DJ –     Hey everybody its Dean Jackson, welcome to the marketingmonday.com live podcast, and I’ve got a very special guest with us today, my friend Dean Graziosi, so Dean welcome.

DG –    Glad to be here, its nice to have two Deans on the phone.

DJ –     Exactly, the double Dean.  A lot of our listeners are familiar with you because we’ve done a couple of different occasions where we’ve gotten together on our podcast here, and I was sharing with you last time I saw you, that I’ve been talking to a lot of real estate agents all over the country and they are really finding that the one segment of the market that’s really moving right now is the investor segment.

DG –    Absolutely.

DJ –     And there’s nobody better in the world than teaching investors, you are the one who has, you are building a lot of these investors, so I thought we would go right to the source and maybe get some good insight on maybe what you are teaching investors, and how our realtors can really kind of be there to understand the mindset of what these investors have, and how to really tap into a lot of that business that’s gone on.

DG –    And monitor, yes.  Well I’ll tell you Dean, and this probably couldn’t be more perfect, because we do share, we are fortunately the biggest out there and I feel like I’m name dropping here, but my New York Times best-selling books have been rocking it for years, because I think we are one of the few that just tell it like it is, because there is a lot of stuff out there that I see that comes across my table of supposed real estate gurus that are offering a lot of automation.  You know, ‘you don’t need a real estate agent, you don’t need anybody, this program will find cheap houses, it will find you cash buyers that will match up and spit out money.’  Basically turning your keyboard into a cash machine, you know?

I think people are about fed up with that, I know I am.  At the end of the day what we teach, one of the most important elements of what we teach is having out students find a real estate agent that can work hand in hand with them so they can grow together, make money together.  So to me, just sharing what I do, the right real estate agent to my student is the best tool in their toolbox, that is the term that we literally use.  Now the wrong agent could be a flip, like a stripped Phillips screw-driver in your toolbox, right?

So here’s a couple of things that I think are really important for all your agents and everybody to think about of where we are heading.  This is the lull, for me this is the quiet before the storm.  This is when people aren’t talking about real estate that much, its because we’ve hit, and I’m extremely confident in the States, we’ve hit the bottom.  I mean if you look at days on market wherever you live, you’ve watched it spike straight up and then you’ve watching it spike, going up you watched the days on market shrink to barely nothing and then as the market, the bubble burst and we went down, you watched days on market increase over time and get higher and higher, and if you look at those days on market in most every state in the country, now they have stabilized.  They might bounce up and down a few points, a little bit here and there, but there’s no more crashing on days on market.

Now, Dean if I digress please, I talk a lot faster than you, you can tell the faster Dean here, but if I go off just stop me, but if you combined days on market stabilizing in most areas, you combine that with the fact that 35% of all purchases in the country now are cash buyers.  The cash is coming in the market.  Combine that with the fact there’s no new builds, Dean, all the new developers when the market crashed, started pulling out, and they are surely not going to start building when you can buy cheaper than you can build.  It’s very hard for a new housing company to build new houses, so new builds, cash buyers in the market, days on market stabilizing, and lastly I just read a report where for the first time in history there are more investors purchasing properties than new home-buyers.  When you combine that its a really great place to be for investors and a really great place to be for an agent who is friendly to an investor.

DJ –     What do you mean by that when you say ‘an agent that’s friendly to an investor’?

DG –    Well I’ll put it this way, this is one thing that we teach and some of you may have heard this, we have more students than anyone on the planet, and again we push our students to find an agent that likes working with them.  Now here’s what we do.  So I’m going to give you the back, or behind the curtain shot of what we teach our students and its catching on huge.  I mean we have hundreds of thousands of people out there, so this is great info, like intel from the inside, right?  We teach our students to call a real estate agency and really talk to the receptionist or the office manager and say ‘who in your office has raised their hand and said they would like, or has experience working with investors?’  I’m just telling you the strategy we use, and you guys can pick this from the opposite side, when the receptionist gives a couple of names ‘Bob and Sally both work with investors’, what we simply ask is, our students ask the agent ‘is there properties in your area that I can come in and buy, fix and flip and sell for a 20 or $30,000 profit?’

Now everybody listening right now, it doesn’t mean that’s what we are looking for, what I teach my students to look for is someone with the right mindset because there’s two answers we get and they are pretty similar.  I mean we have done this with thousands, we do this live at our event Dean, and we get two kinds of answers.  Someone says ‘that doesn’t work this is a down market, nothing is selling.  The only way to make money is to buy, hold and rent and sell some day in the future.’  That’s not the agent we are looking for.  The answer that we get when someone says ‘hey, I’ve either done that or I have a fellow agent that’s doing that, or I know this investor that’s doing that in this town, I would love to be able to help you find those.’  We are really just looking for that shift, that mind shift, the mindset because what I don’t want, and neither does every one of your agents, you don’t want to work with somebody if you are not in alignment.  Everybody on the phone knows they have to have those annoying clients, they are asking for one thing and you are thinking another one, and its one of those things where you get an email or you see their number come up on your cell phone and you cringe, right?

So we don’t want that on either side, so that question, what we’ve realized is that question, in most cases the quickest way for someone to say ‘absolutely Dean, I can help you, let’s see where we can find those, I’ll get some over to you’, or if they say ‘it doesn’t work’, then that’s not the person that’s open-minded enough to what we want to do.  Does that make sense?

DJ –     It absolutely does.  So tip number one is if you want to work with investors let your receptionist know that that’s what you are doing, because they are probably getting calls.  I mean I know you’ve got students in every city in the country right now that are out following your methods there, so they are probably getting a call at your office right now, somebody might be asking ‘who is somebody who works with investors?’  So if that’s you, let your receptionist know.

DG –    And let me tell you a behind the curtain filtering process that we’ve perfected, and just so you know on the opposite side of whether you are an agent or an agent investor as well, there’s never been a better time to get involved in real estate, and that’s what obviously you are promoting and sharing, but what we’ve done is, I have so many successful students and Dean I think this is why our stuff works so well.  It’s because, and you know this, I partner with my top students.  So I find the guys that used to be a machine-shop worker, the house Mom, the nurse, the mechanic.  I have a butcher, we have, it sounds like a butcher and a baker, but I have a butcher, I have a plumber that, guys or girls that were struggling, got involved in real estate, did really well and I partner with them and I never stop robbing what they are doing, and when they come up with an obstacle, they bring it to me, I try to solve it and they go back on the ground.  So its like I’m investing times 10, because I’ve invested with 10 of my stop students.

So one thing that I know is overwhelming in today’s world, someone will call an agent and say ‘I want to invest’ and say ‘send me everything in this certain area that’s in this price range’, and then the agent will put you on an auto-responder so you get all these get deals, and let me just tell you what happens on the investment, on the investor side so you can be aware.  All of them get overwhelmed.  They get an email every day of all these listings, they don’t know how to shift through them, they don’t know which ones are the good deals, they are calling you to look at 20 different houses, they don’t know which one is the right one and all of a sudden overwhelm happens and they don’t do anything.  We all, Dean we know that overwhelm can cause you to be paralyzed quicken than underwhelm, right?

So what we do, and this is something on the opposite side that if you guys offered this out of the gate, you bring an asset that is just doing amazing for our students, we teach our students that when they have an investor-friendly agent that says ‘yes I’ll send you the right stuff, I’ll send you what you are looking for.’  We ask the agent to only send listings that have three things.  It could be one of these three and if it has two its even better, and the three things are, and you should write this down, because if you offered this you are going to blow people’s minds.  Our students only want listings that have either ‘as is’ in the title, ‘vacant’ and has had a price reduction.  Literally you will take 100 listings that you think you want to send this new client of yours, who is an investor, and when you sift those out those 100 will turn down to 25.

DJ –     And that’s a valuable thing for people isn’t it?  When you can be an interpreter a little bit?

DG –    Exactly.

DJ –     You can sift through some of that data rather than just sending them everything, yes you are absolutely right.  I can see how somebody would…

DG –    Well I’ll give you an example.  Sometimes I go on vacations and I get a hare up my butt, like I’m in La Hoya right now, so now I’m like ‘you know I am going to buy a house here.’  I rented one here for a month with my family to get out of the heat in Arizona, its 115 there right now.  So we get out of the heat and I’m in La Hoya and I have to, and I’ve done this before on a vacation in Hawaii and I see an open house and I just walk in for the fun of it and meet an agent.  I tend to like people right off the bat, like if I like you I like you, and I said ‘let me give this agent a shot’, and I’ll give an agent the criteria, they are excited especially if they recognize me and they’ll go ‘oh’, and literally within three days they send me 100 properties.              I go ‘I don’t have the time to look at any of these’, and I move on.

If they would have sent me an email, and again, there’s a lot smarter agents on this phone because they are learning from you Dean, then a lot of the out there, but if they had some kind of filtering process where they proactively got to me and said ‘hey listen Dean, I know you are looking for a great deal, so I didn’t send you anything unless it had these three things, one of these three things’, either ‘as is’, because if its ‘as is’, they probably don’t have the money to fix up the little things.  If its vacant, well someone is paying the bills and no one’s lived there, and if they had a price reduction they are aggressive.  I know a lot of guys teach or a lot of people teach ‘just go after days on market’, but there’s a lot of houses on the market that people don’t care if they sell.  So if its on 200 days and a person just hopes to sell, or if its been on for three weeks and they’ve had three price reductions, which one do you want to go after?  Price reductions, right?

DJ –     Absolute, but that’s one of the biggest fears I think of the realtors about investors, is that they maybe fear that an investor is just going to come in and they will want to make an offer on every vacant property,’ just send them out 50% of the asking price and let’s just see what happens.’  Then the agents are just running around trying to go crazy just putting on ultra low ball offers.

DG –    I couldn’t agree more and that’s why we filter the process, because the one thing we do is we teach the complete opposite.  We say ‘do not find a great agent and burn them out by making 50% offers on 200 properties having them go crazy.  If you help the agent filter out the ones that are aggressive…’  Because here’s what I know, I’m going to tell you guys again, this is what I teach on the opposite side and some of you might be saying ‘I wouldn’t work with an investor if my life depended on it’ and I get that, but there’s still a great side, you should be buying real estate for yourself then.

Here’s what I know, when you filter out, and you have ‘as is’, ‘vacant’ or had a price reduction that will knock say 100 down to 30 or whatever the number is.  Then they are the one’s that get sent to our students.  What we ask our students to do, just so you guys know, and this is a great strategy to teach as an investor, especially a new one who wants to get in the market and I’ll talk about new cash buyers in a minute, what we teach them to do is to go through all the notes on the listing, and if somebody says example, this is how we teach it.  If someone says ‘great schools, great location, recently rehab perfect condition, love the house’, that’s not the same notes compared to somebody might be vacant and have a price reduction but they might not be as urgent as someone says in the notes ‘already moved, house vacant, need to sell’, right?

So we start with the criteria for the agent, but then when those 100 turn into 50 and come to our students we teach them an internal process to narrow the 50 down to 25 then only make offers on say 25.  What we found around the entire country is that doing that filtering process one out of 25 deals always gets accepted, that’s our national average when someone follows that process.

DJ –     At what..?

DG –    I’ll tell you what the average is, its .7 of the asking price.  That’s our national, if you filter it, if its got one of those criteria, the notes shows that someone is urgent and you offer about .7 of what they are asking, they are asking 100, offer 75, we are getting them at about .7.

DJ –     I mean that’s good data to have.

DG –    And that’s real data.  I don’t think anyone has the day to day data like I have with hundreds of thousands of people out there doing it, you know?

DJ –     And I think that there’s a misconception maybe that some people have, some realtors have about investors that they are all either buying high volume and they are making lots of offers and going to burn you out, but there’s probably a lot of people who are getting into investing right now and they are not looking to do it full-time and do it as buy 20 or 30 properties, they are probably a lot of people coming in who might look to buy one or two properties as an investment and just get into the real estate market.  It seems like if realtors have, if you’ve got a great system to educate new investors and hold their hand, there’s probably a lot bigger market of those types of people?

DG –    You couldn’t hit the nail on the head any harder, because what we call them Dean is new cash buyers.  What the new cash buyer is, I think people do sometimes, even our students get the, when they are wholesaling, they think the perspective of a buyer is just what you said, buying a whole bunch, making tight deals, being rude out it, just take it or leave it kind of thing, and they biggest wave of cash buyers and investors right now are these new cash buyers.  Its electricians and carpenters and your chiropractor and your dentist and your doctor and the guy that owns the machine shop down the street who has some cash, saves up their money.  They make their money doing what they do best, they make money being a chiropractor or a dentist, but their money sitting in the stock market that recovered and they are afraid its going to bottom out, or its in a savings account collecting 2% interest if they are lucky, and they want to get into a bottom real estate market, but they are scared to death.

DJ –     And they probably don’t have time to sift through, to go through and do all of this?

DG –    No they don’t have the time, and that’s what we teach.  We teach people how to make it easy.  Like literally I have agents right now, and just so you know Dean, this is something I did, you know but I’ll share it with everybody on the phone, I bought 50 properties in the last 35 days, and I’m talking and I don’t mean a 50 unit complex, I mean 50 different individual houses all over the country, and I have agents that know what I like.  They won’t send me a deal unless it meets my criteria, they’ll filter it out, they’ll knock them, so if becomes a process and the easier an agent makes it for me, the easier it is for me to close on that many deals.  Even if I have an offer that I will make a blanket, an offer and sign it without filling in the details, so my agent instead of having to get back to me and fax back and forth, we have a process where there’s a signed blank document, she’ll fill it in and she’ll email it to me as an attachment and say ‘is this good?’  And I’ll say ‘fine, send it out we are done’, and I can look at in on my Blackberry.

So again, its all about the convenience and here’s what I know, I’ve created investors all over the country that are buying two to five deals a week with the same system, and the agent that they stuck with, I teach loyalty.  Its like the agent that gets you out of, this is from Joe Polish, ‘the agent that gets you out of Egypt, you have got to stick with them so they can take you to the promised land’, you know?  We’ve done that, so again if you can think of that your investor/buyer is a chiropractor or a dentist that works 45 hours a week, doesn’t really know about real estate, but has got some money and would buy as many as you could, that’s the kind of thing that we teach.  We even teach our agents and our wholesales, we teach the train an agent, or train to be a wholesaler how to, the exact criteria: to find a local bank that will refinance our investors without seasoning and they will do it quick.

So we create a process, we literally give the process on how to ask a bank to, like when you are going through a job process, sorry I just went blank, when you are in the hiring process, you are interviewing, God I couldn’t think of the word interview sorry, when you interview somebody we teach somebody the exact steps on how to interview a bank that can be stand-by to refinance our investors’ properties.  So again, we have John Smith the dentist who buys two properties at, let’s just use round numbers, at $100,000 each.  He used up all his cash.  If we give him this process and we say ‘we found a bank down the street, So and So Savings company or credit union, will refinance your properties at 80% loan to value of the appraised value, and there’s no seasoning, why don’t you call Bob?’  He calls Bob, he gets most of his money back what’s he got?  He’s got his money freed up for you to buy two more properties for him.

So again, its all about thinking a little different in these different times that we are in.  You know, I’m sure everybody on the phone would love to go back to the fun they have in ’04, ’05 and ’06, but this the time, and this is what you teach Dean, to reinvent yourself and you are the ones that will come out so on top because you went in a little different direction.  I truly don’t think with the wave of money I see coming into the market, and the market is still going to be flat for a while, I don’t see a better way to have consistent cash flow than being a turn key agent, to get a handful of cool investors in your area that you like working with that you could just keep turning and burning.

DJ –     Yes.  I mean that is amazing, because when you do think about it, no matter how bad the perception of the market gets, you know, we used to have a saying in tennis that every shot makes somebody happy.  Its either the guy who hit it is happy if it goes in, or the guy who is on the other end is happy if it goes out.

DG –    Fantastic, I love that.

DJ –     Every shot makes somebody happy and every market makes somebody happy.  I mean investors have got to be just kind of jumping up and down right now.  There’s probably no better investor market than…

DG –    I’m in, this is my 22 year of buying and selling real estate.  I have never stopped making money and I am buying more and I’m very excited about the market than ever before in my life.  When I say I bought 50, I bought 50 and next Monday I’m closing on 200 properties at one time.  I’m happy as hell and there’s a lot of people out there that are happy.  So again, it might be a little mind shift, it might be a little annoying at first, but its like anything in life.  Anything new is a pain, anything new is a little scary, but again, systemizing any of this, any part of what you do makes it easy, and I’m telling you again, making it so it can be easy for especially these new cash buyers to buy and then rebuy and then buy again, I think its a phenomenal strategy and its the kind of stuff we share behind the curtain stuff.

DJ –     That’s amazing.  I think if I were doing this right now, I would really be concentrating on building my little network, my team of people who can usher somebody right through the process, where you are leading with really good information, I’ve told you Dean about, we have a program called Bank Owned Weekly, our advertised on Craig’s list and on other places to find people who are interesting in the current inventory of bank owned homes, its always a good start to find investors and communicating with them.  But the more you can make that process seamless for them, the more that you can take out the friction in the process, the better off that you are going to be.

DG –    You hit the nail on the head with friction.  So think about this, again going one step deeper, you have a chiropractor down the street that’s got some money, wants to invest in the market, little scared.  Not only do you find him a deal by sifting out and say ‘hey, I brought you these deals because they are either vacant, they are as is and they’ve had a price reduction, I think these are good ones to make a deal on.  Plus they are in an area that rent is very well and very strong, and here’s the research on why it rents.  Now I think the place needs a little clean up, or a little rehab, nothing major.  Well here’s Joe who I’ve used for years and I highly recommend him.  He rehabs very efficiently’, again a lot of you on the line know all these stuff and you already have all these people on your Rolodex.  But just think, when you make things so easy and say ‘here’s the property, it rents in a great area, its going to rent for $800 a month, here’s your cash on cash return that you could get potentially when its done.  Here’s Joe Smith who can give you a price on getting it just’, you know, one of my best lines that one of my students, Greg Murphy, uses, he goes ‘people rehab too much when they are going to rent’.  He goes ‘I just knock the ugly off it.’  I love that.  ‘I knock the ugly off it.’  Paint and carpets and a good clean, you know?  ‘Here’s Joe Smith who can knock the ugly off it for you, and then after you get it rented, here’s Mike down at Federal Credit, they refinance with no seasoning based on appraised value.  So here’s the whole process, let me know how I can help you through it.’  Because the quicker you can get that person cleaned up, bought, rented and refinanced, what do they do?  They come back to you and say ‘I need two more of those.’

DJ –     Yes, and then you could either keep it or sell it

DG –    Exactly.  So…

DJ –     I think if you have that conversation with your chiropractor or with somebody who is thinking about maybe getting into the market, where all they really have to put up is their money and all of the details and stuff can be taken care of, it makes it far more attractive to them.

DG –    Yes, there’s a new system that I’m working on.  I have a whole section called the ‘human automation network.’

DJ –     I love it.

DG –    That was inspired by all these magic money machines I see a lot of these real estate gurus like to sell.  Of course its very sexy, if I said to you ‘Dean, you stay home and this computer program finds really great deals in your area, finds cash buyers, they match them up and you just kind of walk out to your mail box and get checks.’  I mean that’s very sexy.  I’d like to do that, I’d like to go and get a check out of my mail box right now.  It frustrated me so much that I created the human automation network to show people how to connect all these people I’m talking about. You have professional, motivated people all out for the same reason.  An investor has to realize that a good agent wants him to win, wants him to make money because that’s how they make money.

A good rehabber wants him to make money because he’ll hire him more.  An investor wants a good title company that handles the process easily and carefully.  All that human automation network, as I call it, is having all these professionals in line that in most cases they talk to each other.  So as an agent when you set them up with the rehabber, the flow can go continuously from the rehabber, to the inspection, to the banker, to the insurance company and a lot of times the agent and the investor himself don’t even have to be involved, that’s when you start cranking deals out.

DJ –     That’s exciting isn’t it?  I mean I get excited about the potential of that, what our agents can do, you know?  I just see it as such a big opportunity and really just deciding that that’s what you are going to do and going deep into it.

DG –    And one last thing Dean, I know I can go on and on here, but one last thing.  What we teach our students is, as an agent, let me wear that hat for a minute, is if you truly sift out deals where you know a certain part of town is where your investor should be investing, and a certain part that crosses the tracks and there’s nothing renting over there, its not good, if you know that a property is priced too high, or doesn’t have one of the three key elements we talked about, I wouldn’t send it to your potential investor, there’s nothing worse than getting bombarded and you have to, as an investor now, we have to sift out all the deals.  Now listen, that’s how most all agents work they do what the investor tells them.  ‘Send me cheap deals in that area’, but I wouldn’t listen to them because that’s not really what they want.  They want the deals that could work for them, so if you just send them everything they want they get overwhelmed, you scare them aware and they go back to cleaning teeth.

If you refine the search and say ‘here’s this, and this is the connection once this happens’, all of a sudden it doesn’t become overwhelming, it becomes ‘oh my God, I can make X return on my money and this agent is my hero’, and remember when you are the hero you never get squished out because you become the lynchpin.

DJ –     I’m just thinking Dean, when I’m hearing you say that, I’m thinking about the realtors that would love to maybe invest in real estate themselves, but are having a little bit of a hard time with the market right now, and they are just kind of getting by.  But I’m realizing that the real differentiation might be to start really thinking like an investor yourself, at least going through all of that stuff getting all, everything all lined up just like you were actually going to invest in the properties.  Then its probably easier to find people like the chiropractor, or people right there in the community.  The money is probably the easiest thing to find, the deals are the thing that takes the real skill and the effort.

DG –    Hands down, and the thing is we teach people how to be wholesalers as well.  So its the same exact strategies that we teach people exactly how to use unique and Ninja marketing to kick up these cash buyers, literally in days, have these cash buyers in your area on the list that most people don’t know are right down the street.

DJ –     Is it really an advantage to be a real estate right now in this market?

DG –    You know it is.  Of course you have, there’s so many advantages to it, but again I mean we have our students doing amazingly well without being real estate agents, but I mean for me, if I was an agent I would be using these strategies to find cash buyers and killer deals.  If I could keep the killer deals myself I surely would if I was an agent, and if not I would just be the matchmaker to start making these things happen.

DJ –     So Dean, what can people do to start getting more educated and start going down that path

DG –    Well we are in the process of launching my best product to date.  In fact I have training videos that are the best I’ve ever put together, hands down.  I’ll send you a link Dean that you could put hopefully maybe right below this video, where people can opt in and literally we, I’ve been working on these training videos for about a month now, and its going to blow people’s minds.

DJ –     Perfect, I’m very excited.  I’m really looking forward to this, to see all the stuff that you are going to teach everybody.

DG –    Yes, and again.  If you keep your mind open to seeing both sides, because of course there’s frustrations on every level of every business and everything you, personal relationships, business and all of it, I really think whether you want to be an investor or take care of investors or just be a better agent, if you look at how we share and the marketing techniques we teach people on how to find cash buyers and how to find deals no one else can find, it fits in to make an agent, I believe takes them to the next level and be, stand so far, head and shoulders above anybody else in your industry.  So yes, I’ll give you that link, put it below, you guys got to check it out.

DJ –     Awesome.  Dean, thank you so much.

DG –    Dean, thank you.