Our topic all week is about prepping for the 2025 inevitable market adjustment in the real estate industry and this is step 4 of 5, establishing deal flow. This has to happen no matter what’s happening in the market. Cutting to the chase, you can choose to read this show in ten seconds or read the rest. You have to have at least 10 to 20 deals in your pipeline. I would rather see you have 30 to 40 transactions or 30 to 40 potential people sellers that are talking to enable you to buy 1 or 2 amazing pieces of property. When I say amazing, I don’t mean physically attractive but I mean grossly undervalued for their actual value.

They’ve all aged and you’re like, let’s go. I agree.

Discord Question: Best Practices

Each day on the show, we answer a question from our Land Academy Member Discord forum and we take a deep dive in land-related topics by your request.

Mark wrote, “Hi. I’m a new member of Land Academy. I just wanted to briefly introduce myself and look forward to meeting and potentially partnering with many of you in the future. I’ve been on the sidelines of Land Academy for about six months. One of the main reasons that I wanted to join and was excited to join was because of the strong network and this chord channel specifically. I’ve been in real estate since 2005 and since 2012, I’ve been an executive in the single-family rental industry. I’m a founding member of our current company which we started in 2017 where we probably employ 160 members and have over 5,000 homes across fifteen states.”

They’re 5,000 SFRs that are rented and 160 people managing that. You’re in the right place. If you want 5000 to turn to 10,000, this is how you do it.

“I oversee all acquisitions and disposition activity for the company. I’m a married father of two young girls and in my free time compete in ultra endurance triathlons and running events. Again, I’m excited to be part of the network and to learn best practices from many of you in the group.”

Here’s what I read and I’m not a woman. He’s a perfectly in shape young father who has a ton of money and is a business owner.

Looking for something new or ways to improve what he already does and I love it.

This is a dream man, isn’t he?

I’m trying to think. Let me compare it to your bio.

Am I aging in place?

Unshaven.

Middle-aged.

Unshowered.

Someone called me lumberjack days ago.

No, it’s good. I like it.

It’s a fair comparison.

What’s the farthest you’ve run?

I ran into the bathroom a couple of days ago.

There we go. That’s good. I ran from you. Anyway, where were we? Welcome. Glad you’re here. I hope your wife runs from you.

I’m not a triathlete.

You don’t need to train for that.

I’m just running in fear. Running out of safety.

Established Deal Flow

Our topic is prepping for 2025. Step four, established deal flow. We’ve been talking about market corrections that are coming. It’s inevitable. Why? Why do we know this? The data shows us. You can go back and look at it. All this week, you prepared us and talked about exactly where to go and download over a million records. If you want to sit and dive into it and see, “I see that. I see it went way up.”

Some markets like 160% and then you’re starting to see down on the value of the asset month over month. You’re now watching 8%, 20%, 16%, and 4% reductions going down as it’s slowly correcting itself. Jack has said and shared with us many times before, he’s been doing this over three decades. This is not his first time. You’re going to expect more coming up this year in 2025, and we want you to take advantage of it like we are.

What are we doing to prepare? We talked about getting money together. That was it, but we’re not only making sure if we need funding partners that are there but hoarding all our own personal cash. I was looking at Christmas presents for myself, truth time. I may or may not have it online and looking at jewelry stores and I’m like, “I’d rather put that into a property. I’d rather do all these other things with my money. For Christmas, I’d rather have a three bedroom, two bath, and undervalued home in Arizona.”

Who wouldn’t buy an asset and spend $100,000 of equity in it? I go and spend $300,000 and now I own a $400,000 asset. That’s how empires are made.

Things are come back. There’s a lot of things that are leading up to this. There’s a lot of other things that are going to weigh into it too like the interest rates and things like that but we’re talking about deal flow. The point is here too, in preparing for this, you have to have deal flow. It’s not going to just land in your lap. You see it.

I know you’re looking at it. If you’re weirdos like us, you are looking at pretty much daily. You see all the red dots and all the things that are for sale. There’s a lot more red dots and there are yellow dots, which is the sold activity. More pop up every single day, but those aren’t the red dots I want you focusing on. I want you focusing on the no dots. Those are the ones that we’re going after and how are we doing that?

We want you to create your own dots.

It’s going to go from no red to just yellow because you got a hold of it.

We never buy for sale property ever. Let’s take two steps back, and stare at that whiteboard again and it’s blank. Since the beginning of time, how has anybody who wants to sell something create deal flow? For millions of years or however long we’ve been here. For thousands of years, in case of us, we’d probably done it by word of mouth. You can picture a slimy medicine man or salesman travelling around in a covered wagon. By word of mouth, he’s selling whatever you are selling.

Since the beginning of time, anybody who wants to sell something or create a deal flow must rely on word of mouth. Share on X

Fast forward to television, there’s commercials. To Hawk and Coca-Cola, you send out a message and a percentage of people, a very predictable percentage of people respond to that. Some of them are negative and some are positive. What we do is no different. We attempt to generate a 1% response on mailers that we send out. One percent in direct marketing, by the way, is a landslide smashed out of the park’s success.

For every 10,000 letters, we get a hundred people responding, which is about right. Half of those people are responding in a very negative way saying, “Are you out of your rock? Off your rocker. I’m not going to sell my property.” They know what it’s worth and that’s fine. That’s part of this. A small percentage, about ten people out of all at that mailer are going to say some version of, “I just had a life event and your timing’s perfect. I would love to sell or talk to you about selling my property.” Maybe the price works for them at that point that you offered. Maybe it doesn’t.

This is where the magic of Jill comes in because she befriends these people. and she approaches this like she is solving the problem that they have. Which is liquidating the asset quickly so that they can address whatever life situation they’re having. That’s deal flow. If you send out 10,000, you can expect about ten or so potential real acquisitions according to your criteria. If you send out 20,000, you can expect about 20 units of 20 discussions and on and on. If you get yourself into a pattern like we talked about where you’re sending out 5,000 to 10,000 units every single month. You are going to have a deal flow pipeline dreams are made of.

There you go and that’s what you want. You’re creating deals. That’s the whole point here. Your deal flow is not looking for the red dots, sending out the male, letting them come back to you answering the phone, by the way on that very first call creating a deal. That’s your deal flow or having that conversation. That’s your deal flow and I love it.

If you do 10,000 units a month, I’m going to say you’re going to get between 30 and 50 phone calls a week. That’s solid. You can from those then you dig down to find who’s real, does it meet your criteria, do you still like it, does it have eight days, and does it make sense financially. All of that and you go down that path. If you are flowing like that, you could easily put a deal on escrow week and talk about amazing deal flow.

I can’t remember its time where we started out in January on a system like this, where we had to turn it off. We have too many deals to review and too many properties that we’re buying. By the middle of the year, you should be done or on your way to completing whatever your goal is.

Don’t turn it off.

What you should not do is what we talked about, send a mailer out and “see” how it goes. Let’s just see how this goes. I’m going to send a test mail to see.

Are you doing it or not?

Let’s see if I like it.

Testing it is putting your toe in the water. You’re not diving in. Dive in. I totally agree.

Testing is putting your toe in the water. You are not diving in. Share on X

Episode Wrap-up

If you test it, you are dramatically increasing your chances of failing. Join us on the next episode and its step five of the five steps that we’ve talked about all week about setting yourself up to the inevitable 2025 real estate market pricing adjustment. The next topic is executing what we’ve been talking about and then growing your staff because you can’t do this by yourself and make any real money. You should start off by yourself but eventually grow staff. You’re not alone in your real estate ambition.

We are Jack and Jill.

Information.

Inspiration.

To buy undervalued property.