← The BetterLife Podcast
Loading summary
Transcript1 lines
- [00:00]
A
This is the Better Life podcast where we talk about real estate investing, building wealth, and all in all, living a better life. My name is Brendan Turner and I've spent my life investing in real estate to achieve financial freedom. And alongside My co host, Mr. Cam Cathcart, we want to help you do the same. On the show, you're going to hear from world class guests who have been handpicked to help you level up your investing, your leadership, your goals, your habits and more to become the very best version of yourself. So join us as we explore the habits, the actions, the beliefs that it takes to build wealth, real estate investing, without losing your soul. You have to negotiate and get the seller. Even if it's a mom and pop to sell to you. You have to compete to show them why you're the best. Out of the 50, how many are you going to go compete for? Maybe five of them, maybe 10% of them. You're going to go compete for maybe 20% of them? I don't know. Let's just say you make a dozen offers and then you start asking, well, how would I build that system? How would I build a system in which I could do 100 offers every single month? Finding deals, big deals is the same process as it is finding small deals. I mean, I've been teaching this online for 10 years. Today I call it the luck funnel. So write down this right down. Draw a little triangle on a piece of paper. At the top, you're going to get leads that come in. So L is at the top of the funnel. Leads that come in. What's a lead? Somebody who wants to sell their property. So leads come in the top. Next, you have to underwrite those leads. You have to underwrite them. What does underwriting mean? It means to run the numbers. But it's more than just the numbers. You got to run the numbers. You got to look at the economy, you got to look at the market, you got to look at what's going on in the area. You got to look at what the interest rates are at. So that's why, why it's not just called analysis, it's called underwriting. You're going to look at the whole picture and say, how much can I pay for this deal to make it a deal? Like, how much can I pay for this property in order for me to want to buy it and be able to sell to investors? Or however you're going to raise the money to buy this deal. So L is for leads, U is for underwriting, C is for compete. You have to compete for the deal, especially in these bigger deals. That's one big difference, is you're not likely going to find a massive deal that's being sold by. I shouldn't say that. Could we buy big deals from mom and Pops? But a lot of times you're gonna deal with a broker, which means you're dealing with multiple people bidding on the same property. So you're going to have to compete for that deal. And even if it's just you, you have to negotiate and get the seller. Even if it's a mom and pop to sell to you, you have to compete. You have to show them why you're the best, why are you worthy of their property? So L U, C. And then finally, the K stands for keys. If you do the L U C long enough, you're gonna get the keys eventually. It's a funnel. So L U C, K. Luck. And I love telling people, yeah, the secret to success in real estate is just luck. That's all. And, like, what do you mean, luck? Luc? Leads, underwrite, compete, and get the keys. Let's say you got 100 leads a year that came in just properties in your area that were for sale that were pretty decent. Out of those hundred leads, every year you go and you underwrite about half of them, let's say half of them. You're just like, no, I won't even touch that. Bad area, bad property, doesn't fit what I'm looking for. Whatever, that's fine. So you got 100 leads. You underwrite 50 of them. Out of the 50, how many are going to go compete for maybe five of them, maybe 10% of them. You're going to go compete for maybe 20% of them. I don't know. Just say you make a dozen offers. How many of those are going to be accepted and you're going to close on it and get the keys. One, maybe, if you're lucky, at most. So it's a giant funnel. You get 150, 10, 1. And then you start asking, well, how would I build that system? How would I build a system in which I could do a hundred offers every single month? Right now, that's impossible for you most likely to do a hundred offers a month. How would you build that system, though? You reflect on that for a couple hours, and you are going to have a lot of answers and a lot of clarity on that. So I did that with Open Door Capital. I simply said, we want to buy $50 million of real estate. How many offers are going to have to make out of that, how many deals we have to analyze out of that, how many leads do we have to have? And I just worked out a system and I was like, all right, well, I guess I'm going to need some help. So if you want to do big deals right away, if you want to scale up rapidly, you have to get out of the idea that you are playing, you know, pickleball by yourself against a wall and you are playing basketball with a team of five other people or four other people or whatever. You' baseball with a group of nine. You are now a team. You have a role, they have a role. Everyone has a role. And everyone's designed to be perfect at their role. And this is, remember I said earlier, it's easier to buy a hundred unit apartment complex than a single family house. It can be largely because each person in the organization is incredible at that role. They're designed by God for that role. Like, in other words, their personality fits it exactly. And they love that role. It's just perfect. So you build your org chart, and in the beginning it's likely all you. So an org chart for those not familiar, an organizational chart is a chart where, where you list every single role that the company has and who each person reports to. So usually at the top you got a big circle and it probably says CEO. Below that you might have COO. In a big corporation, you have a CEO who's more of the visionary. You have a COO who's more of the integrator, tactical person. Below the COO, you likely have VPs. Now you might be thinking, this is crazy, Brandon. I got no employees right now. It's okay. I want you to write out the org chart anyway. There's going to be blank or they're going to have your name there. Because right now these roles exist. This is important. The roles already exist. You just don't have people to fill them yet. But the roles do exist. You're just wearing all the hats. Different, different moments of the day. You're running acquisitions, you're running investor relations, you're running finance. You're doing everything. So let's write down an org chart. So you've got CEO, COO, and then you got your VPs. There was VP of acquisitions because we need somebody that's in charge of buying deals. I said, I need a VP of investor relations because we're going to have to raise money. So I need somebody who can help me raise money. I'm going to need a VP of finance because there's a lot of money. That goes in and out with financ, I kind of rope in administration and hr. It's kind of like one like at least in the beginning, right now with a fairly small company, it's like finance, admin, hr. Then I have asset management. Somebody's got to make sure the properties are performing well and doing a good job. So asset management, let's talk about this. When you're going to go into big deals. When you want to buy a big property, a big deal, there's a lot of competition for big deals and it's very intelligent competition. What I mean by that is you're not dealing with a bunch of dumb people who've never invested in real estate before and like, oh yeah, if you're just like decent, you're going to be better. No, you have to be good because you're dealing with people like me who have teams of experts who are driving success. So the three words I want you to write down for this tip are choose your hard. Where are you going to focus on getting good at that? Everyone else is afraid to get good at it. So I'll give you an example. Open or capital are hard. We have a few of them, but one of our hard things is infilling mobile home parks. So that means we buy mobile home parks that are 60 to 70% occupied, that have maybe 30, 40, 50, 100 empty lots that are empty. Our hard is to fill up those properties. That's incredibly difficult because it's hard to find used homes, expensive to buy new mobile homes. People that price point typically can't buy them from us. So it's like a whole thing. And then how do we get the money to buy these homes that are $70,000 for a mobile home? When the tenant can't pay it, all they can do is rent it. But I don't want to rent it to. It's a hard thing and I want to go into it now, but it's hard. So we have about a dozen people on staff just on that one thing and we can fill between three and 400 houses every year. Now we're good at it. We are the best mobile home infill team in the country because we work at it, because we chose our hard. Now maybe your hard are septic tanks. Maybe your hard is buying dilapidated apartment complexes that are empty and you're filling them up. Maybe your hard is buying properties that are in small towns. Maybe your hard is buying 40 unit apartment complexes because they're so hard to manage. I don't like them. So you're not competing with me me, because I don't want it. I don't want that hard. That might be your hard. Look at these six things right here. There's six things to focus on when you're really trying to nail down your criteria. What you're going to get good at, what you're going to focus on. I call it the crystal clear criteria. You've heard it before. It is property type. So what type of property you're going to buy? Location. Where are you going to buy? Condition. How nice? How bad do you want to be? Price range. So I buy between, you know, 5 million and 12 million or 1 million and 3 million. Profitability. In other words, what do I need to get in profit in order for it to be a good deal? You know, sometimes you want a lot of profit, sometimes you want less profit. Some people are like, oh, I just need 6% to be happy. Oh my investors need 20%. Okay, those are two different things. Do you need to know what you need or what your investors need? And then finally, strategy. What are you going to do? Are you doing the burr strategy? Like the Big Bird? I call it the Big Bird. It's like where you burr a property, but it's an apartment complex. Big Bird, get it? No, I call the Big Bird. Anyway, and then the last part of that one is what is your unique value? Like what do you bring to those deals? Like why are you good at them? Good at the infill stuff? Because I understand that how systems work in terms of that Lux system and we apply that Lux system leads, underwrite, compete keys to every single mobile home we can find. And so we are just mass marketing for mobile homes, both used and new. Hey, thanks for tuning into another episode of the Better Life podcast. I hope you enjoyed this show and got some valuable insights to help you lead a better life for you and your family. Now, if you found value in this episode, please consider subscribing here to our YouTube channel and let me know in the comments down below what you thought of this episode. And your feedback actually helps us improve the show and reach more people with that message of living that better life. So be sure to subscribe so you never miss an episode. And hey, before I go, you know this show and this channel is all about the habits, actions, beliefs and strategies that give you a better life. But in case you're interested and you want to know my opinion on what it takes to live not just the better life, but the best life ever from like a spiritual and faith standpoint, check out abetterlife.com bestlife thank you again for listening and watching. We'll see you next time on the Better Life Podcast.