Podcast Summary: "The Cheat Code to Consistent Deal Flow | Sharad Mehta"

Podcast Information:

• Title: The Science of Flipping
• Host: Justin Colby, Bleav
• Guest: Sharad Mehta, Founder of Resimpli
• Release Date: October 11, 2024

1. Introduction to Consistent Deal Flow

Justin Colby welcomes Sharad Mehta, a seasoned real estate investor and the founder of Resimpli, to discuss the “cheat code” employed by seven-figure real estate investors to maintain a steady deal flow. Sharad emphasizes that consistency is the cornerstone of successful real estate investing.

Notable Quote:

“If I could just give you one word to get to that, it's be consistent. Just be consistent. And that you'll be amazing.”
— Sharad Mehta [01:14]

2. The Importance of Consistency in Marketing

Sharad highlights that successful investors remain consistent with their chosen marketing channels instead of frequently switching strategies. New investors often experiment with various channels without commitment, leading to inconsistent deal flow.

Key Points:

• Consistency Over Variety: Focus on one marketing channel for an extended period (e.g., six months) before assessing its effectiveness.
• Direct Mail Dominance: Direct mail remains the most reliable marketing channel for consistent leads among top investors.
• Long-Term Commitment: Investors expect results within a six-month period, allowing time to optimize and evaluate their strategies.

Notable Quote:

“The number one thing that they're doing is they're doing consistent marketing… Fortune is in the follow-up.”
— Sharad Mehta [03:06]

3. Effective Marketing Channels and List Selection

Sharad delves into specific marketing strategies that yield high-quality leads. He advises targeting absentee owners with significant equity and a history of property ownership exceeding five years.

Key Points:

• Absentee with Equity: Targeting property owners who do not reside in the property and have at least 30% equity.
• Ownership Duration: Focusing on owners who have held the property for five years or more.
• List Stacking: Combining multiple criteria to refine target lists, ensuring higher lead quality and conversion rates.

Notable Quote:

“Start out with absentee with equity and five years of ownership or more.”
— Sharad Mehta [07:34]

4. Maximizing ROI Through Data-Driven Decisions

Sharad emphasizes the necessity of tracking Key Performance Indicators (KPIs) to determine which marketing channels and strategies are most effective. This approach ensures that marketing budgets are allocated to the highest ROI activities.

Key Points:

• Separate Campaigns: Use distinct tracking numbers for different marketing lists to evaluate their performance accurately.
• Analyze Trends: Over several months, identify which lists generate the most profitable leads.
• Optimize Spending: Redirect funds from underperforming channels to those with higher returns to maximize net profit.

Notable Quote:

“If you're doing direct mail, you should expect at least 3x on your marketing dollars. 3x to 5x is good. Anything over 5x, you're doing great.”
— Sharad Mehta [12:50]

5. Focusing on Net Profit Over Top-Line Revenue

The conversation shifts to the critical distinction between gross revenue and net profit. Sharad argues that maintaining a healthy net profit margin should take precedence over simply increasing revenue.

Key Points:

• Net Profit Margins: Aim for at least 25% net profit after accounting for all expenses, including marketing and payroll.
• Lean Operations: Efficiently manage costs to enhance profitability without overextending resources.
• Sustainable Growth: Focus on building a business model that ensures continuous profitability rather than volatile revenue spikes.

Notable Quote:

“Investors that are successful by doing that, they're focusing on hey, how much net profit does the business have? It should not… it should be the net profit.”
— Sharad Mehta [24:00]

6. Overview of Resimpli: An All-In-One Real Estate Investing Platform

Sharad introduces Resimpli, a comprehensive software solution designed to streamline the real estate investment process. Resimpli integrates various functionalities essential for managing leads, marketing campaigns, and financials.

Key Features of Resimpli:

• Lead Generation: Tools for cold calling, driving for dollars, and list stacking.
• CRM Integration: Manage and nurture leads effectively through built-in CRM systems.
• Automated Campaigns: Set up drip campaigns, email management, and text automation.
• Disposition Management: Manage buyer lists and automate deal disposition processes.
• Accounting Features: Track financials, manage KPIs, and make data-driven business decisions.

Notable Quote:

“If you think about it, [Resimpli] helps you on the prospecting side… once you have those prospects back convert into leads, then you can manage those leads.”
— Sharad Mehta [11:41]

7. Insights on the Fix and Flip Market

Sharad shares his experiences in the fix and flip market, particularly focusing on price points that ensure quick turnovers and profitability. He emphasizes the advantage of targeting properties eligible for FHA loans, which appeal to a broader range of buyers.

Key Points:

• Optimal Price Point: Focus on properties priced below $250,000 to qualify for FHA financing, ensuring faster sales.
• FHA Qualifications: Affordable down payments and competitive mortgage rates attract more buyers.
• Market Adaptation: Maintain flexibility in strategies to accommodate market fluctuations, such as holding properties if necessary.

Notable Quote:

“We're hyper focused on that 250k resale price or below. That's like 150 to 250. That's our sweet spot.”
— Sharad Mehta [27:05]

8. Advice for New Investors and the Role of Coaching

The discussion turns to guidance for newcomers in real estate investing. Sharad advocates starting with wholesaling to build foundational skills and gradually transitioning to more capital-intensive strategies like fix and flip or buy-and-hold.

Key Points:

• Start with Wholesaling: Lower financial barriers and simpler processes make it ideal for beginners.
• Long-Term Goals: Encourage setting aside a portion of deals to build passive income streams.
• Seek Mentorship: Leveraging coaching and mastermind groups accelerates learning and mitigates common pitfalls.

Notable Quote:

“If I could go back, one thing I would change is work with a coach… that would just help my learning curve go much, much faster.”
— Sharad Mehta [32:23]

9. Closing Thoughts and Key Takeaways

In concluding the episode, both Justin and Sharad reiterate the significance of consistency, data-driven decision-making, and maintaining a strong focus on net profits. Sharad underscores that success in real estate investing is achievable through disciplined effort and strategic use of tools like Resimpli.

Key Takeaways:

• Consistency is Critical: Steadily apply and refine chosen marketing strategies.
• Data is King: Regularly track and analyze KPIs to optimize operations and maximize ROI.
• Profit Over Revenue: Prioritize net profit to ensure sustainable business growth.
• Leverage Technology: Utilize comprehensive platforms like Resimpli to streamline processes.
• Continuous Learning: Engage in coaching and masterminds to enhance skills and knowledge.

Notable Quote:

“Just be consistent and be okay with doing the hard work because the reward is going to be 100% worth it.”
— Sharad Mehta [36:42]

Conclusion: This episode of The Science of Flipping provides invaluable insights into maintaining a consistent deal flow in real estate investing. Sharad Mehta shares practical strategies, emphasizing consistency, effective marketing, and the importance of tracking financial metrics. By implementing these strategies and leveraging tools like Resimpli, investors can streamline their operations and significantly enhance their profitability.

Additional Resources:

• Resimpli: resimpli.com – Explore the all-in-one platform for real estate investors.

If you found value in this summary, consider sharing it with fellow real estate enthusiasts to help them on their investment journey.