Zach Hoereth began his real estate journey while attending Florida Gulf Coast University, initially drawn to selling million-dollar homes on the beach. However, he soon realized his passion lay in serving his hometown of Indianapolis. During his junior year of college, he purchased his first rental property, leading to further investments in properties and apartment buildings. With deep roots in the Indianapolis market and extensive personal experience in property investment, Zach is well-equipped to help clients find income-producing properties and achieve their real estate goals. When not building his own portfolio, he dedicates his time to serving his clients, always grateful for the opportunity to assist others.
Here’s some of the topics we covered:
- Zach’s Journey Into Real Estate Investing 00:00
- Mastering Cold Calling 9:10
- Key Questions to Ask Property Owners 13:18
- Staying Solution-Oriented in Real Estate 23:15
- Personalizing Your Direct Mail Campaigns 28:03
- Common Mistakes in Prospecting 34:44
- The Step-by-Step Process to Securing a Deal 39:34
- Essential Tools and Resources for Your Investing Journey 45:44
To find out more about partnering or investing in a multifamily deal: Text Partner to 72345 or email Partner@RodKhleif.com
Full Transcript Below:
00;00;00;02 – 00;00;21;27
Speaker 1
Welcome back to the Life Time Cash Flow Through Real Estate Investing podcast. Clearly I’m not Rod Cleef, but my name is actually Ragnar Aasen. As you may have heard in a recent episodes. I’m going to be hopping on this podcast feed every once in a while and discussing direct to seller marketing, prospecting, and really discussing how you can find off market discounted deals if you’re a multifamily investor who’s looking to do so.
00;00;21;27 – 00;00;37;28
Speaker 1
And that’s where I’m going to be spending our time today on as well with, special guest Mr. Zach Harris. again, Zach, you can intro yourself, but for everybody out there, we’re going to be getting into direct to seller marketing, how you can actually go and get in front of owners who are looking to sell properties.
00;00;38;00 – 00;00;45;08
Speaker 1
that’s we’re going to be discussing in this episode and some other episodes here in the short term future. But let’s get to this conversation with Zach. Zach, how are you doing, man?
00;00;45;15 – 00;00;46;00
Speaker 2
How are you?
00;00;46;03 – 00;00;51;21
Speaker 1
I’m good, I’m good. Why don’t you, why don’t you share a little bit more about yourself? How you got into real estate? what your business looks like today?
00;00;51;28 – 00;01;17;11
Speaker 2
Sure. Well, a little better setup than our last podcast. go around. So appreciate you, keeping me in mind and bringing me out here, but, Yeah, I’m originally from Indianapolis, born and raised. And that is where, you know, I do the bulk of my business today. Similar to to how you got started. You know, originally in college, I was buying single family and small, you know, 2 to 4 unit residential, multifamily.
00;01;17;14 – 00;01;37;08
Speaker 2
And then that, you know, started to slowly snowball and, has kind of fast forward to what we’re doing today and that’s primarily, you know, small multi, a little bit bigger than the 2 to 4 unit, some portfolio deals in addition to some self storage. So, yeah, it’s been kind of a unique few years here as, as you know, trial and error if you will.
00;01;37;12 – 00;01;37;19
Speaker 1
Yeah.
00;01;37;19 – 00;01;57;16
Speaker 2
But yeah. Full time, full time investor. originally kind of transferred, I guess, moved over from residential broker to full time investor and, you know, a few, few different transactions, you know, as I’ve gone has helped me, you know, kind of project myself into that full time investor, role, I guess, if you will. Now.
00;01;57;19 – 00;02;02;23
Speaker 1
let’s give people kind of a time frame here. So when did you start, like, year wise, I guess. Like, what year? Yeah.
00;02;02;25 – 00;02;26;08
Speaker 2
it was 2017, I think was the first house, like 20, $30,000 house that, that I bought. And then, that same year or. No, I’m sorry, 2018 is kind of when the, the momentum started to pick up, that one turned into, I think 3 to 5, five turned into my first ten unit building, in 2018.
00;02;26;10 – 00;02;32;25
Speaker 2
And, cut my teeth on that first, that first building. And, you know, kind of pivoted from there.
00;02;33;01 – 00;02;35;10
Speaker 1
And this is all kind of Indiana midwest.
00;02;35;10 – 00;02;55;28
Speaker 2
Yeah. Tertiary markets. you know, when do you think I know you’re familiar with old buildings, but that first, that first one, I think was like an 1880s build. Oh, yeah. And, you know, probably made every mistake in the book that you could have. So again, cheap building, kind of less, I guess risk, if you will. I think that first ten unit was like 125 grand.
00;02;56;00 – 00;03;00;19
Speaker 2
so, you know, the price of some single families and, you know, like less expensive.
00;03;00;23 – 00;03;01;07
Speaker 1
Markets.
00;03;01;10 – 00;03;18;13
Speaker 2
Yeah. So, you know, looking back, it was just a good learning opportunity to to again cut my teeth and, you know, get some confidence, not only internally but externally. Right. Like, you go into a building like that, you’re like, okay, what am I doing here? It’s a little bit different than a single family. but that kind of opened my mind to, oh, wow.
00;03;18;14 – 00;03;33;12
Speaker 2
Okay, we’re on to something here. I can go buy this with. You know, I know it sounds cliche, but, hey, a few more doors under one roof. you know, I can start to bump the rents a little bit here. And I don’t have ten single families scattered throughout. you know, the city here, so. Yeah, that was that.
00;03;33;12 – 00;03;50;28
Speaker 1
Was the first one. And I’m sure people that are, like, familiar with rod story probably get that right. You want you want to get as many move away from the scattered single family tons of addresses start getting the units under one roof. I mean, that certainly makes the business more scalable. Correct. so last, you know, we’re talking kind of a seven year time frame here in terms of the growth and all of that.
00;03;51;00 – 00;03;55;10
Speaker 1
Let’s give people a sense of of what the business looks like today if you’re comfortable sharing stats.
00;03;55;10 – 00;04;13;23
Speaker 2
So yeah, I mean we you know we kind of joke about this, right. Like door count. yeah. It can be a little misleading, right. But yeah. Well, I think we’re at a few hundred, maybe a little over 100 residential units. that includes some single family still today and some small multis. and then we’re we’re up to almost seven storage facilities in Indiana.
00;04;13;23 – 00;04;44;12
Speaker 2
So I’ve got experience with a few different asset classes. and, and we’ll dive in. You know, more of this, but primarily direct to seller and building those relationships. But, we’re not vertically integrated. We do use third party on all of our residential stuff. And then we we self manage the self-storage facilities. So. Yeah. yeah. You know, we can get all that kind of stuff a little bit deeper if you’d like, but that’s, you know, from one single family home to a ten unit property to a few hundred units today has has kind of been the progression here over the last, seven years or so.
00;04;44;12 – 00;04;59;12
Speaker 2
No syndication, pretty much myself and one of the partner, there’s been some JVs along the way, but, you know, when you’re in the Midwest like that, the price, you know, purchase prices are a lot cheaper, right? So you’re talking, what, eight, 12 units in your market might run you you know what, one.
00;04;59;12 – 00;05;00;04
Speaker 1
Hundred and 50 million.
00;05;00;07 – 00;05;11;27
Speaker 2
Australian door. Yeah. Whereas I’m buying stuff for 30, 40, 50 of door. So you know, we’re able to get away with sometimes using private money. Our own money. so yeah, that’s, that’s what it looks like today.
00;05;12;01 – 00;05;31;06
Speaker 1
Yeah. And I was going to bring it up if you didn’t, the, you know, the fact that you haven’t syndicated the deals right, of your own capital just compounding over time and, you know, finding killer deals, adding value, pulling your money out into the next one, which obviously you can do when you find great deals. Yeah. And, you know, we probably won’t dive into the storage component in terms of like finding those deals, underwriting them operating.
00;05;31;10 – 00;05;53;18
Speaker 1
but we’re going to talk about going direct to seller. And it’s the same process. Correct. Going to a multifamily across the board, across the board. It’s the same process which is perfect here. So why don’t we rewind as far back as you want to go, whether this is like 20 1718, whenever you want to go here in terms of what you were doing at the time, to start getting in front of owners, to start finding and buying direct to seller deals.
00;05;53;20 – 00;06;03;07
Speaker 1
And if that’s changed over the years, that’s maybe talk about the progression. but, how did you start? Because I think that’s going to be relatable for a lot of the folks. Listening is like, let’s sure, I want to start doing this.
00;06;03;07 – 00;06;22;09
Speaker 2
Well, I mean, it’s it’s funny, we were talking about this on the way over here. It’s kind of come full, full circle, if you will. I mean, I started listening to Rod’s podcast, before I bought my first building and attending some of the boot camps. So it’s just kind of funny being here and, like, sharing my story about, you know, I keep replaying the, hey, you know, welcome to the lifetime cash.
00;06;22;09 – 00;06;41;08
Speaker 2
Like this just beat into my head, right? Listen to so many episodes. all good things. Right? But, I mean, heck, some of the things that rod even talked about earlier on are just things I, I applied again, a little bit different environment as far as interest rates and market. that’s neither here nor there. But the first house it was, I call it a for rent sign.
00;06;41;11 – 00;06;59;27
Speaker 2
You know, prices beat up pretty, pretty good. And I didn’t know what I was doing. Right. So I call this guy up. Hey, you know, do you want to sell this place? So we get out there, we meet up and, you know, I’m walking the property. I can, like, I know what’s going on. And, that was kind of the first, I guess, interaction I had with just direct a seller, no agent involved.
00;07;00;02 – 00;07;17;11
Speaker 2
and you get a, you know, the podcast that you guys were just talking. You talk a lot about motivation, right? that’s the almost the main component and direct to seller. There’s got to be some level of motivation. Right. And so having that first interaction with that individual, I saw that they were they retired landlord. Right.
00;07;17;11 – 00;07;41;04
Speaker 2
And so that was kind of the motivation behind. All right. Hey, you know what? I don’t really want to fix this thing up for rent. I’d be happy to unload it. And so that’s that was that first, interaction that I had with. Okay. Hey, this this is there’s something here. So having that, you know, went through the first experience with that particular property and then applied some of that same interaction, if you will, on future, future interactions was.
00;07;41;06 – 00;07;43;21
Speaker 1
Just continuing to scale it out. Yeah. Yeah. Right. Yeah.
00;07;43;24 – 00;08;02;04
Speaker 2
And you don’t know what you don’t know. Right. So on your first one you’re like, okay, you know, you’re trying to go back and forth and figuring out, you know, what’s, what’s this person’s angle. And you know, I want to buy, but why are they selling? And, you know, I was probably having some of those, same emotions that someone who’s new might as well like, what the hell is going on here?
00;08;02;04 – 00;08;09;05
Speaker 2
What am I doing? What are the questions that I need to be asking? How am I going to, you know, rehab this thing? so that was like I said, that was the first interaction.
00;08;09;13 – 00;08;33;08
Speaker 1
Yeah. And then and then obviously all the comfort with all of those different components comes over time, right? It’s so much of what we do is just getting in reps. One, as you know, first, the objective with getting reps and obviously you’re getting better at what you’re doing. You’re getting better at speaking with sales. You’re getting better at identifying those potential sources of motivation, but you also have to get a lot of reps in, because you have to speak with a lot of owners to find a much smaller number of deals.
00;08;33;08 – 00;08;48;14
Speaker 1
And obviously the number of owners you’re speaking with. So it’s not only are you increasing the chances that you find the deal, but you’re getting better at the process along the way. And and there is a period of time where you just have to follow that process. you know, it’s funny, we still have somebody on our on our team calling on for rent.
00;08;48;17 – 00;09;04;08
Speaker 1
It’s like it’s still a deal sourcing strategy because you’re almost it’s almost a 100% chance that you’re going to have some kind of a conversation with the owner, which is obviously what we’re trying to do is trying to have conversations with owners. Sure. so you are calling on for rent signs. That’s how you got number one, right?
00;09;04;08 – 00;09;21;14
Speaker 1
And then again, you started to build out the platform. And I’m sure you started, you know, some probably some cold calling along the way, some all of that stuff. Let’s fast forward a little bit and maybe talk about what it looks like now. because you’re obviously prospecting and marketing to storage owners, I’m sure you’re probably still doing it to multifamily owners as well.
00;09;21;17 – 00;09;28;08
Speaker 1
what are the different lanes that you’re are you living in as it relates to? What are the strategies are employing to actually get in front of? Sure.
00;09;28;13 – 00;09;46;12
Speaker 2
Well, you know, let’s first start with the avatar, right. Like your avatar for, you know, a single family home or, you know, a 20 unit apartment building, there’s going to be two entirely different people, right? So your conversation might look a little bit different. You know, you’d mentioned, you know, you’re not approaching this person saying, hey, I want to buy your apartment for fast cash.
00;09;46;12 – 00;10;07;26
Speaker 2
Like they’ve got some sort of idea of, okay, hey, how do I maximize the value of this in terms of a sale? So, you know, when when those when our team is cold calling or I’m like, I still cold call today. those interactions are just right off the bat are very direct. Right. You know, we want to immediately provide some sort of validation that, hey, we’re not just calling you out of the blue to to waste your time.
00;10;08;02 – 00;10;27;24
Speaker 2
You know, maybe we own a property in the area or we’ve been transacting in that particular marketplace. So giving them, you know, confidence validation that, okay, these these guys are players. Right. And then hey would you consider an offer on this or hey have you considered selling right off the bat. it gives them pretty direct, you know, idea of, hey, what what do these guys want?
00;10;27;24 – 00;10;50;13
Speaker 2
Right? We’re not going in there. And kicking the tires with them and trying to waste their time. So that’s been pretty beneficial. And granted, you get some people that just hang up on your won’t give you the time of day. But, you know, again, back to the motivation factor. If if somebody is going through a life event or there’s something there that would encourage them to have some motivation that helps, you know, drive the conversation and then it just becomes exploration, right?
00;10;50;13 – 00;11;01;00
Speaker 2
Okay. Hey, what’s going on? You know, how long have you owned the property? Then you start to get some of the story behind what’s going on, your peeling back the layers of the onion, and, you know, you get to see if it’s the right fit or not.
00;11;01;02 – 00;11;16;23
Speaker 1
Yeah. I’m trying to think about the best way to ask this question, but the what I’m trying to get at here, I guess, is let’s let’s think about the an initial call with an owner and let’s think about what is the objective of that call. obviously we want to there’s a, there’s the part of the call where you introducing yourself.
00;11;16;23 – 00;11;35;21
Speaker 1
Why why are you actually calling this person right. They’re still on the phone. They’re still willing to chat. I think a question I get a lot is like, what information am I supposed to receive on, on an initial phone call with a seller? Sure. And I think people drive the conversation to the dollars, the sense, the physical attributes of the building, you know, like who’s paying what utilities, right?
00;11;35;21 – 00;11;49;08
Speaker 1
And getting into that, that level of specific. But from a high level standpoint, from a conceptual standpoint, how do you think about an initial phone call with a seller? How do you best approach that to put yourself in a good position to to make an offer in the building, to build some rapport, etc.?
00;11;49;11 – 00;11;55;12
Speaker 2
Yeah, I mean, that first call is very important because if you come off to like, okay, what price you want, they’re, you know, they’re kind of like, whoa.
00;11;55;16 – 00;11;56;26
Speaker 1
Yeah, exactly.
00;11;56;28 – 00;12;12;22
Speaker 2
I think that at least from my experience, people have had, or I’ve had better interactions when they know that I’m just a real person. Right. Hey, I’m Zach, this is here’s the buildings we own. This is what I want to do. This is what we do. You know, this is why I’m on the phone with you.
00;12;12;25 – 00;12;27;29
Speaker 2
Not particularly pressing them for each dollar and cent, right? Yeah. You know, you want to get some of the rent information and you want to get collect some of that pertinent information that would allow you to make an offer. But for me personally, that first call isn’t always, hey, I’ll give you a 500 grand for this property, right?
00;12;28;01 – 00;12;49;28
Speaker 2
Yeah. It’s okay exploring. Is there enough motivation to where there might be a possibility of us transacting together, whether that be now, whether it be in 30, 60, 90 days or six months down the road. that’s more or less what that conversation looks like. And then, to your point, building enough rapport to where you’re giving them the confidence to, to to say, hey, this is actually a, a candidate that could perform.
00;12;50;02 – 00;12;53;13
Speaker 2
If I do decide, you know, when and if to sell.
00;12;53;16 – 00;13;15;09
Speaker 1
Yeah, I’m going to put you on the spot here and get really specific intact. Totally fine. what are some specific questions that maybe you consistently ask or that you like to ask to try to uncover potential sources of motivation, or to really get a seller talking to really to give them the roadmap and the and the runway to share much more information about what they’re actually, you know, what their situation actually is.
00;13;15;10 – 00;13;34;25
Speaker 2
Sure. I mean, so when I’m personally cold calling or if, you know, these are pretty targeted lists, or interactions that I’ve had with some of these people. So I almost compared to like, you almost want to be a sniper, right? So when I right before I get on the call, like I’m doing some due diligence on the property, so I’m not just, you know, hey, you know this I see you’ve got six units here.
00;13;34;25 – 00;13;49;06
Speaker 2
Like, I want to make sure that they know that I’ve done my homework prior to getting on the phone with them. So if I if I’m on there and I can see that they have, you know, maybe a unit for rent, I’m not going to be like, well, how much is this one up for? Like, I can see that, right.
00;13;49;08 – 00;14;08;15
Speaker 2
so typically those questions are, you know, you know, you’d mentioned this earlier. What would an ideal timeline look like for you in terms of closing? Are you looking to identify another property in a 1031? are you, you know, interested in carrying, you know, what your tax exposure look like going into some items beyond just the, the building itself.
00;14;08;15 – 00;14;29;01
Speaker 2
Right. And focusing in on, hey, is it an individual that owns this? Is it inheritance as a partnership? You know, hey, I don’t like my partner. We want to get rid of this thing that to me helps give some better information and really, I guess help direct what direction I take the conversation for those additional questions. Right. I can go find the tax bill.
00;14;29;01 – 00;14;44;14
Speaker 2
I can get my own insurance code. I can get the like if I know if I own enough buildings in that area, I know what the market rents are. I don’t need to sit there and pester that guy or gal with those those kinds of questions. But figuring out, okay, hey, if I were to bring you an offer today, would you be able to close in 30, 30 days?
00;14;44;14 – 00;14;53;22
Speaker 2
Would you be able to close in 90 days? What does that look like? Those are some of the more important questions that I tend to ask. again, aside from just the building specifics.
00;14;53;24 – 00;15;05;19
Speaker 1
Yeah. You know, I think, all of those are great. And I think another one that really gets to the meat of the the issue is what is your alternative to selling? What would you do if you don’t sell a building. Yeah. you know, and there’s all kinds of different answers there. But if it’s oh, that’s totally fine.
00;15;05;19 – 00;15;25;02
Speaker 1
It’s just, you know, I’ll just keep collecting the rents. Everything’s everything’s gravy. Okay. Well, there’s probably an indication of a lack of motivation. If it’s correct, if it’s more along the lines of, oh, I don’t know. You know, I if we don’t sell, we probably have to renovate a few of the units. We may have to, you know, we got at least a couple of these are and then there’s and they’re just laboring over the work that needs to be done.
00;15;25;04 – 00;15;41;27
Speaker 1
Well, that also tells you something different. And then that’s spiderwebs on into a number of other follow ups. but I think the big takeaway point of what you just described here is we’re not getting into the building specific information. That’s information you should have to a reasonable level outside of what you truly can have, which is like, what are all the units renting for?
00;15;41;27 – 00;15;58;20
Speaker 1
Right. But that conversation should occur towards the end of an introductory phone call, after you’ve gotten through all the meat and potatoes of your other stuff. and that’s a total aside. Not really what we’re talking about, but I think that’s part of the reason why it’s really hard to outsource cold calling to, you know, virtual talent. I think specific to multifamily.
00;15;58;26 – 00;15;59;17
Speaker 2
Yeah.
00;15;59;20 – 00;16;02;13
Speaker 1
Agreed. Yeah. You look like you had some follow ups there, but.
00;16;02;14 – 00;16;22;08
Speaker 2
Yeah, I mean, because like, I still play in like the single family space to some extent. And, you know, what do they say like a blind squirrel finds, it’s not like, yeah, if you go cold, call 500 people a day, like, yeah, you’re going to get something. But like, you’re I think you’re nice. Business models are somewhat similar in that we’re pretty, location specific.
00;16;22;08 – 00;16;43;27
Speaker 2
Right? We’re in a condensed area. So if I had, you know, Vas from the Philippines or wherever, right. That are calling these people it that that building the relationship side of things really isn’t present. and I think that that can go a long way in, you know, other relationships with the other building owners, other, you know, people in that in that area, vendors, things of that nature.
00;16;43;27 – 00;16;46;02
Speaker 2
But yes, you’re 100% right.
00;16;46;06 – 00;17;06;08
Speaker 1
Yeah. And part of the relationship developed component of this, which obviously is a critical piece of this whole process when you’re doing multifamily deals and you’re, you know, some guy who owns 20, 30, 40 units, whatever the number is, is not just going to make a snap decision to sell. That’s a that’s a really important decision in this individual’s life, just in general outside of the financial implications of it.
00;17;06;11 – 00;17;31;29
Speaker 1
So you you have to figure out a way to be present over a long period of time, which leads to how do we effectively follow up over a long period of time and there are different kinds of follow up. So I’ll try to narrow this down a little bit more. Let’s say you reach out to an owner and they have a, you know, one of the buildings that I’m kind of describing here, 20, 30, 40 units, what have, you know, like I hadn’t considered selling maybe send me an offer and you gather some information, you send them an offer, they’re like, oh, that’s not working for now.
00;17;32;01 – 00;17;46;11
Speaker 1
Sure. You left the conversation in an amicable place. They’re just time is not right. They’re not looking to sell at that point in time. What comes next for you and your business in terms of how you stay in front of this person in a predictable way and you know you can share timelines, resources, etc.?
00;17;46;13 – 00;18;06;27
Speaker 2
Well, just to take a step back, you know, and not to throw off your hypothetical, but like for us, what I’ve seen with the avatars that we’re buying from, it’s, you know, typically some of the motivation comes from age, right? more times than not, I’m probably not going to go buy, you know, go buy a building or buildings from a 35 year old guy.
00;18;07;00 – 00;18;27;11
Speaker 2
Right. unless he’s inherited those things, wants nothing to do with them. Okay, maybe. Right. But most of the people that I’m interacting with, you know, that do have motivation that are willing to transact are, you know, late 50s and 60s and even 70s. And so part of that comes into the play. In terms of follow up, how do you follow up with these people consistently, consistently without pestering them?
00;18;27;11 – 00;18;43;03
Speaker 2
Right. This isn’t a single family home where it’s like, let me buy your house and we’ll close and we’ll pay all the close calls like there’s there’s more decisions that come into play here. and so we typically try to do very similar to your 30, 60, 90 if there is an indicator where it’s like, hey, you know what?
00;18;43;07 – 00;19;02;24
Speaker 2
Here’s if the financials are shared with us and there’s a higher level of indication of of wanting to transact, wanting to sell, that, that tends to move up on our radar of, hey, let’s stay in touch with these people over the next 30 days, put some numbers together and then give them a soft offer of, hey, here’s here’s the range where we would be is is something that that would be interesting to you.
00;19;02;26 – 00;19;17;15
Speaker 2
Right. And then based off that right, then we’ll will tend to pick up the speed on on trying to move forward with them or not. If it’s hey, I don’t want to share the financials. Hey, I don’t you know, they’re kind of holding that to their side a little bit. we’re not as aggressive, but we’ll still stay in touch.
00;19;17;15 – 00;19;38;12
Speaker 2
Hey, you know, we spoke, you know, a few weeks ago. We spoke two months ago. You know, any more thought of this? Right. And more of a, I would say, like, pretty liberal approach, if you will. Right. Because you don’t want to hound people, but continuing to be, you know, top of mind for them. one thing we’ll do too is when we close a transaction, I’ll ping somebody.
00;19;38;12 – 00;19;55;26
Speaker 2
Hey, you know, we just bought this one down the street from you. You know, any more thought of this, right? Because it’s giving them more validation. Okay. Hey, this person that I’m interacting with isn’t just, like, harassing me about my building. They’re actually going out and transacting, you know, in another buildings and that, again, that’s very helpful when you’re in a smaller market.
00;19;55;28 – 00;19;58;00
Speaker 2
and you can be pretty targeted like that.
00;19;58;03 – 00;20;05;22
Speaker 1
I like that a lot actually, in terms of you close the deal and then you go to everybody within some reasonable radius and let them know that’s that’s pretty good because it.
00;20;05;22 – 00;20;20;04
Speaker 2
Gives them, you know, it’s not like, oh, hey, like, look at me. It’s hey, here’s here’s where we, we bought this thing because it might prompt them to ask you questions. Oh well what did what did you pay for that? Right. Hey, I bought four units down the street or two blocks from you. Oh. Well, what did you get for.
00;20;20;06 – 00;20;33;00
Speaker 2
Oh, I paid him. Wow. That’s. That’s more than I ever thought I’d get. You know what would you do that for mine? Well, yeah. Let’s let’s take a closer look. So it, you know, just helps kind of move that conversation to the to the top of the stack, if you will.
00;20;33;02 – 00;20;55;10
Speaker 1
Yeah. I mean, you should never be worried about what you are sharing, what you paid either because you’re probably buying for a good price considering you’re doing all of this different stuff. So the price you’re willing to pay is probably going to be a price should be, you know, remotely willing to pay, assuming it’s a similar building up the street, which is a much better dynamic than a seller seeing an agent sell a building for some absurdly high price and then anchoring their price to that.
00;20;55;12 – 00;21;12;04
Speaker 2
Like one thing I’ll use, and this is like worked in some instances and hurt me and others where I’m like, hey, you know, I just, I bought these, you know, two duplexes down the street from you, like, you know, a block or two down. Wow. You just killed my appraisal. Oh, that’s that’s what they’re trading for. So. Yeah.
00;21;12;04 – 00;21;13;18
Speaker 2
Well, so it kind of, you know, first.
00;21;13;21 – 00;21;15;16
Speaker 1
Selling a willing buyer, you know, for.
00;21;15;16 – 00;21;27;22
Speaker 2
Some people that are maybe have their head in the clouds on values, you know, kind of gives them. Okay. Wow. This is actually transactions that are happening even though they may not want to admit that that’s the price that, you know, they don’t want to see.
00;21;27;29 – 00;21;46;10
Speaker 1
Yeah. For sure. Let’s, let’s talk about the differences and having conversations with sellers when you’re looking at a deal versus having a conversation with a broker who’s repping a seller when they’re marketing a deal. obviously those are two very different scenarios. Yeah. My $0.02 is you can you can get a little bit more creative. You can have more interesting conversations with the seller.
00;21;46;10 – 00;21;56;27
Speaker 1
You can build that rapport versus there being somebody stonewalling you. what is getting in front of a seller allow you to do that? Pursuing a broker deal maybe does not.
00;21;56;29 – 00;22;13;19
Speaker 2
I think that, like, I can say this because I’m a broker, too. Yeah. but like, there’s communication that gets lost in transition, right? And so sometimes it’s like, hey, this is what we need out of the transaction. This is what we’re presenting. And then the broker, you know, not all brokers, these are some some badass brokers out there.
00;22;13;24 – 00;22;33;03
Speaker 2
We’ll go. And then, you know, it kind of gets twisted or turned and then you start talking about emotion entering the transaction. I think that’s one of the worst things that can happen is, you know, too much emotion. A transaction will just absolutely kill a deal. So I think the approach with, you know, having the ability to just pick up the phone and call this on me like, hey, this is what’s going on.
00;22;33;03 – 00;22;54;12
Speaker 2
Like, can we find a solution? And being solution oriented aside from. Okay. Hey, bro. Hey, Joe schmo broker like, this is what we’re running into. There’s just some more friction there. that I think can be problematic. Again, I’m not saying that there’s, you know, bad deals to be had with brokers, but, that’s. I, I just like being direct.
00;22;54;15 – 00;23;17;19
Speaker 1
Yeah. And I think it’s interesting too, because when I think about all the deals I’ve been involved in that have become the most contentious. Yeah, there have been brokers involved, which almost defies what common logic might be in which it’s like, well, you have there’s a mediator or somebody in the middle, but all that really does is water down or change the communication that’s going back and forth.
00;23;17;22 – 00;23;31;19
Speaker 1
And, and then, you know, whether you’re the buyer or the seller in the situation, you kind of just let it fly because you’re not saying it directly to your counterpart. You’re saying it to somebody in the middle. So you’re you’re you’re letting your emotions get ahead, you know, maybe not getting the best of you, but you’re letting them get involved.
00;23;31;19 – 00;23;39;28
Speaker 1
Maybe to a level that you wouldn’t if you were speaking directly to the person on the other side. Well, you kind of need to. You can’t be as confrontational in that situation, correct?
00;23;40;02 – 00;24;07;06
Speaker 2
I mean, and, you know, for example, right. There’s you go do a sewer inspection or whatever it might be that comes up and it’s like, hey, this is going to cost, you know, 25, 50 grand. That broker has a vested interest in the transaction closing, right? They’re paid based off of it going through, whether you’re making the 25, $50,000 saving on the buy side or not, that’s like, as the buyer, we’re the ones that have to operate the deal after freaking close.
00;24;07;06 – 00;24;24;03
Speaker 2
It’s right. Like that’s when it’s all fun and giddy. When when you’re, you know, have a deal on a contract and close it. But like the day after closing is when you start executing the business model. Right? So, that’s where I think if you can pick up the phone and say, hey, you know, there’s this 25, $50,000 issue that came up, you know, I still want to move forward.
00;24;24;03 – 00;24;38;23
Speaker 2
I want to handle this, but how can we come to a win win solution here? And I think that’s where sometimes it can get twisted. If there’s if it’s going through, you know, broker or just multiple people like that. So like whenever I call sellers I’m not like, hey, I’m a broker. I’m like, hey, I want to buy this thing.
00;24;38;26 – 00;24;43;24
Speaker 2
Do you want to sell? Do you want to transact? Right? Okay. People can some people can respect that.
00;24;43;27 – 00;25;14;09
Speaker 1
I mean also opens up plenty of other doors too, which are probably longer conversations that maybe we won’t get into during this. you know, recording. But I think, obviously it’s much easier to broach creative deal structures when you’re speaking directly to a seller and you can build some level of trust, and you’re also not competing with other buyers who are maybe just showing up with standard cash or regular finance offers where you can get into the seller financing world, you know, maybe whether it’s first position, second position, financing, you can get creative with closing timeline, you know, little stuff along the way.
00;25;14;11 – 00;25;16;06
Speaker 1
whole nother world. We probably won’t get into that, right?
00;25;16;06 – 00;25;35;02
Speaker 2
But even back to the point familiar, right? Going beyond just the building specifics, right? It’s other other elements that come into play there that you can iron out with the seller that I think just it’s easier to do when you’re in direct communication. I mean, honestly, the whole reason I started going direct seller is because of Marcus. Marcus and Millichap agent wouldn’t give me the time of day.
00;25;35;04 – 00;25;36;24
Speaker 2
So.
00;25;36;26 – 00;25;39;23
Speaker 1
So it was a vendetta that sent you down this path? That’s pretty good.
00;25;39;23 – 00;25;44;05
Speaker 2
Nice guy.
00;25;44;08 – 00;26;00;03
Speaker 1
so I guess, slightly shifting gears here and we’re going to, we’re going to flip the conversation kind of on its head there in terms of what people typically get wrong about this. there’s a whole I’ll define this a little bit more narrowly, because there’s a lot of things that you can screw up along the way as you’re marketing and prospecting the sellers.
00;26;00;03 – 00;26;15;18
Speaker 1
But let’s start with this. So specific to to direct to seller marketing. So we’re talking about we’re spending money to get in front of owners, whether that’s direct mail, whether that’s, you know, I don’t have a lot of experience with like Google Ads or PPC. I don’t know if you’ve done any of that stuff. Yeah. So we’re not in like about that.
00;26;15;18 – 00;26;31;03
Speaker 1
And I don’t even think that applies to multifamily conversation. So we don’t have to go down that road. But you know, I define prospecting as you’re spending or you’re trading your time for leads, right? You’re calling, you’re texting, you’re directly emailing someone 1 to 1. Communication, marketing. You’re spending money to get in front of people. So we’ll start with direct to seller marketing.
00;26;31;05 – 00;26;40;20
Speaker 1
I know you have a lot of experience with mail. You’ve done some unique stuff on the mail side. Yeah. What do people get wrong about this? What does a new investor get wrong about this when they start doing this most commonly.
00;26;40;23 – 00;26;57;02
Speaker 2
So my take on this might be a little bit different than yours. But I love just leading with, hey, this is like who you’re who you’re getting the mailer from is me. I’m not like, this isn’t Blackstone, right?
00;26;57;05 – 00;26;57;10
Speaker 1
Yeah.
00;26;57;10 – 00;27;16;07
Speaker 2
Yeah. this is, you know, we buy multifamily or I buy multifamily. having a personal touch to the mail, I think is is important. Again, this is if you’re, you know, I’m speaking I’m in markets where, like, I’m not in a Tampa and Saint Pete market to where owners are just getting harassed. Right.
00;27;16;09 – 00;27;19;11
Speaker 1
their inbox is full, mailbox is full of mail.
00;27;19;11 – 00;27;33;10
Speaker 2
You know, so something that’s going to give a little bit of a personal touch. And I’m not talking like, you know, you need to go put a cover letter and, you know, a family portrait. That’s that’s not what I’m getting at. But hey, like, here’s what I am. Here’s what I do. I can help you if you’re interested in.
00;27;33;10 – 00;27;51;24
Speaker 2
And that’s I can give you a few different solutions. Right. that is something at least in the mailers, you know. Well, what do you put on your mailer? Hey, like, here’s what I am. Here’s what I do. Do you want to sell? Yeah, right. And if you don’t want to sell okay, great. Let’s like let’s let’s still stay in touch because what you’ve created, this person might be 50, 60, 70 years old.
00;27;51;26 – 00;28;11;07
Speaker 2
They probably know more. Something more than, more than than I do. Right. So it’d be interesting to connect. Okay. Hey, if it’s not now let’s let’s figure out ways to to stay in touch. So that’s, that’s primarily is having a personal touch. again, this isn’t a, you’re not casting such a wide net, right? You’re getting pretty specific on.
00;28;11;12 – 00;28;30;29
Speaker 2
Hey, I’m looking at this multifamily property, or I want to buy multifamily properties. To your point, we we, you know, we include similar things like, no commissions. We’re not going to disturb the tenants. I think that is one of the bigger like, points that’s not really talked about is in these smaller multifamily transactions, you know, sub 50 units.
00;28;30;29 – 00;28;50;22
Speaker 2
I mean, even on a duplex, you like, people don’t understand how big of a weight that is. I think on some seller shoulders that they don’t want their tenants to know. Right, because they get into the middle of a transaction. Transaction falls apart. If these people are moving or they’re mad. That’s just that’s really soured the relationship with with those residents.
00;28;50;24 – 00;29;08;00
Speaker 2
And that can it can just be stressful for an owner, especially if that’s their only asset or they’re, you know, they’re they’re migrating more towards a retirement like this, just one less thing they want to have to worry about. So giving them, they assured me that, hey, this isn’t our first rodeo. We want to make sure that that you’re comfortable with the sale and it can be discreet, right.
00;29;08;02 – 00;29;15;16
Speaker 2
while still making sure that everything’s squared away. That’s that’s what we’ll do. So, will you include a little bit of that in the mailer? and. Yeah, that’s kind of.
00;29;15;18 – 00;29;37;19
Speaker 1
Yeah. I mean, a couple of follows. One, I just want to really underscore the importance of the we will not blow up the situation with your tenant. Like that is so massive. Yeah. And it’s I think that might be one of the biggest disconnects between somebody who is a more sophisticated owner that maybe uses a management company, or they’re a larger investor that has an in-house, they have a property manager.
00;29;37;19 – 00;29;54;21
Speaker 1
They’re not they’re not in front of the tenants, like the disconnect between somebody who’s in that position, which is a lot of the folks that are probably listening to, listening to this are going to send direct mail and try to buy, you know, deals direct to. So I’m sure they probably have a hard time putting themselves in the shoes of the person who’s owned this 15 unit building for 15 years.
00;29;54;23 – 00;30;13;27
Speaker 1
And that is a massive hurdle for them to overcome. And just selling or broaching the topic of this conversation. Yeah. so I just want to highlight that. But then the other thing I want to touch on too, is you kept talking about avatar early in our conversation here, and customizing your mail piece to the avatar that is receiving it is so important for you.
00;30;13;27 – 00;30;37;17
Speaker 1
You’re marketing to people in the Midwest, you know, getting small to midsize deals. These people probably find a lot of value in the fact that they’re speaking directly with with you personally, and they’re going to be selling to you personally. but there are different situations as well, right? Let’s say you’re doing you’re sending mail in Boston where I live, and you’re just reaching out to a guy who’s in the northeast who’s like a little bit more rough around the edges and doesn’t really give a, you know, damn about all that crap.
00;30;37;17 – 00;30;43;03
Speaker 1
They just want to sell for top dollar. They don’t want their time wasted. Yeah. You may have to spend a little bit more time establishing the credibility.
00;30;43;04 – 00;30;43;19
Speaker 2
Correct.
00;30;43;25 – 00;30;49;03
Speaker 1
And they maybe don’t care if you buy it. If Blackstone buys it, if your company buys it of who buys it.
00;30;49;08 – 00;30;49;29
Speaker 2
Give me the most money.
00;30;50;02 – 00;30;56;18
Speaker 1
Yeah I don’t yeah I care about dollars and cents here. you know so there’s, there’s all kinds of different.
00;30;56;21 – 00;30;57;10
Speaker 2
Decisions.
00;30;57;10 – 00;30;58;06
Speaker 1
Right. Yeah. Exactly.
00;30;58;06 – 00;31;24;18
Speaker 2
And that’s where again formulating a plan for, for the market that you’re in and how you’re getting in front of people, how you’re continue to stay in front of them. That’s important. Right. I would say I mean, this sounds crazy. And some of the people listening might not, think that this is a thing, but and certain interactions that I’ve had with sellers, I would say they’ve almost put more emphasis on the tenants not knowing during the transaction of a sale than, you know, getting the most out of it.
00;31;24;18 – 00;31;38;21
Speaker 2
Right? Because, right. For somebody that’s owned a building like that for 15 or 20 years, they may have friends or even family members that live in that building. They just want to make sure that they’re not bothered. Right. So, yeah, it’s true. It is market dependent.
00;31;38;23 – 00;31;55;00
Speaker 1
Like, I literally cannot tell you how many deals we’ve bought specifically or in terms of deals we’ve won, where maybe we’re competing with one other person, or maybe the seller finally felt comfortable selling because of the fact that we’re like, we will be whoever you want us to be until the day of closing like that is.
00;31;55;00 – 00;31;55;26
Speaker 2
Oh, it’s.
00;31;55;26 – 00;32;03;12
Speaker 1
Crazy. You talk just a handful of those deals this year alone, right? And that’s like the driving force behind why they finally became comfortable with selling.
00;32;03;14 – 00;32;11;22
Speaker 2
So shy about wearing multiple hats. Hey, I’m the insurance guy. Hey, I’m. Yeah, I’m the appraiser. Hey, I’m the contractor. and the lender.
00;32;11;22 – 00;32;12;23
Speaker 1
I’ve been the bank so many.
00;32;12;23 – 00;32;13;25
Speaker 2
Times, and, like, a lender.
00;32;13;25 – 00;32;15;00
Speaker 1
Wants to come in and look at the units.
00;32;15;00 – 00;32;29;05
Speaker 2
Being on that note. And I think this is a big separation from, like, the 100 and up world and the 50 and under world is I, because we’ve talked about this just personally. You may not get the most organized financials.
00;32;29;07 – 00;32;29;17
Speaker 1
Yeah.
00;32;29;18 – 00;32;48;06
Speaker 2
You may not even get full financials. Right. But if you have enough, you know, this might not be for a first time person. Right. But if you have enough, you know, traction underneath underneath you, you should still be able to be confident to move forward, having just limited information, and being able to move forward.
00;32;48;10 – 00;32;56;14
Speaker 1
100%. Yeah. And I think that’s an important no. Right. This is, these types of deals where they’re, they’re a little bit messier and.
00;32;56;16 – 00;32;56;22
Speaker 2
There’s.
00;32;56;23 – 00;33;01;15
Speaker 1
Hair. Right? You’re probably not going to have their tax returns. You know, you’re probably going to have.
00;33;01;15 – 00;33;02;16
Speaker 2
A bank state. Yeah.
00;33;02;17 – 00;33;06;08
Speaker 1
You might have a paper rent roll or a rent roll in Excel or whatever.
00;33;06;08 – 00;33;09;05
Speaker 2
If you’re getting a handwritten rent roll, that probably means you’re getting a good deal.
00;33;09;05 – 00;33;28;12
Speaker 1
Yes. Yeah. We love those. Yeah, we love the yellow pad rent roll. Right. Like if it’s on this, that’s perfect. I think that’s. Yeah. And it’s an important point, right. Your first couple of deals, you probably want to go through the process with an agent, a broker, something that’s a little bit more turnkey so that you feel comfortable around the edges so that you know what your expenses are going to be for a similar building.
00;33;28;12 – 00;33;45;29
Speaker 1
Right? Because you’re not going to alternate, you’re not going to get the sellers. And even if they share them, you’re probably just going to lie to you because they have no incentive to tell the truth. Right? Unless you’ve built build incredible rapport, you’re going to need a sense of of understanding of how that building’s going to perform. So yeah, this is like, we want to pour gas on the fire and buy really, you know, really just kind of deals.
00;33;45;29 – 00;33;48;21
Speaker 1
But with the discount comes the challenges oftentimes as well.
00;33;48;21 – 00;33;50;01
Speaker 2
It’s a trade off.
00;33;50;03 – 00;33;53;01
Speaker 1
All right. So back to what people get wrong about.
00;33;53;01 – 00;33;53;29
Speaker 2
Sorry I kind of took us.
00;33;53;29 – 00;34;12;01
Speaker 1
Off. No no no. And I rails there. Oh I helped you I also guided that train right off the rails. But, so we talked about what people get wrong with marketing. Right. Which we use mail as an example. Let’s talk about what people oftentimes get wrong with prospecting. And we can define this. If you want to talk about cold calling looks like pick one strategy cold calling cold emailing I know you do a lot of calling.
00;34;12;02 – 00;34;20;29
Speaker 1
Sure. if it is calling, like, what do people get wrong about cold calling? What what mistakes do they make as they start to do that? When they go out there looking for deals?
00;34;21;02 – 00;34;40;09
Speaker 2
I my biggest thing is, you know, because I’ve got some guys that will, you know, they’ll reach out, hey, can I call? Call for you. And my biggest thing that I try to teach them is like, just lead with honesty. Yeah, right. if you get on the phone with somebody and you tell them, hey, I’ve got it’s almost like you’re you’re like trying to show off, like, hey, I’ve got 500 units in this market.
00;34;40;11 – 00;34;57;09
Speaker 2
Well, that person doesn’t give a damn, right? Yeah. Like, yeah. You want to, you want to be honest enough to where you can give them, you know, give yourself credit to where you know what you’re talking about. But being honest with, hey, this is what this is what we’re looking for. And I think at least in the markets that I’m in, people can appreciate that.
00;34;57;11 – 00;35;16;19
Speaker 2
Right. hey, here’s here’s what we can do, here’s how quickly we can close. And then the assuredly to be able to perform, there’s like scripts and recordings that I hear of, of people cold calling. I’m like, oh my gosh. Like, yeah. And even some of the VA’s that I’ve here, I’m like, this is just people can see through that pretty quickly because they’re just not honest.
00;35;16;21 – 00;35;29;02
Speaker 2
and I think that is kind of an overlooked thing, but maybe it’s different in the northeast. I mean, I just try to hey, straight up, this is where we’re at. This is what we can do for you. Do you, you know, do you have an interest? And if you don’t. Hey. Great. Do you mind if we stay in touch?
00;35;29;04 – 00;35;47;20
Speaker 2
Right? Yeah. Like you don’t have to in each call. It doesn’t have to be. Oh, man. Like we didn’t get anything from that. Like, you can leave with something. Right? Okay. Hey, this guy owns a building around the corner from us. He’s a good asset to have. He’s a real friendly guy. Like, still take the notes in your CRM, and if you ever revisit that, it could be three or 4 or 5.
00;35;47;26 – 00;35;57;26
Speaker 2
Like, like you said earlier, like six years down the road, that person might become an asset or there might be some way, shape or form that you can benefit one another beyond just, hey, let me let me buy your building 100%.
00;35;57;26 – 00;36;16;19
Speaker 1
Yeah. And, you know, we define a win, in our business from a cold call standpoint as we receive some information or we have now an email, we can put in a list to where we can stay in touch with them on that schedule basis moving forward. Sure. a win is not necessarily like we made an offer on the building, because that’s a lot to ask for in an initial cold call.
00;36;16;22 – 00;36;34;12
Speaker 1
Correct. You got to catch somebody with like 30 minutes of time, like, which is obviously so rare and they don’t know you. and again, goes back to the avatar thing, right? You mentioned that it doesn’t necessarily like you’re not leading a cold call with like, hey, we own 500 units, etc., etc.. Right? Oftentimes the person you’re reaching out to, I would imagine would be intimidated by that fact.
00;36;34;16 – 00;36;54;16
Speaker 1
Very. Okay. So now I’m going to be taking advantage of by some really sophisticated investor that knows far more about my property than even I do. Correct. So it’s like, yeah, that might work for the guy that owns the 75 unit complex. You’ve established credibility to close, and that’s important. But to the person that owns the six unit or the eight unit, they may be intimidated now and they may not want to engage with you because there’s a fear that they’re going to be taken advantage of.
00;36;54;16 – 00;37;12;28
Speaker 1
So again, it comes back to avatar and McCree on, last thing, as it relates to what people get wrong, I want to talk about what people get wrong during follow up. So we’ve talked a little bit about follow up and how you, you know, you kind of stay consistent with that. Yeah. what do you a lot of investors screw up when it comes time to try and stay in touch with an owner over a longer period of time?
00;37;12;28 – 00;37;39;23
Speaker 2
I think overlooking some of the personal like, right, you and rod had talked about this earlier, you know, taking some personal notes with these people in life events, things of that nature, because those are big drivers of the motivation. And so if you’re not being diligent in, you know, like taking notes during your conversation and picking up on some of the things that they’re saying, you know, you could be missing a lot of opportunity there right on that second, that third, fourth call.
00;37;39;25 – 00;38;00;28
Speaker 2
hey, you know, my my wife’s sick or whatever. My kids going to to school. those are important items that when you do follow up on that second or third call, hey, you know, Johnny is, you know, getting ready to go off to college. Where’s where’s he had to school then you’re having a whole you’re having a whole nother conversation building rapport with this particular person.
00;38;00;28 – 00;38;19;17
Speaker 2
And then it goes right back to the building. Right? I think that sometimes that’s overlooked. I would say that’s probably a key, key driver to some of the success I’ve had with just relationships. Right? People talk about, hey, real estate relationship, relationship relation. But I think that that’s true. and hammering those relationships down beyond just. Okay.
00;38;19;17 – 00;38;22;14
Speaker 2
Hey, this is just a one time transaction.
00;38;22;16 – 00;38;51;05
Speaker 1
100%, you know, and an interesting, sales stat or marketing stat and however you want to define it. And I’m forgetting where I saw this. I might have been, might have been the one page marketing plan, which is like a sales marketing book, but, there’s a graphic in there that said, most individuals who are selling give up after the second and third contact, it was some very large percentage, and then it was some very small percentage of of individuals that make it to the seventh contact with, with a recipient.
00;38;51;05 – 00;39;09;05
Speaker 1
Right. And obviously this is the in the context of just business or selling in a business context. We’re talking about it just in a different context of real estate. Most people give up after 2 or 3 tries. Some large percentage, some very small percentage gets the seven. But the percentage of deals that are closed after seven contacts is the large percentage.
00;39;09;05 – 00;39;29;10
Speaker 1
It’s like 80 or 90% something very high. So I’m butchering this analogy because it’s audio. I would love to show a graphic of it, but the thesis statement here being you haven’t really earned the right to buy a deal or to to really have a conversation on getting a deal done until you’ve contacted somebody seven times. And we’ve seen the same in our business where it’s first call.
00;39;29;10 – 00;39;42;22
Speaker 1
Intro. Cool. Sounds good here. All right. You know, hey, our price doesn’t work. Second one. timing still don’t. Right. Third one, it’s still not right. Yep. Fourth one. Oh, maybe it is. Right. And then we make an offer. All right. We’re still not close enough on the offer we made. They’re still spread their fifth. No good. Six.
00;39;42;22 – 00;39;55;18
Speaker 1
No good seventh. I’m actually really interested in selling. Is that price you offered me a few months ago? Still the price. Shoot offer. Now, maybe we enter some final negotiation. Bang. That’s where we get it done. That’s oftentimes the life cycle of how this stuff goes, if not longer than that, I would agree.
00;39;55;18 – 00;39;55;25
Speaker 2
Yeah.
00;39;55;25 – 00;40;09;23
Speaker 1
But, but in general, I think that’s important, right. Because you have to frame the expectations when you’re getting into this. If you’re an investor who’s going to start doing all of this, that like, you know, I tell people all the time, it’s like, if you’re going to send mail, you should be prepped to send seven mail pieces.
00;40;09;25 – 00;40;29;10
Speaker 1
and if you sent seven over a longer period of time over a year and a half or something like that, assuming your list is big enough, it’s, it would be irresponsible to not get a deal done at that point. Like it’s very likely you’re going to get a deal done. assuming you’re willing to pay a reasonable price, you know, your expectations aren’t to the moon, but that’s that’s a really critical mindset to get into because.
00;40;29;10 – 00;40;44;09
Speaker 2
That’s know I, I honestly should have brought that up. I just didn’t want to make myself sound like a psychopath because, you know, if you would see some of the text I send, you know, some of these, again, it’s like I’m just talking to myself. It’s like I’m, you know, flirting with a girl on Instagram. I’m just scrolling myself there.
00;40;44;11 – 00;40;45;19
Speaker 1
But that’s the perfect analogy.
00;40;45;19 – 00;41;04;25
Speaker 2
You’re right. You know, it’s having a little bit of a personal touch, but but also not being afraid to, you know, continue to follow up. I mean, literally, there’s been, like you said, seven, eight touches. And then somebody is like, yeah, you know what? My husband’s retiring. But that’s that’s kind of my point on the, the personal touches of like keeping in mind, you know, what are these people have going on in their life aside from this?
00;41;04;25 – 00;41;18;03
Speaker 2
You know, this eight unit building might just be like one of the lowest things on their totem pole, as far as, you know, what they’re concerned about. So if they have something else in their life that, that, you know, a triggering event. Okay, hey, we need some cash or hey, we just we don’t want to deal with this.
00;41;18;03 – 00;41;19;15
Speaker 2
That’s when you need to be top of mind.
00;41;19;19 – 00;41;20;16
Speaker 1
Yeah, 100%.
00;41;20;17 – 00;41;22;26
Speaker 2
If it takes eight times, 12 times, you know.
00;41;22;29 – 00;41;31;11
Speaker 1
And the probably will. That’s the reality. It’s probably going to take that long, but it’s worth it, right? That’s the other side of the coin. It’s worth it when you buy the $2 million deal for 117.
00;41;31;11 – 00;41;47;04
Speaker 2
Okay. Well think about it. Right. If you if you contact somebody, you know, seven, ten times over the course of two years, right. And let’s say you maybe have just a few hours. I mean, it’s not like you’re getting on the phone with those people for six hours at a time. No, you maybe have a few hours invested in that transaction of those conversations.
00;41;47;07 – 00;42;05;11
Speaker 2
Yeah. If you walk into a building where you’re, you know, even ten, 15, 20, 25% below market value, that’s a few hundred thousand dollars. Yeah. It’s crazy. Like the numbers are huge. I mean, it’s nuts. Yeah. But again, it’s not it’s not like realized income right then and there. But it’s so some people have a hard time I think wrapping their their head around.
00;42;05;14 – 00;42;17;11
Speaker 1
Yeah. Well and it’s also it’s like it’s important to define the buying of a great deal. Paying the paying a very you know paying a discounted price. Yeah. Paying the right price. That’s the most important step in the process.
00;42;17;11 – 00;42;17;24
Speaker 2
Agreed.
00;42;17;26 – 00;42;33;24
Speaker 1
Because you’re locking in. What’s the most important figure in the investing process, which is your purchase price, your basis. Right. Everything builds from there. If you overpay, it’s extremely hard to operate so effectively that you make up for the shortfall or the overage in what you paid, I should say.
00;42;34;00 – 00;42;55;29
Speaker 2
And in these smaller deals. Right. It’s it’s much tougher to have those swings in income or cut the expenses like it’s different when you’ve got a 150, 200 units and you go raise the rent 150 bucks, like, yeah, you’ve got an eight unit property. Just much tougher to do that. So it becomes even more important to be able to have a, you know, a a good basis when you’re purchasing for sure.
00;42;56;01 – 00;43;14;17
Speaker 1
before we started recording this, you were on the phone. Yeah. Like you were talking about a deal. And I want to put you on the spot about this, resuscitating a dead deal. And this is I’m asking the most specific question of all time, because I think it’s such a good thing to talk about for folks out there that are, like, doing all of this, something we recently started doing the specific language you used.
00;43;14;19 – 00;43;22;00
Speaker 1
do you mind sharing it and talking about how, let’s say, seller hasn’t gone back to you in six months or, I don’t know, some period of time, whatever it is. Yeah. How do you approach that conversation?
00;43;22;06 – 00;43;46;01
Speaker 2
It’s I mean, it’s either a text or it’s an email, usually like the subject. Have you given up on X, right. Or Texas. Have you given up. Not like hey Mr. So-and-so, I hope your day is going well. I think this is from Chris Voss. never split the difference. And I was kind of nervous to use it at first cause I’m like, oh, this is like, this is really direct and like, you almost kind of come off like an A-hole, right?
00;43;46;03 – 00;43;46;08
Speaker 2
but.
00;43;46;11 – 00;43;47;26
Speaker 1
At the same reservations. Yeah.
00;43;47;26 – 00;44;02;21
Speaker 2
Yeah, yeah. I mean, because, like, I’m director, like, I want to be a nice guy. and. Yeah, that. Have you given up on the responsiveness? I mean, you’re talking like a minute later to. Because it’s almost like it triggers something in people’s.
00;44;02;21 – 00;44;03;24
Speaker 1
Brains with loss aversion.
00;44;03;24 – 00;44;17;21
Speaker 2
Oh, wow. I need to get back to this person. And I’ve used that on in all types of situations, whether it be a seller’s buyer, you know, when you’re trying to get something moving, it’s like, okay, have you given up on this? Because you’re almost like, well, damn, I need to, I need to, like, I need to do something here.
00;44;17;21 – 00;44;19;21
Speaker 2
So yeah, that’s that’s a good one.
00;44;19;24 – 00;44;36;18
Speaker 1
Yeah. I think it triggers the loss aversion thing, which is like sales psychology that I am not even remotely qualified to be discussing in any way, shape or form. But just the hypothetical of, like, it’s the same version of, hey, you don’t want to miss, you know, you don’t want to miss the market, right? You don’t want to catch the market on the way down or you don’t want to.
00;44;36;21 – 00;44;54;19
Speaker 1
You don’t want to wait until X to sell because something may change, right? It’s it’s eliciting that motivation for what is incredibly direct. It’s incredibly direct. And it works really well. It does. Yeah. I’ve been telling all of our guys who are following up with sellers like, hey, work the Senate. And that oftentimes is what at least you know, it’s not like you’re going to win the deal all of a sudden, but at least starts to.
00;44;54;21 – 00;45;02;03
Speaker 2
It gives you an indication of like, okay, yes, we want to look at this deeper or like, hey, we’re just not interested. Yeah for sure. So yeah, that’s a good one.
00;45;02;03 – 00;45;15;23
Speaker 1
Let’s quickly talk tools. Resources and stuff. People can go and buy, download, etc. to help them going through all this. So I’m sure you get a CRM if there’s any other tools that you really leverage in a significant way, maybe share those how folks are listening.
00;45;15;23 – 00;45;35;27
Speaker 2
Yeah. So, you know, the CRM, we use RPA simply I mean, it’s we don’t send our mail directly through there. We’ve got another provider. But you know, you can text, you can call, that’s where where like our team communicates with one another. So we have a call center. You know, when people call in and they feel the call and then they’re sending appointments, I mean, it’s it’s it’s a gangster CRM that’s kind of like, you know, pretty boring.
00;45;35;29 – 00;45;50;13
Speaker 2
Prior to that, it was, it was a little bit of a nightmare, just, you know, going through different CRM. But yeah, really simple has been solid for us. some of our list management, you know, like this has actually been this week. I just heard you might know about this, racist. Have you heard of that?
00;45;50;15 – 00;45;51;04
Speaker 1
I have not, no.
00;45;51;04 – 00;46;08;11
Speaker 2
Yeah. So you can, like, stack your list and, I mean, it’s it’s kind of wild. I think it’s probably more applicable for some of the smaller multifamily stuff. but, yeah, you can pull your lists into it. I mean, it’s honestly, it’s like a little over my head. So, just I’m just now kind of learning it. prop stream is another one we use.
00;46;08;11 – 00;46;11;20
Speaker 2
I don’t use costar. Yeah, just I just don’t.
00;46;11;20 – 00;46;14;21
Speaker 1
They’re also going to take your first born kid with any subscription. Yeah.
00;46;14;21 – 00;46;30;23
Speaker 2
So we used to have it, and then I just I didn’t see the value in it. because, you know, in these smaller multifamily properties, you’re hunting for stuff that’s on on CoStar. Yeah. Right. So it’s almost like counterproductive. you know, I’m calling CoStar like, hey, can you pull list for me? And yeah, I just wasn’t it wasn’t it?
00;46;30;23 – 00;47;03;11
Speaker 2
So no, that’s not like no, no shady ins costar, but, yeah, prop stream has been solid for us, right? Simply, I mean, the mailing that we use, I think is the address.com is pretty good. They’ve been pretty cost effective. And, you know, similar we don’t use like, the buy your house cash fast. we’ve got, you know, it’s a little more specific for, you know, the multifamily we mentioned in there, like, hey, we’re looking at buying your apartment or we, you know, that’s I think it gets a little bit of a better response.
00;47;03;13 – 00;47;08;25
Speaker 2
Yep. but yeah, those are those are most of the tools that we use on, on a day to day basis.
00;47;08;27 – 00;47;37;23
Speaker 1
Yeah. The I skipped one is an interesting one because we do stack lists. I think we do it through we simply we just filter multiple lists and then it spits out, you know, common owners addresses on multiple lists and, and it’s just a good strategy as an aside from the actual resource of it all. But just to build out, you know, we call it like a super list where if you have a long time owner with equity or, you know, and they’re they might also be in the, you know, list that’s geographically filtered down to exactly where you want to buy.
00;47;37;25 – 00;47;49;26
Speaker 1
Or maybe they’re showing up on like a code violation or some specialty list you have as well. Yes. If they pop up on all three of those, it’s like you should be throwing all the money you have and getting that person on the on the phone, whether it’s in marketing or you should be calling them quite a bit.
00;47;49;28 – 00;48;08;28
Speaker 1
Yeah, because really indicates a high level of motivation. So that’s a great tool as well. but it’s funny that you mentioned that about CoStar, right? Because it’s like obviously that is the most publicly available data because all of the major brokerages, whether it’s mortgage brokerages, real estate brokerages, they’re they’re pretty much all subscribing to CoStar. Right. And that’s where they’re pulling their list from.
00;48;08;28 – 00;48;26;11
Speaker 2
Yeah. But like when you’re in, you know, say sub 50 sub 30 unit space, like you’re, you’re kind of competing against like you want to be the broker to, to the chase. So you I mean, that’s you know, the whole whole point of that. So again nothing against brokers and they can bring you opportunities. But you know to to get yourself in the door first.
00;48;26;11 – 00;48;44;17
Speaker 2
I mean, kind of like I had to do. I couldn’t wait there and like, review the financials. I just I didn’t have the experience. So that’s that’s why like, for me, going direct to seller was just like a little bit easier, point of entry. And then, you know, you pick up momentum and then hopefully brokers send you deals I guess.
00;48;44;19 – 00;48;59;20
Speaker 1
Yeah. Well, yeah. And you know, again, another topic, but I think this is a really good way to think about it is brokers want to sell deals to people who are credible and have track records. It’s hard to get the broker deals when you don’t have those. So you should start direct a seller, build your tracker and start smaller.
00;48;59;21 – 00;49;02;26
Speaker 2
Right? Yeah, go. Go get a fourplex. Go to six. Yeah.
00;49;02;29 – 00;49;11;11
Speaker 1
go buy a 2030 units direct to seller. And now you’ve got a portfolio, a track record. You have a knowledge of the marketplace and then brokers taking more seriously, and then it makes it much easier to buy the broker.
00;49;11;15 – 00;49;23;15
Speaker 2
Well, not only that, right. You’ve got the data from those properties to be able to help you better underwrite and move forward on, you know, in being able to to move with with quickness because, you know, yeah, brokers don’t want to wait around like, hey, what’s going on here?
00;49;23;15 – 00;49;34;17
Speaker 1
Yeah. Wait, can you send me their utility bills. It’s like that’s not really gonna. Yeah it’s going to move the needle there. Correct? Correct. I think we’re coming up on time here. I want to make sure we get you out of here, give you a chance to plug anything you want to plug. But, this has been great.
00;49;34;18 – 00;49;40;24
Speaker 1
A lot of valuable information. I’m sure everybody listening is probably taking some notes right now, but, folks want to get in touch. You there? Where can they do so?
00;49;40;27 – 00;49;55;11
Speaker 2
you know, I don’t. I’m not super public about my stuff, to tell you the truth. you know, you can find me on Instagram. Zach Dot Harris. aside from, you know, emails that gets at care.com, but that’s about it. I, I’m not really super public face.
00;49;55;14 – 00;49;59;22
Speaker 1
You share an email, so you’re sharing enough for people to get which is which is what matters.
00;49;59;22 – 00;50;05;02
Speaker 2
Not very many people, take the action so you can sit here and give somebody the entire playbook. And there might be, you know.
00;50;05;05 – 00;50;05;12
Speaker 1
Yeah.
00;50;05;13 – 00;50;08;03
Speaker 2
It’s very small percentage of people that that actually going apply it.
00;50;08;03 – 00;50;17;00
Speaker 1
So awesome. Sounds good. You’re doing deals in Indy. So if anyone who’s, you know, got stuck or not I should say Indiana, not Indianapolis, bend, Indiana, the state, self-storage.
00;50;17;03 – 00;50;18;02
Speaker 2
So I mean, if you got.
00;50;18;02 – 00;50;19;14
Speaker 1
Reach out to Zach, if you’re in that space.
00;50;19;15 – 00;50;27;08
Speaker 2
Absolutely. Single family portfolios, multifamily and and some storage at look at happy to JV but yeah reach out again. Grab me on.
00;50;27;09 – 00;50;27;28
Speaker 1
This has been great man.
