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Managing Your Team Virtually with Alex Pardo
In today's episode, Larry talked with Alex Pardo about his business—how he runs it, how he manages his team virtually, and how he gets good deals. So many beneficial information and insights in this episode so don’t miss it!
- Alex's background
- What his business looks like today
- How he runs his business
- Their ROI when they spend $3, 500 on direct mail
- Having an assistant that is not in his office
- The number of leads his acquisition manager has to run to get a deal
- Price range of most of his deals
- His typical buyers
- How he compensates the different people who works for him
- Where he gets his list
- His own criteria when he goes to look for lists
- "The key with anything is you got to be consistent."
- "We believe that if we can get face-to-face with the seller, we can bridge the gap between where they're at and where they want to go."
- "Focus on consistency."
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 down in Miami Florida. My good friend Alex Pardo is our guest today. What’s going on buddy? Alex: Larry, what’s up man? Thank you for having me on. Larry: How are you doing? Alex: I’m doing fantastic all is good. We were talking earlier it’s fantastic to reconnect with you. It’s been a few years but I’m glad to touch base and I’m glad to see that you’re still rocking. Larry: That’s awesome man. Good to see you too. Hey is that Monopoly Money something you got on the background there. Alex: Yeah so let me actually these are a couple different pieces. I’m a big fan of monopoly so I don’t know if you can see that. Larry: Yeah keep pushing. Alex: So I got three monopoly pieces back there. Larry: I love it. Alex: Yeah. Larry: I love it. That’s awesome. Well guys I’ve known Alex for-oh man how long have we known each other? Alex: So I got exposed to you Larry, I think I bought one of your training programs back in like 2006, sorry in 2005. And then you and I met at a conference in Las Vegas in 2009. Larry: Right. Alex: So we’ve known each other for about a good seven years or so. Larry: Right. It’s been a long time hasn’t it? Alex: Yeah it has. Larry: That’s good man. Alex: You’re still out there kicking man, closing deals. I see you still speaking and it’s great to just watch your growth all these years. Larry: Yeah I stay very busy that’s for sure. In fact as soon as we get done recording this I’m on my way to the airport. Alex: I believe you where are you speaking at? Larry: I’m headed to Pensacola Florida. Alex: Got you. Larry: So closer to you at least in your state right. Alex: Yeah exactly. Larry: That’s good. So Alex, why don’t you start out and tell our listeners a little bit about yourself and your background. Alex: Yeah sure so born and raised in Miami, my entire family is from Cuba. And ever since I was a kid I always had that bug to be an entrepreneur and start something. And I remember when I was 10, 11 years old I’d be at the baseball park with my parents all day long I grew up playing baseball and I’d buy baseball cards and I would flip them to other kids. So at the time I didn’t even know what wholesaling was I didn’t know about flipping but I got exposed to buying low and selling high when I was a kid. Larry: Right. Alex: And then I went to college and at some point during college Larry I felt like I wanted to be a CFO or a CEO of like a Fortune 500 company. And I kind of say that I throw up in my mouth a little bit because right out of college I took a job with General Electric Consumer Finance as part of their financial management program. And I’ll never forget Larry three months into that job working an average of 70 to 80 hours a week I was cross-eyed from looking at Excel and PowerPoint all day long. I knew that I couldn’t design the lifestyle I wanted working for someone else. Larry: Right. Alex: So I finished that two year program and I went backpacking around Europe for three months. When I got back from that, a buddy of mine- I was in Ibiza, we were partying in Ibiza and I went to an internet café. A friend of mine sent me an email he says, “Hey do you want to go to this Marketing for Deals Boot camp in Atlanta?” and I said, “Sure.” And he goes, “It’s $997.” And for me this was 2005 that seemed like all the money in the world. Like I didn’t have that. But that was kind of my fork-in-the-road moment. So I put it on my credit card, a month later went to that boot camp. I took out one of the pre-foreclosure letters in that manual and about 60 to 90 days later did my first deal and made 44 grand on that one. Larry: Wow. The turning point. Alex: Yeah that was my turning point. That was October 2005. Larry: So what does your business look like today? Alex: Yeah so wholesaling is our primary niche. I’ve done all types of deals since 2005 but our bread and butter has always been wholesaling. So right now I got a pretty small team I have an acquisitions manager, a dispositions manager, transaction coordinator, my virtual assistant in the Philippines and then a dedicated outbound cold caller who lives in Costa Rica and then obviously myself. So we’re big followers of Traction. We’ve gone through the EOS process so right now I’m wearing the visionary and the integrator hat. So in the next probably six to 12 months I’m going to be looking for an integrator. And then I have those specific people that are basically accountable for those seats; acquisitions, dispositions and transaction coordination. Larry: Right. Good. So tell us a little bit about how your business runs. I know you’re in a very competitive market right? Alex: Yeah so South Florida is pretty competitive especially with all the weekend seminars that seem to be popping up. There are so many people getting into the business. It’s not uncommon for our acquisition manager to go meet with a motivated seller. And that person has 15 to 30 postcards and letters on the kitchen letter. So yeah we’re wholesaling about an average of four deals a month more or less. And we operate here in Miami in Broward County. And from a marketing perspective Larry our bread and butter has always been direct mail. And of the last nine to 12 months we’ve been doing a lot of outbound dialing. And we’ve significantly seen our average profit per transaction go up through that particular marketing channel. Larry: Right. Alex: Outbound dialing has been a pretty hot channel for us. And the key is with anything is Larry you got to be consistent. You got to do it on a daily basis, you got to be focused and consistent. It doesn’t sound sexy but I think that’s the key to success. Larry: That is so true. So tell us a little bit about you were doing direct mail and now you’re primarily doing dialing or are you still doing a lot of direct mail? Alex: Yeah we’re still matter of fact we’ve really cranked it up from a direct mail standpoint. So last year on average we were sending anywhere between seven and 10,000 pieces a month. This year 2018 we’re doing about 30,000 pieces a month. So we’re still doing a lot of direct mail. Matter of fact we’re doing more than we’ve ever done. But we’ve also ramped up our outbound dialing. So I have my dedicated caller in Costa Rica she puts in about four to five hours a day. And then I have my acquisition manager that puts in an additional two to three hours a day of outbound dialing. Larry: So it’s your virtual assistant that’s doing the dialing she’s on the dialer right. And are they calling the same list that you direct mailed so it’s a second touch or is it a totally different list? Alex: Yeah it’s the same exact. So every single list I mean we hit five to seven different lists from probates to inherited. Obviously the absentees with equity out of state owners. We’re sending the mail and then we’re skip tracing those people and then outbound dialing them. Larry: Is there a good service that you use to skip trace those? Alex: Yeah so we use TLO so TLO is one service. I know a lot of people use Lexus Nexus. And then there are several services out there but TLO and Lexus Nexus have been the two that have been the best for us anyway. Larry: That is good. Alex: Yeah. Larry: So 30,000 pieces a month that’s a lot. Alex: It is, we’ve never done that kind of a volume but yeah this year to hit our goal we really wanted to ramp it up. And direct mail is still even though it’s pretty competitive Larry, it still gets us a pretty high ROI. So for every $3500 we spend on direct mail we’re typically getting a deal where our average profit’s around 20 grand. So it’s still a positive ROI. Larry: So 3500 gets you 20 grand. That’s huge. Alex: Correct. Yeah it’s a little more, it’s about 35 and change, but yeah just under $3600 on average in 2017 that we spent on direct mail. We were landing a deal that made us around 20 grand. Larry: Wow, that’s really good. That is good. Alex: Now the thing with direct mail Larry is that you have to have the team and the infrastructure and the system to process all of the leads and to accurately follow up. I think one of the biggest mistakes Larry that people make with direct mail is they’ll send out a campaign and they won’t send out another follow up. Or the leads will come in they won’t call back the hang-ups. Larry: Right. Alex: So there are so many mistakes that people make when it comes to direct mail that you really got to have your follow up system dialed in. and like anything you just got to be consistent you got to pick you got to pick up those calls live. I see a lot of people that are sending their direct mail leads to a 24-hour recorded voicemail. I think that used to work but now and especially if you’re in a competitive market you’re losing out on a lot of deals by not taking those calls live. Larry: Right. I think you’re right about that. How is having an assistant that is not in your office-you said she’s in Costa Rica I believe. Alex: Well so my virtual assistant’s in the Philippines and then my outbound cold caller is in Costa Rica yeah. So we’re all virtual I mean my acquisitions manager, dispositions manager and transaction coordinator they’re here in South Florida they’re in Miami. But we don’t actually have like a brick and mortar office that we all report to. We all work out of our houses. I’m in here in my office but it’s just me here. Larry: So you have one salesperson or disposition manager, one acquisition manager and then you have a closing person that manages your closings. Alex: Bingo, exactly. Larry: That’s awesome. How many leads do you think your acquisition manager has to run to get a deal? How many appointments? Alex: So we’re doing about on average so if we’re talking gross leads and what I mean by gross leads is the phone rings it’s about 82/83. If we’re talking actual real leads where the person has a property to sell, it’s about 45 leads for us to get a deal. Larry: So is that 45 in-home appointments to get a deal? Alex: No, those are 45 the phone has rang and, “Hey I have a house I’m looking to sell.” It typically takes us about six or seven appointments to actually get a deal like a signed AB contract. Larry: Wow, six to seven appointments to a deal? That’s a really high closing ratio. Alex: You think man, I guess that’s relative Larry. I’m always pushing on my team like for the last year and a half I’ve put them through sales training and that number has gotten better. And I continue to push. We’re pretty aggressive with setting appointments, in other words if the after repair value of a house is $200,000 and the seller is looking for 190 but if we hear pain and motivation we’re still scheduling that appointment. Because we believe that if we can get face to face with that seller we can bridge the gap between where they’re at and where they want to go. And taking them through a particular sales process, we can touch on that pain and we feel like we’re in a better position to convert that appointment to a contract. I think a lot of people they might hear oh the house is worth 200 and you want 190 and they’ll just move on and I think that’s a mistake. Larry: Yeah that’s a really good point. Now what’s the average price range of most of your deals if you have one? Alex: About 100 to 200. So we’re in that after repair range of 100 to 200 yeah. Every now and then we’ll do stuff like between the 200 and 300 but it’s few and far between. Larry: Right, now- Alex: That’s kind of our bread and butter. Larry: And your average profit is around 20 grand who is your typical buyer? Is it a fix and flip investor? Or is it somebody looking to buy a house to live in and just want a good deal or what? Alex: No so yeah, about 70% of our buyers are fix and flip. The other 25% are buy and hold and then every now and then we have somebody that has what we call mattress money that they’re looking to fix it up and live the house themselves. But the majority of our buyers are people that want to fix and flip. Larry: Wow that’s good. Now some of our listeners may not get what you’re talking about when you say they’re on a dialer. You’ve got your person in Costa Rica that’s on a dialer, you’ve got your acquisition person on a dialer. Let’s talk about the dialer for a little bit because that’s something that’s really hot right now and a lot of people are using and we just started using it a while back. We’re using call tools, I know there’s a couple of other ones out there. So tell our listeners a little bit about that. Alex: So the dialer has been a complete game changer for us Larry as far as outbound calling. Matter of fact when we first started outbound dialing about nine months ago, we jumped right into a dialer. So we started using a service called Mojo Cells. And you guys go to Mojo Cells, basically what it is, it’s a three-line dialer. So our virtual assistant loads up our list. And then we select the three line dialer you can pre-record a voicemail. So that if you connect with someone and it’s a voice recording, you can click a button and it drops a pre-recorded message. And it’s a three-line dialer so basically you load it up and you hit the dialer and you’re waiting for somebody to connect. You’re going to see three boxes and it’ll highlight it in green and then you just start talking to the person. If somebody else happens to pick up while you’re on a call, there’s another pre-recorded message that says something like, “Hello, sorry I can’t hear you, let me call you right back.” And then the system will know to dial that person as soon as you hang up. Larry: Right. Alex: So before Mojo Larry we used to like our acquisition manager would maybe eight to 12 calls an hour. Now they’re making between like 50 and 70. Larry: That’s huge. Alex: Yeah and then we went to a Mastermind at the Europe part back in December and we heard about another service called Call Tools which is the one that you’re using. Larry: Right. Alex: This is a 10 line dialer. So it’s calling 10 people at the same time and it’s got so many more bench features than Mojo. But the one thing I will say guys is I’m not an attorney obviously make sure that you’re following the compliance laws as it relates to using dialers and just connecting with people. Because you don’t want to get yourself into hot water with that. Larry: Absolutely. Alex: And I think there’s a lot of grey area when it comes to that. So I just wanted to kind of throw that in there. Larry: And that is true, whoever you use your dialer from, whoever’s dialer you use as well as wherever you get your list just make sure you’re very careful about that. And you know the rules and ranks because you don’t want to be spamming somebody over the phone, it’s very important. But we’ve just started using it, it takes a little bit to get used to as I’m sure you know. Alex: It does. So here’s a crazy thing Larry. When I compare when we juxtapose our average profit per transaction when it comes to direct mail which is roughly about 20 grand to the deals that we’ve closed from outbound calling, it’s more than double. Our average profit is just under 50 grand when it comes to outbound dialing. And I’m not talking rehabs I’m talking about straight wholesale deals. Larry: Wow. Alex: And I’ll be honest with you I’m hesitant to even throw that out there because it almost seems unrealistic or unbelievable. But of the deals we’ve closed from outbound calling, we’re making an average just under 50 grand on these deals. Larry: Now the reason I look surprised was not because you just told me 50 grand, the reason I looked surprised is because not so long ago you told that to me and you said, “Don’t tell anybody,” I can’t believe you’re sharing it. Alex: Yeah. No, it’s all good. But there’s more than enough opportunity out there. So here’s kind of how I compare cold calling. Cold calling to me is like direct mail used to be for real estate investors back in 2005/6/7 where there were people sending mail but it’s not like today. Larry: Right. Alex: And I think in probably a year or two there’s going to be so many people calling that maybe it starts to get watered down that tool or that strategy. Larry: Right. Alex: But if you’re not cold calling right now I think you’re losing out on some opportunity out there. Larry: So I totally agree. Even though most everybody knows I’m the HUD guy, I buy a lot of HUD houses, do a lot of stuff on the MLS, but you’re missing out on deals if you’re not marketing your business right. You’re missing out. Alex: That’s right. The way that I look at cold calling versus a lot of other marketing channels is the difference between being reactive and proactive. Larry: There you go. Alex: With the direct mail you send out direct mail and you’re waiting for those calls to come in, you’re waiting for the phone to ring. With outbound dialing it’s kind of like door knocking you’re getting in front of people but you could do it at much larger scale with a lot of these tools like Call Tools, Mojo Cells etc. Larry: That’s great. Couple questions I want to ask you. How many hours a day do you put your people on the dialer because you can’t have them on it eight hours a day. That won’t work. Alex: Yeah no. So on average there are about six to seven hours a day but it’s two different people that are on the dialer. So I have my dedicated cold caller she puts in about four, four and a half sometimes five hours a day. And then I’ll have my acquisitions guy that puts in a couple of hours a day. Larry: So you can literally have somebody on the dialer four to five hours a day. Alex: Yeah I don’t recommend any more than that Larry because I think it tends to burn people out in the long run if you put them past five hours. I think three hours is like probably the right sweet spot anything more than that. And the other thing Larry is you got to make sure that you put the type of person that wants to be on the phone. Not somebody who’d rather be outside the office meeting people because if you put the wrong personality type in the particular seat you’re definitely going to burn them out. Larry: One question comes to mind is what do get a better response on? Your virtual assistant or your acquisition manager using the dialer? Which one gets a better response rate, better dollar per lead cost? Alex: Yeah. Here’s how I’ll answer that question. I think I’m in a unique position that my virtual assistant doesn’t really sound like a virtual assistant. Her English is perfect and her Spanish is perfect. So you would never know that she’s calling from another country. But generally speaking I think local people are better. And here’s what I found, I think hopefully this won’t come across the wrong way. My experience when I have a woman on the dialer, the people that she connects with, the homeowners tend to be a little bit more, their guard goes down. They’re more open and receptive to the conversation versus a male being on the dialer. Larry: Right, I agree with that. Do you mind sharing how you compensate the different people that work with you? Alex: Yeah so my outbound dialer right now is getting paid $15 an hour. She doesn’t get any part of the deal or anything like that. So just gets a straight, she’s an hourly person she gets 15 bucks an hour. We’re about to give her a raise because she’s just done well and she has been with us for almost nine months now. Larry: Right. Alex: So I would recommend anything between $15 and $20 an hour for the right person, is about the right compensation for an outbound dialer. Larry: Okay good. What about your acquisition people? Alex: And then my acquisitions person- yeah I was just going to get to that. So they get 15% of the gross on every deal. So if we make 10 grand on a deal, they’re getting 1500 bucks. Larry: Awesome. Well given the fact that you’re making 20 to 50, that’s awesome. They’re making a good living. Alex: Yeah they’re making a pretty good living. And that’s the only thing they’re responsible for is just processing leads and going on appointments. That’s it, that the only hat they wear. Larry: They bring in contracts right? Alex: That’s right. Larry: That’s good. So what about on the sales side how do you handle that? Alex: Same thing. So as soon as our acquisition manager gets an AB contract, they go into podio, the click a button that changes its status. And all of a sudden now the ball is in my disposition manager’s court. And they’re responsible for building relationships with buyers, they’re responsible for marketing our contracts, showing properties if need be. They’re essentially responsible for now selling that contract to one of our fix and flip buyers or buy and hold buyers. And as far as compensationary the same exact thing, 15% of the gross. So my margins are typically around 50%. Larry: Right. Alex: The company margins so my acquisitions person is getting 15%, disposition person is getting 15%. And then there’s about 20% in just expenses and things of that nature. Larry: Right, that’s good. That’s a good model right there I like that model. What about your list, where are you getting you list from? Share that with our listeners if you don’t mind. Alex: So we’ve gotten our list from listsource.com, we’ve gotten lists from listability.com, Rebo Gateway is another list provider, Lance and Terry over at US Lead Lists. We’ve gotten our inheritance list from them. But honestly Larry, my best list is when we go, we send someone to the county locally and they start to build the list in-house. Last year 2017, of all the lists we had the tax delinquent was by far and away our best list. And that was the list that we didn’t buy from our provider, but we got from our county. Larry: Wow tax delinquent list is your best list. Alex: Yeah so we focus on people that are at least two years behind on their taxes and don’t have a tax infill coming up. That was our best list last year yeah. Larry: That’s good. Now do you have certain criteria like if you go out to list source or listability, or one of those do you have certain like how many years they’ve owned the house, the value of the home, the amount of equity. How do you determine all that? Alex: On average Larry here’s our breakdown as far as criteria. We went back and we looked at the inventory all the deals we close in the last 36 months. And 90% of the deals we closed, the sellers we between 55 and70 years of age. Larry: Wow okay. Alex: So when we go to list source we’re always looking for homeowners that are over 50, significantly between 50 and 80. Larry: Right. Alex: Alright so we’re targeting those people. We look for length of ownership at least 10 years that they’ve owned the property. Okay we look for at least 40% equity. So in list source you can cite like 40 and 100% which obviously 100% means that they own it free and clear. And then we’re looking for bread and butter. So we look for three twos between 1000sqft and 2000sqft. But every now and then Larry we’ll target houses that don’t make sense like for example here in South Florida there’s no such thing as a one bedroom house. But we can go out there and we can pull a list of one bedroom houses because it was incorrectly put in the tax assessor’s office. So sometimes we like to Zig when other people are zagging and we look for those anomalies. Larry: That’s good I love that. We do the same thing with HUD houses, look for anomalies. Alex: That’s right. Larry: That is awesome. Alex: So every once in a while we’ll see one bedroom houses that are like 1100sqft. We know that that’s not a one bedroom house it’s probably a two or a three bedroom house. Larry: Right. Alex: But people are not selecting that in their criteria therefore it’s not getting onto their list. Larry: Right, that’s awesome. So Alex you just shared a tremendous amount of information man I really appreciate this. Do you have anything that we can do for you, our listeners can do for you? Or if you want to share your contact information or have something you want to give away to them or something? Alex: Yeah appreciate that. So I host a podcast called The Flip Empire Show and we’re close to 200 episodes in. I launched it about a year and a half ago so if you guys go to flipempire.com there’s actually a course that you can get for free on flipempire.com. And then I would encourage you to check out the show as well, we cover all types of content. Larry I’ve had you on the show and so I look for the cream of the crop as far as people I can interview. And release two shows a week where I’ll do an expert interview and then I’ll also do a shorter version where I’m answering a question. And it’s typically a five to 15 minute show. So yeah Larry I would love it for people to go to flipempire.com. Larry: Sounds good man. Listen I really appreciate it, you got a machine going on there. You get to work out of your house, be at home with your family. And you got everybody as virtual man I love it. So what kind of parting words do you have for our listeners? Alex: I want to go back to one of the things I said at the beginning; focus and consistency. I think there’s a lot of people out there looking for the shiny object, they’re bouncing around from book to book seminar to seminar. Pick one niche, pick one strategy and go an inch wide and a mile deep. Like focus and consistency and I think that’s what’s going to get you to the next step. Not the latest and greatest insert the blank. You know what I mean? Larry: That’s exactly right. I love it man. Alex thank you so much for being on I really do appreciate you taking the time out today. If there’s anything we could very do for you please let us know. And guys check out his podcast it’s good stuff, I know I’ve been on it. Alex: I love it, thank you Larry I appreciate it man. Larry: Thanks a lot I appreciate it. Take care guys.