Whiteboard Wednesday #4 - Invest in real estate or buy a house?

Hello YouTube, it's Cody and Christian. We are back again for Whiteboard Wednesday, the part of the week where we answer 5 questions from the previous week's chat and we talk about them here.

Yeah, one more week down and 5 questions to go. Our first 2 questions are from Blaze. Blaze asked, because you don't want to talk about buying right away when you're meeting with investors and potential sellers, What are you and your potential seller talking about in those early meetings?

It's a good question. So on the initial meetings, what we're usually talking about is we want to weave in 3 pieces throughout the conversation. So we're going to start with what Cody and I call the circle drill, and we talk about, okay, how do you create relatability, communicate your goal, something that they can help you get to, and the significance behind that goal? You're going to weave these into the conversation following as closely as you can the 80/20 rule. You want to get the conversation as quickly as possible to they are talking 80% of the time, you are talking 20%. So you're just going to weave in those 3 things of your story in that conversation. I'm typically calling asking the same thing: how did you do what you did? If I own a duplex and I'm calling someone with a 12-plex, the conversation is probably gonna look like, hey, I own a duplex down the street from you. I learned that buying duplexes is a little slower way to get to my goal. Insert your goal here in 1 to 2 sentences. Curious how you got this 4-plex. This is the type of thing I want to buy. They'll probably tell you, well, I'm not selling it. Awesome. I don't know how I'd buy something like that. I'm just trying to figure out how to get started and was curious how you got started. Every conversation will be unique, but that is generally what you're calling to do. How did you get to where you are?

And when you meet up with them in person, You're sharing your circle story, and that's part of our logo, and then we'll go over the square drill. We've done that in the past video too, but you're trying to figure out theirs as well because at one point they had targets that they probably hit. If you're giving them a call today, they had some targets they missed, they had a reason they were doing it, and then they've got a ton of stories that they can share with you that you're going to relate with. And so once you get to that actual table, that is what we're doing, and we'll go over the circle drill more in the future.

The wonderful thing is if they don't, if it never turns into a transaction, when you're not transactional, if you learn how everyone bought the assets that they own in a market, one, you know each player and what everyone wants. Everyone knows who you are and what you're trying to accomplish without you over-talking. And you're going to learn how they bought that deal so you can use it again and again and again. It's worth so much more than actually buying their 12-plex. If you learned how they did it, you can apply it Any market, any owner, anytime.

Yep. And then we got one more question from Blaze. I'm not sure where I'm going to be living in the future. Me too, Blaze. Should I wait to invest in real estate until I'm more settled down in a specific location?

I would not. I would not do that because I prefer to buy the things that I own out of cash flow from assets that I have. Now, I started by buying a house. I did the conventional route. I went to college, I did the 9 to 5, I got a sales job, a few years in, bought a condo, scaled to a house. I wasn't getting assets. I wasted about 8 years. If you have followed this channel at all, you'll know Cody and I are in about the same place in our investing cycle. Cody has a few more units than me. While he doesn't have the house yet, he has basically the exact same net worth. I've had 8 more years of life to get to the same place. So I would not add steps. If you want to become an investor, don't add steps. Easiest way to become an investor is to become an investor. Go buy an investment property, start passive income. Our next question is from Al, uh, Banffy. Can you please share how, uh, conversations with investors go and what's your reason for reconnecting with them. So this kind of plays off that first question he's asking. When we have our first meeting, what are we talking about? But further, on a second call, I don't think we've ever talked about that. What are we doing to reconnect to an owner if we're not being transactional?

Yeah. So, Al, you're calling someone, they don't know you yet. You're trying to get an intro. You're trying to just put a name and really a face to the name. So if you're calling them up, My second engagement is going to be to try and get a meeting. When you call them up the first time, they're probably, I mean, maybe they will, they've done it for me in the past on some, some meetings and on certain occasions, but usually they're not going to meet with you the first time. So your second call is going to try and be to build more rapport. I am calling them to cultivate that relationship. The first time they don't know who I am. They think I'm just some other just Joe Schmo who wants to go buy their property, and I'm letting them know that I'm not. And the more times that I reach out to them without actually trying to buy their property, the more they will believe that because it's genuine and it's true to what I'm trying to do. When I reach out to them again, I'm trying to book a meeting because I want them to know who I am. I want them to know what I look like. I want them to remember my name. And if I just call them once, which is what most people do, they'll call one time, They'll share their message, they may get hung up on, or they may never hear back from the person because they don't try and call again. I don't want that. I want this to be relationship-based. So when I'm calling that second time, that second engagement, I want to go get coffee, breakfast, lunch, dinner. I want to meet with them. I want them to know who I am, and I want to learn what they've done because you're not going to get that on the first phone call. And usually you're not going to get a meeting on the first phone call. That's the hard part about the business that most people don't want to go through. I'm sorry to say you need to go through it with a lot of people. There are one-call meetings sometimes, but not usually.

In practical application, this was a call that I did earlier this week is we had a phone call. I got the owner's front office. They connected me with the wife. It's a husband-wife duo. She connected me with the husband who just happens to be the main decision maker in that particular company. Spoke to him 2 times over the phone. We had a first meeting with my wife and him, a second meeting with Cody and I, and we just met back and forth. We never talked about doing a transaction, but in those transactions, they told us how they've sold some of their stuff, and in their particular cycle, they're selling stuff off. The 4th time I've called them after we've met twice, I brought up the idea of, hey, We're shifting around some of our pieces. We may have a little bit more liquidity. Are you still in a sales cycle? Are you looking to unload stuff? It's not built on being transactional. Turns out he has nothing he's unloading right now. He wants to sit and meet with us again to talk about his strategy and how we work moving forward. So each call, I mean, you can eventually bring up a transaction, but the relationship cannot be based on doing transactions. You'll know when you're there.

And then we've got MD asking, wow, the Google Maps thing is pretty cool. Would you guys mind doing a video live finding a deal with this method?

That is a good idea. My— the reason that we did the video the way we did where we showed how to get our contact info is because I don't want to do a video that has other people's contact in it. We did that very, very intentionally. I'm okay if you find our contact information and if you try reaching out to us, we've already had people do that. So if you use the drill effectively and you find our contact, good on you.

And we've had about 5 people do that so far. So I mean, you can find— we mentioned everyone's contact info online. It's online. But we don't want to give out other people's. If you find a property using this method, then wonderful, and you can give them a call. But we're not willing to give out their info. You got to go do the work and make that connection because that's your connection.

And the last thing I want on a recorded call, if we actually go through the call where we reach out to someone, I would hate for someone who I randomly called to watch our YouTube channel and find out, what? I didn't realize I was being recorded. I'm online now. It's uncomfortable. What we will do is we will do a role play of what that looks like. Conveniently, there are two property owners in this room, so we can do a real mock call between what it looks like to be a buyer and to be a seller, and we will post that in the coming weeks.

Yep. And then last question for the day from Mom Clark: Is it better to inquire about properties from individuals or from companies? It is—

you want a relationship. And this is just firing from the hip here. My instant thought is that individuals own companies. Yep. It's people. So if you go out and you talk to an individual and build a relationship, they could already own a company. They could own a lot of companies. It could just be mom and pop who bought a few properties. You always want to get to the person though. So I would say if you're doing relationship-based real estate like Cody and I do, 100%, you just want to get to the person.

Yeah. Focus on the individual. That is where you can have a significant relationship. You're actually going to get to know how they did what they did. And at the end of the day, business owners are people, individuals. You can find a whole bunch of LLCs. We've shared how to find those on this channel just recently. But at the end of the day, somebody owns all those LLCs. And so if we just don't add steps— Christian's go-to line is, we don't— we want to buy a Rambler because we don't like to add steps. Don't add steps to your process. Just focus and prioritize a relationship with an individual over trying to go through all the hoops of a company, because companies are going to have guidelines and individuals are going to relate.

And there's exceptions to this, but for the most part, there are two places that you're going to get deals from. The company that you find deals from would be a brokerage. I mean, brokers control deals and owners control deals. And owners control their off-market listing because it's not listed. And if they've listed it with a broker, reach out to them. But those are really the two people that you're trying to connect to if you want to play this game at the highest level and get into creative finance and relationship-based selling. All those involve great relationships with the individual who owns the asset. Your next step, if you want to broaden that, is you have a good arsenal of brokers that you really trust. Those are the two types of people you want to contact with. I wouldn't go straight to a corporation and try to work your way around the corporation.

That sounds complicated and unnecessary.

He says that's how I feel about that.

That is it for today's questions, though. If you have more thoughts that you want to have addressed here on this channel, we're doing this every single week. Put them in the comments below. We will see you guys next time, and if you want to see anything else on the channel in addition to Whiteboard Wednesday, let us know. We will make it happen.

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