates, the campaign structure, the sales scripts, the KPI tracking system that I use, I created a free course. Click on the end screen to watch that full course right now, and I'll see you there. Thank you for watching, and I'll see you in the next video. Thank you guys.