Brandon is back with Miquella and Aaron Gaunt to explore how they successfully expanded their business from Southern California to operating across 14 states nationally. In this episode they are also joined by Stephanie, one of the key players responsible for managing the Gaunts' disposition process as their Investment Sales Director. In this conversation, Stephani and Miquella provide a behind-the-scenes look at how their team has adapted to handle dispositions at a nationwide scale.
"Hello, welcome back to another episode of the Collective Clicks podcast. This is your host Brandon Baitman, and today is another episode in our series with Aaron and Micha Lant, who took their business from local in Southern California and expanded it nationally and had to figure out the dispositions portion of that. We're going to talk with them about what they did, who's on the team, what kind of processes they have for dispositioning deals in a variety of markets, and I think you'll learn a lot. Stephanie, Michaela, thank you both for joining me to talk all about dispositions."
"Yeah, um, I have no doubt this has changed a ton in the business over the past year or so since we started working together, because obviously a year ago you started just in Southern California. That's where you're doing dispositions, and you've transferred from that to how many states?"
"I think we're at 14, 14 states."
"Yeah, yeah. So I don't even know where to start. Like what, maybe you can help me understand like what are some of the biggest things that have changed with you trying to figure that out over the past year?"
"We realize we need a lot more. You know, we've changed from being order takers. You know, we had the how the market was in 2021 and 2022 where pretty much anything you blasted out, you just had people, you know, calling in and they would sell pretty quickly. And so with the market shift, you know, we definitely saw that there was more work that needed to be put into dispo a property. A lot of people that, you know, they may see the post, they may see the email blast, but they kind of get hesitant on it. So it really takes our team cold calling them, getting them on the phone, talking more in depth about it for them to realize like, 'Hey, this is a deal and this is worth it.'"
"We were able before to have two to three acquisition people per one disposition person, and now like Aaron mentioned earlier, we're one to one. With our acquisition guys getting two to three contracts a week minimum, you know, that's a lot on the dispo side. And when they're having to spend more time on them, they really need to not be bombarded with too many deals. So, and with nationwide, I mean, that adds a whole other fun aspect into that."
"Yeah, um, that's a maybe a good place to start is exit strategies. So you're mostly doing wholesale, you're doing novations?"
"Uh, yeah, wholesale, novation. We kind of... the goal is always to get it on market, you know, that's really and do the novation route. That's where you're going to get the biggest buyer pool. But we'll start once we get the property, you know, we do start by blasting it out on Investor Lift and kind of cold calling the area while they're also looking for an agent to list it. So you got about a few days to see if we can move it off market, but if not, it's ultimately ending up on market."
"Okay, so it's kind of like work at wholesale first and then only move it off market if it makes the spread that we're looking for. If it doesn't, then it's like, 'Okay, yeah, then we put it on market.'"
"Okay, so it's sort of sequential, and obviously the best-case scenario is you find a super high offer off market in two days, and then you just go there. But if you don't, then you can novate it. And it sounds like with the seller, you could go either way. You're generally putting together agreements where you can novate it or wholesale it?"
"Yeah, yeah. They always go into it and they kind of get all the contracts signed ahead of time and have that conversation with them ahead of time of 'We're, you know, bringing in a third-party buyer.' So we set the sellers up from the get-go that that's the route that we're going to take, whether we take that one or not. If we do move it off market, we have the situations where some sellers don't want that, and so, you know, you just price it accordingly. And then some we only move off market, but they're pretty much set up for novations."
"Got it. That makes sense because a lot of people that I've worked with, they kind of say like, 'This is a novation deal' or 'This is a cash deal.' You sort of say it's a deal and we're going to move it however we can. You set expectations up front, and if you set the expectation that it's going to be harder for the seller, it ends up being easier. That's fine."
"Yeah, because it is... we found it's hard to go back to the seller and then change the premise of how we got under contract. You know, that's much harder. There's much more resistance on that versus just upfront being transparent and saying, 'This is what we're doing. We're bringing a third-party buyer.' There you go."
"Yeah, totally understood. Uh, and Stephanie, I understand you work... yeah, what do you call it, dispositions agent? Is that actually..."
"We call it um, investment sales director."
"Investment sales director, okay. And it sounds the way it sounds, you know?"
"Yeah, 'cause you know, it's all about stroking people's egos in this business. I've noticed, so you know, when you tell them that big, you know, title, they seem to really like, really respect you, especially because of the title, I think."
"Yeah, fair enough. I think it does definitely go a long way."
"Yeah, so this is what you're doing on a day-to-day basis?"
"Yes."
"Um, help me understand your process like start to finish. Um, somebody gets a contract locked up, then what happens?"
"So it comes over to the disposition side. Uh, we connect with the seller, introduce ourselves, kind of get a little bit acquainted, build some rapport with them, uh, because we are going to be in contact with them through the entire process, uh, once it goes from acquisition to dispo. Um, and then after that, we also try to get photos from them. If we can't, then we have other means that we're able to use in order to get those photos, either with, uh, you know, um, an outside source or the agent that we're going to work with."
"Um, for some properties or states, uh, we already have an idea of who we're going to work with as far as an agent because we've been doing this for a while now. Um, so we kind of have the agents' list built pretty well."
"Um, so after we talk with the seller, uh, that's when we get going on marketing. Uh, we get it blasted out on Investor Lift. During that period of time, we already start working on looking for agents. Um, of course if the seller is not okay with listing the property, which doesn't really happen too often - usually they're pretty okay with it - um, unless of course they have like a time frame or speed. Um, if they have more time, then of course novate it. Um, but yeah, so and then once we get the agent, we can usually tell within the first two to three days whether or not we can sell it off market, um, because we'll get a lot of action, you know, on Investor Lift. If it's, you know, kind of silent, um, then that's when you know that you need to get an agent on it. Um, also based on the spread too as well, whether or not we can novate."
"Yeah, yeah, understood. Um, if I could just ask a few questions about that. So you start with, uh, it sounds like Investor Lift is kind of one of the first things, um, that you look at. I imagine you're just kind of throwing it into the system, letting it be listed there, and then it sounds like you do some cold calling to buyers and stuff like that too. Is that something you do personally, or do you have like separate cold callers that work in the company to be calling buyers?"
"Do personally."
"So that's like part of your job for any deal that you have, as you're going to be calling the buyers. How many buyers do you call?"
"You want to make 75 calls a day. So at least 75 buyers, sometimes that could actually just be 35 because of course I multiply. I call, you know, five times."
"Get those pick up. We triple tap."
"Yes."
"Okay, okay. So so that's the, that's the goal overall is 75 calls a day?"
"Yeah, and then depending on the number of deals you're working, that kind of determines your capacity, how deep you can be going with each of those deals. And we like to double tap because even, say that like, like this morning I got a call three times from a buyer. That just goes to show me how much interest they have in the property. So, you know, other buyers may have properties that they're selling also as well, so just it says a lot when you're calling multiple times, um, you know, for someone there. It sounds urgent, it creates that urgency."
"So well, nowadays everybody thinks it's spam."
"So yeah, exactly. That if you're calling the same, if you're getting the same call from a number two to three times, it's like, 'Okay, maybe this is something I need to answer.'"
"Yeah, fair enough. Do you text them as well, or no?"
"Mhm, yes."
"Okay, so you call, cold call, and text basically your buyers to try to get the deal. What, what, what do you say to them? What does it generally look like?"
"Just let them know, 'Hey, I'm calling you in regards to a deal. I seen that you were a VIP investor on our buyer list, and I wanted you to get an opportunity, you know, to jump on this deal. I didn't want you to miss out.' So, yeah."
"Okay, got it. Very cool. So, so it starts there."
"Yes."
"And then you'll kind of know within a few days how that's going based on are these people actually interested. Of course, you've blasted it out too, and how many, uh, how much interest do you get there. Then you look for agents?"
"Yes."
"And how do you look for agents?"
"Um, I go on Zillow, I'll use Redfin, PropStream. Um, I like to work with agents that have already sold a property within that area within the last few months. Um, and I'll narrow it down that way, and I call about five agents at a time. Um, kind of just first come, first serve, you know, whoever gets the CMA to me. I like to get at least two to three CMAs. Um, that way I know what I'm working with. And they, if they all kind of, uh, meet in the middle or at the same, then that's when I determine, you know, how my conversations went with that agent, you know, how confident they sounded, what kind of strategies that they use. I like to work with the ones that are very creative, how responsive they are."
"Yeah, responsive too, uh, proactive, um, you know, how much urgency they have behind them as well because, uh, time is of the essence. We want to get this sold as soon as possible, and also realistic too as well."
"Okay. I understood it. CMA, what does that mean?"
"Um, comparative market analysis."
"I saw the pause. I'm probably the only person..."
"Thank you."
"I'm the only person here who doesn't know what that is."
"Okay. Um, okay, so you get that, and that kind of tells you sort of how they think about it, and you could probably tell if they're, how qualified they are."
"We like to look at it too because I want to see how knowledgeable are they, you know. Are they going to send me something and say, 'Oh, you can list your property for $200,000,' but I go and I look at the comps in the area and I'm seeing that a fully renovated, all fixed up house sold for $190? Then they don't know what they're doing, you know. It's not common that they overshoot. Uh, some, some tend to, some of them because they forget that they're... you know, a lot of agents, I'd say 50-50, aren't used to dealing with investment-type properties and fixer-uppers. They're just, they're in their mind thinking retail, top of the market, most for the property. It's like, yeah, we want to get the most for the property, but we also want this to move fast, you know."
"I know there's some people that they say, 'Well, we have the contract for 60 days, so we're going to wait the whole 60 days to move it,' but we don't want, we don't like doing that to our sellers. We don't like stringing them along. Um, you know, within two weeks, our goal is within two weeks. So we're making sure that we're pricing it aggressively to move fast and not sit. Now, some areas are going to sit. We had the conversation with the sellers ahead of time, 'Hey, based on this area, everything's sitting for 60 to 90 days,' you know. So we have a lot of those conversations up front with the seller as well. Um, but even with that, we've, we've make sure that, okay, well if things are moving at X price, drop it down a little bit lower than that so that it's looking even more appealing, you know. Everything is to get it moved and get it moved fast, and that's what I meant by realistic."
"Yeah, I want a realistic price point, not something that, you know, it looks good. Um, I need a realistic... 'cause I would... we want an offer within two weeks or less."
"Got it. And how many of these properties end up selling to a cash buyer, um, through like Investor Lift, for example, versus through novations? Do you know what things have looked like this year?"
"Um, I was just looking at that earlier today. I want to say it's probably like a 70-30, 70% novated, 30% um, off market."
"Yeah, got it. And I imagine a lot of those ones that you're novating, you're getting offers even off market, but it's just not at the, like, you know, you could do better on the market."
"Or it's like at what we have under contract for, so wouldn't make sense."
"Yeah, understood. Okay, so about 70% novations are how your business functions right now?"
"Yeah."
"Was that true last year?"
"We really didn't even implement novations until this year, so we were strictly off market last year in 2022. And then with that shift, we realized we have to change how we're... how are our exit strategies for the properties. And so this year is when we really dove into the novations a lot heavier."
"Understood. One of the things that I've heard negatively about novations is that there's more moving parts. It can be a little bit more, uh, more difficult to get the deal done. Um, I'm super interested to hear from your perspective how true that is. Like, does the realtor do a lot of it, or is there, um, is there still a lot of work required on your end? And, uh, does that take a significant amount of time? Is it hard to scale?"
"There's a lot that we try to... you know, you're going to have like inspection time frames, appraisal time frames, um, but we have those even, you know, up front when we see the offer. We try to counter out, counter those out, you know, wave them if we can, take it as is. Um, but it, it can have more of a fallout. But as long as we're talking to the buyers and the buyer agent up front and making sure they all realize like, 'This is a fixer-upper, there's... you know, make sure you're talking to your lender that there... it's not going to have... um, things aren't going to be perfect,' they're usually okay with it. Um, there's a little more steps to it, a little more coordinating of getting an inspector in there, getting the appraiser in there, um, but I wouldn't say it's so much more that it makes it not worth it."
"Yeah, that makes sense. So there's a lot of people that, uh, that I speak to that are afraid of going into multiple states as a business, primarily on the dispositions side. That's where a lot of the fear comes from. Um, and I know you've been through quite a journey this year. Uh, I'm, I'm super curious to hear about some of the challenges that you've had that you had to overcome throughout the year, and, and how you were able to fix those things to, to get it so you're actually still moving deals in markets that maybe you've never been in before."
"Yeah, yeah. I know what I have, but I think it's just making those small tweaks, you know, figuring out those markets. Um, you know, not being afraid to take that risk and explore a market that you've never, you know, been in before. Um, I mean, there's no pain, there's no gain, right? So I mean, as far as, uh, you've seen, it's, it's possible."
"Oh yeah, absolutely. Think maybe a lot of the, uh, a lot of the scariness of it is kind of in your head?"
"Yes, yeah, it's, it's... it's fear of because you don't... the fear of the unknown, you know. You don't know what possibly could happen or will happen, but it's just... you just have to just go into it and take that risk."
"I guess I would say I'm, I'm, I'm okay with taking a risk, though. I think, I think the fear comes from people feeling that they can't physically be there, you know. When you're in your own market, you can go door to door, you can be there, um, when the buyers go and walk in. So there, there is some added challenges when you are in a different state, but it's also, you know, the fear of the buyer talking to the seller, you know. We, we... but you got to vet the people beforehand."
"There's a lot of vetting we do with the agents, with the buyers ahead of time. We're not just sending random people. It's actually talking to them, asking them for, if, if it comes down to it, to proof of funds, how serious are you, what flips have you done, are you really a flipper or an investor, or are you just kind of window shopping? Um, and had and telling them like, 'Don't talk price with seller, don't... you know, any questions, call me. If you want to ask them about the structure of the house, fine, but call us back.' And we really have not run into very many people that have gone behind us and talked to the seller. I think it comes up once every few months."
"Okay, so it's... yeah, it's really just in your head. People are really afraid of... but in practice, like, there's always going to be those bad players that are going to do whatever they want to do, but..."
"Yeah, I mean, you'd probably still run into that in the local market."
"Oh, we have."
"I'm sure you have."
"We did, yeah."
"Fair enough. Um, let's talk about contract fallout. Um, where has that been this year? Do you, do you happen to know like where you're at on a percentage basis and how it has shifted over time?"
"I, I don't. I want to say we're probably around a 50-50, um, but it's a mix of fallout. I mean, there's a mixture of sellers just, yeah, being sellers and, you know, I think changing their mind, not being cooperative, saying that we can get in, then not getting in. You know, I think that that's where a lot of some of the fallout has been. Um, as far as not selling it though, that if we look at just that, like those ones aside, I'd say we're probably closer to like, like a 70-30ish, um, just looking at that aspect because with novating, that's upped our close rate a lot because we're opening it up to a lot bigger buyer pool. Um, and so properties that we probably never would have been able to move before strictly off market, we are now moving them on market. Um, so that has definitely drastically helped, and, and next year, it's only going to be even better, especially as we grow the dispo team too."
"I think that was one thing we realized this year is, is doing the one-to-one ratio of acquisition to dispo. Um, because we were looking at, at one point, each, each person had, you know, 20 properties. You can't focus on 20 properties in a day. It just, it isn't physically possible. Um, so now with the added team members, it's allowing them to really put a lot of time into each property for the ones that take, that need a little bit more work. Um, and now we're, we're able to move them at a, at a much better rate."
"Yeah, that makes sense. What would you say to somebody who says that you won't be great at dispositions unless you focus on a single market?"
"That's a limited, limited belief."
"So what if... I'll just paint a picture for you. Sorry, you know, you know I'm just giving you a hard time. Um, let's just say I, um, let's just say I'm a wholesaler. I've been in whatever city for 10 years. I've got my list of all my buyers there and stuff, and, and basically dispositions to me is calling up the people that have already bought deals from me or people who are already on my list or I met at the REIA or, you know, something like that. And that's how I'm dispositioning properties. Sure. Um, I look at that and I think, I... to go into other markets, that's really difficult because my advantages are my relationships in my market, and I don't have those in other markets, right? Um, how easy is that to overcome?"
"I mean, it, it will take a little bit of time to build some of those relationships, um, but it's all about, you know, building them, building themselves up as salespeople, you know, growing in our training, growing in reading books, um, having, knowing how to have better conversation to build that rapport, you know, really, um, asking the buyer like, kind of boosting their ego in a way, talking to them more. Um, just all sales skills, talking to them more about what are they looking for, what are they wanting, how, you know, things like that. And then we found that they open up a lot more. Um, yeah, it's not going to be an instant overnight like, 'I know I can move this,' um, or build a relationship with somebody right away, but it's just with time. I mean, even when you're starting in your own market, you didn't have those relationships ahead of time. You had to build those relationships. So, um, but even buyers, I think down here and where we're at in Southern California, half of them I've never met face to face. I've only ever talked to them over the phone. Prob... a lot more than half, honestly."
"Yeah, it's got to be. But, but I've been able to build those relationships with them myself, and so it just is taking that same concept and into another state."
"Okay. So do you feel significantly more comfortable in states that you've already done business versus a new state, or have you gotten so used to dispositioning in any state that it could be Texas where you have more experience, or it could be some, some other random state? As long as you know it's not like an attorney state, for example, compared to a title state or whatever the case is. I'm curious, are those really different to you now, or is it just kind of like dispositioning of property in the United States is kind of... you follow this certain"
"It's not like an attorney state, for example, compared to a title state or whatever the case is. I'm curious, are those really different to you now, or is it just kind of like dispositioning of property in the United States follows a certain process and it doesn't matter if we've done 100 deals in that city before or just one? It's kind of the same process."
"Yeah, yeah, I think one big aspect of that too is that we have a good title company that covers like 30-something states."
"So I'm not really worried about finding a new attorney or title company in each state. That definitely helps."
"Okay, same title company. What's the name of that title company?"
"Clothline Settlements."
"Okay, yeah, 30 states. Leveraging a title company across states, absolutely. Her and her team are absolutely amazing. She's been in title for, I think, 20-plus years, so she really helps us work through a lot of the issues. But I really feel like it's the same process for you guys?"
"Yeah, definitely. For me, it's just being comfortable talking to people regardless. It doesn't matter what state you're in. I can do dispositions anywhere. I can usually figure out how to work with somebody pretty easily. It's just asking those right questions, really making it about them. I like to ask, 'What's your style of investment? What do you do with your properties?' That way I can figure out whether or not the deal I have is a good fit for them or not. I'll also be upfront and honest with them as well, and I found that really does help. Being honest and transparent with people definitely helps."
"Yeah, totally makes sense. If it's not too much to ask, what does a compensation structure for somebody like you look like? Is it commission-based, salary-based, or a combination of both?"
"It's commission-based. Are you 100% commission-based in the role, and is that based on the spread at the end of the day, I imagine?"
"So acquisitions get paid on the spread, and then dispositions get paid on the spread as well."
"Yeah, exactly the same."
"That's pretty simple. Interesting. What's the biggest mistake you've made moving from one market to many markets for dispositions?"
"Not starting novation sooner."
"Okay, so you started with wholesale?"
"Yeah, we were seeing that where we were having trouble is in the more rural areas. You're not going to have a lot of buyers on that. Those properties really need to get on the market versus off-market. So I think that's one mistake we made, not getting some of those early in the year on the market fast enough."
"Got it. So maybe you had novation on the tool belt somewhere, but you didn't have a great process for it and didn't really know exactly how to do it."
"Exactly."
"That makes sense. And as for doing dispositions, do you also dip into TC, or do you have a separate TC team that handles that?"
"Yeah, especially for my own properties that are already in escrow. I'm still working with the seller and also still talking to the buyer, getting anything that escrow needs, making that communication. If they need me to, actually, not even if they need me to, I take that initiative myself."
"So a lot of the coordinating?"
"Yeah, yeah."
"Okay, fair enough. This actually seems really simple. Tell me if I'm over-simplifying this: deal gets under contract, next step, we're going to call some buyers, blast it out, have some conversations with people, use InvestorLift for that. Do you recommend it?"
"Oh, yeah, definitely."
"So InvestorLift works, you can find the right buyers, call them, blast it out, get some offers through the system here and there. Then you look for agents, the agent puts it on the market, and hopefully, you close in the next 60 days. About 70% of the properties you get under contract work out that way. And then, of course, sometimes the seller backs out for whatever reason. But in terms of finding a buyer, is it really that simple? I mean, simple doesn't mean easy, but is it that simple on paper?"
"Yeah, of course. Not that easy sometimes when you're going back and forth, negotiating a lot. They also post properties everywhere on Facebook, Facebook groups, Marketplace, Craigslist, setting the bait by getting the property on as many platforms as possible to get eyes on it. But in all honesty, it really is as simple as that. With novations, it's made it a little simpler. We're leveraging somebody else's time, an agent's time. They're the ones out there doing the marketing, showings, which frees up our time to work on other properties because somebody else is now working on the property for us."
"That makes sense. Have you tried using a flat fee listing service instead of an agent?"
"We did, and that's why I think for a while we were steering away from it. I think we also didn't know that you could use agents to put it on. In hindsight, it was like, 'Oh yeah, duh.' But I think we thought there might be something special with the flat fee services, that they had some special agreement with the MLSs in the areas. I don't know what we were thinking. It is cheaper, but there are issues with a flat fee service. No one is monitoring it, especially when it's in a different state. There are things we may not know, certain disclosures that need to be done or uploaded, and we're not in that area. With the agent, you're paying more, but it's like paying a fee for anything. Aaron always uses this analogy: 'I could go buy my sandwich, but I'm using DoorDash and happily paying double because of the speed, convenience, and ease of somebody else bringing it to me.' So we are paying more for the agent, but we're utilizing them for their expertise, boots on the ground, and knowledge of the area and paperwork."
"Yeah, that makes sense. With a flat fee service, you have access to all the documents you need, but I don't know what documents I need. With an agent, they know the area and the necessary documents. We're utilizing someone else's expertise instead of trying to figure it out ourselves. You can, but when we are in as many states as we're in, an agent is the way to go."
"It's interesting because a lot of barriers to being in multiple markets are exactly those things: not knowing the streets, not having boots on the ground, not being able to see the property. Good agent relationships fix that problem. If you're good at finding new agents in areas where you haven't had one before, you have that covered. I imagine you've worked with some agents that didn't work out. What do you do in that circumstance?"
"You try to keep the line of communication as open as possible. If it gets to where let's just get it through the finish line and close, then we just don't use them again. We take initiative ourselves when it comes down to it. I'm not afraid to step on somebody's toes respectfully. If it gets down to it and our agent hasn't responded for five days, I'm calling the other agent. With all due respect, I have to get this to the closing line for our seller. Sometimes you have to take initiative. You have to be proactive. If you sit back and wait, it will all fall apart."
"Yeah, I imagine finding the right ones in the beginning is crucial. Things like how quickly they respond, what their CMA looks like, all give you a pretty good idea."
"Yeah, even over the last six months, I've figured out better ways to vet an agent, what questions I should have been asking from the beginning, and where not asking those questions hurt me."
"Definitely. Do you find agents are more hungry for your business with the craziness in the agent world right now?"
"Some are. You want to test their fight, how much they want that listing. If they're just doing you a favor, I don't want to work with them. It's finding agents who know how to work outside the box and understand investment sales. Many we come into contact with say, 'Yeah, it's normal, it's investment stuff, I get it.' Finding those agents, not the ones who don't understand, is key. You can't just Google an agent and go with them. You have to dig deep."
"Understood. Anything else you'd add for the dispositions process?"
"I've worked with my agents on novation and off-market deals. Building that relationship with them and going back to them, like 'Hey, can we sell this off-market?' They're like, 'Yeah.'"
"And you offer them, in that circumstance, just like their one side of the commission or both sides of the commission or a flat fee?"
"Flat fee."
"Okay, so if you can find me a buyer for this, I will give you how much money?"
"It depends on the spread, what it's going to be. If it's in a market where we're only selling it for $5,000 or $10,000, we'll say, 'Hey, we can give you $1,000 or $2,000.' If it's a bigger spread, we'll compensate accordingly. The good thing is, you already have a relationship with them, so they don't get offended. They know you follow through."
"Exactly. They also know you'll come back to them for more. I think they like the off-market stuff because they don't have to do any of the paperwork. Off-market is all our assignment contracts and agreements, really easy. They're just connecting you, and they get paid."
"Fair enough. Well, thank you both for taking the time to dig into the dispositions. I think I learned more than a few things and hope this is valuable content."
"Hire Dispo Girls."
"Yes, Dispo Girls. You just have girls on the team?"
"All our acquisition side is
"It's not like an attorney state, for example, compared to a title state or whatever the case is. I'm curious, are those really different to you now, or is it just kind of like dispositioning of property in the United States is kind of you follow this certain process, and it doesn't matter if we've done 100 deals in that city before, if we've done one, it's kind of the same process."
"Yeah, yeah, I think one big aspect of that too is that we have a good title company that covers like 30 something states."
"Yeah, so I'm not really worried about finding a new attorney or title company in each state, so that definitely helps."
"Okay, same title company? What's the name of that title company?"
"Clothline Settlements."
"Okay, yeah, Danielle is leveraging the title company across states. Absolutely, her and her team are absolutely amazing, and she's been in title for I think like 20 plus years, so she really helps us work through a lot of the issues, but I really feel like it's the same process for you guys."
"Yeah, definitely. For me, it's just being comfortable talking to people regardless. It doesn't matter what state you're in, I can, I can dispositions is dispositions. I can usually figure out how to work with somebody pretty easily. It's just asking those right questions, really making it about them. Like, I like to ask, 'What's your style of investment? What do you do with your properties?' You know, and that way I can figure out whether or not the deal that I have is a good fit for them or not. And I'll be also upfront honest with them as well, and I found that that really does help. Being honest and transparent with people definitely helps."
"Yeah, totally makes sense. If it's not too much to ask, what does a compensation structure for somebody like what you do look like? Like, what kind of, like is it commission-based, are you paying a base salary, is there salary and bonus potential?"
"Commission-based, so it's, are you 100% commission-based in the role and that's based on the spread at the end of the day, I imagine?"
"So, acquisitions get paid on the spread and then dispositions get on the spread."
"Yeah, all right, exactly the same. So that's pretty simple."
"Yeah."
"Interesting. What's the biggest mistake you've made moving from one market to many markets for dispositions?"
"Not getting them on, I think not doing starting novation sooner."
"Okay, so you started with wholesale?"
"Yeah, we were seeing that where we were having trouble is the more rural areas. You're not going to have a lot of buyers on that. Those properties really need to get on market versus off market, and so I think that's one mistake we did is not getting some of those early in the year on market fast enough."
"Got it, so maybe you had novation on the tool belt somewhere, but like it wasn't..."
"Yeah, we were still kind of like, have a great process for it, you didn't really know exactly how to do it."
"Okay, exactly."
"Yeah, that makes sense. And as doing dispositions, do you also kind of dip into TC or do you have a separate TC team that handles it?"
"Actually, yeah, especially like my own properties that are already in escrow. I'm still working with the seller and also still talking to the buyer as well, getting anything that escrow needs, making that communication if they need me to. Actually, not even if they need me to, I take that initiative myself."
"So, a lot of the coordinating."
"Yeah."
"Okay, fair enough. So, this actually seems really simple. You tell me if I'm just like way oversimplifying. Deal gets under contract, next step, we're going to call some buyers, we're going to blast it out, have some conversations with people. You use InvestorLift for that?"
"Mhmm, recommend it."
"Oh, work."
"Mhm."
"Okay, so InvestorLift works, you can find the right buyers, you can call them, you can blast it out. I'm sure you get some offers through the system here and there, and then you look for agents, you've had a few. The agent puts it on the market, next 60 days, hopefully you close. About 70% of the time, the properties that you've gotten under contract, that's going to work for you. And then, of course, sometimes the seller backs out for whatever reason, you know, those things happen. But in terms of finding a buyer, is it really that simple? I mean, simple doesn't mean easy, but it is that simple on paper?"
"Yeah, of course. Not that easy sometimes when you're, you know, going back and forth, then a lot of negotiating. I mean, they also get the post properties everywhere on Facebook, Facebook groups, Marketplace, Craigslist, you know, putting, getting, we call it setting the bait, just getting it everywhere, getting the property on as many platforms as possible to get eyes on the property. But I mean, in all honesty, it really is as simple as that. I think with the innovations, it's made it a little bit simpler. You know, we're leveraging somebody else's time. We're leveraging an agent's time. They're the ones out there, they're doing their marketing, they're doing the showings, which frees up their time to be able to move more to work on other properties because essentially somebody else is now also working on the property for them."
"Yeah, that makes sense. Have you tried, I know some people with novations are doing like a flat fee listing service or something like that, and essentially not using an agent. Sounds like you're leveraging the agent to make it a lot more efficient on your side. Have you tried it the other way?"
"We did, and that's why I think for a while we were steering away from it. I think we also didn't know that you could use agents to put it on. I don't know why, it was just kind of like, well, hopefully that's a nugget for somebody listening to this. Hindsight it was like, oh yeah, duh. But I think we thought that there might be something special with the flat fee services, that they had some special agreement with the MLSs in the areas. I don't know what we were thinking, to be honest. And yeah, it is cheaper, but the issues you fall into with a flat fee service is there's no one monitoring it. You know, and when you're, I think that a flat fee service works if you're in your market, meaning where you are living. You could be there, you could go to the property, but when it's in a different state, there's a lot of stuff that you may not know. There are certain things we found out, disclosures that need to get done or a certain way it needs to be uploaded, and we didn't know. We're not in that area. So yeah, with the agent, you're paying more, right? But it's also, it's just paying a fee for anything, right? Like Aaron always uses this analogy, he's like, 'I could go buy my sandwich, but I'm using DoorDash and I'm happily going to pay double what I'm getting my sandwich for because of the speed and convenience and the easability of somebody else bringing it to me.' So we are paying a little bit more for the agent, but we're utilizing them for their expertise in the area and expertise in the paperwork."
"Boots on the ground."
"Boots on the ground. With a flat fee service, you have access to all the documents you need, but I don't know what documents I need. And so with the agent, they know what they need, they know the areas. So it's utilizing someone else's expertise in that instead of trying to figure it out yourself. You can, I'm not saying you can't, but when we are in as many states as we're in, if we were only in one or two markets, I'd say yeah, maybe we could utilize the flat fee and maybe go that route. But with being in as many markets as we're in, agent all day long."
"Yeah, it's interesting because if you think about it, a lot of the barriers that people have to being in multiple markets are exactly those things. Like, I don't know the streets, and I don't have boots on the ground, I'm not able to visually see the property. If you're really good at finding, well, if you have good agent relationships, it fixes that problem. Secondarily, if you're really good at finding new agents even in areas where you haven't had an agent historically, then you sort of have all that. I imagine you've worked with some agents and it just hasn't worked out, you hire the wrong agent from time to time. What do you do in that circumstance?"
"You try to keep the line of communication as open as possible, and it gets to where like, let's just get it through the finish line, let's get it to close, and then we just don't use them again. There's a lot of stuff that we take initiative of doing ourselves when it comes down to it. So, I mean, if it, I'm not afraid sometimes to step on somebody's toes in the right manner. We try to be respectful of our agent because we, you know, as I do have my license in California, so I do know a little bit of it, of like agents are only supposed to be the ones talking, the seller's never supposed to call the other agent, so I understand that. But like, if it gets down to and our agent hasn't responded to me for five days, I'm calling the other agent. But it comes down to like, 'Hey, with all due respect, I got to get this to the close line for your buyer, for our seller. Sorry, ask for forgiveness later.' Somebody has to take initiative. So there's, you know, you
just got to take the initiative and get the deal done. And if that means that I have to step on some toes, I apologize later. And like I said, I understand the agent's role, but sometimes you just have to take control of the situation to get it done."
"Yeah, totally. It sounds like a lot of your success boils down to having a system that works, being adaptable, and just putting in the effort to get things done no matter what obstacles come your way."
"Exactly. Having a good system in place is crucial, and being willing to adapt when things don’t go as planned is just as important. It's not always easy, but it’s definitely worth it in the long run."
"Absolutely. This has been incredibly insightful. Before we wrap up, is there any final advice you'd give to someone looking to scale their real estate business across multiple markets?"
"Sure. I’d say don’t be afraid to take the leap into new markets. Do your homework, build strong relationships, and leverage the expertise of others, like agents who know the local market. Also, keep learning and adapting. Every market has its nuances, but if you stay committed and flexible, you can overcome those challenges."
"Great advice. Thanks again for joining us today and sharing your experiences."
"Thanks for having me. It’s been a pleasure."
Sign up to our Newsletter
Ready to join the big leagues?
Start with a free strategy consultation.