Join us for this episode of Larry Goins Brain-Pick-A-Pro. Learn from leading experts in real estate investing and business. Get the latest information of what is working right now and their predictions for the future. Get ahead of the pack and take advantage of this insider information. Success leaves clues! See first hand what works from them, the lessons they have learned and how to avoid the mistakes they have made. Don’t miss a single episode of Larry Goins Brain-Pick-A-Pro.
Using Virtual Assistants in Real Estate Investing with Ryan Johnson
In today's show, it is Larry's turn to interview Ryan Johnson who once interviewed him on his own show Level Up Your Business Podcast. If you are interested in real estate investing, this is one episode you shouldn’t miss as Ryan shared a lot of real estate insight, information, and experiences.
- How Ryan started investing in real estate
- How Ryan and his team got affected when the market crashed in 2007
- Putting deals together using virtual assistants
- Challenges he ran into while rebuilding his business with VA's
- Figuring out how to let his VA manage the phone
- What Ryan's business looks like
- Determining if the seller is motivated or a tire kicker
- The market he is in and the volume he is doing
- How he found his acquisition guy and what his compensation is
- The main objectives of the acquisition guy when he visits a prospect
- build rapport
- get an idea on the rehab cost
- educate the seller on the process
- His formula
- How much they want to make per deal
- Typical buyers for their houses and how they found them
- How they promote their website
- Typical price of the property they are buying and selling
- What co-wholesaling is
- "It is not necessarily about the price whether or not somebody's going to accept your offer, a lot of times people will do business with people with who they like."
RESOURCES AND LINKS FROM THIS SHOW:
Larry: Welcome to the Brain-Pick-A-Pro Show live from Lake Wylie South Carolina and all the way up north. It’s Ryan Johnson, what’s going on buddy? Ryan: I’m blessed and highly favored how about you? Larry: I love it man. So guys Ryan just had me on his podcast recently and I’m thinking, “Man this is a cool guy, I got to interview this guy.” So right away I’m like, “Let’s do an interview I got to get him on Brain-Pick-A-Pro right. So Ryan I got some specific things I want to talk about because you got some really good experience you got some good info that you need to share. So I got a bunch of questions I want to ask you. But I want you to start out and tell our listeners a little bit about yourself, how you got started, struggles. I mean I know the backstory that you’ve told me but I want our listeners to know it and see where you came from, what you went to and then how you started over. Ryan: For sure. So I got started investing in real estate back in 2003. Back when I first started I was in pharmaceutical sales as well and my goal was to ultimately earn enough from real estate where I could quit my pharmaceutical sales job and do real estate full time. So I was able to do that in the course of two years. So I acquired enough passive residual income that I was doubling the amount that I was making in pharmaceutical sales. Larry: Three. Ryan: Yeah. It was awesome. Now it was a lot easier to get loans back then in 2003 but in two years I was able to fire my boss, I was working full time in real estate. And one thing led to another I learned how to do different types of deals, and then I started assembling a team and I had a team of roughly around 10 people that were working for me. And we had a highly productive business. And then 2007 came end of 2007 and the market crushed and it really wiped me out. So it was a challenging time, I had to let my staff go. So it was one of those situations where I was at that fork in the road where do you continue to go on this path with real estate or do you go back and get a nine to five? And my heart of hearts would not let me go back and get a nine to five. So I was like, “Okay I just got to figure out a more efficient way to do this where I don’t have a lot of overhead and I’m not in a situation like I just came out of. So I decided to do is try out a virtual assistant. So I hired my first virtual assistant back in 2009. And I started putting deals together using virtual assistants to handle of the stuff that I didn’t like to do. Like I don’t like paperwork, I don’t like admin stuff none of that stuff. So I had my virtual assistant doing that stuff and then I was handling the buyers and sellers and talking to them. And one thing led to another, I got systems in place and to be quite honest with you, it got to a point where it was more efficient with me running my business with a couple of virtual assistants than when I had 10 people and I didn’t necessarily know what everybody was doing. Larry: Are you serious. Ryan: Yeah absolutely man. Larry: That’s awesome. Ryan: So now the way that my business is structured I have a virtual assistant team and then I’ve got a couple of people on the ground here like for acquisitions and stuff in order to look at properties. Larry: Right. Ryan: Because we primarily focus on wholesaling, but most of my team is virtual. Larry: That’s really cool. So you had a team of about 10 people and then the market blew up and all that. And like you said you had to let them go but you rebuilt with virtual assistants Ryan: Correct yes. Larry: So tell us a little bit about the challenges that you ran into in hiring virtual assistants because I got two VAs right now and I’ve got a team of people in my office right outside that door. And acquisition people, closing a hot acquisition and a sales guy okay. In my opinion it’s very difficult to find that right VA that’s going to do-that number one knows what to do, and number two will do it, and number three you can trust that they’re going to do it right. Ryan: Sure. Larry: Right. So tell us a little bit about some of the challenges that you ran into in rebuilding your business with virtual assistants. Ryan: Okay so everything that you said I do agree with. I think one of the challenges that I ran into initially is I’m starting from scratch with somebody. So I was starting with somebody that didn’t really know real estate so there was that challenge of how do you instill this knowledge or US real estate into somebody that lives in the Philippines. Larry: Right. Ryan: So honestly that’s where processes and systems became even more important. So what I would do is as I was training her on something so let’s say for instance running comps. I had to run comps anyway. So I ran comps but she’s on camera as I’m running comps watching me doing this and I’m recording it so then she can go back and refer to that. So basically slowly but surely we put together a training library that she could refer to, I mean honestly now she does things especially when it comes to admin paperwork for the real estate deals much more effectively than I can. Because what happens is if that’s the only thing that they’re working on they start seeing efficiencies that they can take advantage of. Whereas people like you and I we’ve got our hands on a lot of different parts of the deals but they’re focusing on the admin part. So they figure out how to do stuff quicker, how to make sure that this person gets followed within this time. So everything started clicking and now we’ve got really good systems in place. And then another challenge that I ran into initially was how do I make sure that I’m not having to get on the phone and do all the follow-up? The phone would distract me a lot. So I’d be working on a deal then I have to pick up the phone and then you have to get back to getting on the deal. So I taught her how to manage the phones, that was a game changer in my business not having to pick up the phone and get distracted every time that the phone rang. Larry: So you figured out how to have her manage the phones but she’s virtual. So the calls come into her and I’m assuming she’s in the Philippines. Ryan: Right correct. So we use a software Line2 that’s L-I-N-E and then the number two. Larry: Right. Ryan: And with Line2 what happens is you can install it on your desktop or your mobile and we have a business line. So any calls that come in, they ring to her desktop and/or her mobile if she’s not at her desktop at the time. And the nice thing is I can receive those calls as well if I wanted to because of Line2. And Line2 works just like a business phone system. So you’ve got your voicemail, she can transfer calls to me if need be. So she’s basically the receptionist for our business because everything goes in through Line2. Larry: She could transfer a call to you live? Ryan: Yes absolutely. Larry: So she could take the call like if it’s a seller lead, take the call, qualify the lead and say, “Hold on just a minute I want to let you talk to the owner.” And then she transfers it to you. Ryan: You got it exactly. Larry: That’s huge I love it. Ryan: Yeah. Larry: That’s a great tip. Ryan: What she’ll do is she will reach out to me like we use another software called Viber, V-I-B-E-R which is what we use in order to chat throughout the day so we don’t have to pick up the phone every time we’re trying to talk to each other. So we use Viber and she’ll shoot me a message on Viber saying, “Hey so and so is on the phone, do you have time to talk to them?” and I’ll say yes or no. and then she’ll just transfer that call over to me on Line2 on my phone. Larry: That’s hug, I love that. That’s awesome that’s some really good tips right there. That is great. So tell us a little bit about what your business looks like now. I know you told us about this VA, but tell us a little bit about what your business looks like from the start of a deal. A lead comes in or whatever, all the way to closing it and cashing a cheque and who’s involved. Ryan: Sure that’s a great question. So from the start of deal let’s say a lead comes in from our website, when a lead comes in from our website the first person that sees that seller lead is my virtual assistant. So she has a script that she uses where she will call that person back because it’s so important to be the first person to call somebody back when they’ve reached out to you. Otherwise they’re going to continue to go down a list until they find somebody that will help them. Larry: Exactly. Ryan: So she will call that person back she will build rapport so she’s not like a robot. She’s got a lot of phone skills I’d say that. Larry: That sounds- and hold on just one second, what’s her name and number? No I’m just messing with you. Ryan: So she’ll speak to that person, she’ll build some rapport she’ll confirm the information that they’ve provided and ask some additional questions. One of her main goals when she’s on that call is to determine whether this person is motivated or tier keeper. So we have certain trigger questions in place to determine whether or not somebody is just window shopping or whether somebody is ready to move now. So if it somebody that is ready to move now, and is anxious to sell what she’ll do right there on the phone is she will schedule an appointment with them to speak to our acquisitions manager. And she’ll use an app that we use called Calenly and she’ll set up that appointment right there with that person on the phone. If they’re ready to talk to somebody now she’ll do it now. If it’s some situation where she they can’t talk now she’ll set it up on Calenly. Then my acquisitions manager who is a local person will then speak to that seller in order to set an appointment to look at the house. And then once we’re ready to get that property under contract my virtual assistant handles all of the contract paperwork. So obviously I tell her the terms of the deal but she does all of the data input for that particular contract. And she sends it out for E-signatures via Hello Sign and then we get those signature back. Then she sends out the contract to the title company and she confirms with the title company that they’ve received it. And then she’s instrument in that process in terms of following up with the seller, making sure that the title company has everything that they need. And following up with the title company to find out the status of the deal. And then when we close obviously I’m involved in, but even then most of our closings are via email. So when the paperwork comes in to sign what she’ll do is she will send that over to me, let’s say it’s something that I need to get notarized. She’ll extract those documents so that I can go and get those notarized, and then I send those back to her. She’ll put the package together and send it off to the title company. Larry: That’s good. Now tell our listeners what market you’re in, what market are you working? Ryan: I’m in the Indianapolis market. Larry: Indianapolis, awesome and what kind of volume are you doing? Ryan: So it just depends on the month. Larry: Right I get that. Ryan: Typically we’re around 10 deals a month. On a slow it will be five deals, typically about 20 deals a month. Larry: Okay, alright cool, that’s good. So you’ve got a local boots on the ground acquisition guy. Ryan: Yes. Larry: How did you find him and how do you pay him? Ryan: So my boots on the ground guy actually used to be my competition. Larry: Okay. Ryan: Yeah. Larry: They got tired of going it alone right? Ryan: You’re right. So we started off in real estate at the same time. We actually had the same mentor when we started off. Larry: Good. Ryan: I ended up doing my own thing eventually and then he was still working for somebody. I said, “Hey you know what I’ve got things rolling here, what do you think about coming and working for me?” So he came aboard many years back and he’s been with me ever since. And then in terms of compensation I pay him a percentage of all the deals that he’s a part of. Larry: Okay good. So you pay him a percentage. Do you mind me asking what the percentage is? Ryan: Oh no absolutely. So I pay him 20% of the deals that he’s a part of. Larry: So if you buy a house for 50 grand you wholesale it for 60, that’s 10 grand he’s going to put two in his pocket. Ryan: Correct. Larry: Right okay, good. Because he has to be a sales guy going into the home he’s got to be a sales guy. Ryan: Right. Larry: Yeah good. Ryan: Absolutely. Larry: Alright cool. Tell us about what happens in the home. Do you still go out into the home by the way and deal with sellers? Ryan: Me personally no, I haven’t done that in a while. Larry: Good for you, that’s good. So do you have like a stock presentation or something that you use or have an iPad that he goes through? What do you do in the home? Ryan: When he goes to the home his main objective is to one build rapport because what we’ve noticed is that it’s not necessarily always about price whether or not somebody is going to accept your offer. A lot of times people will do business with who they like. Larry: That’s right. Ryan: And he happens to be a very likable guy. So his objective in there is to build rapport and to get an idea of what we’re looking at in terms of rehab cost. And then also to educate the seller as to the process so that they feel comfortable because a confused mind will not work. So he wants to make sure that they’re comfortable. So those are his main objectives when he goes to the property and as long as he’s able to accomplish that. And ideally we’re trying to get a contract right there when he is at the property as opposed to having to go back and think about it etc. and then that person might actually go and call somebody else. So we try to finalize things as much as possible when he’s at that property. Larry: Right. Do you mind sharing with us what your formula is? Like everybody has got their own formula and maybe some new people listening to this they may not understand what kind of formula they should be using when they’re in a house. So would you mind sharing like ARV times this minus this minus this? Ryan: Sure so we use ARV times .75 and then we back out the repairs and then we back out whatever we would like to make on a deal as well in order to figure out what our MAO is, Maximum Allowed Offer. Larry: Maximum Allowed Offer okay. So if it’s got 100,000 ARV time .75 is 75,000 right. If it needs 15 in work now you’re down to 60. And how much do you want to make per deal? Ryan: So typically we don’t want to get any less than 5,000 on a deal and usually we’re wholesaling these deals. So we typically start at 5,000 and then it just depends on how much spread is available where it’s a situation where we can make it’s still a good deal for our end buyer and still a good deal for the seller. And that’s what we’ll base it on but we typically start with 5,000 and then go from there. Larry: That’s awesome. So yours is ARV times .75. I love it because I’m ARV time .7 and I want to make 12 to 15 a deal. So I got to buy a lot deeper and we’re making a lot of offers. How did you come up with the 75 or is that just what buyers are willing to pay in your area? Ryan: It was just playing around with numbers and seeing how quickly we can move properties versus how long properties are on our books. Larry: That’s good. Well if you’re willing to do ARV times .75 that’s a higher number than 70. Plus if you’re willing to sell a deal and make five grand as opposed to 10 or 15, that’s even more. So you can get more deals and you just make it up in volume right? Ryan: Exactly. Larry: Awesome. Who is a typical buyer for your house? Is it a fix and flip investor or landlord or that sort of thing? Ryan: So I would say the buyers that we’re dealing with most often are going to be fix and flippers. And most of our buyers are actually out of state investors because the Indianapolis market, we have a lot of money coming in from the west coast and a lot of money coming in from overseas. So we’ve worked with a lot of Israeli investors for instance. So that’s basically who we work with a lot. And then outside of that we work with a lot or wholesalers as well. Larry: So your buyer is probably buying it, they might be an out of state or an out of country investor but they’re buying it to fix it up and rent it out right? Ryan: Exactly or to fix it up and flip it. Larry: Okay. That’s interesting. How do you find these kinds of buyers? Ryan: So those buyers, what’s happened is and it’s funny because I didn’t start off in looking for that niche of out of state investors. So those buyers have typically found us and then what’ll happen especially with the overseas investors they’ll find us on our website, indywholesaleinvest.com. Larry: Right. Ryan: And what will happen is especially overseas one of the buyers overseas let say like an Israeli buyer, he will decide to be the guinea pig for the group. So he’ll have the dialog with me, he’ll actually have a visit here, typically purchase sight and seeing and then he’ll come and he’ll have the visit. He’ll see the operations and then he’ll recruit other people that are a part of his network to also buy properties from us. Larry: Right. That awesome that’s good. I notice you’re using a care website. Ryan: Yes, yeah. Larry: I love OnCare we have our templates for our own students but I love their websites. Do you generate a lot of lead on your care website? Ryan: Yeah we generate a pretty decent amount of leads from our OnCare site. Larry: And what do you do to promote your website? Ryan: Most of what we do has been Medatag related. So outside of that we’ll do some things in some of the local publications promoting our website but most of what we’ve done has been more SEO related, more long term search engine optimization. Larry: Now do you have a VA that’s working your website to push it out there for buyers and sellers? Ryan: Yes, yeah we have. So we’ve got two different types of VAs. So we’ve got VAs that are more admin centric and then we’re have VAs that have I’d say special skills when it comes to SEOs as well as like social and promotion. So depending on what we need we’ll use those VAs for that. Larry: Right. That’s good. Ryan: That works. Larry: Let’s see I got a couple more questions here. What is the typical price of a property that you’re buying? Like you’re buying it for X and selling it for X. Ryan: Yeah good question. So most of the properties that we purchase are typically under $50,000. So we might buy a property so I’ll just think of like a recent deal. So we’ll buy a property for let’s say $35,000 and it might have an ARV of 90 or what have you. Larry: Right. Ryan: And then we’ll sell that property and then we’ll sell that property for somewhere in the 50s something like that. Larry: Okay. Now are you touching these properties at all? Ryan: No. Larry: Okay so you’re wholesaling every one of them. Ryan: Right. We were doing a lot of fix and flip previously. I’ll tell you I like seeing properties go from dilapidated to beautiful. But I don’t necessarily like the amount of time that’s involved. Larry: I hate rehabs, I’m with you man. Ryan: Amen. I mean when I think about how many more deals we’re able to wholesale using that span of time that we’re waiting for a property to be rehabbed, I’m like, “Why do I need to fix and flip the place?” Larry: I’m with you. I had a guy in my office for an interview and he was having me run the numbers on it and he said, “I’m getting ready to buy a property I’m paying 31 it’s got an ARV of 80.” And I think he said it needed 25 in work. So I’m saying seven eight so 56 minus 25, now you’re down to 31. And if you want to make 10 now you’re down to 21 right. Ryan: Yeah. Larry: So by the time he pays 31 for it, he puts 25 in repairs, right. He’s got 24,000 in profit but he’s getting a loan that’s another five grand now he’s down to 19,000 and he’s got to pay 6% real estate commission right. Ryan: Right. Larry: Six eight so 48 now he’s down to $14,000 in profit. Why not just wholesale it and make 10 and be done? Ryan: Exactly. And know that you’re going to get a profit and not to miss in holding cost. You still got holding costs and not knowing when that property is going to sell after you’ve rehabbed it. So I couldn’t agree with you more. Larry: That’s exactly right. Now you mentioned earlier that you do some cold wholesaling. Tell our listeners about that if they may not be familiar with the term. Ryan: Sure. So with cold wholesaling so we do it a couple different ways. So a lot of the deals that we get are from wholesalers. One of our strengths is working with buyers and we get a lot of buyer leads in. So if a wholesaler has a property and they’re looking to move that property we will work with that wholesaler in order to move that property. So there’s two ways that we do it, one if it’s just depending on the situation we will actually bring the buyer we’ll split the profit with the wholesaler, so whatever raw price that they have in it. And then it’s whatever price we present to the buyer and we’ll split that with them. The other way that we do it is we’ll just outright get the property from the wholesaler, and not necessarily split anything. We’ll see whatever their price is, we’ll negotiate that and we’ll get their property from the wholesaler and then just sell it directly to our buyer. Larry: And then make whatever you can on it. Ryan: Exactly. Larry: Right, that’s good I love it. Now do you use a cold wholesale agreement when you do the first one? Ryan: So it just depends on who we’re working with. Larry: Right if you know them. Ryan: What did you say? Larry: If you know them. Ryan: Exactly if we know them right. So I mean we’ve got some really strong relationships with the folks here locally. So a lot of times we don’t have to get too caught up in certain agreements. But yeah if it’s somebody that we haven’t worked with before, then we’re making sure we dot our ‘I’s and cross out T’s. Larry: Right that’s good. So how are you marketing for these buyers? You said you have a really strong buyers’ list. Ryan: Yeah so I mean again a lot of our buyers come from either our website or they’re coming from referrals. So referrals from other people that have worked with us like the Israeli buyers or some of the other out of state buyers. Larry: That’s awesome. Ryan: I’m sorry. Larry: That’s awesome that’s great. Ryan: Yeah it’s really a blessing because it makes it a lot easier when we’re getting a referral from somebody because it’s a lot easier to get that first deal done and continue to do deals with them because there’s already some type of trust that’s been established because they know that you’ve taken care of the person that referred them. Larry: That’s good. So if I get a deal in Indy right I could turn it over to you and you could sell it and we’ll split the profit right? Ryan: You got it man. Larry: That’s awesome. Ryan: Let’s make it happen. Larry: That’s awesome. You’d do that probably with anybody listening too right? Ryan: You better believe it. Larry: One more quick question I’ll let you go I know you got a meeting you got to get to. How do you pull your comps? Ryan: So I’m actually real estate broker. Larry: Oh good. Ryan: So I’m a licensed broker yeah. So I pull my comps from the MLS. Larry: Awesome. Ryan: Yeah and then I’ve taught my virtual assistants how to run comps as well that make life like everybody on my team knows how to run comps. Larry: That’s awesome, that is great. So man I really appreciate you taking the time to be on today. It’s been really great and really informative and I know our students got a lot of good information out of this. I really appreciate it man. Ryan: Hey I appreciate you too Larry. Larry: Hey let me ask you a question if somebody wanted to reach out to you maybe they have a deal in the area or something like that that they want to run by you or whatever, how would somebody reach you? Ryan: Okay so we’ve got two sites. If you’re interested in using virtual assistants in you real estate business or any other productivity things to help your real estate investing business you can reach us at ryansjohnson.com that’s ryansjohnson.com. Or if you’ve got some real estate leads and you want to just co-wholesale and what have you, you can go to our real estate site Indy, I-N-D-Y wholesaleinvest.com. That’s indywholesaleinvest.com. Larry: Awesome. That is great man I really appreciate you taking the time I wrote all that stuff down we’ll put it in the resources. And thank you so much for being on and let me know if there’s anything we can do to help you okay. Ryan: Hey I appreciate you too Larry. Larry: Alright buddy thanks a lot enjoy the meeting tonight. Ryan: Alright thank you. Larry: Alright thanks see you later. Ryan: Alrighty bye-bye.