All Forum Posts by: Melissa McRay Johnson

Hi @John Mucilli!

I've been in the REI game for 17 years, and I believe there were a few key factors in growing and scaling a successful business. One thing is to never stop marketing. A lot of times people get overwhelmed doing a lot of deals and stop marketing in order to "catch up". This is a huge mistake. If you've got too many deals then it's time to either implement more exit strategies or hire help. Another factor that helps lead to success is investing your profits back into your company. Put money into your marketing, hiring, and reserves. Don't take it all and run out and buy a Lambo the first chance you get :) You also want to make sure you're building a solid foundation for your business. Without systems, processes, a great team and culture, and focus your business will suffer later and it will be more difficult to identify where the breaks are. After running our flipping business as a husband/wife team only for about 11 years, I took over and built a team that took that business into 8 figures with a gross profit margin of about 35%. This was done by getting super focused on efficiency in the business, hiring for cultural fit, improving marketing strategies, and keeping a close eye on the financials. I love running a business that is super lean and profitable. Now I am focused on doing less deals at higher profits and I have a lifestyle business that allows me to pursue other interests that are generating revenue. I also suggest rounding out your portfolio with a few rentals and creating some owner finance notes for passive income. Flipping for me has been a great jump off point into building multiple streams of revenue over time.

Hope that helps and maybe inspires--best of luck in your REI journey, it sounds like you're on the way to success!!

Hi @Rod Lambe!

Reading your post and the responses really hit me hard. I'm sorry that you felt so discouraged that you would "just go away". I've been in this business for 17 years and I can tell you that it's not as easy and glamorous as people make it seem. There is a lot of hard work, disappointments, and learning that goes into this--it's not a get rich quick thing by any means. Most people you see out there having success don't share about the fails and the hard times they went through to get where they are now. All of that said, here are a few things that might be helpful:

Work on your mindset. If one little setback is going to knock you down, then being an entrepreneur is not for you. You've got to get mentally tough to overcome the million difficult things that this business is going to throw at you.

Start small. If you are just getting started, maybe you don't jump right into a big expensive deal. Have you tried birddogging? What about wholesaling? Both require little to no money and a much lower risk. 

Continue to educate, but make sure to take action. Sure, you're never going to know everything--there's too many variables there. But choose one or two exit strategies and learn all you can about those. Also remember there are a lot of ways to finance properties, not just the conventional way. There's hard money out there and private money. I believe Bigger Pockets has a book by Matt Faircloth on raising private money. I would suggest reading that. I've used private money exclusively since day 1. I don't ever recommend leveraging your own money to do deals. If your deal is good enough there is always going to be a buyer, which makes me wonder if you know how to analyze a deal properly--you may need to educate more on that aspect. The property is FSBO, but is that price the full market value of the property? I never suggest offering the asking price, that's just a starting point. You may also want to learn about negotiating to help know what to say when you go on the appointments. Power Negotiating is a great book. Also anything from John Martinez is awesome, he teaches negotiating specifically for RE investors.

Build your network, buyers list, and critical industry relationships. If you're going to wholesale a deal you will need buyers to market to. And a title company to close the deal. Contractors if you plan to rehab. A Realtor if you plan to list. Keep those things in mind and take the time to find key people you can leverage in your business.

Be patient. Getting your first deal takes time and consistency. So many people throw in the towel right before things are about to happen. It's awesome that you're fired up about REI, but keep in mind this is a long game if you plan to do this seriously. It took months to get our first deal. Also understand that the deals will ebb and flow, so be prepared for that. Be consistent with your marketing and ALWAYS follow up, even if you lose out on a deal. You'd be surprised how many deals fall out, and if you're good at follow up you will be there to pick it up later.

Last of all--YOU CAN DO THIS---but ONLY if you want it bad enough and are willing to put in the work. I wish you all the best and will be so excited for you to get your first deal. 

@Nick Webb

I'm in Texas, but this is generally how it should go:

1.You sign a contract with the seller to buy their house. Make sure you put your entity name and/or assigns as the buyer on the contract.

2.Go ahead at that point and receipt that contract with the title company immediately. You want to get this process started right away because many times there will be title issues that will need to be cleared up that could take time. Ordering payoffs and HOA docs also require time to process. Sellers aren't always aware of liens or back taxes owed. They don't always know their loan balance. You want to get ahead of any problems and be proactive in getting those issues cleared up prior to closing. You don't want any surprises at the closing table that could cause your seller or end buyer to walk at the last minute.

3. Market the property within 24 hours of getting it under contract. We put a two week funding approval clause in our contracts that allows some time to market the deal, as well as give us time to renegotiate if there's a lien or title problem that was not disclosed to us from the seller. *Note: we believe in being transparent when we are planning to assign a contract and always make sure the seller understands what we are doing, but not all investors do this. Decide which type of person you want to be :)

4. Once you have an end buyer, you'll do an "assignment of contract" contract which goes to the title company as well. It shows the original seller and the new end buyer with the sales price your end buyer is paying. The buyer will wire earnest money to the title company (whatever was negotiated on the contract). Prior to closing the buyer will wire the purchase funds to the title company to be held in escrow. You are collecting the difference between the original contract sales price and the end buyer's contract sales price as your assignment fee, but ONLY after the deal is closed.

5. I would highly recommend keeping up with all steps of the transaction as it moves forward so you know if there are any delays or problems. I would suggest not just dumping it all on the title company and expecting them to handle everything with no communication from you. They get buried with files and if you're not staying on top of things it can cause delays. Plus you want to maintain a good relationship with the seller and end buyer in case things fall apart on either end. The title company will let you know when title is clear and you're ready to close.

6. Once closing is complete, the title company will disperse the funds and you will receive your assignment fee. It should appear as a line item on the HUD. Then you can decide if you want it in check form or have it wired to your account.

Hope this helps!

Awesome @Christopher Brown! Best of luck! I'd love to hear from you when you get that first deal :)

Hi @Jonathan Abbott!

I love marketing and hope I can help a little. A couple of things:

If you don't have a brand, I would suggest creating one and making sure it's on everything. I say this because branding right now is important in marketing. When people are getting a ton of mailers, there's nothing to set you apart from the rest. The more you reach out to them (you should plan on at least 6-7 touches in each campaign), if they recognize your brand then you become familiar to them instead of just one of the other hundred postcards they get and toss in the trash.

I would also try making it more personal. Add your photo, it doesn't have to be a professional headshot. Something a little outside of the box but not weird should get their attention. People respond really well to a family picture if you're comfortable doing that. If you're local to the area put that in there somewhere too. The point is to stand out and make people feel at ease and not intimated. When it's too professional looking then people shy away, if it looks too cheap and gimicky then it turns them off as well. Think professional, but personable.

Watch out for the colors and fonts. Too much going on with color is overwhelming, and make sure the font you use is easy to read and clean looking.

If you have a testimonial I would include that as well. Nothing is more powerful than a good testimonial to build instant credibility and trust. I would also recommend getting yourself set up with the BBB and adding that logo to your mailings. I can't tell you how many times people have contacted us because of our good BBB rating and reviews.

Include your website on your mailers! If you don't have one I would suggest getting one. Even if you can't throw any money at PPC or SEO right now, you can include it on all of your marketing pieces to drive traffic to your site. Most people now like to do their research online first before contacting you. So I would suggest putting testimonials, BBB logo, and a video above the fold on your site along with a contact form for them to fill out.

I like the simple message you were thinking of replacing the original text with. 

Just curious, was there anything on the backside of the postcard?

Hi @Christopher Brown!

Landing deals can be tough sometimes, especially if you struggle with sales and negotiating. Here are a few things that might help:

Make sure you are listening. A lot of investors want to talk too much about themselves and what they can do rather than listening to what the sellers are saying. Remember first and foremost that people want to be heard, and if you listen and show that you genuinely care about what they are going through it helps tremendously. Listening with empathy, asking questions, and just being a decent human being goes a long way to building rapport and trust. There have been many times that people have sold to us, even though our offer wasn't the highest, because they just liked us more than the other investors they talked to. No one wants to be talked down to or have their home verbally bashed by a stranger.

Make sure you follow up. There have been deals we've lost out on, but we kept them in follow up, and when the deal doesn't go through with the buyer who beat us out we were there to pick up the pieces and close the deal. Don't be afraid to walk away if the deal doesn't make sense or you feel like you aren't getting anywhere right away. Sometimes deals take time and they need to realize the problem isn't going to solve itself. That's when you'll be in the front of their mind if you've stayed in touch with them over time.

Get to the real motivation. You'd be surprised at how often sellers aren't really thinking about the money, there's usually some other underlying problem or motivation that they might not say outright at first. This is where the listening and building rapport come into play again. Remember that you are there to solve a problem for them, not to buy their house. You have to figure out what the real problem and motivation is that selling the house is going to solve and address the situation that way.

Ask good questions. One of my favorite take away questions is "what will you do if you don't sell this house"? It gets them thinking about the problem and the stress of having it just sit with nothing happening. Ask for their timeframe on making the decision. If they aren't ready now, when will they be?

Make sure the decision makers are present or available during the appointment. You risk losing the deal if you can't get the people who have to sign on board and if there's a delay in getting in touch with another party you run the risk of them ghosting you.

As far as marketing goes, the best advice I can give is to test and measure. Try out a few different letters and postcards and see which ones you get the best response from. I always try to make my marketing pieces a little personal. You can add a photo of yourself or your family (if you fee comfortable), branding (your logo), a testimonial, and even a credibility aspect like the BBB logo or 5Star Google rating if you have it.

I hope this is helpful!

Hi @Redi Yib! Coaching programs are a difficult area to navigate. While there are a lot of places to sign up for these and get valuable information, I feel like they miss the mark by not being able to bridge the gap between education and action. A lot of people I talk to have done a lot to educate themselves, but when it comes to implementing what they learned in their own business they get stuck. One on one coaching or mentoring that is specifically tailored to YOUR goals and desires, while sometimes more expensive, can provide results quicker and more focused on YOU. Feel free to reach out if you'd like to talk more about it, I'm happy to help!

Congratulations on taking action and making moves for your future at such a young age!! I wish you all the best! Feel free to reach out if there's anyway I can help. Sounds like you're off to a great start :)

I also use West and West Attorneys for my evictions. I've been a client of theirs for the last 17 years and they've always done a good job.

Outsourcing marketing was a game changer for my business. You can find people on Upwork and Indeed, as well as VA providers like RocketStation. I have someone that I use to help me create video content, then that content gets chopped up into mini content (quote posts for Instagram, short videos for LinkedIn and Facebook, blog posts, photos, etc.) and distributed through the platforms I engage in. Someone who is good at marketing will understand how to squeeze the most content out of everything you do. It's helpful to shoot longer videos and then have them chopped rather than doing a whole bunch of really short videos. Make sure whoever you hire knows how to edit videos well, has an idea of your aesthetic, understands your audience, and is testing and measuring the results of all marketing endeavors. They should also provide you with some analytics and numbers on ROI for your marketing.

Hope this helps!