What I Learned From Flipping 400+ Houses these Last 5 Years!
Hello, my name is Erik Stark. I am a committed husband, dedicated father and full time real estate entrepreneur. Over the past 5 years I have bought and sold a nice handful of properties. In that time, I spent a LOT of money on education and mentoring. Here is my summary on what my success has been accredited to in these last years. The first two are the most elaborated on as they carry the largest rewards.
1. Find a mentor:
Let me help you compartmentalize this fact.
There is no experience like real world experience.
When you are breaking into real estate, you’re going to do so in just this way. You will read everything you can get your hands on (mostly case studies and interviews rather than strategies that teach the “how-to’s”), you will try some and results will be dismal. The real world TELLS you more in shorter time than a book ever will. The experience is what tells you what your results are.
When you have a mentor, a live, breathing, responding, encouraging person who has broken through those dismal results, you can now, “eat off their plate” and begin getting in nibbles that build momentum towards freedom.
There is more that goes into selecting a mentor than their visual (surface) success. You should verify their track record. Get to know what they stand for. Do they carry strong moral character? What are their beliefs?
Mentors can shave years off your success curve. A good mentor will want to see you surpass him. Someone who looks out for your well being with no bias view point. Be sure to invest the up front deliverance of value to a potential mentor. They are used to being taken from and someone always wanting something.
I have mentors for all areas of my life. Some of my mentors aren’t even considered rich let alone wealthy. If someone has wisdom to dish out, they become a mentor to me. My son and I were fishing on the ocean pier a few weeks back and met a gentleman who has been fishing there 28 years. He runs a fishing ministry right at the pier and has changed many lives by taking in and mentoring kids, teens, adults and elderly. I consider George an amazing mentor. He will likely be there when my son catches his first shark. All we have to do is show up and do the work. He’s providing the strategies and shortcuts to success.
“98% of success is showing up”
It is part of the duty to give back as a successful person. Its called good stewardship of your talent. So be sure, when you become mega successful, you always have one hand reaching up to where you are going and one hand down helping someone get where you are. This universal law governs the good steward council and continues the growth of society in a world so easily being destroyed.
2. Master Marketing:
Maybe this has become more of my personal passion and love that stemmed from real estate and I have a unique way of justifying it or this has truly has been a foundation to our success.
When you mainly dominate a marketplace with a strong presence, your business is able to depend on the income to create systems that support that flow of leads. When leads are flowing in with consistency, you are able to maximize each lead within its category. Wholesale it, retail it, rent it or live in it. Sell the lead, list it or play matchmaker for a fee.
Real estate to me is little more than a marketing machine that transfers a lead to a conveyer belt that brings fruitful results. THATS IT.
When the faucet is turned on and there are 5, 10, 15+ leads coming in daily or even weekly you are able to source those leads to well qualified team members that carry out their purpose. Yes, there is up front work to have a solid team, but thats what a business is. The marketing keeps the business alive. When there is abundance, people think better, clearer, with more passion. Abundance encourages the drive behind results.
Learn everything you can about the marketing mediums of your industry. Turn on your blinders to shiny objects and do opposite of what the majority are doing. Here are a few of my personal few that have helped define our marketing.
1. Be consistent and persistent
2. Collect a swipe file of your competitors mailers and out do them all (This has been intensely crucial to our success by knowing what others are doing)
3. Know your lists and keep them clean (Find my articles on this on RealEstateMogul.- com labeled Go Deep Not Wide. This is important)
4. Do both online and off line marketing (online ads/bulletin flyers, videos/postcards)
5. Relationships get deals done. Build them with sellers by talking 95% about them, 5% about what needs to be done to solve their problem. (People dont buy what you do, they buy why you do it)
6. Follow up forever. Period.
Marketing has infinite returns on investment especially once it comes from a deeply rooted referral standpoint. When your brand is “top of the mind” in your market, you have made it to business success. Do not take this as a “surface success” idea I am just throwing out there. This one compartment has the ability to spawn multiple businesses within your own business. You can rock at business but if you are terrible at driving customers to that business, you wont be open too long. I would recommend, if it’s not your strength, find someone who will have a vested interest in the success of your business and have them create your marketing.
In this article I would like to share what I have learned and reconcluded about real estate success. The experience I am talking about is that of my own. Not observing an office where investors were flipping but OUR office, where my business partner and I went flipping crazy doing deals. We spent over $150,000 on education and while we received some great golden nuggets at those events, the same principles paired with hard work got us farther than the extensive fluff filled education. Lean in and take note. The above two topics will take you extremely far and are true pillars to our success. The principles listed below are concrete principles that will fill in as you grow and become confident in your ability.
There Are No Secrets: Thats right. Principles of real estate will never change. EVER. They have been around before you and I decided real estate is for us and will be around long after we are gone. What changes is the strategies and dynamics of HOW the business is done. Follow the principles and you can choose your own methods, follow methods and you will be in trouble. All the information in the world is available to you. There is NO SECRETS. Gurus often package their product as the latest greatest secret, all that it is is one of the principles of success repackaged so that you can understand it better. Be savvyier than the rest of the crowd and you will be more efficient, be more knowledgeable on when you are being sold, keep more money in your bank account and always be trained with the intense focus of knowing you already know what it takes to be successful. I had the opportunity to interview Joe Girard who is known and accredited by the Guinness Book of World Records as the Greatest Car Salesman in History. On that interview I asked, “Joe, what are the secrets of your success?”. He laughed and said, “Son, there are no secrets. Find your passion and get your ass to work”. What a great summary from the man who has already achieved what most of us strive every day to accomplish. Your passion will push you much further than any paycheck ever will…So find out what your passionate about and learn as much as you can about it and get busy with that knowledge.
Have Crystal Clear, Written Goals: Goals keep you focused on YOUR vision. I assure you there will be conversations when you speak to someone who just did a $50,000 deal over in this niche and it is so easy to be persuaded into abandoning your vision and jumping over to theirs. DONT DO IT! Stay true to your goal and those $50,000 (and greater) deals will be in your sights before you even realize it. Tie your goals to your WHY. Be selfish for a moment. I am living proof that what you seek will manifest itself into fruition. The best “system” will never work if you don’t. Think about when you book a trip to a destination for vacation. What must happen before you begin planning your to do list? You have to know where are you going and when? Without this, there is no measurable, enjoyable progress. The dire consequence of not having crystal clear written goals is that you likely will end up working for someone else’s goals rather than your own. Sit with your family. Discover what you want. Agree that you know it will take work and sacrifice. Set the destination. Set the time frame. Create the “ to do “ list that gets you there and get busy.
Focus On The Gold: 3 crucial must haves that every successful must focus on each day is having conversations with buyers of real estate, sellers of real estate and lenders of real estate. Nothing is more important than this. Websites, marketing, business cards all play an important part in real estate but websites and business cards don’t get deals done. They are fundamentals of real estate and do nothing to put money into your account. A lot of time goes into some of these deals. Sometimes they pop off, sometimes they are just incredible learning lessons but think of this next time your in the middle of a drag out deal….Olympians practice for over 1000 hours for 90 seconds of Glory. That 1000 hours does NOT give you a medal. It prepares you to be at your absolute best for those 90 seconds of showtime you are being graded on. Focus on the gold and do not get distracted.
Relationships Are Everything: The REAL currency of real estate is the people. The relationships you manage well. Relationships are leverage. They allow you to leverage other peoples skills, time, energy, money and resources for you to benefit from. Learn the Peoples Code, which can be learned in Dale Carnegies How To Win Friends and Influence People. Be fair with people but do not ever fail to show leadership. Knowing that most people are lost in their life and are looking for a good leader can allow you to position yourself into greatness. In every town across the globe there is a “good ole boys club”. They exist for barbers, car guys and you guessed it, real estate. These “good ole boys” can shrug off areas, values, inside deals, relationships, opportunities, friendships and possibilities that are worlds beyond what you could ever work for on your own. When you build your team, try to keep it focused and small. Keep in mind that as you add more bodies to your team you have to be the leader to manage that relationship. When that circle is small and manageable you can build exponentially rather that linearly.
Discover YOUR Passion and Pass On The Rest: Your passion will carry you farther than money ever will. Find out what stirs your blood. What keeps you up at night. What consumes your mind. What leaps you out of bed before the alarm clock and master it. This will lead you to your best life ever. Everything that you are not passionate about, should be handed off to someone else. When you study the greatest entrepreneurs of the world, you will find it was passion that drove them to create and be the greatest. Richard Branson, Steve Jobs and Mark Zuckerberg were all driven but a desire much greater than money and they did whatever it took to achieve their envision results.
Know Thy Documents: I want to start this off with a quote that deeply impacts my mentality around this topic because I share it from my personal experience and it goes like this…”experience is what you get when you read the fine print, education is what you get when you don’t”. In the business of real estate, there in INCREDIBLE horse power to achieve greatness. Unfortunately you can also lose your greatness. Your hard work could directly benefit someone else. You can also bury yourself in debt deeper than you ever may be able to work off. Having an in depth understanding of the documents you frequently use and frequently sign, will give you an incredible advantage and understanding in the game of real estate. Read and reread them. Ask questions. Seek counsel. We personally have been saved (and skinned) for tens of thousands of dollars throughout our career. Be a good steward of your business, other peoples money and a industry leader and know your documents.
Get Educated/Take Action: Read, study and fail as much as you can. I recently read an article about a group of college kids who decided to quit college and open up a beachside taxi service using tricked out golf carts to take beach goers to the local restaurants, back home, wherever and what they figured out usually takes entrepreneurs decades. In their article they quoted, “We learned more in 30 days of business for ourselves than we did in 4 years of business school”. Life is the best teacher and until you get that real life feedback, you cannot begin to gauge what will happen. Become tireless in your effort to always have an edge on your competition. Minimize your education process by only learning relevant information from reliable sources.
Know Values COLD: I have won (and lost) many deals by knowing (or not knowing) the values intimately. When a seller calls, you need to have a ballpark margin of what that property is worth. In terms of cash, retail, wholesale, rental and who the ideal buyer/tenant is for that area. Knowing these values in depth allows you to show confidence in educating the seller on what they have. You can set your ball park upfront and prequalify them right away. The sooner you set this tone with the seller, the sooner they will move in your favor if they are truly motivated. Properties vary by block so I strongly advise you keep a strong pulse on the farm area of your market. If you really want to get in deep with values and be able to speak a industry lingo, learn price per square foot of PPSF. Block by block, layout by layout, area by area. I have many instances where I knew values and that I could pay 80% of ARV when I know my competition is only at 70%. This is likely one of the largest contributors to flipping over 400 properties.
Start Where Others Quit: We have all been told that successful people put in extra effort. To really leverage that trait, start putting those efforts in where other people quit. Listen for Ques on what other investors tell you they are frustrated with. For example, years ago we repeatedly heard from investors that they wanted to begin mailing probates because they know its a great source for leads. Problem was is that the info is tough to obtain. We jumped in knowing that the rest of the industry WANTED to master this but the roadblocks they faced kept them from mastering the process. I am not quite sure what it means to “dominate” but I do know we repeatedly buy more probates than any other investor. Picture it this way, if we all set off to race from one starting point and the goal is to get to the finish, wouldn’t you rather pace yourself from the get go and pick up the pace when your competition gets tired? This way you have much more energy to not only outlast the competition, but enjoy life when you begin making more money with less of your time. If I had to put a percentage on the amount of victories we won just by finishing where others quit, I would truthfully say around 60%.
Reward and Celebrate Your Victories: Live well from your efforts and remember your after consistency. All to often in this business (and life) we become numb to the highs (but not the lows) that reap breakthroughs. You flip a huge deal, you toss the money in your account and you are right back at it. Score another great lender and your now hustling through your nights to put that money to work. Stop and celebrate your victories. I learned this from one of my mentors (who is 82) and I often asked him what he wished he would have done differently. I never heard him say he wished he would have bought a bigger yacht. It was things like, walking with his wife more, being at more baseball games with his children, taken the time to give back to the community, went hunting with his friends more often. I remember when I was “sold” into getting into real estate, there was a overhead screen with a mansion, lamborghinis, bentleys and bright blue skies and I thought “wow, how cool would it be to live like that”? Nowadays, I know that none of those things would make me any happier than I was that very day but the moral of the story was to have something worth working for. Why do you wake up and sacrifice so much if you’re not enjoying the fruits from your labor? Every time I flip a property, I take 1 or 2 days and usually head down to the Florida Keys with my family. Last month, I took my son out deep sea fishing. Just this past weekend, while in Vegas giving a presentation on My Big WHY, I took my wife on a helicopter ride over Lake Meade, The Hoover Dam and the Grand Canyon. We are here to celebrate life…so lets do so shall we.
Stay True To YOUR Vision: First off, what is your vision? Why do you wake up every morning? Why should anyone care? Knowing, at your deepest core what makes you wake up and fight hell to score a few extra inches on your game board IS the reason for living. Its the greatest source of energy you will EVER put into your body. If you are not waking up with FOCUSED INTENT to get you closer to that vision, you likely are not living life at your full capacity. I don’t mean that other people live GREATER lives, but surely people live out ONLY what their core drive is to achieve in life. Besides, if you don’t stay true to your vision, you likely will get sideswiped into living someone else’s. Know what drives you and makes you sacrifice your most precious asset. The deeper you dig to find your why, the more intense you will work toward your vision. This is the ONE principle I wish I would have obeyed and followed more closely.
Turn Failure Into Learning Experience: Its only failure if you do not learn…and life is the best teacher. You will learn more in 30 days of business than 4 years of business school. When something goes well, duplicate it. When something doesn’t go well, spend the time de-framing what went wrong and find out why it went sideways. Internalize it. Make sure you do not suffer defeat a second time from a lesson learned. I realized after years of always going to seminars that had I stayed home and went over those mistakes, I would have learned more by going over what directly impacts my business based on real life experience rather than her How-To’s, If Thens and Heres How. One way that I did this was to keep a deal journal. This journal goes over IN DEPTH how each transaction unfolded. Surprises, problems, victories and blow ups. Its all documented. As any great coach has a play book, keep a play book on what worked and didn’t work. Expect success but inspect progress.
Check Your Ego At The Door: I have lost deals, buyers, lenders and some great relationships due to my ego. No business manual EVER discussed pairing knowledge with an ego to make win/win situations. Be subtle in your approach, casual in your discussion and downplay your expertise. I have won multiple transactions by being a normal, likable and totally transparent. Remember, people love to hear about themselves. No one cares how many houses you have flipped, how many sellers you have helped. They want to know what you can do for them and do for them now, at your expense. Learn to deal with getting used. This does not mean you should get ab-USED but get used to the seller feeling that they received the better hand.
Go Bigger: Once you have laid a foundation of solid results, start stretching for bigger opportunity. Whether its wholesaling a package of homes or buying your first multi unit rental, you need to be stretching your abilities. The goal is to flex your risk muscle so you are always becoming comfortable with your ability to move on larger opportunities as they arise. As a wholesaler, you are only as good as your last month and the day will come when making $10,000 seems like an unemotional victory. While you are pounding away at wholesales or rehabs, stop and call on that large commercial building. The same effect will unfold in the world of BIG real estate that unfolded in the current small world we operate in.
Keep A Low Overhead: There are endless examples of entrepreneurs who go belly up trying to keep up with an over leveraged lifestyle. If this is your first year making insane amounts of money, save most of it for your tax bill. It will come around. Refrain from big spending at all costs. New cars, clothes, world travel, ritzy office fronts and shiny objects are amongst the list toppers for show stoppers. You may realize (not everyone does) that once you have plenty of expendable cash and a consistent plan for keeping it coming in, these once shiny objects mean nothing. I spend my money in the following order: tithe and contributions, business building and marketing, health and lifestyle and life experiences. At this point in my life, material possessions mean very little. The same $1000 I see people spend on a pair of shoes would get me a lifetime of memories down in the keys with my family for a few days. Those shoes will end up sitting in my closet and never give ANY value to me whatsoever.