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Jason Rios has spent about 30 years of his life in Las Vegas and entered the real estate industry there over a decade ago after graduating cum laude from Pepperdine University with a degree in Business Administration. He started out as a traditional Realtor before transitioning into the investing side several years back.
Mr. Rios is familiar with a wide array of investing strategies and enjoys utilizing his entrepreneurial skills along with Alex to help expand their investments. His goal by 2020 is $100,000/month in passive income. In his spare time, Jason enjoys time with his loved ones, attending sports games & concerts, traveling, thrill-seeking, playing softball and giving back as president of his local alumni chapter.
Alex Wentland was born and raised in Chicago,IL and has been living in Las Vegas for 3 years. Prior to getting into real estate he went to a community college and was planning to work in the medical imaging field. He was waiting tables for the last 7 years and finally decided to pursue an entrepreneurial path after reading an impactful book despite most people’s opposing opinions. He chose real estate as it seemed like the most traveled path to financial success.
Alex’s goal by 2020 is also $100K/month in passive income and to become a millionaire by age 30 with the help and teamwork with his partner Jason. Alex loves spending time with his fiancée and 2 dogs, taking hikes, going to movies, sporting games and traveling.
Their dissimilar paths brought them to the same REI circles, leading to a partnership in 2016 that started as wholesaling and has evolved into a multi-faceted investing approach. Their first deal together closed in 2017 and has since led to over 100 completed transactions. Alex and Jason feel this is truly just the start of what they will accomplish together.
Alex Wentland Contact: firstname.lastname@example.org
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Danny Johnson: This is Flipping Junkie podcast episode 110. [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.
All right. Awesome. Today, I’ve got Jason Rios and Alex Wentland. Jason has spent 30 years of his life in Las Vegas, entered the real estate industry there over a decade after graduating cum laude from Pepperdine University with a degree in Business Administration. He started out as a traditional Realtor before transitioning into the investing side several years back. Thank goodness. Mr. Rios is familiar with a wide array of investing strategies and enjoys utilizing his entrepreneurial skills along with Alex to help expand their investments.
Alex was born and raised in Chicago. He’s been living in Las Vegas for 3 years. Prior to getting into real estate, he went to a community college. He was planning to work in the medical imaging field. Thank goodness he saw the light and got out of that and into investing.
They both have a goal for a 100k a month in passive income for themselves and a short timeline to do it. So I’ll talk with them a little bit about that. Alex wants to become a millionaire by the age of 30. And he believes with the help and teamwork of Jason that they’ll be able to do that.
So, their dissimilar past brought them to the same REI circles and leading to them partnering in 2016. Their first deal closed together in 2017 and since have led to over 100 completed transactions. Alex and Jason feel that basically, truly just a start of what they will accomplish together and I agree. These are great guys. I’m glad to have them on the show. So let’s get to the interview.
So, we’ve got Jason Rios and Alex Wentland joining us, I’d say, from Las Vegas. You guys both invest and live in Las Vegas, but I think Alex is somewhere else right now. Welcome to the Flipping Junkie podcast.
Alex Wentland: Thanks for having us, man. I’m in California right now, but we both reside in Las Vegas.
Danny Johnson: Where you at right now?
Alex Wentland: I’m in San Diego.
Danny Johnson: San Diego?
Alex Wentland: Yeah.
Danny Johnson: Not a bad place to be?
Alex Wentland: Not a bad place at all, yeah. The weather is beautiful.
Danny Johnson: All right. So, I wanted to get in to how you guys each individually got interested in flipping houses and how you got your start and try to give us a good idea of what you guys found out about and who you knew if you maybe knew somebody that was doing it or just saw that other people are doing it and then how you made that transition from not being an investor to being an investor. Either one of you can go first and then we can have the other one go.
Alex Wentland: Go ahead, Jason. Oh, okay. So, I never grew up as an entrepreneur. Kind of just was raised and born into a blue collar family. Dad worked in construction, and my mom worked for the airlines. So entrepreneurialism just wasn’t part of our life. If you mentioned a business, it was like the risk and you got to have insurance and all this type of stuff. So, I was always kind of scared of it. It doesn’t mean I didn’t really understand it.
I was going to school. I didn’t really know what I wanted to do. I just knew I was supposed to go to school and get a job and education. I was going to a community college, waiting tables in the meantime at night. And then, I read a book which was super-impactful which was Rich Dad Poor Dad which a lot of entrepreneurs kind of get the bug from that. That kind of pertained to real estate and then I watched a lot of Robert Kiyosaki stuff which was a lot of flipping houses, rental, and passive income and that kind of turned me on to real estate.
I tried like an MLM business as well for a little bit, but I didn’t like it at all. So real estate definitely seemed like the better route. It seemed like it was just well-traveled so I knew a lot of people made a really good income and it was a good asset class. So I figured I could flip a house and make what I’d make in the medical field which was what I thought I was going to into in a few, one flip or two flips. That’s kind of how I got into it and I just went for it. I just studied and I took action. I met Jason along the way. I knew I wanted a partner just to balance myself, and I like bouncing ideas with smart people so I sought out someone that was knowledgeable and kind of in the same path as me.
Danny Johnson: So when you set out to do it, what did you find most impactful in learning how to flip houses? What did you find yourself always going back to? For me, it was like Ron LeGrand CDs. I would just see some CDs all the time.
Alex Wentland: Got you. Podcast. BiggerPockets Podcast probably until I found you actually, until I found other podcasts because people would be on there kind of promoting their podcast and talking about themselves. So probably that and then also just anything. I read books about, not just real estate but mindset, entrepreneurship. Thinking of growing rich was a huge one for me to really stay positive in the beginning. When you’re doing something like that, they kind of support you but it’s kind of like, “What are you doing?” So, you have that telling yourself like, “Should I really be doing this? Can I be successful? Is this fake> Did these people all just lied to sell your education?” All those type of thoughts going through your head. They keep me grounded. I just kept listening to people that were successful in BiggerPockets and other podcasts and then reading books and then just staying motivated by mentors through books like Michael Jordan, some people who had success in business too, Warren Buffett—all those type of guys. So that’s kind of what helped me stay focused and knew it was possible until I have success doing this.
Danny Johnson: Nice. I like listening to the podcast too, but my problem is you always get these tips from these books and then I have like a million books to read. And so, I have to stop listening to podcast because I can’t order any more books. I’ve got to finish the 20 or 30 that are already stacked up. Every time I see them, I’m like just, “Oh, man.”
Alex Wentland: I know. And it’s so hard for me to—I’ll order books, and I always just find myself listen to podcast instead because I don’t like reading. I like learning, but for some reason reading is just tough for me but I know it’s so good to kind of train your brain.
Danny Johnson: You do the audible thing?
Alex Wentland: I try it, but then I’ll listen to something and I’ll be like, “What the hell did I just do for 20 minutes?” And I’ll forget what I listened to. So reading, I’ll stay a little focused. I’ll know after a paragraph like, “Okay. I missed. I don’t even know what I just read. Opposed to like an audio, I don’t think I get as much from it. In a lot of podcasts, I’ll watch the video instead of listening to it. That way, it helps me kind of stay focused personally.
Danny Johnson: All right. Jason, how about you? What got you interested in flipping houses? If you want to start with what you’re doing before and go from there.
Jason Rios: Sure. I did kind of that traditional amount of college and everything. As soon as I finished college, I got into real estate and became a licensed realtor. I didn’t really like it too much. It’s just relying on all these outside parties for so many aspects. So I thought I didn’t like real estate at all. I eventually realized I do like real estate. I just like real estate investing. I’ve been lurking in the BiggerPockets forums for quite some time. I’ve been familiar with a bunch of different investing strategies just from BiggerPockets and reading so much and listening to the podcast and all that kind of stuff, but then I ended up connecting with a new real estate broker that I went to hang my license under.
When I was seeking out someone, I just wanted someone who would be conducive to what I was trying to do which wasn’t setting the stone. It’s some kind of an investor and investor-friendly person. And so, I connected with a broker who had been flipping lots of properties. I think he had done over 200 when I first met him. I still wasn’t that interested in flipping. I was just more interested in investing. I even approached him, “Hey, what are you working on?” He was doing foreclosures at that time just because he was very opportunistic here in Las Vegas.
And so, that kind of got me started as far as on the investing pad versus just traditional realtor-type stuff. It just kind of evolved from there. I wasn’t really too interested in flipping. I was very aware with it. I had clients who did that until Alex approached me and told me about what his plan was. I was working on my own plan for something separate in real estate investing, but I figured it was worth a shot to join up with Alex because he had done his homework. We’re already familiar with each other for quite some time knowing that we have the same mindset and all that kind of stuff and we were a good fit. And so, it made sense. “Hey, let’s give it a shot.” He already has his plan. “Let’s go with it.” Once we started on that, it made sense to devote all our time to it because it seemed very promising.
Danny Johnson: Nice. So, how did you guys meet each other?
Alex Wentland: It was through like someone, a third party, kind of just another investor that we knew. We don’t even talk to him anymore actually ironically, but I went to a meet-up. It was one of the first meet-ups I went to, and I was actually nervous. I was like, “Maybe I won’t go.” But I studied enough so I could kind of hold the conversation.
But again, I met him and then he introduced me to Jason. And then me and Jason, we kind of did like with this individual and a couple of other people did this kind of mastermind marketing thing together. And then after that kind of—we stopped doing that. I kind of approached him. I was like, “Hey, man. This is what the model I’m going to do.” It was mostly wholesaling. He knew the market very well in Vegas. I had only been there for a couple of years, and he knew real estate as far as analyzing properties very well. He was a realtor for a while.
So, I knew how to handle acquisition and marketing and all the front end and then he can handle the back end. So it just seemed like it was a good fit and that’s kind of how we met. I was like, “Hey, let’s see what happens.” We went from there and kind of just took off and had some success.
Danny Johnson: So that kind of answered my next question too because I’m going to ask…A lot of times people will partner up to do this business and it’s more of like, “I need to just have somebody join in the decisions with me so that if there’s a mistake I can say we both made the mistake. It wasn’t just me making a bad decision.” When people don’t bring different things to the table. I was wondering like how did you guys feel about when you got together. Did you feel like you were both wanting to do the same things? But you just said that you were more of the acquisitions, bring the deals in. And then Jason working on making sure that those turn into profit.
Alex Wentland: Yup. Exactly. That’s why we work so well together too and we’re kind of in the same mindset, but I think we balance each other very well. I’ve heard partnerships fall apart probably because they were too much alike or they didn’t kind of even each other out.
Danny Johnson: Or one guy keeps going to San Diego and then—
Alex Wentland: Yeah, exactly. I think that’s why it made sense. It was a good partnership. It kind of turned out to really be a good partnership after we got to know each other even better. We don’t let our ego play into stuff. We’ll test up like, “Okay. Well, maybe what you’re saying is right.” Sometimes I’ll go, “Oh, this is such a good idea.” And then he’s like, “Hey, did you think about this?” And I’m like, “No, I didn’t.” I would just waste like 10 grand if I was going on by myself right. It proves to work out well.
Danny Johnson: Nice. That’s awesome. If you’d known each other a little while before you guys partnered up in this, did you guys have conversations for trust? Let each other know a little bit more about each other and where you’ve come from and all that kind of stuff so that it’s a little bit easier for you guys to communicate like that and know that whenever somebody challenges what you’re saying, it’s not an attack on you. It’s more of just like a criticism saying, “Hey, you want to think about this other thing.” Does that make sense?
Jason Rios: Yeah. It seems like it kind of evolved organically where we were part of this mastermind for a separate purpose. We would talk in there as a group, but then we would also talk outside. And it seemed like every single time something came up, Alex and I were on the same page. Before we go around the same page, we just kind of confirm with each other afterwards about our thoughts and hopefully these align. So it’s like, “Okay. Well, this person is very in line with the way I am and vice versa,” and we felt that ethically, morally everything we’re on the same page.
When it came to decisions, we didn’t have the egos. We were both okay making decisions on our own, but we knew that it was advantageous to bounce it off someone else and always get positive or constructive criticism and feedback and everything.
Danny Johnson: Awesome. Have you guys read the book, Ego Is the Enemy?
Alex Wentland: No. It sounds good though.
Danny Johnson: It’s a really good book.
Alex Wentland: I’m going to put that in my notes actually.
Danny Johnson: Holiday. I’m forgetting his first name for some reason. I’ve read several—it’s right here. Ryan Holiday.
Alex Wentland: Ego Is the Enemy?
Danny Johnson: Yeah. It’s that book.
Alex Wentland: Nice. I’m going to read that. I like just the title alone. It’s such a character flaw. It can be used against you. You see it in people more and more as you kind of get into different ventures when you interact with different people in business especially. I just don’t really get the point of it. Maybe sometimes it can benefit you, especially in making business decisions, I think. You should really look at it from a really objective point.
Danny Johnson: Everybody probably deals with it to some extent. Everybody is always looking at things in terms of themselves like it’s about them. Relationships and everything, it’s always about you and it’s like it’s not about you. The more we can separate ourselves from what’s going on, the better we end up being. Excellent book.
I wanted to also mention—I read in the beginning of the episode that you both have an awesome goal of 100,000-dollar a month passive income. Who copied the other person? Or did you guys both have that?
Alex Wentland: I always wanted it, so I guess I copied the passive part. I just never put it into words. I always knew how much I wanted to make without me doing much. It was funny because Jason was like, “Oh yeah. One of my goals is to make $100,000 a month passively.” And I was like, “No shit. I kind of have the same thing.” So I kind of copied him I would say. He kind of said it first.
Danny Johnson: How did that number come up? And how do you guys intend to achieve that? Is it a well-spelled out plan? Or does it kind of evolve?
Jason Rios: We don’t have the actual financial projections where you reverse engineer it to see, “Okay, what do I got to do to get there? And how long is it going to take and everything?” Unfortunately, we have not done that yet. But based on certain projects we’re working on and what we’re aware of, our capabilities, the team that we’re adding on, we do feel that it’s achievable through certain investment approaches we’re making right now which I’m not even sure if we have time to get into. Alex for instance can tell you more about what’s going on in California with what we believe will add to that goal.
Danny Johnson: You had mentioned doing wholesaling. You want to talk about your sort of timeline working together, what the strategies have been? Has it mostly been wholesaling you guys do? Some fix and flip or rentals? What are you guys doing?
Alex Wentland: When we first started, it was purely wholesaling. All assignments. We’ve never double closed or anything like that. That was predominantly what we did. And then as we kind of build a little bit of capital to gap-fund some deals, we started taking down stuff that was really like rehabs or wholesales. We weren’t really doing anything. But like rehabs, we’re just like paint and carpet. And we would wholesale, maybe we would make five grand. But if we take it down ourselves, we make $20,000 or $15,000 even. Those were the ones and they’re super easy. It’s evolved to that, too.
We also have been working on getting some stuff in place to make rehab process pretty much turnkey with a GC we know in town that also flips, but he has a construction company. So he knows the flipping process. He knows what comps look like. He understands the process of a flipper. He’s not just a construction guy. We were working on that relationship to be able to flip more houses. So this year, 2018, we’re looking to do a lot of wholesale deals still, putting them on wholetails and then adding a little more of rehabs in there especially where the Las Vegas market is. Last year, Jason kind of did some calculations like how much money we missed out on, on deals we wholesaled. Where if we rehabbed them, the potential upside and appreciation after like four months was hard to swallow.
Danny Johnson: But that’s all theoretical.
Alex Wentland: For sure. Yeah. It definitely is. But if we could take them down and we know it’s a good deal at the numbers now and then it has potential to appreciate, might as well try to capitalize a little bit of that easy process.
Danny Johnson: What do you guys see with appreciation right now over there?
Jason Rios: It’s about 1% per month for the most part what’s going on and then in hotter areas it’s even more. We were looking at a deal we signed recently where in the past six months, that neighborhood was getting about 2.5% appreciation per month which is crazy. So for instance on that, if we just purchased it, we took a few weeks to rehab it. It’s already going to be appreciating well and then we’re getting into the hottest selling season of the year here in the summer approaching so we know just based on those factors alone we can make a lot more money even wholesaling that type of property.
Danny Johnson: Are you guys letting that appreciation and those facts in those different areas kind of affect your purchasing decision on those? Are you guys still just being conservative and then just like making more? Or are you paying more banking a little bit on that appreciation?
Jason Rios: We do bank on it a little bit when it’s not a quick closing. So if we know that someone doesn’t want to close for two months, we know that, “Hey, if it takes a higher number to get the deal done, it almost certainly is going to make sense.” We won’t do a deal where we think the numbers don’t work in the present time, but we’ll do it if we think, “Hey, we might make $1000 only on this if we’re to do the deal now.” We’ll get it signed at that amount knowing that there’s an upside. We’ve seen that happen where a deal and we signed it. It was probably worth about $2000 to us. And then when we ended up wholesaling it, we get like $18,000 and it just works out pretty well.
Danny Johnson: Nice. You got to be careful though. Getting a little bit with the appreciation and looking at that and hoping that that’ll always continue especially if you scale up volume. I’m sure you guys already know. The wholesale that you guys do. What percentage of those are you guys doing no work on? Or do you guys pretty much do something on all of those?
Alex Wentland: We’ve pretty much done something on all of them. I guess there was one currently that should close this week that was a wholetail. We send it to our buyer’s list, but then a buy-and-hold investor needed a conventional loan so we closed on it and did absolutely nothing and sold it to them for significantly more. So I guess you’d consider that a wholetail. But as far as buying them and actually listing them on the market, I think we’ve always done something where there was paint, carpets, stuff like that but I believe so.
Danny Johnson: What kind of typical repairs are you guys doing on those wholetails and the typical budget for those?
Jason Rios: We’ve been able to keep it under 12 grand for the most where it’s trash out, paint, carpet, flooring, and then minor repairs: if they got a broken window, landscaping, clean up, trash out. So that’s worked out pretty well. A lot of times we end up doing the counters and stuff like that just because we know, “Hey, we spent a couple more grand. We’re going to get maybe $8000 more in refill.” But about $12,000 and under typically is what we stayed within.
Danny Johnson: That’s not too bad. What is the typical age of these houses?
Jason Rios: Most of the houses we encounter are… Well, here in Vegas, an old house is 1950s. You don’t really see anything older than that. Even a 1970s looks kind of old here in Vegas, but most of our deals will be in that older range as far as the average age might be around 1978 or something like that. But the ones we’ve dealt with have typically been 1990 to 2005. We kept it easy, and now we’re actually doing more of those older ones where we have to go in there and fully rehab the thing because we do have that turnkey team in place so it makes sense. We don’t have to do any of that hard stuff. The contractor knows exactly what’s going to maximize a value.
Danny Johnson: That’s what I was asking. It’s like when we go to do wholetail or just a light rehab. It’s always that pain in the ass thing on somebody’s older properties where once you change out the one thing, it makes everything else look horrible. And then you’re like, “Now, we got to do. We got to do this.” It’s like one of those. If you’re doing like ‘90s or 2000s, maybe it’s—
Alex Wentland: It’s great. They’re like new. That’s exactly right. It’s all so cosmetic. In Chicago, you can find houses that are so old so I like saying most of the houses that we’re wholetailing are like 1990s and up. It sounds kind of funny since we’ve been listening now to podcast. These older states where some people are like, “Yeah,1800s,” I’m like, “Oh my gosh. I’m not going to live out here then.”
Danny Johnson: I wouldn’t even know how to handle properties like that either.
Alex Wentland: I know.
Danny Johnson: You got some crazy stuff going on I’m sure.
Alex Wentland: Yeah, definitely.
Danny Johnson: So with doing a little bit more and the flipping side, are you guys doing anything right now for the whole passive side of things yet? Or is that still something you’re building towards?
Alex Wentland: Yeah. So we are building towards it. We definitely plan to get into larger multifamily projects. We love Airbnb’s. We love that strategy. It works in so many different types of markets, and there’s a lot of cool tools you can analyze Airbnb’s with in particular markets online now. So we’re– Airbnb’s that we’re holding on to.
Vegas, we would hold a lot more if Airbnb was legal, but they pretty much still rolled it pretty much I would assume because the hotels and the strip. Some lady just got fined like 50 grand or over 70 grand. A 65-year-old lady got nailed and they just made an example of her. We don’t want to buy a property assuming we can do that. We don’t hold anything in Vegas right now. And rental rates, it just doesn’t make sense there compared to like the Midwest or somewhere.
Danny Johnson: If you don’t mind my asking what you’re doing in San Diego. I don’t know if you told me or not.
Alex Wentland: That’s a completely different project. We’re actually slowly getting into the cannabis industry so really off topic. So cultivation industry in California. Me and Jason have talked about it in the past. We wanted to get into it just because we knew it’s a wave we wanted to catch and not look back in 20 years and be like, “Wow. We missed a really good opportunity.”
So we had met someone that’s a real estate investor that had also been in industry for about a decade and he needed someone helping him on the real estate side. So that’s kind of how we linked up and got into the cannabis industry which is more in the cultivation. So it’s more of the growing. All legitimate license of course by the state.
We’re working on a huge project up north which is acquiring four licenses for cultivation, like 80,000 square feet of greenhouse cultivation. We finally settled on 2.2 million-dollar acquisition price. They’re carrying a good amount of it which is great so we kind of got creative with it, but that’s a huge investment for us and will help us get to that $100,000 a month passive income little quicker.
Danny Johnson: How much do you guys feel like that percentage of your time that’s going to take running that whole side of things?
Alex Wentland: It’s going to take a good amount. So between me and Jason and then now—he’s pretty much our new partner—Mike. He can handle a lot of the workload on the cannabis side and then Jason can focus predominantly on the real estate side and then I can kind of hover back and forth. It’s kind of what we’re seeing probably will happen. So percentage of time at this point, we don’t really know how far it’s going to go. This is only one property that we’re looking at, that we’re probably going to be closing on in the next month or two.
From there, we don’t really know if we’re going to scale it, if we’re going to look into moving at other states and grow it out as an actual full-fledged business. We really just started into it. So at this point, I don’t know exactly. But we take a good amount of time like any business in any type of new industry. But without Mike, our partner, there’s no way we could get into it. We’d have to just learn so much and it just wouldn’t make sense. We barely have enough time from our wholesaling company, let alone trying to do a whole another business. So it made sense because we met a partner who’s been in it for a while and we complement each other because he’s also a real estate investor so we can help with that side as far as signing up wholesale companies—
Danny Johnson: Did you guys look at it like, “There’s so much to be made in real estate. Should we spend our time working on something else outside of that?”? And I’m sure you did, I guess. Was that an easy decision? Or was that something you guys went back and forth on for quite a while?
Alex Wentland: Do you want to take it, Jase?
Jason Rios: Well, yeah, we did kind of debate enough [inaudible 00:28:47] our wholesale business and turn it into a full-fledged business that can be operated on its own. The more we dedicate and focus our efforts on that which was always our intention and we’re well aware of the shiny objects, just weighing the opportunities, it made sense. We can still have our wholesale business operating and running and growing even not at the rate we would’ve if we dedicated all of our time to it but it made sense to pursue this opportunity which would expedite our efforts towards that $100,000 passive income goal per month dramatically. So if that’s what our goal is to what’s going to get us to that path the soonest, well, this was an opportunity that almost certainly would get us there quicker than anything else unless we threw all of our earnings into cryptocurrency a couple of years ago or something else.
This is our viable option of what made sense in…We spent many months leading up to this point to be able to acquire this property that he’s talking about, so it’s not something that we made in haste or anything. We definitely did all kinds of research to make sure it made sense and it was viable, and everything penciled out.
Danny Johnson: Nice. Growing that wholesaling business to be where you guys have time to focus on these other strategies to. Is that what you guys are focused on a lot, like building that team out? And do you guys already have that team in place? How many people are on that team?
Alex Wentland: Yeah. So we want our wholesale company to be a pretty much well-oiled machine. We’re not there yet completely. So we have a lead qualifier who filters all our leads. We have an acquisition manager who obviously goes down and takes down the leads and gets contracts and then we have one part-time VA that just does miscellaneous stuff for us at work. We have someone running our numbers, so Jason was doing that. He still does do it, but we have someone that, I guess, analyzes the bulk of them and Jason will spend times take a look at a second look to see if we can squeeze anything out of it or analyze a rehab or something like that. I guess we have a couple of cold callers as well, so [inaudible 00:31:14] and then we’re also bringing on a transactional coordinator right now as we speak. We’re trying to build it out so we don’t have to be doing day-to-day stuff which we’re almost there but not quite.
Danny Johnson: Have you guys had any issues with hiring before? Have you been through a couple of people in each of these positions?
Alex Wentland: Yeah, just a little bit.
Danny Johnson: I wish some lessons are learned because that’s a hard thing for a lot of people including myself. We struggle with that sort of thing.
Alex Wentland: The human element is so unpredictable. We just had to get rid of somebody who I thought could elevate to different positions and help us out maybe when we go national. And then, we found out he had a drug problem so it was like complete 180. But we use personality to best kind of filter different positions or different personalities. Mastermind has helped us a ton. Just hearing other people that have been doing it for five, six, seven, or 10 years, asking what they have done. That’s the biggest help, I think, for us. Learning new experiences, I guess.
As far as like for a lead qualifier position, we tried people overseas and paid them less and it didn’t work out for us. Some people don’t mind doing that, but I think you can get better results from someone that’s American and understands the culture and you pay them a little more. You get a better quality, and people will realize that when they call that they hear someone that sounds like they’re from the Philippines. I think there’s a disconnect especially on the trust side of it when they’re trying to sell your house. They’re not buying a 20-dollar product. One of the biggest mistakes is hiring overseas certain positions when they should be American based.
Danny Johnson: Yeah, and that first phone call is like the rapport builder, right? Even if it’s not the person going to look at that house or the person actually buying the house. It’s the first phone call, man. That just sets everything up. And just having a little bit more investment in that person and how they handle that. So it’s not just let me fill in these blanks and then goodbye. It’s like taking the time to have that conversation.
Alex Wentland: Yeah. Build rapport and kind of laugh with them and all that good stuff which is something we kind of have to train in the people a little bit. You just kind of let them like, “Hey…” Not to be too professional where you sound like a robot. You want to have some fun with it and let them know you’re a real person. I don’t know if there’s anything else as far as hiring Jason that’s been difficult.
Jason Rios: [CROSSTALK 00:33:49], so I couldn’t.
Alex Wentland: Anything difficult with like hiring that you wanted to add?
Danny Johnson: It must’ve cut out for him. Do you guys have people in house or in office? Or are they all remote?
Alex Wentland: Everything is remote. Everyone works virtually, so we do not have a physical office. Something that, as we scale, we’ve talked about that we might implement but we haven’t needed it. We do a good amount of deals. It doesn’t seem that it’s affected it at all, but I have heard a lot of people say that the office kind of just creates a good culture and a different vibe, so that’s something that we’re probably going to be looking into maybe this year. We’re not sure though. Currently, we don’t think we need it though.
Danny Johnson: How often do you guys meet virtually as a team? And then how often in person as a team?
Alex Wentland: So as far as virtually, I’ve been in constant contact with our lead qualifier acquisition manager. We talk pretty much every day. We need to get better on which is something we’re probably be implementing in the next month or so is having them report on certain things which we do not have them do yet, which I think is very important to keep them accountable. But we talk to them every day, pretty much every one in our team. When we meet in person, we don’t often really meet in person. Our acquisition manager is a good friend of ours so we see him. Jason sees him all the time. Our lead qualifier, maybe once every couple of months. Like I said, I talk to her every, I’d say, several times a week.
Danny Johnson: How are you guys compensating? Are you guys compensating in a way that, that rewards them doing better in getting more of these deals like bonuses or commissions?
Alex Wentland: Yeah. Jason, do you want to take it? I don’t know if he’s there.
Jason Rios: My connection is off. You should go for it.
Alex Wentland: So our lead qualifier, we don’t have any bonus structure yet. We just pay her per hour and we’re paying her $16 an hour. We do want to implement something where maybe per deal she kind of filters and qualifies some type of bonus. I’ve heard people do like $50 or $100, something like that, just to keep her incentivized and have her more fun with it. We haven’t done that yet.
Our acquisition manager, we have a tier system that we use. From one to two or three deals, she gets a certain percentage and then it goes up from there. So if you close a certain amount of deals, the more deals he closes per month, the percentage then goes up.
Danny Johnson: That’s nice. I haven’t heard of that before.
Alex Wentland: Yeah. So we tiered it. We might have tiered it a little too high, but as we talked to other people in the industry… It’s the importance of masterminds and seeing what other people are doing.
Danny Johnson: It’s always kind of hard to lower somebody’s with the pay they’re already.
Alex Wentland: Yeah, exactly. They’re still getting good money, but you tell someone they’re going to make something and then like three months later like, “Yeah. I think we’re paying too much.” It’s not a good conversation.
Danny Johnson: Hopefully, you’ll work it out in some way where it doesn’t seem so bad.
Alex Wentland: It’s fine. It still works. But when you start doing more volume of deals, it’s something that I think you don’t necessarily have to pay in such a huge percentage because they’re going to do very well with a smaller percentage assuming you’re doing a good amount of deals.
Danny Johnson: So do you guys have like a goal for the year that’s either a financial or a volume goal? And then are you guys doing these KPIs in keeping track of all your numbers as far as what you’re conversion rates are as far as going from lead to deal?
Alex Wentland: As far as how many deals this year, we want to do over 100. That’s our goal. We should hit it. Last month was our best month. We got 11 contracts. So we’re on the way to do it. The biggest thing for us is inconsistency. We’ll have a huge month and then the next month will be half that. So that’s something we’re working on pretty hard right now.
We do track our KPIs through our CRM system. I don’t know. That’s on the top of my head. That’s another thing we need to improve on. We have them tracked which is awesome, but we really need to sit down and analyze them and look at—
Danny Johnson: Focus on them.
Alex Wentland: Yeah, focus on them more and know exactly. For instance, if we put this dollar amount out in say direct mail, this should be the equivalent of deals we should close. I don’t know that off the top of my head. I can look at the numbers and probably find that out pretty quickly, but we do have that tracked. We just need to focus on it better.
Danny Johnson: Are you a numbers guy? Jason, are you a numbers guy?
Jason Rios: Yeah. I’ve always been a math nerd and for some reason I enjoy it.
Danny Johnson: You’re probably the one that should be looking at that stuff then.
Jason Rios: Yeah. We’re actually compiling a bunch of data at the moment so we can really hone in all kinds of different numbers and ratios and such.
Alex Wentland: Yeah. I want to shoot myself when I do it. That’s what I talk about when we balance each other.
Danny Johnson: Well, I’m interested in it, but I only want to look at it once every like month or something; whereas Melissa gets into it and does choose the number. I always thought I was, but I don’t think I am.
Alex Wentland: Yeah, I don’t do that but some people love it. I want to know like, “Hey, are we making money? What’s our margins?” That’s kind of what I care about. But like to get real into it, my head starts spinning. I look at too many numbers.
Danny Johnson: Have you guys taken the Kolbe test? The K-O-L-B-E, Kolbe.
Alex Wentland: No. Was someone else telling us about that, Jason? That was like saying kind of what your personality and what you should—
Danny Johnson: Well, it’s more natural. It’s something like personality has changed throughout your life or they can change. As we turn, you grow and stuff. This one is more of like how you are, I guess, instinctually and there’s like a fact finder measure in there. So it’s like fact finder, quick start, follow through, and implementer. And then, you basically are going to be hiring one and it goes down like it’s the lowest ones. And I’m a pretty low fact finder which means I don’t want all the info. Just give me enough to make a decision, I don’t want to hear all of it. I’m a selective listener because of that. It’s pretty cool to see it though because it’s very helpful.
If you’re a quick start, you tend to get into a lot of things. So if you’re a high quick start and a low follow through, you’re going to start a lot of stuff but you don’t necessarily finish all of it. You don’t care to finish all of it.
Alex Wentland: Maybe I heard you talk about this. Was it through a book? You talked about it in one of your podcasts, I think.
Danny Johnson: I might have. It’s interesting. Well, I like seeing all that stuff. And then it gives you like tips on… I have one printed out. Let me get it real quick. So here, I’m trying to keep it front and center but it says, “Commit but a very little.” It says, “Target your top priorities. Unlike time, you can replenish cognitive energy but it takes downtime to do it.” So basically, it’s like I have high follow through also, but it doesn’t mean I’m going to like start something and finish it like right away. I’m going to start it. It’ll bother me until it’s finished and it could take a real long time. So if I have all these things going, it’s going to bug the hell out of me to not have them all finished. It says stuff like, “Don’t take apart small appliances and stuff like that.”
Alex Wentland: That’s great. We should probably do that. It’d probably be interesting to see like Jason probably low in certain things where I would be high and vice versa.
Danny Johnson: That’s a pretty cool thing. What’s your marketing look like right now?
Alex Wentland: We do a lot of direct mail. Probably one of our best sources of deals as far as volume. We do a lot of online marketing: Facebook, PPC, SEO which is all done with you guys through LeadPropeller which has been awesome for us. And then, we have a couple of people on the phone making phone calls. We do some driving for dollars too as well. That’s not as much as volume, but you get a lot of good deals on those.
Danny Johnson: Like the calling stuff, what are you guys calling? What do you have them calling on?
Alex Wentland: Same thing that you would send direct mail to. So we’re just have them to call them, cold caller, to get lists, skip trace the list and then have them call them.
Danny Johnson: How many calls do you have them do per day? Or do you guys know what that is?
Alex Wentland: About 100 an hour.
Danny Johnson: Hundred an hour?
Alex Wentland: Yeah.
Danny Johnson: So it’s like a Robodial thing?
Alex Wentland: Yeah, exactly. Yup. Something we just implemented. You got to manage people so it’s much harder than you would think. It sounds kind of cool and good way to get the sellers which it somewhat is. A lot of people are doing it. It’s hard, but you got to find the right people to do it unless you want to do it yourself. You have to train the people what to say. Give them a good script and then keep them on the script. So you’re managing people which is difficult, but it seems to work pretty well as long as you can manage the people properly and have enough time to do it.
Danny Johnson: How long have you had people stay doing that for you?
Alex Wentland: We’ve been doing that for three or four months now.
Danny Johnson: And you got the same people?
Alex Wentland: No. I fired two people already in three months and hired another. We replaced them. We have two right now. I like to have three at all times.
Danny Johnson: How many hours a day are they doing that?
Alex Wentland: Part time so three hours. Three hours a day.
Danny Johnson: I couldn’t imagine anybody could really handle doing that for much more than three hours a day and [crosstalk 00:44:14]
Alex Wentland: That’s exactly right. They get burned out. Maybe someone that’s really built their stamina like say if they’ve done it the last 10 or 15 years like purely cold call maybe but you can hear it in the calls. If they engage as much, you can actually hear them.
Danny Johnson: There’s not going to be much excitement in all of those calls like, “Hey.” You keep that up for more than—
Alex Wentland: No, it’s like, “Oh, we’re 5,” and they’re just like, “How many beds? How many baths? All right. You might hear from us.” So we have them on a part-time basis.
Danny Johnson: What do you pay them? Do you mind me asking?
Alex Wentland: $20 an hour.
Danny Johnson: That’s a little bit more because it’s pretty tough.
Alex Wentland: It’s tough and you want to get good quality.
Danny Johnson: How many deals do you say you guys have gotten from those?
Alex Wentland: We’ve done a few. We have a lot of follow-ups in the pipelines. We get a good amount of leads, but then to qualify those leads. We’ve done probably several traditional sales so we get a lot of business from just traditional sales that we refer out to our realtor team which we can go end up to you if you want. But I think we’ve done three in the past three months from it, so it’s not bad and we just started it. It takes a minute for these people to get it in the groove and talk to people and learn what they’re doing.
Danny Johnson: Who’s doing the drive for dollars? How are you guys handling that?
Alex Wentland: My fiancé was doing it last year. She was doing that and she would skip trace them and call them and follow up. We got a good amount of deals. We got like several deals from it and made 50 or 60 grand or something like that, pure wholesales too. She loved it. She was like, “How much do I get to make off of those deals?” I was like, “What? You’re contributing to the business.”
Danny Johnson: It’s for the team.
Alex Wentland: Yeah, exactly. She was doing it. Now, my mother is actually—which is funny. It’s like our family. My mother wanted something to do and I was like, “We could drive around and look at houses and take down the address.” So that’s what we have literally just started like a week ago doing it for us.
Danny Johnson: I enjoy it.
Alex Wentland: Yeah. She was like, “This is kind of fun.” You get to look at these houses and houses you think were vacant and then you go on a Sunday and they have a Mercedes parked in the driveway but it looks like a dump in the ghetto. She gets kind of a kick out of it and it gets her away from my dad, so she enjoys that.
Danny Johnson: It’s a win-win.
Alex Wentland: Yeah, exactly.
Danny Johnson: That’s awesome. I think Melissa was telling me when she did a lot of the analysis on our marketing stuff and what produced most amount of deals and the most amount of profit to per these different sources…I think she said the direct mail ones actually had the highest return, like the amount of profit. Not just the return but the amount of profit was actually from those. I think it’s a pretty underutilized thing for most people. They think it’s like a beginner thing and then they move from it.
Alex Wentland: Direct mail or driving for dollars?
Danny Johnson: Driving for dollars.
Alex Wentland: Yeah, I agree. If you can get someone doing it for you and kind of just outsource it, I think it’s a great source. The houses you can tell are stressed. So if you can find the seller… Most of the time, people won’t do the work to find them either. So there’s probably less competition on them. So you probably get a better margin and it’s easier to work as opposed to maybe PPC or direct mail where they call five other people and now you have to convince them to go with you.
Danny Johnson: You guys have somebody taking those calls, right?
Alex Wentland: Inbound?
Danny Johnson: Inbound like somebody is live answering all those calls.
Alex Wentland: Yeah, every call. So we have our lead qualifier. She’ll answer them. If she can’t get to them, then we have our call servers back her up. It’ll forward to them. So if she’s in a call or someone calls in and she can’t get to it, it’ll forward to them. They’re all American. It’s not like PATLive or something like that. So they all get answered live and then that call service will then send it over to us and they’ll probably ask some questions and build a little bit rapport. And then, our lead qualifier will take a look at it, probably call them again, verify some information, kind of determine whether that lead will go to our acquisition manager or whether that lead will go to our realtor team to take down as a traditional sale.
Danny Johnson: Nice. I like how you do that. That’s cool that way.
Alex Wentland: So we initially founded ourselves losing a lot of deals that we thought we can convert traditionally, so we linked up with a friend of Jason’s in town. He’s a top realtor, and he’s great at closing over the phone and closing in person. So we linked up with him to take our leads that we thought were traditional. A lot of times, we’ll talk with these people and they’ll say, “No, I’m good.” After we give them the offer, they go, “Sorry. I don’t want to talk to your realtor.” They’re like, “Okay. No worries. We’ll send it to our realtor anyway in a cold call so he’ll get the lead.”
Danny Johnson: That’s good. Do you mind us asking how you structured that?
Alex Wentland: We get 35% for broker fees.
Danny Johnson: That’s pretty good.
Alex Wentland: But we get them a lot of leads.
Danny Johnson: Awesome. Well, it’s been a great interview. I really appreciate both of your guys’ time being on the podcast. Do you guys want to end with anything or share anything with the audience?
Alex Wentland: Jason?
Jason Rios: Sure thing. One thing that we just recently started implementing is private money lending for our flip purposes to allow us to scale up now that we have that turnkey team set up and obviously the capabilities to handle everything. That’s one small thing that we implemented. But then also, we understand a lot of people want to get into this kind of industry but they don’t know how. We’re offering some opportunities in that that have very strong returns because it’s obviously costly to set up operations and everything. We have numbers kind of penciled out. There’s opportunities for people there. That’s really what we’re currently going to be working on here in the next coming months.
Danny Johnson: Is there any way that anybody interested in finding out more about what you guys are doing and all that kind of stuff can reach out to you guys?
Alex Wentland: Yeah. Do you want to go ahead, Jase?
Danny Johnson: I think maybe his connection.
Alex Wentland: So I guess you could probably just email us about it if you do want more details about that if it’s something that interest you. So my email is email@example.com. And Danny will probably put that in the show notes or something if that’s something that kind of interests you. Cannabis industry which a lot of people ask us about it all the time and we just started talking about it. It’s crazy that so many people whether they agree with it morally or all that. It’s kind of the shiny objects in terms of…You can reach out and we can tell you more about it.
Danny Johnson: If you have something like a link or something to see some information some more in the website, we can throw that in the show notes page as well. Just send it over on email whatever and I’ll put it in the show notes page.
Alex Wentland: Perfect, man. I appreciate it. This is awesome.
Danny Johnson: Yeah. Thanks so much for being on. All right. I hope you guys enjoyed that interview. I certainly did. Alex had mentioned that he uses LeadPropeller for Facebook, AdWords, and SEO. We do offer those services for investors across the country. If you’re interested in finding out more about that, find about availability in your market and maybe what you can expect from those services, feel free to reach out to us at (210) 999-5187. Everybody have a great week [music] and we’ll talk to you next time.