The Worst Wholesaling Advice? | King Closer Reacts

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Transcript

Welcome And What We React To

SPEAKER_05 0:05

What's going on, everybody? Welcome to the King Closer Reacts. I am the King Closer RJ Base the third, and this is the series where I'm gonna watch some goofy videos about wholesale and real estate and stuff like that. Tell you if I agree or disagree. Let's get it in the first video.

Three Questions To Qualify Sellers

SPEAKER_04 0:20

Two, you've got to leave. Somebody called you back. Now what? You need to qualify both the seller and the deal, right? First, you need to figure out if the seller is actually motivated. I always say real estate deals evolve from situations. So your job on this call is to uncover their situation. What you'd ask of three questions. Why are you thinking about selling? How soon do you need to move? And what do you owe on the property? Those three questions will tell you everything you need to know. Now here's the thing: motivated sellers are not trying to get top dollar. They want speed and convenience over price. That's the key. If someone is arguing with you over every penny, they're probably not motivated enough yet. You know what? That's okay. Follow up in 30 days. Things change. Situations change. I've done deals with people I followed up for a year.

SPEAKER_05 1:15

Okay.

Speed Vs Convenience And Timeline Fit

SPEAKER_05 1:16

Well, we just came firing out of the gates where I'm just gonna be like, I think I disagree with almost everything that's said in that video. Just because it's such generic advice, and it's it's it's really just not painting a full picture of what it is that we do as wholesalers and and real estate investors. Speed and convenience. We say that all the time. Speed could be something that a seller needs, but what about Teresa in Missouri where she wanted 180 days to take care of her 60 years of living inside of her property? Do I want to offer her speed? Well, that's the convenience side. It's really just convenience. We work on their timeline. If they need speed, we can do that. If they need 180 days, we can do that. Now, following up with someone when they're arguing with you over every single penny, and we're gonna follow up in 30

The Hidden Cost Of Follow Up

SPEAKER_05 2:26

days. I mean, before long, your CRM is gonna be so chalk full of leads that you have no idea where your money is. You're gonna burn through your your drip sequences, your phone numbers, you're gonna burn your CRM and your EIN with your A2P. I mean, there's so many scenarios here that it's long-term when you're trying to run a highly efficient business, you're spending money following up with people that have told you no and argued over every single penny. Could you potentially close a deal from that long-term follow-up? Yeah. But you are going to be consistently bogging down your business. I feel like I just say this on every single video right now. Two things kill wholesale companies. Too many leads, not enough new leads every single day. You have to have a flow within your business. Now, going back to the three questions that he wants to ask every single seller. And he says, if you ask those three questions, you know everything that you need to know. I couldn't disagree more. This is the foundation of acquisitions. Your ability to ask open-ended questions, not a question like how much money do you owe? We can just look that up on prop stream. I mean, we can load that up. It doesn't move the needle. Are we hoping that they say they owe $50,000 and your maximum allowable offer is $50,000? So that means we can offer that to them. No. That's a close-ended question. We want to ask broad questions that gets the seller to open up about their true situation so we can offer a solution. He was correct about the fact that deals come from situations, but your three questions don't tell you the situation, it's gonna give you surface level answers. And surface level answers give you shallow conversations with sellers, and that doesn't lead to closing funded

Pipeline Vs A Pile Of Leads

SPEAKER_05 4:27

deals.

SPEAKER_03 4:27

If your deal flow feels random, some weeks busy, some weeks dead, it's not the market. So you don't actually have a pipeline, you have a pile of leads, those are not the same thing. A pile of leads is everything dumped in one place: your notes app, your inbox, your head. You can't tell what's hot, what's cold, or what needs a touch today. So you react to whatever's loudest instead of working what's actually closest to closing. That's why it feels random. It's because it is. A clean pipeline has every lead in exactly one stage, and the stage tells you what you need to do next. New lead, not qualified, qualified past the filter, needs a number, offer out, waiting on a decision, follow-up, not now, but not dead, on a scheduled touch, under contract, moving to a buyer. Five stages. Every lead sits in one. When you open it, you don't decide what to work on. The pipeline already told you. The follow-up stage is the one most wholesalers don't have, and it's where the most deals quietly die. Beginners track leads, operators track where every lead sits, because you can't run a business on a pile only on a system. DM me or comment system, and I'll break down the exact pipeline stages I use so you always know where the lead is and what's you gonna maybe argue about CRMs and statuses.

SPEAKER_05 5:49

Listen, statuses are important, but there and he's right, there should be a flow, not just a pile, but I think we're putting too much importance just in general for the past, I mean, I've been here for a decade on follow-up. Uh this is screaming that we just lack the ability to truly decipher what the seller needs, offer a solution, and close. So when I hear these kind of videos, I'm like, are you selling a CRM or are you truly running a wholesale operation? Because that that video right there truly felt like we were just pitching a CRM and all the bells and whistles, the stages that it could go to, and then that's going to do the work. That's gonna tell us what we need to do. I just need organization, that's all I need, and that's really all closers need. We just need to know the status of the lead and what we've done with it and timestamp with notes. Outside of that, everything else is just unnecessary for me as a closer.

Why Most Wholesalers Never Level Up

SPEAKER_00 6:54

Why do most wholesalers stay stuck? Okay, great question. I actually just did a training on this in our free community probably three weeks ago. Anyway, I would say even just that, that's the problem right there. You're calling yourself a wholesaler, right? It's just a limiting term that I don't like. Uh start calling yourself real estate investors. But the reason why a real estate investor might stay stuck is because they underestimate just how much time, effort, and energy it takes to level up the organization, right? Um, I I mean, again, there's levels to this thing, right? And there's five of them, in my humble opinion. There's five levels. Level one is the hustler, level two is the solo operator, level three is the manager, level four is the leader, and then level five is the business owner where you have an asset that can that can produce outside of you, right? And it it takes different skill sets, and you need to become a different type of person at every single level. And I feel like most people just don't know that, and so it never happens for them.

SPEAKER_05 7:57

Some ominous music going on in the background for us talking about that. Uh, okay, so I have to address the fact that he's the question was I think coming from his audience, why are most wholesalers, why did they get stuck? And then he says, Well, you should stop calling yourself a wholesaler and call yourself a real estate investor. Brandon, I don't know if you got the message or not, brother, but we are not allowed to do that. Like the real estate investors, the real ones, they're they get really angry and they make a bunch of videos about this. So we cannot identify as real estate investors because we're peons. Like, we're just the pissance of the real estate world. We just flip paper, brother. We are not real estate investors. I apologize to all the real estate investors that Brandon said that, and he he is remorseful already. Okay. Please don't come after us. Now, as far as the stages of being a business owner, that's for any business. That's not just for wholesalers. I actually think the reason why most wholesalers get stuck is because they think it's going to be easy. And so, because they think it's easy, they don't actually train, they don't actually put the time in to develop reps and or put reps in to develop skills. And so, because of that, we never even get past that hustler stage. In fact, I don't even think they enter the hustler stage. I think they enter the let's click the button. This has got to be easy. Everybody says it's easy on social media, and so they don't even really become a wholesaler. That's the majority of people inside of this industry. You start looking around, and there's a bunch of people that are like, I'm gonna get into wholesaling. Six months later, it's like I'm still gonna get into wholesaling, but life's happened. I had this thing happen in my job and my wife and my kids, and all this. And wholesaling gets put on the bat burner. It's very rare for me to see someone go all in on wholesaling for an extended period of time, and I'm talking about years, and end up stuck. That's a rare occurrence. Getting started and never getting past your first couple months. Oh no, that's common. So I don't think that's getting stuck. You just never got out of the starting

Subject To Deals And Ethics

SPEAKER_05 10:14

blocks.

SPEAKER_02 10:14

So this guy went on this whole rant about me buying this house subject to the existing mortgage and saying that it was unethical what I did and wrong what I did, and how you know I robbed this lady of her house. Backstory. This lady was about to lose the house. She contacted me off of a Facebook campaign. Uh basically, I just went on all the the yard sale groups, posted that I buy houses, and she contacted me. She said, Hey, I got a house, I can't pay the mortgage on it anymore. You know, do you think you can help me? And I did. I helped her out. I took over the property subject to the loan, it was super cheap. The remaining balance was $88,000. The house was worth $250,000, which is a humongous amount of equity. If you do the numbers on it, we sold it well yesterday it closed and it closed at 200 and what was it, 225? Or no, 235,000. Was it 235? No, it was two 225,000. We were we were we had it listed at 235 and it would have sold at 235, but the appraisal came back low.

SPEAKER_05 11:28

So this guy Okay, it was worth 250, it was listed for 235, sold it at 225. Let's just say the value is 225, and he he bought it sub 2 at 88. I don't know all the ins and outs of what that seller needed. Maybe it was about to be foreclosed on, and he's like, listen, I can take this over, I can catch up the arrears and and stop the foreclosure. Um, normally when there's that big of a gap on a sub two, uh, there's some sort of cash exchange between the seller and and the the real estate investor that's buying the property, normally, but the seller's needs and motivation might not have required that. And so, yeah, he got a great deal. Good for him. Did he steal the house? No. She had a decision to make and she made it. We have no idea what happened in her life to put her in such a bad situation where she needed to do that. I couldn't see myself actually getting in that position with a property that I lived in, but nobody can until it happens. And these tools, these tactics, like subject to the existing mortgage, seller finance, novations, they exist to help people in these types of situations. I don't think he did anything wrong. And I bet you if you went and talked to that seller, she wouldn't think she's happy that there's no foreclosure on her record. Guaranteed. I've bought properties very similar to that. In fact, the same thing from Facebook, subject to the existing mortgage with a six-figure plus spread. Those people were actually happy. One lady even made me a painting because we saved them from falling into foreclosure. And so two years later, they were able to restart their life and go buy another property. So it's just perspective. But people that are not in this business, of course, are going to think that we're the scum of the earth and that we're stealing properties when we really

AI Lead Managers And Team Roles

SPEAKER_05 13:34

aren't.

SPEAKER_01 13:34

Mick Perry fired four of his lead managers and his contact rate went up by a factor of four. And I'm kind of nervous to say this publicly because of what it means for all the other lead managers watching this right now. He did not downsize because his business was struggling. He downsized because AI was making four of his human lead managers obsolete. Contact rate went up four times after they left. And more importantly, cost per contract went down under $1,000. Four people replaced by one system that never clocks out, never has a bad day, and never asks for a rate. I'm an AI and I'll show you what this looks like inside your own.

SPEAKER_05 14:05

Alright, so this is clearly Steve pitching his AI lead manager and leveraging the fact that Nick Perry uses it and he got to get rid of four lead managers. I'm gonna be honest with you, I picked this reel to talk about because several years ago on Pardon the Disruption, which is a podcast that I did with Steve Train and others, I argued that the most worthless position in all of real estate investing and wholesale operations is the lead manager. I've never seen the benefit of the lead manager to have someone go out, get somebody on the phone, and then schedule an appointment for somebody else to come in and close, instead of just having the closer close it right then and there. And yet Steve argued with me and argued, and now he's created something that got has gone out and replaced all the lead managers to essentially do the exact same thing, which is funny because Steve argued this and then he retired out of wholesaling. Maybe it's because he had a bunch of lead managers, I don't know. I've never believed in this position, and so I want to know from my audience, the guys watching this video right now, do you find value in the worthless lead manager position? And what value do you see in providing your organization? Is it the fact that it gets closers to just only speak to people on appointment and their setup and their calls are just handed off to them? Because if so, we have similar types of positions in other businesses that we run. It's not always effective. It takes time, it takes training. So now Steve's saying, let's replace that with AI. I'm gonna be honest with you. If an AI lead manager called me, that might lead me to not want to get on the phone to sell my property. But Nate Perry is saying it's lowered its average cost by contract by $1,000, which is a significant amount. Just throwing that out there. That's a significant amount to even have as an average cost per contract if you're a nationwide wholesaler. So I'm curious, do you guys think this is beneficial to the wholesaling business? Because I'm standing my ground. I think the lead manager is the most worthless position that we've ever created because we created that in

Final Take And Comment Question

SPEAKER_05 16:42

this industry. Alright, guys, that's this. I don't know. Alright, guys, that's this episode of the King Closer Reacts. I want to know in the comments. Lead manager, should we have them or is it worthless? Let me know in the comments. Regardless, show me some love, like today's video, and we'll see you guys tomorrow.