Episode #10 – CoronaVirus-Adapt, Survive, & Prepare for Tomorrow
Welcome EarlToms podcast. Today we’re going to unfortunately be doing some more on this Coronavirus. Kind of what what we’ve been seeing and also the fact that we’re all having to adapt, survive, and be prepared for life after. That’s what we’re actually going to call this episode Is Coronavirus-adapt, survive it, and then prepare for what’s coming after. In the last episode we talked about the different phases of what’s going to be coming and that still holds true. The stimulus checks, the payroll protection, those things. They’re all just band aids that are being put on the economy right now to help people and help businesses.
At some point in time, we still have to go back into society. I know a lot of people right now are wondering when this is going to be over. You have a lot of people that have this pent up energy that want to get back to life as normal. Unfortunately, a lot of things air not going to be what we used to think as normal once we come out of this. You’re starting to see that now. If you listen to actually business owners, leaders in the business industry, they’re all predicting that we’re going to have 25 or 50, some even say 100 new companies that show up out of this virus that are going to lead tomorrow’s generation for the future. What you’re looking at right now is not necessarily let’s listen to the guru and say, this is what you need to do. I don’t consider myself a guru. I consider myself a business owner that’s just trying to help others in this industry. I don’t listen to gurus that right now you know, Grant Cardone is kind of taking a beating publicly with the way things are going in his business. You’re seeing people saying they’re getting 100 times more emails every day than they used to this because everyone, including the gurus are suffering right now. They’re all trying to go out there and get new business. But what is the common thread between all of this? Whether it be people, businesses, the economy, families, you name it, it’s panic. If you panic, you go back to the exact same thing that we discussed in the episode called The Fever. You force things. You rush things. You don’t just let him happen as they may.
One aspect of this episode is going to be to prepare, to just remain calm. Tomorrow is still going to show up. The sun is still going to come out. You may be stuck inside because we all are pretty much under a state at home order right now with in our different states. The sun is still going to come up tomorrow. You need to understand that. How you get to tomorrow and your livelihood along with your family’s livelihood is going to depend on what you do right now. You need to understand that everyone, not just you, not businesses, every single person in the United States, whether they’re five years old or 75 years old is on edge. Everyone is trying to figure out when they’re going to be able to go back to some semblance of life as normal. They’re tired of being stuck at home. They don’t want to be stuck at home. Some just want to be able to go back to work or run down the street to the bar, have a beer, and hang out with friends. They want to get that social aspect back in their life. I laugh a lot of times because I’m seeing memes all over Facebook that say, husbands and wives are not saying how lucky they are anymore. I’ve been at home for so long together. You know those people. Those comments are not coming on Facebook anymore. Right now is the time that you really find out what you’re made of, what you’re going to do and how you’re going to survive. You know what’s coming? What we all have to do is remain calm. Get the panic out, the anxiety. If it happens to you, get up, go for a small walk. 5 – 10 minutes, 30 minutes. However long it takes to clear your mind, get the energy out of you, come back and do what you were going to do. By the time you do that, if you take just a little break, your opinion and what you were going to do is likely going to change. You’re going to have that time when you’re walking to just think. Is this the right thing to do? Are you going to second guess yourself? Probably. Right now might actually be the only time that you need to second guess yourself because what you’re doing right now is going to determine what you’re doing tomorrow when that sun comes up. You have to have the mindset that just like you’re on edge right now, so is everyone else. Your approach to everything needs to be everyone is on edge. So how do I relax their anxiety, their panic? What I need to do to convey that message, is that I’m here to help them and get the deals, whether it be getting the sale, getting contracts from the sellers and still being able to get the property sold with your buyers right now.
One thing that I am seeing a lot with buyers is they are already lowering their prices in anticipation of what is to come. Most of your investors are always good at negotiating a lower price. Now they have an excuse. If your investors are going to do it to you, you need to learn to hone your skills of being able to get those prices from those sellers so that you can still pass along a deal to your investors. There’s a couple of different hedge funds that I sell to that are bigger institutional clients. They’re slowing down because the activity is not what it what it was. You take properties now that would have sold, for $100,000. Now they’re actually offered $60,000 to $70,000. What I’ve done with all of my buyers right now is, I’m getting in contact with them and say, Look, we’re all in this together. We’ve got to figure this out. Here’s an address. What are your initial thoughts on it? I’m not guaranteeing you I could get it under contract. I’m trying to learn how you’re going to be approaching certain areas, certain properties so that I could get them under contract for the right price. That way it helps you out so that you’re still able to have business coming in. Even now where I’m at, I have been calling real estate agents because I actually do buy and hold. I will check the MLS from time to time to see if there’s a deal on there. Typically, I don’t buy a lot off of the MLS but right now I am finding a lot of these owners haven’t come to terms with the fact that the prices are going down. You have to adjust to it. It’s almost like a trailing effect. Everyone is kind of still approaching the simple fact of I need money, and if I don’t get what I want, then I’m not selling. Instead of coming to the understanding of hey, tomorrow is going to change, get money in your pocket so that you can be prepared for tomorrow. That’s the biggest obstacle right now that all of us are going to have to overcome. It’s important right now to be able to talk to your buyers to get a feel of how they’re going to be approaching not only today, but say a month, three months in the future. You’re trying to hit a moving target right now. Real estate is always moving, so you have to be able to go with that moving target. If you don’t, you’re going to get left behind. As you’re going with this moving target, like I said in the last episode, you have to alter the way that you’re marketing right now.
One thing that I have noticed that has changed my marketing a little bit. I’ve actually stopped spending as much money every month but still getting more leads now. What I’m doing is sending these postcards now that say, I’ll buy it sight unseen. 99.9% of the time I would never do that because it’s a bad idea to buy something sight unseen. If you’re doing virtual, you’ve got boots on the ground in certain areas, that’s fine. You’re not buying sight unseen because someone, not you, is going out there looking at it. Now a lot of these people say, Okay, I don’t want to risk the possibility of getting infected but I can still put money in my pocket. These mailers, the response rate is almost triple what it usually is because I’m hitting the pain that they have right now. They want money, they need money, but they’re trying to figure out how to get it. So when you address that and what you’re sending out, it helps them understand that, hey, there’s a possibility I can get money. I can provide for myself for my family. We’re all going to be in this together. Let me just make a phone call and see if they actually buy sight unseen. If you don’t get the lead today, that’s fine. You still have their contact information. As I’ve said many, many times, the information is the most important thing that you can have as far as the deal is concerned because not everyone is ready to sell as soon as they contact someone. We’re going to call 10 different investors and get offers. That’s fine. When the property doesn’t sell because you have that information, you have that automation set up, you’re staying in contact with them. When the reality of what’s going on sets in because you’re automation, whether it be an email, a phone call, whatever it is, you have to set it up. You’re staying in the mind of that person. It may take 30 days. It may take 60 days, three months, but you’re staying in front of him. When the reality does set in, you’re the one that’s going to get that deal. It’s important to continue to do your marketing. You need to focus on the people right now that are going to entertain what you’re trying to do because they need money. They don’t want to catch the virus. That’s one way that you can do it right now. We’ll send these mailers out to buy sight unseen. You can even mention the Coronavirus in your mailer. You’re addressing the pain that they’re going through and giving them a solution to the current event the world is facing right now.
Another thing that I’ve seen that’s kind of increased is Google. I think last week I had 15 calls from search results. If you’re not doing SEO, or you haven’t done the Google My Business, that’s something that you need to look into. Google My Business is free. You have to learn or either hire somebody to do the do the SEO for you. That takes a little time. A lot of these companies can rank your website but it’s not going to be an overnight ranking. If you’re looking forward saying, Hey, in three months, when the prices actually start bottoming, they start going down and people really start getting out needing money because they lost their jobs or their falling behind on their bills – their mortgage is late, whatever is going on in their life in a couple of months. If you go ahead and do that now, you’re going to have a better chance of being found at that time. You could do the GMB for free. You’re going to need to pay somebody or learn how to do theSEO job yourself. That’s one thing that’s going to happen that comes out of this. People are still going to be weary about being around each other. I don’t know how long. It may be a month. It maybe two years. Nobody is sure right now. If anybody tells you they are sure you need to stop listening to them because they don’t know. You have to focus your marketing on social distancing right now while providing a solution. Cold calling could be a perfect example. Have your VAs say, we’ll buy sight unseen. You don’t have to be there. We’ll make you an offer. Don’t get comfortable with that but right now people just need money. They need a solution to their problems. They’re likely to take an offer that they wouldn’t take under normal circumstances. They always say, if your first offer isn’t insulting, you didn’t make the right offer. You have to get to the point to where you understand what a borderline insulting offer is. We’ll still negotiate with you so you can get that deal. Make sure when you’re stuck at home that you’re actually taking the time to educate yourself on your market and how to determine value. You’re absorbing everything you possibly can right now because what you have now that you typically don’t have is time. How are you using that time?
One thing that I found that is free because it’s already paid for is I’m going back through all of my old leads. I might have been some thousands of dollars away before of being able to get that get that deal. Now I’ve got people actually entertaining what I’m offering. They’re entertaining offers that are even less because my job is to provide a solution to a seller and get the property sold to a buyer. If my buyers are reducing their prices, I don’t have a choice but to reduce it to the sellers. It’s how you explain it to them when you talk to them. You already have their information and right now is the perfect time to call them and say, Hey, I know we couldn’t come to an agreement before, but what about now? You know you’re at home, you’re not working. If they’re essential, they are still working but right now the biggest thing that everyone has is panic about what is to come. Let them force the situation while you remain calm. If you do that, you’ll wind up getting these deals that you didn’t get two weeks ago, three months ago. Now it’s a different circumstance. You just have to learn how to present the circumstance and the solution in the way of today’s time. Make sure you mention this virus. Make sure you mention if you’re meeting someone out there that you’re going to wear gloves, You’re going to wear a mask and not going to get close to them. You’re going to spend the least amount of time in their house without a lot of conversation. You’ll be more than glad to have any kind of conversation that’s needed over the phone or email. Whatever you need to do right now to reassure that seller that you have their best interest in mind to keep them from getting sick. You can still get deals under contract and in turn, get them sold to your buyers.
So you really have to be agile with what you’re doing because every single person that you talk to right now is going to give you a different reaction than the normal reactions that you’re used to. The panic. The anxiety is what’s creating that? It’s not you. Stop taking it personal if you are, Everyone is in the same mental state as you are right now. What is tomorrow going to bring? When can I get back outside to breathe the fresh air, look at the sun, and enjoy the weather that we’re having right now. This is the time of year where it typically warms up. People start getting out and move around a lot more. Right now they’re having to stay inside. It is causing that anxiety. You have to get your mind in that mentality. When you’re talking to someone, they are in the exact same mental state that you are right now. You want to be able to still do your job. Since real estate is deemed essential you’re still able to do it. You’re still able to drive around, go look at houses, meet with contractors, meet with buyers, while they’re not able. Your anxiety is not near as high as theirs is. You may have the same exact anxiety about paying your bills next month. They have that as well. The way that you pay your bills right now is to understand the pain that they’re going through is the same pain that you are right now. They have the same anxiety of what’s coming in the future, You have to approach it that way. Now you know one thing that I’m doing right now. I’ve always done it but I’m kind of more focused on it right now. I tell people, this is what I can pay today for it. I would hope that you would go ahead and do it because tomorrow or next month we may be in a completely different scenario. Once all of these things start being realized, once this band aid of the stimulus and paycheck protection being used as a band-aid gets ripped off we have to go back to normal life. What’s going to wind up happening? I point out in the last couple of days, what I think is J. P. Morgan, that has decided if you don’t have a 700 credit score and you can’t put 20% down, then they’re not going to finance your house when you buy. Well, that’s misleading it in its own right, because if it’s an insured loans, we’re still going to have the same process. On the backside of that, I don’t remember if it’s PennyMac, FreddieMac, whoever it is, they’ve already said that if someone goes into forbearance with their mortgage after 15 days, they’re going to make that mortgage company buy the loan back. You’re going to wind up seeing a lot of these smaller loan companies go out of business because they can’t afford to buy a loan back. They stay in business with the volume and rolling it over instead of actually having the capital to just say, I have $100 million so I’m going to buy every loan. You’re going to see a retraction with every title company, every attorney that you’re talking to right now. Something that I used to see when I was appraising is the time right after Christmas – January, February, March was the refinance season. April really started the home buying season for everyone. They’ve seen the refinance go through the roof compared to previous years. The purchases have basically fallen off a cliff. I’ve talked to five or six of them in my market and every one of them has agreed that the refinances have skyrocketed while the purchases have fallen off the cliff compared to year over year data that they have in their own office. They’re all still surviving because this is their refinance season where they didn’t really have a lot of home purchases. They’re also looking at it in a way of when everyone gets finished paying for Christmas by refinancing their houses, what’s going to happen come April, May, June, July, and August during the real estate season. They’re all trying to prepare for that. If your attorney and your title companies are trying to prepare for that, then you should be doing it as well. If you’re not, you’re about to get left behind. It’s going to be the investors that are going to be the people that saved this economy right now. If we all do it the right way and we prepare, we don’t force these deals, we don’t get that fever because the foreclosures are coming. If mortgage companies have to buy a loan back and they’re not able to the people that lost their jobs and aren’t getting hired back – they have to go find another job, the foreclosures are coming. Who is going to be there waiting to get them? Wall Street and investors to turn around and rent them out. We all know you have the 5% investor rule. You have 90 days now to be able to sell it for more than 5%. The rental market is going to be what’s coming. You’ve already got a generation that prefers to rent but now, what you’re not paying attention to is all of these parents for that generation. They laugh because you’ve got 30, 40 year olds that are still living at home with their parents. Now their parents have lost their jobs or their retirement. They took a large hit with their 401k, Their parents can’t afford to actually provide for their kids anymore. It’s going to trickle down and it’s going to hurt when it shows up in the economy.
Your investors will be the saving grace if there is one for real estate in the next year. Wall Street funds are being created every single day right now because they know they are about to be able to buy at prices that we haven’t been able to buy since 2009, if not even lower than 2009. They’re all about to get into the real estate industry. They’re going to rent their houses. You have certain funds out there that don’t know what they’re doing, You’ve also got certain funds out there that are very, very organized and they know the markets they’re in. They know what they need to be doing. They’re analyzing it every single day. In order for you to benefit from this, you have to stay up to date too. That comes back to getting that education right now. What I would say do is spend an hour every day, whether you’re looking at different articles about what the market’s doing, looking at different articles online about finding value, taking a a real estate agent course or real estate appraisal course online – something right now to give you more knowledge coming out of this than you had before. You also need to be able to understand where your marketing dollars need to be spent. You could be more effective, spending less money, and getting more leads. The leads are not necessarily going to close today but it gives you that information so that tomorrow or in three months when that person becomes really desperate after the Band Aid has been ripped off and they haven’t recovered. You have that information and you have that lead. You need to actually start putting your processes in place because you have time. You need to figure out what CRM works for you. Do you still want to pay $100 a month for investorcarrot or is now the time you get on upwork or some other website like that and say, create my website because these monthly bills are what’s keeping me from being successful. Every time I get a deal closed, if I’ve got five or $10,000, by the time I pay all these different services and still market, I’m pretty well left with nothing. These monthly bills are almost like your interest. If you don’t pay your interest first, you’re always going to be in debt. It’s the same way with monthly bills. The more you have to spend every single month just to keep your business open and keep a roof over your head, the harder it’s going to be for you to be successful. Figure out your process, figure out your automation. Like I’ve said before that we’ve got something on EarlToms.com about the automations. The emails go out every 15, 30, 45 days. We’re staying in front of these people. During this, we even sent out a email to all the contacts that we have. We’re still calling them, but we’ve sent out an email to all the contacts that we’ve had over the years. We’re asking, Hey, we’re still here to provide help if you need it. Do you still own the house? Would you be interested in selling it now? We’re getting a good response from the emails and calling the old leads. Those are already paid for. It’s not increasing our monthly spend so we’re able to actually tighten and keep more money.
Once this goes away and we return to some semblance of normal, we’re going to be prepared because we were able to survive financially. This whole virus, it’s not a this is going to be over in two weeks. I promise you, in three months, if you prepare right now the way that you were supposed to in three months, it is going to be a free for all for wholesalers. You’re going to see countless people that need money and you’re going to have countless investors that have been sitting on the sidelines. They’re going to buy everything they can. They’re going to start buying everything that they can get their hands on because the prices are going to be lower. Instead of them only being able to buy one house now they can buy two with the same money. Whatever winds up happening in your market, a retraction in the values is coming. Make sure whatever you’re doing right now, you focus more on getting the information and the leads for today and tomorrow so that you can have them when the market actually pops. It may be six months from now, maybe three, maybe one. The market is going to pop and people are going to need help. If you’re prepared for it, then you’re going to come out of this a whole lot better financially than you were when you went in it. Make sure that you’re adapting to the market, to the conditions so you’re able to survive and that you were preparing for life after. If you don’t do those three things right now, you’re not going to be in a financial position that you need to be to be able to stay in this business.
We’re going to lose a lot of wholesalers in this business. We’re going to lose a lot of real estate agents. We’re going to lose a lot of investors. You’re going to have the cream of the crop, the ones that were able to adapt, survive and prepare. You’re going to have that cream of the crop, every single one of them – the wholesalers, agents, investors, everyone. They’re gonna rise. They’re going to make money hand over fist because they did what was necessary instead of going about this willy nilly putting everything they come in contact with under contract using a formula. If you’re using a formula, you are about to lose a lot of money because you’re going to waste every single dollar that you’re spending on marketing a formula right now doesn’t work. If you’re using a formula, you’re basing the formula on pre Coronavirus. The virus changed all of that. You need to get your education and figure out where the retraction is coming from, how fast it’s coming, and where it may bottom out. Who are the ones that are most in need? What other properties that are going to be the easiest to get your hands on, get under contract and get sold? Focus on that right now. If there has ever been a time to find a niche, it is right now. Once you find that niche, that’s your foundation. Once you have your foundation and we come out of this now you can put the bricks and sticks on the house. If you’re throwing everything out there hoping you’re going to get a deal closed, you have three little pigs and the wolf about to blow the house down. Don’t be that person. Build your foundation. Find your niche so that you can adapt, survive and prepare for what’s coming after the virus.
We hope that you’ve enjoyed this. We’ve kind of gone on a rant for a little while. It’s important right now to understand that these are unprecedented times no one saw coming. We have to figure out how to survive. In order to survive it, we have to adapt to what’s going on in current conditions. We also have to have the foresight to understand when we come out of it, things are going to change. We have to figure out the automation process. Is the new technology what’s going to work today, tomorrow, or in the next two years? It’s not going to be exactly the same as what it was two months ago. If you could do that, you will set yourself up for a financial windfall.
Going forward with that, we’re going to bring it to a close. We hope you enjoyed the rant and the information that we’ve shared with you today. Like I said, there’s plenty of things on EarlToms.com to help you with the processes, the SEO, the automation, and the technology. We welcome you to go over to EarlToms.com and browse around to see what you can find that may work for you. See what could be cost effective and still get you leads. If you weren’t doing anything else, make sure that you put it in your mind right now is the time to adapt, survive, and prepare for tomorrow. Do that and you will be successful. If you don’t do it, you might as well walk away from this business right now with the money that you still have. Unfortunately, you won’t be in this business anymore. You won’t necessarily have a higher risk of losing your house or anything like that, because it’s important to know tomorrow will change. Again, thank you for listening to this episode. We hope you can figure it out and are able to do what we’ve we’ve told you. The goal of all this is to make sure that we do keep a lot of people in this business so that we can actually help the economy when it’s needed and help these sellers have a solution to their financial issues that are here today and that are going to be coming.
We’ll be back with another episode hopefully not Coronavirus related because we really want to get back to real estate in general with evaluations and things that you can do as far as, talking to sellers, get buyers, and the business in general. Instead of all these problems that are running around right now that none of us wish that we had. Run over to EarlToms.com. We hope that you’re able to keep your doors open. We’re here to try to help you keep your doors open, be financially successful for you and your family. Until next time. Thank you for listening.