The 3 Biggest Scaling Mistakes Killing Your Wholesale Deals

If you want to scale your wholesaling business before you start spending way more money on marketing, there's 3 things that you need to really nail down on if you truly want to scale. And after closing more than 300 real estate deals, I can tell you that most people don't only have a lead problem, but they have 3 other problems that if you don't fix them, you're never going to be able to scale your wholesaling business. And I wasted over $400,000 trying to figure this out. And if you stick with me to the end of the video, you're going to make sure that you actually keep this in check to make sure that you actually get to your profit goal. And if you want to scale it the best way before spending on money and marketing. So stick to the end of the video and make sure that you apply everything that you watch. So before I start talking about 3 things that are impeding your growth, I need to tell you something because I talk to so many wholesalers that want help in scaling their business. And one thing that I notice is truly going to surprise you. I talk to all these wholesalers saying that they want to scale to $50K a month or $100,000 per month, but when it's time to actually take action to getting to their goal, their actions do not align with what their goals are. And the reason why is because people have no work ethic, they have no discipline, and they want things done so fast and they're not willing to put in the work. So those are the wholesalers that you guys are competing against. So if you are one of these people that is ambitious, just know that you're going to be able to crush because like all these other wholesalers that I talked to, man, they say they want something, but honestly, they have no work ethic. And if you just have an ounce of determination and discipline, you will be able to crush them. And if you are someone that I've talked to in the past, you really need to get your head right if you truly want to scale your wholesaling business, because this business is going to test you more than anything else before. And actually getting to your goal is going to be way harder than you actually think. And that is why only a small percentage of wholesalers truly scale to $50,000 to $100,000 per month profitably and where they can do it over and over again, because it's not easy. But with that being said, what I was saying is Although we help you with marketing, that way you can crush it with Facebook ads, and we have a less than $2,000 cost per deal across all clients. Before you start spending more money in marketing, there's 3 things that you need to fix. And the reality is that most people think that they have a lead problem, but in reality, they have a conversion problem because more leads is not going to equal more deals if there's a hole in the bucket, because everything's not going to be optimized. So the 3 bottlenecks are going to be, one is going to be your conversion. Number 2 is going to be your follow-up. And number 3 is going to be your dispo. And I'm gonna be sure to go into these in detail, so make sure that you pay attention. Now with the conversion is most of you guys don't have a structured sales process where you can filter through a bunch of the leads. And I talk to clients all the time and they may say, hey, these leads are not motivated, but the reality is that you guys are not good at sales. So with us, with the average offer to contract ratio that we have with our clients, it'll be anywhere from 3 to 5 offers to contract. That means that if we give an offer to a seller, Due to our process, we're able to put one property under contract for those 3 to 5 offers that we give. And if it's above 8 for you and your team, you have a conversion problem. You don't have a marketing problem. So the first thing that you need to focus in your business and trying to fix is going to be this conversion problem, because if you are able to fix this, then you don't need to spend as much money in marketing in order to get to your goal, because in the end it's all math. So if you do the math between 8 to 12 offers, and if you do the math, 3 or 4 offers, you're going to save so much money in extra marketing. By just fixing this foundation. So, so you really need to dig deep into the marketing process and build it replicable where you understand exactly what your conversions are. So for us, what we do is we use the TARP method. So the T stands for timeline, A for agenda, R for result, and P for permission. So when we begin a phone call, we always tell them how long the phone call is going to take. And then we go over the agenda. What are we going to go over in the phone call? We set the right expectations before the first call begins. That way they know exactly what to expect and how exactly do we work, because we don't want to be spending time with people who want market value because our time is more valuable talking to people who want to sell right now. So that's what we do in our initial sales process and consultation call with the sellers. Since we do inbound, we have way more leverage so we can position how everything works from the get-go, and that way we get way better results as to what to expect. Third is going to be the result. We're going to find out if we can actually give them an offer. That way they can make a decision and pretty much the outcome of what the seller is trying to achieve. So we're going to talk about the things that they're looking for. What have they done in the past? Why now? And go over the motivation, future roadblocks, influencers, all those things. And then we go over the permission. We tell them like, hey, if at any point during the call you think we're not going to be a good fit, please just let me know and I'm going to do the same. That way we don't waste each other's time. Does that make sense, Mr. Seller? Yes. So this is one of the parts that we use within our sales process. Now, The full sales process, we give it to all of our clients, with the clients that we work one-on-one with. And if you don't have something like this that is structured and you are just winging your sales process, I can guarantee you that there is money sitting in your CRM before you decide to spend more money in marketing. Now, the second bottleneck is going to be the follow-up because a lot of people follow— a lot of people focus on the new leads, but if you have hundreds, if not thousands of leads in your CRM that you are not getting a hold of, or you haven't followed up with them in a few weeks or months, I can guarantee you that you already lost a deal from that. We did an audit within our CRM, like last year, and a lot of the people that we gave offers to, we found out that they sold months down the road to someone else. And we did the math and it was over probably like $2, $3 million that we could have made. And of course, you're not going to get everything, but I can guarantee you that if you don't have a structured follow-up process where you can still reach out to these people, you're going to miss out on opportunities. If you are, let's say you're doing inbound and you're doing Facebook ads like we are, and you don't get ahold of the people in the first couple days, a lot of people stop trying. But what we do is we put them in a nurture sequence within our GoHighLevel, and we have AI that is sending automatic messages to make sure that they're still being touched. And it's crazy that we probably get like 8 to 10 appointments extra per month by having this structure. So if you have a team, or maybe it's you, and you're not trying your hardest to reach out to the people that already gave you their information, I can guarantee you that there's money in those opportunities. So you need to pretty much think of how you can have an automated process and sequence where you can still follow up to these people and still be in touch with them until they answer you, or until they tell you that they sold the house, or for you to stop calling them. If you don't have that, I can guarantee you that you won't get as many deals. And the third stage, another thing with the follow-up is if you don't train your team on what to do and how to do it, They will only focus on the new leads and all those old leads that you already paid for, they won't be touched and you won't be able to generate any revenue from those. So what I recommend is that you look at your follow-up process and see where the gap is. What we do is we have a kind of window of people that came in in the last 7 days that we haven't been able to get ahold of, and we are gonna hammer them for those first 7 days. And then after that, it's gonna go into a drip sequence that goes week by week where we still text them and call them a couple times a day. I'm sorry, a couple times a week, and we still send them emails. And you'd be surprised at how well the email sequences work, because a lot of people will see the email and sometimes they see texts from other people who are sending, you know, SMS blasts. But those are 3 things that I can guarantee you that if you apply, you'd be able to put more properties under contract. Now, the 3rd thing is going to be the DISPO problem. I know that if you look up deals, it doesn't guarantee anything until the deal actually closes. And the way that the industry is right now and how the market is, where stuff is taking a long time to sell, now it's way more important than ever to make sure that our day spot process is in line so that we can actually convert those contracts into closed revenue and money in the bank. Because if we don't close the deals, we're not making any money. So I want you to track what is your average days to getting a contract with a buyer. If you're doing wholesales, what is the average timeline? If you're doing renovations, what is the average timeline? One thing that we saw with Novations is that they're sitting way longer than they used to the year before and the year prior. So what we're doing right now with Novations is we are listing so aggressive because we want to create demand. To give you an example of the last one that we did, we got the property for like $145,000 and we listed the property for $160,000. And that may be way too low and no, we wouldn't make any money if we sell for $160,000. But what we wanted to do was to create the demand. So we got like 15 showings in the matter of, you know, 2 days. And we accepted an offer that we're going to make $25,000 on. And before that, we had a ton of other deals that were just sitting there where we had to do a lot of, you know, price reductions and renegotiate with the sellers because we were forecasting for the properties to sell of what we thought of, like they were going to sell. But now if you're doing renovations, it's more important than ever that you do, you know, that you lease probably like at 20% of what the market value is if you want to create demand. Because if you're not getting offers or interest within the properties, you're not going to be able to move the deals. Another thing that I want you to track would be the percentage of your projected profit to what it actually closes, to the percentage that you actually close in revenue. Because what this is going to be able to tell you is, okay, when you project and when you underwrite the deals, let's say you're trying to make $20K per deal, but if you look at the last quarter and you're only making $12K, now you know that you need to adjust something within your comping process and offer-giving process to reflect that. So you got to be able to track all this data in order for you to make the decisions. And if you're doing wholesale deals, I want you to be below probably like 21 days before you actually find a buyer, because if it's longer than that, then you haven't really nailed the sales process. I'm sorry, the DISPO process where you want the DISPO process to be automated. Now, depending on the market that you are in, you want to already have established buyers that you know that they're buying before you even get a deal. So you know exactly how much they're paying for properties, are doing the cap rate, are doing the 1%. Are they doing the cash-on-cash return? Are they looking for a set amount of profit per deal? Because different buyers are going to underwrite their deals differently, and that is why some people can pay more than other buyers. And it's your job to find what those buyers are and how much money can they actually pay for your deal. And if you fix these 3 things, the days to buyer, the percentage of projected to actual revenue, and the deals on hold, you're going to be able to sell deals much quicker and make that money back within the business before spending more money in marketing. So what I want you to do right now is to run this audit right now. What is your leads to contract ratio? If you are running inbound and if it's worse than 1 in 25, you have a conversion problem. So number 2 is going to be how many leads haven't been touched in the last 14 days. If it's more than 10% of the pipeline, you definitely have a follow-up problem and you really need to fix that within your CRM because you're just going to be wasting money getting new leads and your team is not able to reach out to the previous people. Number 3, what is your average days from contract to signed buyer between wholesale deals and innovation deals? And if it's more than 21 days for cash deals, you have a disposal problem. And if it's more than 60 days on innovations, you need to price them more aggressively and on the right, better. So you don't deal with properties that are listed just on the market. And like I said, you want to create demand. So price your innovations way more aggressive, slightly below, above of what you have it at, create the demand and go from there and get the highest, you know, kind of bid and the highest offer once you have the demand. So once you fix these 3 things, then you can actually scale, spend more money in marketing. But what we see with a lot of people, depending on the market, the cost per deal is going to be anywhere from $5,000 to $8,000. And with our system and our students, we are below $2,000 per closed deal. And that is because we have really good marketing and we have a really good follow-up process, sales process, and this whole process to make sure that you actually close deals and we're not just contacting every property without being able to sell it. And because of these 3 things, Fidel Guajardo is making over $100 per month and he's spends about $6,000 per month in ads. Kyle, he just started with us a couple months ago, he already closed $50,000 and he has over $100,000 in the pipeline pending to close. Paul, we just started working with him this month, he got 5 contracts and we only spent around $3,000 because all of the things of the machine are aligned and you can only close deals if everything with the marketing, the acquisitions, and the dispo is actually aligned. Be able to identify which of those issues and bottlenecks is giving you the biggest problem, that way you can fix it before you spend more money in marketing. Because in the end, it's how much money can you actually net and how many contracts can you actually get into the closing table so that you actually get paid. And another thing is you need to track what is your average profit per deal. If you're at $10K, it's going to be super hard for you to scale because if your cost per deal is $4,000 to $5,000, you're only making $5,000 in profit. And if you have a team, you're going to pay them 10%, 12%. You're making $4K profit per deal. And I think we just go through so much headache in wholesaling for you to net that. So take a look into that. And increase your average profit per deal. Because if you plug innovations and you know the sales process and you know how to negotiate, you're going to be able to increase that to $15,000 to $20,000. And if you do that, if you're making $10K per deal before, you pretty much double your business by just fixing the sales process and the conversion. And you don't need to spend more money in marketing depending on what your goal is. Now, if you need help implementing either the marketing or the sales or the follow-up with the conversions, I want to talk to you and I want to help you scale. And like I said, I already paid every mentor, spent over $300,000 in coaching and masterminds and over $300,000 $5,000 trying to figure out the marketing on inbound on my own. So I know exactly what works. So if you want to work with us, here's exactly what we do. First, we fix your inbound lead system. We focus on pain-based ads. That way you get the cheap leads that are very high quality, and therefore you don't need to spend $5,000 to get a deal. You can spend $1,500 to $2,000 to get a closed deal because we get really good with the marketing. Number 2, we fix your sales process to make sure that you're able to convert these leads into signed contracts and close revenue. Number 3, we have the discipline KPI tracking to make sure that we actually get these deals sold so you actually make money back in the business. Number 4, we scale based on profit. Once we track all the data and if any of the holes that the bucket has before we spend more money marketing. So here we focus on the actual profit, not the revenue, 'cause revenue is just theatrics. What we want is how much money do we net at the end of each month? 'Cause that was what wholesaling and flipping is. So if you are not a beginner and you are already doing at least $10,000 to $15,000 per month, and if you're stuck at the same revenue number for months, and you're tired of cold calling or buying shared leads or relying on agencies, and you want a lean, profitable system where you can actually scale based on profit and not have a bloated operation like all these other wholesalers, and you're ready to own your marketing and your data, I want to work with you. The only thing that you need to do, click on the link down below. Let's schedule a call with me and my team. We're going to map what the plan is, talk about your bottlenecks, and show you exactly how we help wholesalers scale to $50,000 to $100,000 per month by spending less than $10K in ads in market. So with that being said, I hope you enjoyed the video and I'll watch you in the next one. Thank you.