The Titanium Vault hosted by RJ Bates III

Scott Bower: Keys to Consistent Success

December 05, 2019 Scott Bower Episode 102
The Titanium Vault hosted by RJ Bates III
Scott Bower: Keys to Consistent Success
The Titanium Vault hosted by RJ Bates III
Scott Bower: Keys to Consistent Success
Dec 05, 2019 Episode 102
Scott Bower

Scott Bower is the founder of HBSB Holdings in Phoenix, Arizona and the host of the INVESTTHIS Podcast. In this interview RJ and Scott break downs the keys to consistent success as a real estate investor. They also cover how Scott is revamping the INVESTTHIS Podcast. 2020 is going to be an expansive year for INVESTTHIS! Scott and his team are working hard behind the scenes, lining up top guests, expanding content, and focusing on advancing his listener's wealth mindset to new heights. So, mark January 9th on your calendar for INVESTTHIS 2.0's first interview. Also, Scott covers his current mission for raising $5,000 for The Midwest Food Bank. The Midwest Food Bank currently distributes over $18.5 million worth of food to over 1,700 non-profits each month. They stand ready for disaster relief efforts and can get food-filled relief boxes to those in need, within 24 hours. Thanks to the generosity of their donors, and the valuable work of their volunteers, The Midwest Food Bank has provided millions in food and disaster relief for over 16 years. Scott is dedicated to raising $5,000 this holiday season, which he will match, donating $10,000 for those who truly need it. **Most importantly they will be volunteering on December 14th from 9-12am and would love anyone and everyone to join them!**

Show Notes Transcript

Scott Bower is the founder of HBSB Holdings in Phoenix, Arizona and the host of the INVESTTHIS Podcast. In this interview RJ and Scott break downs the keys to consistent success as a real estate investor. They also cover how Scott is revamping the INVESTTHIS Podcast. 2020 is going to be an expansive year for INVESTTHIS! Scott and his team are working hard behind the scenes, lining up top guests, expanding content, and focusing on advancing his listener's wealth mindset to new heights. So, mark January 9th on your calendar for INVESTTHIS 2.0's first interview. Also, Scott covers his current mission for raising $5,000 for The Midwest Food Bank. The Midwest Food Bank currently distributes over $18.5 million worth of food to over 1,700 non-profits each month. They stand ready for disaster relief efforts and can get food-filled relief boxes to those in need, within 24 hours. Thanks to the generosity of their donors, and the valuable work of their volunteers, The Midwest Food Bank has provided millions in food and disaster relief for over 16 years. Scott is dedicated to raising $5,000 this holiday season, which he will match, donating $10,000 for those who truly need it. **Most importantly they will be volunteering on December 14th from 9-12am and would love anyone and everyone to join them!**

spk_0:   0:01
It's not real estate investors, entrepreneurs and agents. You're in the right place. Unlocking the secrets to real estate investing in entrepreneurship. Welcome to the Times Young vaults hosted by R. J. Bates The third years. Hey, guys, Welcome to the titanium vault. I'm your host, R. J. Bates. Today I'm sitting down with my good buddy, Scott Bauer. How you doing, man?

spk_1:   0:32
I am just phenomenal man percent. You invite me to be here. Happy to be here today.

spk_0:   0:37
Yeah, this is long overdue. I was a guest on your podcast. The hashtag invest this podcast a long time ago. I think it was like a year, year and 1/2 ago. And so this is this has been long overdue to get you on the show and be a guess. So for the people that don't know who you are having listened to your podcast quickly, can I introduce yourself and tell us what you do in real estate?

spk_1:   0:59
Yeah, definitely. So. Money. Scott Bauer. I'm here in the Phoenix Arizona market. Uh, run. I run a cop. HBs be holdings toe holding company. That primarily wholesales fixing flips has a random portfolio. Ah, we do some singer multi family syndications. And, um, and I have the investors podcast so out there trying to provide value for people.

spk_0:   1:24
So let's talk about your company real quick, and then we'll circle back around in the podcast. Eso you do a little bit of everything which is similar to what we do. Um, what would you say is the vast majority of your businesses that wholesaling flips, rentals? What does it look like?

spk_1:   1:39
Yeah, so it all really stands from wholesale. So really, it's a marketing play 1st 1st and foremost for sending out marketing. We're getting opportunities put in front of us. And then at that point, I'm trying to figure out what is the best approach. Is it a wholesale? You know, because that's quick money allows. We're really we're solving two problems. We're solving a problem for a cellar that has, ah problem property that they need to sell quickly. And we're solving a problem for an investor that needs an off market discounted property and when otherwise, find without me, right? Right, though, uh, first and foremost, we're going to see if the wholesale opportunity, if it's not, it's actually better as a fix and flip then you know what? We're going to go down that route, but there's a lot of other creative ways you can go about it, right? So not every deal could be, ah, wholesale deal. We can always buy it at a wholesale price. So is it possible toe? So if I have the seller finance it for us, can we create a rap note out of out of the deal and use that as long term cash flow and wealth building for myself in the company? Um, you know, we're just looking at every different approach that we can to make sure we maximize every deal.

spk_0:   2:40
So let's talk about that real quick when your say when you're a TTE the appointment or you're analyzing the deal and you're trying to decide Hey, what's the best play here? At what point time are you making the decision on Hey, maybe we should offer seller financing or, you know, hey, we wanna try to make a subject to offer or something along those lines on more creative side. When do you When do you all make that decision within your company?

spk_1:   3:09
So it really comes down to very forefront of talking with a cellar because is at the end of the day has nothing to do with me, or my company is buying this asset. It has everything to do with cellar and what is going on for them. What is their reasoning behind why they picked up the phone and called or responded to our online ad or, you know, talk to a cold call. Whatever it is, why did they do that? Right. So within that fact finding, we can find out a lot of things. Do they have a mortgage? What? The payment is with term limits, You know, that can maybe see if that's an option. We kind of have the only free and clear. You know. Would they would they entertain carrying paper or being the bank for us? You know, and through this fact finding it kind of starts to eliminate. Opportunities are different, um, possibilities for us, Right? Because you know, if if they only house free and clear, but they know they need to sell today, they don't want to carry the paper. Um, that eliminates some of the different exit strategies for us. So a lot of that comes from the very beginning.

spk_0:   4:09
So let's you know, I think the answer that you gave it I'm not picking on you when I say this, I guess Podcast host, You and I both experiences frequently, like the people that do multiple strategies. Would they talk about? Okay, I hold. So I fled by my rental. So because they have those air like that, the top three main ones, right? And then they say I analyze those deals and I make the best decision for my company for you and I because we both our podcast does. And we both do that within our companies. I want to dive into that a little bit and try toe, hopefully help people that are struggling with that within their companies. Like, how do we make those decisions on, like, more specifically? If say, you decide you're gonna buy it, how do you decide if it's gonna be a flip or rental By what? What is the deciding factor for you in your company and between those two strategies?

spk_1:   5:01
So this is a great time. I'm buying two condos right now. Um, there in the center, central part of phoenix, their condos and buying one. It's a one bedroom condo for $70,000 buying a two bedroom condo literally right above it for $77,000. Now the one bedroom can rent for 8 59 58 months is the rental rate. The two bedroom can rent for 9 52 10 50 of month, Right? So at 70 and 77,000 those air great cooperates. If I'm gonna put a renter in there, that's a great opportunity. But even a better opportunity would be if I could create a note out of that and actually Seller finance it to attendant buyer or somebody that's going to go in and actually, you know, buy the property from me and I would become the bank. And the reason why I look at it that way is I'm taking the properties down on buying them initially with private money. Now, my private money costs is not low enough for, like, a long term hold. But it is for the short term. I could probably hold onto it for a year with the private money and yeah, it's gonna cost me a little money, but you know, it's not. I'm not paying 18% interest on, right? So when I'm looking at that deal of like Okay, do I wanna flip that order? I want to make it a rental. It really looks good from a rental standpoint, because worst case scenarios. I just put a rental in there. I go to a bank. I do long term financing and refinance out of the private money in the long term financing. And I have a renter in there. I have a good cooperate because of my cost basis. Originally, when I buy the asset and what I could rent it for, So that's that's really the safest approach. If I want to try to diversify my own portfolio and say, I want to create a note out of it Well, now I have more opportunity, right? Creating notes I don't know. It might be a bit of advanced. I don't know for some, that

spk_0:   6:45
man, we talked about it all the time. I love I will so find the owner financing. So let's let's talk about it.

spk_1:   6:51
All right? So let's say, um, properties. Ah, let's use the one bedroom, for example. I'm buying for 70,000. It's worth 100 and 10 if it's fixed up. That's the RV on the deal. Okay, so I'm buying it with 10% private money, no points, just 10% straight. It's straight across the board. No points. All of my payments are due, and they're do, uh when I sell the onset, so get there. Differed. So by the property for 70,000 10% interest. Right? And I go and I say I find a tenant buyer somebody wants to buy in that, or there would be interested in buying it. And I'm gonna get 24 20 to 25% down for down payment from that person. I'm gonna sell them that asset at the market value, so I'm gonna sell it to him at $110,000. That means that they're going to give me 20 to $25,000 down to maybe $30,000 down, and then I'm gonna create a note out of it now. That no, because they're a penalty box type buyer. They're gonna charge a little bit more. I'm gonna be able to charge him a little bit more interest in a bank would. So right now you go get bank financing at 44 and 1/2 you know, 5% interest for these long term loans. So maybe I charge them 6% interest. Okay, I'm gonna make a spread on the difference between what I pay. Well, I guess I should back up. I'm gonna have to refinance my original underlying debt. Okay, That's either gonna be through a traditional bank where I'm gonna get that 44 and 1/2 percent money, or I'm gonna go to another lender that I have in my pocket. That is a long term lender that make maybe they'll give it to me at four or 5%. You know, I do have a couple of those, right? So then I would make an arbitrage on the difference in payment every month. Um, and then and the way the amortization works you You know, you pay a lot more interest up front, and as the lone goes on overtime, you reduce that interest payment and more goes towards principle. So let's say the average person. If I'm gonna give them a 30 year note, the tenant buyer I'm gonna put in the property, I'm gonna give him a 30 year alone, right majority people pay those off, like 77 to 10 years, right? They're gonna go and they're gonna refinance it, or they're gonna sell it or whatever. If they do that in the seven year timeframe that I'm gonna get a pretty good payday because of how the amortization schedule is paid. Right, though that's really probably the most profitable way to do it. Now what? You'd give up when you if you want a cellar, finance it. And am I going too fast and too crazy you going? You're good. All right. So if I was to cellar, finance the property and not keep it as a rental, then I give up a couple of things. What I give up is, um I give up the depreciation off the asset, which really, if you look at it in the long term and the long run is not really you're not really giving up anything because what we know about depreciation is if you sell that asset, you have a thing called depreciation recapture. We're gonna have to recapture that at the highest rate possible. When you go sell it. Okay? You're not really recapturing it or you're not. You're not saving that money in the long run. You just are in the short term, right? Right. Um but what I gain out of that is so these two condos, they both have H always an angel weighs $225 a month. If I sell it, I don't have to. I no longer am responsible for taxes and to pay for insurance of pay for H away. So these air, too? I mean, that's probably another three or $400 maybe even $500 a month, that I'm gonna avoid having to pay out of my pocket for these assets

spk_0:   10:29
as well as maintenance. Any vacancy. If you've ever been a landlord, will you understand? Is vacancy. It's always going to come up, and it's always gonna be at minimum one month. I mean, there's no way that you can move someone out, get it cleaned up, find someone else to come in. It's a minimum of one month. And when you look at the cash flow on that, that is like crippling toe what it does to you. If you're only making a couple of $100 a month anyways, especially if they turn over and leave after one year. That's the worst thing that could happen. And so you're removing that as well. And also capital expenditures. I know you're kind of in a market that, you know, you don't have some of the craziness, but you all do have hell storms there. But you should have insurance. You got the crazy, huh? Boobs out there sometimes, you know, But, you know, sometimes capital expenditures A C units are huge out there, you know, because you live in the desert 110 120 degrees. So you have to have a C units. And the only knows is the landlord. You know, you're removing that expense. Also, that when you really look at it I gave I have to go replace an A C unit for just call it $3500. May think about how many months you have to own the property to capture that $3500. So, yeah, the owner finances as a powerful strategy to remove some of those concerns. Now, another thing. That and I think this is funny to be Your second point you brought up was people always talk about, but I'm gonna lose the right to capture appreciation as well on owning the property. I personally I will never, ever in my company count on appreciation for anything. It's just not a concern of mine. It's a It's a bonus if it actually happens. So that's why I have no problem. Owner financing. You know, we've done it a lot with our rental properties, and another thing that you can do is you can actually have both of these. You can have a property for a rental and convert your tenant into your buyer after those first couple of years. We've done that, and that's a beautiful scenario where it's their your tenant for two years, and then you go to them and say, Hey, um, your lease is coming up in a couple of months. Would you be interested in buying this house? I mean, you've lived here for 24 months, Don't you want it to become your home? And you know, well, the reason why we ran is because we don't have good credit. I don't care about your credit. I'll become the bank if you could just, you know, somehow raise X amount of dollars for a down payment. I'll become the bank and you could become a homeowner. And suddenly you become a savior to your

spk_1:   13:16
tenants, you

spk_0:   13:17
know. So it's a beautiful scenario, man. It's one of my favorite strategy. So I'm glad you brought that up. So

spk_1:   13:23
yeah, it's It's, it's It's huge, man. And to be honest, when you're talking about appreciation, it's just like the past in the future. The past is no longer here anymore. It will never come back. And so therefore, you should basically forget about it because it's not. It's not ever coming back for the future on the same. The same thing is we don't know what's gonna happen tomorrow. Help! We could both be dead tomorrow for all we know, right? So you don't know what's gonna happen. So don't count on the Either we need to live in Is that today what is today look like? You know how to maximize today. Of course, you got a plan for the future a little bit, but you don't know. So

spk_0:   13:58
let's talk about your flips. Are you mainly buying houses and and trying to convert them into either a rental or owner finance or you still doing the traditional flips. Where you just some of them on the retail market.

spk_1:   14:11
Eso actually probably 95% of what we do is still in the wholesale in the wholesale market. On the deals where we aren't able to wholesale him, they're not gonna be a good rental, and they don't. I'm not doing full flips right now. We're not doing full got got remodels on putting back on the retail market because of where we're at in the market cycle. I don't want to expose myself to that right now. And so what we're doing, if we're gonna be flipping, we're gonna do easy, easy remodels, maybe going in there, putting new cabinets and maybe do it some flooring, maybe, you know, removing popcorn and making an old house look a little bit newer course paint. But nothing major, we're not moving. Walls were not adding square footage. That's just not what I'm doing.

spk_0:   14:54
Well, you're a wise man. I think the where we are right now, like you said in the markets, I go on specifically your market. Phoenix, Arizona. It's scary times out there, you know? I mean, it is that's some crazy, wild, Wild West stuff that's going on out there. I mean, people are buying stuff that stupid prices, and it just doesn't really make a whole lot of sense to me because that was one of the markets that was heavily impacted back in 08 No. Nine. And it's as if everyone just forgot that that happened and that the possibility of that happening is is still there. You would think that would be one of the markets that is more conservative, but it's almost like because it was hit so hard and because for so long there was this great opportunity there that it's been forgotten about and for lack of a better way of putting it. I think it also has to play. The part of y'all are like Phoenix. Arizona is like the Guru Central out there. I feel like everybody out there has, like, some kind of education program and and I'm not saying anything bad. I think some of my best friends and people that I looked up to you in this business are out there, but, um isn't It's an interesting market for sure, and so I think you're being very wise and majority your business being on the wholesale inside and focusing on Hey, there's people out there that are willing to pay for this. Um, when you do your marketing in a hot market like this, are you a specific, too a type of property or a price point that you're going after, or you kind of buckshot going after anything that can come your way?

spk_1:   16:38
No, no, we're really very, very specific. So what I did was actually building at Avatar back at beginning of this year. 2019. I built an avatar for the last two years of purchases I bought of exactly the property and the person that I was buying from. So what that allowed me to do is just say and what I was selling to, because it doesn't do you any good to buy property, even if it's a great deal. But if you have nobody to sell it to and you're not gonna take it down and flip yourself, what's the point? You're just wasting time, money and energy, right? So we built the Avatar, and now that's what we go after. Now it's a pretty wide net because Maricopa County of Phoenix eyes the Phoenix mm essay all around it, um, is big. You mean, we got plenty households to go after, right? And so we drop anywhere. 25 to 30,000 mail pieces a month, um, that are targeted, and then also cold calling also, uh, Google AdWords paper click. Um, doing some r v m and some email campaigns as well.

spk_0:   17:41
So let's talk about the direct mail because you're in a very hot market. And direct mail can really be difficult in a hot market if you're if you're not good at it, you know? I mean, so what do you think are some of the best tips that you give the people that want to try direct mail in a hot market that can make it successful?

spk_1:   18:06
Uh, first and hands down. If you want to be successful. Consistency is your is your best friend. No matter what. And I mean, no matter what, you send that marketing every month whether you have money to do it or not, you find the money to send the marketing because, um, you know, direct mail is one of those things that you know. You're gonna send it out today. You might not feel that for another month. Two months. It might be a year before you get a phone call, but somebody's getting. If you have a good I guess it's another part. You have to have a good, solid marketing letter. Um, that is not It doesn't look sleazy. Doesn't look cheap. My letters very professional. It's very to the point where there's no hidden secrets. It doesn't look like, you know, we're hiding anything. Um, you know, we make reference to being better Business bureau rated, make sure that they know where they could go. Take a look at us and consistency. I mean, I go back to that. So I've been sending here in Phoenix for 56 years. I guess every single month, every month I've sent 25 30,000 mail pieces every month. How many's doesn't. How

spk_0:   19:12
often are you changing the list that you're hitting? I think that's so is the consistency is important, right? And and I think I would agree with you wholeheartedly. That is the most important part of any form of marketing, but specifically with the right male. But how often are you saying OK, we've hit that list enough times. We're going to change. Or do you ever do that?

spk_1:   19:35
Yeah. So work every month were adding to the existing unless, but we're changing the entire list every quarter. Okay, so there's also two variations of the list. We have a non distress list and in distress list, and they're going together. They're they're going out together, but they're also going out in a different time, if that makes sense. So within that, within the quarter time period there, everybody's going to get hit multiple times, both on the distress list and non distress list, because they have to kind of overlap. And we're gonna send him out every every month. They're dropping every week. Rather right there, just breaking up in two months at a time.

spk_0:   20:15
And when you're seeing out the direct mail, are you wanting them to call you?

spk_1:   20:20
Yep. Yep.

spk_0:   20:21
And then when I may call you, how do you handle in the lead intake? Is it you're trying to close on the phone right then and there. Where? Your scheduling an appointment.

spk_1:   20:31
So the leads are leads. Manager here takes all the incoming calls. Um, either that or acquisitions will sometimes as well, but take the incoming call. First, we're really just understanding why they took the, you know, the initiative to pick up the phone call. Because if you think about it, direct mail, especially somebody got, you know, when was the last time you went to your mailbox? You open it up. You went out there, you grabbed a piece of mail, you looked at it, you opened it, read the letter and then pick up the phone and called right. There was some sort of motivation of some sort for you to do that because I could tell you the majority. My mail goes from the mailbox to the trash, right? And that's for most people. So there was a motivation there. So I want to try to understand. Why did they pick up that phone and call once we know even a little bit of that boom set the appointment and the reason we want to set that appointment right away is because let's say we set the appointment for later today. Or let's say we set it for tomorrow. As soon as we get off that phone, two things have happened. Number one, that cellar has already committed to themselves. They have somebody coming over to their house. And so let's say somebody else calls it with the same similar type of message. They say, Well, sure, you can come, but I already have somebody else coming first. Okay, it's about you. You know that opportunity to get in the door, right? Second thing is now you bought yourself a little bit of time because once you hang up the phone, you can actually look up. Let's say you don't get a whole lot of information on the call and you don't know anything about property. Really, you can look up the property. There's a lot of information. We get online so you can look up property, the ownership status. You can see how long they boned it. You can see old MLS photos or current MLS photos or whatever it is. You can see a lot of that online, and then you could make your distinction at that point. If you need to call that cellar back and say, Hey, you know, we took a little bit of a look online, You know, you just bought this house last year. There's really no equity. Whatever it is, you can cancel the appointment. You can change the appointment. I mean, at that point, you're controlling what? What? The outcome is there. So

spk_0:   22:27
that's one of the biggest, I guess one of the biggest things I have foot flopped as the owner of my company has been. Do I want to set an appointment, or do I want to try to buy the house over the phone? And the reason why is because there's times where we've been successful doing both and and it's like there's nothing worse than when I tried to sell the how or when I tried to buy the house over the phone and I get to the moment and it's like, Okay, I got him. I sold like they're they're sold, they're going, They're going to sell the house to me And then they say, Yeah, but I can't sign a contract right now because I'm meeting with this guy Scott tomorrow it too. And it's like because now I shot my shot, right? It's over. I can't be like, Oh, well, let me come tomorrow at 2 30 You know, they're kind of like No, you already told me your offer. We're good, right? But then There's also times where I've said, Hey, let me come to the house tomorrow at two o'clock and then I get to call in 12 and they're like, Hey, Scott called me yesterday and he bought my house and it's I Oh man, Like I could have tried. So I've always gone back and forth. So have you ever tried t close on the phone or you have you always just been dead set on were scheduled appointment.

spk_1:   23:52
So for the longest time and I still run on a lot of appointments because it's what I enjoy the dio. Yep, really, d'oh! Um And so I've tried to buy over the phone and I always just come back to Well, I need to go in the appointment because I put myself in the cellar situation number one. I'm gonna shine if I get in front of that person and pert in person, unless there's like a really outstanding reason of why they're not going to sell their house to me that day, I'm getting the house right. I've just had built that type of I've been able to do that and we'll really enjoy it.

spk_0:   24:24
But let's talk about that for a second. Why do you and I both feel that way? Well, first, we gives us energy bright like it's something to you and I enjoy doing, but there's literally nothing more important to like our entire lives than buying houses. Like I am going to be passionate about this. Like I'm going to go there to solve that Sellers problem, and we're gonna get down to it like I'm on you, man, There's gonna be some serious reason as to why they're not going to sell me their house. It's not gonna just be because, hey, you know I don't like you or anything, but we're gonna find a way to make this work and we're gonna solve the problem. So I think that's important for people to understand why we both feel that way. And we wanted to continue to do that. We've chosen to run our companies that way, and we want to do that because it first and foremost I would assume it's because we both started small. And that's what when you first start small, that's what you do. You have to go do acquisitions and then followed by dispositions and everything else that goes on, and it's just one of those days where, you know, you just kind of want to stay within that role a little bit because it's like your status still staying in touch with your company, no matter how many people you have. So when when you run an appointment and you're sitting down with a seller, what were some of the tips that you would give? I just had John Martinez on a couple of episodes ago, so I don't want to put you on to much of spot and have you tryingto beat the man, the legend himself of cells. But what are a couple of tips that you would give that you think different to you from some of your competitors that you could close the deal on the spot?

spk_1:   26:03
So first and foremost, I mean, I'm just gonna actually piggyback off of what John teaches, cause that's where I learned everything about it. I mean, John's John's ah, model of sales is absolutely on point, and, you know, he had come from a personal standpoint, right? He's understanding about what makes people you know. It's a very emotional decision. It's not logical of white people who are deciding to sell their house. It's right for as an extreme discount. It's an emotional reason, right? So I guess what differentiates me is I'm following the same procedure as a lot of people because let's be honest. A lot of people use John Martinez, but I'm I'm trying to just It's not about me. It's never about me. When I'm at those appointments about them, it's about what is going on for them. How do I solve their problems? And so I try to listen. I try to be there, try to listen to what You know what it is that is causing them to be in this situation. And why are they? Why are we talking? Why am I even there? You know, and then I could try to construct a solution for him, and I guess I can give them multiple solutions if they want it right. So that's kind of where the different gator comes, as well as just being a person, you know, I'm not pushy. I'm not there to sell them on anything. I'm there to solve a problem for them and give them an opportunity to solve their own problems. That's not me selling them on anything else. I think

spk_0:   27:28
you said you said a couple of things throughout this interview that I think very important for people to take away from this on your marketing. You were short and concise and to the point, but you also sold your company a little bit with a or B B B rated. You can trust us. Do you put a You put like a link to your website on your marketing so

spk_1:   27:52
we don't We do not put a link to the website on the marketing on purpose. It's 2019. Everybody knows if they will look up a company that get online and type it in, and they're gonna find us its holdings dot com. It's the same thing, is what you know. So I don't I don't give people that option, but what we found WAAS. When I was actually putting my my, uh, you Earl and my email address on there is the response rate went down on the marketing, So people were instead of going to going to pick up the phone and call that get on the Web site or they would send an email. Now that's a cop out because you have don't personal interaction with anybody. When that happened, I So you lose that touch and that that personal field with somebody. Therefore you could lose opportunities, and that's what I found.

spk_0:   28:38
So that's a very good point. So going back to what I was saying so your company a little bit with some, you know, accolades like, Hey, you know, you can trust us B B B rated whatnot, and then when you go on the appointment yourself, you're no longer selling your company or selling yourself. You are there to understand what the problem is and understand that it's an emotional decision that they're about to make, and then you're there to solve the problem. Those air like very key factors that are gonna differentiate yourself for anybody who has been doing this for a long time. You've shown up at an appointment where there's multiple investors like that. That's inevitable. You're gonna show up and it's I oh, well, there's Johnny, you know he's over there and then you have that awkward moment of I'm going, you know, Johnny's in the kitchen talking to the cellar, and I'm sitting in the living room trying to listen to what he's saying. You know, like Oh, I'm really staring hard at this corner of drywall. But in all reality, I'm trying to listen to what he's saying. It is that awkward moment. But I've heard investors like how they try to close the deal, and a lot of times it goes to bragging about who they are, making these unwarranted promises that the seller doesn't really want to hear. And then it finally gets down to the number. And in all reality, what you're saying is that's really not what you're doing. It all you're going in there and just listening to what they have to say. But then do the majority of the talking because in all reality you can ruin your process by talking too much. You just listen and they'll tell you every answer that you need. If the motivation is there and then you're just solving the problems that they just told you. So I think those are amazing, um, of key factors there on the cells process, and just to kind of how to differentiate yourself from from other people. Did you kind of have anything else to add their about that process.

spk_1:   30:43
You know, I learned the process on Lee through experience, so I want to talk about this stuff. It's I went there and I did talk too much, and I realized that killed the deal. You know, I've gone, I bought, I don't know. Somewhere close to price. 300 houses. I don't know if the exact number is, but somewhere in that ballpark since I've started doing this business, that's a lot of houses. Yeah, but that means I've probably gone on, I don't know. 678 900 a point. I mean, I've done on a ton of appointments, right? I've done everything wrong. I've made the mistake. I've seen it, not work. So then I figured, OK, well, what if I just shut up? Yeah, but if I just don't talk very much, I just let them talk and let them express other feeling. What's going on?

spk_0:   31:25
So I have an interesting question. This Oh so piggyback off of Ah, my interview with John because I asked him So Ryan Robson, my partner next over flipping, and I we had a disagreement about what you do when you first walk in the door. I said I'm going to read the cellar, but more off or not, we're going to walk the house and I'm gonna let the the cellar told me about the house, and that's how I'm gonna build. Report is off of the house, and then we're gonna go sit down and talk. Ryan is, ah, a fan, not even fan. He's He's adamant on the fact that we were gonna go sit down at the kitchen table. He is gonna ask for a glass of water, and he is going to talk to the cellar for 20 or 30 minutes and then walked the house and then make his offer. What do you do when you first walk in the door?

spk_1:   32:23
So do not sit down, Actually. Hate. I do not like really sitting down on the kitchen table round for that. So when it comes to the presentation before I get there, I kind of let no over the phone. What we're gonna be doing in there, I'm gonna come. They're gonna take a look at the house when I get to the front door, I say, Okay, we're gonna spend the next 15 or 20 minutes of like, you know, I walk in and say hi. Introduce myself. Good to meet you. How you doing today? Hope you're having a great day. And then I lay out the framework. We're gonna spend the next 15 20 minutes, walk around the house. So I just want you to tell me everything you know about the property. You know, there are many leagues. You know anything about it. They may. They may not, but just let me know. And throughout that, we're gonna have a conversation. Just guys, we walk through certain rooms, you know? Did you live here? No. You didn't know you did. You grew up here. You have your kids here. Whatever it is, you start to just learn more about them. After we do our 15 20 minutes watch to sit down on the table, we'll talk about our options. You don't talk about what You know what the possible next steps might look like, and we'll try to go over any you know, any problems or questions that you have, and I'll be able to answer those as best as I can. And if we come out of here the end where you know we can't come to an agreement. That's okay, too. At least I get a chance to hang out with you for a little bit.

spk_0:   33:33
My thought process has always been. It makes the seller a lot more comfortable to talk about what we're actually there to talk about, which is the House. And Ryan is a fan of making them uncomfortable up front and then building the reporter by making them feel comfortable by talking about their kids or or maybe whatever the distress factor is and relate to it until story. And I see the benefit and both, to be honest with you, it's just me. I think it's more about whatever you you are more comfortable in. I don't like to be awkward right off the beginning, because my fear is we're never gonna get out of the awkwardness. And Ah, and Ryan's an expert at getting out of the awkwardness and suddenly making it like, do not really like this guy like you were super weird like 10 minutes ago and you made things really awkward. But now I really like you, you know. And so that's his like superpower. Mine is not, you know, it's like Let's let's walk around. Let's talk about the house. And then from there maybe we'll see a picture or a dog or a kid or something. Then would you relate about those

spk_1:   34:40
topics there? So I think you do. You do two things. So with the comfortable with the side of things right, I just want to be me is not being awkward. That's just, you know, I like to be personable. I like to, you know, you're right. We came there, show up for the house. Why is it that we go? So the talk Sit down on the table? I don't know. I feel like people read can read through that and they think, you know, scam. What's this guy? You know, he's right over here. Talk about whatever not nothing to do with the house. But that's the reason why we're here now. Of course, you could make side talk in short talk or whatever, but I like to just be genuine. Were there to talk about the house. Let's talk about the house and Sprinkle in something about the kids or whatever. You're a long way

spk_0:   35:23
right and you know what another thing is is talking about being genuine. John talks about going negative, right? Right at the beginning. Like, Hey, I'm here. You know, not all houses are a good fit for me. Only by about 10% of the houses. I see I had to twist that a little bit because I had to be genuine. And so what I say is I want to buy all the houses like I'm not gonna lie to you. I want to buy every house in the United States. Okay, but not all the times are they a good fit for my company because we can't come to agreement, so I hope we can. And it kind of almost puts the onus back on them like a I'm not gonna overpaid for your house. Like I hoped we could come to an agreement. Um, because I want to buy your house, but we just have to make sure it's a good fit for us. And then we started to walk through the process, and he kind of immediately makes them know that Hey, I'm pretty serious about this, but I'm also not a dummy, and I'm not going over pay for it and kind of sense that expectation up front. So anyways, man, I really appreciate you kind of diving into that a little bit because I think sometimes a lot of you know, I remember when I went on my first, like, 15 20 appointments, and it was like everybody talks about going on appointments and things like that. But what do you say? What do you do? And like you said, man, we both we we just have failed forward. Um, throughout our process of man, there's nothing worse than when you leave the house and you go around the corner, you're just gonna pull over. You're like I screwed that one up. Like that one was on me like I didn't say the right things. Cassie and I go on a lot of appointments together. There's been we always recap it lie afterwards and insight. It's always awkward when one of us screwed up at the beginning because other person had to tell him why. Hey, r j, you should have said that during the appointment. And, you know, did you see the body language and Yeah, I saw the body language. Okay. Yeah, we're not gonna do that in the future. Yeah, I know. All right, look, let's let's go back to the grind. And, you know, those are uncomfortable conversations that you're gonna have to have with yourself or with your partner. But through that, you know, now we really have to have those conversations. And it's almost like we get in reference back in our heads and have body language between us or even my when we get a moments like, Hey, remember that time during the Stone Meadow appointment? Let's do it. Let's try to do that again because I did this the same situation, you know? And it's just experience, man. And but there's no way you could do that without being consistent within your marketing. So you talk about the right male. You're doing a lot of other things. Um, one thing that you brought up was a little bit of email marketing. Is that because when you're doing your skip tracing for the cold calling, you're getting email? So why the hell not? Or is that actually a method that you're getting success with?

spk_1:   38:16
Yeah. So you know, we have tons of leads have come get a 35 100 leads over the last few years. That have come into the system right now. I haven't bought 3500 houses. Shoot. I wish I would have it. That means there's a lot of people in there that I have their email address. We've communicated. They've reached out to me. We either code or couldn't come to an agreement on something, but they're in the system. So back when I first talked to them, it wasn't a deal. Wasn't if it wasn't, You know, that might be three years ago, right? Think of everything that's happened to you in the last three years or something might have. Now we're always calling people. Everybody goes on a follow up, my follow up, his key. That is like the number one thing for me. And we were just having a meeting this morning about it. Follow, follow, follow. Just never let them know. Lead left behind. Nobody ever falls through the cracks. Right? So e mails, just another way to touch them. It's another, like, right now we're getting ready to send out a after Thanksgiving gratitude email to everybody that I've ever talked to just saying, Hey, you know, we just went through the Thanksgiving holiday. I'm super grateful I've had the chance to communicate with your contact with you. You know, we may or may not have been able to come to terms on opportunity in the past, but, you know, we're just to let you know we're still out here and, you know, we're still looking to buy. And, you know, we actually open up some new buying criteria, so maybe it would, you know, if you're still thinking about selling, you know, let's reopen the conversation, see if there might be, You know, we might be able to pay them, or we might be ableto make an offer that works for both.

spk_0:   39:43
One other thing is is like I talked about your in your specific market. I mean, if it was three years ago, a lot changed in your market in three years. All right? You know, I mean, maybe them wanting 70,000 for that one bedroom, one bath condo three years ago was not a deal. Now you look at it. You're like, now it's deal, you know? So all right. I'll give you that 70,000 you wanted, you know, and a lot of times, the sellers, you know, their situation hasn't really changed a whole lot and they're still in their mind saying I that's what I want. I want 70,000. And so now it could be a deal for you. Or maybe now you have a buyer that's looking for a specific property that you didn't have three years ago. You know, you It's like you said you just now made your avatar in the beginning of 2019. Maybe that's what not what you were. You were as a wholesaler in 2017 when you initially talked to him. So I like that man. That's really cool, cause yeah, everybody talks about follow up. But you're I mean, you're doing direct mail cold calling. I'm assuming you're doing coke, calling to the same people that you're just sending direct mail right there, not two separate lists.

spk_1:   40:54
So we're do we're doing both. So we do to the list or direct mailing actually have on off its 1000 calls a day. That's doing that, Phillip Pace. Nobody. And then we're also doing specialty lists within the different different markets that we're calling on internally here in the office.

spk_0:   41:13
Yeah, and I like that man because you're changing it up there a little bit. Those specialty, those niche list. It's very important that you're hitting those frequently. Those niche Lis can die out pretty quickly. You know, um, those situations are either gonna be hit hard by other investors, and they're going to sell quickly. Or that situation is gonna mandate that the house is Is it gonna be taken away or something's gonna change the process if they don't sell that investors. So it's important to hit both of those. Um, I know that the reason why you actually ended up on the podcast outside the fact that we're I've been on your show and we're buddies, but you actually made a post that you have an initiative, a mission that you're trying to get behind and you want to get on. I think it was 20 or 25 podcast before the end of 2019. So I'm day fel that you picked the titanium ball to be on one, but share with everyone. What was that mission and and what? What were you trying to get behind for the end of the year?

spk_1:   42:16
So really, really excited about kind of what we've decided to get behind. There's a nonprofit called Midwest Food Bank that is here in Phoenix. There actually have 11 locations all over the U. S. One in Haiti. Well, nine and guests at the U. S. One in Haiti and one in East Africa. And what they do is they provide food to the food shelters, they distribute it. And it's just what, um, the founder of this company. I believe he's the founder. He's pretty sure he is. That's a lender. A friend, Um, just has the biggest heart out there. He just loves to give. And, um, you know, he started this. And so my initiative here is we want to raise $5000. It's a small number of $5000 to donate to Midwest Food Bank by the end of the year. Um, and then whatever we end up raising through the fundraiser here, I'm gonna match so we could give double that amount, which is gonna be really exciting. We're also gonna be donating our time, which is the most important thing on December 16th for just for three hours. So it's going to be a lot of fun. Probably 15th 14 14 December 1 of those days um, and I'm excited about it. It's gonna be fun. Made

spk_0:   43:35
one of the, you know, when when I got into real said investing. Obviously it was for financial freedom, freedom of time. And that became a point where making money was not as exciting as it was at one point Time because I realized that giving to people just like we give on our podcast, we don't make any money off of our podcasts. I mean, I don't know if you plot there, actually think that you do. I mean, we're poor broken podcast. So So Okay, we real making money off this now. We're there are benefits to doing this, though. And one of those is talking about initiatives like this, just like we have would be kids hands air here. Um, I love what you're doing, man. Giving back, um, is something that I am so proud of. This industry there's a lot of people that talk aboutthe negative aspects of the real estate investing community. The people that come in and want to act like they're gurus, and they don't actually know these large seminars that go around and charge these 50 60 $100,000 tell people the rack up their credit card bills, and those are the negative side of days. But that's the air here nor there, because the thing for me is is seeing the giving nature of this industry. The people like yourself that there's there's really no reason for you to do this other than it's a something I want to get behind support, my buddy, who's one of your private money lenders, which is an amazing, reciprocal relationship there, and give back to the less that it less fortunate. You know, it's Ah, that's one of the most proud things about this industry to me because there's a There's always something negative that could be said about any industry, but very few industries are willing to rally together. Um, some of my really good friends in your market, um the batch group batch Skip Tracing Basin, Jameel, Steve Train ticket Bring Daniels at TTP. They just did a toy drive out there, man, and they donated $10,000 worth of toys yesterday. They all dressed up like elves. You know, it's it's just amazing. So love what you're doing. Um, for anybody that's interested in helping out with Scott's initiative year and giving, you know, donating proceeds. To help get food for this, we're gonna drop in, and the show notes will have a late there. If you're in the Phoenix area, are they able to come out on December 14th and help you out?

spk_1:   46:12
100%? Yes, T shirts were trying to get, um, many people, as we possibly can is three hours. It's gonna be a bull last recording in my time there before, and it's a lot of fun, you know, at these different nonprofits and things where people are donating their time. The craziest part is, everybody's happy. Everybody's in a great mood. And the reason why? Because they're giving that secret to life. It really

spk_0:   46:37
is, man. Well, there's nothing better. There's no better way to wrap up the show that the secret of life is giving right there. So, Scott, thank you so much for taking time. Man, I'm so so honored that you paid the titanium vault be wanting a podcast to come on and share. Um, you shared some great wisdom about real estate investing in the acquisition side of days. Felt like we probably could have gone on for a couple more hours just diagnosed in this entire business. But, uh, thanks for taking the time, buddy. And, uh, any final words before we sign off here,

spk_1:   47:08
R J thank you for for having me on the show, man. Hopefully, you know, you have a good rest of the year. Um, and just super grateful. So thank you.

spk_0:   47:17
Absolutely. And for everyone, that's Listen, if they want to tune in to your podcast, where is the best way that they can find it?

spk_1:   47:23
Oh, yeah. Gotta gotta end off on this. So I have the invest this podcast Something really, really exciting in 20 21st part of January 2020 is we're gonna be launching and best this two point. Oh, it's ah, invest this wealth mindset where we're gonna be interviewing people about the mindset that they have to the creation of wealth that they have, which is gonna be really, really exciting. You're not gonna want to miss it. Please tune in to the show. You could go to invest this podcast dot com and you could find me all over the social media. Is that these Scott Bauer, uh, Facebook Instagram Twitter. LinkedIn you name it, Get behind the cause and, uh, ask me any questions. I'm always here to help.

spk_0:   48:04
Yeah, when you search for money. Instagram is the Scott Bauer, but his pictures the one where he looks like he's an epic Mm. And a fighter about to go in. I was actually making the thumbnail for ah for today's interview, and I showed it to cast. I said, What do you think about this? And she goes, Oh, that's cool. It looks like he's about to like, going to the ring and light fight someone like All right, we're gonna use this one. All right, buddy, Thanks so much for sitting down with us

spk_1:   48:32
arm, and it's activated. R J C man,

spk_0:   48:35
thanks so much for listening to the titanium vault with your host R J base that hurt more imposing. To stamp the date, visit www dot podcast on the titanium vault dot com and on facebook dot com slash the titanium vault. If you enjoyed the episode, please rate in review. Well, can't you next time on that time