Following A System…

Recently, we had a guest expert on our Interviews with the Expert series. The topic was investing in land. (Here’s the webinar link in case you want to check it out).

During the webinar, I had kind of an “aha” moment and I decided to do a “challenge”.

I was going to take Jack’s system (Note: I had NEVER gone through the materials personally prior to this) and implement it. My goal was to get a parcel of land under contract in 30 days or less.

Here’s What I Did…

I committed to spending 60 minutes/day on the system. And truth be told, many days I got too busy with our other businesses that I had to double up sometimes to make up the time. But I was committed to it.

The first part was going through the training, taking notes, and following along as I went.

I followed his system on finding areas to invest… (I suspended any previous beliefs that I had and any conceptions I had about areas, the model, etc.). I wanted to go into this system of investing without any of my own experience clouding matters (You’ll see that didn’t always happen, but I tried my best!)

I followed his recommendations on lead sources (I did hit a few bumps here because I didn’t realize the data sources would not have all the information!). And truth be told… I actually found that many of my counties that I’d selected to start working in were not available with the lead source I’d contracted with. But I figured… that’s okay! I can get my feet wet with the lead source and get the ball rolling and then I can contact the counties directly and work to get the lists direct from the counties as I expand.

I modeled his letter (this is where I put a little of my own spin in since I have 7+ years of real estate direct mail experience). And I sent out my first batch of letters within 30 days of setting out on learning this new system.

Our first batch of letters was a pretty small bath. I think we wound up with about 175-180 in total after the bad addresses came back.

It took us a little while to evaluate the deals and then a bit longer to get the courage to put the offers together. This was uncharted territory for us! (It was a different type of investing AND in a different state, so I had to find some state contracts to make sure I wasn’t missing anything pertinent to the state).

We ended up with 29 calls in total (so far! Some are still trickling in.). That’s a 16.6% response rate.

We wrote 9 or 10 offers (and some of them I was really embarrassed about and anticipated some angry callbacks!)

To my surprise… We had ZERO angry call backs and several offers accepted that we just sent out because we were following the system, with NO REASON to believe they’d actually accept the offers. I’m talking… one person said they wanted a minimum of $5000 and our offer was $912.00. They signed it and sent it back AS-IS!!!

So far, we have 3 contracts that have come back fully executed and we’re moving on to the closing phase of the deals. We’re expecting 1-2 more to come back based on conversations we’d had prior.

In total, the 3 that have come back will cost us $2924 plus closing costs to take ownership of. The total market value on all three combined is somewhere in the range of $18,000-$25,000. We’re planning on keeping 1-2 of them and putting them into our IRA, but want to sell one for sure and maybe a second.

The best part is… we’re about 90% of the way through a totally systematized process. In fact, I’ve not spoken to a single seller! My assistant has made all of the calls and talked to all of the sellers. I simply evaluated the deals and my partner wrote up the contracts and mailed them out.

Moving forward, we have a little more work to do. We have to streamline the closing process and the selling process, of course.

Starting next month, we want to ramp up the marketing to 200-250 letters per week going out the door. According to the statistics on this mailing, that should generate 12-15 deals each month.

The Lesson:

So why am I telling you what “I” did in the last 60 days?

Because I wanted to do a little test and see what happened! And what happened is that I was able to build a business model in 60 days that can run “almost” on autopilot. I will always check the numbers on any deal I ever do because it’s my money on the line!

And I did it from a standing start. This means: YOU CAN TOO!

But here’s what I did that was different than most people.

I got LASER-FOCUS. I didn’t try to mix and match different systems. Too many people take pieces from different systems and try to put them together into their own. Until you have experience… Until you have had success with the COMPLETE system, you can’t start mixing and matching and substituting ingredients.

Let’s look at a cooking analogy!

If you’re baking a cake, there are certain ingredients that MUST be there and they must be present in CERTAIN quantities or proportions. If you fail at getting the main ingredients together properly, then nothing else matters. But once you get the basics down, you can substitute flavors, add ingredients, substitute items, etc. In terms of real estate, you can increase your offers, test different locations, and start playing with other aspects of the process. HOWEVER, until you’ve got the full system down… don’t start tweaking it! It simply won’t work. It will leave you feeling frustrated. It will cost you time and money. And it will cause you to wonder if real estate investing even works at all!

So… I encourage you to choose a system that appeals to you and FOCUS on it. And focus on it for the next 60 days – one hour per day.

60 Days to Your Success:

Here’s a simple plan that can bring you success in real estate in 60 days or less.

  1. Choose a model that gets you excited! (I have had it up to my eyeballs with tenants and I wanted a break from fixing and flipping houses. I’ve got 2 new companies launching and want to focus my energy there). This is why I chose the Land Profit System (PLUS, I wanted to see if I could do it from a standing start part-time with NO prior experience. I literally put myself in your shoes!).
  2. Commit to 60 days of focus (Truth is… if I’d not procrastinated on getting the offers out, I could have had an executed contract in about 35 days of listening to my FIRST training session).
  3. DO NOT try to get creative. The first 60 days are for you to master the system you’ve invested in. And remember to invest in a FULL system if you’re just getting started… a system that will take you from A to Z. Later on, you can learn more advanced strategies for marketing or creative financing or creative exit strategies). But for now… master the mechanics. On Day 61, you can add in your own flavor!
  4. Follow through. There are going to be things that make you nervous when you move through the process. (Like the first time you write up a contract/offer in a new state where you don’t have an attorney or Realtor looking over your shoulder!). The point is… keep moving. With lots of programs, you’ll have the opportunity to get your questions answered. Use this first 60 days to get your questions answered so you don’t stumble.
  5. Build your OWN processes for handling the business. No, I’m not contradicting what I just said. What I’m saying is that as you follow through the system, there will be things that you set up in your business to handle things. For instance, I set up a “7 Folder Process System”. This way, I never lose a lead and I know where every lead stands at all times. (Evaluate, Write Offer, Submitted Offers, Dead Deals, Etc.).
  6. Don’t Second Guess. There were times when we were going through this first phase that we would think, “In the past, we’ve done X… Let’s just do that to save time or money”. I learned the hard way when I got the first executed contract back that went against everything I would have thought. Truth be told, I should probably send out another 5-6 offers even though I was afraid they’d be “too lowball” of an offer. Heck… this person just took less than 20% of the asking price… HAPPILY!
  7. Scale it up. Once you start to see successes, it’s time to scale it up to a business level. If you can do it once, you can do it over and over again! Here’s my general rule of thumb for scaling: Invest 25-30% back into the business until you’ve paid back your start up costs and are at full scale. In other words. If you make $5000 on your first deal (assuming $5000 PROFIT), the first $1500 goes back into the business to cover costs and get your next round out the door.In our case, we spent $500 on a lead source (that will last us several months). We spent about $115 on the direct mail campaign and offers. And we paid our assistant about $200. So… our hard costs into the business to date are $815. That leaves us $685 to invest in the next mailing. You can also depreciate the lead source over all the campaigns if you’re in a financial position to do so. I do, however, recommend reimbursing for the cost of the course out of your first profits as well. This gets you to a point where everything else is profit So in this example… Add another $997 for the course. After all expenses were paid, we’d be left with $2503 profit. The course is paid in full AND we’ve got $685 toward our next mail campaign and/or payment for our assistant! So, this would allow us to send out 641 direct mail letters AND keep $300 in reserve for our assistant to process the leads.The cycle repeats over and over again until you’ve built a sustainable business! And over time, you are simply managing the business while it runs itself and you focus on new models, businesses, etc.

I can tell you that I’m SO excited about this model and we’re ramping up to build it BIG! Our goal is to be doing 10 land deals/month by the end of September. And we’ve got the business plan laid out to account for cashflow as well as retirement.

I do hope you follow this model for success and are able to choose something that gets you excited and go with it!

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