Secrets of Virtual Wholesaling - With Wholesaling Inc. Coach Chris Arnold

Most people get into real estate investing with a dream of living in the Bahamas, adventuring in the jungle, all while having the cash flow come in… Well, today on Deal’s Today Podcast, I interviewed Chris Arnold, a serial entrepreneur of REI Radio, and coach at Wholesale Inc. He's done exactly that. With all the years of hard work putting together systems and teams, he’s built himself businesses that he can manage from anywhere and that fits the lifestyle he enjoys. So, in this interview we’ll go over methods to methods to hiring and managing, how to find deals in today's market, and how he’s coping with COVID-19. 

In it, you’ll also hear:

The top methods to growing a quality (not just quantity buyers list)

His top method for lead generation (and how it’s much cheaper than Direct mail, and more efficient than cold calling) 

Strategies for tying up contracts during COVID-19 and making people feel comfortable

Tips he gives his students for getting started

How to find a virtual market

The demographics that make up his best motivated seller

And much more

Interview Transcription:

Paul:

All right. Welcome to the Deals Today podcast. I'm your host, Paul, with realestateaudios.com, where we jump into the guts of what's working in real estate today. Today's guest is a very special one. I had a lot of fun with it because he's an interesting dude and he is the coach, one of the coaches, for Wholesaling Inc., Chris Arnold. Chris, he is their... he hosts the podcast for Wholesaling Inc. He also is a coach, like I said, and he also runs their REI Radio program, which is a program we're going to talk about in the interview.

Paul:

Like I said, he's an interesting guy because he has four businesses that he runs, that he's built up. He has a brokerage business. He has a wholesaling business. He has a mastermind that he runs and he's also a coach for Wholesaling Inc. He does this all. He runs all four of those while in the Caribbean's in Mexico. He does it all virtually. We talked a lot about that. We talked about how to run a wholesaling business virtually. We talked about what type of people to hire, how to manage them and we also talked about what to do in today's market, because as you're listening to this, it is the height of the pandemic.

Paul:

Hopefully, by the time you're listening to this, things have flattened out in the US. We talked about the changes that he's made currently in the business and how it's done very well for him. Things that you can do today. Very simple things that you can do like, he went completely virtual now in his business. He does not meet with sellers or his acquisitions managers I should say, they do not meet with sellers, buyers don't see the houses and he does this all very well. We're going to talk about how he manages all that, some of his lead sources and his business structure as well, what his business structure looks like from the bottom to the top.

Paul:

Stay tuned for that. Listen in on that. It's a long one with a lot of information. If you're interested in knowing more about real estate marketing lead generation, I have lots of goodies at the realestateaudios.com website, head over there. You can sign up to my daily newsletter in which I talk about marketing mindset and business tactics every day in real estate investing. You can sign up there and I have a lot more audio and interviews there you can listen to. Let's head to that and let's get to the interview. How long ago did you start wholesaling?

Chris:

I started real estate 15 years ago. I got my feet wet on the retail side, so became a real estate broker first. That was my step into the investment side and then we actually started aggressively doing fix and flip wholesaling and so forth, roughly about probably 10 years ago, somewhere in there.

Paul:

All right. Do you recommend people starting with fix and flip first?

Chris:

Over what?

Paul:

Over wholesaling, just jumping straight. If you're coaching one of your students and they're like, "You know what? I want to start fix and flip but I also want to do some wholesaling." What would you recommend to them?

Chris:

I mean, I fixed and flipped before I wholesaled. I don't think it's black and white, but if you're asking my opinion or someone was asking me, I would tell you to wholesale before you fix and flip, because it's the old adage, it's, do you want a fast nickel or a slow dime? I just think there's a lot less opportunity for mistake on a wholesale than doing a flip because people [inaudible 00:03:39] in the house will be like, "Oh, I didn't see that," or, "Oh, I didn't know about that," as you're going through the rehab process. I prefer wholesaling over fix and flip just because it's easier and I like things that are more simplistic. That's just my philosophy when it comes to business.

Paul:

Yeah. Awesome. Did your license help with wholesaling?

Chris:

It does and doesn't. We have to definitely communicate that I'm licensed broker in the state of Texas and there is a fiduciary side to that. I mean, legally if something went down, they could say, "Well, you're an agent, therefore you are considered an expert," but then there's the flip side of access to the MLS, the ability to take brokers fees. At the end of the day, I think the pros outweigh the cons and I'm actually glad that at least someone is licensed in my company. Now, if you have your business, does it need to be you? No, I mean, it could be your wife, if you're married or your spouse or your husband, it could be someone in your team. It could be a friend, business partner, whatever. It doesn't have to be you but it is nice to have a real estate license because it allows you to do some cool stuff.

Paul:

Cool. Awesome. Did you start off wholesaling virtually or were you boots on the ground guy when you started?

Chris:

Oh man, we started old school, man. We had an office with a big printer and WiFi and electricity bill, just the whole thing.

Paul:

They go overhead?

Chris:

Overhead that comes with the office. Again, you want your office to look nice, so you got to furnish it. Again, I'm not hitting hard on offices. Some people just thrive in an office environment and they love the culture that that creates. But for me, what's more valuable is freedom of location. We definitely, probably about five years ago, started getting really aggressive on moving toward the virtual model. I think for a couple of reasons, I didn't want to stay in Dallas forever. I wanted to move down to the Caribbean, which is where I live now, in Tulum, Mexico, which is south of Cancun.

Chris:

I think also you can see starting about five years ago my opinion, where tech was going. I think that the virtual world was something that was on the horizon and now with everything that's going on, I think everyone's getting thrusted into virtual world. What I'm interested to see is how much of this behavioral change sticks. There are companies now doing Zoom and signing up for Zoom that never thought they would be because you have no choice. I think once people cross that behavioral line, they might look back and go, "This is actually better. I don't understand why we just don't stay virtual." It's about to be an interesting experiment.

Paul:

Right now, we've talked off the air, you have four people, acquisition managers, you also have a CEO, right?

Chris:

COO, yes, chief operating officer.

Paul:

There is no office in your business structure, everybody's virtual. You haven't even met your executives, right?

Chris:

I've not ever met them face to face. But that just shows that with virtual technology, things like Zoom or things like Join.me or apps that we utilize like WhatsApp, Slack, different things like that, phone calls, you can develop a really close, tight relationship and build someone with trust that you've never met face to face. I actually feel that my virtual team is closer than my in-office team ever was. Probably part of that is, is our conversations are conversations about business and life and we get to it on the phone and we just have a lot less drama because we don't have the old, somebody drank my Mountain Dew in the fridge. We're not bumping in. It's tough being with family, anyone in close proximity for long periods of time. I think we're all realizing that right now. I just think that some of the benefits on the virtual side are really strong and we have a deep culture and we don't annoy each other probably because we're not around each other all the time.

Paul:

Right. Right. Let's jump into the whole virtual side of thing. We talked off air about some things you're doing right now, the whole Coronavirus. What are you doing right now, as far as your team goes, as far as going virtual and fighting that coronavirus pandemic?

Chris:

As soon as it hit, we knew that there were three shifts that we had to make immediately in the sense of maintaining social distancing. How do I interact with the seller and get into a house and pictures and all that if we can't interact? Then I have my cash buyer if I'm a whole seller and the investor, I can't interact with that person face to face. Then lastly is the title company. All of those a lot of times have been done belly to belly, eye to eye. The first week we shifted very quickly in that direction and I'll just break down the real practicals on how we do that.

Chris:

With the seller, you've got three options. Option number one, allow the seller to do photography and videography and then they can send that over to you and that photography and videography will allow you to evaluate and assess the property and the repairs that are needed to be done. Like, "Well, how do they send that over? It's a big file." That's a tech question that comes up. Just email them over a Google drive folder and they can drop it into there. The second thing is, if they are a little bit more tech savvy, you can do a recorded Zoom, which is super cool. That allows you to actually guide the tour and have a conversation and point out what's this or that and so you get a little bit more control doing something along those lines.

Chris:

Then the third thing that we do is if they're tech deficient, then we're actually taking an actual iPad tablet type tech, taking it to their house. My inspector has a mask, hand sanitizer, the whole nine yards and usually these people are over the age of 50 and he's handing it through the door, turned on, ready to go so that they are shown easily how to operate it and they can do photos and videos and pass it back through the door. If we don't like what we saw, we just give it back to him and say, "Hey, can you go back to that room and take a picture of this, et cetera." That should remove every social distancing objection that you get between the seller.

Chris:

Now, then you have obviously moving over to the direct side investor, the cash buyer. What we did is, we took those videos and we embedded them into our email blast. We want them to be about five to six-minute-long walkthrough videos and we didn't know what was going to happen at first. We weren't sure and I remember the first one we sent out, I got a text right after we sold it and we made 23,500.

Paul:

Nice.

Chris:

They were like, "Oh, okay. I think this might work." Still a little bit of skepticism. That was probably, I think it was about four days later, and I posted this in Wholesaling Inc because it was really encouraging. My disposition person sold four in one day, where we never went into the seller's house and the investor never left their house. They all did it off of video. Then at that point, the proof was in the pudding and we're like, "Okay, these investors are okay doing this." Now, it's not every single investor. Some are hesitant about doing it but you just need the ones that are willing to make that move. Then-

Paul:

Right. Right. Right.

Chris:

Yeah. I'll stop right there and let you fire away a couple of things before we keep going.

Paul:

Is this something you're going to continue doing after all this?

Chris:

I think it's possible because, okay, everything's moving toward AI and automation and the more that we can begin to lean on systems and tech to do the jobs of people, the better and safer our businesses are because the one volatile thing in our businesses are humans. Now, it's the best asset that we have without question. I love, love my team. It's the thing I'm most proud of but at the same time, that's the thing that's most likely to throw you a curve ball. Somebody leaves your company, somebody is married to someone and they get moved and they have to move or just different things that happen to people. That's what makes business difficult, is the human element. I think we're going to stick to some of this, which is super cool. It's the ups of what's going on as well. Yeah. Go ahead.

Paul:

How many markets are you in right now?

Chris:

We just [crosstalk 00:12:12]-

Paul:

Locations.

Chris:

We don't do virtual wholesaling from the standpoint of going into other cities. What we do is we focus on growing our radius outside of Dallas-Fort Worth. You can go to other markets, which is great. I've got buddies that do it. I definitely believe in it. For us, we just wanted to continue to expand our radius and go further and further out. That works for us in building our cash buyer's list and that's the way that we'll grow, is via radius.

Paul:

Nice. Nice, and with your students, they're looking to go virtually as well. Do you recommend them to go to certain markets over the others or start where they're at?

Chris:

Just with wholesaling in general?

Paul:

Yeah. Wholesaling in general.

Chris:

Yeah. I mean, the thing that... if you really want to do this right, you want to hire a data scientist or a statistician and you can find one and pay them to provide you the research and know statistically these are the best markets to go in and do deals. That can be based on competition, that can be based on sales price, that can be based on days on market. I mean, there's a lot of data there and I'd much rather go into another market knowing that it's data driven versus... I think San Diego would be a cool market to do deals in. That's not always the best approach, you might want to do some market research. I definitely recommend going to a statistician.

Paul:

How much does statistician costs? Do you know? Do you guys use one?

Chris:

I don't go into other markets so we haven't hired one but I don't think they're super expensive from what my buddies have told me on doing it. I just know we've looked at that model and we started to break it down and were like, "This is the only way we would go into other markets," but then we changed our direction overall.

Paul:

Would you have to give the statistician the numbers you're looking? Because if I want to get into virtual wholesaling, I don't know what numbers to look at. If I tell them, "Hey, I just-"

Chris:

They'll tell you.

Paul:

Oh, they'll tell me? Cool. [crosstalk 00:14:07].

Chris:

Yeah, you can tell them what your business is, what you're trying to accomplish and there's ones that have actually already done this for other investors.

Paul:

Oh, nice.

Chris:

It's not like you're going to be the first person.

Paul:

Very cool. Somebody was... my aunt, was asking about the transition of you being a one man show, I don't know if you ever were a one man show and-

Chris:

Yeah.

Paul:

... transitioned into delegating. Some people find that so hard to do. Like, "I can't delegate this task over." Do you know what I'm talking about? How do we transfer-?

Chris:

I know.

Paul:

... transition over that?

Chris:

It's the thing that holds back most investors, it's, here's what it is in a nutshell, it's unwillingness and inability to give up control. Entrepreneurs by nature, we can tend to be control freaks in a lot of ways and so the idea of passing a baton to somebody, knowing that they might not do it at the level that I do it. It's not their baby, of course, they're not going to care about it at the level you do. You birthed that baby. That is your business, but you have to get past all that and begin to understand that if you ever really want to significantly grow a business, you're going to have to trust people and empower them. You're going to have to raise up leadership and you're going to have to sometimes be okay with people doing things, maybe not at the exact level you would.

Chris:

As John Maxwell says, "If somebody can do it 80% as good as me, I'm going to delegate it, all day long." Which I think gives you a rule of thumb to take a look at. For me, what drives me is lifestyle. I want freedom. If I choose to be a one man show, I will never have freedom. My value system and my drive for freedom outweighs my drive for control. It's the old adage, do you want to be rich or do you want to be king? The reality is, and what that actually means is, you can be king of your castle and be the one that's responsible for everything and everything relies on you and everyone's dependent on you and yeah, you feel really great about yourself and there's people that set up their leadership that way.

Chris:

I think it's really selfish to create a business that's fully dependent on you as the owner. That's not a business. That's a little bit more of a dictatorship. But the flip side of being rich is the fact that I can get out of the business and I can empower people to do things without me and therefore, make my business potentially sellable because you can't sell a business if it's just you. That's not a business. Nobody is going to buy that. I think that that's really important. I love the old saying that the success of your business is measured by how long it would run if you stopped working in it today.

Paul:

Yeah. Wow.

Chris:

Ask yourself that question. If I quit today, am I still making money? My deal is, I want to do nothing and know that my business is still running. To me, that's a business.

Paul:

Yeah. I love it, man. For students, is there anything you particularly tell them what you should start outsourcing first when they're brand new and they're a one man show?

Chris:

Yeah. I think that you should make a touch list, so that's what we call it. T-O-U-C-H list of everything that you're touching. You're wearing, again, there's your role and then there's hats. The role is where you should ultimately be, the hats are what you're having to wear until you can put somebody else underneath that hat. In the beginning you're wearing the admin hat, you're wearing the sales hat, you're wearing the CEO hat. You might be wearing the janitor's hat. Your job is to fire yourself from those positions as quickly as possible and to literally build out an org chart, your name is going to be in every single seat and your job is to start replacing your name with somebody else that's particularly going to do that job better.

Chris:

An easy exercise is to do what's called a touch list. Everything that you're touching and go through and start prioritizing. Of these things, which ones are generating me the most stress? Which ones are the things that I absolutely hate to do? Which one of these things are time killers? Are energy drainers? It'll be really easy when you make that whole list, just track everything you do for like a week and then look at that list and just go, "I want to get rid of that. I want to get rid of that." The reason I tell you, you have to do that, is because it's going to be different for every person and that's more customized versus me just telling you, "You should get this off your plate." I don't know how you're wired. What I think I don't want to do you might be like, "I love doing that in my business." The touch list is a powerful way to figure that out.

Paul:

I love that. Yeah.

Chris:

Then, you figure out how many hours it's going to take for somebody to do that, what that job's worth and you make your first hire and those things become obviously the job description and the responsibilities of the person who come in. Guess what's the most beautiful thing? You're going to bring someone in that loves to do those things that you hate and it makes them feel important because they get energized in doing them because we're all wired differently. That's the beauty of the team and the beauty of business.

Paul:

Yeah. Now let me ask, because this is something that popped in my head right now. A lot of people struggle. I feel that that kind of person, it has an entrepreneur spirit as well. You as a leadership role drive them and people fear of hiring those types of people because they'll just leave to start their own business. Is that the case with you?

Chris:

Yeah. Your hiring should be based on psychological assessing. Let me give you the old [inaudible 00:19:51], John Pike has taught me a lot about this. This is the guy I use for hiring, but it's like the iceberg analogy. If you look at an iceberg, only 10% is above the water. The other 90% is below, which you cannot see. You only see the 10% in an interview, the 90% that matters you will never see in an interview because you can't see it, it's internal. If you psychologically assess people with things like DISC profiles, Innermetrix is what we utilize.

Chris:

You can actually determine whether someone is a bouncer, whether they're going to be an issue of not being good to submitting to authority, they're just going to want to do their own thing because they're hired. I mean, you can know all of that before you ever hire anyone. That's the power of assessing. If you're hiring right now and not utilizing assessments, you're literally making decisions blindly. It's like, as John Pike says, "It's like throwing darts in the dark." You're just hoping that you hit something.

Paul:

Yeah, I know how that feels. Can I ask you about the structure of your business as far as, you got your acquisition managers and then who manages that? Who manages that?

Chris:

Yeah. I'll give you the high level of our org chart. Again, you have a visionary at the top, which is myself. Underneath that you have our COO, which is Sierra. She literally runs the day to day. Everything funnels up through her. She is my direct report. Everyone else reports up through her and then underneath that you have our executive staff, which is our directors. You have a director of sales that manages everyone underneath the sales team. You have a director of marketing, which manages everyone that has to do with marketing. You have a director of disposition which has to do with reselling our properties. Then lastly, you have a director of closings, which has to do everything with transaction, coordination and so forth. It's a COO with those directors underneath there.

Paul:

Now, how long did it take you to develop this? Because when I was doing my land business, I was trying almost the exact same structure. Now, I copied it from the E-Myth book. How long did it take you to create this structure and get everything flowing well?

Chris:

It took a long time because here's the problem, it takes a long time to find the right people. I think the hardest thing in running a business is building a great team because we make a lot of mistakes, you've got to make the right hires. As Jim Collins says, "The most important thing you do is getting the right people on the bus, the wrong people off the bus and the right people in the right seats." Simple analogy, but man, does that take a long time to do. If you're asking me now, I don't really feel like until maybe... I've been doing this for 15 years, I probably made my first hire two years into the game. Let's say I've had employees now for 13 years. I'm giving some math because people probably won't understand this. I would probably say it took me about seven, eight years to build the team.

Paul:

Wow, that's incredible. I mean, that's-

Chris:

But it's the most valuable asset that I own, is it's called your chassis. The chassis of a car. I think the most valuable thing you own in your organization is an incredible chassis because at the end of the day, my team and I can go do anything because I have an incredible team. We could shut down real estate and go do something else. What maintains and stays is an unbelievable team that works together.

Paul:

That's awesome. That's awesome. Now, you mentioned disposition. Going back to the market change, is there anything you're doing differently for disposition? Well, you did mention you're doing your videos but as far as pricing goes, someone's asking about comping and pricing. Are you adjusting things? Are you seeing a lower end, lower comping prices?

Chris:

Nope. I'll tell you the shifts that we made on the disposition side. I'll run through them real quick. We talked about a shift in technology. You definitely need to do that. Start embedding those videos, sending them out. The next thing is a shift in our, what we call sells approach with those investors. Those investors, it becomes not just external. We now have to coach them through the internal and the philosophical. Right now, they have fears. They have questions. They want to know what our opinion is on what's going on.

Chris:

Our director of disposition has really stepped in and started to have much more of a heart to heart approach with our investors and has begin to coach them and counsel them. When you take that approach right now, we all need that. We're all pretty vulnerable and willing to talk about stuff and how we feel because that's what pain does. What I would tell you is, you definitely want to change your sells tactic. It's not about just the external numbers anymore. There's also a feeling side to what's going on and we're taking the time to really hold the hand of our investors.

Chris:

The other thing is we shifted the type of buyer. Our VIP list of buyers got knocked down tremendously because they don't want to do deals right now. What we did was, we had to replace that list with new VIP buyers. Well, guess who those are? They are people that are newer to the business that look at this opportunity and say, "Guess what? I've had trouble getting in the game because I'm going against all these huge wholesales, I'm sorry, all of these huge investors buying properties and building their portfolios. They're on the sidelines. It's time for me to get some market share."

Chris:

Now what we're doing is we're selling to those investors. We'll guess what? Because they're not super savvy and been in the game, we're not seeing a decrease in our average profit per deal. We're still getting big pops because they haven't analyzed as many deals. They might've done five deals or 15 deals. Does that make sense?

Paul:

Yeah.

Chris:

Our new VIP buyer lists are hungry to get in the game. They're also hungry to do a deal and they're not as aggressive on the negotiating tactic yet because they're not as experienced. We're not having to discount our properties, which is great.

Paul:

Go ahead. I'm sorry. I was going to shift gears from disposition.

Chris:

Well, I was going to say one more thing which people want to know, is the financing. You better be providing your cash buyers list with financing options and making warm introductions with people and financial institutions as hard money lenders that are willing to do deals. Guess who they are as well? They're the small guys going, "I'm going to get some market share while the big guys sit on the sidelines." Now you're starting to see a pattern who's willing to play the game right now.

Paul:

That's awesome. Yeah. Now going back, before disposition, are you adjusting offers right now with your seller leads? Are you dropping? Are you adjusting anything here?

Chris:

No. I mean, we haven't adjusted our overall formula. Again, when I say that, we always try to buy at the deepest discount possible. We have three prices. We have our great price, our good price and our walkaway price. We look at a deal and go, "We're shooting to beat out the great price, the big discount, if not, we'll take good. If not, we have a walkaway amount," which is like, we can't pay any more than that. Our sales team is trained to go in and get the deepest discount possible. Formulas matter at a walkaway but other than that, they're just going deep as they can every time.

Paul:

You have a system, a cell system plugged in that you give your sales team then. Do they follow a system, a certain order of things?

Chris:

Mm-hmm (affirmative). Yeah.

Paul:

I'm sure people are curious to know about that. How do they come up with the offer first, give them an offer right away? Do they give them some time to build rapport? How does that work with your sales team?

Chris:

Yeah, so our funnel is, a lead comes in to our, what we call calling assistant and they answer the phone and their job is to pre-qualify that lead. We don't want to send anything directly to the acquisition manager that's not warm or hot. If that person is motivated and has the ability to sell, then they live transfer it to the acquisition manager. Now the acquisition managers are having quality conversations only. Then from there, if they like the deal, then we're getting that inspection done and we have an in-house inspector that's going and getting that information that we need. That means, our acquisition managers don't have to leave the office or from home. We don't have an office, but their office.

Chris:

Then once we get the inspection report back, they're able to look at the photography pictures and then from that point, determine the price that they want to go in and negotiate at. That's literally our funnel for how it's getting to a point where they're ready to make an offer and then they'll make that offer via like DocuSign.

Paul:

Does the acquisition manager come up with that offer or does that go up higher to your director?

Chris:

No, they're trained in the beginning when they come on. If they're new, we run the comps for them but after a while, I mean, our sales team is so seasoned, they run their own comps.

Paul:

All right, cool. Cool. All right. Let's transfer over to radio because that's your thing, man and I'm super interested in it. This is the first time I've ever heard of anybody doing radio like you do. Why radio and what has it done for you?

Chris:

Because I think that radio is the most dependent and consistent marketing place ever put in place. I've been doing it for nine years and it's been tried and true and when I've lost things like Direct Mail, because it got oversaturated in 2018, things like PaperClick can go up and down. I have overhead. I have a business that runs without me. Therefore, I have a responsibility to make payroll to do those things and what I really enjoy at that level is something that's reliable and radio has just been tried and true now for literally nine years that we've been doing it.

Paul:

Nice. What's the ratio look like for you? For how much dollar spend do you get or how much profit do you make per dollar spent?

Chris:

Yeah. Our budget is 27,500 per month but we started at 1,500. What I love about radio is it's a low barrier of entry on cost. Most people are spending more on Direct Mail than that, but when it comes down to the return, that's the most important thing. Dollar per dollar return is for every dollar I spend and how many dollars I get back. If you're spending over 5,000 a month on radio, your dollar per dollar return is going to be somewhere between three to $4, which is great. Every time you put a dollar out there, into that Coke machine, that Coke machine of radio is kicking back three to $4. Now, the flip side is if you're spending less than five grand, then you're going to get somewhere between a one to five to one to seven and the reason for that is because the law of average is working in your favor and you're just spending a minimal amount on radio. Those are fantastic returns.

Paul:

Yeah, and compare that with Direct Mail. Do you have a number for Direct Mail?

Chris:

Yeah. Yeah. Direct Mail for us used to be one out of four and then in 2018 it crashed to one out of two.

Paul:

Wow.

Chris:

Because that was when you'd walk into someone's house and see like 50, 60 postcards stacked up on a table. The beautiful thing about radio is there's virtually no competition. If I ask you who in your market is doing radio right now, you're going to step back and go, "I can't think of anyone," but I ask you, "Who do you know that's RVM-ing, text blasting doing Direct Mail?" Everyone is, and it's saturated and I don't care how good you are at in a marketing piece like we were with Direct Mail, if there's too many people around that poker table, it's hard to play the game and win because there's just too many chairs there. You want to go play at a poker table where no one's really playing.

Paul:

I agree. Yeah, I agree. Then, so why does radio work then? Why do you think it works so well?

Chris:

I think it works for a few reasons. Number one, it hits our demographic, which is over the age of 50. Most people do not realize that their demographic is primarily over the age of 50, which is key. Most people are like, "Well, I listen to Spotify." I go, "You're not your demographic. Your demographic watches TV and still turns on the radio." I think that's number one why it works so well, you're targeting your demographic. Number two, it's not list dependent. I don't care what marketing you're doing. The reason it's oversaturated is everyone's fighting over the same list. You might have a different method on how you hit that list, be it RVM-ing or direct mailing or cold calling, you name it. The great thing about radio is it's not list dependent. We're hitting people that are not on list, which means that we don't have competition on those people.

Chris:

Then the other thing I would say is because it hits millions of ears at a really inexpensive price, there's no way I could direct mail the amount of people that my radio station hits in the sense of ears, millions of people. I couldn't afford to do that much direct mail. With that, you're going to get celebrity status and you're going to get instant credibility. What I mean by that is, you do not get celebrity status with direct mail or bandit signs. You probably don't even put your company name on there because people will hate you but on radio, they listen to you and they go, that guy or that woman, if on TV or radio is a celebrity, because that happens in all of our brains. Second to that, you get instant credibility. If you're on radio, Paul, you must know what you're talking about, otherwise, you wouldn't be on the radio. We all make that assumption. Those are some of the key reasons I think it works out really, really well.

Paul:

Yeah. Is there any other marketing strategies you're doing right now or is radio the only thing in your business?

Chris:

No, we were built on four. We do radio. We do online marketing. We do a little bit of Direct Mail, really niched and focused and then we do co-wholesaling or JVs. We work with new investors and help them move their deals because we have such a strong backend and buyers list.

Paul:

Okay. Now, doing virtual deals, is there ever the question from sellers that are about being in a different location or that's not an issue with you?

Chris:

They don't know. How would they ever know?

Paul:

They don't know, right. Yeah, it probably-

Chris:

[crosstalk 00:34:51] living in Mexico.

Paul:

Right. All your access to managers, they can comfortably say they live in that same Dallas, in that same area?

Chris:

No. I have acquisition managers that don't live in Dallas and do all the deals virtually.

Paul:

Nice. Nice.

Chris:

But it doesn't come up. Our company is located in Dallas. We have an address in Dallas that the mail is sent to. I'm from Dallas, my business partner is from Dallas. We have a few people in Dallas, so there's no question that we're not local. It just doesn't mean that all of our employees and salespeople have to also live in the city, but people view us as local because we are and we started there with brick and mortar.

Paul:

Yeah. You mentioned that 55-year-olds being your demographic. Is that the majority of your lead? Would you say that's 80% of most of your deals, is the 55 and old demographics?

Chris:

I would say that that's true for us and most people around the country. There's three demographics. There's over the age of 50, there's rural and then there's urban and you might have a combination, one stronger than the other, but generally speaking, most of us have the strongest demographic of over the age of 50.

Paul:

Okay. Then with your students, when they're building out lists, that's the demographic. You tell them, "Hey, focus in on that, build a very super tight niche." Or how do you...? I mean, I guess my question is, how do you instruct your students when they're going into a new market, they're brand new when it comes to lead generation, other than radio, what do you instruct them to do?

Chris:

In the sense of figuring out who their demographic is?

Paul:

No. In the sense of, hey, they're starting from... they're fresh, they don't know where to find deals. That's always a question, where do I find the deals? Do you give them a step by step guide and say, "Hey, do this and that."

Chris:

Yeah. I mean, think the two first things you got to do going into any market is number one, you first, you find the buyer and that is by building your cash buyers list. That's the very first thing that you do. If you've got the buyer, then all you got to do is go find the product to sell that buyer. Then the second thing is, you got to figure out what marketing stream that you want to utilize in that market. I believe a lot of streams work, all of them do if you work them right. Does that make sense? You have to figure out what stream of marketing or channel are you going to apply? Maybe it's cold calling, maybe it is RVM and texting, but if you're generating deals and you've got a backside buyer that wants those deals, then that's most of the equation on the startup.

Paul:

Do you guys have a pretty detailed follow up system after generating these leads from radio or whatever marketing source you use?

Chris:

Of course.

Paul:

Of course.

Chris:

Aggressive.

Paul:

Aggressive.

Chris:

I think follow up is probably the biggest problem out there. It's one thing to generate leads, it's another to be able to manage them and most companies are terrible at managing leads. Yeah, for sure.

Paul:

How long would you say when somebody calls in would that... your continued follow up, how long does that go out towards? You keep following up for another three years, five years, you never stop following up with them until they tell you?

Chris:

We stay till they buy or die.

Paul:

Nice. Nice, and this goes-

Chris:

Till they buy or die.

Paul:

This goes for every call? Somebody who's just maybe shopping for an offer, is not really selling retail buyers, that goes for everybody?

Chris:

If you have somebody that comes in and is just a complete knucklehead that you know is never going to do a deal, then no, we don't follow up with those people. But if there's ever a hint of motivation and a possibility of being able to do a deal, absolutely, we keep those in lead follow up. We might status those as old leads. We might even status some people as dead leads, but what we will do is we'll go back even into the dead stuff and when times are slow, we'll go back in and work those and still revive deals. That's the key of having a CRM and making sure something like Podio, that you're going in and every lead is in there and as they say, no lead left behind. Everything is statused. Everything has great notes and someone is making sure that all of those leads are being touched and audited, which is usually a lead manager who does that.

Paul:

Now, do you have a statistic as far as when a deal happens after a certain number of follow ups?

Chris:

I know that if you look at studies like by MIT and stuff like that, I think they say it's somewhere around number seven to 12 touch. Isn't that statistically what I think we've always been taught?

Paul:

Yeah.

Chris:

You have to... that's with all lead sources, everything most people buy on the seventh to 12th follow up attempt.

Paul:

With radio, do you feel those sellers are a little more motivated?

Chris:

Oh, absolutely.

Paul:

Absolutely. [crosstalk 00:39:56].

Chris:

That's why we answer those calls all the time. It's the highest motivated lead I've been able to generate. I mean, think about someone's driving down the road, calls in off a radio ad, they are motivated, they're willing and ready to make a deal happen. We definitely nurture those leads and we do not send them to voicemail. We do not send them to a website to fill out a web form. We funnel them all through the phone and we answer those calls live, just about every time that we can.

Paul:

Awesome. I love that. All right. How do you build a cash buyers list then? That's always a big question.

Chris:

We're touching on everything. Let me give you the few effective ways to build a cash buyers list. Number one, the fastest way is to buy a list or trade for a list with someone in your market. You're like, "Will people sell lists and trade?" Absolutely. We've done it. It's the fastest way to buy and sell and trade lists. The other thing is going in and scraping social media. You look for people that are opting in in Facebook groups, on Instagram, all that type of stuff and saying, "Hey, I'm a cash buyer. I'm looking for a deal." That's another great way to be able to do it.

Chris:

Another great way to build your list is to add into your cash buyers list agents that represent cash buyers. You can actually pull that data via the MLS and you can add in agents that represent cash buyers. then lastly, I forget the name of the site, but you can go in and pull corporations and corporations that have bought more than 10 properties are great to go ahead and reach out to as well and add them to your buyer's list. Between those four, you'll be off to the races. That's like the 80/20 I just gave you the [crosstalk 00:41:48].

Paul:

Awesome. I love that. No, I love that. I think that's spot on too. That applies to all businesses, but as far as trading lists, building a list. But, last question here, on radio, is there a format of message that you put... people probably are asking, "Well, what the hell do I say on radio? What kind of message? Is this a simple I buy houses message?" What do you [crosstalk 00:42:16]?

Chris:

Again, we coach people how to do this. It's turnkey. We give them the actual ad. We tell them when to advertise, who to advertise with, at what price and so forth so you don't have to create anything. But to answer your question, yeah, it is a cash type of ad in which we are touching on pain points, have you inherited a property? Is your house going into foreclosure? Are you a landlord that's tired of dealing with tenants? What we do in that ad is we try to speak to every pain point that we know that is the reason people sell their houses at a discount.

Chris:

We know that whoever has that pain, when they hear that ad will respond and go, "Yeah, that's just me. I just inherited a house from my parents in Texas and I live in California and I don't know what to do with it," or whatever that looks. I mean, that might not be a good example because they're in Cali, but you see what I'm saying? But whatever that looks like and hit on that pain point and have people call you that way via the ad, which is great, super simple process.

Paul:

Awesome. I love it. All right, Chris. Where can people reach you? You know what? They might be interested in this radio program you got going, it's coaching program. What's it all about?

Chris:

Yeah, yeah. We are helping people set it up around the country. It's market exclusive. We already have markets sold out but we want to preserve it and not let it get oversaturated. I've been doing this for nine years and I know people are nervous about RVM-ing, text blasting, Direct Mail. They're tired of doing stuff that honestly is a little bit sleazy because we take spam approach. I hear all my students on all these reasons why they're coming in. We're teaching people how to set this up and man, this is the time to do it because radio stations are highly negotiable right now, they have softened up. You just want to book a call, even see if your market's open and if you qualify to get in. You can do that by going to a wholesalinginc.com/reiradio, again, that's wholesalinginc.com/reiradio. Then, if you just want free education too, I just launched YouTube as well so you can follow me at Chris Arnold Real Estate and that's where I'm just going to be giving you all my principles, my ideas, everything we're talking about, just handing it out because that's how we all grow.

Paul:

Is there anything I left out that you want to... any last messages?

Chris:

Dude, I think we hit on a lot. I think-

Paul:

We did. We did.

Chris:

[inaudible 00:44:41]. You were taking a lot of different notes because we hit on some key stuff. The big thing I'll tell people right now is, if you move to virtual model, you do the things that we're talking about, we are still doing deals. We had a great March. April looks great and I'm saying this to instill belief and hope in you from the fact that if you shift and you adapt, you're going to be fine. That's what determines whether something survives in an environment when there's a change, is if that organism adapts to its environment and that's what you got to do. Adapt.

Paul:

Awesome, dude. I love it. All right, Chris. Thanks for being on, man.

Chris:

I appreciate it, man. I enjoyed it.