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150 Deals at Age 22 by Putting Relationships Over Profit with Cole Ruud-Johnson

The BiggerPockets Podcast
58 min read
150 Deals at Age 22 by Putting Relationships Over Profit with Cole Ruud-Johnson

It seems like young real estate investors get more and more impressive every week. Today we talk with Cole Ruud-Johnson, a wholesaler and flipper out of the Seattle area. The impressive part? He’s 22 years old and has done 150+ deals to date! Even at 22, Cole’s journey wasn’t a linear path, he had lots of ups and downs to get him to the level of success he achieves now.

Cole tried to be a real estate agent at 18, but wasn’t getting the hang of it. After failing at a couple of real estate brokerages, he entered into a third and learned how they were creating their own inventory via cold calling. He decided he’d give this a try, and partnered up with his friend to cold call for deals.

After three months, an agent brought them their first off-market deal. This first deal alone netted them $105,000. Yes, you read that right, six-figures on ONE wholesale deal. This wasn’t enough for Cole, he knew he had to get back out there and work on getting his next deal.

Cole’s small business grew to a small empire, but over time this pushed him into a massive burn out. He had to make some BIG changes in his business, many of which even business veterans wouldn’t be comfortable doing.

Now he’s here with us on the podcast, talking through his lean team, his deals, his systems, and how new wholesalers can start getting deals. Cole even throws in the script he uses to get wholesale deals over the phone, so if you’re thinking about getting off-market deals or starting your wholesaling journey, this is the episode for you!

Click here to listen on Apple Podcasts.

Listen to the Podcast Here

Read the Transcript Here

Brandon:
This is The BiggerPockets Podcast, show 444.

Cole:
I think if you really want to be in real estate and make it work and you’re showing up every single day with, like we were talking about, persistent consistent action, something is going to happen. I think the main thing that separates people from the others, there’s mindsets behind that, there’s tangible things you can do. But if you’re in the game long enough, whether you’re an agent or you’re trying to flip, or do development, or you’re doing buy and hold stuff, something is going to happen.

Speaker 3:
You’re listening to BiggerPockets Radio. Simplifying real estate for investors large and small. If you’re here looking to learn about real estate adjusting without all the hype, you’re in the right place. Stay tuned and be sure to join the millions of others who have benefited from Biggerpockets.com. Your home for real estate investing online.

Brandon:
What’s going on everyone? It’s Brandon Turner, host of The BiggerPockets Podcast, here in the Sea Shed. Not She-Shed, somebody asked me the other day, “Why do you call it a She-Shed?” It’s a Sea Shed with my buddy, Mr. David Greene. David Greene, what’s up, man?

David:
What’s going on? We’ve got some magic today coming out of said shed.

Brandon:
We do have some magic out of said shed today. Today’s show is phenomenal. We interview a guest named Cole Ruud. Ruud. Let me say that again, shoot. I messed it up.

David:
No, leave it like that.

Brandon:
Oh, man.

David:
Because it’ll make the outro make more sense.

Brandon:
It will make the outro make more sense. All right, well. Cole Ruud is our guest today here in the Sea Shed, and he is a good friend of mine, a phenomenal real estate investor, and … 22? 23? 25? 27? 22. The kids like 22. He is killing it in his real estate business, though. You guys are going to love that. You’re going to learn about all the mindset stuff on how he does it, but equally importantly, the tactical, like how he does it. What are the things he’s doing? What does he say on the phone? How does he talk to sellers? What works, what doesn’t work, where he gets his lists from. All that stuff to unpack all that today.
It’s pretty awesome. But before we get to that, let’s get to today’s quick tip.

David:
Quick tip!

Brandon:
Here is my quick tip for everyone today. Sometimes on these shows we talk about terms that you might not know. For example, today’s show we talk a lot about wholesaling. You might be like, “What’s wholesaling? I don’t know what that is!” Then just not look it up. Here’s a very simple quick tip. If you go to BiggerPockets, there’s a little magnifying glass at the top. You go up there and you click on it, and then you type in any real estate term whatsoever. Then hit enter, and you will get … It’s basically our search results, categorized by forum, blog, podcast, webinar, blah blah blah blah blah. People, companies.
You can really dig in on any topic. Don’t let, “I don’t understand what that is,” stop you. By the way, wholesaling is basically where you find good deals, and then you instead of doing the work yourself, you find somebody else who wants that good deal, and you make kind of a fee for kind of being the middleman. That’s probably not a great explanation, but that’ll give you the idea, is you’re basically making money without actually having to do the flip. You’re finding the deal, you’re getting paid to find deals.
There are ways to do it that work in every state, there’s ways that don’t work in every state. There’s legal ways, illegal ways, so make sure if you’re going to do wholesaling, do your homework. But anyway, the quick tip is to use BiggerPockets to learn stuff, it’s really good.

David:
Yeah. Cole’s 22 going on 52, so on today’s show, we cover how to start a business, how to get out of working in the business, so working on your business basically, converting everything into different steps that you can manage people. We talk about adding different streams of income to something that you’re already doing well, and probably most importantly the mindset behind how successful people operate, which as today’s guest shows, they work even at a young age.

Brandon:
Yeah. Such a good show. You guys are going to love it. All right, I think that’s it. I think it’s time to start our interview that we just did here, live in Maui in the Sea Shed with Cole. Without further ado, let’s bring him in.
Cole, welcome to the BiggerPockets podcast, man. Good to have you in the shed.

Cole:
Thanks for having me on, man. It’s good to be in person out in Maui.

Brandon:
Yeah. So tell us a little bit about how you got into the wide world of real estate investing. Actually, wait, before you do that. How old are you?

Cole:
I’m 22 and three quarters. I’m turning 23 in May.

Brandon:
Okay. That’s a super young age, and give us a quick … Before how you got into real estate, give us a quick understanding, what do you do? What’s your thing? I guess I want to set the table, because I want people to know what you have right now, kind of what your business looks like, and then we’ll go into how you got into that.

Cole:
How in depth do you want me to go there?

Brandon:
Just give us a broad overview of your current business.

Cole:
A broad overview right now, we have an off-market direct-to-seller company, and rent in Washington. We have an office, 2000 square feet, sales managers, guys, a whole team. Right now we’re doing 90% wholesale, so direct-to-seller, selling those deals to other investors, and then 10% flips. We have three flips going on right now, so transitioning into that slowly, but still primarily wholesale.

Brandon:
Okay. Then tell us approximately how much volume in a year do you do? Like in the last year, what have you done? What kind of revenue numbers did you see this year?

Cole:
Yeah, yeah. In the past year, we do about six to eight transactions a month in the Seattle area. Before that, we were in four different states, that number was higher, but right now we’re back down to six to eight, and just comfy in the three main counties around Seattle.

Brandon:
That’s great.

Cole:
Yeah, so whatever that comes out to. 70, 80-ish deals a year?

Brandon:
Wow, okay. That’s crazy. I did I think three whole sales once in a five year period, and that was … I was impressed with myself. Let’s go into how you got started. How’d you get into real estate? I mean, you’re a young guy with a business that most people would be jealous of [inaudible 00:05:21], so how you’d get it?

Cole:
Yeah. Growing up, I grew up in a real estate family. My great-grandma started a brokerage called Ruud Realty, which is one of the first brokerages in all of Seattle.

Brandon:
Rude? Like R-U-D-E?

Cole:
R-U-U-D, that’s my last name.

Brandon:
Okay. I was like …

Cole:
That’s how it’s pronounced, though, R-U-D-E.

Brandon:
I thought it was Rudd. I’ve been pronouncing your name wrong for like …

Cole:
Nope, nope. No, just Ruud.

Brandon:
We’ve hung out a number of times. Did we play poker together?

Cole:
Yeah, yeah.

Brandon:
Yeah, and I …

Cole:
Until 3:00 AM one night, yeah.

Brandon:
Yeah, exactly, and I called you Rudd.

Cole:
A lot of times I just let it slide, because it just … Even when I tell people, the next time it’s back to Rudd.

David:
He pronounces a lot of words wrong. Don’t feel bad. Rough instead of roof, magazine instead of magazine.

Brandon:
I don’t pronounce anything wrong.

David:
He’s got a Maui accent now, so yeah.

Brandon:
Exactly, right.

Cole:
She was kind of the … She launched my whole family into real estate. Then my grandparents, they did a lot of commercial stuff in Seattle. They owned a bunch of buildings. She was an agent. Then my mom got into the business, she became an agent, and my brother followed her. Growing up, any time I wanted to make money or be involved at all, I was going with her to open houses, putting signs out for the open houses. I was staging, just because we had a staging company on the side, so I was moving furniture around. I was always around the business in some way.
Transitioning to when I actually wanted to make money, I naturally got my real estate license at 18, 19. When I left school, after a semester, and I absolutely hated, hated, hated being a residential real estate agent. Switched brokerages three times, because of course it was the brokerage that was the problem, it was not me.

Brandon:
Always the brokerage, of course.

Cole:
I showed up to every sales meeting.

Brandon:
That was everyone else’s fault.

Cole:
Yeah, it was not my fault. Showed up to every sales meeting. I sat on Facebook a couple of hours a day, scrolled through a few posts out there, cold called my sphere, which at 18 or 19, they tell you to cold call your sphere, it’s like …

David:
All your friends. “So, you’re graduating high school soon, huh? How’s that looking? You want to buy a house?”

Cole:
Yeah. So it was brutal. I mean, I was making a couple hundred bucks a month just doing showings for other agents, yeah. Then the third brokerage I moved to was an off-market company, where they were doing … Every Tuesday night they’d bring a bunch of investors in, and they would show them what was going to be coming to auction that week, and they pretty much didn’t go to the auction. That’s how they were running their company.
I learned that side of the business and how they were creating their own inventory, and I’m like, “That seems like something I can get behind.” Because people don’t care what my age is then. 18, 19, 20. Rather than in Seattle, selling a million-dollar house, they’re like, something’s going on here.
That’s when I learned it, and then a couple of nights later, when I learned about wholesaling, me and a buddy were at Applebee’s. My origin story kind of started at Applebee’s.

Brandon:
Half-price appetizers.

Cole:
We shared half-price appetizers, wings.

Brandon:
So good. That’s how I survived college. That was it, right there.

Cole:
We were on Instagram, and these other two young guys in the area had posted this $40,000 check on their Instagram. I was like, “What are these guys doing? If they can do it, we can do it,” kind of thing. Literally the next day, he came to my parents’ house, because I was living with my parents at the time, up in pretty much their attic. We started cold-calling. Then for the next three months before we got a deal, we were just sitting up in that room cold calling every single day.

Brandon:
That’s cool. Why did … I guess, why cold call? Most people don’t jump to cold calling as the first thing. Usually they’re like, “Well, I’m going to go out and drive,” or something like that.

Cole:
Yeah, so we did that. We actually drove around the most expensive neighborhoods of Bellevue and Seattle, $3 to $6 million homes. We’re like, “We’re driving for dollars.” I don’t know, I always want to feel like I’m doing something, so I had no idea what I was doing, but I just was like, “I’m going to put one foot in front of the other.” We were at the same time driving for dollars, going to all the meet-ups. I was Facebook messaging all the guys in the area. That’s what you do, is to ask them to go to coffee.

Brandon:
Yeah.

Cole:
The normal process. Then landed on cold calling, because I don’t know, it just felt we were getting the most traction on that out of anything, yeah.

Brandon:
That’s cool.

David:
Let’s pull a couple things out of your story here that we can highlight for listeners, and then we’ll move on to the next piece. First thing, very impressive. You realized early on, “This is not what I want. This does not match up with where my passion is, what my identity is.” You didn’t force that square peg through the round hole, like we were talking about, that Rosie was doing the other day. You adapted, okay. “I don’t like how this feels, this is not my identity. I’m moving on.”
Which pushed you into cold calling, and I’m going to assume that was because your age group was not in a point they could help you get to the goals you wanted to get to. Calling 18, 19 year olds in your sphere, looking for people to buy or sell a house, was an uphill battle. But cold calling, you’re calling the people that can do what you want to do, and I just want to highlight … The story you’re about to tell us, which is incredible, started because instead of saying, “I guess I can’t sell houses, I’m only 19 years old, what am I going to do?” You said, “Well, what can I do?” Which led to this awesome story that everybody else can follow in that same path if they take that same approach.

Cole:
Yeah. Backtracking a little bit on that point, I think that came from, I grew up a basketball player. I remember I was in 7th grade, I came home one day…

David:
I love it, man.

Cole:
I come home one day …

David:
I just got the feels.

Cole:
I came home one day from 7th grade, from middle school, and I was like, I want to be the best basketball player, I want to play college basketball. My parents didn’t give me one of the, “Oh, yeah, you’ll be fine, you’re really good, it might happen.” It was like, “Okay, we’ll have a trainer show up here tomorrow to pick you up.” And they did, and the next five, six years, every single day I was working out, and I got a chance to play in college. I didn’t actually play in college but I got the chance.
That was so ingrained in me, to … As long as I show up and put one foot in front of the other and do something every single day, something’s going to come out of it. Even though the residential stuff wasn’t working for me, I knew, it was just so ingrained in me at that point that if I show up the next day, try something else, eventually something is going to shake. I’m going to meet a person, I’m going to go to the right event, there’s going to be one seller that wants to help me out. And it happened, so yeah.
I think the cold calling was just a piece there, but it was really the mindset behind that, that I think it was the biggest cue to not just … Okay, real estate’s not for me, moving on.

David:
Yeah. I have a very similar story, where basketball literally created the foundation of, I can.

Cole:
Yeah.

David:
I didn’t grow up believing that I could do anything. Basketball was the first thing in my life that I worked at and got better, and I saw the relationship between action and working, and the result that I wanted. Just like you, I got super close. I actually didn’t play in college, I broke my ankle when I was getting ready to go play there. I actually am glad that happened, because I think that created a fuel that I used to do all the other stuff that I did.
But I wish everyone else could have an experience like that, where you just see … Trying to take it all out in one shot is why people get discouraged. But just this understanding that if I just keep moving that ball forward, if I keep putting myself in the right situation, that turnover’s coming my way. I’m going to be the one leading the fast break. I’m going to get better. At 22 years old, the fact that you’ve figured that out young. I mean, credit to your parents and credit to you for …

Cole:
The funny part is, I wasn’t that good for most of the time. My freshman year of high school, I was on the C team, wasn’t that great, but I was still like, every day. I was working out every single day, crazy. Three, four, five hours a day. I wasn’t going to dance, I wasn’t doing anything besides playing basketball. Sophomore year wasn’t that great, junior year was on varsity finally but wasn’t that great. Then senior year, MVP in everything. It just all clicked one year.
I knew … That’s kind of how my real estate journey’s been, too. I had a few years of struggle, and then it kind of all came together.

Brandon:
Well what you did is, you went all in on something, right? You went all in on basketball, and you went all in on real estate. It just shows what happens when somebody focuses, and says … We kind of laughed about earlier, driving for dollars, and these multi million dollar neighborhoods that you’re probably not going to buy anything. But it doesn’t matter. You were doing something, and you tried something else, and you were doing something.
We talk a lot about focus here on the podcast. David and I will talk a ton about how you need to pick your bridge. But in the beginning, you probably don’t know what your bridge is. A lot of people have no idea what bridge is going to get them to success island, so by just trying this and trying this … You were like, “Oh, I didn’t like the agent thing so I’m going to try this thing, and oh, I didn’t like the driving for … Definitely wasn’t working. Oh, cold calling is working good.”
That’s when you lean in and you go to that bridge so hard. I tried basketball, and then I leaned into it and I kept going. That’s awesome.

Cole:
Yeah. What you were saying, I think what that developed in me is, I didn’t really care about the how with stuff like basketball. I didn’t know how I was going to score in a game, or how it was all going to shake out. The same thing in real estate, whether it’s cold calling or whatever is working, it’s not worrying about the how. It’s just picking a direction to go, and showing up every single day. The how usually …
If I look back at my life the past three years to sitting here right now, the how does not make sense. It does not make sense.

David:
Well, you also are hitting on a point Brandon and I have been talking about a lot, which is the pivot, okay? You did everything you had, you threw it into basketball. You had a goal, you wanted to play in college. It didn’t happen, but you just shifted all that momentum into real estate, which is why now you’re crushing it. At 22 years old, this is incredibly impressive what you’ve put together. That was largely because this momentum you built, your work ethic, your belief system, the habits you had, were formed from basketball. They translated pretty well into business, where it doesn’t matter if you’re not tall enough or fast enough or strong enough.
I always tell people in business, your athleticism is your mind. Your talent is your mind, and all of us have complete control over how that works out. Like we just talked with Jim Kwik yesterday, explaining how to program your mind like your body. As people are listening, I just want them to hear, that’s the key. You start, you build momentum, and if it doesn’t go the way you wanted, you shift that momentum into something else, but you don’t completely … You don’t wait until you know exactly what you want to do before you ever start moving. Thanks for that little segue and background.

Cole:
Yeah.

David:
Let’s kind of get into where you took it after you …

Cole:
Cold called?

David:
Yeah, the cold calling business.

Cole:
Yeah, so we were cold calling every single day for three months, and finally … Our first deal didn’t even come from that, though. An agent brought us this opportunity, because I was letting people know what I was doing, and it was this crazy … I’ve never done a deal like this. It was in Seattle, and the Sunset Hill, Ballard area, which is … You don’t do a ton of wholesale deals there. The deal was brought to us, like 800,000 purchase price, and the one buyer we had actually met that we knew was buying, that we had a good relationship with, we sold him on this like, “Hey, man, if you build up two stories and you build a bridge over to an ADU on top of the garage, might be something here.”
He bought it from us, and that first check was 105 grand.

Brandon:
No way!

Cole:
Our first deal ever was 105 grand, yeah.

Brandon:
105 on the first deal, that’s amazing.

Cole:
Yeah. We had to pay a few people out, but we took home a good chunk of that.

Brandon:
That was an MLS listed property, or what was …

Cole:
No, no no, it was off market.

Brandon:
Okay. So the agent found it off market and brought it to you, is that how that … wow.

Cole:
Yeah.

Brandon:
That’s crazy.

Cole:
How my mind works is, my mind immediately went to … I don’t know why it went to, “Crap, yeah, I have this check, but what if I don’t do another deal?” Right away I was like, “How can I turn this thing into a repeatable model, where we can keep doing deals?”

Brandon:
In other words, how do you make a business out of this versus, “I got a check.” Which is a huge mental change there.

Cole:
Exactly. I don’t know why my mind went right to there.

Brandon:
Yeah, that’s awesome.

Cole:
We didn’t spend any of that money, like none of it. I didn’t get a car at the time, clothes, nothing. Stayed at my parents’ house, and next day we were cold calling again. It was actually another three months until we got the next deal from cold calling, or it was our first cold calling deal. Six months of cold calling before we got an actual cold call deal. Then from there, I hired another person to cold call, another person to cold call.
When I was 19, after we were three deals in, we signed a three-year personal guarantee lease on an office, and rented and just went all in.

Brandon:
Yeah, went all in.

Cole:
Then we had to figure it out at that point, because we had some overhead. So we started filling that office with just buddies that wanted to try out real estate and do sales, and we had like seven or eight guys in there eventually. We were doing random markets, we were doing deals in Spokane, St. Louis, Fresno, California, Sacramento, California. All over Washington. Weren’t making a ton of money at the time, because we weren’t tracking anything. It was chaos.

Brandon:
You weren’t getting $105,000 wholesale fees every other day?

Cole:
No, no no no. Most of them were 20, 25. We’d get a 60 here and there, but with eight people in an office, it was chaos. I learned so much this first year after that, but it was absolute chaos.

David:
You mind if I jump this and take it a different direction we normally do?

Cole:
Absolutely.

David:
We always cover the big picture stuff, like how you did it, which we want to keep doing. I want to dive in for a second and have you talk a little bit about how you developed your cold call skills. It’s not just a matter of, “I make 100 phone calls, I’m going to get X amount.” It averages into that, but it’s just like if I shoot 100 shots, if you suck at shooting you’re not making as many, right? Part of success is getting better at shooting because you shoot so much.
For people that want to cold call, what advice can you give that you learned about how to do it better, how to build rapport, how to recognize motivation, that type of stuff?

Cole:
Yeah. I think the tactical stuff with rapport and motivation is huge, but I think before you get into that, it’s sticking with it for a long enough time for it to pan out.

Brandon:
To get good at it, yeah.

Cole:
Because no matter how good you are at rapport, and no matter-

David:
Yeah, to get good at it.

Cole:
If you have the best grip, best rapport, best everything, if you only do it for two months and then you’re like, “Oh, I’m going to go to the next shiny cool marketing thing that I heard on a podcast,” it’s not going to work. First and foremost stick with it, but then … I mean, for us it’s really just having quality conversations. We train our cold callers, when they get on the phone with someone. When I was cold calling, to really do the best they can, to adapt to that culture and find out what the real reason that people are selling is.
Because a lot of cold call centers and people who are cold calling to start, they don’t care about the other person on the other end of the phone, it’s just … That’s a check, it’s a dollar sign, not a person. They skip over a lot of deals that are there. Most people aren’t going to come out and say, “Hey, my dad passed away, I just inherited the house,” or whatever the situation may be. Really, not being in a rush to just get a quick number and move on. We really take the time to get to know … We try to get to know every single person. It’s harder at scale, but especially starting out, we really wanted to get to know every single person we were talking to, without spending 30 minutes and wasting all of our time.

Brandon:
What have you found has worked? I want to dive into cold calling a little bit.

Cole:
Absolutely.

Brandon:
What works? What doesn’t work? How has it changed over the last couple of years, or has it? Because yeah, like David said, it’s not just the numbers game, you make 100 phone calls you’re going to get it. There’s things that you’re doing right now that are better.
First, why don’t we start with the, who are you calling? Let’s start there.

Cole:
Yeah. Right now, I’ll kind of put that in two answers, because versus where we are now, versus …

Brandon:
Yeah, yeah yeah.

Cole:
Yeah. Right now we call pretty much everyone, and obviously-

Brandon:
Pick up the phone book and just start dialing?

Cole:
No, pretty much yeah, we buy in the whole county, and we call pretty much everyone.

Brandon:
Do you look for people who have equity, you buy lists of equity? Or do you-

Cole:
Right now, for how many leads we need right now, we don’t.

Brandon:
Okay, you just call.

Cole:
Yeah, we just call. When we were getting started, absolutely. We niched down into absentee lists and higher equity, longer ownership, all that kind of stuff. But I think the biggest thing with cold calling is, it’s a separate business than a real estate business. Whether you’re doing it yourself or you’re having someone do it for you, it’s a whole other business. You have to track KPIs in that business, you have to look under the hood all the time, making sure people are performing, that they’re being managed. Otherwise you’re going to be throwing money in a garbage can.
People look at it as just, “Oh, no, that’s just my marketing,” but no. It’s a marketing business, especially if you’re wholesaling or flipping, going direct to seller. Your marketing side of your business is a business, and your acquisitions, dispositions … Your acquisitions is a business, it’s the sales team, and your dispositions is a business in itself, with networking and building a buyers’ list.

David:
That’s such a good point to highlight. When Brandon and I give webinars for BiggerPockets, we have to talk about the LAPS funnel, which is just four steps to getting something in contract. You’ve got leads, then you analyze them, then you pursue them, then you find success. Those first three steps, the L, the A, and the P, actually involve completely different skillsets, completely different resources. You should look at each of those like they’re a different business. How do I generate leads? Who analyzes them and how do they do it? Then what’s our position when we’re pursuing it?
When someone looks at this like it’s a job, and they treat everything the same, they typically aren’t going to be nearly as successful. I really like that you’re highlighting … You really want to take this whole process, pick out the parts either that you’re the best at, that you want to learn, or that you’re the worst at that you want to leverage off, find other people that are better at doing those things and view it from that perspective. Is that similar to what you found as you’re running your company?

Cole:
Absolutely, yeah. The biggest growth for us came when we really sectioned off every piece of our company, and put a really good leader in charge of every single thing. It was hard to let go of that, because naturally I feel like I can do everything better than everyone else, so if it was up to me I’d still be cold calling and selling stuff and selling it to our buyers. We have a manager of our cold callers who is really really … We trust the guy, we love him. That’s his section of the company. From a bird’s eye view I’m always looking at numbers in that section, but besides that I don’t get involved too much as long as we’re meeting our numbers.
Sales team, we have a sales manager who is my partner in the business, Mike, and that’s his thing. It’s like his baby, that section of the company. Then I’m on the dispositions system side. When we were scrambled and everyone was kind of doing everything, it was chaos, we weren’t making money. But when I stepped out and said, “Okay, how can I make everything just funnel up to me at a bird’s eye overview, but we have someone who cares about the business in charge of every little piece?” That’s when we really took off.

David:
Brandon, I’m curious. Did you have a similar experience with Open Door Capital, splitting things up like that?

Brandon:
Yeah, I mean exactly. I feel like that’s … Everything that you just explained in the last five minutes, I want people to rewind this, because that last five minutes might be the most important five minutes of any podcast we’ve ever done. What I mean by that is, for people who want to scale. That is the key to scaling, is you run your business like a business, you have your KPIs, you know what each person is doing. Even if it’s at the beginning, it could be all you. Think, now I’m an acquisitions person, now I’m on dispositions.
Then you can put people in there as you need to. The great thing about real estate, especially things like wholesaling and flipping, is that you make money back pretty quickly, so that you can afford to hire people to do this, because the business generates the money for these people. In other words, you became a leader. A word that I use a lot, and we talked about this with my coach Jason Drees when he was on the podcast back a few months ago, is I’d use the word general in my head. I’m a general in a war. I’m not a cadet anymore, I’m not a lieutenant, I’m not down on the battlefield most of the time, unless they overrun the gates, they’re now in my compound. Fine, I’m going to grab a gun, I’m going to go out there and shoot.
Just like you, you look at the numbers at a high level. If there was a problem with your calls coming in, I guarantee you’d jump in there and start figuring it out.

Cole:
Yeah. It’s a hard balance, to know when to jump in and when not to. I see stuff every day that happens and I’m like, “I want to, I can do that better. I can fix that right now.”

David:
Yeah. When we interviewed Jocko on the podcast, and in his book Extreme Ownership he talks about this lesson he learned, where he was on a team of operators that were … They were infiltrating a boat or something. They were all looking down the scopes of their guns, looking for threats, which is what every one of us does when we’re scared. We focus on what can hurt us. It makes sense, it’s a survival technique, right?

Cole:
Tunnel vision.

David:
Yes, 100%. They all get off the boat, they’re all looking down their scopes. They’re looking for the enemy. It was a training exercise. He realized that no one knew how to direct any of the people where to go. Because when you’re just looking for a threat, you don’t understand the big picture, or how to maneuver yourself to be in a better position to even address that threat.
He took his eyes off of the scope, he took a couple of steps backwards. Now he can see all the troops that are on the field. They’re looking for the threats, he’s trusting them, and he recognized, “Oh, we’re going the wrong way. We need half of you to go this way, and half.” He makes the call, everyone moves into it, and it was a turning point in his life where he understood, when you are doing the job, you can’t do what he recognized, which was lead the people. What you’re describing is every leader’s problem, is that they see somebody miss a shot and they go, “Oh, I better be the one to get in there and get behind a gun, we can’t have those misses.”
Then you lose having an entire platoon of people that you’re moving into another position. I think you’re right, there’s that art of … Can the business survive if we’re fumbling the ball this often, as people are learning? Do I have to get in there and do it? But the ultimate goal is to get yourself in the position of general, just like Brandon said. Because you see how all the pieces fit. You recognize the resources. Maybe I’ve got to take this person out of dispositions and put him into acquisitions, because he’ll be better there.
For everyone who’s going through that same struggle, it’s normal. You’re not bipolar, this is what all of us have to go through. It’s really hard, but the longer you do it and the more steps of faith you take, it does get easier.

Cole:
Yeah. I think another way to summarize that is, I heard it one time as … As you get spread more and more thin, would you rather have you at 40, 50, 60, 70% doing a task because you’re so spread thing, versus someone at 80%? They might not be able to do it as good as you if that’s the only thing you’re doing, but they’re going to do it. I think I actually heard that at the Mastermind for the first time, someone said that.

Brandon:
Oh, really?

Cole:
That finally clicked, because I was not doing any of the stuff then. I was doing everything. That’s the first time it clicked, and then we did the [inaudible 00:25:42] vision, that kind of saw my business from a bird’s eye overview for the first time. Then it rolls into a whole other … That journey to be able to actually do that is a whole other piece.

Brandon:
Yeah, that’s cool. Yeah, what Cole is talking about here is, we did a Mastermind thing, we called it the Maui Mastermind. Tarl and I led it, about a year and a half ago now. Yeah, everybody in that group is still close with each other and friends. It was a great, crazy good time.

Cole:
I’ve done a deal, or done a business transaction with about 80% of the people from that.

Brandon:
That’s crazy. Yeah, it’s a good indication … I don’t want to dive into that too deep here, but if you’re not getting together, people are not getting together with people in their world. In the real estate world, whether it’s in your area, or whether you go somewhere, go to a conference. I know things have been difficult for the last year here, but just as we get back in the world again, just remember there’s such value in that networking and connecting deeply with people. It was just phenomenal.
Anyway, so I want to go back to cold calling a little bit more here. Let’s talk, when you’re calling somebody, what do you say? What’s the first … You’ve got the list. Let’s say you’re going to call … Let’s say they’re just starting out, right? Let’s go there. Somebody’s listening to this podcast right now, they’re never done cold calling. What lists should they target, or what would you recommend their first steps for cold calling?

Cole:
Yeah. If I was just today going to … If I was right now starting in real estate and I wanted a deal in the next couple of months from cold calling, I would buy higher equity absentee lists for an area.

Brandon:
Explain what that is.

Cole:
An absentee … Most companies you go online, ListSource or ATTOM Data, most companies online, they’ll give you an absentee filter, which is someone that their mailing address is different than the property address. Fairly simple. Then you want to … They all have criteria, so you want to stack equity on top of that. You don’t want to be marking people with 10, 20, 30% equity. You might if you’re really good at seller financing and stuff, but just starting out, wouldn’t recommend it. Get a 40 plus equity list, and you get a skiptrace and you get phone numbers back.
Then you want to keep it simple at first. Especially as you’re learning the business, you don’t want to have too high level of conversations the first couple of calls, because they’re going to come out off of that and think you don’t know a ton of stuff. Keep it as simple as you can, and leverage other people and real estate agents if questions come up through the process.
But the first call should pretty much be, “Hey, Mr. Seller, this is Cole.” I always tell people if they’re starting in sales, reference another … Say, “Hey, I work for a local company,” so you don’t come off of a, “Hey, I’m a CEO of a real estate company.” Say, “Hey, this is Cole. I work for a local real estate investment company. We buy and sell properties in this area all the time. We have some money set aside for another one this month. Are you open to talking more about potentially selling your property on blah-blah-blah Street?”

Brandon:
It’s a good script.

Cole:
That does two things. It’s a soft opening, and it confirms the information that yeah, they are John Smith and they do own 123 Main Street in Maui.

Brandon:
Yeah. I think people probably overcomplicate this a lot.

Cole:
Absolutely.

Brandon:
They’re just thinking, “Oh, I need my exact script, I need to know exactly what words to say in the right order.” Yes, you should have a list of things you’re trying to get across, right? But how important do you think … I mean, being genuine I think is such an important thing. Because I’ve been cold called many times before, and I can tell, some people are reading off a script, or it’s just completely impersonal. Other people are just like, “Hey!” I got one the other day from a KW, like Keller Williams agency.
Like, “Hey, is this Brandon?” I’m like, “Yeah, it is.” “Hey, this is whatever, I work with Keller Williams down here in Kihei. We just sold a house two blocks from yours, got a really good price for it. Just curious if you wanted to sell at all, if you had any interest.” I was like, “Eh, no, I really like my house right now, but thanks for calling.” I was like, “This was such a nice, genuine person.” They probably had a script of some kind, but she was a normal person and a normal conversation.

Cole:
Yeah. I think so much of it is how you position yourself and reference the seller. If you come in as super, “Ugh, I’ve got to make 10 more cold calls today, because I heard on a podcast if I make 100 this week I might get a lead that might turn into a deal.” Versus sitting down and wanting to have conversations with people. While we’re talking about making it complicated, I think it’s hard not to do that when you get started out, because part of your brain does not want to cold call when you’re getting started out.
You find ways to, “Oh, I’ve got to follow this script, it’s so hard to follow, or they’re going to say no, or no one’s answering.” Those little things I think are huge. To really sit down, take the time, care about who you’re talking to. Yeah, use a script, like kind of what I just went through. Use something like that, but you don’t have to go 100% off it every time.

Brandon:
Yeah.

Cole:
Conversations are going to go where they go.

Brandon:
Yeah. I didn’t do a ton of cold calling ever, because not a big fan of the phone. But I would send out direct mail, and I would take the phone calls, right. When I did, I had a list … I had a piece of paper I kept with me everywhere I went when I was doing this more heavily. Everywhere I’d go, I’d have this piece of paper, a bunch of them in a stack. It was just all the questions I needed to make sure I got. But it wasn’t like a script, like, “Hello. Thank you so much for calling me today.”
It was just like, “How long have you owned the property?” Line. I would just pull out this piece of paper, and I would just … “Oh, on the next one I’ve got to make sure I get that question.” Like, “When did you buy this property?” Then I just find a way to make it natural in that conversation. I had a script, but it wasn’t a script. I had a list, but it wasn’t a script. That seemed to work for me.

Cole:
Yeah. That’s exactly what I would recommend. I wouldn’t call it a script, a guideline.

Brandon:
Yeah, yeah. A framework, maybe? I don’t know.

Cole:
A framework, of how to guide a conversation, is really what you’re looking for. You’re not looking for word for word, otherwise it gets robotic.

David:
Would you agree if somebody’s new, and they’re just nervous as heck, that actually having words they can read is a good way to break into it, until you get a little more comfortable?

Cole:
Yeah, absolutely. That, and understanding that it’s going to suck the first few times you do it.

David:
Oh, yeah. That’s such a …

Cole:
So many people are like, “Dang it, that was not what I thought it was.” But like with anything, the first time I surfed, the last time I was in Maui. It was like, I’ll get it.

Brandon:
That’s what I tell people, it’s-

Cole:
Then you look around, people are like, “Everyone is laughing at me, I suck, I’m on the big surfboard because I’m not good enough to ride the little surfboard.” Everyone goes through the same thing. The first thing I cold called I couldn’t speak English. The same thing first time I spoke on a podcast, I couldn’t talk. It’s the same thing, it’s gradually improving, and giving yourself the freedom to suck.

David:
That’s I think what the secret is. If you walk in with low expectations … I use a snowboarding analogy. I don’t know a human being that ever snowboarded and crushed it the minute they got on a board. It doesn’t happen.

Cole:
They don’t want to go back the next time after the first time.

David:
Yeah. That was me. It was miserable, but the reason I eventually learned how to do it so-so was because I didn’t want to waste that first experience of misery, and say I got nothing out of it. It was so bad I was going to make sure I learned. But if you go in thinking, “I’m supposed to be good at it,” and then when you’re not, you’ll think, “This isn’t for me.” As opposed to, “Well, everyone sucks at this.” It’s impossible to be good at doing this without some practice.
You have to get that feedback. “Oh, that worked. That didn’t work. When I changed my tone I got more engagement.” Brandon, do you mind if I read your quote that you have behind you? I think this is so good for people.

Brandon:
My quote? The one back here?

David:
Yes.

Brandon:
Sure.

David:
For those that struggle with that feeling of, “I don’t want to be laughed at because I was on the big surfboard.” When you compare yourself to the surfers, it is embarrassing that you’re on the big surfboard. What about when you compare yourself to the 99% of people that are on the beach watching? They’re never even got in the ocean, right?
This quote, was it Teddy Roosevelt, I believe? “The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who at best knows in the end the triumph of high achievement and who at worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither knew victory nor defeat.”
It’s such a beautiful quote. I love that you put it up here, I love thinking that all the time. It highlights the big loss is that you never tried. It wasn’t that you tried and fell off the surfboard, or that you didn’t get on the good surfboard.

Brandon:
Yeah.

Cole:
Yeah. I mean, I think people getting started in real estate, other forms of entrepreneurship, they thought there’s no margin for error. I think the reason that I’ve scaled and accelerated so quickly is because I realized, there’s infinite margin of error. I can make as many mistakes as I want, and what’s the consequence? Is I just get a … There’s no one really keeping score. What’s the other word? It’s like a spotlight effect. You think everyone is thinking about you all the time, but everyone is thinking about themselves.

David:
Oh, 100%, yeah.

Cole:
No one cares.

David:
Acknowledging human narcissism is the best thing you could ever do for your business, because they all care about themselves so much more than you.

Cole:
Yeah. That was the biggest thing for me, and what’s helped with that, realizing that there’s infinite upside and it doesn’t matter how long it takes me to get there. I can fall and stumble all I want.

David:
Okay. This is awesome. Now you’ve got this company where you’ve got phone calls, and then acquisitions, and then dispositions. Let’s hear a little about how you’ve scaled that to what it is now.

Cole:
Yeah. It was really … I had a lot of advice from people who had been in the business a long time, and I didn’t listen to any of it. They were all like, more checks is not always better, slow down a little bit. I was like, “No, I’m going to keep hiring and we’re going to go to every market in the world. We’re going to wholesale from Washington to Australia.” We had 10, 12 guys in the office and crazy overhead. We were spending 40 to 60 grand a month on marketing at one point, across cold calling and mail and everything.
We got to the point where I had a bad burnout a year and a half ago, because I realized, if I’m going to do all this work to bring home what I’m bringing home, I might as well just go get a job. At that point it clicked, I’m like, this is what everyone’s been telling me. I just went to a Mastermind, and I was told this stuff, and it’s happening.
From there I’m like, “Okay, we’re going to redo this, we’re going to keep our fundamentals and our foundation but build it up the right way.” Because I always liked the quote, I forget who it is. It was talking about, you can’t build anything good on an unstable foundation. Our foundation, I had to go back down to the ground and patch holes, pretty much, before I built back up. That looked like pretty much clearing house. We got all the way down to me and my new business partner, because me and my other business partner had separated, so we got back down to two people, and we were still doing deals and making it happen.
Then the right way, putting KPIs in place, making sure that we were actually taking home money at the end of the month, and then somewhat enjoying what we were doing. We started putting the pieces back together really really slowly and carefully. Then what our operation looks like now is, we have a sales manager. We have a marketing management team. We have me, I still run dispositions, just because I love doing it, and I like having a challenge for me to wake up and do. Then a transactions manager.
It’s really simplified. Like what I was talking about before, we have everything segmented, whereas before-

David:
Yeah. You’ve got your lieutenants in place.

Cole:
Yes. Versus before, it was 12 guys in an office, running … It was like a frat house. Real estate frat house, is what it was. We literally had something called Wine Wednesday, where people would bring in bottles of wine on Wednesday mornings. Yeah, and it was …

Brandon:
Sounds like a frat house.

Cole:
It was a mess. But through that, learned, and now my life, it’s like day and … I’m glad I went through that, because I know I’m never going in that direction again.

David:
Yeah. But that’s the pivot, right? You never would have got to the point where you recognized, “I need to rebuild,” if you wouldn’t have started building. It’s very similar for me, 2020 was that year for me, where I had to go back and I had to say, “Okay, the way I’m doing this is not going to get me where I want. It will get me forward, but not at the pace or the life that I want to have.”
Can you share a little bit about what that experience was like? Because it takes some faith, when you step away from knowing, “I can take the shot,” to, “I’ve got to trust other people to …” You’re probably making less money when you stop pushing forward and go back to rebuild it, so that you can make more money later, and that’s always scary because you don’t know if it’s going to work.

Cole:
I think what did it for me is, I was seeing so many of my personal problems become business problems. The stuff that was happening in my business was … When I sat back and reflected, it was the same problems I was having in my personal life, with not trusting people and not wanting to let go of anything, or have hard conversations. I realized that I can fix this both ways at the same time. It really came with just absolute trust, and willing to accept the consequences of that and learn from it.
Before, my previous partnership, we’d be micromanaging each other. Like, “Hey, you left the office at 3:50 today, I was here till 5:30,” all that kind of stuff. Versus now, it’s, he’s responsible for what he’s responsible for. We talk and we check in with each other. But it’s that absolute, almost … Not blind trust, because we have stuff, KPIs we look at and stuff. But trust enough where I think you have my best interest, I have your best interest, and then learning from mistakes through that process. That’s the biggest thing.

David:
Do you have a system in place for having those difficult conversations?

Cole:
We talk once a week. We have a scheduled time for an hour where we sit down and everything that’s on our mind. I think the biggest thing that’s hurt me in the past with business partnerships is letting stuff brew underneath the surface for weeks and months.

David:
Yes.

Brandon:
Yes.

Cole:
Where little things … I was doing the same thing in my personal life, with family and friends. Instead of that, putting guidelines in place to hey, when something comes up, let’s talk about it on Monday morning. Whatever it is, so that it doesn’t brew and … I’ve found that when I’m getting all that stuff out, I’m so much more productive too at the same time.

Brandon:
Can I actually ask David a question here? David, you do something … Because on that point, it’s so good, not letting yourself brew. Now David, you do something I’ve never known anybody else to do, is you have a performance coach every single week meet with your real estate team. Can you just … That’s right, right? Can you talk a little about that?

David:
Yeah, and that’s what’s so impressive about the fact you’ve figured this out at 22. I’m a little jealous, because at 22 I was nowhere close to being able to do any of this. But what we realize is those difficult conversations have to happen. Otherwise resentment forms, and we were basically being poisoned by different people on the team having resentment for different reasons. Not only do they have to happen, you have to have a GPS check-in, right? You could be going the wrong way, and if you don’t meet with everybody, that’s when you get signal again and your GPS says, hey, you missed that turn, you’ve got to go back around.
You can go six months the wrong direction if you don’t ever have these check-ins. We’ve sort of combined it all together, where once a week my real estate team, my mortgage team and my operations team, I do three of these meetings, all get on a Zoom call with our performance coach, who is basically there … He’s a psychologist to mediate that, so that it doesn’t get out of hand. People don’t get nasty, they can’t take it personal. It’s kind of like a relationship counselor for the business, like if you and Heather go to a relationship counselor to discuss your marriage. You’re not screaming at each other and bringing up hurtful things when there’s a third party right there that’s going to call you out on it.
That has been tremendous. It is expensive, that’s what everyone says, is, “How could you possibly pay that much money?” It’s another one of those steps of faith. I know if we meet weekly, we discuss what’s causing the resentment, we bring it to the surface so it’s not me versus them. It’s really everybody on the team is all in agreement, we’re committing to this is what we’re going to do. Then it will turn into more revenue later, and I think that’s part of why we’ve had so much growth.
I would never, ever, ever try to run a business without that method. It’s sort of like, you mentioned your business problems and your personal problems were similar. I was about to ask you, do you have a coach? Because they’re so good with this.

Cole:
I have a lot of … That’s another thing that I wanted to talk about, is how many people I’ve surrounded myself with that I would call mentors and coaches, in some way. That’s been the biggest reason that I am where I am. The hardest thing about that, I didn’t hire a coach at first, when I got into real estate. I didn’t have a performance coach, or I didn’t have a business coach. But I did have people in real estate that had been around for a while, that I had added enough value to where it developed into a friendship and a mentorship, where I could pretty much take any situation and call them any time of day and say, “Here’s what’s going on.”
It just accelerated me night and day. Now where I am right now, I do have a business coach, and a personal coach. I have like three or four coaches that I pay, just because I found every time I do that and I commit more money to myself, I never regret it. Yeah, and that’s where I actually learned about that whole meet once a week, get everything off-

David:
From your coach?

Cole:
Yeah, it wasn’t like randomly one night where I was like, “I think weekly meetings would be …” I can’t take credit for that. But another thing it’s done is, we also have amazing ideas that come out of those sessions that we wouldn’t have had. Because when we’re laying all of our issues on the table at the same time, and seeing all of that, and we put our brains together, we can plug holes faster. It’s a pretty cool thing to see.

Brandon:
That’s cool. How many hours a week do you work right now, would you say?

Cole:
Oh man. This week in Maui?

Brandon:
That’s a bad example.

Cole:
Probably 10 to 20 active, focused hours on the computer. I mean, the rest is phone calls and emails, where I’m needed. Because I switched to more … I read the book Deep Work.

Brandon:
Oh, yeah yeah.

Cole:
I kind of switched to that model, where I sit down in the morning and I give myself three to five big things. For two to three hours I lock in, try to put my phone away, sit there and knock everything out. Then … Because I was bad, when I first got started working, just because I felt good to work and I felt like I was in motion. But unlearning that and really sitting down, getting my work done and then trying to enjoy my life.
That’s another big thing, is what do I fill my free time with has been a challenge too. But yeah, so about I would say 20 to 30 hours a week of …

Brandon:
That’s cool. You moved, right? To …

Cole:
Yeah, so September, kind of mid-COVID, everything. I was drained, so yeah. I moved to San Diego with a couple of buddies.

Brandon:
Yeah, that’s cool. But you’re still doing all the work up in Seattle, is that right?

Cole:
Seattle, yes. We still have the office, I’m still up there [inaudible 00:42:33] … I try to be up there a week or two a month.

Brandon:
Okay.

Cole:
And make sure we’re rolling, but … It’s been awesome. I’ve learned so much, just being away from the business and seeing … That’s the ultimate letting go of the vine, is being in another state. Yeah.

Brandon:
Yeah. I know, David, you’re doing the same thing right now where you came to Hawaii for an extended period of time.

David:
Yeah.

Brandon:
You’re forcing yourself to figure out, how do I make this business a business, and not just dependent upon myself? What have you learned about that so far?

David:
Well, what I learned is that my goal is to stay away until something breaks, and then look and see, why did that break?

Brandon:
I love that.

David:
Not to the point that the whole thing could collapse, right? But that’s kind of how you figure out where you’ve been cheating. Where you’re supposed to be the general, but you’re actually in the field a little bit too much.

Brandon:
I love that.

David:
When you take yourself out of it, and let’s say that you’ve been putting more houses under contract than you probably should be. Your acquisition manager should have stronger skills when it comes to closing. But you step in and you just do what seems to you like the last one little percent, a couple of phone calls. Then you stop having them, and you guys go from 30% of what you were doing. You think, “Holy cow, how are we missing this much?” You now immediately know, my acquisition manager needs either more training or more accountability, or more oversight or more skills, something so that they can get up there.
A lot of the time what I found was that when my presence was there, I have somewhat of a strong presence, the agents on my team thought, “Oh, David will handle it. He’ll take the shot, he’ll do it.” When I walked away, they didn’t have the confidence to actually go in there and get it done. They knew what to do, they knew how to do it, but they didn’t have the confidence, and I had to step away for them to face that fear. Okay, I’ve got to be the man or the woman, I’ve got to get in here and do this.
Like Brandon, what you mentioned was really smart. When you’re in a business and you want to see what needs to be improved, step away, see where the water starts coming in, that’s where your leak is.

Cole:
Yeah. I couldn’t really describe what I’ve been doing, but you’ve kind of described what I’ve been doing in an unconscious way.

David:
Same thing?

Cole:
Of just, yeah, what’s been breaking? I fly back up there, I try to put it back together.

David:
Plug the leak?

Cole:
Put it back together better, or try to, and then fly back down to San Diego. It happens again. Yeah, that’s a great way to put that, yeah.

David:
I just can’t believe you’re doing this at 22 years old. I mean, have you been thinking that too, as we’re listening to this guy’s story?

Brandon:
Yeah, a little bit, yeah. Yeah.

Cole:
It comes with the mentors and coaches, is just … I love action. Coming from sports, I just love to be in motion, action. I love to have something every day where I feel like I’m moving forward. I have this thing, I almost feel like I have to earn my free time and stuff, so I just love pushing the ball forward in some way.

Brandon:
What it just shows to me is, it shows this … If you want to be successful, not you, anybody wants to be successful in any way. There are a series of things that they can do that are very tangible, and you can find that out by talking … You talk to these people. You talk to Tarl Yarber, you talk to Elliot Smith. You’re like, “What are you guys doing?” You learn from these guys. You attend Mastermind meet ups.
You learn and you’re like, “Okay, I’m just going to go put that into practice.” Then it works. I say this on the show a lot. You should work so that success is not a surprise. Nobody with a six pack ever woke up and goes, “I got a six pack, what?” Nobody does that, right? Nobody says, “I just ran a triathlon, how did I do that?”
I did the Iron Man, or the half Iron Man last year. I was not surprised that I finished. I didn’t do well. I wasn’t surprised I didn’t do well. I mean, I didn’t do bad, but I did exactly how I thought I would do, because I did the level of work that would get me to exactly the level spot that I got. It’s not a surprise that you are where you are today at all, because you did exactly what a person should do to be able to get in that spot. People are listening to this, it’s really a fairly simple thing. Go find people who are already doing what you’re doing, or what you want to do. Find the people who are already doing what you want to do. Ask them, what is it you do every day? What’s the key there? Then do it.
The great thing is, you don’t have to ask them. You can listen to podcasts like this. Everybody listening right now, a couple hundred thousand people, can literally go do exactly what you did, because you just shared everything that you did to get there. I’m sure there’s more than that, and they can get deeper and get to know you, but success is not super complicated.
One more question I had kind of before we start moving towards the famous four, and I know David, you had one more you wanted to ask too in there. But I’m curious, I know you added flipping to your business. You started with wholesaling. I’m wondering, why did you do that, and how has that been? Where do you see yourself headed with that?

Cole:
Yeah. We started flipping a couple of months ago, mainly because we kind of felt like we hit a plateau and wanted to challenge ourselves again. We thought that would help not only create more revenue with flipping, but also help our main business. Because we service investors who are flipping, so to get to know that world a little better, we feel like we could package up deals way better on the front end.
Then a lot of it was just the challenge of learning something new, building new relationships in that field, and having a whole other … We want to grow, so that felt like a natural thing to grow into. I know a lot of people do it in reverse. They go flipping, oh flipping is so hard, it sucks, let’s wholesale. But for us, we feel like we’re connected enough, we have a good enough relationships with people where we can make it happen and do it the right way. Big key of that was just wanted a challenge, yeah.

Brandon:
That’s cool. I love that you said you were looking for a little bit more of a challenge there. I feel like that’s such a sign of a strong team, is when … Not that you get bored, necessarily, of what the business is. Because business is getting really good at something. But you added another basically lane to your bridge. You built a bridge, it was working, you had people now working the bridge for you so you can relax a little bit more. You’re like, how do we make this bridge stronger? How do we make this better? How do we get more cars across this bridge?
So you add in a lane. You didn’t go and start a wooden sunglasses business, right. But you’re starting … My Open Door Capital, this year we’ve been having a lot of investors ask us this question, about why aren’t we getting into apartments? We’ve begun to ask ourselves, should we add those on? This year we’re actually going to add on apartments, add on another bridge. Not that we’re bored of mobile home parks, I love mobile home parks and we’re going to still do them. But I’m like, I want to add another lane to that, to be stronger, so we can do more deals, get more investors in, start a bigger fund.
For the exact same reason, and I love the challenge of going into something a little bit new. You and I are in the same [crosstalk 00:48:27].

Cole:
We only did it once we had our foundation really set.

Brandon:
Yeah, exactly … That’s the key, right?

Cole:
[crosstalk 00:48:31]

Brandon:
That’s the key, is not building the bridge before you have the foundation set. That’s huge.

Cole:
Yeah. It’s been … Now that we have something that pays the bills and a successful business now, we can kind of veer off a little bit. But I’m glad we waited as long as we did for that, yeah.

Brandon:
That’s cool. Where are you flipping it?

Cole:
Mainly just King County, around Seattle. Pierce County a little bit too, which is a little more south, but we’re trying to stay local. Just because that’s where our relationships are. I lean a lot on people like James Dainard, who’s been on this podcast before.

Brandon:
Yeah. He’s awesome.

Cole:
Who helps us a lot. It just makes it … I don’t want to veer out too much, where we’re doing stuff that, we’re pulling permits and everything. We do carpet, paint, appliances, put it on the market, in and out kind of stuff.

Brandon:
You’re getting all that stuff off market, are you getting any on market?

Cole:
No. I’ve never done a deal off the list in my life.

Brandon:
Really? Wow.

Cole:
Yeah. Out of the almost 200 transactions I’ve been a part of, not one of them has been [inaudible 00:49:21].

Brandon:
Wow, that’s cool. It’s because you got really, really good at doing off market, and there’s better deals off market if you’re willing to put in the work needed to get there.

Cole:
Yeah, you can pretty much write yourself a check, because whatever you can negotiate and put together, it’s … Yeah, paying yourself.

Brandon:
That’s awesome, man. All right, David, I know you had a question.

David:
Yeah. Before we do, I want to highlight your bridge analogy, just for the people that are hearing this that are trying to figure out what we mean. Because I don’t know if there’s a better way of understanding what we’re talking about when we’re describing building a funnel, or a business to run leads through.
You have to look at every deal you close and sell like a car or a truck that was carrying goods, that got from one location to another. The more trucks you can get from one place to the other, the more money you can make. When we first start off, we’re putting them on this bumpy dirt road, we’ve never done this before, we suck at it. We’re getting halfway there and then we get a flat tire, the shocks break, you didn’t put enough gas in. Every mistake you can imagine stops these, and you barely get anything across just to be somewhat profitable.
Then the more times you do it, the better you get at maybe driving, or anticipating what route to take them on. At a certain point, you pave that road, and deals can flow very much more simply. What Brandon is describing, what you’re talking about is once you’ve got that bridge built, that the cars and trucks can travel on, you start adding extra lanes, which are extra components to that business. The wholesale component, the flipping component, the retail sale component. Maybe selling some of the services you put together to other people. A property management component.
That’s what it feels like when you’re building a business, is you are trying to create an infrastructure that you can move deals up and down, and at a certain point when they can go 65 miles an hour and just shoot right through, you’ve got this passive business, that then you can stop, or you can take your bridge building abilities that you learned and go build another bridge somewhere, and do another thing, which is what most entrepreneurs do. Thank you for kind of highlighting that that’s the same thing that you’re doing at, again, 22 years old. What the heck.

Cole:
Yeah. All my spin-off businesses have come from not even on purpose, just we have this thing, we’re using these other things to help that. Other people need that too. [crosstalk 00:51:27].

David:
That’s exactly right.

Brandon:
You guys have the cold calling thing, right? The cold calling business?

Cole:
Yeah. That’s exactly how that happened. I started that internally, because we had eight sales guys, we needed a lot of leads. Then a buddy was like, “Hey, can I use that?” Then it just kind of … It was a natural thing of, this works for us, other people need the same thing, here you go. But it wasn’t a purposeful, “Oh, I’m going to go out and start this really cool cold call center.”

Brandon:
Yeah. You built it out of need.

Cole:
Out of need, yeah.

Brandon:
Then you’re like, “Yeah, now other people are going to use it? Great.” You leaned into it. It’s a very LEAN startup way to build a business, which is cool.

Cole:
Those are the best kind, in my opinion. Yeah.

David:
That’s exactly right. Same thing I’m trying to do, you’ve just got a 16 year head start on me, dude. It’s very impressive. All right. My last-

Cole:
You might live longer than me, though, so who knows.

David:
I don’t know about that, man. I think I damaged my body quite a bit trying to figure out how to do all the stuff that you learned going to Brandon’s Mastermind at 21 years old. My last question for you is, there’s clearly something special about you that’s different than other people, where you discussed this as-

Brandon:
It’s his smile.

Cole:
It’s my smile, yeah.

David:
Yeah, I would agree with that. And your eyes, they’re very hypnotic. I find myself staring at you, forgetting what I was trying to say. You make it sound so simple to do what we’re doing. In fact, you show … Maybe I should re-say that. You reveal how simple it is, when you get out of the obstacles that talk yourself out of it. To close, can you share a little bit about how you developed this mindset, what you do differently than other people, so that others that want to follow this path can have an easier journey?

Cole:
Yeah. I think the biggest thing is, most people operate out of a model that’s 99% information, 1% action. They’re gathering information all the time, but barely taking action on any of that information. I don’t feel like you accelerate as quick that way. For me, I’m always learning. I’d say I’m more like 70-30, 70% action, 30% information. I’m always learning new things, but I’m taking really precise, deep action on everything I learn.
An example of that was with cold calling. When I first started the cold calling side of my business, all I did was cold calling. I learned about cold calling, implemented what I knew about that, stuck with that for a long time, took extreme action on that. Instead of learning six different marketing channels and doing 10% on each one. I’ve taken that, replicated it across everything I’ve done, and I think that’s what’s allowed me, combined with the not really caring if I fail.
I don’t know, I haven’t pinpointed where that’s come from. To be honest with you, I think sports helped a lot with that. But I don’t know exactly where that never thinking about failing came from. Just it not being a thing to me. A lot of it was probably how I was raised. It was never like, “You’ve got to meet this grade, you’ve got to do this.” I could’ve graduated high school and been like, “Oh, I’m going to Africa to be a safari guide for the next 10 years,” it would’ve been awesome.
I think a lot of it came from that, but I haven’t nailed that down. But that, combined with just going deep and showing up every single day with persistent and consistent action, and the pursuit of my potential. Really what it comes down to, I want to find out what I can do, what that bar is.

Brandon:
That’s cool, mean. I love to hear that. I think again, if you can get the mindset of somebody successful and then just do what they’re doing … It’s almost impossible not to achieve that level of success. Especially given over the long haul. Yeah, you might encounter … Like oh, the market crashed, or whatever. There’s always a reason. Maybe somebody holds back temporarily, but long term, like 5, 10, 15 years from now, I don’t understand how anybody that listens to this podcast is not going to be a multimillionaire in the next 5 or 10 years. Everybody, if they just put into action the stuff, the mindset and the tactics. It’s there for the taking.

Cole:
Yeah. Just got to put it into motion.

Brandon:
Yeah. It’s so fun, about real estate and entrepreneurship and all this. It’s just there. It’s not just what you’re given. We can take whatever we want. You can have whatever you want, the kind of life that you want to lead, if you just are willing to put in the work needed to do it. The stuff that we’ve learned from you today is, it doesn’t even mean it’s 100 hours of work. Maybe there’s times in your life where you have to really power through. But you put people in charge of different things, you scale up and you bring people in, you become a good manager, and you get the higher dollar per hour skills, and you’re there.

Cole:
I think one of the biggest lies that stops a lot of people in our culture is the work 100 hour week, because you don’t have to do that to be successful. There’s ways to put stuff together with other people that it doesn’t have to look like that, so yeah.

Brandon:
Yeah. That’s where I think things like performance coaching come in so handy, where … Dan Sullivan, the strategic coach that we had on. His company slogan, their mission or their goal, is that you I think it was double, triple your revenue with it, and then half the amount of time you work or something like that. Their goal for everybody they bring into their company is, we’re going to make you work half as much and you’re going to make two or three times more money. Minimum, that’s their baseline. They just work.
It might sound crazy to people listening, but I would almost say that’s way under shooting. I feel like if I had a performance coaching business I’d be like, “Our goal is to have you work four hours a week.” We believe everybody can work 4 to 10 hours … If you want to. What else would we do with our time? So we all work more than four hours. But I want every person to get to that level, where they can take a week off, take a month off, go travel to Hawaii for three months because they want to go hang out, go to Europe without a cell phone for a month.
I want people to get to that level, so when they come back … Or spend time with their kids, it doesn’t have to be travel. It could be spending time with your kids. When they come back, they can do what they love to do and invest and be wholly in it. Anyway, dude, this has been amazing. We’ve got to wrap this up in a few but first, let’s get to today’s …

Speaker 5:
Famous four.

Brandon:
All right. Let’s get to the famous four. Question number one. These are the same four questions we ask every guest every week, so I’m sure you know what’s coming, but number one. Favorite or … I like to say favorite, I need to rephrase this question. But basically, favorite real estate investing book, or book that’s made the biggest impact on your real estate?

Cole:
For me, it’s the book called Flip by Nick Ruiz.

Brandon:
Okay.

Cole:
He’s a fix and flip guy out of Wisconsin. That was the book I read when I was first getting into wholesaling. It’s a really basic level bird’s eye view into real estate, but it made it click in my head, what I was doing, my path, where I could take it. For me, that was … Business wise, I still reread that book, so it’s definitely the biggest impact on me, yeah.

Brandon:
All right.

David:
Okay, favorite business related book.

Cole:
Has to be Traction. I was given that book-

Brandon:
I was going to ask what you used for your operating system.

Cole:
Yeah, I was given that book. I have not been that good about following all that stuff, but I was given that book about two years ago, and I’m decent at following a lot of it, a lot of the meeting stuff, the Level 10 stuff. We do a lot of that, but I haven’t been …

Brandon:
I would highly recommend, because we just did at Open Door Capital. He’s a brilliant consultant. It’s not super cheap, it’s thousands of dollars to have a …

Cole:
It’s worth it, though, yeah.

Brandon:
But it’s so … Because I feel like we were operating at 85% tractionable. We were doing 85% of the work, and it was fine. We were good. But now we’re at like 98%, I feel like. That little bit, dialed … I probably cut 5 hours a week, 10 hours a week out of my own work just by bringing that consultant. Because all of a sudden … Just fine tuning all these little things, and when you’re operating a business at a pretty high level, it’s so good, so anyway, I highly recommend that. Bringing some kind of consultant.

Cole:
Yeah, we need to take it up a notch with that stuff. We’re probably at 50% right now.

Brandon:
Yeah.

Cole:
To be honest with you.

Brandon:
Which is better than 99% of businesses out there, don’t know how to run any of it.

Cole:
But it still opened my eyes to that direction, yeah.

Brandon:
Cool, man. All right.

David:
All right. When you’re not crushing it in business, what are some of your hobbies?

Cole:
When I’m not crushing it in business, I’m skiing, or I’m playing basketball, or I’m working out. I’m on the beach. I love to travel, so I’m all over the place with that. But during the winter, you can find me on a mountain, absolutely. I’m skiing. Summer, I’m on a boat, or I’m playing basketball.

Brandon:
I’m on a boat … Okay. I want to know, this is the three and a half question. If you and David Greene here were competing against one another in a game of one on one basketball, who wins?

Cole:
I’m going with me, for sure.

Brandon:
You think so? You think you can dominate? David’s pretty good.

David:
I would say you would probably beat me one on one. I’ll just give you that. But if we put us on a team, we will destroy you.

Brandon:
I think we should try it. I had a basketball hoop in the backyard, but I don’t have it anymore. Me and David against you, who wins that one? You still win.

Cole:
I’m still probably going to be.

Brandon:
All right.

Cole:
I don’t know, I put a lot of work.

Brandon:
All right. Yeah, you should claim that. I like the confidence, it’s great. All right, last question from me. What separates successful real estate investors from all those who give up, fail, or never get started?

Cole:
Yeah. I think it really comes down to staying in the game long enough for something to shake out. I think if you really want to be in real estate and make it work, and you’re showing up every single day with like we were talking about, persistent, consistent action, something is going to happen. Something is going to happen. I think the main thing that separates people, yeah there’s mindsets behind that, there’s tangible things you can do, but if you’re in the game long enough, whether you’re an agent or you’re trying to flip or do development, or you’re doing buy and hold stuff, something is going to happen if you’re in the game long enough. I think that is the biggest thing.

Brandon:
All right, very cool.

David:
All right, last question of the day. Where can people find out more about you?

Cole:
I’m most active on Instagram. It’s @coleruudjohnson, R-U-U-D is how you spell that, not Rudd.

Brandon:
Not Rudd.

Cole:
Yeah, I answer everything on there. I’m not great about Facebook or anything else, so that’s where I spend most of my time.

David:
Awesome.

Brandon:
What’s your side businesses … Give a plug in the cold calling stuff, and everything else.

Cole:
Yeah. We have Call Magic Leads, that I partner with a couple of good buddies on. We’re a full service call center for investors and agents, so we provide really good lead flow for that. That was out of … I took it out of my internal business, and we made it something awesome that other people can use. Then besides that-

Brandon:
Which website for that?

Cole:
Callmagicleads.com, yeah.

Brandon:
Perfect.

Cole:
Submit a form, it’s super easy. Yeah.

Brandon:
Very cool. All right. Good deal, man. Thanks.

Cole:
Appreciate it. This is awesome.

Brandon:
This has been amazing.

Cole:
It was fun.

Brandon:
This was fun. It’s been a long time coming, ever since you were here in Maui last time. I was like, “We’ve got to get this guy on the podcast.”

Cole:
I’m glad we did it in Maui. Makes this feel …

Brandon:
This was much better doing it in person, yes. I like doing these in person Sea Shed calls.

Cole:
Absolutely.

Brandon:
All right. Well, David, do you want to get us out of here?

David:
Thanks, man. This has been great.

Cole:
Yeah. Thanks for having me on.

David:
David Greene, for Brandon, it’s Roof not Rough, Turner. Signing off.

Speaker 3:
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In This Episode We Cover:

  • How wholesaling and off-market deals can net big profits
  • Why you need to be consistent when cold calling 
  • The script that Cole uses to get off-market and wholesale deals
  • How to scale your business (and prevent massive burnout)
  • Growing slowly to scale, instead of fast and crashing
  • The types of lists that Cole and his team pull
  • Keeping the flow of communication open between you and your partners
  • Taking action instead of just taking in information
  • And SO much more!

Links from the Show

Books Mentioned in this Show:

Connect with Cole:

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.