Don Costa
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Show NotesDon was also on episode 36, click here to listen and learn more about Joint Ventures.
Don Costa, is a married father of 3 kids. He has been in the real estate business for over 10 years. He started Knocking on doors and wholesaling properties, and then quickly moved to flipping houses. Currently his office is on track to do a 100 flips this year.
Don is a networking machine! He is on track to do more than 20 flips this year solely from his networking efforts. Crazy!
Networking as a real estate investor is one of the cheapest ways to generate leads and deals and is probably the least utilized method of all.
Don mentions that he feels networking to be the best way to use Other People’s Marketing. Many investors use Other People’s Money, but few use Other People’s Marketing.
He calls all the marketing from other investors in his area and quickly asks if the investor is a wholesaler or a cash buyer.
His conversation is then guided by whichever the investor mentions they are.
If they are a cash buyer, Don wants to find out if they’d be interested in lending on a deal or joint venturing and splitting profits.
If they are a real estate wholesaler, he wants to know how many deals they’ve done. If they haven’t done many deals, he invites them to his offer and provides coaching. This is awesome because he is building a relationship with a new wholesaler that could bring him deals for years to come.
He even offers to do deal analysis for wholesalers so they know they already have a buyer at a given price. This takes almost all the risk out of the deal for them…which is invaluable when you are new to this business.
In this episode, we do a little role playing to see exactly what Don says when he calls real estate investors. The insights are incredible.
Listen to the episode to get the tips that have helped Don Costa to generate over 20 flip deals this year alone.
linksEpisode 36; click here to listen and learn more about Joint Ventures.
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Episode TranscriptionWelcome to The Flipping Junkie Podcast. My name is Danny Johnson former software developer turned house flipper, flipping hundreds of houses. Each week we bring you interview, strategies, stories and motivations to help you get started flipping houses and on your way to becoming your own boss and achieving financial freedom. Thanks for spending time with me today. Now let’s get to it.
Alright everybody. Welcome back to The Flipping Junkie Podcast. Thank you for listening to the podcast. I know there’s a lot of other house flipping podcasts and things clamoring for your attention on the Internet and on your iPhone and everything these days, but thanks so much for listening. I really do appreciate it. We’re going strong realize that we’re really close to having, I think this is episode 48, so we’ve got only four more to be an entire year’s worth of podcast so it’s really cool. I can’t believe it’s already been about a year. It’s pretty crazy.
Anyway, we’ve been working on this series that’s kind of like an online course that’s a new update every week starting with foundation, marketing and finding deals. We’ll be getting into analyzing deals and running comps all that kind of stuff upcoming. Probably we got about three or four more weeks of marketing funding deals because that’s usually what people struggle with the most after determining where they’re going to find money for deals, so we’ll get into that.
I want to take just a quick second to thank the LeadPropeller team, our real estate investor websites that we offer, I just really appreciate everybody on the team working really hard to develop all these features and support team. Matt has really been an awesome asset to LeadPropeller handling support, helping out all the customers calling in. The one thing that does set us apart make us different is having that live phone support. If you ever need any help with anything with your website no matter what it is you can always call and get help right away. It’s a pretty awesome thing and customers really love it and Matt is awesome at it. Thank you Matt.
Today we’re going to talk about 20 deals a year from networking with Don Costa. Now Don was on the podcast back at Episode 36 when we e talked about joint venturing to fund your flips and so that’s partnering up with somebody that can put the money up for the flip and doing a joint venture. That was a great episode. If you want to listen to that, go back to Episode 36. You can find the show notes page at flippingjunkie.com/36 and there you can also download his joint venture agreement. Be sure to check that out whether you’re thinking do that now or in the future you might want to download that joint venture agreement so that you’ve got it handy, just save it in your folder of other house flipping stuff that you have and the show notes page for today will be found out at flippingjunkie.com/48 for today and his other episode is 36.
Now Don Costa, he is a married father of three kids. He’s been in real estate business for over 10 years. He started knocking on doors on wholesaling properties and quickly moved to flipping houses. Currently though his office is on track to do about a hundred flips this year. So he really knows what he’s doing is really crank things up and he loves what he does and he loves helping others get into the business which is always awesome. It’s a reason why he’s on the show again. Don, I was mentioning, he pretty much has been getting about 20 deals a year just from networking which is crazy. Some people think well that’s busy. I tried that before. I talked to some people and I can never seem to get deals, this and that. But I think there’s a real art to it. Obviously if he’s going 20 deals a year that’s something everybody should be doing and just working to get more of those deals so we’re going to talk Don here in a second. I hope you guys enjoy the show.
Danny Johnson: Hey Don thanks for being on the show.
Don Costa: Hey Danny. How are you doing buddy?
Danny Johnson: I’m doing great. So this is your second time on The Flipping Junkie Podcast. You’re on Episode 36 and it seems like you have been growing and just taken off even further from even then from when you were on the show.
Don Costa: Definitely, definitely. We’ve been really really busy on our end trying to make all our goals for this year and doing a lot of marketing.
Danny Johnson: Awesome. And so in that show we talked about you were being on track to flip 100 houses this year is that still something you guys are shooting for? How’s that coming?
Don Costa: Absolutely. We’ve done some marketing campaigns and had some things really go well for us and we are on track to possibly even beat that goal. So it’s going to be a good year for us.
Danny Johnson: Nice. And for the people that didn’t listen to that one, do you want to give a real quick couple of minutes intro to who you are and how you got started.
Don Costa: Absolutely. I got started back in 2003, pre-crash. I had just gotten married and my wife basically want me to get a real job and I wasn’t about to do it. I knew that I wanted to do this and I had been kind of circling this for years and I realized I think it was in that moment that you get married and you know you’re going to have kids and you realize that this is the last chance. And so I went out and started interviewing mortgage companies and like I mentioned in that episode I got offered by one of the gentlemen I interviewed with I got offered the opportunity to JV on deals. And so I took him up on it, I went out and got to know ___ list and started knocking on doors and developed a pretty good knack if an individual was going to sell their home to anybody it’s initially going to be to me and I just kind of built it from there.
Danny Johnson: Nice and it’s awesome to hear that you started with the joint venturing and still focus a lot on networking and obviously that’s what we talked about this show being about, being that we’re in the sort of the marketing and finding deals phase of this series that we’re doing on The Flipping Junkie Podcast and this is one – it’s marketing. If you first hear networking you might not think well it’s not so much marketing but it is marketing. It’s marketing yourself. Twenty deals a year from networking is – and you said it looks like you’re on track to do even more than 20. Just from networking right?
Don Costa: Yeah. Twenty is kind of a round number. I would say we do more than 20 from networking. The thing about networking, the thing that’s important to know is that I was a victim of the crash. I wasn’t prepared. I wasn’t watching my business. I became a much better businessman because of it. It wasn’t cool at that time, which is the cool part of the story now is, I actually started broke twice in this business. I started broke the first time very naïve and I started to broke the second time and I was $2 million dollars in debt the second time by the way, and much more scared getting into it. I had no choice but to network. I didn’t have any money to market. I was literally in a meeting with an investor talking to him about funding for one of the first deals I was putting together and I got a text my wife telling me that the water had been shut off. I was that broke at the time and what I did is I started putting tags on Craigslist and letting people know that I was looking for either funding partners or I was looking for properties. With that I realized a lot of people were doing the same thing they were posting. So what I did is I started calling everybody ads. My mission at that point became I don’t have the money to market, but a lot of people are marketing and these people who are marketing are probably going to be either actual cash buyers, they could be potential JV partners or they’re are going to be wholesalers, individuals who have properties. And so I picked up the phone every time I saw a bandit sign, every time I saw a Craigslist post. If I got a letter right to property we were doing I would call that individual and I would say “hey this is who I am. This is what I’m doing. Are you cash buyer? Are you a wholesaler?” And nine times out of 10 they’d say they’re a wholesaler and I would say “look, I got the money behind me to buy properties, if you have a property make sure your first phone call.” And from that that’s a lot of the properties we get now. I mean, I still do the same thing if I have downtime I call Craigslist. Get on Craigslist and if I haven’t seen a phone number before I’ll call it and literally I have built relationships with individuals, wholesalers and other individuals that I still do business with to this day and buy properties from from either trolling Craigslist or calling bandit signs. That’s the first aspect of networking. It’s very important. Other people’s marketing, other people’s money, other people’s marketing is very important and a very important aspect of how I built my business.
Danny Johnson: I’m taking notes.
Don Costa: No worries.
Danny Johnson: So the question I have is how often in the beginning would you say that you trolled Craigslist and then how often do you do it now or do you have people hired that do that for you. What’s the process?
Don Costa: in the beginning it was daily. I’m ADD number one, so if I’ve got downtime I need to be doing something. So I would get on if I had any kind of downtime that was my way to relax was getting on Craig’s List and looking through and looking for numbers that I didn’t recognize and calling and introduce myself to people and it was actually a lot of fun. You meet good people that way. So now I do it – my downtime is not as often so I probably do it maybe once every couple of months personally. But I’ve trained our acquisitions guys in our office to do it. And that’s still one of the ways that we look for deals. So yeah, I mean, we still do it. Me personally, not so much but we definitely still do it.
Danny Johnson: Yeah. So do you have sort of like a quota or have a metric for that that you check in with your acquisition guys on a weekly basis or is it just when you guys have downtime or feel like you just wanted something different get on the phone.
Don Costa: It’s kind of the downtime thing. One of the things about Craigslist at least is after a certain point you’ve pretty much called everybody. So you’re looking for new numbers and they do pop up and that’s kind of how you do it. Now more for it’s whenever I get somebody’s letter because we have a ton of properties in rehab or on the market and so a lot of guys doing direct mail marketing they don’t necessarily scrub their list or LLCs or Incs and so we end up getting letters and I always call them. A lot of people will take the letter and they’ll throw it away “oh it’s a competitor.” I always call them. And again it’s, “are you a cash buyer.” If you’re a cash buyer maybe there’s a way we can do business together. Are you a wholesaler? If you’re a wholesaler or a cash buyer in the market, we’re one of the very few aggressive cash buyers in the market and definitely give us a call so and then from there I’ll reach out and maybe invite them to the office and buy them the lunch and buy them the coffee. If I feel like we’re a good fit personality-wise, I’ll ask them to maybe come and train with some of our guys in the office and make them better wholesalers. We’ll train you to be a better wholesaler if you can guarantee us the first phone call on the property type of thing.
Danny Johnson: That’s awesome.
Don Costa: Yeah. So we do stuff like that. So it’s really relationship building. I mean that’s really what it comes down to is reaching out and building relationships. You’re just looking at things definitely that then a lot of our competitors do.
Danny Johnson: Wow. First of all, how do know when it’s a new number on Craigslist? I mean, there’s so many numbers and do you have a system for that or is that just like you’ve seen them so many times—
Don Costa: Seen them so many times. There are a few guys that I’ve worked with for years that just constantly advertise on Craigslist. And I’ve learnt to know their phone numbers and their marketing or what their marketing looks like and every once in a while they’ll use a new number and I’ll call and I’ll be like “Hey, oh Allen, what’s up dude?” But yeah, for the most part it’s just recognizing the number as something you’d call before.
Danny Johnson: I was going to say, let’s say there’s a new one so you haven’t seen this one and you call them up, let’s role play a little bit and just show because sometimes people hear “Why don’t you call them and talk to them?” “Well, what does that mean?” Do you want to do a little role playing?
Don Costa: Absolutely.
Danny Johnson: Okay. So I’ve got a new number list on Craigslist. I said that I buy houses. Sell me your house.
Don Costa: Okay. So I dial your number and you answer the phone and I say my name is Don and Danny how are you doing today. I’m in the market. I’m doing a lot of stuff in the market. I just want to reach out to you. I noticed you’re doing some advertising. Are you a cash buyer Danny or are you a wholesaler?
Danny Johnson: Let’s say I’m a cash buyer. I’ve get tons of money.
Don Costa: Danny, I appreciate that. We come across a lot of properties on a regular basis. We’re not wholesalers, we actually rehab them. We’re always looking for relationships with individuals who have capital. We might be able to work together on some properties. We may be able to create an opportunity. We can make some money together. Are you interested in doing that?
Danny Johnson: Yeah sure. What do you have in mind? What kind of what kind of opportunities do you usually have?
Don Costa: Well, we have quite a few different types of opportunities so why don’t we do this, we have an office here in the area you’re welcome to come down to meet with me in the office where we can talk about our business. You can see what we’re doing or we can meet for a cup of coffee. What are you comfortable with?
Danny Johnson: Yeah cool. I’ll come to the office. I want to see your operations.
Don Costa: Absolutely. And then we set up a time and we go from there. So and then I bring them in and I show them kind of what my staff is doing, stacking order on file, show them how we run our business and some of the projects we’re doing and we talk about are they interested in being a rate term investor or are they interested in doing JVs. If they are, then we send them a project.
Danny Johnson: Awesome. And like we said episode 36 of The Flipping Junkie podcast we actually went into great detail and joint venturing to fund the flips with Don here and so if you want to find out a lot more about that. But just real quick though, what’s a typical sort of joint venture deal? So I came to your office, I was blown away with you guys systems and processes and the great deals that you were doing and I wanted to joint venture with you. If you don’t mind sharing what kind of joint venture deal would you want to work?
Don Costa: The standard joint venture deal is the guy with the money, puts up all the money, and we locate, identify the project, we walk the project and came into contract and we managed the rehab and then we get it sold and then we do a profit split. Some people like the rate and term and they just want to get their interest payment and not be bothered with it. Some people want to be a little bit more involved and make a little of more money. And so the reason why I like JV, like I mentioned last episode, because we’re doing so much volume that cash flow is just a tough thing. And so, we want to make sure that we always have property capitalized so we do a mixture of JV and rate and term investors. And so we’ll just let them know that on JV it’s a true split, usually 50/50 in some cases. We negotiate 60/40 our favor. I mean, it’s not an overcomplicated thing, JVs. It’s clear cut as it can be. You put up the money. We do all the work. You don’t have to worry about it. If you want to walk the project, check the project any time go ahead and do it and at the end we’re going to do a step forward split.
Danny Johnson: Yeah, nice. Let’s say that that phone conversation went a different way and you called me and you ask me “Are you a cash buyer or do you wholesale?” And I told you “I’m a wholesaler and I’m just wholesaling these properties.”
Don Costa: I would say basically, Danny, we’re cash buyers in our market and we’re very aggressive cash buyers. We have quite a bit of capital available to buy properties and we want to make sure that we get an opportunity to business together if you’ve got a good transaction and I’d love the opportunity to take you to lunch or coffee or bringing you by the office, let you see it we’re doing and then see if we might be a good fit to work together in the future.
Danny Johnson: Yeah, nice.
Don Costa: We don’t ever want to disparage other wholesalers because we make a lot of money off of wholesalers. When I say this and wholesalers hear it, don’t think it the wrong way, but I will usually break down the wholesalers that a lot of the guys that they’re going to be approaching in our market are going to be other wholesalers. And so, they’re going to do the same thing. They’re going to want to tie you up like you’ve tied the homeowner up and then find an end buyer. We are a true cash buyer we’re not a wholesaler and so just know when you call us that you’re dealing with the guys who are going to buy your property. I try to try to break that down and let them know that we’re different. We are not a wholesaler. We’re not going to tie it up and then try to find a buyer. We’re going to buy it. I do that as delicately as possible because like I said we really appreciate wholesalers and we don’t want to ever make them feel like we trying to disparage them in any way because we want them bringing us properties. We just want them to know that we are the real deal.
Danny Johnson: Yeah. You’ve got to save yourself apart from everybody else that they’ve talked to.
Don Costa: Absolutely.
Danny Johnson: To get to that top of that list of people that they’re going to reach out to whenever they do other potential deal that they put under contract. Do you do any sort of mental calculations when you’re talking to wholesalers on the phone to determine sort of where they’re at or do you ask certain questions to determine their experience level and then ask just come in the office and provide some training for them?
Don Costa: I always ask them if they’re brand new. If they’ve done any deals. I always ask them how many deals have you done basically in a nutshell and a lot of it will be very forthcoming with “I haven’t done anything yet” or “I’ve only done a couple.” If somebody is willing to take the opportunity to come in because like we have Justin, our acquisitions guy here, we got myself, we have Chan who we work with pretty closely who is a broker that knows our system, one of us will sit down with them if they want to come out to the office and break down what’s a deal for us and what’s not because if you’re going to truly go out there and work at it, we want you to know what we’re looking for, that way you can contract it properly. Another thing we do and we have five or six wholesalers I work with that we do it is if they have a property that they’re in question as to what the ARV is and we’re we’ll be willing to offer on it, text me the address. We’ll do a quick analysis and we’ll shoot you what our max number would be. So that way say, “we want our purchase price to be $150” you can go back now and you know where you’re selling it at and negotiate backwards with the sellers so that way you’re not locking it up at $150 and then realizing that’s not a deal for anybody. We’ll do a quick analysis and shoot back a number for them and then it gives them the tools to make better decisions. I don’t know if we’re unique. I don’t know if other guys do it or not. I just know we do it. We try to create relationships. It’s very important to us and we try to give these relationships the tools to be successful because if they’re able to lock up deals, good deals, and bring them to us then we’re making money. We actually have an individual in the office literally as I’m talking to you. His name is Marco and great guy and I met him at a REIA and he’s getting into wholesaling. He’s actually sitting down with Justin in the last couple of days going through basically what we’re looking for and how to find them and that kind of thing.
Danny Johnson: Wow. That’s awesome. I think that training is invaluable and the offering to do the analysis is such a big thing because you think in terms of new people that the biggest problem is just being uncertain whether they’re analyzing the deal properly making the proper offer. If you take out that uncertainty and help them they’re going to love you because you you’re making it almost risk-free for them.
Don Costa: Right. And it becomes a smoother transaction for everybody. It really does become more of a win-win for everybody. You’re not going back to the seller and renegotiating. They’re not thinking they’re getting one thing and then having to come down a little bit. For us I feel like it creates more of a win-win across the board.
Danny Johnson: Yeah. So have you ever had anybody take advantage of that a little bit too much? You know, they sort of text you a ton of addresses where you’re like, “You can’t be getting this many leads.” Have you ever had any issues?
Don Costa: No. Not really. No. I wouldn’t say that. Probably, I say, the most we get from any one person in a day is maybe four or five addresses. It’s not an everyday thing. Usually it’s one address here and one address there. We try to be as responsive as we can as quickly as we can to them, but usually our turnaround times are like 15-20 minutes we can give you an answer. But no, I can’t say that. I guess at some point if somebody did yeah I’d be a little nuts.
Danny Johnson: Yeah. I was just asking in what. And so you’re giving them numbers, but obviously you don’t know what the repairs needed are so they still have to sort of come up with a safe number for repairs or do you have a simple formula that you have them use?
Don Costa: We do kind of a simple format. If they send us the address, we use Google street view and whatever assets we have available we’ll look and see if there are any previous listings with pictures and different things and we’ll do a quick analysis in kind of a worst case scenario. This is where we need to be worst case scenario, if the rehab is less than we can probably come about. I always train them that worst case scenario we have to be 150, but we’re basing that on at $30,000 rehab and if we get into the property and it’s less than we can come up off that number a little bit. One of the things I always try to teach these guys is that you got to pitch it to the seller that way if you haven’t seen the property yet. You got to tell them worst case scenario my offer is going to be around “X” but if I see the property I can probably come up. Personally I found that framing it that way – because generally when see the properties, not always, but it’s generally in better condition than we were expecting. And so when you say you threw out what I could probably give you in $120 worst case scenario, but if you get me into the property and take some pictures I might be able to come up off that number and then you get into the property and you see that doesn’t need as much rehab and you can offer like $130, $130 instantly sounds better than $120 and I found that helps me significantly when it comes to closing and getting them to a more realistic number because you get them what’s kind of a lower one and the lower one is realistic for worst case scenario. I’m not talking about lowball just because you want to be a jerk. I’m talking about based on worst case scenario this is where we’re at. That’s helped me quite a bit in negotiating.
Danny Johnson: I guess the balancing act there is being careful not to have that number be so much of a shock that you don’t even get the opportunity to go and look at the house.
Don Costa: You got to be realistic and reasonable in your endeavors and you’ve got to frame it. I mean framing is so important in anything you do in this business, but you got to frame it in a manner that says this isn’t my offer. This is this where I’m out without seeing it and if I can get into it then we may be able to come up and if you pitch it that way and they know that there’s an opportunity to have a discussion about more money then you’re less likely to lose them than just throwing out a lowball offer and not being able to see the property.
Danny Johnson: I like that. I like that a lot. I think it helps determine a little bit of how motivated they are too sometimes because sometimes that’s the reason why we’ll do something like that is where it doesn’t seem like there’s a whole lot of motivation to sell and their asking price is pretty high. We know that they don’t owe much, so there’s room, there’s equity there and then we’ll do like what you suggested there was to say, especially if it’s something it’s like an hour drive away or something like, “we’re probably going to be about here assuming that it’s going to need quite a bit of repairs” and do that. And if there is they’re saying “well come out and look at it” we know they were somewhat okay with hearing that so it’s fine and we’ll go there and look at it.
Don Costa: Absolutely.
Danny Johnson: Let’s go back to our conversation about Craigslist ad. I told you I’m a wholesaler. You say “Hey, how many deals have you done?” I say “Well, I’m brand new I’m trying to get into this.” And then I come into your office and you’re helping me out and I think it’s awesome. You’re my new best friend and I’m saying “Hey, I’m doing Craigslist ads. I’m not really getting any leads for any houses. How can I find these deals?”
Don Costa: Well, it goes back to networking. Do the same thing we do. Call individuals and reach out to individuals on advertising and marketing that you see. Go to the local REIA groups and meet people. We have had numerous deals come from REIA meetings and just introduce ourselves and letting people know what we do and how we work. Follow up in everything that you do is important too. One of the things is that I do on a regular basis if I haven’t heard from a wholesaler or a real estate agent and I work with, if I haven’t heard from them for a while I’ll send them a text “Hey, how are you doing? I haven’t heard from you. You got your priorities on the radar?” “Do you want to go to lunch?” “Do you want to go have coffee?” I try to stay in the forefront of everybody’s mind. So follow up is crucial in the marketing. Follow up is crucial in any aspect in your relationship in this business – following up with your contracting crews, following up with your wholesalers, following up with your agents just reaching out and saying “Hey, I was thinking about you.” They realize they haven’t heard from you in a while and would love the opportunity to buy another property from you. That I don’t think people realize how important it is and I try to train everybody that’s working in our office to do that. The other thing too that they could be doing is contacting agents and people talk about contacting agents and let them know what you’re doing. But build relationships take the agent to coffee, take the agent to lunch. I buy probably three or four deals a year. They’re all high-end deals from one particular agent that I met. I called his business card and took him to lunch and he brings me – I did a lower end deal. I just put in a contract with him last week. It was a pocket listing from another agent in his office and I met that individual from his business card. I called him up. I think that people look at things in a manner of “if you build it they will come” and I look at it as “If they built it, they’re doing what I’m doing, we got to find a way to do business with them.” So I called their advertisements, their business cards, their Craigslist ads and then I follow up aggressively and repeatedly. It’s just really important to put your stuff out there and talk to people and tell them what you’re doing. You’d be amazed at the phone calls we get from people who just know what we’re doing and they have a relative who inherited a home or something to that effect.
Danny Johnson: Nice. And so, is there any other training that you do? So you have them market or network, so you’re networking, they’re networking, everybody’s networking so it’s exponential reach.
Don Costa: Right.
Danny Johnson: So all these people. Is there anything else that they’re saying “Okay, well that’s great I’m going to do that. Is there any marketing I can do?” Is there any kind of suggestions that you have for those people to try to find deals like door knocking or anything just things that you do?
Don Costa: Anything that you can – if you’re new, anything you can afford to do it and as you grow, a direct mail marketing is always – I just talked about this with somebody the other day because we’re getting ready to do a huge direct mail marketing campaign. We’re spending $20,000 for a large drop and I had to gut check myself on that. I was like, “That’s a lot of money. You could buy a car with that.” But we had a conversation. We have never done a direct marketing campaign. I have personally never done a direct marketing campaign that hasn’t produced a result. I not only made my money back but made a little bit of a profit from, if not, a lot of profit from. Direct marketing is a great way to go and we try to advice them in what areas to go into. Door knocking in the West Coast, there’s a site called Property Radar where you can get default list and I’m not so familiar with the East Coast. But going and door knocking on notice of faults and the trusty sales is a really good way to get yourself out there. It’s inexpensive. Like I said going to the REIA groups and different things. There’s so many things you can do. I think staying active in something in one direction or another is very important. Again, just telling everybody, anybody that you have an opportunity to tell them what you do. Sometimes it doesn’t come back tomorrow, but you’ll see results. You plant a seed and sometimes four months or six months later produces a property.
Danny Johnson: Right, right. I want to touch a little bit more on the follow up because you’re right. Even in the past when I’ve committed to networking, it’s just not something I do for the most part. But I committed and said I’m going to do it and I’ll make that outrage and maybe one or two of the people follow up a couple weeks later and then it’s just like off to doing something different, and so that’s why it’s never been a huge source of deals for me. But is there a way that you motivate yourself to follow up? Do you have any kind of system or any kind of – are there certain people that you knew have more likelihood to have deals sent to you that you follow up with or what’s your tactic on follow up?
Don Costa: Well anybody that I do any kind of business with or have done any kind of business with I definitely by all means will follow up with. I have like a built in hunger, a built in drive that it’s like this voice in the back of my head “What could you be doing right now to build your business?” and it’s constantly the back of my head. And so if I’m sitting there and I have downtime, I will literally be trolling Craigslist or following up if I’m. If I’m driving in the car and I realized, I haven’t heard from so and so in a while, the second I get stopped, I’m texting them and saying “Hey, I haven’t heard from you.” It’s interesting because there are guys, there wholesalers that I’ll buy a property from or two properties from and then they might go silent for six months and I don’t know why they went silent they might have had a family emergency. They might have gotten paid and decided they didn’t want to work. You don’t know why they disappeared for six months, but I’ll reach out to them every once in a while and then pop up with a property or two again. And so I think a lot of people think “well, somebody fell off the radar so they’re not worth my time” or they’re not doing anything, but I found that not to be the case with consistent follow up. From one guy I bought four properties last month. I’m buying two properties this month and I have another two in contract we’re going to close next month. He went probably six or eight months without selling me anything. He just kind of went a different direction for a while. But I was constantly on the phone with him saying, “Hey, what are you doing?” “How are you doing?” “Let’s go to lunch. Let’s go do this. Let’s go do that.” And so when he when he came back around to do wholesaling again I was this phone call.
Danny Johnson: It works. It works on me too because if I’m getting more houses that I’m wholesaling, I’m wholesaling to whoever is top of mind. I’ll call these people that I just sold the recent ones too and then I have a friend that I haven’t talked to for months call me up and say “Hey, what do you got?” And guess what. It’s like I’ll tell them “Oh, we’re putting this one under contract today. Would you be interested at this price?” And then next thing you know, the next one I’m just thinking him first and so he’s getting the first call. All it took was that one first call again after months to say “Hey what’s going on?”
Don Costa: Right. It’s not just networking for business. I want to make sure I make that clear. I have built really good friendships from this. There are guys that I will call and banter with a joke where or text and joke with that I do business with now that I’ve met off of a Craigslist post and we do business together because we built friendships together. A lot of people look at competition as a bad thing and that’s never been the case for me. I’ve always looked at competition as an opportunity to grow my business. Maybe I can provide something to their business and they can provide something to mine that we wouldn’t necessarily have been able to do on our own. And so that’s always the way I’ve looked at it. Justin who is here in our office who is doing the acquisitions who’s literally taken our volume to a level because he’s so aggressive and good at what he does, I met him off a Craigslist ad and took him to lunch and I was like “Hey, I like you. Come to my office and let’s do some work together.” He actually laughed at me.
Danny Johnson: So he was trying to start his own investment business.
Don Costa: He was trying to start his own investment business.
Danny Johnson: And you guys ended up working together.
Don Costa: We ended up working together. I brought him in and he’s doing a great job. He’s a great asset to the team. You just never know what the opportunities are going to be when you reach out to people. I think that’s the point I’m trying to make here is we have people working in our office that were people I reached out to that we’re kind of doing their own thing, but we found that we could work well together and can be part of our team. Why grow it on your own, let’s grow it together. And then of course there are individuals who like doing their own thing and we build great relationships with them and they’re bringing us deals. As I’m talking about it, I realized that I built my business on nothing, with almost nothing, basically no money and I spent almost nothing building my business. The first handful of deals I did were all based on relationships. The first flip I did when I got back into it was I built a relationship with an agent and she was able to get a deal for me that I probably wouldn’t have been able to get at the time and she actually works in our office now. I built a relationship with her. She was at another office and then when she decided to move she came in and she moved to our office. She is one of our best. She does her own side transaction. She’s one of our top producers. So just from reaching out to websites and business cards and Craigslist, I’m looking at my company and a lot of the individuals here – I have a second agent in our office is probably our second top producer who I met off at Craigslist and he was working for a different office for years and just came over not too long ago.
Danny Johnson: Wow. Yeah it’s awesome because that’s a completely different way to doing than putting up an ad and interviewing people when you sort of build those relationships first probably a lot better higher than trying to decide on what you think about people and how well they’re going to work just based on some of interview questions.
Don Costa: I apologize. I didn’t get the last part of that question.
Danny Johnson: It wasn’t a question really. I was just saying that it’s probably a lot better way of going about it when you’re looking to add people to your team. If you are networking and have people in mind that would be a good fit because you’ve talked to a lot of people and finding someone that would be interested to do more together than less individually like you said.
Don Costa: Right. A lot of these individuals we’ve worked together on projects or over a period time too, but before they came part of the team and we’ve learned that we work well together.
Danny Johnson: You probably don’t have a very high turnover rate in your office then.
Don Costa: We don’t actually. Almost five years that we’ve been running this office we have had one assistant leave and one agent leave. So two people in five years.
Danny Johnson: We’re they going off to do their own thing or was it something else?
Don Costa: The agent wanted more of a structured office like Remax that was more geared towards that. We’re an investment company so we’re not geared towards that and the assistant we basically hired her in through as the source for employment and she was moving onto greater opportunities.
Danny Johnson: Cool and then let me see what else. Do you actually still go to some of the REIA meetings and seek out people and who do you look for to talk to at those meetings if you do?
Don Costa: We actually – yes we do. And we are actually spearheading one of our local REIAs and so we talk to everybody at this point in time, but you can’t judge a book by its cover in this business. There are a lot of guys with a lot of money that you would never guess or are very successful or making a lot of money in this business, so I try to take the opportunity to talk to as many people as I can. I don’t seek out at any one individual. I talk to people and see what they’re doing. I let them know what we’re doing and take the opportunity to see if we can do some business together in the future. Now the kind of spearheading the REIA here and we’re looking at doing other market they we’re in people are coming up and approaching us obviously because you’re the guy at the head of the room. As you get more experienced and more comfortable in your own skin in this business, putting yourself out there, I’m sure as you know Danny doing the podcast, is that gives you a lot of opportunities to do business. People reach out to you with business opportunities and it really helps open doors.
Danny Johnson: Absolutely. And you were actually going to be releasing your podcast soon. Did you want to talk about that yet or is that still top secret. Nobody knows.
Don Costa: It’s not top secret. It’s going to be called Flip Talk and we’re very excited about it. We have actually got quite a few episodes recorded already and we’re just trying to put some finishing touches on it. We’re going to be releasing soon. You go to fliptalk.com and there is an opt-in to be notified when we release and it’s exciting stuff. I want it to be more educational like what you do. Really just kind of talk to people and give them real information. We’re going to be doing a format where we’re doing a real estate roundtable where there’s going to few individuals like our project managers in our office and our acquisitions guys and myself sitting down actually having candid conversations and of course we’ll be doing an interview format. I’d love to have you on here soon. Obviously I’d like to interview you about some of the products you have. We’re going to try to really give good information. There’s a lot of great stuff out there. We don’t want to compete with guys like you who are doing a phenomenal job, but we feel that we can bring enough to the table that people I think will be excited about everything we got to offer.
Danny Johnson: Yeah. I’m looking forward to it and yeah I agree to be on the show too when you want to have me on there. I think you said what you wanted me on their first five out of the first 10 episodes right?
Don Costa: Absolutely. If you’ve got time for that, I’ll make that happen.
Danny Johnson: I’m just kidding. I don’t have time for that now, but yeah, I’d love to be on the show. People can go to fliptalk.com to be notified when that’s released. Like we said you can go also to flippingjunkie.com/48. I’ll have a link to that just in case you’re driving and you forget what that is, but that’s a great domain name, fliptalk.com. I like that. Is there anything else that you wanted to share with the audience?
Don Costa: We’re working on five minute flip as well, that’s an episode 36. I fiveminuteflip.com we’re putting together content for that and that’ll be a video series where we do five minute segments on stuff we encounter. It’s going to be a little longer out to release than we want to be. We just want to make sure we got a lot of good content together, but definitely go to fiveminuteflip.com and opt-in there if you’re interested in that as well. We’re really working hard to put a few things together on both the podcast and the video series for people. We’re very excited about it.
Danny Johnson: Awesome.
Don Costa: You can reach out and email me at dontriplestack.com and I will always respond. If anybody needs any help with anything, I’d be happy to answer any kind of questions.
Danny Johnson: Awesome. I’m just sending you emails every day.
Don Costa: You can do that.
Danny Johnson: I appreciate it once again for sharing on screen information and I like that it’s different it’s not the typical stuff. We’ve been doing a lot on direct mail which there’s a reason for that it works and everybody does it, but I think this networking is definitely a good way to go especially if you don’t have a lot of money for those direct mail drops and everything, so doing this networking is an awesome way to do it. So thanks again Don I appreciate it.
Don Costa: No problem Danny. Thank you.
Danny Johnson: We’ll keep in touch.
Don Costa: Alright.
Hey everybody. That was Don Costa sharing how he’s doing more than 20 deals a year from networking and just fantastic tips in there to get some deals, build relationships, more importantly is really what it is all about because having those relationships whenever something comes up in your business or in a deal that you have an experience for and to have other people, other friends in the business that you can reach out to and get information from about how to best proceed. Because like we they’ve experienced something like that is just invaluable it’s priceless and beyond that whenever things that happen that are crazy or funny, it’s good to have people to be able to call and laugh about it with. Networking is definitely a way to go. I really need to do more about it. I’m going to be working with my team on doing some more networking outreach and building more relationships, get more deals from other wholesalers in town and if you’re one of my local friends that’s listening to this I’ll be reaching out to you and be sure to reach out to me as well. We’ll do some catching up. But to everybody, the show notes page is flippingjunkie.com/48 and the other episode that Don was on with me was episode 36 of flippingjunkie.com/36 and he did provide his joint venture agreement on that one in the show notes page so you can download that for free. Pretty awesome he was willing to provide that.
Everybody have a great week. Be sure to, if you don’t already have a web presence, you probably should consider it and you don’t have to put in all the work and figure out the content — what it should say, how it should work or hire a developer. All you have to do is go to LeadPropeller.com. And if you want to keep track of all those leads that you’re getting from the LeadPropeller site and analysis and follow up and having your whole business run with a great software system so that everything’s orderly and you’re getting the benefit of everything that you do, check out REIMobile that’s our CRM system. It’s cloud-based to access anywhere where you’ve got internet. It’s a very awesome system, REIMobile.com. Everybody have a great week. Talk to you next week.
