Justin Colby did 96 deals last year Flipping Houses with Direct Mail (CFFL 0163)
Justin Colby did 96 deals last year Flipping Houses with Direct Mail
Jack Butala: Justin Colby did 96 deals last year Flipping Houses with Direct Mail. Every Single month we give away a property for free. It’s super simple to qualify. Two simple steps. Leave us your feedback for this podcast on iTunes and number two, get the free ebook at landacademy.com, you don’t even have to read it. Thanks for listening.
Jill DeWitt:
Jill DeWitt here with LandAcademy, and today our guest is Justin Colby. Justin is a co-founder and president of the Science of Flipping on the investment group and Phoenix Wealth Builders. The Science of Flipping is a free podcast on iTunes. Omni and Phoenix Wealth Builders are both professional real estate investment companies, specializing in purchasing, rehab, and flipping of distressed property in the metro-Phoenix area. Justin has been in real estate investing since 2007, an ironic time to become a real estate investor. As the markets were changing and all the conventions of real estate investing were being thrown out the window. He didn’t start out in real estate as an investor. In first, he first cut his teeth in real estate in 2005, when he became a real estate agent and joined his friend in starting a real estate brokerage.
Last year, he and his partner flipped 96 homes, and as a whole, he and his partner have flipped and sold over 300 properties to date. As of 2013, Justin and his partner have become developers. They started and they are currently in progress of building 79 town homes in Mesa, Arizona. Not only is he active and a successful investor, but he also is a very powerful and successful real estate coach and public speaker, who has mentored more than 1000 real estate investors. Very impressive. Thank you Justin. Steven and I are glad you’re here with us today.
Justin Colby:
Well, thank you for having me. I’m very happy to be here.
Jack Butala:
You know what you have on me, Justin?
Justin Colby:
What’s that?
Jack Butala:
You’re young and handsome.
Justin Colby:
Ah! Well, that all goes away at some point, so right now, I’ll stick to my brain power.
Jack Butala:
In the pre-show, he asked me about the audio equipment. My audio equipment’s better than yours, man.
Justin Colby:
There you go. Exactly correct. I’ll take the compliment. Thank you very, very much for the compliment. I will take it.
Jack Butala:
I’m going to get right to it. Everybody who’s listening to this show is wondering what the heck is difference between you? Why can you jump into this and kick some butt? Flip a ton of houses.
Justin Colby:
Yeah.
Jack Butala:
What does it take? What’s the secret?
Justin Colby:
Tenacity. There’s no easy way to do this. This isn’t rocket science. Real estate investing doesn’t take a major degree from a major university and business and master’s and all the other things that conventional wisdom would say you’d want to have. It does take a ton of tenacity. Patience. I would say for those who are either just getting into this or have been doing it, or want to get to the next level, surround yourselves with the right people. Understand that you’re always going to want to be around people who are doing it better, who are smarter. Who would be doing it longer. Who have the systems and tools. Also that this isn’t a get-rich-quick business. Real estate in general can pay you very, very handsomely. Hence why we are in this business. Hence why realtors are in the business. Is you can make a ton of money, and create an incredible life. With that, and part of that, in what I think is partly unrealized by many, is that it takes a ton of tenacity and hard work, and a bunch of action. That is why I’ve been able to reach to the top of the mountain of where I am is simply, I don’t have … Give up is not part of my vocabulary. I would say tenacity is the biggest component.
Jill DeWitt:
I’d say you sound like the “I don’t know the meaning of the word no.”
Justin Colby:
Right.
Jill DeWitt:
You just have to “All right, we’re going to come at this another way, because we are going to get this deal done.” I get it.
Justin Colby:
Right.
Jill DeWitt:
Yep.
Jack Butala:
To flip 96 houses or homes in one year, you must be ridiculously organized.
Justin Colby:
Well I can’t say that about myself, but I have built a very strong company, and I’ve surrounded myself with people who are very organized. That is a big component when building a company is being able to compliment each other and realize your own weaknesses. Sometimes, that’s difficult, but you’ve got to realize where your strengths lie and where your weaknesses lie and I realized very, very, very early on organization and systematization is not necessarily my strong point. They are my weakness. I’ve been able to build a company that I’ve surrounded myself with people that have very strong organizational skills. Very strong abilities to systematize. Because of that, I’ve been able to be very lucky and successful.
Jack Butala:
What is your strong suit, then?
Justin Colby:
My biggest strong suit is people. Right? I’m … If you’ve read any of the books like “Traction”, or any other entrepreneurial book. “The E-Myth”. There’s always the implementer or the manager, and there’s always the visionary and creative. I’m the visionary and creative. I’m the rainmaker, so to speak, where I can get into any door. I can get introductions to any person. I can close any deal. Without my team behind me, organizing, systematizing, it doesn’t matter how much money I make rain. All that money flies out the door, because there’s no one organizing the money. Right? My biggest strong suit is growth, development, vision, creativity. Then having people be able to follow my lead. I’ve got to be able to create and paint an incredible vision, so that people can follow that.
Jill DeWitt:
That’s your unfair advantage, we’d call it. I love that. How do you inspire that or in the people that you coach and mentor?
Justin Colby:
Yeah. It’s funny that we’re doing this call now. I just got off the phone with a group in California. I’ve been coaching and mentoring now since 2009. I’ve definitely had my fair share of different type of people and circumstances. From New York to California. Part of what I always want them to understand is “I’m going to shoot you straight. I’m going to not always say things you want to hear. I’m going to say things that you need to hear. The reality of these situations are this. To be able to overcome these realities, here’s the answer.” At the end of the day, I’m not going to blow smoke. I’m going to tell you exactly what needs to be done to reach the goals and achievements that you want to reach. Here’s how you do it. Here’s the exact blueprint to do it.
Now I’m going to hold your hand to get through the blueprint. Don’t come to me calling excuses or telling me that it doesn’t work or any of that, because that’s your own excuse in your own head of why you don’t want to put forth the effort. I come from a place of being as authentic and genuine as I ever can be, and not to blow smoke in any realm. To tell it how it is. Because of that, it really comes off well. I think people genuinely believe and have faith that we can get them to the point where they want to go.
Jack Butala:
Man, I totally agree. I really agree with the fact that you need a visionary and you need an operational person. That’s what we talk about in our program. I’m the visionary, also. In fact, Jill and I are pretty much both visionaries, but we’ve got a pretty good team following us around, making sure that we don’t make a mess.
Justin Colby:
Yeah.
Jack Butala:
What do you say to somebody who’s brand new at doing this, and they know they’re a visionary, but they don’t have that team? They don’t have that luxury of the team that you and I have built?
Justin Colby:
As soon as you can, find that person. That person doesn’t have to be a business partner. I think the big misconception is they need to go find a business partner to do this. If you want to give away 50% of what you make, sure. You can also find a managerial partner. Meaning you pay them however you structure. Whether it’s a percentage of the deals, or salary, or whatnot, but as soon as you have been able to make some money, you want to be able to go and find that person. Again, it doesn’t have to be a business partner. It can simply be someone in your business to help you with that. For example, transactional coordinator could be a very simple, easy hire to help you become more organized during the transaction of the real estate transaction. It could be something that simple all the way up to a business partner that can help you manage everything from A-Z. Finding that person sooner than later is going to be a huge component.
Jill DeWitt:
I agree. Hey, I have a question for you, because this is one that we get all the time. If your business was going so smooth and you’re doing great and making money and everything’s fantastic, why would you take on this extra thing, right?
Justin Colby:
Yeah.
Jill DeWitt:
What made you want to go off and share it and spread, basically your secrets kind of thing, too? How do you answer that?
Justin Colby:
It’s a good question, and part of it is I enjoy the people in our business. I enjoy interacting. We run two masterminds, very successful masterminds, where we’re in a room for 2 straight days with our students and our coaches, and we are trying to conquer real estate investing. We do that 3 times a year. That is the most enjoyable part of our job is because I’m not over the phone or I’m not on a Skype call or whatever. I am face-to-face with our students. That’s part of the joy of why to do this. A lot of people are going to say “Oh, you’re just trying to … It’s all financially-driven.” That’s not true. Part of it is the true passion of where I come from, and I talk a lot about finding your passion. Is in people. Is in helping. Is in developing. Is in creating. Is in that entire process of taking someone and helping someone from A getting them all the way to Z and being an integral part in their business, in their lives.
To help see that progress. For me, the reason why I do it is because I enjoy that component, and that is a large part of my passion. Just like in real estate, a large part of my passion is the creative part of the deal, and trying to figure out how that deal can fit into our business when on paper, it doesn’t. Again, as you grow in business, obviously you have more and more opportunities, and you don’t want to take each and every opportunity, but I have had this opportunity to create an incredible coaching business with my business partner, Kent Clovier. It fulfills a great portion of my passion that I have in life. Which is working with people, helping people, and creating a vision for those people to become successful. Reap the rewards of their hard work.
Jack Butala:
That’s fantastic, man. You know, the reason that we … I’m going to answer Jill’s question, too. We completed almost 16,000 clips since the ’90s. Like I said, earlier, I’m a lot earlier than you are. People ask us all the time, “What the heck? Why are you doing this?” The real reason is that, like you, I love watching these people grow. My best moment is when a member, we just don’t hear from them anymore, because they’re so successful.
Justin Colby:
Yeah.
Jack Butala:
That, and we do a lot of transactions with our members.
Justin Colby:
You do a lot of that?
Jack Butala:
Our deal flow is a lot …
Justin Colby:
Yeah, I would say one of my proudest moments to your point is when I, all of a sudden, become the student. That my student has now found a new way, a new something, that he just taught me something, or she just taught me something. I love that moment. That’s when I find the most success in doing what we do. To say “Wow!” This is no longer a coach-student or mentee-mentor. This is now we are playing on the same field. That’s a lot of what our masterminds do is creates this opportunity for these people to get on my playing field and we no longer are coach or student. We’re seeing eye-to-eye, and going after the same goals. That’s what I love.
Jack Butala:
That’s great. The nucleus of what we teach and what we try to instill in our members is how to use direct mail.
Justin Colby:
Mm-hmm (affirmative).
Jack Butala:
To find properties that are undervalued. I’m wondering if you guys have a different way to find property. What makes you say “Heck yes, we’re buying this house.”
Justin Colby:
Yeah, I think direct mail is a huge component of what we do. We’re actually right this very second doing a split test in our market here in Phoenix as this is a very difficult market. I think one of the things I want to mention now is there’s so many of your students, or our students, or anyone else saying “Aw, I can’t get my deal. I’ve been doing this for so and so long.” Right now, the real estate economy, and the economy in general, is very good. The sellers are starting to become much more informed. There are more investors in markets. We all feel the effects. If you are just starting, or if you are not reaching your goals, don’t get all down about it. My call ratio has gone down drastically the last 6 months. The difference being is it doesn’t change my perspective of how direct mail works.
It may change how I utilize direct mail. I’m currently split-testing sending our normal bulk mail, which we send tens of thousands a month, to split test a portion of that and send first-class priority mail, which costs me $1.50 a piece, versus our bulk mail, which costs me roughly $0.39 a piece, to see if we can outsmart our competitors. Spend a little bit more, but they’ll open my piece of mail. Call me first. Rather than throwing our bulk mail into the trash because they consider it to be junk mail. That’s the part of the business I love the most is we are always trying to figure out a way to outsmart the other investors, and to get in front of more sellers. Part of that is trial and error, and split testing different ways to do so.
Jack Butala:
That’s great. I mean I have the same exact attitude. If you’re not getting the response that you want, move some stuff around.
Justin Colby:
Yeah.
Jack Butala:
You guys, are you concentrated in the greater-metro Phoenix area, or do you have other markets that you buy and sell stuff in?
Justin Colby:
Yeah, we’re Phoenix. Last year, we did roughly 10 deals in Dallas. We are now right this second actually as of yesterday’s meeting, we are looking to jump into Houston, possibly Dallas again, and possibly even Portland or Nashville. The model’s not going to change. It’s going to be the exact same model. We built this model. We have a good office of 9 people. We can run it virtually. We are looking to be in Houston, Portland, Nashville, and Dallas here in the near future.
Jack Butala:
That’s awesome, man. A big component of what we do is rural, vacant land. Our company’s called LandAcademy.
Justin Colby:
Yep.
Jack Butala:
That’s just, it’s been our staple. We buy properties, and literally flip them the next day for twice what we paid.
Justin Colby:
Yep.
Jack Butala:
One of the great things about us is we’re not locked into any geography. If we kind of pound out the West Texas area, let’s say, then we’ll go over to Nevada or Michigan or wherever. It seems to work out really well. Our members are constantly reporting back that they move around, too, and in fact, there’s a group that just formed, which I think is an unintended consequence of what we’re doing. It’s a great thing. It just formed and some of the senior members in our group are getting all together and getting together to find out where each person is mailing and doing it in a different place. It’s amazing what can happen if you just stick with it, and not get down about the fact that maybe 1 mailer didn’t work.
Justin Colby:
Yeah, and so what I would actually, just at a curiosity sake. As we started developing. As you guys mentioned in the beginning of the show. If you go and randomly go into Michigan, for example. I don’t know if you ever would. Found, did some direct mail and found a piece of land. Where does that buyer come from, for you guys? As you just jumped into Michigan. As a new area. I would assume you’re selling it off usually to some sort of developer.
Jack Butala:
Yeah, that’s a great question. This is what we have done for years, and what we teach. There’s 3 or 4 places on the internet. One of them’s called Land Watch.com. Another one’s called LandAndFarm.com. We have no affiliation at all. What we teach is this. If people that buy property, more than 60% of the time, my research has shown that whoever buys these assets. I don’t care if it’s a department building, piece of land, or a house. They have, or already own, property really really close to that asset. We do a little follow-up direct marketing piece. Based on that. Step one, and it takes just maybe a couple hours. If I bought a piece of property in central Michigan. I would go out on these websites. Accumulate a pretty big database, really really quickly. Contact these people and say “Hey, I have this piece of property. I didn’t even buy it yet, and I don’t have the money to buy it, but I don’t want this acquisition to go to waste because I think it’s worth probably twice what I’m about to pay here.” Man, you can build what we call an A-list. A group of buyers. Really, really quickly by implementing that.
Justin Colby:
Nice. Do those come like you said, Land Watch, LandAndFarm. LandAndFarm, I’m assuming it was?
Jack Butala:
Yes.
Justin Colby:
They give you the information about those people? Like what …
Jack Butala:
Well-
Justin Colby:
How do you get ahold of them?
Jack Butala:
Yeah. Those are, both of those sites. There’s other ones, too. Both of those sites have listing after listing after listing either directly from sellers or from agents in that area. What you do is you just fill out the box, in some cases. In another site, their email address is directly on there.
Justin Colby:
Got it. Okay.
Jack Butala:
You just build a list, and contact them, and it’s pretty logical.
Justin Colby:
Yeah. Very, very, no different than what we teach in residential real estate. Right? You just use a couple websites that are a lot more tailored to what you guys do.
Jack Butala:
Exactly. The whole key though, for us, is man, you got to buy it cheap. You got to send out a ton of mail and buy it cheap.
Justin Colby:
Yeah. Yeah, I would say, that’s probably a key to everybody, right? We’re a little different right now in this economy just because there’s so many investors that are looking to hold property that you don’t have to buy it that cheap. They don’t have to spend a lot of money. You know, they buy the home and throw a little bit of money and they can do it and they can do it. Right now, especially in our market here in Phoenix and up and down the state of Arizona, has a really good rental market. There’s parts of California that are good rental markets. St. Louis and other areas, it’s such a hot rental market. The state of Texas is such a hot rental market, you don’t have to have a super discount right this second.
Jack Butala:
That’s a great point. Let’s say the flip market dissolves. Then you could focus your interests, I’m just thinking out loud here. You could focus your interests on raising capital, because there’s so much money out there.
Justin Colby:
Mm-hmm (affirmative).
Jack Butala:
Raising capital and just having a rental situation. Maybe you rent it up, clean it up, rent it, and then sell it.
Justin Colby:
Yep.
Jack Butala:
There’s a lot of different ways to go at it depending on where the market is.
Justin Colby:
100%.
Jack Butala:
All right, so wrapping this up. Do you have … I mean what are two or three things that you can give, the advice that you can give of somebody who’s starting out?
Justin Colby:
Obviously, follow people like yourselves. Become students of Steven and follow what they’re teaching you to do, because at the end of the day, as much as you think you know, there’s always a value in having a mentor, or coach, or at least some sort of educational system that can help you through the path and can shorten that or condense that learning curve. Have an incredible passion for this, because it’ll help you get through some of the tougher times. Or slower times. Maybe they’re not tough. Maybe it gets slow. If you have a passion for this business, you will be able to stick through this, and come out the other side with making a ton of money and whatnot. Lastly, have the tenacity. Have the fortitude. Have the sticktoit-ness, which I think is not a real word, to be able to stay in the game. Because you can make a ton of money at this and create a lifestyle that is unbelievable. The two of you are examples of it. I, myself, am an example of it. I’m constantly travelling and doing cool stuff. I get questions all the time about, from my friends who don’t really even understand what I do.
“How can you afford to go to …” I just did San Francisco, Chicago last week. I’m going to Vancouver this week. I’m going to the Kentucky Derby the week after that. I’m always doing things like that and people are thinking, especially people who don’t really get this concept of entrepreneurship and real estate investing is I’m creating a life that I want to create without having to work as hard as I want to work. That being said, it takes a lot of hard work, and it took years for me to get to this point. It didn’t always start off that way. The tenacity and fortitude and sticktoidness had to be developed over the first 5 or so years for us to come out to this point where I now have two offices and I’m travelling all the time, and I’m very rarely in any of the real estate transactions. I was just telling one of our students, I’m closing 6 deals this month. I forget what our gross profit is, but it’s a lot of money. I am not a part of any of those deals. It took that first 5 years to have the tenacity, the fortitude, and sticktoidness to get here.
Jack Butala:
That’s great.
Justin Colby:
If you have those components, you will ultimately be very, very successful.
Jack Butala:
The title of my very first podcast is called “All my friends think I’m a drug dealer.”
Justin Colby:
Yeah.
Jack Butala:
That’s the lifestyle I have.
Justin Colby:
Right?
Jack Butala:
My friends are coming up to me a lot of years ago in the 90s and the early 2000s, saying “What? We’re really worried about you, man. What? Why are you driving these expensive cars, and you don’t seem to have a job at all.”
Justin Colby:
Yeah.
Jack Butala:
Yeah. I mean it’s very attainable, you just got to focus on it.
Jill DeWitt:
Mm-hmm (affirmative). Justin, where can we find you?
Justin Colby:
Well I, myself, also have a podcast on iTunes, called The Science of Flipping.
Jill DeWitt:
Great.
Justin Colby:
People can find that podcast there. As always, it’s free. The Science of Flipping is on iTunes. You can email me at Justin@TheScienceOfFlipping, and those are probably the two best avenues to go to.
Jill DeWitt:
Awesome. Well thank you so much for joining us. That’s Justin Colby from The Science of Flipping, here on the LandAcademy show. Hope to, that we can connect and do this again sometime, Justin.
Justin Colby:
Thanks for having me. I appreciate it.
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