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Ryan Robson has been helping sellers sell their homes for the last 8 years. He has averaged 100 plus flips since that time. He has experienced a lot of ups and a lot more downs on his journey a long the way. From these experiences he has built a real restate empire flipping houses in 3 different markets.
Ryan didn’t start in real estate right away. Right out of college his father suggested he go into accounting and let the real estate knowledge come to him. So, he did that. Ryan quickly realized that sitting at a shared desk with 6 other people was not his idea of a perfect job, so he decided to get his feet wet in the real estate investing market.
First Ryan started working other real estate investors, using his experience and knowledge he had gained from his previous accounting job. All was going well for a while, but on his return from a trip to Europe the investor he was working for had to let him go because of the housing market crash. This devastated Ryan. He spent two weeks spending his time doing what he had thought was fun, watching TV, playing video games, and so on. Ryan quickly got restless and though, “This isn’t fun. I need to do something!”
That’s when Ryan started his solo real estate investing journey. With the housing market the way it was in the early 2000’s, Ryan had to buy and sell fast. “I had to be careful about what I bought the houses for,” he says, “because tomorrow it’s not going to be worth as much, you know?” As time progressed and Ryan started getting comfortable with short sales and flipping houses. As a result. Ryan began to grow his team. For a long time everything was working smoothly. “I had about 10 or so acquisitions managers, or sales reps,” Ryan remembers, “I had a good sized team.”
Things were running smoothly, that is, until one of his employees turned out to be a bad seed. Ryan describes it like this:
“Most people are trusting. I’m a trusting person. I want to believe that everyone is doing the right thing all the time, but that’s not always the case. This person…he ended up taking 6 of my people with him, then after I had to end up firing 2 more because I didn’t know where they stood on the issue. I’m not mad that it happened, I’m mad because I let it get to that point. I mean, we ended up shouting at each other in the office, right in front of everyone. It was a big blow out. It should never have gotten there. That was my mistake, but I learned from it.”
This caused Ryan to need to transition his business. Because of the way short sales were going at this point in the housing market, Ryan admits he was needing to let a few people go anyway. They had gone from closing about 100 deals a year to a slower decline. In the end this shift wasn’t all terrible.
“I really enjoy investing in people,” Ryan says, “I’m at that stage where I like to see them grow. It’s fulfilling.”
Now Ryan is a very successful real estate investor with a wife and three children. He has been able to keep his business alive despite getting it started in a very volatile time for buying and selling houses. In fact, Ryan has transitioned again to online marketing to make sure his real estate investing business is bringing in high quality leads.
“I use LeadPropeller PPC,” Ryan tells us, “I know I’m not on here to give you guys a plug, but it’s great and what you and Josh are doing is amazing. It was in 2016 that I made the dive into PPC and it’s been great!”
It’s awesome to hear from Ryan Robson and see the success of his real estate investing business!
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Danny Johnson: Welcome to the Flipping Junkie podcast. This is episode 106. [music] Welcome to the Flipping Junkie podcast. The podcast for flip pilots everywhere. Flip pilots are the house flippers that work more on our business instead of in our business by keeping a 30,000-flip view. You’re now part of a small group of house flippers that considers themselves flip pilots that strive to build the life of financial freedom and time freedom so that we can spend more time doing what we love with who we love. In this podcast, I give you a glimpse of the daily life of a flip pilot so let’s gets started.
Hey. Welcome back to the Flipping Junkie podcast. I got an excellent episode for you here with my friend, Ryan Robson, and we’re going to talk about lead to deal conversions. If you’re getting leads, you want to make sure that you’re turning as many of those as possible into actual deals that make you profit and return on your investment. So we’re going to cover that in detail.
I do want to say really quick that we did have some audio problems on this one, so you might hear some echo and it might get loud and a little bit quiet. I apologize for that. We cleaned it up as much as we could, but this show is definitely worth listening to so give it a good listen and bear with us on the audio quality. You’re going to enjoy it. Check out the show notes to get what we share in this episode at flippingjunkie.com/106. Enjoy the show.
All right, everybody. Welcome back to the Flipping Junkie podcast. Today, I’ve got a good friend, Ryan Robson, on the show. Thanks for joining us, Ryan.
Ryan Robson: Danny, how are you brother?
Danny Johnson: Doing great.
Ryan Robson: I get that a lot by the way. It’s Robs, and most people do say Robson.
Danny Johnson: Oh, Robson. Okay. Well, I apologize. Well, I’m going to find out a lot more about you today. We’ve been friends for a little while in the 7 Figure group, a mastermind group that we’re both part of, and you know your stuff. I admire how hard you work and how hard you get into this business. Everything that you do, you’re completely focused on finding out how to do it best and you’re kind of fanatical about learning everything that you need to learn for everything that you’re doing in this business. So I appreciate it. It’s going to be fun today finding out more about you and how you got started. Let’s start from the very beginning. What got you interested in flipping houses?
Ryan Robson: Wow. My father is a real estate developer here in Phoenix and he builds houses for a living. He’s been doing that since I was born and before I was born. I remember sitting with him at Rubio’s Baja Grill one day. I graduated from high school and I said, “I want to get in to real estate and do what you do.” He asked if I wanted to study in college, and I was kind of having this, “Where should I go in my life? Where should I study?” I remember some great advice he gave me. He said, “Look. You’ll learn real estate. Real estate is something you go out and do and learn. Go study accounting or marketing or finance. Study something else other than real estate. Don’t think about real estate right now. Don’t worry about.” And ironically, it ended up being really a good advice that I’ll get into later.
So I studied accounting at ASU and graduated in accounting. I served a mission from my church in Spain for a couple of years, which is an awesome experience. The Spanish I learned there helps a lot in flipping real estate as you can imagine here in Phoenix with the Mexican and Hispanic culture here. Kind of my story, Danny. I don’t mean to bore you with all these little details.
Danny Johnson: No. The details are what make it good. And so whenever people say, “I bought a course and I started flipping houses,” that’s what’s not good.” I want to know the details of… All details are great. And I’m sure everybody out there listening appreciates that, too.
Ryan Robson: Hopefully somebody can relate to this at some point and provide some value to them. But my mind has always been in sales from the very beginning when I very first started. We met at Rubio’s because I was working at Rubio’s that day, and I love selling fish tacos. I always say that when I become a millionaire, I’m going to go back and work at Rubio’s. Unfortunately, I made a million dollars and I’m not there. But maybe when I become a 10 millionaire, I’m going to go back to Rubio’s and sell fish tacos. I just love that experience. It was so fun for me to interact with customers and have that connection with people in selling them tacos.
I’ve always loved sales since I was a kid, and I wanted to do real estate. I sat with my dad and we were talking about what I should in study in college. I was really wanting to get into real estate. Ever since I was kid, I love sales. All I wanted to do was sales. I had paper routes. I love knocking on doors and selling magazines, and I could earn a dollar. I was really surprised when my dad—and it was almost rude awakening when my dad told me to study accounting.
I wounded up going to work for an accounting firm that put me in a back room with no windows and said, “I want you to work for 16 hours a day auditing this company’s books and work a small table with four other people sharing the table with you on spreadsheets.” As you can imagine, that was like creative mind in the sales lines. That’s the exact opposite of what you want to be doing. Why do you want to be in sales? Money with no income limitation, right? Working for $40,000 a year for an accounting firm.
So I got to tell you, Danny, it was some of the best experience I ever had. What was great about for me was it really forced me to be analytical and stop and think about what I’m doing and why I’m doing it and see the potential downsides and the rest that you can take on as an auditor. So it was really good. I only unfortunately lasted two and a half years before I almost went crazy because I wanted to get out there in the world.
I think I had mentioned to you in the past that I tell someday why it was such a great opportunity to get it. The years ‘04 to ’07 when it was taught to me. So all of my friends are out there making millions of dollars in real estate. You could’ve been anybody and made a million dollars from ‘04 to ‘07 if you try. If you just have the desire and you worked hard, you would’ve made a million dollars in a year pretty easily back in those days.
So I’m sitting here making $40,000 a year as an auditor and my friends are making the million dollars a year and buying the boats and cars and houses. I was just—
Danny Johnson: You guys had the crazy appreciation there in Phoenix, right?
Ryan Robson: We did.
Danny Johnson: The market went insane. It was a huge level there. So no matter what you bought at it, several months down the line, it was going to be worth way more.
Ryan Robson: Some of my auction friends that I became friends with later would say… They just, “Next $10,000.” They wouldn’t even bid up by hundreds. They just say, “Next $10,000.” They didn’t care what they bought the house for at the auction because they knew tomorrow it will be worth another 50 grand so anyway. Crazy days. But luckily, I was making $40,000 a year from ‘04 to ‘07 and everyone lost all of their money. I didn’t lose all my money which is good.
So in 2007 right before the crash hit, I left the auditing firm to go work for a hard money lender. I was really excited to make my first kind of entrance into real estate, and this guy for some reason… Somebody had referred me to him and had convinced him that I knew what I was doing in real estate which I really had never done real estate before other than being around it with my dad. I was just so excited to have my own office. He hired me for double what I was getting paid. I was making 80 grand a year which I thought was a lot of money back then. I told him I would’ve taken 20 grand less if I knew I was getting my own office, especially with the window. So I was stoked from my first real job out, learning real estate
And then, the market crashed. I was working for him right in the middle of the crash, and I remember the day that I lost my job. Ironically, I had just gotten back from a trip from Europe. I was really upset that I lost my job, and it sucked to lose my job because the guy had no business coming and he got nothing else to do but let me go. But I was wishing it would happen right before I left Europe. I probably would’ve just stayed in Europe for another six months. I wasn’t married at the time. I was single who screwed around. I had been working really hard for him, so I was excited to take a break. The market was kind of depressed at that point. There just wasn’t a lot of positivity back in 2009. It’s a mix around real estate. I took about two weeks and did nothing and worked out and slept in and watched movies and played video games. I just got bored. I just wanted to get out. At the end of those two weeks, I was like, “What am I… This sucks.” I thought this would be fun, but this really sucks. I don’t know how long you were single before you married your wife there. But when you’re single, you could pretty much live on nothing, right? Now, that I’m married with three kids, it doesn’t work that way anymore.
Back then, I had about $25,000 in savings and I thought, “Shoot. I can live for another two years with this much money.” I got really bored. I found a guy that has an open office space and I wanted an office with him. I started kind of seeing some stuff he was doing. He was really in the loan modifications, and I thought, “You know, that could be the route to go, and I ended up getting really into the short sale game.” That was kind of my first introduction into flipping real estate with buying short sales.
Danny Johnson: A good time for it too back then, right? The banks were having trouble selling the properties.
Ryan Robson: Yup. It was great. And back then, the market was going down. So I had learned flipping real estate as I’m chasing the market down because I really did hit rock bottom until about 2011 here in Phoenix. So, I had to learn how to find buyers and generate cash offers from Canadians and get really creative. It’s the opposite problem of it going up, right? Because back when those auction guys were buying and they’ll be worth more tomorrow so they paid whatever, well, I had to be really, really careful when I pay for a house because tomorrow is going to be much less.
Danny Johnson: What kind of criteria do you remember? What kind of criteria you’re using back then knowing that you needed to get a heck of a deal to make sure you didn’t lose out?
Ryan Robson: My criteria was sell as fast as I probably can to get out of this thing before it’s too late. I was always too scared to do the wholesaling or short selling that some people did [____ 00:10:45] of short sales that people were doing back in the day. I would just read these articles about that and it just always scared me a little bit. So I closed on them, remarketed them, and sold them as fast as I possibly could and created some unique ways of doing that.
I rode that train for about five years; 2010 was my real first year. I think I closed my first deal in December of ’09, but I’d say 2010 was my first year of flipping houses. I did 35 deals that year. I thought, “Wow. I got this figured out. This is great.” I just kept pushing hard and asking for referrals from people and pushing that short sale market harder. I did 60 deals in 2011. And then ever since then, I’ve kind of averaged at 125 deals a year.
Danny Johnson: Nice. When was the transition to move away from the short sale? What was the percentage of deals that were basically short sales like for the first couple of years and then it started trailing off? What did you move to?
Ryan Robson: That is a not-fun conversation to have. I mentioned that I work hard and I wanted to bring this up because I think it’ll relate a little bit to your question here. Somebody asked me the other day that I’ve been working with a little bit. I hear about all these about these bureaus about being able to not work that much and still close a ton of deals. Is that possible? Maybe. That was kind of my answer. Not really. You don’t necessarily see all the hard work they put in into the past and maybe get there, right? But that’s a ton of work. I’d say maybe 20 or 30 deals a year is the threshold. When you get over that over that 20 or 30 deals a year, you’re working your butt off, right? And you’re dealing with employee issues. You’re dealing with all this.
So I had built this huge organization. I have 10 sales guys or acquisition managers. There’s a common term out there that people use, right? But I have 10 guys out there that were pounding the street. I was paying a monthly percentage of profits on every deal they found. And we’re primarily focused on short sales and some foreclosures.
I ended up having one bad sales guy. You had shared some experiences in the past with me, and I appreciate that. I have this one guy that was a bad apple that took down about six other sales guys with him. It’s amazing as you grow your company how… I lost sight a little bit of how important the people were in the company and by no means am I bringing myself for him being a bad apple, but I could’ve caught it a lot earlier. And I blame myself for that. I let it go too long. I had some potential issues coming, and I just let it drag and drag and drag until I found out that deals are being stolen and all kinds of bad stuff was going on the background.’
That’s hard as a business owner because most people are trusting, and I’m a very trusting person, right? I want it to be be that everyone has the best interest of everybody at all times. I don’t know. I just let it go too long, and it really damaged my whole organization. Not only did he take six people with him, I fired two more people because I wasn’t sure where they stood on the issue.
Danny Johnson: I’m glad you brought that up because we talked a lot more recently about team and building the team and having the right people in place. And that is huge because I have recently myself waited too long to let somebody go. It gets to the point where you’re weighing the benefit of doing so against the negatives and what you’re going to have to do with. I think a lot of people just ignore. They just don’t even look at the problem. They just completely shut it off because they know if they start thinking about that they’re going to realize all these things that make it seem impossible to let them go.
Ryan Robson: Sure.
Danny Johnson: Until you reach a point like what happened maybe with you where it solved itself by becoming such a huge problem that you had to take care of.
Ryan Robson: It was, and it was a blowup. We’re yelling at each other, and everyone in the office got to that point. And it just never have gotten there. I made that mistake. I grew really fast and we were doing a hundred deals a year. I had 10 people out there bird-dog in finding deals, I was paying them. You asked me what that transition looks like. It kind of forced me into a transition in a way. We were slowing down anyway, so we were needing to let a few guys to go as it was because short sales were… This is 2004 at this point by the way. We were kind of thinking, “What’s the future of this look like?”
Now, luckily foreclosures were still big here in Phoenix and you can go to the auction and buy stuff so that kept me going for a little bit. But you don’t need sales guys to go to the auction to buy a house, right? So there was some major restructuring. We started outbound calling really and that—
Danny Johnson: What kind of sales or marketing were you guys doing with all the sales people if you weren’t doing auction? What were you doing back then with all of those sales people to generate the leads to be able to go out and try to put them under contract?
Ryan Robson: It was pure outbound calling. At the beginning, it was all referrals because there were so many short sales that everybody knew 10 people that were short selling their house. You just had to ask, right? Who do you know that needs to get out of their house? And you had 10 listings the next day, right? It was just that many in Phoenix.
Danny Johnson: Were there not a lot of other competition during that time there in Phoenix?
Ryan Robson: Nobody had it figured out. It’s funny. I have this cardboard right here. I wasn’t necessarily planning on showing it, but this little cardboard piece right here… When I started my short sale business, I woke up at 02:00 in the morning and I was trying to figure out what were all the problems with the way the short sales process work? How can I make it more efficient? I got this idea 02:00 in the morning. I woke up and this is the back of my—I just have to say it— it’s the back of my laptop that I just bought. It was like a part of the box or something, and I just grabbed that from the side of my bed and drew out the business model in the middle of the night. And that’s the business model that I use.
To answer your question, Danny—sorry—I took that normal process that people did and I realized: Now, there’s four or five people involved in the short sell. And I tried to combine as many people into one group that work with easily together instead of working apart from each other.
Danny Johnson: What does that look like?
Ryan Robson: Great question. We had an agent, the buyer’s agent, and the negotiator all work together to solve the common issue of selling the house and all be a team that work together to solve the issue of the house. Traditionally, you have a listing agent and a buyer’s agent that kind of oppose each other in a way and then you have a bank. You have kind of a three-way negotiation going on between the listing and the buyer’s agent and the bank. And then on top of that, if you add a retail buyer and a normal seller, now you have these two extra parties. And a retail buyer doesn’t really understand the idea of, “Wait. It might take three months. It might take six months. How does that…? What? I don’t understand. We just need them to buy house and move in to it.” So there’s a major inefficiency in the retail market that a lot investors are getting.
Most investors have been doing this before. See. I was stupid. I didn’t know any better, right? I was just jumping in and be like, “Okay. This is how you buy a house in short sales.” But most of the people that had been in the market before were selling postcards out and buying at the auctions. Think about it. How do you go from getting a list and buying a house the next day at the auction to getting a deal and waiting six months to close on it that you may or may not get approved by the bank? As the investor buying that house, you’re thinking, “Why would I invest time in short sales?” And if you’re just the investor and you’re planning on offering on some other listing agent’s house, you don’t know how good of a negotiator that listing agent is, right? You’re getting whole confidence to that negotiator and then that listing agent gets some higher offer from somebody that’s going to end up backing out within a couple of months and they go with their offer instead of yours.
I just saw some of those inefficiencies in the process, and I’ve explained those to sellers and just walked them through. I think if you see. No, you probably can’t see it. See that one guy with the multiple people at the bottom, that’s a buyer putting offers into multiple houses. So that’s what I would explain to sellers. These retail buyers, they go put six offers out there. And whatever gets them the approval letter on, they close. Where I’m an investor. My offer is not going anywhere. You tell me I’m approved. I’m closing tomorrow.
I walk these sellers through inefficiencies and why we’re the best group. Honestly, it probably would’ve been better to get houses at the auction and do it the easier way. You asked if there’s competition. People caught on after a while when they saw what we’re doing and started kind of do some of the things that we were doing, but we’re really only guys stupid enough to invest all that time into short sales at the time.
Danny Johnson: Even just in your answering the questions. Typically, I’d ask somebody, “Was there a lot of competition back then?” And they’d say, “Yeah. There was competition.” But you went through and explained like on a higher level, like a more detailed explanation of the competition and how there was competition but not necessarily for the short sales because of the issues involved with doing short sales. And you figured out how to make that not so much of a problem so that you could still work the short sales, and in doing so have less competition. I’m sure you still had some competition making that room for you. Whereas other people like I back then would see those and say, “I don’t want to mess with all that.” I’m just going to do more marketing and find straight deals and just deal with the easier stuff, but I have a competition to deal with. That’s exactly what I meant. It’s really cool how you do that.
Ryan Robson: You had to create business model. You had to hire negotiators and people to find the deals. Anyway, it was fun and there were a lot of… Thank you for that compliment, but there were a lot struggles along the way to get there.
Danny Johnson: Like you’re saying, it makes it sound easy but I’m sure it still wasn’t easy. And I’m sure a lot of people are probably to see that diagram that you’re showing. Would you mind sending me a picture of that and I could just put it up?
Ryan Robson: Sure. I’ve been trying to get that thing framed for six years. It’s been sitting on my desk, and I never do it. I need to do it. I thought about it this morning. It got me thinking I was going to show it to you, Danny. I looked over it and I’m like, “I’m going to get that thing framed.” You probably can’t see, but there’s like footprints on it like somebody stepped on it but they’re not that happy about it. It’s like your first $100 you make at a company. You frame it. That’s kind of what I want to do with this. It’s like my first business model I ever drew out, anyway.
Now, you asked me what that transition looked like. So it was a tough transition and it was sort of a fun ride. But once they slowed down, the auctions kept me busy for about a year. I’m going to give you a rough number. See. I don’t know the exact numbers, but it was in the 2 million dollar net range in 2013. In 2014, it was below a million. It was just a drastic drop off. Even that sounds like a lot of money.
But when you have an organization that’s making a couple million dollars a year with that many people running it and you go to making less than a million bucks, it’s a major issue for an organization, right? You were setting your net income [inaudible 00:22:37]. People were getting nervous.
Danny Johnson: That makes me want to go down the route in this interview of how those lessons in that experience of having the organization, a bigger team, and then having a transitioning market or a transitioning business model to where you had to maybe shrink down. How has that affected your building your team and maintaining team after that point?
Ryan Robson: I’ll tell you what. In ’14 and ’15, I was in this transition, but 2016 and 2017 were really interesting years. I had to mentally get over. I had made all this money. I’ve felt how to close 100 deals a year. If I say I’m going to close 100 deals a year, I’m going to figure out how to do it. I don’t care how.
But I had never sent out a postcard or a letter until 2017. Isn’t that crazy? I’ve been flipping homes since 2009 and I did zero PPC. I’ve never done PPC. I’ve never done Facebook. I’ve never done postcards or letters, and I figured out how to flip 100 deals a year. Don’t get me wrong. In 2016, I probably closed like 80 something deals. In 2017, it was like crap. This method of buying at the auction and buying off the MLS is drawing up really fast. I’ve got to figure out how send out postcards and letters. I have the money sitting in the bank account. Most people are scared because they don’t have the money. But I think there’s another factor most people don’t think of. I have the money and I was still scared. I didn’t know how to do it. I didn’t know how to start. I’m this experienced home flipper and I had no clue how to send a postcard and what to send them, what company to call or what PPC looked like.
Danny Johnson: Interesting. So it’s not just the fear of losing money but maybe there’s the fear of just all the different little things that—possibilities, right? I could have it say a million different things. I could have it sized small or large, glossy or not, color or not, full color or not, first class postage. You can get in to a lot of if’s, what if’s and this translates to not just postcards but everything else.
Ryan Robson: I tried to learn about construction by the way. I tried to learn about doors or windows in construction. There’s a thousand moving parts to it.
Danny Johnson: Yeah. Now, that’s funny because I was reading a book and a guy was talking about: When things get complicated, figure out what it is you’re avoiding. He says, “A lot of times, we’ll make things complicated when they’re not.” And it’s because we’re avoiding something. We’re afraid of something. We’re just afraid of screwing up or whatever it is, and we’re trying to make it complicated, right? Because the postcard—who cares? You could’ve chosen any of those options and send it out and found out what worked and what didn’t and then had success. And I’m sure that’s what you did. But the whole hesitation here—
Ryan Robson: No. It’s talking to guys like you, Danny, honestly. Until I have other people that help me give me the confidence to do it… I started listening to podcasts. I started going to some Mastermind groups. It bothered me so much inside that I was willing to throw $50,000 to $100,000 away and I was okay with that and not get deals, but I was still not pulling the trigger. There’s something back and I couldn’t figure out what it was. It wasn’t money. That’s what was frustrating me inside internally because I’m a driver.
When I set a goal, I go do it. And my goal was to be successful in PPC and postcard marketing, the letter marketing—what these other investors were doing. I tried to go to guys in my market, and they were just not willing to share. Everybody was so close minded, and that’s a goal I’ve made. It’s to be just complete open book with people, share what I’ve done to be successful, share my methods. Because I know when I needed that, that will really help me and there’s enough deals in every market, right? There’s enough deal for everyone to share. Just be an open book. Give, give, give and you’ll be happy.
Danny Johnson: Yeah. There’s a lot of truth to that. What are some of your tips then when you move into having to generate these deals and do the marketing to get these leads in? What have done that’s worked pretty well for you?
Ryan Robson: I love outbound calling. I have this kind of epiphany the other day that if you can and you have the budget for it, try your hardest not to focus on one source of marketing. PPC will only give you a certain number of deals per month. Postcards will only give you a certain number of deals per month.
Here’s the problem with that, and this is the hard part about our business, Danny, flipping houses. You truly don’t know not only how many houses you’re going to buy next month but what the wholesale fees are going to be or what the flipping profits are going to be, what the price of the house is going to be that you’re buying, what the margins are going to look like. We don’t have an industry where you’re like, “I’m just going to buy a certain number of widgets, make them, and I know I’ll sell this many.” We’re very transactional, and it’s a lot of needles-in-a-haystack type approaches. So my goal is to put more needles or create the potential to find more needles in every haystack. And one way of doing that is to have multiple marketing methods going on at one time.
So right now, I’m doing outbound calling, PPC, and postcard campaigns. And it’s funny because some months in PPC I’ll close four or five deals and then the next month I’ll close one. And it’s like, “Crap. If I was just relying on PPC and I have built an organization to close four or five deals a month, well that month I close one would be very scary.” And that’s same analogy with postcards and everything else.
One thing about people getting into this business is they’re not successful for a month or two and they give up too early. In that third month, they have closed seven deals if they just would’ve held on.
Danny Johnson: Right. Yeah, it’s tough. And I know that you are fully capable. So if you’re generating the leads and you have the possibility of making a deal, you’re going to make a deal because that’s the other side of the equation, right? You can generate those leads. But if you can’t turn those into deals, it might not be the marketing. It’s more of the business, and I’m pretty sure you got that nailed down.
What are some things that you’ve done to…? We’ll get back to the marketing because I still want to touch on that. Just because my mind is already switched to this now, so we’re going to talk about it. But from the side of getting that lead and turning that into a deal, what are things that you’ve done in your organization to make that more likely to have? The top things. I’m sure there’s a lot of things. What are some of the top ones that have really improved your conversion rate to deals?
Ryan Robson: From a simple method, I’ve tried to make the profit formula for my acquisition people as easy as possible. So I teach them how to come up with ARVs. I help them come up with the ARV at the beginning if I need to. But really, I educate them on construction and that’s something a lot of people forget with their acquisition people.
I find that important as an acquisition guy going to the appointment. If you’re there, you need to get the contract signed. I can’t tell you how many appointments that my acquisition team will go on and the seller say, “I met with someone a day or two ago, and they said they took pictures and they’re going to get back to me for an offer in two or three days.” Well, what’s really going on there is their acquisition guy has no clue if it’s a $20,000 remodel or a $50,000 remodel and that changes his offer.
Danny Johnson: Yeah. That’s interesting.
Ryan Robson: So the more educated I make my acquisition people on how to come up with the right estimate on what the fixup should be even if you’re wholesaling, right? Because if you think it’s a $30,000 fixup and everyone else you’re sending those pictures out to know it’s a $50,000 fixup, that’s the reason your deal is not selling. It’s not that you’re necessarily priced wrong. You’re estimating your fixup incorrectly, right?
Danny Johnson: Yeah. So what are some good ways to do that? What are some good ways to train your people on those costs?
Ryan Robson: You keep diving down this rabbit hole, don’t you? I love it.
Danny Johnson: That’s what I’d want to hear, so I’m kind of asking.
Ryan Robson: No, you’re fine. We’re going to keep going. This is good. So training is the best, but we create standardized pricing with all our contractors. We tie these contractors down to how much you charge to put up a fan. How much is a bulb light charge to go in? How much per square foot on flooring? There’s a few things that are really hard to get standardized pricing on and that’s drywall, underground plumbing, and some electrical items, right? It depends on how long the run is to the panel and stuff. It’s a little bit outside of my knowledge. But doors and windows, I know what those cost. I know what the material and labor it costs us to install them.
I have my acquisition guys count. They come back and they’re like, “There’s nine windows. I’m going to multiply that by a certain amount and that’s the budget for windows. And there’s this many doors.” It’s ways to come up with really quick math. It’s a 2000-square foot house. Well, 1800 square feet is going to be tile and roughly 200 square feet is going to be carpet. I don’t expect them to get it perfect. But man, they better be within five or tenth number, not that much further off, right? So that’s standardized pricing with contractors, and I’ve done through this with a couple of guys in the markets that I’m working on right now. I’m making it sound easy, but it’s not that easy. There’s some educating you have to do with your contractors because not all contractors are willing to go that way.
Danny Johnson: And the point there though is the standardized pricing, to figure out what those things are, the main items, and just having those conversations and not just be a one-time thing where you say, “Pricing is this.” You got to follow up and make sure that they are calculating right or if they have questions that they’re going to be willing to come and ask so that next time they know and aren’t just like coming up with some wild numbers. I think that’s pretty big. It’s a good point.
And then if we go back, knowing repair cost so that they’re more accurate on their offers and maybe can offer more but still leave the same amount of profit because they just nail down their rehab cost better. What about—?
Ryan Robson: We win deals sometimes because the bid really is 20 and some other wholesaler thought it was 30 or some other acquisition guy thought it was 30. So we’ll win that bid because we’re willing to pay a little bit more because we know we can do it for 20, right? Because we know our numbers better than them.
You got to have knowledge in this industry. Coming in to flip houses without knowing anything about construction, I never understood that. That doesn’t make sense. Unless you’re just getting such amazing deals, it doesn’t matter because you’re going to be right every time. It just doesn’t exist in every market.
Danny Johnson: I think that’s what saved my butt in the beginning, but I learn pretty quickly. That’s also probably why Melissa, for the longest time, was just doing the books because then I didn’t know that I was not… I was spending way more in the rehab than I thought what I’m budgeting for. But anyway, that’s—
Ryan Robson: I’ve been there and done that.
Danny Johnson: She runs all that now. Great. So, what about acquisitions people and sales training? Did you guys do John Martinez? What are you guys doing for training for sales, if anything?
Ryan Robson: One of my main acquisitions guy is right now that’s doing a good job. He’s the big Sandler guy. He’s really big on training if anyone has ever heard about it. John Martinez’ is basically a twist on Sandler, I can say that. Sandler I don’t think is currently living. I think he’s passed away now. He’s famous for sales training.
Danny Johnson: So it’s Sandler Sales Training?
Ryan Robson: Yup. And he’s kind of the—I don’t know—the bible for sales training. They have real estate specific sales training, but Sandler training in general is just general sales training. John Martinez basically took Sandler and made it more directed towards real estate and put [inaudible 00:34:56]
Danny Johnson: Do you feel like there’s—?
Ryan Robson: Go ahead.
Danny Johnson: Well, I was just going to ask if… Because I see the sales training and I see people trying to do what’s taught in sales training. And when there’s no personalization to it or coming to the angle of who you are, it makes a huge difference in my opinion. Do you feel the same way? Do you talk to your people about trying to turn it into? Use the same sort of techniques but only if they’re natural for you.
Ryan Robson: Yeah. So it’s interesting. I had to a really hard sale the other day. I don’t go on many appointments anymore by the way. I had a sales guy that was out of town. He really needed me to go to his appointments. I went to the appointment. And my wife wasn’t that happy that I was going on an evening appointment as you’d imagine. She thought I was over those days of going on appointments.
So now that this appointment and this seller, just he needed the disappointed that hard sale, put my hand out there and said, “We got a deal? And I’m going to make you feel bad if you don’t shake my hand right now and sign right now.” This guy needed that to sign. He never would’ve been able to sign the contract if I didn’t push him with that really hard close. Not every seller needs that, right? I want to go back to this thought.
So I got another sales guy. If you do his DISC profile, he has a lot lower D and a lot lower I and a lot higher C and S, I guess, or the other two. I’m so high on D and I that I don’t even know what the other two letters are.
Danny Johnson: I believe it.
Ryan Robson: He’s the opposite of this other sales guy, right? And you wouldn’t think traditionally he’d be a great sales guy but he’s good because he does what he does. So, I explained to him what I did and we both agreed that that’s not his method and he would never feel comfortable putting somebody in that position because he wouldn’t want to spend then he wouldn’t want to maybe have confrontation and that’s just not his personality. So I truly believe you should sell based on what your personality is but try to incorporate as many of those sales tactics you need to get the deal done. I don’t know how better to say that.
Danny Johnson: No. I think you said it very well. I agree completely with that. And that I like how you pointed out the whole DISC profile part of it too because it is typically the high D that’s going to have that personality, right? They will use those techniques and it’ll be natural for them. But for people that don’t like myself… I’ve got a mid-range D, but I feel some of those techniques are just weird for me and I’m more of the come in and be a nice guy, just be myself.
Ryan Robson: Yeah. That probably works for you and that’s okay because… And here’s the reality. You’re going to close deals that I will never close, and I’m going to close deals that you might never close. So you just got to know that when you’re going into things that you might not get every deal, but knowing what type of personality you have I think is important because that’ll help you know the deals you should be closing, right? And then it will also help you know maybe some deals that you aren’t closing. Maybe there are some techniques in the S. For me, there are some softer techniques that I should be learning and getting out of my comfort zone to do that aren’t the hard closes and aren’t the very outgoing type of close, right? Anyway, I agree. I think it is great.
Danny Johnson: Yeah. Sometimes I forget that there’s people listening out there. It’s like we’re having this conversation. But for anybody listening out there, if you haven’t don’t the DISC profile before, if you haven’t don’t the personality profile for yourself or anybody on your team, you can do it for free over at tonyrobbins.com. It’s tonyrobbins.com then down in the footer he’s got somewhere for DISC assessment. I’ll include the link on the show notes page along with Ryan Robson’s diagram on the cardboard box there that he’s showing on the video, and that’ll all be at flippingjunkie.com/106.
All right. So, let’s go back. Any other lead to deal conversion kind of things that you’ve worked on in your business to tweak it a little bit better to get more out of the leads that you’re already getting? We want everything.
Ryan Robson: I got a lot for you. I don’t know how much time we got here. So, to get more out of the deals I’m getting… You probably know a little bit about this, Danny, but I’ll tell the listeners. I created a buyers model. It’s what I call it. Fixer upper is probably the best word, but I’m probably going to get sued now that I just said that word, but it’s really what I call the buyer’s model?
Danny Johnson: Is that a trademark?
Ryan Robson: I don’t know. I hope not. Let’s assume not. It’s a mutual mistake. I think that’s the legal term. I made an assumption it wasn’t.
So, anyway, what I did is I figured out how to identify a buyer who wants to buy in a certain way and/or a realtor who has a buyer that wants to buy a certain area that wants to buy a fixed-up house. I then go find the house, buy it. They come in and pick all their upgrades, pick all their finishes. We do the remodels to the way they want it and then they close the day the construction is done.
So basically, the model I created is I have a guaranteed buyer and I end up making more money on these deals than I do on the regular flip deals I do. And the reason why is… And I was going to mention this earlier that I think is important. It’s the same idea, I guess, concept goes with your acquisition guys that you should train them. Don’t overdo houses more than they need for the neighborhood. And what I mean by that is… I can’t tell you how many times I see a house in a neighborhood that’s just like… I know they put 50 grand into it, but they only needed to put 30 to sell it. Find out what the other concept is. If they haven’t done new windows, don’t do new windows. I just wanted to get that across.
One way we make good money on these deals is we kind of explain to people, “We’re going to sell you the house at the highest appraised value that we can get and we’re only going to do this, this, and this on the house. And this, this, and this is going to be similar to what the other remodels have done in the area. But if you want new windows, we love to do that for you and we charge 5 grand for that. But maybe it’d only cost me 3 grand, right? And if you want new doors, we’d love to do these new fancy doors for you. And we take them through the whole builder method of the design showroom and we have them pick out their tile. I know my cost in this stuff, so I know where to push them on the tile. I know where to push them on the doors, where to push them on windows, where my margins are as a homebuilder. I end up making an extra 10 to 25 grand on upgrades in profit on these deals.
Now, I found that that 250,000 to 600,000 range has been the best type of buyer for this business model. It tends to be either a more experienced first-time home buyer, maybe an older first-time home buyer or a second- or a third-time home buyer is better for this business model. However, with all the HGTV programs out there, everybody loves the idea.
Danny Johnson: Yeah, I know. It’s an awesome idea. Again, one of those things where I would say, “Too much work. I’m writing it off. I don’t want to…” But then you went and took it and said, “I’m making this much more. “ I’m like, “Wow. I would’ve written that off.” And here you are making more because you’re doing that. And just doing a little bit more is probably not that big of a hassle or headache. So, what’s the median price point over there so that everybody listening has an idea including myself of where you’re talking about because you’re saying $250,000 to $600,000? What’s the median in Phoenix right now roughly?
Ryan Robson: I think it’s in the mid 2’s.
Danny Johnson: Mid 2’s? Okay.
Ryan Robson: Yeah, mid to high 2’s. So, Phoenix is a very competitive market. We have two flippers in town that are institutional buyers that are flipping 100 homes a month each. It’s just nuts. So I’ll get a call from postcard or PPC and they’ll say, “Hey. My house is only worth $250,000. I’ve got an offer here for $225,000. That’s a cash offer from one of these institutional guys. Can you beat it?” I’m thinking, “No, I can’t beat it. I’m going to offer you $180,000. What do you mean can I beat it?” It’s like I’m competing against these institutional guys. So I have to come with efficiencies. It forces me to come up with efficiencies that keep me in business.
Danny Johnson: Yeah. I always wondered if there was another way to compete with that sort of situation more than on price because both of… If you’ve been buying from sellers for a while, you know it’s not always about price, right? There’s some other situation or issue. Is that something you guys also focus on with your acquisitions where you try to drill down to find out what the real issue of selling is and then making sure that you can solve that problem for them more than how much you’re going to be able to pay them?
Ryan Robson: I just had this training this morning with a couple of my sales guys. I listened to their calls. I really like to listen to every single call. If you guys aren’t using call software to record your calls, then there’s lots of different softwares out there. You need to be recording your own calls. It’s great to refer back to them and see what did I do right or wrong.
But anyways, I was listening to some of their calls and one of my sales guys… I don’t want to use the word “argument” because it’s the wrong word, but he got into this like… There was this tension on the call where he said, “What is the parking like?” And the seller said, “What do you mean the parking?” And my acquisition guy was like, “Well, the parking. What’s the parking like of the house?” He didn’t understand what he meant by parking which he was trying to ask about garage spaces or whatever. I honestly don’t know. I think he was trying to ask him how many garage spaces or if there’s a garage or not. But the sales guy had in his head that he will get this answer on the phone. He had to keep diving down this rabbit hole. The seller was getting frustrated because he didn’t understand him. And I was just like, “What are you guys doing?”
So I had this training this morning. We talked about that. I said, “Look. I do want to know the address.” And sure it’d be great to have a few details about the house, but all I care about on that phone call is: What is their motivation? Why are they selling? What is the reason they’re thinking of selling? How soon do they need to sell? That’s all I care about, right? If you want to ask them at the end of the call once you set the appointment, “Hey, by the way, let me just jot down your address. Was that the…? Remind me.” I’ll find the details on your house as if I already had them, right?” “Hey, I don’t have your house details. Can you remind me? Is it…?” That’s great if really want to do that, but don’t sound like a—what’s the right word—a telemarketer that takes inbound calls—there’s a name for that—where you’re just like taking information and writing notes. I can hear one of my sales guys in the background writing down and pausing for five seconds after he asked the question. And I’m like, “No. Just have a conversation with these people.”
Danny Johnson: Right. Build rapport.
Ryan Robson: Yeah. So build rapport, find motivation. And that call should not last for more than… I think seven minutes is kind of the number I’m shooting for. It should be under seven minutes. So when I see the call recording email come through, when it’s between four and seven minutes, I know it’s a good deal.
Danny Johnson: Nice. So you’ve shared some really big things and I hope that everybody listening had taken notes and realized the importance of a lot of this stuff. The calls, recording those calls, listening to them. You might think that everything is set and working great, but you got to check on this stuff from time to time because, like you said, you hear situations like that then you’re like, “Wow.” It was set to where it was set pretty good, but then it’s moved over time to getting a little bit more lazy maybe and just like it changed and so you got to be on top of all that. And it makes a huge difference because how much are we paying for these leads, right? Hundreds of dollars per lead. We have to make sure that every single call that comes is being handled properly. So yeah, it’s big. So even if you’re not doing a lot of deals out there and you’re only doing a handful a year, man, this is important. So yeah, I really appreciate you sharing all of that.
I do want to get back into the leads stuff because we spent quite a bit of time on lead to deal, but you talked about the calls, the outbound calling. Who are you outbound calling? And how are you doing it?
Ryan Robson: So, Mojo has been my primary source. I tried thousand calls a day. I have not tried John Martinez yet. He was kind of new when I looked into him. I’m sure he’s great. Honestly, I like John a lot and I’m sure what he’s doing is great but I wanted him to get some more experience. That was about six months ago. I probably should’ve gone at the beginning. That’s kind of what a lot of people do, but I’m one because I had it figured out with Mojo and I had my own team doing it.
The advice I give people with outbound calling… And I hear this a lot that they burn through callers. If you’re going to hire locally—and by locally I mean here in the states. If you’re going to hire locally for people to call, do not have them call for more than two to three hours a day and find something else productive. It truly is looking or a needle in a haystack, and there’s usually only one needle in these huge haystack of calls. And you’re just trying to get lucky and find that person ready to take your call but (1) they have to answer, right? And (2) they have to be in a position where they want to talk to you. And then (3), they have to be motivated to sell their house at the time. It’s just like the stars have to align in outbound calling, but you’ll going to find people you’ll never find with postcards because some of the people would never pick up the phone to call you but they will take your call.
Danny Johnson: Yeah. And I know how painful that is. I had a job as an outbound telemarketer when I was a teenager, and that was the most miserable job of my life. It was like two or three hours went by and I look up in literally 15 minutes. Ridiculous. But yeah, that’s the thing. You go through rejection all day long. What’s that?
Ryan Robson: Two to three hours, I think, is the max per day.
Danny Johnson: That’s a really, really good point. Don’t expect too much. Set those expectations a little bit lower from the beginning. So, who are you calling? Just like equity list or stuff like that? What are you—?
Ryan Robson: We call foreclosures. We call canceled and mixed buyers. We try to target it as much as we can. I don’t call the general equity list. I tried it, and I probably want to try it again. I tried it with a thousand calls a day. I got two deals from it. I think we made—I don’t know—10,000 to 20,000 calls. That’s a lot of calls to make to get two deals.
I think cost-wise it made sense, but the process is at the time. I’ve heard they’ve gotten better by the way. I’m not trying to knock them. But at the time, their processes weren’t quite in place. And it’s just my personality. If you don’t have your stuff figured out, I’m going to move on with somebody that does, right? Because of my high D personality, I just don’t have the mental capacity to give you the patience to figure it out right.
I’m back to that mode again and we’re cranking through a Mojo. I only have a couple of callers on it right now. But I’m in this mode now where ironically, Danny, I’m trying to slow down. I don’t want to close 100 deals a year anymore. I only want to do 40 to 60 deals. I would just rather hit more triples and homeruns and do 40 of them instead of 100 singles and doubles. That’s just where I am in my life.
I don’t know if you saw my Facebook post the other day, but I was in Cancun on a beach. And on my phone, I bought a $700,000 house that was worth 1.2 million and I was just like, “How great is life?” I finally bought a house on a tropical beach like I always wanted to do.
Danny Johnson: That’s awesome.
Ryan Robson: it was just luck of the draw. I just happened to hit my email and the stars aligned right there while I was sitting there.
Danny Johnson: That’s a big point. You’ve been through the cranking and trying to do that many when you find out it’s not all that’s cracked up to be. It’s more of quality and having a good time while you’re doing it, right?
Ryan Robson: Yeah. And for those listeners that are maybe interested… I don’t mean to put too many plugs on your show here, Danny. But I’m looking to invest in people. I’m not looking for specific markets. I’m looking to invest in people. I’m looking to find the real people first and then figure out if the market makes sense for me. I’m doing that in two other markets right and I have invested in two guys. I’m helping them grow and do their business. They were doing maybe five or 10 deals a year, and I’m trying to show them how to do 30 to 40 in their first year and get that experience.
Just kind of where I am in life, Danny. I’m trying to slow down, invest in people more, put more time into… I don’t want to say coaching. Coaching is the wrong word. I’m not trying to become a coach or start my own coaching program.
Danny Johnson: But you’re talking about more one-on-one type.
Ryan Robson: Yeah, where like I’m giving you my money and time. I don’t know how better to say that. It’s not coaching. It’s like if you lose, I lose kind of at thing.
Danny Johnson: So if anybody out there listening wants to find out more about that, what’s the best way to get a hold of you for it? Are you even taking anybody else on right now?
Ryan Robson: Yeah. I’m always interested. Look. I’m interested in developing relationships. So the first guy that I invested with, we talked for three to four months before we ever did anything. We really got to know each other. I put things out there and see how he responded. Sure he was still interested. He made a big investment [inaudible 00:52:52]. I don’t want to say I made him. He quit his job and that was one of my kind of requirements. If we’re going to be putting x amount of dollars in marketing every month… I don’t want disclose too much about his market and what’s he’s deal. We didn’t talk about it. For me to put a lot of money in your market, you can’t have a full-time job and take all of these calls and go on all of these appointments. If you’re going to run, you need to be able to run fast, right?
Danny Johnson: Right.
Ryan Robson: This business is hard to run part time. I think people are successful doing it sometimes, but you’re going to limit yourself.
Danny Johnson: Yeah, for sure.
Ryan Robson: You’re asking me how people can get a hold of me. Sorry.
Danny Johnson: Right.
Ryan Robson: I went on a tangent.
Danny Johnson: I know because that’s what everybody is thinking. It’s like, “How do I get a hold of you? He’s going to forget it. He’s not going to say and then we’re not going to know.
Ryan Robson: Well, I don’t know about that. firstname.lastname@example.org. You can happen to look me up on Facebook, Ryan Robson on Facebook. I’m sure you and I are friends. I’m on Flip Pilot group. You can find me on there. I’m not here to pitch that. I don’t mean to do that, but I get a lot of joy out of investing people and seeing them grow and that’s kind of where I want to be in my life.
Danny Johnson: That’s really cool, and I respect that. We didn’t talk about this. It’s not like a planned thing, but I like that you’re doing that. And if I didn’t think that you were a good person that I would recommend other people to for that kind of situation, I wouldn’t have it on here. But I think you are a great person. If somebody is thinking about wanting something like that, Ryan is definitely the person to contact. So definitely reach out to him. Talk to him. Start a conversation. Who knows what happens?
So I appreciate you being on the show, Ryan. I know we had a couple of audio problems and stuff like that. I’ll do a little bit of editing to make it a little bit better. But hopefully everybody heard everything. And if you want to repeat the email because it might’ve cut out right while you were saying it just to make sure everybody got it.
Ryan Robson: email@example.com
Danny Johnson: All right. Cool. I think we got it that time for sure. So that’s pretty much all we’ve got. So if you have anything else you like to say.
Ryan Robson: No, but I do use your LeadPropeller PPC stuff. I know you don’t have me right here give you a plug but my business would not be running as smooth without your PPC work, so I appreciate you and Josh over there. You guys are great.
Danny Johnson: Awesome. Thank you so much. How long have you been doing PPC with us?
Ryan Robson: About six months. I’m your member in 2017. It was that year. I was like, “I got to figure out how to become best with our markets and I dove into it, the PPC and postcards. I really dove into that world I live in now.
Danny Johnson: Great. Well, glad to be helping out where we can with that kind of stuff. especially with Google’s changes lately over the last turn of the New Year and stuff, they changed things around. To stay on top of all that stuff is just… It’s a lot of work, but that’s why we’ve got Josh here doing it. He’s awesome. He knows the stuff. So thanks for mentioning that. Have a great day, Ryan. It’s good talking to you.
Ryan Robson: Thanks, Danny. Sorry about it. I am going to buy a new mic right now.
Danny Johnson: That’s cool. And you’re going to be in Costa Rica, right?
Ryan Robson: Well, see you there brother.
Danny Johnson: Awesome. All right. Have a good one.
Ryan Robson: Buh-bye.
Danny Johnson: All right. I hope you enjoyed that episode. And again, sorry for that audio quality. We’ll do better next time on that. But if you want to find out more about his road map when he was getting started on that cardboard drawing that he had, just head over to flippingjunkie.come/106. And then if you would like to find out about doing PPC through LeadPropeller like Ryan is, check out leadpropeller.com and click on the Services navigation menu bar up there. On the menu up there, you have Services and you’ll find out more about AdWords and Facebook marketing that we do and SEO that we do for real estate investors so you can take advantage of that hands-off lead generation and let us take care of that for you. So check it out. Find out if there’s availability in your market and a little bit more about what to expect. And as always, thanks [music] for listening to the Flipping Junkie podcast. Everybody have a great week. I’ll talk to you next time.