15 at 5 #18: Business Update (8/7/23)

What is going on, everybody? A little solo episode, um, of 15 at 5 here. Isaiah's working on a deal, but I just want to go into our current kind of business state. So other things I wanted to talk about, um, but yeah, trying to keep it consistent here every week for 15 minutes, um, and just kind of go into, um, some things we're doing in our business. I've been talking a lot about subjects, but today I kind of want to talk about, uh, kind of where we're at in our business, what we've done for the first half of the year, um, kind of what we're looking at for the second half of the year, and just some of the things that I'm dealing with right now trying to build up the acquisition side. So overall, we've really split— we like— we started so um, separated, like, or so, so broad, right? They say focus on the one thing. We did not focus on the one thing for like a long time. We were out of college, we were realtors, and then we were doing the investment side. It's like, if you really want to excel in one thing, you got to go either pick one thing, right? So we picked the investment side, but then we're still really wide, right? We're still doing multifamily and we're doing wholesale, right? Um, so two, two completely different beasts. Like, wholesale is very transactional Um, it's just sales and marketing. Multifamily is sales and marketing to get the lead in the door, but then you have operations, you have financing the deal, you have all these things, right? Completely different animal. And so now it's almost like we haven't shut off the multifamily, we're still doing it, but now it's like we're really laser focusing on, um, doing the wholesale side of it and really systemizing that and automating it. And our goal being to, um, our goal is really not a specific amount of money per month, um, it's more of just getting ourselves out of the business. So say whatever our goal is— Mike Gomes had a video about this— say it's $50,000 to $150,000 a month, right? I know people out there doing $1 million a month, whatever, but what's the point of the whole thing? It's to, it's to get time, right? Like, the, the purpose isn't accumulation of money or to stroke your ego and say you're doing $1 million a month. It's to— the reason you make money is to buy your time back. So why not just optimize for your time in the beginning, right, by building this business? And we're really focusing on hiring people and scaling ourselves out. That's the ultimate purpose. Yes, to have money, but than have this wholesale business just be like a heartbeat for us and just always be a source of cash. That's gonna free up our time to go do other things in addition to starting up the multifamily business, or maybe you wanna travel a little bit. But I think that's a really important point of like, it's not about the money. Like money is great, but why do people want money? They want money because they want their time back. So why not just optimize for time in the beginning when building your business? If that's what you want, it's time to go experience things and do whatever. So that's really what we're focusing on. We're laser-focused on it. I think our goal is like to be between $50K and $150K a month, but like scale ourselves out, right? We wanna try to be at like a 60% profit margin in the business. I know a lot of people who have really big operations are at like 50% profit margin. But one of the things you start to see when you grow the business is like when we first started, it's like you get a check for $10K, you're like, "10K, let's go." It's like taxes don't exist. Like, you don't have any expenses for the business. You're like, 10K, let's go. But now it's like, all right, well, you got to take out 25, 30% for taxes now. And then on top of that, you have a certain expense— expenses every month that you have to, um, contribute to. So, uh, that's something too. So finally getting a structure for how we allocate money on each deal. Like, each deal, X amount of money goes to me, X amount goes to Isaiah. Obviously we split it 50/50, and then a certain amount goes back into the business on every single deal. So really getting that systemized, and then we can start to track how many deals do we need per month to reach these metrics, right? Um, and like I said, there is still revenue goals, but it's also about, um, creating the systems and hiring other people. But 2023 so far, I think we've done between 12 and 14 deals, and we really had a slow start to the year, like January to January to beginning of April, we didn't— we did like 2 deals. We didn't really do much. Um, but then honestly, what changed everything was getting a sales process. Um, so for me, that was joining Blueprint. But really just having a process in general, whatever process it is, just absolutely is an absolute game changer. Because before, it's just like bashing your head against the wall. Like, you're talking to these people, but you don't know where they're at. Like, how close are they really to selling? But a sales process really just allows you to uncover information, really figure out where the seller's at and what you need to get them to do in order to really get them to the point of where they're going to sign the paper. So since I did that sales process, we've put a deal under contract every week, pretty much every week since April. So 4 under contract in April, May, June, July, and Isaiah had a few under contract as well. But Um, even though I was doing predominantly the acquisitions, but the sales process really changed everything. Now, all those deals didn't close, right? Some of them are still in escrow, um, they haven't closed yet. Uh, I think about 6 we have in escrow, and a few have fallen out for various reasons, right? So, um, a few of them were kind of like option agreements. So a lot of times when we're, um, the numbers are close and we're like, we don't think it's a deal for us, but we essentially approach the seller and say, hey, It's not a deal for us, but just because it's not a deal for us doesn't mean that it's not a deal for other people out there. Like, we're investors, like, we know all the people in the area, right? We're going to the meetups, we go out to eat with them, we golf with them. Like, why don't we send it out to our network and see if we can find a buyer for it, right? So it's kind of like an option agreement, um, and, uh, you try to find a buyer for 2 weeks. If you can't, then, um, you go your separate ways. So that was a couple of the agreements, um, and then 2 title issues which killed us. 2 title issues absolutely killed us. Probably, I don't even know, probably like $75,000 to $100,000 worth of, worth of revenue we could have had if it wasn't for the title issues on the deals. So what are you gonna do, right? You do everything right, you do the sales process, you get it at a good price, the seller will sell it to you, you're solving a problem, like everything, but then there's issues with the title, right? And that's just part of real estate, but Both of them were issues with probate. So there was two people on title and one person had died a while ago and it was never taken care of. Because what happens, what happens when you own property and someone dies, that ownership interest has to go through a legal process called probate, which is, is what happens. You own an asset and you die, like this, this process has to decide who, who gets ownership of the asset, right? So if that doesn't happen, it needs to happen at some point. So for instance, property that we had, um, in Exeter, it never happened. Like, the person died a while ago. And then the other thing is the owner's under the impression like, oh, it doesn't matter, right? Like, no one ever did anything about it. But yeah, it has to be taken care of. So that kind of killed us. Um, we had a deal in, um, in Massachusetts as well, similar situation. Seller just wanted to get rid of it. It was an absolute disaster. But We couldn't really get it to the finish line until it's through probate. One's actually still under contract. We're just waiting it out. We'll see what happens with it. The other one was like, it was a nightmare. The guy's ex-wife had to be tracked down, who he hadn't seen in 20 years, which was part of one of the things I needed to get the deal done. Track the ex-wife down, hasn't been seen in 20 years. His son was involved, who wanted rights to the house and all these things, right? It's interesting, right? It's like at a certain point, and the seller wasn't really willing to work with us on that. He had to go initiate probate and it's like thousands of dollars to do that and all that stuff. But I don't know. At a certain point, it's like what's worth your time? I guess we are here to help people and solve problems, but can't be spending a year of my time and thousands of dollars just for whatever. And then the seller doesn't even want to work with you and do their own part. It's like, whatever. If you don't want my help, then that's fine. Move on. That was kind of the Andover deal. Um, or not Andover, wherever it was. I feel it was Lawrence maybe. Um, but yeah, so stuff happens, stuff falls out in title. Um, our goal, I think we're really going to pick it up in the second half of the year here. We're looking to hire, which is an absolute— hiring is freaking tough, man. Hiring is just trying to find good talent, you know. It's like, that's why I guess companies have entire hiring departments, because it's hard. And then it's like getting good talent, retaining good talent, um So it's definitely interesting. So trying to hire a lead follow-up manager. So the way the acquisition side of the business works is you have your lead generation. Essentially have 4 departments, right? You have lead generation, you have lead follow-up, you have acquisition manager, which is like the closer, and then you have a sales manager who doesn't really make any calls. They kind of oversee everything. They might hop in to close like a tough deal for the acquisition manager. Um, so right now we have obviously a lead generation person, Grace, and she crushes it. So we're trying to get a lead follow-up manager because we have like 170 leads in the system that are like past 60 days from selling. So essentially, this is how it works. Lead gen reached out to people, anyone who says, "I wanna sell my house," and they have a reason to sell, it gets pushed to the CRM, right? And then lead follow-up's job is to first of all, qualify that lead that comes in and say, "Is this a legit lead? Do they have a reason?" Secondly, what's the timeline of this lead, right? Are they, are they more than 60 days out or are they within 60 days from selling? Um, if they're within 60 days, it goes up another level to the acquisition manager, um, who sees where the lead's at. If it's outside of 60 days, that lead follow-up manager needs to follow up with them until they are ready to sell, right, within, within 60 days. Um, and just because they're within 60 days from tonight doesn't mean it's a deal for us. It just means that they're within 60 days from making a decision. Right? Could be a deal for us, it could be a referral to a realtor, they could just need property management. Um, there could be a bunch of different things that could happen, but that's kind of how that works. So we're trying to bring someone in for the lead follow-up position, which is a really important position. And especially in our CRM, we have a lot of larger multifamily properties, so, um, these people need to be able to have like a, um, pretty— I don't know, a pretty, pretty high-level conversation with the seller to really dig in to see what the seller's situation is and really get a good gauge for their timeline. Because if you can't have have a good conversation with the seller, they're going to walk all over you and not really give you the information you need to determine where they're at, um, with their timeline. So, um, getting that talent is definitely huge. But, um, at the end of the day, it's just a sales and marketing business. That's all it is. And that's like, you're just a real estate entrepreneur, honestly. Like, yeah, you're an investor if you own units and you actually invest in property, but it's more like you're a real estate entrepreneur because you're just, you just own a business. It's just a sales and marketing business. Um, and marketing is the lead gen, right? The cold calling and the texting for us. By the way, texting has been going crazy in New Hampshire. Texting is really good in New Hampshire, way better than calling, I think. Um, it's interesting. I think we're going to get into Florida, into Tampa. Um, I think other markets cold calling is going to be better. But, um, another whole thing is like why it's important to track your KPIs, right? Because we're seeing, okay, we're not getting a ton of leads from cold calling in in New England, right? In New Hampshire, in Massachusetts. But texting is going off, right? We're getting all sorts of leads from texting. Okay, so let's, let's double down on texting, right? That's why we track key performance indicators, which are KPIs, so that we can focus on what's doing well in certain markets and double down on it, right? Uh, let's say you make KPI— the purpose of KPIs is to make business decisions, right? That's a business decision. We got 13 leads from texting last week and 1 from calling. What are we doing with calling?, right? Let's keep doing it, but let's double down on texting and just get more leads that way. Um, but yeah, so we're searching for a lead manager right now. I'm doing both, like I do my acquisition manager stuff, um, and then I pop into the CRM as like the lead manager, put my lead manager hat on. Um, and those are the people who are 60+ days from selling. So ideally I'm just, um, focusing on the acquisitions right now because it's a higher dollar per hour task. Um, because the name of the game is delegation, right? I don't know where I heard this, but delegate to elevate, right? That's how you essentially build the businesses. You just do all the positions at first, then you start to delegate things and slowly get your way out of the business. But looking to hire a lead manager, I think by the end of the year, we wanna have at least 2 lead generation people that are cold calling and texting, and we may separate the roles, I don't know. I don't know, I don't know. I know some people who have their lead generation people call and text, but it almost seems like it's too overwhelming. So I think we might need to separate those roles. Like if we can get, if we can cold call in Tampa and it has more traction, there's not as much available time, like space in between the calls, then I think we can separate the roles. But calling is just kind of slow, it can be kind of slow. I think that's just the nature of cold calling these days, a lot of restrictions, numbers go to spam quickly, it's kind of tough. But yeah, 2 lead generations, lead generators, a lead follow-up manager, and then I'll be an acquisition seat— I'll be acquisitions and sales manager by the end of the year. That's the goal, right? Then next year we'll get into hiring a couple acquisition managers, and then I'll just be the sales manager. So I'll just be kind of managing everyone, getting pumped up in the morning. And then by the end of 2024, hopefully hire— or beginning of 2025, hopefully hire a sales manager. Acquisition side is done. And then Isaiah is going hamster on the dispo side. He is not here because he's working on a deal, but Um, he's kind of building all that out. Um, but yeah, that's, that's kind of what's going on right now. Um, I've really learned how like basic the business is. I say the biggest realization I've had, um, even over the past year is how basic the business is and how important it is to disqualify people who aren't going to do business with you. Because at the end of the day, it comes down to time. You only have so much time in the day, so you get into the thought process of like who's worth spending time on? That's like the question. Who's worth spending time on? And that was the hardest thing for me to figure out in the beginning. I would treat, I would try to like make a deal out of every single lead I talked to, which is just foolish and it's just naive, but that's also the ignorance tax, right? Of just not knowing. So I just, you try to make everything a lead, it's not a lead. But the question I essentially ask myself now is, where should a lead be, right? The first question I ask is, do I want— and I think as a business owner, right— do I want my acquisition manager spending time on this, right? They should be, they should be dealing with leads that are 60 days and less, right? Timeline. Do I want my AM spending time on this, this lead? No, probably not. But okay, so do I want my lead manager spending time on it, right? Is it worth my lead manager's time? If it is, set a task for the lead manager, right? But if I'm like, nah, I really wouldn't have my lead manager follow up with this either, they're just not worth it, there's no motivation, or they're just not willing to work with us. I don't think it's worth that time. And that's when I just mark it as dead. Now, mark it as dead, right, because I just don't think it's worth the time for even the lead manager to follow up with. I would still put it on a drip campaign because you can do that in REsimpli. Now put on like a not interested text drip, so it sends them a text message every 3 months for 2 years that just says, hey, I know you're not looking to sell your property, but do you know anyone else that's looking to sell, right? And it'll drip them for 2 years, um, and then it'll give you notification when it's done texting them. But Um, that's kind of the, the really key mindset is like, is this lead worth spending time on, right? It's really just going through people like, where's the deal? Where can I find a deal today? Where can I find a deal today? And the people that, um, are not, uh, willing to work with you, just disqualify, disqualify, disqualify. Because every minute you're wasting on someone who's not going to do business with you is just, um, a minute longer it takes to get, get to a deal, right? So you're just trying to Have a conversation with someone and try to disqualify and get them out of the pipeline as quick as possible because you don't want to be— you also don't want to be wasting time on someone following up with them. You don't want to be following up with someone who's never going to do business with you. That's equally as unproductive as speaking to someone who's never going to do business with you. But anyways, that's 15 to 5. Current business, what we're going on, and kind of the things I was dealing with, but I thought I'd bring it up instead of having a specific topic. Kind of things I'm dealing with right now, you know. But anyways, hope everyone has a good week, um, and we'll be back next Monday.