In Episode 27 of An Investors Journey, we go over Cold Calling Basics Step-By-Step - AIJ027!
In our opinion, Cold Calling is, in our opinion, one of the best forms of getting leads.
Unlike Door Knocking, Cold Calling gives you a million chances at a first impression. You can literally call and screw up the call so many times and as long as you wait a couple of weeks they won't know it was you that called.
NOTE: Make sure the address you use for Skip Tracing is the address of the subject property and NOT the mailing address if it's different.
Now, that your list has been skipped traced you can start the 4-Step Process to your next deal.
Get through the list. If you're scared or nervous of screwing it up just keep in mind that all you must do is just get through the list. Don't worry about what to say or what not to say. Just get through the list. This will help build your confidence by having to speak to so many people that eventually you become numb to Cold Calling.
Connect the dots. ONLY after you're ok with #1 you can now move to #2 which is making sure the number goes to the person that owns the house you want to buy. Simple script "Hi, I'm looking for the owner of 123 Elm."
Test out different scripts. ONLY if you have gotten through #1 and #2 do you get the privilege to start testing different scripts. There's no one amazing script for every homeowner. Different homeowners respond differently to different scripts.
Follow-Up. Once you have gone through the whole list at least once and gotten rid of bad numbers and wrong numbers you should go back through to leave voicemails and text messages. Follow-up is crucial because when you first called you might have gotten them at a bad time and they blew you off. So you want to try again.
Planting the seed. When you initially call someone you might get ignored because at the time they were not thinking about selling. But, now you have planted a little seed in their heads of "What-if?". This is why you want to check back with them after a couple of weeks or once a month.
Track EVERYTHING! Keep track of how every call goes. This will help you when following up later. You now recall what they said and what script you last used.
Different scripts you can use:
FREE Home Evaluation: "Hi, I was calling to offer people in your neighborhood a FREE Evaluation for your home. Would you be interested in one?"
Direct Approach: "Hello, My name is ____. I'm an investor here in >>your city<< and was interested to know if you have considered selling your house?"
There are a million other things you can say. Make it your own. Just don't over think it. Done is better than perfect. Eventually, you will get better and think of better things to say.
What if they're interested? Ask to go see the property. If that's an "I can't right now. Give me an offer." Then you can ask them "When was the last time ____." In the blanks put in all the major stuff.
When was the last time...
You got a new roof
You replaced your AC
You updated your kitchen
You updated your bathrooms
You painted your whole house
You replaced the floors
You replaced the water heater
This helps to determine what will need to be updated. If you ask them "what types of repairs does your house need?" They may get defensive and say NONE! This may be true. Things that need to get updated don't always need to get replaced.
One of the lessons we’ve learned throughout our journey is how tunnel vision can hurt you. Not just in the day to day operations of your business but also managing renovations.
Tunnel Vision is a serious problem if left unchecked. When we spend so much of our time in one particular task it's very easy to overlook the details.
About tunnel vision; why it happens and how to prevent it.
We’ve had a couple of different issues with tunnel vision. We used to take turns renovating houses depending on who had more time available and who had what project going on.
What we realized was that when you're managing a property the correct way (by that I mean actually managing the project and going to the property consistently to make sure everything is getting done right) you tend to develop tunnel vision in that particular project.
This is common, it has nothing to do with ego. It has nothing to do with your inability to run a project.
When you go to a project consistently, it gets to a point when you start focusing on the end goal of the project. But because you're focusing on the end goal you tend to miss things along the way. You're actually starting to develop the tunnel vision to hit the finish line.
We recently had a project that John was managing. He was there every day, I was not. One day, I go to take a look at the property and as soon as I walk into the kitchen I say, “What the f#[email protected]?!” "What happened to the cabinets?!” There were two different styles of cabinets installed in the kitchen. I reached out to John to ask what had happened and he said he honestly hadn’t realized the cabinets were different. I called the contractor he also said he hadn’t noticed.
What happened was the cabinets were delivered and they were all supposed to be white shaker cabinets. The contractor, as he’s moving along the scope of work installs the cabinets and they thought everything was fine. They were all the same color the difference was the style of the door.
In this situation, it’s very easy to blame the contractors but it happens to them as well. Tunnel vision doesn’t just affect investors it happens to anyone who’s involved in a project 24/7. You’re there every day and you stop paying attention to the details because your so focused on getting across the finish line. It was the first thing I happened to notice because I wasn't used to being there.
Yes, This Happened Again!!
We had another project that I was managing that we were having serious issues with the contractor. This contractor, unfortunately, was a typical contractor. Many contractors as soon as they get a little money and some work they think they can expand. In doing so they bring on a bunch of guys to do the job he no longer wants to do until eventually no longer even goes to the jobs. He could run a GC business without stepping foot inside his projects.
He talked such a good game and he actually did seem like he knew what he was doing but unfortunately, it all stopped at the talking.
We only took on this project because he said he could "definitely" get it done for the price we needed. At the time we were still getting our systems in place so we didn't know what we didn't know.
I started having so many problems and delays with this guy and he kept coming up with excuses every step of the way. So it got to the point where this project was becoming a nightmare for me. I could not wait to get through this project. I had horrible tunnel vision during this project.
In doing so, there were so many things I had overlooked. At the end of the project John came to check out the house and as he’s walking through he says, “Holy shit what happened?!’ And as he's walking around he’s rattling off all the things that he saw wrong with the house. And it wasn’t until he said it that I had realized there was anything wrong and I thought oh my god! I missed so many things.
We ended up having to spend an extra week or so fixing those things ourselves to make sure everything was done correctly.
Our Solution To Tunnel Vision
After these two projects, we realized that you need someone to check your work as you’re going through the project. We put in to place a form of checks and balance to make sure we don't fall prey to tunnel vision again.
What we do is every so often or before a scope gets done, whoever isn’t in charge of managing the project will go in and check how everything is coming along. This helps prevent tunnel vision because you have one person there 24/7 making sure the projects get done and then the second person is able to come in with a fresh set of eyes and see the project for what it is and pay attention to detail.
In this industry, as you take on more projects and move quickly from one project to the next it’s very easy to lose sight of the small things. It’s even easier for the contractors to overlook things which is why it’s so important for you to manage these properties and be there consistently.
The Opposite of Tunnel Vision
The other extreme I’ve seen some investors do is not visit a property for weeks or months at a time and then show up at the end with their roll of blue tape.
They’ll blue tape the shit out of a house.
That’s just inefficient and just ends up pissing everyone off. Now it's going to take more time and money to go back and fix things. And I get it, a lot of investors think, "Oh, well the contractors should’ve known better!"
It’s your project and you need to take care of it. You need to make sure it gets done properly. You need to be there on a consistent basis, you should be there every time there's a change to the scope of work or it's hitting the next phase. You need to make sure everything was done correctly. If not you’re only hurting yourself and your pocket. You’re also jeopardizing your relationship with your contractors if you just blame them for the project getting messed up. (I think YOUget it. It's all on YOU!)
Tunnel Vision Doesn't Just Happen On Projects
Tunnel vision has gotten in the way of the day to day business operations as well. I don’t know if it’s something that gets easier with time or experience. I think it's human nature to overlook things that we see or deal with on a regular basis.
I do a lot of the branding and marketing for the company and a lot of times I get caught up in trying to get everything done that I miss the finer details. Sometimes, I don’t realize I've missed them until it’s too late.
Same with running comps. We have a procedure for running comps but sometimes since you’ve done hundreds of them you get comfortable with running through the process and missing details. So now when I'm done doing the work I give it to John for him to give it a second look and make sure I didn't miss anything.
Recently, I ran a comp on a property and then gave it to John and once he saw it he realized the home was in a flood zone. It’s something I should have caught but when you're doing so many at a time you tend to miss things.
Now every time I finish something I say to John, "Hey, look it over what do you think?" When he finishes something he’ll bring it to me and say, "Hey, look it over what do you think?" This way we avoid tunnel vision and make sure we don’t miss anything. Sometimes it's not a big deal and other times those small issues have cost us time and money.
It's Not About Your Ego
You want to let the ego go out the window because all it does is screw you up.
We have a contractor we are going to start working with on a few projects. From day one, we told him how we run our company. That we will be checking his work every step of the way to make sure everything gets done properly.
At first, he took offense to it. He thought it was something against him personally, or the way he ran his own business or whatever else his ego was perceiving. We explained to him that it wasn't personal. Tunnel vision is just a part of our line of work. We deal with projects all day every day that we miss things and at the end of the day it's OUR business.
We are raising funds for these projects. These are our investments and how things get done reflects back on us. So we have to make sure everything is getting done right. It’s not that we’re checking up on him because we don’t trust his work. We’re just another set of eyes to make sure the project runs smoothly.
Tunnel vision is real and it does happen. The goal is for everyone to succeed. This is why I emphasize so much the importance of partnerships.
You maybe rehabbing houses and you're the only one that runs your company. Should you go get a partner to check your work?
I think you should. This business, if you run it like one, is too much for one person. I don't want you to think just go hire people. I think the value of a great partner is undeniable.
A great partner can take so much pressure from you. Dedicate on the other side of the business that you're weak on.
But, if you still don't want one, then call on an investor friend whom you trust and know they know their shit. Maybe by treating them out to lunch, they will be willing to walk your project and point out things you might have missed.
Once you have done this enough times it will require less and less the number of times you bring someone in. Especially if it's a small project.
No More Excuses
Now, you're completely aware of tunnel vision and how it can ruin your business. So don't let it. Put your ego aside and ask for help.
At the end of the day, you're helping yourself.
Like always, if you have any questions or thoughts make sure you reach out to us. Also, share your tunnel vision story with us of when this has happened to you too.
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Our Most Recent Rental Using BRRRR Step-By-Step - AIJ026
In Episode 26 of An Investors Journey, we go over Our Most Recent Rental Using BRRRR Step-By-Step!
As a small business, banks are not lining up to lend to us. Maybe they have something against lending money to people that ACTUALLY know how to make money, who knows.
So, in order for us to acquire what we love which is rentals, we must get creative. We went ahead and decided to partner with an investor/friend of ours that we REALLY trust. I can't emphasize "REALLY TRUST", enough. What we're doing is actually going into a partnership with this investor. If at any time in their life they have any type of financial troubles they may try to force the sale of the house. You want to make sure you're not put in a situation that will hurt your business.
Scope of work was small. Tile in the laundry, paint the whole interior, EXTREME deep clean to get all the stuff left behind and the smell out, landscaping, shelves in the laundry, and some other miscellaneous stuff.
The whole house has tile and granite countertops.
That being said, here is how the numbers broke down:
House is a 3/2/2 1578sqft Blt in 1999
Purchase $130K + closing cost (We bought from a wholesaler who walked away with $12K)
Borrowed $144K (The reason we borrowed more was that we were projecting the house appraising for $180K which 20% of that is $144K. We also knew we would have more fees when we refinanced so we wanted to be out of pocket ZERO)
Hold time 2 months at 10% interest only ($2,400 interest payments)
Refi terms 5% 30-year mortgage
We did split prepays which were $1600ea (This pretty much makes up your escrow. 5mo homeowners insurance and 6mo of property taxes)
PITI $1195 (Principle, Interest, Taxes, and Insurance)
In this episode of An Investor's Journey Podcast, we want to cover Doing What You Love Can Suck.
We always hear "Do what you love and you'll never work a day in your life."
Well, I think people have taken that way to literal. You still need to actually WORK!
This where we see so many people struggle and get stressed (including myself). Life is not easy nor is running your own business. Even if you love what you, you still have more shit days than great days. But, it's those few great days the make the shit days worth the headaches.
While I 100% believe in following your heart (after all we only get one life to live) you still need to understand that most days will require much work. Most of this work will not be fun, will not be sexy(no Instagram moments), and you will hate. I these points you tend to start questioning if you're even doing what you love because it actually feels like work.
I'm here to tell you that maybe you are and maybe you're not. The only way to know for sure is to put in the work.
In this podcast you will hear:
~Why you have to understand that dealing with shit is apart of it
~Finding your passion through the process of elimination
~A personal story
~Why it's OK if what you thought would be your "passion" turns out to not be.
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