David Dodge and Mike Slane are back again in DPI to talk about the third pillar of Wholesaling, Following Up. What is the importance of Following Up and how does this help you in getting more deals and to be successful, Persistence and Consistency. Follow up not only to the person but to all aspects of pillars in the business.
Welcome back to the Discount Property Investor podcast. Our mission is to share what we have learned from our experience and the experience of others to help you make more money investing like a pro. We want to teach you how to create wealth by investing in real estate, the discount property investor way. To jumpstart your real estate investing career, visit freewholesalecourse.com, the most complete free course on wholesaling real estate ever. Thanks for tuning in.
David: Welcome back, today. We are talking about the third pillar of wholesaling real estate.
Mike: I love it, Dave. So what are the three pillars of wholesaling real estate?
David: Help me out here.
Mike: If you haven't listened to the prior couple of episodes, the three pillars are; number one, marketing. So in order to wholesale properties, these are the three things you have to do consistently to do deals. One is marketing. You have to have new seller leads coming in in order to do deals. If you don't, you are not going to do deals.
The second one is making offers. So number two, make offers. If you are not making offers to those sellers that are coming in from your marketing efforts, you are never going to buy a house. You are never going to have anything under contract, you are never going to be able to buy a property. You are not going to be able to sell that property, you won't be able to wholesale it if you don't make offers. Super super important.
The third one, follow up. It's as simple as that. I mean that almost could be the end of this, just follow up. You have to. Guys, what's that sales statistic? I think I mentioned it in the last one.
David: Yeah, I'm going to pull it up real quick.
Mike: Pull it up because I like it so much. I know you do too. It's the percent of sales made on the first contact is so small. It is super super important to follow up with your prospects or your seller leads rather. This is before offers. This is after you have made an offer, after you have just spoke and they say, "I'm not really interested in selling". You just keep following up. Dave, here, what is that statistic here that we've got?
David: Trying to make it bigger so we can read it here. So--.
Mike: Sorry, I thought you had it.
David: I will, I'm working on it. Okay so 48% of sales people never follow up.
Mike: This is why it's so powerful.
Mike: I forgot the first half of it.
David: The first half is the best part, right? I pulled this up on the web and it went to my page on PinInterest.
David: Isn't that crazy? I just found the first picture that I liked, and it was me, interesting. 48% of sales people never follow up with a prospect. That is half, guys, 48%. Alright, next thing; 25% of sales people make a second contact then they stop. So half don't even follow up one time, a quarter of people will follow up once.
Mike: There's 75% of your competition.
David: Gone. They are out of the game. 12% of sales people only make three contacts and stop. So basically one in ten people are going to make-- yeah, not even that, they are going to make three calls. They follow up once, then a second time, then a third time and that's it. Only 10% of sales people will make more than three contacts with their clients, customers, potential sellers in this case. So that right there shows you your competition. If you follow up once, you are doing better than half the people out there.
Mike: Get to the good part, Dave. Get to the good part; come on, man.
David: You follow up a second time, you are better than 75% of your competition. So, here is why this matters, right? This is why the people that are doing all the follow up are doing all the deals, okay? 2% of sales are made on the first contact, 2%. Half of the people are going to stop right there. 3% of sales are made on the second contact. 75% of people don't get this far. 5% of sales are made on the third contact. So we went from 2% to 3% to 5% from first, second and third contact. This is where it gets real fun. 10% of sales are made on the fourth contact. So essentially one in ten is going to take four contacts, right? But let's jump up to 80%. 80% of all sales are going to be made between the 5th and the 12th contact. 80% between the 5th and 12th contact. On average only 10% make three.
Mike: This is our secret sauce.
David: This is the cheat code right here.
Mike: Dave and I will tell you, neither one of us is a great sales man. I do not consider myself very good at sales. I am just persistent.
David: I am damn persistent. Calling--.
Mike: Dave does the same thing over and over and over. Again, that's just what we do. Again, we put a system in place that our assistants, and our workers, they do this. This is what we do, we just keep following up. This is what is so cool about this business too. This is how you beat the competition.
David: This is how you beat the competition.
Mike: One of my simplest and favorite quotes, because it has been a long time, probably been about ten years. I ran a couple of marathons. I ran 5k's in high school, but it's the saying that life is a marathon, not a sprint, baby. You have to keep doing this stuff all the time. So that's the same thing with following up in wholesaling. You can't just do it one day for three hours; make some cold calls, you're grinding and that's awesome. Props for getting out there and doing that. Do it again in a couple of days. If you're working a day job and you're exhausted; do it again in a couple of days. Do it again in a couple of days.
David: This is like our 215th episode give or take?
Mike: Do it again!
David: We have done it 215 times--.
Mike: And to our five subscribers, we appreciate you guys.
David: We really love you guys. The thing is though, you have to do it over and over again. So, when we are talking about follow up. We are not just talking about following up with the person because we want to get an appointment. We are talking about following up on all aspects of this business. So we are going to follow up on the marketing side of things, right? When we are doing any type of marketing and we call on somebody, and they have interest, we are going to call them back later. We are going to make a note, create a task, and all them back. If they have a lot of interest then we are going to try and set up an appointment, and that is what we are going to follow up on. The first part of that is-- are you interested? Would you like me to make you some sort of offer to come see it? Just follow up on that. That is a whole segment of what needs to get followed up on. Then there are the people you need to try and get in the house. They want to sell, they have told you already. Now at this point you need to make them an offer, or maybe you have already made them an offer, but you still need to see it. If you are doing this virtually, you need to get somebody else out there to see it, or have them send you pictures, right? But you are going to be following up on that. Once you see the property you are going to want to send that offer in writing if you haven't already. If you send the offer to them and they don't sign it, now you are are following up with them on that. Hey, did you get it? Did you have any questions? Why haven't you signed it yet? Okay? That's the first part, pillar one, marketing. There are actually three different ways to follow up within that.
I guess pillar two is the offer part, those two kind of go together, right? But then the last part is now once you have this property under contract, you need to market this property to you cash buyers. That is really where the wholesaling comes full circle, right? So now when you have a buyer that comes through, and they say, hey I like it, I will make you an offer. Two days goes by and you haven't got an offer from them, you have to follow up with them too, okay? Bunch of people come through, follow up with every one of them until you get an offer.
Mike: I love that.
David: Guess what? You're not done following up. Now that you have an offer in hand, in writing, you've accepted, there is a $15-20'000 spread on your wholesale deal, Woohoo! Guess what? You're not done. Now you have to take all that information to the title company. You are going to follow up with the title company. Did you get it? Do you have any questions? What do you need from me? What do you need from the seller? What do you need from my partner/cash buyer? You are going to follow up with those two people now. They are going to probably need LLC docs, or they are going to have questions about when they need to show up to the title company, and how much money do they need to bring? What's the hub look like? So you are following up with everybody always. That is the cheat code, persistence. You can't just make one call, do one piece of marketing and get an appointment, it's not going to happen. You can't run one appointment and get a deal. You can, it's just not gonna happen. It's not-- the odds are not in your favor. Let the odds forever be in your favor.
Mike: I like it, man. It's kind of like dribbling a soccer ball or something too. You have to keep touching it.
David: Got to keep touching it.
Mike: Got to keep touching it.
David: Dribbling a soccer ball is perfect analogy.
Mike: Like literally--.
David: Get the ball from here to there.
Mike: Even with the seller, once you have it under contract, and Dave, you were talking about this; then you have it sold, brought the information to your title company. Now you have to follow up with all three people. You have to follow up with the seller and say-- did you follow up with the title company? Did they call you? Good. Okay great.
David: It doesn't slow down, it speeds up.
Mike: It does, it accelerates to get to the closing table.
David: To get to the closing table. That's the thing I think people forget; oh I did all this marketing then they will do like one day of follow up a month. That's great and all, but you shouldn't block it all into one day, because certain people need to be followed up in certain times. Meaning you may need to call one guy tomorrow. This other deal you're working on, you can call them in six months, that's fine. Certain things need that priority.
Mike: This is where it gets complicated for me personally, because my brain just doesn't work with dates that well. So when I started out I started with using Google calendar. I think that's a great way to schedule your follow up when you're starting out.
David: Doing five or six on there is just going to get real cluttered though.
Mike: It's however you do it.
David: It's how you start, right.
Mike: This is a free service, it's a great way to start. Talked to a seller, need to follow up with this person in two weeks. Just click on the calendar, put a little reminder, put their name and phone number when you need to follow up. Great, take your note pad, however you want to do it. I think it's a great way to do it. Use a Google Doc even to take notes on each person. Again, you have to have some sort of way to track these notes.
Mike: Figure out what you're following up with this person about for goodness sakes. So again, there are plenty of ways to do it for free when you get started. As you progress, after about a month if you are consistently reaching out to new people, get up to a couple of hundred or a thousand people that you've contacted; it's unmanageable-- for me personally to do it without using a CRM. A CRM is an acronym for customer relationship management software. Again, it just became impossible for me not to do it, so we started using CRMs. They just change the way we are able to follow up, because you are able to create a task in there, assign it to yourself or a team member, and then that task is either going to get done that day, or when they get time to it. Again, the important thing is that it is not necessarily it gets done on the day you assigned it, it's that it gets done, that you get the follow up done.
David: Love that.
Mike: Super important. The one that we use pretty much exclusively now is REIBlackbook, and we will stick a link in the show notes so you guys can check that one out. It is a very powerful tool. If you click our link, I think they waived the licensing fee, which is like a thousand dollars?
David: Yeah it's a great deal, check it out.
Mike: Yeah very good. If you need a CRM, that is kind of who we would recommend. But again, when you are starting out, don't let that be a road block. That is not one of the pillars. The pillar isn't figuring out which CRM I'm using.
Mike: The pillar is--.
David: That's why we call them the pillars, look at it like a bar stool, guys. These are the money making activities. Having a CRM is going to help you follow up more consistently. It's going to remind you of your previous conversations. It's really it, okay? Yes it could have a million bells and whistles, and REIBlackbook does. We love it, and we use a lot of them. But at the end of the day, what happened last, fill me in, and what do I need to do now? That's it. That's what CRMs do. They remind you and they keep you-- task orientated or focused, right? So when it comes to follow up, guys; this is what I want you to take away from this second, right? Simply 80% of sales are made on the 5th to the 12th contact, okay? 90% of people out there don't make more than three. That's it. Those are the two stats I want you to run with, alright? 80% of all your deals are going to happen between the 5th and the 12th contact. 80%, that's almost all of them, between the 5th and the 12th contact. When you look at your competition, okay? 90% of the other people out there doing this are going to make maybe zero, one, two or at the most three contacts. So you can win in this game and be successful if you master the art of following up. In fact, master the art of all three pillars. Pillar one is marketing to motivated sellers, master it. Pillar two is making offers, verbally, in writing, snail mail, fax. However the hell they want it delivered, make it. Pillar three is following up relentlessly. Mic drop, that's it.
Mike: Love it.
David: Thanks for listening, guys. Signing off.