Real Estate Mentoring Student Close to $100K Month Investing
Dave Dinkel: All right so by way of introduction for you guys who don’t know John. This is John Aaron. I call him Bentley John. And I teased him so much about his Mini Cooper that he had that he went and bought another car and the other car happened to be a Bentley. You started– come on over here. Don’t stand behind me. You started in about November of last year.
John: Correct. Yeah.
Dave Dinkel: But when did you do your first deal?
John: Probably the end of February or March sometime, a couple of months I didn’t get a deal.
Dave Dinkel: And when I first saw you, you had your leg in a cast.
John: Yeah. I dislocated my knee.
Dave Dinkel: You’re hobbling around. [Chuckle] Tell them how you dislocated your knee. [Laughter] It’s an embarrassing story.
John: I’m doing something real manly.
Dave Dinkel: Shoes. [Laughter] It’s OK. So while you were in the cast which I remember being two months.
John: Yeah, I was still hustling boy.
Dave Dinkel: Were you?
Dave Dinkel: You started from ground zero did you have any experience whatsoever before that?
John: No. I tried to– I had my license as an agent, I tried that. It didn’t work out. I didn’t do a deal. I felt like I was more a natural for investing.
Dave Dinkel: You haven’t hit 100 grand a month yet but you’ve been pretty close.
John: Yeah, I’m close. I’m on my way.
Dave Dinkel: Yeah.
John: Yeah, I should be there soon.
Dave Dinkel: So, repeat that for them. A month.
John: Yeah, a month.
Dave Dinkel: When he came in to me, what did you say me originally when you came into me?
John: I said I want to do a deal a week and I didn’t do a deal for a couple of months but…
Dave Dinkel: Yeah. And now, you’re in a bad week if you don’t do two a week.
Audience: Congratulations, man.
Dave Dinkel: Yeah, good job.
Dave Dinkel: So, if you all saw him at the buffet you know he really likes food.
Audience: What areas do you work?
John: I work in Broward and Dade and North of Homestead and South of West Palm. I did a deal in West Palm but it’s hard for me to sell them out there for some reason.
Dave Dinkel: And predominantly the way you sell them is you do put out bandit signs. You do Craigslist.
John: Yeah. Bandit signs, Craigslist and building your buyer’s list and…
Dave Dinkel: Did you bring some cards? Yeah.
John: Yeah. No, I brought…
Dave Dinkel: Flyers?
John: …example of…
Dave Dinkel: I mentioned to you earlier that he likes to get everybody on his email list. So you might as well get on his email list. Yeah. [Laughter]
John: Now, this is just an example of whenever I’m networking. When you guys get started and you want to network and get everybody to like you, I just always keep. You can pass it around.
Dave Dinkel: Oh thank you.
John: These are properties.
Dave Dinkel: I finally get to work a little. Can I get my copy autographed?
Dave Dinkel: Is this your aoinvestments.org? What’s your email address?
John: It’s on there. It’s on my website.
Dave Dinkel: OK. So, if they go to aoinvestments.org, it’s on there, right?
John: Be able to write and offer sale. So whenever I’m networking I just give people leads and still the same this is what I do so I do, I’ll show them what I have right now. And it usually sparks a conversation or helps them realize what benefits you can bring to it.
Dave Dinkel: OK. From a double sided aspect, there are a number of people here that have no idea what real estate investing is until yesterday and now they’re totally confused. But for these people, what would you say to them. Here’s a person that wants to be a real estate investor, you were in her spot a year ago.
John: Yeah. I mean if you– you have to really want it. If you kind of want it, when deals fall through and when things don’t go right, you might give up. You got to really– it works 100% if you do what Dave says, it works for sure. But you’re going to have doubts. But you can’t stop. You just got to do it. Keep following up and keep making offers. It’ll work. But you’re going to have doubts like every human being does but it does work for sure.
Dave Dinkel: Now, he works full time at it but full time for him is not six or eight hours a day sometimes.
John: Yes, more.
Dave Dinkel: Yeah. But where else could you work those hours and make as much money and you can doing anything.
John: Yeah, nowhere else.
Dave Dinkel: No. And I mean athletes make more money but the reality is they have a short life span in terms of…
Dave Dinkel: And you could see he’s not an athlete.
Audience: How many hours for you personally?
John: For me personally, it all depends. I mean right now I’m starting to implement a lot of new marketing. So right now I’m working a lot more. I’m working weekends. But usually, I usually start around 9:00 and end up around 6:00. Because I would start earlier but agents and sellers aren’t up as early I can get up with.
Audience: Do you have anybody to help you?
Dave Dinkel: Yeah, I have an employee, yeah.
Audience: You have an employee?
John: Correct. Yeah, for the last year or for the last couple of months.
Dave Dinkel: OK. So what does– go ahead.
Audience: I’m sorry.
Dave Dinkel: That’s all right.
Audience: What do they do exactly for you because that’s something that I like to know?
John: Right now I just have help on the marketing or selling the properties. So he helps me push the properties. I’ll put them up on different websites, Craigslist and he puts the signs up and he helps me build my buyer’s list.
John: Yeah. I was…
Dave Dinkel: What does your…
John: I was doing it all myself for the longest time.
Dave Dinkel: You’re going crazy there for a little bit. What does your day look like? You got up at 9:00, what do you do first? What do you…
John: First thing I do is make 10 offers. It takes me about 20 or 30 minutes. That’s nothing. And it’s really nothing because if that’s all you do, you’ll never get a deal. Offers don’t mean much. You have to follow up. Next thing I do is follow up during the day. I have about 50 to 100 properties that I follow up on everyday. If I get it in a certain price range that we can make the deal happen, I’ll follow up by calling them. But if we’re way apart, it’s just by email. And you’re going to get a lot of No’s, a lot of curse words, a lot of “Are you out of your mind?”. Just got to get numb to it. Because this is a numbers game.
Dave Dinkel: I haven’t asked you this question and you may have to think about it but let’s say you put in, you get 100 properties under contract, how many of those actually close? They’re under contract. You put them up for sale but you can’t sell them. Out of 100, how many do you think that would be?
Audience: Closing rate.
Dave Dinkel: Yeah, closing rate.
John: Right now we’ve been doing pretty good. Right now we’ve been selling almost three out of five. But I will usually say, out of five properties that I push or 100 but I’m just going to say five to make it simple. For sure, I can count on at least two closes, at least two.
Dave Dinkel: OK.
John: And that’s not going through you guys. When I was going through you guys, it was a lot higher. Their buyers’ list is a lot larger than mine so it’s a lot higher when you’re going through them.
Dave Dinkel: But the other part of that is we split those deals with you.
John: Yeah, split them in half.
Dave Dinkel: So maybe more effective to– and you do, you try your own list first and…
John: Right and then you know.
Dave Dinkel: OK. What other questions you guys have of him?
Audience: What the area of like marketing are you working on right now, like REOs or…
John: I’m working a lot of REOs, no Fanni Mae’s. Fanni Mae doesn’t have any deals. REOs are the best to me with reductions when you give them the reduction report. I usually work with– sellers really don’t care too much about the report because they have attachment to the property. But a lot of REOs never even have seen the property so they’re going off what you tell them.
Short sales too, the only thing I don’t like about short sale is you can’t count on them until they’re approved and you can waste three to four months with 10 short sales and not even get a– not even being able to market them because they never were approved. I like dealing a lot with agents myself. That’s 60% of our business and the rest is direct mail dealing with sellers and expired listings but direct, mostly direct mails you know.
Dave Dinkel: John has been successful in helping us sell some higher priced properties. Any last questions?
Audience: Bandit signs handwritten or pre-printed?
Audience: So about your direct mail?
John: Most of it, unless I’m doing 1000 or more envelopes are handwritten and the letters are printed.
Dave Dinkel: Did you get the thing I sent you back last night?
Audience: What do you found to be more successful would be letters or bandit signs, what’s your…
John: Everything but bandit signs work for sure. Craigslist, that’s started working for the last couple of months for some reason, I don’t know why. Letters work, you have to just be on top of it. You can’t let any lead– or at the beginning I was so crowded before I had employees, I was skimming on my leads that mean I was missing calls. But you have to treat everybody very seriously. Everything if you focus on it I believe it works. I know the things I focus on works. A lot of people whine that things I do don’t work and they work. I believe if you focus on a certain aspect of the game it will just going to work out for you.
Dave Dinkel: Yeah. And most people quit too soon. They mail out one letter, doesn’t get the response that they expect and they say letters don’t work. And it’s over with for them. But here’s the other answer to that question. What works best? At any given time, they’re going to work differently. So one time it’s going to be bandit signs, the next month it might be mailing pieces. You just got to do them and they all work. Yeah, they really all work. Yeah, just go to the aoinvestments.org and the contact information is on there. All right guy.
Audience: During your week, especially when you’re beginning, how often did you meet with the homeowners and what were the ways that you decided that you’re actually going to screen the homeowner and then decide to go meet with them?
John: One of the mistakes I made at the beginning was getting excited because people wanted to sell. I mean that’s the bad– the worst words you want to hear from a homeowner is one, they don’t need to sell and most likely you’re wasting your time because they’re going to want to overprice it or the Realtor® is going to lie to them and say you don’t take that, you can get this. And six months later lowered it to what we’re going to give them. If they need the sale, time frame like when do you need to move, when do you time frame and they’re how…
John: Yeah, how motivated they are is very important.
Dave Dinkel: Some of this stuff sounds familiar. Does it? [Laughter] But it really works that’s why he’s telling you.
Audience: And then at the beginning, when you first got started, how often– when you’re structuring your day– how do you structure your day when you began, what stage you’re going to see homeowners? Was it everyday or…
John: When I began I was like a bat out of hell even with my leg because I was everywhere. I mean I would do anything. If I’m getting a call right here and I didn’t mind. I was putting bandit signs out in the middle of the night. I mean I was going crazy. But now I’m a little more relaxed. I set up appointments. I don’t like– I’m getting more citfied and I don’t like the high traffic so I’ll set up appointments in the middle of the day. But at the beginning I was doing whatever it took just to get rolling.
Audience: What does your signs says?
Dave Dinkel: Bandit signs.
John: My bandit signs? When I was trying to get properties, my bandit signs would say, “I will buy your house cash” or it’s simple so an eighth grader can read it on. And I was getting a lot of short sale leads from those. And when I’m trying to sell them, I just put the highlights of the property like if it’s concrete block, I’ll put 3/2 concrete block or ocean access or highlight in the price and my phone number. And I put them up. That’s what it is.
Dave Dinkel: You never put the address on.
John: No, you never put the address on it.
Dave Dinkel: And you can use them over again if you do it that way even if you don’t have the property, right?
John: Right. If you happen to get a house the same, same price.
Dave Dinkel: Well…
John: Because I put the price on there.
Dave Dinkel: OK. But you can always tell them you sold that one in the interim.
John: Right. There’s a list from that.
Dave Dinkel: Yeah.
Audience: You’re a Realtor® right?
John: Yeah, I still have my license.
Audience: OK. So when you did get those leads that they went to the short sale, they want to list it, what did you do with that?
John: I will refer them out. I have– my mind was 100% investing oriented. I don’t have any Realtors®.
Audience: So refer to someone else.
John: I don’t have any Realtors® at all. I am just focused on being building my investment.
Audience: But you did take the opportunity to refer it.
John: Correct. Correct. Yeah, I did.
Audience: John, you use 1-800 numbers?
John: No, I use– at the beginning I was using the Google voice number but I was getting a lot of mixed signals and I couldn’t get my call so I just went and bought a phone from Walmart cheap one and just chose a different zip code and didn’t use a name at all. So I just got a fake phone from Walmart and now that I put on my bandit sign.
Dave Dinkel: Do you still do that?
John: Yeah. So I got a different phone for bandit signs.
Audience: Oh good.
John: Because the city will get on you about bandit signs. If they can track you down they will, yeah.
Audience: But when you phone get that phone, do you need to register under your name?
John: No you don’t.
John: Just give the zip code and they just give you a phone.
Audience: Prepaid phone.
John: Yeah, like a $30 phone.
Audience: Yeah, like a track phone.
John: Track phone, yeah. And if you do get in trouble all you have to really say is “Dave told me.”
Audience: And his phone number is…
Dave Dinkel: Yeah. It happens all the time.
Audience: And you take the calls yourself?
John: No, not now. My employee does.
Dave Dinkel: But he did before
John: But I did before, yeah.
Dave Dinkel: I mean we’d be sitting there talking about something and he’d be getting phone calls al the time so.
Audience: Your employee, how do you structure their pay? Do they get a cut of the deals?
John: I give him a salary and commission. Salary and commission.
Audience: What kind of commission?
John: Commission on the properties when it sales. I usually give him a percentage of the profit. Just the…
Audience: Which is?
John: Usually around…
Audience: Well, just give me an average, you don’t have to be…
John: Right. 10% or 20%.
Dave Dinkel: Oh that’s pretty fair.
Dave Dinkel: That’s very, very generous.
Audience: That is.
Dave Dinkel: Yeah.
John: But if they’re not motivated day to day, they’re not going to take the same look at putting up the signs. They’re not going to take the same– I want to look at each buyer like I look at them trying to get the deal done. If they just want to get a check, that’s all they’re going to do just blah, blah, blah and get paid.
John: You offer them an incentive, it gets them in the business and looking at it at the way that they should and the way you do.
Audience: Good deal. What do you think was the tipping point? Was it…
John: I got a few deals under contract but oh, the tipping point was just keep going. I mean I learned from experience what to do and what not to do. Luckily I had good people…
Audience: Become more comfortable with leads
John: Right, right, right, right, right, right. Correct. And learning that– just having tough skin. This business is not for anybody, not for anybody that’s soft or anybody just looking for easy way out. It’s– you have to be tough and you have to go at it everyday and respect it as your own business. Nobody is going to hand you a check. You got to go get your own check.
Dave Dinkel: But the benefits are enormous as you can see.
Dave Dinkel: So one question I haven’t really heard asked is how long do you think the average deal takes and what’s the longest it has been? Once you put it under contract?
John: Once I put a property under contract a couple of weeks ago and it is closing Monday so it took about two weeks to close.
Dave Dinkel: Well, that’s a good tight one.
John: That’s a great one.
Dave Dinkel: Yeah.
John: I had one that, I had it– when I got it, I think it was one of my first deals that I got probably like in March or something like that and it didn’t close till like June. So I had to get liens mitigated through the city like…
Dave Dinkel: How much did you make on it? Do you remember?
John: I think we made like 19 or something like that.
Dave Dinkel: OK, if I ask you how many hours did you actually have invested in that particular property even though it took four months or whatever.
John: Not that long. Not that…
Dave Dinkel: Three?
Dave Dinkel: Yeah. OK. All right. We thank you, as always. All right, let him go. Let him get back to work.
John: All right.
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