The 24-Week Challenge: Week 18 – Setting Up Your Mass Offer System

The question the 24-Week Challenge poses is how do real estate investors build real wealth and freedom without access to millions of dollars in capital? Zack Childress is taking us through the steps that will get us to the answer.

It’s not difficult, but it does require work and study from you to build your own investing business. This is week 18 of the challenge and today you’ll be learning about Setting Up Your Mass Offer System.

A mass offer system gives you deal flow from multiple deal streams… wholesalers and MLS, for instance. Plus, making offers gets you engaged with a seller.

A seller may not accept your initial offer, but if he counters with a higher price, at least you’re talking. And you’ve spent minimal marketing money to get that engagement.

And what do you do after you make a mass offer and get 4 or 5 deals? You follow up on the offers that didn’t turn into a deal. You’ve already made contact, so follow up with these sellers to get additional deals.

Many new investors are afraid to make offers. But, remember, an offer/contract is only binding on you if all contingencies are fulfilled.

Zack recommends using a letter of intent. You can re-listen to the week 5 podcast to refresh your understanding of how to work with letters of intent and contracts.

“We are not in the hope business. We’re in the do business.” So, do take action by making offers to sellers whose properties have been on the market for 90 to 180 days. They are likely to be more than ready to sell.

Watch and learn:

Listen and enjoy:

What’s inside:

  • Learn the benefits of mass offers
  • More offers = more deals = more money
  • Don’t be afraid to make offers; contracts protect you

Mentioned in this episode:

Transcription:

Download episode transcript in PDF format here…

 So, the big question is this, how do aspiring real estate investors like us escape from the rat race and build real wealth and freedom without access to millions of dollars in investment capital and start to live the life that we know we deserve? This is the question and this podcast will give you the answer. My name is Zack Childress and welcome to Real Estate Investing Talk Show.

Let’s talk about digging into a mass offer approach into a market and why that has got benefits to it and why you should be thinking about it. So, here’s what you need to understand. Why do we do it? We do it for deals. We do it for deal flow because let me explain something to you. You gotta have multiple deals streams. We talked about this in the masterclass last night. You got to have multiple deals. You gotta have MLS deals. You got to have wholesale deals coming in from wholesalers. You gotta have direct mail coming in. You got to have online stuff. But when we slow down and we start to look at this like a spider web. This is you in the middle, you’ve got MLS, you got wholesalers, you’ve got online, you’ve got direct mail.

Well, then each one of those opens up to different things, too. For instance, my wholesaler lead flow may open up to where I have six different wholesalers bringing me deals, right? My online lead flow may open up to where I have online leads coming from Craigslist, online leads coming from classifieds, UDL, online leads coming from for sale by owner sites. So, you understand, like it opens up my direct mail. That’s a whole another class I could teach for days on direct mail by itself. But then when you look at them, alas, you have to click on it too and open it up because there’s normal day to day activity which we set up an MLS system to automate lead flow into us. That’s one form. And then obviously making offers on a property.

But on the other side, there’s what we call a mass offer approach, and that’s why we do the mass offer approach. It’s to give us an extra stream of deal flow coming through because so many of you, when you’re doing onesies and twosies, you’re just not making enough offers. And I’ll tell you this, I learned this a long time ago when I first started in this business going on 17 years now. I’ve been a long time. So almost seven to 2008 and 42. I started at 25 and 41. I started at 25, so 16 plus years. So, I’m going on set. I had to like backtrack that minute. Forty-two. Where’d I get that? It seems like 40 past me right back.

The good news is I’ve been doing it over 16 years, which means what? I’m not some fly by night guy that read a book, get a deal in wanting to shoot a bunch of videos on it. I’ve been doing this for a long time and I’ve been teaching people how to do this for over a decade. Yes, a decade. And I’ve taught people from east coast to west coast to Canada and Australia to Czechoslovakia to Africa. We went global man, we went global and sometimes I need to slow down and appreciate that. So, that’s part of that journey – just understanding where we’ve come from. But I learned this a long time ago that I had to get consistent on my offers. I had to get more consistent on my offers because here’s what I know – the more offers (you write this down for me guys, put this on a piece of paper somewhere) equals more deals, which equals more money. More offers equal more deals equals more money.

I’ve been saying that phrase now for over 10 years. And I say it because it’s the truth. And there’s a big difference between lead flow and deal flow. Let me be very clear on that. So, for example, lead flow comes from direct mail, comes from online, and from all different forms. Those are lead flow, deal flow, meaning something that’s actually under contract. So, let’s understand the difference in that. A lead is just a prospect. It’s just somebody we’re talking to a deal is when someone’s actually signed our contract or we have a contract signed, that means that’s the difference. A lead has to be turned into a deal, but understanding how the communication, the research and the negotiation phases, those three phases work take you from a lead to a deal.

So where do we get deals from? Well, really deals come from our MLS lead system and our wholesale lead system. Because the wholesalers bring us deals that have already signed contracts. We get deals from MLS because we’re not in the communication research and negotiate stage because it’s just on them. Unless we make an offer, they accepted. That’s a deal flow. Well to speed up that deal flow on the MLS, you speed up your offers, you just make more offers. We understood that. That was the approach. If I want more deals, then I need to use the MLS in that way. I need to use the MLS in a way as if it was a pond full of fish and instead of sticking one rod in there and catching one fish at a time. I needed to figure out how to put 100 fishing poles in that pond and catch as many fish as I could.

We call it the low-lying fruit. But on other side, some of you are extremely nervous about making offers and I completely understand this. I completely understand. Making offers can be scary. It can be a little nerve wracking and it can be the number one thing I always find from students whenever I talked to a student. I say, look, how many offers are you making? They’re like, well, I haven’t really made one yet. I asked them why. And they always say the same answer. Well, I’m afraid they’re going to accept it.

This is what I do internally. Because I know, if they will get over that fear, they’ll hear this. “Yes.” That’s what I know. I know that without a shadow of a doubt, but people are afraid. I get it. So, when I say to you, we need to have a mass offer approach, man, you guys probably go like crawling doll. But here’s the thing guys, don’t be afraid of a contract. A contract is only binding if the contingencies are met. Do you understand? It’s only binding if the contingencies are met, right? That’s what we have. Contingency clauses and that’s what you have to understand about contracts. They’re not as scary as you think they are. You just need to learn how to use them and to learn what to put in them. You need to learn what to say and what not to say and how to have the right contingencies. So then when you make offers, you have contingency clauses that allow you to get out of the deal if you need to.

But for my new people that are afraid to even do that, that’s why we always teach. – use a LOI, use a letter of intent. Here’s why. Yes, a purchase contract is binding. If, if what, Jill?

The contract is binding, but you have to have a payment.

Well, I didn’t say what makes it by now. It’s only continues its binding if all that’s right. It only stays binding if all contingencies are met. As Jill says, once two parties have signed in, monetary has been exchanged to secure the agreement and terms and everything’s been written now. Absolutely it’s binding, but the little contingency section in there is like the loophole, right? It’s the I’m out. Right? And that’s what you need to understand. That’s what determines whether it continues to stay binding with inside the contingency periods.

So that’s why people are nervous about offering you too long of a contingency period because they want to assure. They want you to figure out if you’re going to stay in or out quickly so that they can go back to the contract being binding so that you go to close and you buy the property from them. But listen, that’s why you use our contracts. Our contracts allow you to have a contingency period up to 30 days with an extension for another 14 business days. Contingency periods. Yeah, it keeps you safe. So, don’t be worried about contracts as much as you need to understand how to use the contract. But if you’re still nervous, use the LOI. I still use an LOI until this day. I use the LOI on mass offer approaches, only because it’s easy. It’s a one-page agreement and you should too, when you deal with the mass offer approach.

Okay, so let’s talk about this. We use the mass offer approach to get the low-lying fruit out of the market. Now, what is mass offers? Well guys, I can send out over 3000 offers in less than three minutes. You right now, you are probably falling off your couch, but you got to hit. I can’t do that myself, right? I have to use technology to do that. But imagine for a moment with me, just imagine for a moment with me. Just imagine. Do you think you’d get one or two or three deals at 3000 offers? We’re not in the hope business, we’re in the do business, and the reality is, yes you will if you’re making those offers to the right types of prospects, right?

So here, write this down. When you’re making mass offers, you want to pull the properties that are on the MLS and you want to pull every property. It’s on the MLS within 90 days or that’s been on there for 90 days. You also want to pull every property that’s on the MLS if it’s been on there longer than 180 days.

Those two numbers are the numbers you go for. Obviously, you got to get an agent to help you with this. You got to find an agent that’s going to be on board with you. You got to find an agent that’s going to want to entertain this idea. Typically, the older, seasoned agents don’t want to do it because they’re afraid it’s going to ruin their reputation. That is something that you know an agent like that probably isn’t investor-friendly because they probably cater to more of the retail, first time home buyer type situation. We’re looking for investor friendly agents, investor agents that understand that this business is a numbers game and the more offers you make, the more you make as an investor in the more they make in commissions. So that’s the targeted agent we’re looking for.

So, let’s say we go and we say, okay, these are the areas that I want to invest in, which is called market segmentation, which we teach at the three-day event. We go market segmentation, we break it down, we identify where we want to be, and then we go to our agent. We say, look, pull me every single property in this market that’s been on the market for 90 days or longer. Also pull me every single property has been on the market for 180 days or longer in these areas. So now, I’ve got the 90 to 180 and I got the 180 and higher.

Now, why would I pull two separate lists, instead of just seeing everybody that’s been on 90 days or longer? Because I’m going to set up two campaigns. Here’s how it’s going to work. I’m going to set up an offer campaign for the 90s and I’m going to set up an offer campaign for the 180s and higher. And why do you think the 180s and higher, am I gonna make the same offer at the same discount to them?

No, I’m not. I may offer on the 90s something higher. I may offer them, I don’t know, 65 percent of ARV or in some cases, I may offer them 75 percent of the listed price. Where on the 180 and higher, let’s say

I’m going to offer 75 percent of the listed price on the 90s and 80s. I’m going to offer them 65 percent of the listed price. Here’s why are some people are going to refuse my offer? Of course, but let me tell you something. The ones that have to sell right now and they know they have the room to sell it or those are the ones that are going to counter us. That’s the purpose of the mass offer system. We’re going to get some out of it, but it’s not always about how many we get out of it, how many actual deals.

It’s about the engagement. Listen to me when I say this. It’s the engagement. I’m just as happy when I do a mass offer approach to the 90s and higher at 65 percent of the list price and they counter me at let’s say 90 percent of the list price. I’m just as happy because now, I skipped all that other marketing. I skipped all the communication phases, I skipped the research phase. I skipped all that. Now I’m right down to negotiations. Now we’re back and forth with contracts. You know, let’s just use 100,000 as an example. I offered him $65,000. They countered me at 90. I countered back in 70. They counter me back in 85. I make sure my numbers are good. I’ll pay you 75, that’s my final offer. Boom. The point is, I’m snatching low lying fruit base on agitation. I know that it’s been on the market for a while. So, you gotta think about that and so what do you gotta do. You gotta line up in agent.

You got to line up an agent, somebody that’s willing to do all that and that could be a little bit of a challenge, couldn’t it? Because when you start thinking about agents and what they’ve had to do to make an offer, let’s say, you pulled 90s and you pull 180s and now let’s say it’s 400 properties. Do you know what an agent’s going to do to write $400 offers? Especially for you guys in California? I mean, Geez, your contract out there’s like 14 pages long. You know, that’s a lot of work. But hey, if an agent gets it, you do it. I mean that’s how I started. Here’s the beauty, they could be looking across the river and see this great life – just beautiful, a nice home, but they don’t know how to swim.

So, they look at this river and they think to themselves, “Oh man, I’m so scared,” but now there’s a boat that will take you across the river. But you got to learn how to do what? You gotta learn how to use the boat, right? There’s a rope that goes across and you could grab the rope and you could swing across and hope that you land, and then there’s somebody over there that’s going to teach you how to swim. This is going to work with you and say, here’s how we get through a river. Here’s how you swim in the river. Here’s how you start in the current. Here’s how you put your feet first, here’s how you weighed to the other side and here’s how you get off the stream, and then you work your way back over. People will look at that and then they’re afraid, they’re afraid of not the destination.

They’re afraid of the journey it takes to get to that destination because it’s the unknown. They haven’t learned it yet. They haven’t figured out the skill sets. And here’s the reality. There’s three different ways to get across the river. You just got to pick one, you gotta pick one and you got to pick one that’s gonna get you there. That’s going to give you the most success over time. Right? And in life we’re always faced with multiple ways to get to the other side, and the other side in our world is what? Financial freedom, right? Yeah. You could go join Amway. You could sell products online, you could do the Amazon drop ship business. There’re all kinds of things, but real estate is the way to go. Real estate is like combining how to swim and the boat altogether. So, if I’m going to do the boat, I’m going to want to learn how to swim too, so I might as well learn both of them because what if the boat tips over?

I need to learn how to swim, right? Why am I going to take the rope? I don’t want to hope. I want to execute a plan that can be taught to me, that will get me across. I have two options. If the boat sinks, I can still swim. So, the fear is overcome in any journey we take when we slow down enough and embrace the idea that we need education, that we need to learn the process to get to the other side of the river. Until then, it will always be fearful. So, one of the things when you’re doing a mass offer approach, you’ve got to be able to justify your offer. Now what does that mean? If I’m just throwing offers out there, then it’s just an offer. But if I throw an offer out there with a cover letter, now I’m in a position to where I’m not just making offers on properties, but I’m actually explaining my offer through the cover letter and it changes the game of mass offer approach because now every offer that goes out goes out with a cover letter on it.

And the cover letter just says, “Dear homeowner, I hope that you review my offer today. My offer was based on the market in itself and what I need to do with the property and whether I’m going to rent it out or I’m going to have to come in and fix it up and resell it. Probably some of the things that you don’t want to do. I’m going to be willing to do that. But that’s going to require me to spend the money on top of what I’m paying you. So, I hope that you’ll take a long, hard look at my offer and let me know if you want to counter. I’m open to suggestions. Thanks, and look forward to talking to you soon.”

So now not only have I just sent an offer, I’ve sent a cover letter on that offer that opens up a door of communication with that seller or even that agent. So, the agent can then explain to the seller, well look, they sent this cover letter and explaining their offer. Would you like me to read it to you? Yeah, sure. Great. Or just send it to me. Okay, here you go. And that’s something else. So yeah, I know what you’re thinking, man. I got to get these offers set up. I got to write these cover letters. If you want to do with the Solo Per Norway, you’ve got to do the work. You’ve got to grind it out guys. Now is there technology out there? Absolutely. Is there systems that we can put? Of course. Yeah, absolutely there is. But you know, sometimes if you want technology, you got to pay for technology. You know, people don’t build technology to give it away for free, you know? And so, if you don’t have the ability to bind technology, then yeah, you’re gonna have to do this.

I say this all the time. Look, we’re not in the hope business. We’re in the do business. That means we got to do every day to get this business going. And listen, is it going to be one of the hardest things you’ll ever do in the beginning? Yes. But is it going to be one of the most rewarding things you ever do? Yes, absolutely. A lot of the stuff that you have to do in the beginning, you don’t typically have to do it over and over again because here’s why the hustle is right in the beginning because you’ve got to create income, you’ve got to create profits quick and early into one to either pay yourself back from anything you invested in your education and yourself and to. To put some money to the side to start hiring some help, to start hiring an assistant and then they start doing all that stuff that you were doing. It’s a build process. You got to get out the gate and you got to shoot and fire and then aim in some cases, right? It’s like being in the dark and you got a wolf run an agile. You just fired.

That was my life when I got to start. But you know, that’s typically what a new investor does. It doesn’t have the resources to go out and get help or get a coach or get technology or get software in their business. They’ve got to be all that. Listen, when I first started, I didn’t have all that. I was the guy sitting there late at night, and all these cover letters. I was the one that was getting with my agent to put all these offers together. I was the one that was taking them back to my office. Yes, back when we used fax machines and stand in front of a fax machine and sending offers out. I was that guy. I was also the guy that went out and looked at all the properties and negotiated all the deals and made all the phone calls and set up all the marketing, and that was me.

I was a solopreneur. Listen, I was such a dedicated solopreneur that even when I was out pumping gas, I would take my “We Buy House” flyer signed to the gas pump. Like I cared a stack of fliers with me everywhere and type. I didn’t care where I was at. If I was going into the bathroom, I take one with me. I’d tape it to the wall. If I was pumping gas at taped to the pump, you didn’t matter where I was. If I parked in a Home Depot parking lot, before I go into Home Depot, I go around the parking lot of stigma stick my fliers on all the door or the car windows. I was dedicated so most people won’t do that. But that’s why I had the success. I had it so quick and so fast every day. You understand every day I was doing something for my business, something every day. You know, we get the people who come in, they get excited and they want to get going and they do something for a couple of weeks and they don’t do anything for a couple of weeks and then they wonder why they got to build it and start back over again.

Because you lost consistency in your approach. You kind of do it every day and look, every day is not that hard to do something. Whether it’s five minutes here, 10 minutes there. Look, I would go and get lunch. I would always go somewhere different to get lunch. Typically, somewhere there was a shopping center and I would go to the shopping center at park my car before I’d go get lunch and I would walk around that shopping center door to door to door with a stack of fliers and tape. I would ask these shop owners, Hey, do you mind if I put a flier in your window for people who need to sell their houses? Maybe and they need somebody to buy it quickly. Oh No, no, no, no. Tape it up there. You buy houses. Yes ma’am. I sure do. Oh well what’s your phone number?

It’s right here. I go to the next one and I always use the first one. I would say, hey look your neighbor, let me put this in their window. And they told me I should come talk to you. Do you mind if it put my flyer in your window guys? I was relentless. You understand? Like I was relentless. I was going to do whatever I had to do to make this business work. So yes, I wrote all those cover letters in the beginning. But you don’t have to. I mean, you can always get technology to do it. If you don’t have the ability to do that, then yeah, these are things you need to do it. Remember, we’re only talking about one aspect of your lead sources right now, which is the MLS. But you got to make sure that you put a cover. You putting a cover letter on there will separate you from everybody else.

The other side of that is, putting a cover on her own it, and when you sign your name, write a PS This is how you make bird dogs out of this. Or also as we call them in the office property locators. Ps, you may not be able to take my offer as is, but I’m a local house buyer. You should be putting this on everything. Ps, you may not be able to take my offer as is, but I’m a local house buyer. So, if you know anybody that needs to sell their property quickly for cash, please let me know. I think about this. If I’m sending out hundreds of offers a month, how many times is somebody read my PS line? How many times is somebody read my PS line and said, oh, I remember this guy. I’m talking to somebody. They need to close quickly, so I’m doing several folds.

One, I’m finding deals. Two, I’m getting deals to negotiate with me, and three. I’m finding people to build a referral-based business with me all because of the cover letter on the offer. But some people won’t do it because they say, what Jill? It’s too much travel. Work trouble, right? It’s too much trouble. So much work. Well. That’s why you’re in this position. You’re in now, a scholar, what it is, right? I mean you’re now in that position because someone years ago, you thought everything else was too much trouble and now you’ve had the eye, the eye opener that either you’re, you’re stuck in a job for 20, 30 years that you probably hate. You’re not living your passion and you have no idea of retirements. Come in and can you even survive on retirement, right? Like that’s a big issue and so now you’re thinking, oh, I better get busy, or you’re the type of person that just came out the gate, right?

You went to college. He did all those things like he was supposed to do. You’ve got this pretty sheet of paper that cost you $80,000 that you stick on the wall and you’re either still trying to find a job or you found one and you’re realize in really quick. That is a long road in that company in hopes that they’re going to keep you that long for retirement and so now you’ve woken up and said, I better take control over my life and that control is obviously real estate and so you know that’s where you get to be creative and you get to have the adventures. But let me take some guys. It ain’t going to happen. If you don’t make offers and the more you make, the more deals you’re going to get, which means the more money you’re going to get. Okay? But let me just help you understand this.

That mess off or approach is only what we call the first approach. Because like if I go into a market and I make $500 offers, well I don’t leave that market because here’s why. Let’s say I make $500 offers and I ended up getting five deals out of that great. Made 50 grand, 100 grand off those deals. Boom. Shacka Lacka. Right? But that means there’s what, $495 more over there that I have the potential to go back after. So, I do the shotgun approach to get the low-lying fruit and then I go back over there and I started the long process, right? Let’s talk to him. Let’s get on the phone with you know, and then you might pick up another three or four or five, right? But the point is, especially if you’re brand new, why not make a shotgun approach? Why not find as many deals as you can, as fast as possible?

Why not do that? And make 20, 30, 40, $50,000. Now you’ve just padded your business to where now you have tons of future growth. You’ve got money for marketing, you got money for an assistant, you got money for yourself, you got money. So that’s why we call the mass off for the first approach. It’s not the end of all is just one approach into the market. Then we’d come back and start our other approaches, you know, making, getting with the agent, going to, looking at the house, maybe you can make more, offer a higher offer on it, running the communication phase, running the research phase, then start the negotiation phase or the counter phases, um, and then building that process up. So, it’s just the first approach. Okay. So, so like I said, the, the mass offer approach is all about the, that’s the first approach into the market, right?

And then from there we come back and we follow up in the market. But guys understand, there is a faster way to do this. Years ago, I created a technology called the automated deal maker and that’s exactly what it is. You load all your properties, you export them out from the MLS, you put them all in there. You don’t even have to put in there. You can put any properties in there. You set up an offer campaign. You tell it when to send the offer out. You tell it how much to make the offer ad on a percentage of the ARV or list price. You pick the contract you want, whether it’s an LOI or a contract, you pick the cover letter, whether you’re trying to get a lease option or just a rental property or just a flip or a commercial or an REO.

You pick it all and then you set it up and you in the system literally even follows up on that offer for you. So, I can tell the system, hey, look, when you make these offers, I want you to follow up on that offer every 14 to 21 days. Now I want you to do that for three more times, so literally it’ll make the offer and then every 14 to 21 days it’ll send the offer out. Again, 14, 21 days will send the offer out again and I can’t even adjust it. I can say every new offer that goes out, raise it by one or two percent. So, the offers a little bit different every time it goes out. That is a magical tool if you want to jump into the market and get the low-lying fruit out. Okay. Now why did that happen?

Because you remember the story I shared. did it because I knew more offers equaled more deals, which made me more money and I ended up hiring eventually two girls and my two ladies, I’ll call them in my office. And here’s the funny part guys, if you’re listening to me right now, I paid them to come in my office Monday through Friday and stand in front of a fax machine and send offers out all day long. That was their whole job. Stand in front of a fax machine and make as many offers as they possibly could. They would just, they’d write the offer, right? The cover letter and fax, right the offer, right to cover letter and fax it. And then that was when my system mind came into place and I was like, man, I could, I could get technology to do this. And, and I was paying $70,000 a year for those two girls now this was in California, right?

It was a high paid faxing job machine. So that’s why we ended up creating the technology just to do it for us. So, I don’t even have to worry about while I sleep. It’s making offers for me when I’m awake. It’s making offers for me while I’m at the kids’ school. It’s making offers for me. It’s an offer machine that’s known as the automated deal maker. Now, if that’s something that you’re interested in, by all regards, pick up the phone and call the office 7072474248 and just talk to somebody, and tell them to say, hey, explain this thing to me a little bit better.

What does it do? How does it work? All is entailed. It’s got all the cover letters. It’s got contracts in there, it’s got follow-up features, you name it. It’s built and designed to do that.

So, you’ve been listening to the Real Estate Investing Talk Show. I’m Zach Childress and I’m on a mission to create 10,000 real estate bosses over the next year. Will you be one of them? Head over to my website, ReisuccessAcademy.com/lab class and register for my free web class where you’ll discover how to escape from the nine to five grind and become your own boss in real estate. See you there.

 

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