Mike Minutes Mastermind 07.01.22

Hello, guess the nation. Happy Friday. Let's go and jump into things. First off, some announcements for those of you that command center runs your P4P. They sent out a. They're just systematizing how people give them information a little bit because it's kind of coming from so many different directions. Some people were using the chat a lot, some people were using notes inside service autopilot, some sometimes you were emailing reports each day. So they're trying to standardize that. They sent you an email with a document. They have a separate chat now for your P4P. So that way as things happen throughout the day you need to do adjustment. You can just pop it on there and they'll take care of that as well as if you have some employees you don't run P4P, et cetera, that is now all standardized. So make sure you read that document. I know it's like a page or two but it really will make it much more smooth and they'll be able to do your P4Pmuch faster. We are taking some feedback from Marcus actually and that is allowing you to be able to save a time card inside the P4P software without a time punch out. So that way if they're punched in throughout the day, you can literally just go in there and add notes or adjustments throughout the day. And because like right now you need a punch out time in order to save a time card that will change in the next few weeks. So we're working on that. But they are, they did systematize that and give you some guidance on using the Connect Team chat that's specifically just for your P4P. And that way again, as the day goes on, you know, an employee breaks something or Yellowstone Pathogenous quickly pop into that chat and add an adjustment to them.

Couple other things that are going to be changed across Zooper and Service Autopilot based upon everyone's feedback. There's going to be. Some of. You had already done this because we had talked about it but. And the newer franchisees have this because of new training. But we're going to kind of standardize across the board and that is there's going to be a separate service created called Initialmo. And in that you're going to have all the details that Command center asks on the phone. So a lot of times what happens is you'll just get a new.

A new. What's it called?

A new over the phone estimate. Let's go. Sorry. A new over the phone estimate. And they've already asked a bunch of questions. And they don't usually make note on there at command center unless there's something specific like they have irrigation or be aware of X, Y and Z. But what we're going to do instead is have actually the questions that are asked each time with yes or no. Just to give the crew as much information as possible as well as giving that that customer the feedback of like hey, this is our first service and it's going to be inside of the estimate description in terms of like we're going, we want your feedback. These are first services. Anything that's missed as well as letting our crew know like hey, you should knock on the door on the first visit. Every first time mowing visit, that initial service, you should knock on the door, you will reduce your drips dramatically. So that's going to be in there that verbiage and we'll be uploading document next week of what, what else happening here? Same thing with yellow slips. There's going to be a new service for yellow slips. So that way when a crew member goes to a yellow slip, they can just punch in, punch out. It's really easy to calculate P4P because it's already there. Doing that as a ticket hasn't worked as well for some of you. You've already done this. You create a service in yellow slip because we've talked about it, but we got to standardize it because otherwise it's just a matter of like when a yellow slip is being created. Like which, you know, does this location use tickets, these jobs, etc. Inside Service autopilot, but also inside super creating that new service. We're going to do this stuff for you. This will usually take us like five minutes. Probably these changes in each account. Another thing that we're going to do is adding the fine print for mowing service about 24 hour notice that they have to give us a 24 hour notice to cancel or skip service. Otherwise they will be charged. So these are all things that most of us have already added. But we have to kind of standardize across the board. Otherwise it's very difficult command center for them to answer questions about like 24 hour cancel notice, to cancel, things like that. So we'll have a document of exactly what's going to be happening inside of everyone's account. But all stuff we've talked about, it's just about formalizing it and putting inside the templates.

Cool, let's go ahead and jump into questions. Oh man, I messed it up. See, I created this like five minutes ago. This little Graphic up here and I messed it up. It's okay, let's jump into questions real quick.

Boom, boom, boom, boom. I think this one's about real estate because I looked at this one this morning.

Yeah. Garrett from Glendale. All right. By waiving a home inspection, aren't you risking the fact that there could be something that needs a major unforeseen repair? Sounds like they took good care of it. But they wouldn't necessarily know but they wouldn't necessarily know if a septic tank was about to go out, if there's a water in a crawl space or foundation issues, especially since it's in a flood area. Will you have an inspection done after you close? I'm sure you know what you're doing. Just so, just curious of your explanation. I, I figure all of those will. They'll be under $20,000, which won't ruin your investment. Yeah. So if you were getting your very first house, I recommend getting an inspection. I'm not super good at looking at a house and knowing like, ah, that foundation is off or like that thing's messed up. But there's definitely indicators that can kind of point you in the direction of whether or not a piece of real estate needs.

Here. One second. I'm going to prioritize this other question real quick because it has to do with lawn care. Then we'll go into real estate. So we'll come back to that in just a second. Mike. I typically do the schedule anytime between 6 to 8pm the night before, which does not give the client 24 hours to give notice. What do you suggest we do?

I. You don't want, you're not going to be doing that. Yeah, so I see. You're saying so they can't cancel the night before then. Right. So if they're getting a automation that says, hey, we're going to get your property tomorrow, and they respond that can't, you know, please cancel me. Sorry, but like, you're within the 24 hour limit. You could be more lenient if you wanted to be on that one. Like if. Again, I'm assuming that you're talking about someone who has an automation that comes in the evening before, etc. But again, if a customer doesn't want their service done, they can let you know a day or two in advance. I would recommend that highly. We do not have a lot of issues. We usually the first time that someone, you know, we roll to a property like, hey, don't do our service today, we give them one notice. They, hey, just FYI, 24 hours. We need a heads up and we've never had a problem since. Now if someone keeps doing over and over and over, we just let them go. It's not worth your time as you scale up to have somebody that's doing that to the crew on P4P and it's not worth it financially for you to be dealing with that every single week or they call every single week. And again, someone who calls command center every single time you do service and is costing you money and you don't want them. So.

I would say that, you know, you'd say, look, you still gotta give us 24 hour notice. If you wanted to make that 12, you could, but I don't think it's necessary. Like if someone wants service canceled this week because the grass isn't growing, they can give you a day or two. Heads up. That'd be my recommendation. And we give them the first time as like a grace one and just tell them, hey, look, FYI, you know, we're not going to charge you for today's service. You got, you told the crew just to leave and skip the service. But in the future there is enough there. We're gonna, we have to charge you for the whole amount. If it's not within 24 hours. If it is within 24 hours. So. All right, back to this question. So I answered this in the Facebook group and the basic premise behind this is two things. Number one, I have done a lot of inspections before, prior to this deal where I'm waiving the inspection. So if it was your very first one, you probably should get an inspection just to have that reassurance because your 20, $30,000 expense could potentially sink you. That's the first thing. Second thing is.

In this market, I really believe if they would have priced that house at 550 when they put in the market instead of 650, they would have got multiple offers and would have been bid up to 570, 580. What happened is they started at 650, it came down and now I've been on the market for six weeks. I offered $35,000 less than asking price. One day after they just lowered it by 21, 21,000. So literally two days before I submitted my offer, it was 55,000. What was it? 55, no, $46,000 higher than my, my, my, my price that I gave my, my offer price. So I already knew I'd come down a ton. And when you're doing that, some people like, I'll just lowball a Bunch of offers and send them out. Okay, sure. But if you're actually serious, you want to make sure that when the client or when the seller sees your offer, they know you're serious. And one of the things that people are asking the most is between agents, because ultimately the agent just wants the deal to go through. They don't really care if it's 550 or 570 because they get their commission on a percentage of the. At the purchase price. They do not care. You have to remember with real estate agents, they do not care about having an extra 10 or 15 or $20,000. They just need the deal to close. So I already know with, with the offer, with the property being on the market for six weeks, the selling agent is going to be putting pressure on the seller, like, hey, we got to take this offer. We got to take this offer because they want their commission. I already know that they're going to put pressure on the, on the seller. The next thing I'm thinking about is I know that the selling agent is going to talk to the buying agent, my agent, and asking them, is this, is this buyer legit? Like, are they going to follow through on the deal? And I know that my.

Buying agent, my agent is going to tell them he's never backed out of a deal. He will close this deal. Once he makes an offer, he will close the deal. And that's how I've been. Again, your reputation precedes you. Right. So my agent can confidently say, hey, I've worked with him for years. He's never, ever backed out of a deal. And, and that's a good thing for, again, the agent to then go to the seller and be like, hey, let's take this offer because they want their commission. You got to remember, this is like the weird thing with the agents in between you. You can use so many different leveraging opportunities when it comes to selling yourself. The next thing is I offered a $20,000 earnest money, which typically you're only going to do 1% earnest money. So that would be like 5,000. The fact that I put $20,000 earnest money down also tells them that I'm not backing out of this deal because I'm confident in my financing. So these are the type of things that if you do, you're going to be able get a better deal. That's why they did not counter to me. So typically, people that get an offer that is literally 7, 6, 7% less than asking price.

And what, 15% less than their original asking price, they're going to counter, I was $35,000 below the price they were that it was at. And just the day before they had just dropped at 21. So it's not, it's very rare that you would do an offer and they wouldn't counter like you would think that if I, if they're at 575, I offer 540. I was expecting a counter at 550, but they didn't because they immediately saw, okay, he's going to close the deal. This is going to go through. He waived inspection, he has a bunch of earnest money down and his agent says he closes everything. So doing that allows you to get good deals. And if you're wanting to go after a good deal, you got to realize that a good deal is going to have multiple buyers or a lot of interest. And if they would have raised, lowered the price down to 550, they would have had multiple offers. So.

I really, I really came to my, from my perspective, if there's enough, if the deal is good enough for me to buy $20,000, better not break the deal. If $20,000, because I find out that something's wrong with the septic is going to break the deal, I don't want the deal because too skinny of margin. That being said, deceptic specifically has to be checked anyways by the bank. So remember, if you're getting financing on a loan, a lot of times you might waive inspection, but the lender. Ah, yes, there it is. The lender is going to require inspections on certain things that are out of date. So because the septic is so old, I know that's going to get inspected anyways, but I can waive my inspection on the offer to look better to the potential seller or to the seller.

So yeah, the lender is going to require an inspection on the septic. I'm not, I'm waiving my inspection and everything else. And. But yes, you're 100, right, Andy? The lender is going to require inspection on certain things they're not going to require on everything.

I'm sorry, why is this cut off? Oh, that's so weird. See that white box at the bottom of the screen that's supposed to be at the top. Man, did I get for trying to do it myself. Okay, so yeah, the good questions though, I would recommend if you're getting your first couple deals to get an inspection, bottom line is I know that inspection is going to slow the deal down by one to two weeks. And right now inspections in my area are literally costing. I paid $4,000 last year for an inspection. This one would probably be 20002500 maybe. I could probably get it for cheaper thousand. 1200 for a cheap one like this. It'd be easy, actually. So maybe I maybe save $1,200 on this inspection. Usually inspections are only less than a thousand, but I probably said 1,000, $1,500. I saved a couple weeks, and I want to close on this deal. I got to get, you know, moved over there. I got to get a whole bunch of stuff done. So that was, that was. The speed and confidence of the offer is important to the potential offer that you're giving. So. All right, education, let's move to the last one here. Man, I really messed this up. Sick. Okay. I wanted to go over because there's a lot of questions about the mortgage stuff. So I want to explain how mortgages work when it comes to buying down your interest rate. Okay? So right now, interest rates are obviously going up, but anytime you have a mortgage that's being offered to you from a lender, they're going to give you the option to buy down the interest. You're like, that's weird. Basically, by you giving them a fee, they will lower the interest rate. That's all it comes down to. And the reason that they are okay with this is because they'd rather lower the interest rate and get the upfront money and it secures the loan even more for them from a financial standpoint. So when I, when this deal came through to me, I had offers for my rates everywhere, from 3.8 all the way to 6.2, depending on how many points or how much I paid down the loan. Okay? And so when you say pay down or points, you're basically putting money down to lower your interest rate. And so typically, as a very rule of thumb, I don't pay down my loan. I do not put points down. Here's why.

If so, let's just say I have a loan and I'm going to spend $6,000 to pay this thing down. Let me just make some notes and I'll show it to you in just a second. So $6,000 is going to be the cost to pay down the loan. Now, when they say points, this would be a one point fee or one point pay down on a $600,000 loan. All right? So if you're getting a $600,000 loan and they say, hey, you're gonna have to pay down one point, that's 1%. A point in real estate is always 1%. So one point is gonna cost you $6,000 as a fee to pay down on this $600,000 loan. So this might save you, let's just say, $100 per month. By lowering your interest rate, it's going to lower your monthly payment by $100. So here's how you do the equation. Okay? You take how much you're paying on for the fee for the pay down $6,000, and divide that by how much you're saving every single month by having the interest pay down. And in this case, it's going to equal 60. Now, this is the number of months that it is going to take before you break even on the savings. So in this case, I have a $600,000 loan. I have to pay one point down, $6,000 in order to bring my interest rate down. And by doing so, I'm going to save $100 per month. That's going to mean that it's going to take 60 months before I break even on this fee. So the big question that should be really coming into play is do you believe that interest rates are going to be going up or down over the next five years? Because if in five years, the interest rates, it really doesn't make a whole lot of difference. And if I'm going to sell this property in the next five years, do not take the deal, do not pay $6,000, because I'm not even going to see the maturity of that 60 months. Now, if you plan to live in this house for the next 30 years and you're never going to move, which everyone does, but no one actually ends up doing, but if you plan to stay on longer than 60 months, theoretically it would be a better deal for you to pay the $6,000. But this is the problem. I believe in two to three years, interest rates are going to go back down and I'll be able to refinance this loan and save this money without spending the 6,000, I'll be able to spend way less than 6,000 and probably save 2 or $300 a month by refinancing this loan. So if you believe the interest like I believe in five years will be lower, then bad deal. If you are going to sell this house in the next five years, using this math, bad deal. If you're going to stay in this house for the next.

15, 20, 30 years and you believe that you're at a low for interest rates, like interest rates aren't going to keep going down like six months ago, probably a good idea to pay down because you're not going to see 2% interest rates again for a very long time.

That's when you might want to do a pay down. So that's what basically a interest rate pay down is or points towards your mortgages. You're basically paying a fee for a lower interest rate. And you do the math like I just say there. And that is the fee divided by what you save per month is going to give you how many months it will take you just to break even on that fee. And if you believe you're going to sell the house before then or you believe you're going to refinance it before then, do not do the deal. And for me, I believe I'm going to refinance it within the next two to three years and take all my cash back out once I do capital improvements and make the property worth much more. Okay, that's all I got, I think. Yes. Any questions? That's all I got. Happy Friday, everybody. Hope you have a fantastic weekend and we'll see you on Monday. Take care.