Hey Moguls, we’ve gotten some terrific feedback about one of our newest Faculty Advisors, so we invited back to provide us more super-helpful info.
Doug Van Buskirk quickly rocketed to HUGE REI success and financial freedom by analyzing and honing in on the importance of negotiating and communication. He’s already given us loads of good tips on those topics in his two previous awesome lessons, so make sure you check ‘em out.
Specializing in single-family wholesaling and mobile homes, Doug uses one of the lowest-risk, highest-ROI investment models for his deals in Charleston, SC where he lives. Today, he only spends about 45 minutes to an hour PER MONTH on his REI business, and the cash flow still rolls in every month.
We’ll let this youngin’ (just 27 years old, but wise for age!) take it away from here…
From Doug Van Buskirk…
Can you remember the last time you had a true a-ha moment?
One when your heart starts racing and your mind is going a million miles an hour, thinking about what you just learned…
In today's lesson, I want to tell you about one of the greatest a-ha moments you'll ever have as an investor.
It's a technique taught by some of the most transformative business minds on the planet, and I'm certain that when you put it to use, everything's going to get clearer, and you'll smother any indecision and inaction that's been trying to hold you back from growing your real estate empire.
What Most Investors Do
How do most investors plan their businesses? Well, they kind of take it as it comes. They know they need to do some marketing to get a deal. They might even set a goal to put out 20 bandit signs, or send out 100 postcards. Then they wait to see what happens.
But here's the problem…
Those are the wrong goals. They’re short-sighted and will more than likely take those folks down the frustrating path of mostly poor, and always inconsistent, results.
When you start your journey without having a clear final target in mind, you almost always take the long route.
That's the route most investors take. But obviously you don't want to be like 'most investors,' or else you wouldn't be here.
Highly successful entrepreneurs use a different strategy to make sure they overachieve and control the future of their business.
The Epic A-Ha
So here's the hack you use to leapfrog everyone else – it's called Reverse Engineering.
Reverse engineering means that we start with the end goal in mind. And then we plan backwards, or ‘reverse engineer,’ to figure out what actions we need to take to achieve that goal.
Here’s an example:
Let’s say I've set a goal to make $10,000 per month in my investing business. At $5,000 per wholesale deal, I need to get 2 deals done per month to hit that target. Ok, easy enough.
But let's dig deeper…
How many offers do I need to make in order to wholesale 2 deals? In my area, I need to make about 20 offers to motivated sellers to get 2 accepted.
That ratio might be a little more in my favor if I’m using a different strategy besides wholesaling. But since our offers on properties we plan to wholesale are usually low-balls, we have to assume a lower acceptance rate.
Okay, back to it – we've gotta make 20 offers. Makes sense. Now I need to know how many people I need to talk to in order to find those 20 motivated sellers…
Depending on a few factors – where I’m marketing, my marketing medium, target market I’m searching for, etc. – I'll probably need to talk to 50-60 people that are interested in selling their property.
Easy enough. That's a number I can wrap my head around. That's about 2 people per day. As long as I'm talking to 2 people per day, I know I'm on target for my $10K/month goal.
Keeping It Simple
The beauty here is the simplicity. Reverse engineering takes something seemingly complicated, like wholesaling 2 deals a month, and breaks it down to the least common denominator – how many potential sellers I need to talk to every 30 days.
If I'm not hitting my income goal, I'll skip being confused, and I'll check to see if I've talked to 60 people in the past month. If not, then bingo, I've found the problem. It's probably got much less to do with my offer prices and my local market than with the number of people I'm talking to.
If, however, I am talking to 60 people a month, then I’ll know there’s some other issue and I can begin to analyze where the kinks are.
It all starts with clear goals and a vision for the future.
Focus on What You Control
When you use the reverse engineering technique, there’s another cool thing happens – you assert control over your business.
Think about this… We, as investors, have no control over:
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Who calls our ads;
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How motivated those callers are; and
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Whether or not they accept an offer on their property.
We can influence these things based on our marketing and our salesmanship, but ultimately, we can’t control what anyone else does.
There’s way too many outside forces at play.
Focusing on things that are out of our control is a surefire recipe for frustration.
Instead, focus on the only thing you truly control: the scope, scale and frequency of your marketing. Getting in front of X-number of potential sellers per day – that is entirely in your power. Take care of it, and the rest will fall into place.
Somethin’ to Say?
I’d love to hear your questions and ideas, so get involved in the conversation by commenting below. Let the marketing begin!
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Set definitive goals for the next 6 months. Income goals, # of deals, and anything else you think you should track. Be specific and tell other people for accountability purposes. Write your goals down on a piece of paper and put them somewhere that you see every day.
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Create working estimates for ratios of sellers: qualified leads, and offers: deals.
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Determine how many sellers you need to be talking to per day, and then create a marketing plan that will put you in front of that many sellers.
Doug Van Buskirk
has always been fascinated with patterns in how people behave. He's used that passion to put a spotlight on the intersection of real estate and psychology, applying that science to networking, negotiation, and marketing. Doug's been investing for a little over 2 years, specializing in single-family wholesaling and mobile homes. In that time, he's also built an online marketing company and real estate coaching program. Doug first achieved his financial freedom at age 25, going from never having done a deal to replacing his 9-5 income with cash flow from income properties in just under 6 months. He lives in Charleston, SC with his fiancé Jen and Lhasa Apso dog, Amber.