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Justin Williams has been a full-time investor for over 8 years.
He’s flipped over 500 houses.
He considers himself a house flipping machinist. What he means by that is that he is all about building systems so that he could scale quickly and do more with his time.
Keys Points From This Episode
Here’s what you will learn in this episode:
- How he won a car for a house flipping challenge from his mentor but never received it
- How Justin doesn’t stress about those things and just focuses on the future and the fact that he learned how to make so much more money flipping houses that the car didn’t matter
- How Justin was in a really tough spot when the economy changed and found the opportunities out of the adversity and ended up doing better than ever before
- The question to ask yourself every time you do something during the day
- Why it’s wrong to think you can do everything better than someone you could hire to do it
- How he found the person that basically runs his house flipping business
- What he’s noticed from the people that he coaches that succeed that is the reason for their success
I was busy doing most of the work in my flipping business and had a talk on the phone with Justin.
His excitement and approach to flipping through systems really inspired me, so much so that I asked if he’d mind if I flew to California to hang out with him for a day to learn more. This was out of the blue, mind you and he still accepted.
I immediately booked a flight and spent a day of crash course learning from him.
It actually surprised me when I got there and he asked what I wanted to do. I just wanted to talk with him all day and hang out. But, with the question asked about what I wanted to do, I just said, “Let’s go check out one of your rehabs”.
He was driving and he looked over at me and said, “well, I haven’t personally been to one of my own rehabs for months (may have been over a year).”
He had built up his systems to such a point that he had people doing all of that busy work for him.
That way he could always focus on the bigger picture.
This goes against what most house flippers do.
Justin runs his business like an actual business.
Justin recommends you ask yourself the question, “how can I get someone else to do this” any time you work on something during each day.
An awesome tip I got from Justin is that when someone that works with you has a problem, they have to call with a solution to the problem. They cannot call just stating there’s a problem. They have to have a solution to recommend first.
This teaches them to learn how to come up with solutions and not always rely on you.
When first hiring someone, start them out part time so that you aren’t always struggling to find them stuff to do. Build it up over time.
Listen to the episode to find out how he found and hired the person that basically runs his entire house flipping business now. We go into detail about what qualities and experience they had when interviewing and then how he taught and trained her. We even talk about how compensation was handled over time.
I struggle with feeling that I have to do some of the things in this business, like meeting with sellers and making offers.
He asks me in the interview, “Do you like spending time with your family more than closing sellers?” Just think about that. Always focus on what’s most important and have other people do the other things. Powerful.
Over all, this is one of the most information packed episodes ever on the podcast.
Just Williams is a good friend and I recommend anything and everything he puts out there.
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Danny Johnson: This is Flipping Junkie Podcast Episode 4. [music] Welcome to the Flipping Junkie podcast. My name is Danny Johnson; former software developer turned house flipper, flipping hundreds of houses. Each week, we bring you interviews, strategies, stories and motivation to help you get started flipping houses and on your way to becoming your own boss and achieving financial freedom. Thanks for spending time with me today. Now let’s get to it.
All right. Today is a good episode. I’ve got my good friend Justin Williams. He’s been a full-time investor for over 8 years and he’s flipped over 500 houses. Now, Justin is the systems guy. He really has turned his house flipping business into a real business where he’s not having to be there doing every little thing. He considers himself a house flipping machinist because he does build systems that scale quickly, and so he can do more with his time and do what he wants with his time.
We also go into a lot of detail about how he set up his systems from the beginning for his house flipping business; how he hired the person that really basically runs his entire business now and how you can do the same. There are some powerful stuff in here as far as like even questions to ask yourself every time you do something during the day, to see if that’s something that somebody else could do for you. And, you know, why it’s wrong to think you can do everything better than somebody you could hire to do it, which is something that I’ve struggled with in the past. So enjoy the episode. I know I had a lot of fun interviewing Justin and I’m sure you’ll enjoy listening to him. So let’s get to it. [music]
Hello, house flipping junkies. I’m super excited to introduce to you Justin Williams. If you don’t know Justin, he’s a great guy, a great businessman, a great house flipper. He’s taught me a lot in this business. And if you don’t know about his podcast, House Flipping HQ, you should really check it out.
Hey, Justin, thanks for being on the show.
Justin Williams: Hey, Danny. How’s it going?
Danny Johnson: Pretty good. Yourself?
Justin Williams: Doing awesome. Happy to be here. Thanks for having me.
Danny Johnson: Yeah, no problem. I’m glad you made it. So, tell us a little bit about you and what type of investing you do.
Justin Williams: So, I’ve been a fulltime real-estate investor for about 8-1/2 years now and I’m a flipper as you mentioned, but I don’t really consider myself a flipper. I consider myself a machinist, a house flipping machinist. My goal is to create a machine that works for me, and we’ve done pretty well with that in the past. Since we started 8-1/2 years ago, we’ve flipped over 500 houses.
Danny Johnson: Wow!
Justin Williams: Currently doing about a hundred houses a year. And this year, we’ll do anywhere between 150 and 200 and that’s pretty hands off for me. I’m pretty hands off with all that.
Danny Johnson: And you’re able to do that because of the systems that you’ve built. If I try to do that, I would be pulling my hair out and going crazy. You know, I remember talking to you a couple of years ago and actually just a little over a year ago. And I was talking to you and you were talking about systems and I was talking about growing my business and, you know, I just remember thinking I need to go and spend time with you in person. And I know you probably thought it was kind of crazy when I called you and said, “You mind if I come to your house tomorrow?” You know, I just wanted to jump on a plane and get over there. That was really cool that you…
Justin Williams: I thought you are a successful person because that’s what successful people do, in my opinion. So I thought you were just like me because that’s something I would do.
Danny Johnson: You said, “Yeah, come on over.” So, I got a plane ticket and went over there and spent a day with Justin. And I learned a ton of stuff and it was really a great experience then. You know, I’m so glad I did it. It was so worth it.
Justin Williams: Not to cut you off, but I was excited that you wanted to come because I want to learn a ton from you. I had learned a ton from you and it was a great opportunity for me to pick your brain because of all the things I’ve learned about internet marketing and online marketing… So for me, it was a win-win. I really appreciated you coming and I learned a ton as well.
Danny Johnson: And that’s a lot in this business whenever you open yourself up to learn from other people and willing to take the time to help them and have them help you or so. You know what, I’d really like to find out more about reasons why people started flipping houses. Would you mind sharing your backstory with us about how you got started?
Justin Williams: Yeah, absolutely. I’ve been an entrepreneur basically my whole life, I guess you could say that. I was going to Brigham Young University, playing football, just got married. It was about 10 years ago… I always forget years, but this was about 10 years ago, 11 years ago I got married. Ten years ago, my wife and I started this satellite dish business just over 10 years ago.
Long story short, we ended up with a $120,000 of debt, a failed partnership, had to let all my staff go. We went to Bakersfield basically overnight. So we had a $120,000 debt. We were living in this house with like 10 other people; people that worked for us and family. It was just a madhouse. It was crazy. We had a 6-month-old son. And we worked harder than we ever worked in our life. Did knocking door to door, getting that debt paid off. Right? And then once we got the debt paid off, I’m like, “Okay, we’re done with this, let’s get into real estate.”
We also wanted to do real estate. Got into real estate. Basically, we were ripped off. You know, we spent $40,000 in our first 2 years trying to learn this business. My first mentor promised me a car I never got. It was wild, you know. Took us 7 months to do our first deal but we finally did it. It was a lot of work. We took a lot of action. So that’s how we got started. But then after that 7 months… well, go ahead, what are you going to say?
Danny Johnson: So your mentor promised you a car? I mean, that was like a contest where I think you had told me about that before. So what exactly happened there with that?
Justin Williams: So, part of the thing was this guy, like I paid $15,000 for his program. And basically, he said whoever is the best student, “whoever shows the most improvement” is what he said. But it’s basically saying whoever performs the best is going to get this free car. And he had this picture of him with this car, it was a Chrysler 300. Not the most fancy car in the world, but nevertheless a nice car.
Danny Johnson: Yeah, that’s a car.
Justin Williams: Yeah, it was a car. And you know, my wife and I won the car. A year later, we went to another seminar of his. We presented, everyone voted. It was like this big deal. It was like one of the neatest, most amazing days of our life. I mean, next to like getting married and having our children. It was like up there. Right? People were cheering. Gives the trophy, gives a picture of the car. He said he was going to send it because he didn’t know who was going to win, so he had to send it to us. A few days went by, no big deal, weeks turned to months and he just never sent it.
Danny Johnson: Wow! That’s insane.
Justin Williams: Yeah. It was horrible. But you know, at the end of the day, stuff like that happens, right?
Danny Johnson: Right.
Justin Williams: And we could either focus on that or we can just go make our own, go to another deal and buy your own car. We just moved on.
Danny Johnson: Right. There’s no sense in sitting there and being angry about it and upset and not doing anything, you know.
Justin Williams: Yeah. So it took 7 months though. There were many times when we felt like, is this really going to work? Like, we wanted to quit. But the crazy thing is, after that 7 months, it only took 2 months to do the next deal. And it took 6 weeks to do the next deal. And then we started doing deals on a monthly basis, sometimes more than one. And that’s when things really started to look up and we thought, “Oh, this business really does work.”
Danny Johnson: Yeah, absolutely. I think a lot of people see that it takes so long to get that first one and then they are just thinking automatically that it’s going to take that long again even after they get the first one. But almost everybody I talked to, it’s the same situation. I think it took us 5 or 6 months. I don’t even remember anymore, but I know it was about the same amount of time and then the second one, I think, was in the next month.
Justin Williams: Well, it’s like the learning and experience and all the things that you don’t know is what takes so long and once you have that, that’s so valuable. Right? People sometimes don’t think about it that way. I believe strongly that once you figure out how to make money, you can make as much as you want. So it’s just a matter of learning how to make the money and then you can just go gangbusters, right?
Danny Johnson: Right. You find out what works. And then the part of having the faith that you’re going to find a deal and then when you get one, you know, wow! You know, these exist. “I can do it. I can do it where I am.” You know, and you let go of all those things that are holding yourself back with the thoughts of “Doesn’t work here”, “It wouldn’t work for me”, “You know, I can’t do that kind of thing.” All that sort of stuff.
Justin Williams: Yeah. Absolutely.
Danny Johnson: So you guys, typically, how do you find most of your deals? I think you buy from wholesalers and work with real estate agents, correct?
Justin Williams: Yeah. I’ve done short sells. I’ve done REOs. I’ve done trustee sales, which is foreclosure sales for those who may not be aware. I buy it from wholesalers. We do a lot of our own direct marketing. In 2010, we had kind of a lull because before that, we were doing short sells and wholesaling and all kinds of stuff.
But then, I started to change that in 2010. We had this lull and then in 2010, we decided to start buying rental properties. In the beginning of 2011, we had purchased 12 rental properties in the last 4 months. That was the most houses I’d ever purchased to any single period of time. There were rental properties, so I wasn’t really worried about the flipping margins or any of that stuff. But what happened in February of 2011 is we were totally out of money. Right? Any of the money that we did or did make up to that point, we put into rental properties.
All of our private money lenders, they were out of money and I was like, “Crap.” Like, I literally can’t pay my bills next month. So, we took 4 of the 12 houses and I had to sell – I had to to get the money to keep my business going, to keep paying for my family and everything in hand. When we sold those 4 houses, I was devastated at first, but then I realized how much money we made. We made more money than we needed for like an entire year to live. And I looked at the returns compared to what we were getting on rentals and it just hit me.
I was like okay, what if I could do this every month? What if every month I could flip 4 houses, I sold the 4 houses. What if I could sell 4 houses and what if I can make more money in 1 month than I need for an entire year? Like, what could that do for me? And I started thinking about books like The E-Myth and The 4-Hour Workweek and I was like, you know, I know supposedly rental property is just the only way to have passive income in real estate. But I also know that you can create a business, not a job. I know that there are these huge businesses out there, they are ran with systems. I thought, why can’t we do that? Why can’t we do this on a big scale?
Danny Johnson: If I can stop you real quick too. You know, the whole point of finding the positive in the adversity. So you were thinking, “Wow! We can’t pay our bills. We’re house rich right now but cash poor.” And instead of thinking, you know, throwing up your arms and saying, “Oh well.” You know, you found the benefit out of it. You actually took that adversity and turned it into where you are now, like you did that pivot right there. You know, you looked for how to change the situation to your benefit.
Justin Williams: Yeah. And I can write 10 different times in my life where that has been the case, where there was a moment of utter like feeling of failure and loss and struggle and oh my gosh, like “What are we going to do? Our life is over.”
I mean, I am like dramatizing this situation. We were about to have a baby; my wife was stressed. We didn’t know what we are going to do. If we got into the details, like, I would be bawling, my wife would be here really crying. Right? It was very difficult situations. Every single time, as long as we didn’t give up, we just dug in and looked for a way, different doors would open and different opportunities would present themselves because there are opportunities everywhere.
Danny Johnson: Absolutely.
Justin Williams: It’s just a matter of you looking for that. Every single time with hindsight, we have been better off because of that challenge or struggle that presented itself. I would not be a multi-millionaire right now. I wouldn’t be making 7 figures a year and living where I want and doing what I want if it wasn’t for that struggle that we went through.
Danny Johnson: Right and that’s huge. And then I’m sure that you’re now like I am where if something comes up and it’s sort of a problem, we maybe spend a minute of that feeling sorry for ourselves.
Justin Williams: Yes.
Danny Johnson: And right after that minute, it’s like, okay how is this actually going to help us? This happened for a reason to teach us something and to change something to improve everything.
Justin Williams: Yup. Mourn for a couple of minutes and then okay, now what? Right?
Danny Johnson: Yeah, yeah. Figure out how you’re going to turn it around. Why is this a positive that this happened, you know.
Justin Williams: Yeah. So in 2011, we ended up flipping 60 houses which was more than we had done the previous like 3-1/2 or 4 years combined. And we went literally from 2010 to having a very low income year and I think we made, it was crazy, like $40,000 to in 2011 making multiple 6-figure income and just like “oh my gosh.”
I mean, it sounds so crazy, but literally it was just like from 1 year to the next, our lives were changed. We went from being not knowing how to pay our bills to being able to – literally this is different for Terri and I because we grew up not having a lot of money and either of our families just kind of getting by. And it was like, wow, like we can go on any vacation we want. We can pretty much buy any house we want. We can move whenever we want. We can do what we want. And it was a crazy thing.
Danny Johnson: Yeah. That’s awesome. And it’s amazing how fast that can happen, you know, when you really build like the systems. So, let’s talk a little bit about the systems that you’ve built because that was the whole point of me flying out there to see you as I wanted to know from top to bottom like how did you grow and build your systems. I’m sure you learned things along the way. Can you walk us quickly through like where you started with building the systems?
Justin Williams: The number one thing like I’d advised every single person to do and I don’t want to over simplify this, but every single day rather than just get to work, think of how can I get this done without me being involved, like every single thing you do. How can I outsource this? How can I systematize this? Who can I get to do this?
I mean, just this morning I’m doing my education business and we started a new platform called 8 Minute Millionaire. And I just came up with this idea to get like someone else to do most of my blog post for me, at least most of the legwork. But that’s just constantly how I’m thinking. I’m always trying to replace myself. I’m always trying to fire myself. Every time I’m doing something, whether it’s signing paperwork or anything, I think how can I get someone else to do this and it’s not “can I?”
Never ever ask can it be done; always how can it be done. Because I guarantee you the president of Apple or any of these huge companies is not dealing with all these details in all aspects of their business, there’s no way. They would have one store and that would be it and it would still floundering. Right?
Danny Johnson: Absolutely.
Justin Williams: It’s impossible.
Danny Johnson: You focus on what you feel like you can do better than other people and then look at what it costs, like what your time is worth and then how much you could pay somebody else to do it, and then it seems like an obvious decision at that point, right?
Justin Williams: Exactly. And it’s basically 3 things: Should I be doing this? Should I eliminate this? I could go if I were to consult with someone. I could go through their life and everything they’re doing, and 50% of everything they’re doing, they literally just stop, right?
Danny Johnson: Yeah. I learned that lesson like every week.
Justin Williams: Yeah. So now they have like another 50% of their time back, right? Then you can go through it, it’s like okay how can we systematize this. So first look of what can you stop doing. There’s was like 3 things: Stop, drop and roll. No, I’m just kidding. Stop doing it. Systematize it. and that’s without having to have someone else do it. And then outsource. Okay?
So look at those 3 things. A lot of things can be systematized without really having to like necessarily pay someone to do it. There’s a lot of things in it anyway. So just look at those 3 things and figure out how you can systematize your entire business and life. I like to systematize my life as well, so it gives me more time in general.
Danny Johnson: Yeah. And one of the things I remember I talked to you about, and I think a lot of people think about this whenever they’re looking at hiring somebody to do some of the things, they’re thinking, you know, “I can do this better than anybody else, so I need to do it.” And what you have told me was maybe you can do it better. But when you’re trying to do everything, you can’t do it as well as somebody else if that’s all they’re doing is focusing on that task and that makes a whole lot of sense. And then the other thing was the struggle of teaching somebody or having somebody do things the way you want them to or to have them constantly be calling you with questions and it’s like, you know, you’re spending just much time as if you’re just like… you could have done it quicker basically than you know them just asking you and you helping them through it. And you said, well, the thing is that might be in the beginning but as soon as they get and run with it, then your time is freed up.
Justin Williams: Yup.
Danny Johnson: And one of the big things from that was when someone calls you, “This is what you had told me that you do.” When somebody calls you, they can’t call you with a problem without first having thought through some sort of solution to the problem that they’re going to run by you. So, say something needs to be done at one of the rehabs and they’re calling you and say, “Hey, you know, there’s a hole in the ceiling. We don’t know if there’s a leak from the roof or something like that. What should we do?” You don’t accept calls like that.
Justin Williams: No. Maybe they would call me with the solution every single time. And what’s so interesting, Danny, is that first, their solution might be the right solution 50% of the time, and then at 75% of the time and now they call me, and 99% of the time their solution is perfect. Then if anything, I might just like give one other little tip tidbit, right?
Danny Johnson: Right.
Justin Williams: But it is incredible. And as they’ve done that, they’d become empowered to where they actually need to call me that much because they know what to do.
Danny Johnson: Right. They make the decisions.
Justin Williams: They know. They’ve been empowered to know they can make those decisions.
Danny Johnson: And then the other thing that I took away from that meeting was, basically with regards to rehabs, if there’s a question about whether something should be done, you put a price limit on it. If it’s more than X amount then they need to call and get your approval. But if it’s not, they can make the decision themselves.
Justin Williams: Yup. And Tim Ferriss talks about it on his book as well. It’s actually been a long time since I had read the book but just the concept. Right? It’s just not worth my time. My time is worth a couple of thousand dollars an hour. Like I don’t need someone calling me and asking me if they can pay a contractor an extra $100 for something and having that take 20 minutes of my time and disrupting my whole day. Like, just take care of it. Right? I don’t care.
Danny Johnson: No, it makes a lot of sense. It actually frees up a lot because when you think about it, most of those calls are for things that don’t really cost that much.
Justin Williams: Yeah.
Danny Johnson: And usually, you know, the answer is always, “yeah, go ahead and do it.”
Justin Williams: Yeah. Exactly.
Danny Johnson: What kind of things in the beginning because there’s still a lot of people out there that are maybe doing some deals and feel like they can do more if they just maybe brought on somebody to help them do some of the things. So what were some the first things that you did that you hired somebody to take care of?
Justin Williams: You want to start with… So when you’re hiring someone to help you out, there’s two things that you want to start getting rid of: You want to start with the things that take the most time and are they easiest to do. So that’s one category. Okay? So things like utilities where you could be on the phone for like an hour but anyone can do that, it’s like a big waste of time. Things like paperwork. Things like lockboxes.
All the stuff like entering data into the MLS. You know, we outsource all our letters now. But if you’re doing like letters, like she started writing out the letters and just every single little thing that you can think of it that just takes time. My goal is to like never leave my office unless it’s to go have fun, unless it’s just go to the beach with my family.
Danny Johnson: Yeah. That’s awesome.
Justin Williams: It’s like all these basic things that just take a lot of time. Always, always never just go and do it. Always say “Do I have to do this? Or is there’s a better way?” Maybe at the beginning you’re having them go to properties and they’re doing videos and giving you details and all the stuff, but how much time can it save you? What if that can save you an hour of time, right? So just all these little tiny things you want to have someone else do. And then what else you want to do is you want to teach them one thing that they can always do whenever they have nothing else to do. Because the last thing you want to do is hire someone and now all you’re doing is spending all your time trying to give them stuff to do. That’s like the worst feeling ever.
So first off, I’d recommend starting part-time, give them all the basic and easy-to-teach things that just take a lot of time, and then teach them one thing that they can always do that could take as much time. So for example, when I hired Vanessa, I had her doing all these basic things. And then I said whenever you have extra time, which was half of her of time, she still had working 20 hours a week – 10 hours, she had doing these basic things then the other 10, she would just get on the MLS.
And this is when you could buy more houses on the MLS, and she would just look at house after house after house and make offer after offer after offer. So I taught her how to analyze properties. I intentionally hired someone that was an agent before so she knew how to use the MLS a little bit, but she didn’t know how to analyze properties like an investor. No one does, right? You know that. So I taught her how to analyze properties and make offers. That way, I didn’t have to spend a ton of time working with her but I could just give her basic feedback. So those 2 things, that’s kind of where I focused.
Danny Johnson: Yeah, and that’s what I was thinking was basically one of the things that you could always have somebody do in their time when they don’t have the other task to do is marketing. You know, we always need to be marketing and that’s something that…
Justin Williams: Always.
Danny Johnson: Yeah. They could absolutely fill up a full-time week if you didn’t have something else for them to be doing.
Justin Williams: And then they don’t want it. After a couple of weeks, you train them one new skill. A couple of weeks, either one new skill. Until now, she runs my entire house flipping business.
Danny Johnson: Yeah. It’s crazy. And how did you find Vanessa?
Justin Williams: Craigslist.
Danny Johnson: Craigslist. And so you just put an ad that said, you know, what’s the gist of what your ad said?
Justin Williams: Yeah. I put an ad on there that said, you know, just what I was looking for. I tried to be specific but not super long; shortened to the point but specific. And then I got like a hundred resumes. Out of that, we nailed it down to 7 that we then emailed a couple of follow-up questions to.
And from there, I narrowed it down to my top 2 or 3 and she was number 1 and I said, “Hey, do you want to meet up?” We met at Starbucks. I gave her the job on the spot.
She didn’t have anything from me. At the time, I didn’t have a website because I wasn’t buying houses online. I mean, other than the MLS. So I didn’t have a website, I didn’t have a card. I had like one little thing I could give her to give her any kind of validity of anything.
Danny Johnson: That’s correct.
Justin Williams: And she’s a little like, “Okay, this is weird but whatever.” She works from her house. I worked from mine. We went after and never looked back since. It’s been over 5 years.
Danny Johnson: That’s awesome. And then the ad, were there any skills that you asked for in the ad, that you were looking for?
Justin Williams: You know, I wrote the basic like you have to be able to have some computer skills, kind of people skills.
Danny Johnson: Have to have a car and a license, right?
Justin Williams: What’s that?
Danny Johnson: Have to have a car and a license, right?
Justin Williams: Yes. That was the one… yeah, car and license. The one thing, I was like… what’s one specific skill though that I do want them to have because there’s tons of people out there that can type and communicate and whatever. But I was like, what’s the one skill I want this person to have that they’re going to focus on the most. And for her, it was going to be making a bunch of offers. So I wanted to find someone who could use the MLS. So they could also input data.
I don’t know how to use the MLS hardly at all. Like I do. I’ve caught properties and stuff, I have but not anymore. I haven’t been on those in a couple of years. But I wanted her to be able to fill out… see, here in California it’s called the CAR, the California Association of Realtors. I wanted her to be able to do all that stuff. I wanted her to be able to do the… oh, what’s it called the person who manages your houses that you’re closing on? See, I can’t even think of the words.
Danny Johnson: What, are you talking about the closer?
Justin Williams: Yeah. Not the closer but the person that… the transaction coordinator. That’s what I was thinking of. I wanted her to be able to do all those things without me having to teach her too much. So I looked for one skill that she would have that would help her with that and that was her being a realtor. So let’s say your main focus is you want someone to help you manage your projects. Like that’s what she does now but she built into that. You know, you might want to look for someone who maybe has a little bit of experience in construction or something that will give them a little bit of an edge to where you’re not training them from absolute ground zero. It’s just not necessary. Why train someone from ground zero if you don’t have to?
Danny Johnson: Right. And especially if you have some experience with it. Obviously, if you’re hiring somebody to help you out, you probably have done some deals like somebody that’s interested in learning the business, but maybe not so much to the point where they just want to learn what you’re doing and then go off on their own.
Then the other thing was did she seem like… whenever you’re interviewing her, did she seem like she had passion to learn and figure out. Because you probably in some of the emails maybe of weeding through the other people, you have to meet lately with hiring and everything. It seems like the people with passion are the ones that you want even if maybe they don’t have as much experience, but they’ll take the time to really care and be interested about what they’re doing instead of just like waiting for you to tell them each thing to do, that kind of develop their own ability to go off and learn things on their own and take initiative. Now, how did you compensate her in the beginning? How was it structured?
Justin Williams: What I did was at the very beginning… What was she getting at the time? I think we started at $10 or $11 an hour, this was a few years ago. So that would be the equivalent of an extra dollar to whatever. The minimum wage is different in different places, whatever.
But then, I said look, after one month because the first month of training someone like you are going to put in more effort than they’re going to give you and there are certain ways to set it up to have it be more balanced, but that’s just be aware of that so you’re not frustrated. Right? So the first month I said, “You’re going to get paid X. After 30 days, you’re going to get a dollar raise. After 90 days, you’re going to get another dollar raise. After 6 months, you’re going to get another dollar and after 1 year you’re going to get another dollar. From there, we’ll just see how it goes,” right?
Danny Johnson: Right.
Justin Williams: So what that did was I could have said, “If you do good, then we’re going to give raises.” But for me doing that, it was kind of like the carrot was there, right? She knew it was possible. It wasn’t this unknown. People fear the unknown. So I took away the unknown. Of course, she has to work harder or she’s just not going to have a job at all, right?
And then we gave her bonuses. Like for every house we bought, she got like a hundred bucks or something like that. So that’s kind of how we started it out. I mean, now she is to the point where…what’s she getting. What I do now, I’ll just say it, I don’t care. She gets paid a guaranteed salary and it’s at like $75,000 a year, but her actual pay is based off of 10% of my net profit of my company.
Danny Johnson: Wow. So she has incentive to go out there and make more to do more.
Justin Williams: Exactly. Yeah. So for example, at the end of the year she made $75,000. Let say we make, whatever, a million, 2 million or whatever, right?
Danny Johnson: Yeah. It’s like doing math, doing math…
Justin Williams: Yeah, it’s all easy math. So if we do a million, then she gets a $25,000 bonus. This year, we’ll see what will happen, like it could be a big year, she could get $100,000 bonus or something like that.
Danny Johnson: Yeah. That’s awesome.
Justin Williams: But it’s not on top of her base. Her base is a guaranteed pay so it’s all inclusive. Right?
Danny Johnson: Right. So matter what, she knows that she’s going to have X amount to manage and pay her bills and everything. And then when you get that bonus like, “Wow. I expected to get this. I knew I was going to get this but now I got this.” It’s a great incentive. So have you had any issues with other parts of business that you’ve systemized that you’ve learned maybe like any kind of mistakes that other people can avoid when it comes to systemizing their house flipping business?
Justin Williams: We make mistakes every single day. If you’re not making mistakes, then you’re probably not growing and progressing. I like to throw that out there because so many people like they’ll hear you and I doing the interview and it looks like this perfect, beautiful, everything is perfect. And no, we deal with problems every day. My thing is I’ve hired problem solvers. So I only deal with minimal problems.
I’ll just go through some of the parts of the systems that I used. So acquisitions is that’s where you make money in this business. I just learned a long time ago to let other people do the legwork for you in acquisitions. If I’m hopping on the MLS every day or I’m writing out letters to sellers or I’m the one taking the calls and go into these appointments and doing follow-up, like I’m never going to grow my business. And that’s okay in the beginning. If you just try to learn the fundamentals for a few months, that’s great. But after like 6 months to a year, if you’re feeling burnt out and you’re wondering like, I feel like I have a job and I’m getting a deal here and there, but that’s because you created a job, not a business.
Danny Johnson: Right.
Justin Williams: With acquisitions, you want to let everyone else do the legwork and then they can just present you with the final deal. Like once they have it under contract or they have a counter, they can present it to you and say, “Hey, this is this, this is why, this is the margins. This is how old the house is. This is why I think it’s a good deal.”
And then all you have to do is say, “Sounds good,” or you have to say “Oh, I’m concerned because of this.”
That should be your goal at the beginning, to get to that point. Okay? So that’s acquisitions, and this can be done by hiring someone to make offers for you. This can be done by working with wholesalers. This can be done by just like working direct to seller. Maybe you have someone who sends out the marketing and they take the calls. And maybe you meet with the person at first try. You can take steps. Maybe they set up the appointment for you, like that’s my brother Steven is right now. Like he has people out doing the marketing for him and screening the calls and then they set up the appointment and he closes like 8 out of 10 of his appointments.
Danny Johnson: Yeah. That’s awesome.
Justin Williams: And he only spends a few hours a week doing it because he set up all the system. Now, he wants to get to the point where someone else is going to the appointment for him. So his job is to close the appointment and do the…
Danny Johnson: I’m interested to see how well that works for him to find somebody… Because as the years have gone by and I’ve had other people helping me, I think that finding someone that can close the deals like you can is probably one of the harder pieces to fill in to have someone else do.
Justin Williams: But once again, I’m going to give you a hard time here. [laughs] If you believe that, that will be true to you, okay? So I’m not saying it will be harder. Yes, is it harder than having someone screen the calls? Yeah. But there are so many sales guys out there that could easily go close these guys and they could probably do better than you.
And I don’t mean – you’re awesome – but they could better than me because guess what, even though I have the sales experience, that’s not like 100% my thing. I’m trying to create a business. I’m trying to do all these other things. My friend, Andy McFarland, who’s actually my coaching partner with our coaching program, he’s hired several sales people in several states and they’re crushing it. They’re doing like 15 deals a month, wholesale deals per month.
Danny Johnson: Wow. That’s awesome.
Justin Williams: So once again, I mean, and I’m member of Collective Genius which is a mastermind group, it’s like $20,000 a year. It has like the top real estate investors in the nation, everyone doing around 100 deals or more a year. And when we go to these meetings, we don’t talk about ARVs and estimating repairs and stuff like that.
We talk about building businesses, and one of the number one things people talk about is hiring sales people. Once you get in that mindset and you realize “Oh, there are hundreds of salespeople,” it’s just a process. I mean, you could have 10 sales guys in the next month if you want. So, know it can happen, know you can do it. For them, it’s simple training. If they have sales experience, they can close sellers, no problem.
Danny Johnson: Yeah. That’s awesome.
Justin Williams: Excuse me. So where were we? [laughs]
Danny Johnson: I’m just taking notes. So there’s always room for improvement. You know, I enjoyed that part of it, too, though it is part of the thing. And I think if I’m going to do something, that’s probably where my time is most by.
Justin Williams: For sure.
Danny Johnson: But I do agree with you that that’s –
Justin Williams: You want to build into it. You want to build into it. But Danny, I’m going to ask you a question point blank and this is for everyone out there: Do you enjoy closing sellers more or do you enjoy spending time with your family?
Danny Johnson: Yes. Spending time with the family, of course.
Justin Williams: Do you enjoy closing sellers more or do you enjoy building a 7-figure plus business? I mean, it’s like you can go close sellers anytime you want but set up a system to where you don’t have to do that. And if there’s one day we are super bored and you wake up, you’re like, “I really want to go to close a seller today,” then you can do that. But I encourage people to look and you grow into it. Once again, I’m not trying to get people overwhelmed here. Look at every single thing and figure out how you can systematize it, and if that’s what you focus on, is what grows. That’s what you focus on, is what improves. If you focus on it and believe you can do it, you will find a way to do it.
Danny Johnson: Right. And that’s huge to always understand that when you’re getting started, so that you always have that in your mind like when you’re doing something that you’ve done before, that’s the system that you document so that when you bring somebody on, you have documentation of how you did it and then they can just do it.
Justin Williams: I used to enjoy closing sellers. I don’t anymore. If I think about talking to the seller, I want to throw up. [laughs] And I’m not saying people out there should feel this way. That’s probably not good encouragement for everyone who’s just getting started. But the point is that we are always growing and progressing. And once you done something like hundreds of times, you wanted to do something new. You want to move on to something different.
Danny Johnson: That’s true.
Justin Williams: And now I am passionate about helping others grow their businesses and learn about wealth and abundance and mindset and how they can accomplish anything in life, right? They can overcome any obstacle. That’s what I love to do now and so that’s where I focus most of my time and let my business and my systems take care of all that other stuff.
Danny Johnson: Right. And that being the case, that’s pretty much what your new podcast is about, isn’t it?
Justin Williams: Yup, yup.
Danny Johnson: You want to talk about it real quick exactly what it is and…
Justin Williams: Sure. So I started House Flipping HQ a couple of years ago and what I’ve realized is everyone who is being successful in my coaching program, it was because they didn’t let their mind stop them. The fundamentals can literally be learned depending on how much focus and effort you put into it in like a week and then you take action and learn more and more. But the fundamentals are easy. It’s getting people to believe what can be done. So I just realized everyone who is successful are the people who have the game together mentally, and then they learn with you and, they go do it and then there you go.
So, 8 Minute Millionaire is the new podcast and website that my wife and I started together and it’s just about helping people realize that they can accomplish anything in the different ways that are out there that they can make money, and getting rid of all the crap that we’ve been told our whole life whether it’s our own story that we replay in our head or something we’ve been raised with, you know. “Money doesn’t grow on trees or money is the root of all evil.”
It’s just all these different things that have impede us from being wealthy than impede us from being successful in all our different areas and changing that for people. And as a part of this podcast, we’re mentoring my little sister, she just turned 25 today, today is her birthday actually. And she still is basically tied to the umbilical cord of my mom and she doesn’t feel very smart. She doesn’t feel like she can do things. But she doesn’t have like a schedule. She doesn’t have goals. She doesn’t have all these things. So we are mentoring her and we are following her journey. My wife and my goal is to take her from being broke as a joke, having zero, not feeling like she can do very much, doesn’t exercise on a regular basis to within 5 years making a million dollars.
Danny Johnson: That’s awesome.
Justin Williams: And she’s going to run a marathon in 6 months. She’s never done anything like that.
Danny Johnson: It must have been amazing to sit down and write out those first goals. So, you guys have done that, right? You’ve already gone where she’s written out her goals for at least the first amount of time. Did you see that she’s struggled with believing that she could actually do those things?
Justin Williams: Yeah. I think she did a little bit but she’s seen me in the last few years go from being broke to making a 7-figure income every year. And then also my other 2 brothers recently in the last couple of years have gone from… you know my brother Derick, he actually worked for me a couple of years ago. Before he worked for me, he was making like $30,000 a year.
He worked for me. It didn’t work out, then he was stuck. How we talked about he was stuck and I think he was really upset at me for a while in a weird way because it’s like, “Dude, I had this job. I was making $30,000 a year and I’m not making anything because I’m not working for you anymore,” and he was in a corner and he decided to start his own app-making business, which his roommate was making apps at the time.
So find your unfair advantage, right? Who do you know? Who’s doing something? And I don’t know exactly what he makes right now, Danny. But I do know that – and this was in the last couple of years, mind you – he recently bought a really nice boat, cash. He bought a house for my other brother Steven, who’s doing really well in real estate right now as a wholesale dealer. Derick funded the entire thing.
Danny Johnson: Wow.
Justin Williams: He also has like a lot of money with me like multiple hundred thousand dollars. [laughs]
Danny Johnson: That’s amazing.
Justin Williams: So I’m pretty sure he’s making like $300,000, $400,000, $500,000 a year right now. Two years ago, he was making $30,000, right? So I think he is seeing what I’ve done, he realized he can do it. He thought, “How can I do it and how can I take the steps?” And with Steven, the exact the same thing. Steven started real estate about 20 months ago. He is my brother after Derick and he’s working a dead-end insurance job. He had no money to his name at all. Just got married, had a baby on the way, didn’t know how to pay the bills. Got going. Took crazy action for 3 months. Felt flat on his face. Got his first deal. And now he’s systematized. We went on a family reunion last month and he brought in, I don’t know the net profit but $80,000 in wholesale fees in 1 month.
Danny Johnson: Nice.
Justin Williams: Systematized. To the way that he’s not working on his business like hours and hours a day. It’s just I think my sister has seen this and I think that’s what makes her believe. She doesn’t just know like what to do. She doesn’t have the habits. I mean, she wakes up at like 10 o’clock and just kind of goes about her day. She is going to school but it’s just kind of like whatever, like not even really into it. Now, we have her waking up now at 5:36 every day. She exercises every day and then she gets going. For the first year I said, “You’re going to fall flat on her face.” She actually has to pay me at first to do this, Danny, and I don’t need the money. She has to pay me because she has to learn sacrifice. She’s never had to do that because my mom is always giving her whatever she needed, right?
Danny Johnson: Right.
Justin Williams: So she is required to wake up early and she pays me to work her butt off. Okay. Does that make sense? Like, it may not make sense to you but…
Danny Johnson: It makes a lot of sense. It’s powerful. No, no. I think you have to instill the whole thing where she is having to really work hard, put in the work. But with that comes knowing that you did it yourself, somebody else didn’t do it for you.
Justin Williams: Exactly. Yes. She’s paying me $2,000 on the first month, $1,000 for the second month and then nothing for the third month. It’s just I don’t pay her, she doesn’t pay me. The fourth month, she’ll start getting paid minimum wage and then she’ll get raises based on her performance. I am not giving her anything in this. She is going to earn it all. It’s all 100% her.
And the goal is for her, in her 2nd year then to make a 6-figure income. The next year, make a quarter million dollar income, half a million. And then the fifth year, when she is 30 years old because today is her birthday, for her to make a million dollars that year. It’s up to her. But I’m very confident that if she just sticks to… Because it’s really just a matter of having the habits and doing the things that millionaires do and you can become a millionaire. And it’s not about becoming a millionaire, the money is just the side thing. It’s about changing the person you are and knowing that you can do and accomplish anything.
Danny Johnson: Absolutely, yeah. That gets into the whole thing when people talk about people that win the lottery and lose it within a year and actually are worse off than where they were before they won the lottery and it all has to do with because they never became the person that took to earn a million dollar.
Justin Williams: Once you learn how to make money… I can make money doing a hundred different businesses because I understand. I’ve been there like I’ve gone through that and you know what it takes. You could take all the money we have right now and it wouldn’t faze me. Like we talked about, I would cry for a minute and then I get back up and go get it again.
Danny Johnson: Right, absolutely. We’ll go ahead and wrap up the interview here, but is there place where flipping junkies out there, you know, our listeners can find you?
Justin Williams: Sure. Obviously, this is a real estate podcast so go to houseflippinghq.com and you can check out everything we got there. We have a free 4-part video course that I go through one of the house flipping fundamentals. If you’re interested in a more detailed coaching, you can reach out to us firstname.lastname@example.org. Then yeah, check out 8minutemillionaire.com and we have some really cool stuff going on there as well.
Danny Johnson: Cool. And we’ll have the show notes page on Flipping Junkie if you go to flippingjunkie.com/podcast/justinwilliams. And we’ll have key things, takeaways from the episode and then links to his website and anything else mentioned in this interview.
All right, Justin. I really enjoyed the interview and got a heck of a lot out of it. Thank you so much for being so generous with your time and all the information that you shared.
Justin Williams: Thank you, Danny. Thanks for having me.
Danny Johnson: All right. Well, have a good one.
[music] Thank you so much for listening to the Flipping Junkie Podcast. I’ve got a lot of awesome interviews with some amazing guests lined up and I can’t wait for you to hear them. So be sure to subscribe to the podcast right now and visit the blog at flippingjunkie.com for more awesome house flipping education.