Serial Entrepreneur, Professional Marketer, And Investor: Sonny Tran

   Currently, we’re on the verge of some big moves in the housing market thanks to the uncertainty of any economic recovery that’s on the table. We don’t know exactly how it’s going to go forward but many expect good real-estate deals from motivated sellers. We’re going to look at real-estate investing during interesting times.

   Today, I’ll be interviewing Sonny Tran, a real estate investor and serial entrepreneur. He took his background in banking and finance and combined it with strong marketing and sales techniques to build a business in real-estate investment. Sonny is very enthusiastic about what he does and we’re going to talk to him about approaching lead generation, the importance of mentoring and we’re also going to hear some real-life investment situations that Sonny found himself in. Listen to Sonny as he talks about sales psychology, what to look for in investment partners and how to build a list of motivated sellers.

Topics discussed in this episode

·         How to do prolific lead generation

·         Effective sales techniques for distressed properties

·         How to analyse a good deal

·         The value of a mentor

·         Why time is your most valuable asset and how to save it

·         What Sonny looks for in investment partners

·         The sales psychology of real estate deals

·         The stages of how Sonny sets up finance

·         What savvy investors look for in a deal

·         How to climb the ladder to bigger deals

·         The balance between getting multiple new leads vs persuading your existing warm leads

·         How to do door-knocking the right way

·         The importance of combining approaches

·         How to build your list of motivated sellers

 Transcription

INTRO: The fastest way to learn is through someone that has already done whatever you want to do. Fastest! The fastest fastest way to get extra knowledge is to find a mentor.

PAUL DOCAMPO: All right, this is Sonny Tran. We’re in a mastermind together, and I didn’t know this about Sonny, but he is a real estate guy and a business builder, serial entrepreneur. We were talking before this about all the amazing things he’s done in marketing and sales. He’s a marketing and sales guy, and I hope to talk about his banking and finance background and how to lend, what he looks for when he’s looking at deals, analyzing deals, and how to do proper lead gen and sales techniques when finding distressed properties. So this is Sonny. Sonny, how many businesses do you own right now?

SONNY TRAN: I own seven businesses right now. They’re all kind of interrelated, which is the cool part, but there’s usually one domino that falls and affects and helps all of them. Right now it’s real estate. So I’m looking right now to acquire real estate broker agencies. I’m looking to buy real estate companies or partner up with real estate companies that are doing things to create more revenue for everyone.

PDC: You mentioned a CRM. You built a CRM as well?

ST: Yes. We actually have a CRM that we actually help investors and real estate agents kind of dig in where they can actually keep all their contacts and place in order, and they can send messages out to their customers or leads when it comes in. We have it automated 100 percent where if someone fills out a lead form, they go to a website through funnels, because I do a lot of things with ClickFunnels as well, that when they’re doing that, it automatically generates leads and sends it straight to your cell phone and it’s inside the CRM. It actually can make your phone ring at the same time they’re filling out that form. So that’s what’s amazing because in real estate..when someone fills out a form, you need to contact them within the first six minutes. Highest response rate. After that six minutes, 80 percent of conversion is over

PDC: You mentioned the resources. So for somebody starting off, what kind of resources is he going to want to have in his toolbox?

ST: (0:24:08.8) The fastest way to learn is through someone that has already done whatever you want to do. Fastest. And the fastest fastest way to get expert knowledge is find a mentor. You can buy a program. Yes. You can learn how to do things and learn it yourself, but you get a mentor and also with a program..they’ll give you knowledge. You don’t know what the right and wrong things are to do sometimes because you haven’t went through it. Once you have a mentor, they’ll watch all the things that you didn’t see and you didn’t know, and maybe you can share some deals with them and then have them split it and do it if you’re brand new. If you’re an expert, find an expert who knows how to do things even better than you. That’s what I learned. Everything I learned means through mentors. It’s not through..it’s learning a book and a program, but then I also do the mentor thing because I learn even faster that way. And when you do it that way, you’re an expert just like how they’re an expert. And, hey, you’re giving away some part of the deal percentage, but you make more money that way because then you do the stuff yourself at an expert level because the problems you can face in losing certain deals could be in the millions. Do you want to learn those mistakes when you have millions, or do you want to learn them now when you don’t have a lot of stuff or a lot of money and those mistakes won’t crush you before you even get started in real estate investing. So those are the questions you want to ask. It’s actually that simple.

PDC: Now, lending. You really pick at somebody who’s coming to you with a deal. Not pick at them, but you really want to go through them and figure out if this is somebody you want to do a deal with. What are some things..if somebody is bringing you a deal, what are some things you’re looking for as far as gives you kind of the red flag you don’t want to deal with them or gives you a good flag…

ST: (0:25:32.0) Are you talking about personality based, or are you talking about the statistics?

PDC: Let’s do both. Let’s do personality based. Somebody is brand new and they bring you..they’re coming with a deal. They have it under contract. They want to close it, but they’re pretty brand new at this.

ST: (0:25:45.1) Well, my first question is did you comp it out? Yes, I did. I have all these comps. What are the comps? Now I’m testing their knowledge. What are the comps? And they have to give them to me. Oh, yeah, they’re comps I’ve looked at. It’s like, you don’t have them in a report? We’ll talk later. Why don’t you get that done and your Executive Summary. And the comps..then I look at it. It’s like, you know, if you want be pacing the market, it’s got to be deals that closed in the last 90 days because that’s how it is in normal mortgage lending. Oh, really? How did you get those comps? Okay, so they do their research on closed sales. Not, oh, it’s listed for sale. Listed for sale is speculation. That’s not a deal. You know that. So you’re starting to see it. Now I’m going to..those are the things I’m looking at. But how did you comp it out? That’s when I’m actually teaching them. I don’t want to do too much, but if they’re brand new, if I like them..before that I go on personality. Are they doing the right thing? Are they just in it for the money, or are they helping the person? My thing is I’m an expert in a lot of these things. I don’t want to teach someone that’s going to create problems in the marketplace and I’m a part of that. I never want to be a part of that. And that’s the thing. So if they’re really good, it’s like, all right, why did you want to get into investing? Is it the money, things for your family? Okay. So when you’re learning how to do it, are you trying to make the most money you can? I’m asking those questions. Or are you maybe trying to be like fair? But I’m not asking directly. I ask indirectly. It’s like, look, here’s how much money you can make from it. So when you did the deal with them, how did you arrive at the price you and them agreed, and they’ll tell you how the psychology and the selling of it. It’s like, huh, interesting. Okay. So what did they tell you? So I’m asking them the dialogue..the sales dialogue. Why am I doing that? It’s because I want to understand how they got it. Okay. So what are you trying to sell it for now, and what’s your plan on selling it and stuff like that? Because a lot of times some of them will list it. Some of them are wholesaling and whatever. I got it on a contract. I want to get money so then I can do it. Then it’s like are you buy and hold? Are you fix and flip? Or one of those two? What are you trying to do? Oh, are you trying to do the rest because obviously, if it’s really messed up, which most deals in real estate investing is, you need hard money and private money. Those are the types of monies that you need. 

And then after that, what happens is you deal with that and then you do the next deal which is regular conventional money once you get it fixed up and you have a rental contract in place, which is a normal real estate loan unless you have it under an LLC. Then you’d go commercial financing. So you starting to see? There’s different financing and different grades of that. And from there it’s like, hey, they do that. So initially sometimes they get investors to front them because then the next question I ask them is, “So you need money to make the deal happen. Do you have money to fix it? Because depending on what type of deal it is, we may not be able to provide that.” And then the next question is how much skin in the game do you have in it? Because I’m going to tell you, you want to do a certain deal, if you have skin in the game, it makes the banks feel better. I need 30 percent into the game of the purchase price. It’s like, oh, it’s worth this much ARV. Oh, we could do that. Those are different types of lenders. Those are like lawyers and attorneys. They’ll charge you more money if they’re going to give you all that. That’s fine that they can do that. 

(0:25:32.0) What do your contractor estimates look like? Where do your contractors come from? Who are they? Have they done deals before? Oh, I’m going to do it myself. This is your first deal, and you’re not..no, no, no, no. We’re not going to do that deal. That’s too risky. What you’re asking me is to put up all our money, our investors’ money, and all this stuff to do. You’ve never did anything. If you were the bank, what would you say, John? And you already know the answer. They’re like, uh, I wouldn’t do it. That’s why I’m giving you the framework on how you can do it. So these are the things I need if you want more investors to do it however, and you have to put some skin in the game. If not, you’re going to get the highest interest rate possible because now we’re talking straight to investors with their hard money. And they lend it that way because they just want to make investment return on it, but they want to know the question is their money safe? 

So you have to do your due diligence. Locking in the deal is only one thing. Now the next step is like, oh, man, these comps, and I show them the comps and the comps aren’t there. It’s like you just made a bad deal then. How are you going to get out of it? I don’t know. That’s your thing, your deposit and stuff. You need to talk to an attorney because that’s not my thing. Because then they’re starting to ask me legal questions. I’m not an attorney. I may know a lot, but that’s not my thing. I’m a lender. I try to perform my function only.

PDC: Do you ever buy these contracts? Do you ever buy these deals from people who come up to you?

ST: (0:29:45.0) I do. Yeah, I have. I do. I have because what happens is that they can’t do the deal. No one wants to do the deal if the lenders aren’t going to the deal. It’s like, “Look, I can do it here and you can make a little bit more money than what you’re doing in this. I’ll do it this way where we can partner in the deal, but here’s what it is because then we’re going to have to get the hard money. Now I have to put a down payment because a lot of times they have no money. Sometimes they find great deals. They really have no money. Instead of wholesaling and making $500 or $1,000 or $1,500 or $3,000, whatever their price is, you can make maybe $10 grand on it, but here’s what we’re going to do as partners. You don’t need to do all this other stuff. So I have them run the project. So then they’re learning how to do it but they’re also doing it because, when you’re in my shoes, time is actually the most valuable asset. It’s not money. It’s not all these other things, and how can you get more of your time working optimally. So now all these guys have become other people looking for deals from me. Kind of cool.

PDC: So a lender would be a good end-buyer then or a good partner.

ST: (0:30:40.8) Yeah. I mean, it’s actually a phenomenal partner, and actually, I taught many people that are flipping, like actually professional flipping, they got the lending, so I just gave you guys an inside secret. Now you guys need to use some of my stuff. But inside secrets like once you become a lender, you’re getting all the deals, and a lot of deals flow from other people from it. But do you have the money? That’s the next question. You have to kind of get to that other point. But if you’re at that point, yeah. Because I actually helped a professional flipper. They did $5, $10 million a year and then became just a lender, and from that they increased their business to like $50 million because now they’re doing lending and they’re still funding projects. And everyone knows them, and if the projects fail, guess what happens? In hard money you have deed in lieu of foreclosure. What does that mean? If the guy can’t successfully flip in his name, you own the property for all you lent for. Wow! How would you like to get into a deal even higher and better with less risk, and if they fail, you still get a return on equity. I don’t know. I can’t believe I just shared that one. So yeah. That’s another thing. Man, you’re good at digging the information out. So that is actually a really great strategy, but you need to have a portfolio for probably a good amount of money to be able to do that.

PDC: Hey, real quick. I want to introduce you to my free daily newsletter where I give out free daily tips to real estate investing strategies, marketing, and sales techniques to keep you, the part-time investor, moving forward every day. So head on over to RealEstateAudios.com, and you’ll get a free report along with that free daily newsletter.

PDC: So you need a portfolio of experience too, but to circle back, this goes back to finding people who have done it, being a mentee of them, and working with them as a partner, learning under them, that’s how you can gain the experience of a brand new person to bring a deal to you to have the experience and the confidence to know you can do a deal.

ST: (0:32:37.3) Not just confidence, speed. Instead of you doing one freakin’ deal trying to figure out how the heck to do it, you can do 10 deals because he’s gonna tell you, oh, those nine deals are crappy deals. Go find another one. Because they know how to make money. They’re not doing it to waste their time either because now you actually leverage on someone that really knows what they’re doing to help you make money faster. From there you’re learning to be an expert like a mentor where now you can mentor other people to kind of do the stuff that you didn’t know because you graduated knowledge. It’s like a teacher. How do you become a teacher? I got to go to kindergarten, preschool. Then I got to go to high school. Then I got to get a degree and all this stuff and then become a teacher. Then I got to be a teacher sub. What are those things called? The teacher’s aide. Then I can be a teacher. Then what do I want to be? Principal! What do I want to be then? Superintendent. It’s a graduation of all that. And even a deal in real estate investing actually starts off you have no money. You’re a wholesaler. Then you graduate to buy and flip, and then you have more money. What do you do? Buy and hold. Yeah! Then there’s the next category. What are you buying? Single-family homes. Now I’m buying multi-family homes. What am I buying? Apartment buildings like Grant Cardone. Now what are you buying? I want investors. I want to buy apartment complexes all over the country, and I want to get syndication, get people’s money. So you’re starting to see this graduations in everything. And what’s the best way to do what you want to do? Someone that’s already done it. 

(0:34:04.6) So self-education is one of the biggest things, and I actually have a monster course I can help with that. And we have all these awesome bonuses.I guess to your list I can probably put together and do a real estate training on that or maybe give a thing of our CRM. Because our CRM is actually..it gives a lot of value. I would say it’s worth $12, $1300 a month, and we do it for $497. But it kills it because all you need is one thing. You don’t need 50 different things and one software to do it. It does calling, texting, schedules your appointments for you automatically, and if people cancel, they text you back. It goes to the CRM and boom. It’s got an autodialer on it that can keep track of everything.

PDC: Yeah, so going back to the sales thing, and this reminds me, high-volume people who are wholesalers are doing multiple deals a month. Do they still have this deep, intense sales..like we gave some scenarios. We gave some roleplaying of digging deep into a seller’s mind and figuring out the pain points. Somebody who is doing a high-volume business, who’s doing 20 deals a month, and you’ve probably seen them. I don’t know how deep you go into these businesses. Are they utilizing these really intense appointments with sellers, or are they just a numbers game. They have a low conversion rate, but they have a high numbers game.

ST: (0:35:13.3) So it depends what you mean by deals. You say 20 a month. There are some people that can do 100, 200 a month, but they’re not doing it by themselves. You need a team. That’s why, when you’re talking, I don’t know what your community is and whether there are teams of people or people that are just starting out. So maybe you have a team, but you have to kind of graduate it. What I just described earlier is you just became a mentor, you just became part of a team, and you’re one of their people that run out and find deals. But those people that are doing the bigger deals, they’ve done it so much, they have so much wisdom and experience, they already know how much the cost and what the marketplace is in that market, what the value is, and how much they can flip, sell, fix, all that stuff done already by just seeing how much did you lock the deal down. But in talking and negotiating, that’s the skills that they need to teach other people. They’re doing it, but they’re going to probably do the higher value ones, the ones they think they can flip for higher amounts of money. So they’re putting their time into higher money-made properties. Like maybe properties in a community in Philadelphia, we have some you can buy for $100,000 that you can sell for $300,000 or $400,000 for fixing. That’s the communities they might look at, but they’re not going to look at $30,000 properties that you might be able to sell for a $100,000. Not their time. But they’re going to have all their people run out, the wholesalers, and find the deals and then have them lock it and make a phone call and kind of do that. Because I wouldn’t go out and do things like that. Why? Because that’s not my thing. My thing is to help people finance it. It’s why I get high volume because I have lots of people coming and buying to me too. 

(0:36:38.5) You have to create a system, and the system is what frees you. Just like when you go to McDonalds. Do you think that high school year kid knows how to make a freakin’ burger? No! You hit a freakin’ button, and then the button..a lot of them don’t even know how to do math sometimes. So you hit the cheeseburger button and Extra Value Menu. It already calculates that and tax. And some of them now they have the machines that the coins come out. You don’t even have to count the coins anymore. So you’re starting to see. It’s a system is what saves you. So what you need to do is you need to learn from some of these gurus that have different systems in place. Actually I work with some gurus too. I don’t know if they get the system for their own things, but they get systems for their teams. Why? You make more money. And the truthful thing is there are a lot of people that are making a lot of money, and they’re sharing it. So you just got to kind of figure out because all the gurus that are out there have different things. What I think is best is you kind of find your niche, but I’ll actually learn different systems and see what works for you. Because that’s what’s the thing. Everyone doesn’t learn the same way. Like people learn this way podcasts or talking. Other people need to see people to learn. Other people they need to write it down and read it and study it. They’re visual. It’s the same kind of thing here. On those people, do different modalities and figuring it out by mentors is the fastest way because you now to get to apply the knowledge in real world experience is by doing it. 

(0:37:49.0) I don’t mean to preach it, but even God taught..the greatest books and anything that was ever written, it’s old. So in the beginning they said, be fruitful, do multiply and have dominion. That’s a God thing. He’s showing you that’s a success path to be successful. What does that mean? Be! So who do you want to be like to be mentored like? Do! Then your doing comes natural because the mentor tells you exactly what to do. The right things, not the wrong things. Right? And then you will have what you want to have because your mentor usually has what you want to have already. You see what I’m saying? If you keep on practicing doing, you get frustrated because I don’t know if I’m doing the right thing or not sometimes through a course. Why? Is it because no one is telling you you’re doing it the wrong way. From Tony’s..I don’t mean to preach on Tony, but he’s got his four models. He’s like everyone believes they have potential. There’s four squares here, right? It’s potential. And then action leads to a result that you want. Then to the left is belief or limiting belief or certainty and uncertainty, and he goes back up to potential. We all believe we have the potential to do things, right? But is it the right action? If you don’t know what you’re doing, I’m just going to do it and get flipping in real estate, but I don’t have the right course or anything. I’m just going to do it by action. You’re just doing the thing. You don’t even know if you’re doing the right thing. Wrong answer. So that’s why you need courses and training and stuff. But a mentor will get you there faster, and you’ll get the result that you want. Because you’re not getting the results you want, you don’t know what you’re doing wrong. Did you make a million dollars in doing real estate investing? No? Learn from a millionaire. Fastest way to learn. So that’s what I’m going to preach at you. It goes back to a quote that Tony Robbins says too. Because a lot of people get frustrated and, like you said, “I don’t have the money.” It’s not the lack of resources, but it’s your lack of resourcefulness. 

(0:39:30.4) Let me describe an example. The first deal that I ever did in flipping, I did it with three people. One of them was a lawyer. I’m the lender, and the third guy was a real estate attorney. We did it together because we had to put in money equally together. So the deal was to put in $30,000 to buy a house for $100,000. After we fix it, the market comp is like $180, $230. So I was like, okay. That’s cool. We can do that. We all got into the deal. Oh my gosh! The house was really messed up. It was a short sale, and they had an in with the real estate agent. It was one of those listings that he was the agent for, and it was on the market recently. You know what I mean? And he gave it to us for us to kind of look at everyone else in the marketplace put it there, and he was like, yeah. So then we just kind of bid, but it wasn’t shown to a lot of people because people didn’t know. They didn’t really post many pictures because it wasn’t there, and some people saw in the pictures that it was really bad. They’re like they don’t want that. It looks like it’s really bad. But we actually were one of the ones that looked in it. The front door was beaten in, so you had to put a piece of cardboard there and the back door. It’s like, oh, let’s fix that up. The contractor, which is my partner, he’s like we can get all this fixed for about $20 grand. Cool! All right. So we know it’s like $20 to $30 grand. We got the lawyer in to make sure all the liens and all the problems were addressable. Okay, cool. Well, it came up close to set on a day, like a week before. The lawyer, because lawyers are very risk averse, was like, “Man, I can get the money..I don’t want to do it. It’s too much risk. There’s so much stuff. It’s all messed up. What if someone falls and they sue me,” and all this stuff. I was like, “It’s perfect! You’re a lawyer. I don’t have to pay $400 an hour to do it. It’s perfect! You can litigate.” He was like, “But they’re suing me now,” and I’m like, what a lawyer. So he bailed out on the deal. Then the contractor is like, “We can do all this and make this happen, but I don’t have the money. Do you have the money, Sonny?” I was like, “I can’t do the equity like that, and you’re not putting in money, bro. You got put skin in the game,” because that’s the first game in real estate. If they have no skin in the game, they don’t care. They walk away. Everyone else is left holding the bag. Not happening here. I was like, “Nah, man. I don’t know. I don’t think I want to do the deal, bro.” So then he pulled out too, but I got the hard money finance because the hard money was..he was worried because it was at like 15 percent interest. Seven points. So he was thinking that’s $15,000 in interest plus seven. That’s $22,000. I don’t like this deal. I was like,”Dude, how do you make money in real estate? It’s not when you sell. It’s when you buy.” So I ended up buying it myself for $100 grand. I cleaned it all up, and then I was going to sell it. The comps at the time were getting stronger. They were maybe like $250, $240ish, and I was going to list with the same agent because he’s the one that did the deal for us that we got the deal. What happened was it was snowing in Philadelphia, and someone fell on the curb and some of the neighbors, because I build rapport with all my neighbors so they’re watching out, and someone fell and they took pictures. And I was like, do you have insurance? I was like, I do have insurance because I bought insurance on it because, if it snows in Philadelphia, you have to remove the snow within like 24 hours. And it’s been in that time that someone fell, and I was like, I don’t think so. Maybe sometimes we do a land grab. This was a corner lot which had a lot of snow shoveling and I didn’t get to it because it was freakin’ like three feet of snow. I was like, oh my gosh! This is the last..now I’m down to doing lawsuits! This is the worst thing ever! So I was like, I got to sell this dang thing. I got to get this thing off the books, man. I don’t know because no one ever sued, and I have insurance. I was like, I got to get this thing..so now I’m in distress. Now I’m in emotional disrepair. I was like, holy crap! The lawsuit is going to be like $100 grand. Who knows. Because they had to take him to the hospital because they brought the city police. The city police writes you a ticket for violations of not shoveling or whatever. So they had them there. I know because the neighbor was like, “Dude, they have pictures and all this stuff.” So I went and I took pictures. I was like, “Look, I shoveled. I had salt. Maybe they fell on that. I don’t know.” I was like, man, this is terrible. This is..whatever! I’m done with investing. I don’t want to do this stuff. So I put the deal up. A lot of people wanted to buy it. So I had it for $100 grand. All I did was I just cleaned it out. Cleaned out the dirt, and I wholesaled it for..I wanted $150, $160 because I knew the resale was $240, $250 and I knew you only had to fix like maybe $20, $30 grand worth. So I had my numbers down pat. I just didn’t know..I’m not a guy with a hammer. That wasn’t my thing. That part I was unaware of. So what I did then is I tried to sell it. A lot of people came. Professionals said they’ll give me $120. I was like, no! I bought it for like $90 plus my closing cost is $100,000. I was like that’s dumb because of my closing cost. I’m not going to do it. It was like, oh, we’re professional. We can do this. I was like, literally I’m a lender, and I can do it too. I’m just like, whatever. I started to learn other people’s pitches, so that was kind of cool. I got to interview other..but finally this other guy said..he got me an emotion. “My mom lives in this neighborhood. I think I’m going to move there,” and whatever. He lied to me. He bought it, and he was like, “I’ll give you $140.” I was like, “All right, $140. You pay all closing costs,” and I knew in my head, because I’m a better deal maker than him, that actually was $5,000 in closing costs. So that was actually $145. Okay. We said $140 plus closing costs. I wrote that in a contract, and it ended up being $145.  He was like, “Dang!” I was like, “Well, that’s how it goes, bro.” What I learned is he didn’t buy it..he bought it to flip it. He sold that property for $380,000. I’m like, oh my gosh. He lied to me because he sold it six months later. He put on top-end everything, and I was like I don’t know how to fix stuff. So that was my next problem. But I still made $40 grand. I held it for like two months, but I had to sell it right away instead of fixing it and trying to get $250ish for it because fixing wasn’t my thing. But I still made $40 grand. All I did was clean it.

PDC: Yeah, yeah. Now, going fast forward today, we talked a lot about sales. We talked about lending, and we talked a little bit about lead generation before we got on this call, and you do lead generation for people, right? For investors? And we talked about either door knocking or paid ads. That’s the primary way that you funnel leads in. So door knocking. Do we just pick a random spot to door knock? How do you give advice for door knocking?

ST: (0:45:35.7) If you live in a neighborhood that can be renovated, then you get to know your neighbors, and then you ask them..I’m going to give you a really hot strategy (inaudible) wholesalers and are..man, you’re getting a lot of stuff out of me today. I didn’t realize. So you ask the neighbors, “Hey, do you know anyone in the neighborhood that’s selling? I’m looking to buy to get my family in or something in the area.” Actually I did rent a house in an area. That’s strategic. Why did I do that? Because it’s a renovated area, but there are still a lot of rundown houses in the neighborhood, and I know the rundown houses. It’s like, hey, is that neighbor Sally? And you get to know them all, and then what happens is..then it’s like, “Hey, if you can find something like that, I’ll give you $500 cash if I can get a deal done.” “What? Dude, I know this guy. I know this guy.” So now they’re running. I got other people that are..in our industry, in wholesaling, it’s called bird dogging. They’re going out there to find properties for you. They’re door knocking, but they know the neighbors. And you can knock doors and get to know neighbors. It’s like, “Hey, are you looking to sell? I want to move my cousin and my aunt out here.” So that’s the one strategy. Others is be friendly with other people that know everyone in the neighborhood and offer them the way to do door knocking. That’s how you add speed to door knocking. That’s the fastest, most effective way. 

(0:46:46.7) The other way to do it is to run ads to that neighborhood, and you have to spend money. We have a proprietary method that we do send ads into it, and it gets a lot of distressed homeowners calling, but you have to answer the call within the first six minutes of the lead. So we can run that. What you do is you combine that with door knocking. And if they’re not answering, then you still door knock. It’s like, hey, did you get the email? So what it is is..have you ever read  The Art of War?

PDC: Yeah.

ST: You know, when you get in war, you want to handle it in many modalities. So it’s kind of like the Army. When they’re coming in, they call it a big strike. They’re going to come with the Air Force. They come with the ground troops, the Army. They’re going to come with the Marines and maybe come with a bomb and a missile blowing it up and helicopters, all kinds of stuff. So that’s what you’re doing. If you’re running paid ads on their Facebook or Google, you’re running that. You’re door knocking. Now you’re doing that. What if you send postcards to the area? Then you can do bandit signs in the area so they can see the same phone number. But you want to build a brand that way and build some type of brand and put those phone numbers or something like that. So not all real estate investors do it because sometimes they want to know (0:46:46.7 inaudible) person. The strategy that’s kind of taken shape in the last few years is like My Dad Buys Houses or I’m Sam and I Buy Houses or John Buys Houses or whatever that freakin’ slogan is, and you can do that. And you can send postcards in the area and just litter it with that. And right now, with every (0:48:14.2 inaudible) you can do that really cheaply in a zip code. Send that, do bandit signs, but do the same branding. It’s John Buys Houses or whatever it is. Then you can go on the internet and do it, and then you can buy other websites like, Hey, distressed homeowners, John buys houses, or something like that. But you have to build a landing page. You have to have a traffic source. You should have a Facebook. You got to do a lot of things combined. But you do all that together. It’s like the Air Force. Eventually you’re going to win because you’re bombarding them from many different angles, and now they see the message many times. Studies show you need to see a message 12-16 times before it registers. Now they know who you are, and you’ve kind of built the brand, But then you get the guys knocking on doors like, “Hey, I work with John Buys Houses and someone wants to buy a house. You want to have a conversation?” “Oh, I’ve seen those signs. Yeah, I seen it on my Facebook. That means you must be real legit, huh?” You know what I mean? So that’s how it is because that’s what it is. You’re kind of delivering the message through whatever they want to listen to.

PDC: It adds the credibility.

ST: (0:49:13.4) Yeah, it’s the campaign. Some people think I just want Facebook ads and, hey, I’m doing real estate marketing. Not really. But some people are like, hey, I just do the bandit signs and I’m marketing. Not really. But if you do everything and all this stuff going together, now you really are hitting it, that same spot. You’re really what they call in real estate farming the area. 

PDC: I just did a quick course on this talking about utilizing Facebook with your existing list or your existing farm area. It’s important, I think, and maybe you can chime in or correct me if I’m wrong, to know that, if you don’t get the leads from the Facebook but you’re getting calls from website, getting calls from your bandit signs, it doesn’t mean that the Facebook ads aren’t working, right? Because you’re doing the branding.

ST: (0:50:01.7) You can track them though. With Facebook, with the website when they go on there, with the banner ads. It can all be tracked in one thing. So I’m teaching that to your non-marketers out there. It’s called a Facebook pixel. In Google, that pixel..you can install it in Google, and it’s called with a Google tag manager where you can install both in one thing. So now you can operate as one. Everyone knows Facebook, but do you know they own Instagram, which is almost all the traffic? And you know YouTube is owned by Google? So if you have that, you pretty much covered 90 something percent of the whole freakin’ world. And if they’re doing that and the bandit signs and you’re going to that website and you have it direct to John Buys Houses, it all can be housed there. And we have a CRM that can connect all of it together. You can see all of it, and you can actually have a phone number connected to John Buys Houses so when they call they can get a recording or you can drop them a voicemail or you can call from it that shows John Buys Houses and they return the call. It tags it in there and it knows the customer’s phone number is tagged with a Facebook campaign that you did or it’s with a website that you had that’s connected with it. Now you know that customer reached out to you. Before you called them they went to your Facebook, they filled out something. Oh, they were in Google and they did something. They checked out your YouTube video that you did on how to sell your house really fast and we’re helping people with that. That’s why you should use all the mediums. Now you’re talking about something else that’s deep within my genius zone which is marketing. When I talked about different modalities, well that’s direct sales. Now we’re talking marketing. Well, now you’re talking working your Google together with your Facebook, with your website, with your email, with your phone number, with your videos that you’re doing because you put on YouTube. Google knows. Now it’s connected to Facebook. Now you’re seeing where these people are, and actually they all have reports they can run that can tell you what’s going on if it’s the same customer. So now you can really track.

(0:51:54.0) I know, Paul, you’re awesome at writing copy and direct response. Well, this is direct response marketing that you know where the customer is kind of coming from the first time you seen them in your funnel, in your sales page. Let me define funnel. Sometimes we get crazy on that. Funnel is just..all this is just a website that is going to get one desired result. What is it that you want? In our business, we actually want the phone number. We may want the email too, but you want the phone number so you can talk to them because it’s more emotional and more things can close through talking. But if you get the email too, it’s a bonus because with the email and phone number, which is what we ask when we do our lead generation..we actually ask for your phone number and email. If they give us a fake phone number, we’ve still got their email, so we’re following them around in Facebook. We’re following everywhere they go. How would you like that? Have you ever noticed when we’re on Facebook, when you look at QVC or you look at Pizza Hut, you’re starting to see ads for Pizza Hut? How do you think they know? Because they tracked you. And you can do the same thing for these customers. I hope that hit you with an epiphany. When you know how to do that, you’re now operating fast and you’re operating more strategically like the United States government. That’s strategic now instead of just doing one thing. If you have it all working in one thing, then you spend one thing to do much. So imagine when you’re talking to all these customers, what if you did a Facebook video that can explain this process to people before you talk to them to warm them up, and then you did another video to help them understand why it’s best to sell now. If you have enough information knowing that you did your property deed search and did enough of your homework to be the correct thing, you’ll know that it’s coming on sheriff sales, it’s on foreclosure, or something like that. You know who owned it before. You know there are all these liens on it, or maybe they’re suffering from that crushing debt and you know how to talk to them. If you did more of your homework on the backend, it’s easier to close. So now we’re getting to the sales. But in marketing, that’s a message you want to convey on what you know about them.

PDC: I love that, yeah. Are you ever a big proponent of building a list, compiling a list. Stacked list building is a big thing now, putting together all these different motivated..going through the title, finding all these notices, building a large list of people, motivated sellers. Are you a big proponent of that? Do you know anything about that?

ST: (0:54:06.9) Yeah. So there are actually many different strategies to do these things. The best thing is to have your own list and produce it, but you can use other’s lists. If you want to do faster, instead of doing all your homework and research, our strategy that’s the fastest way is you can get those lists, you load it into something, and you send the ads to it. Because they’re going to tell you they want to do it or not instead of doing stupid research that wastes time, because that’s what it does, right? Remember earlier we talked about what’s the most precious thing you have in your life is time. How do you know that? Well, a great man whose name is Steve Jobs, remember on his dying thing, what did he talk about? He was like, instead of me growing my company and doing all this money and having all this money, I just want to have more time in my life. And now I’m looking at the dying years of it. It’s like I want more time. And he can’t have it. If he could give a billion dollars, which he had to do it, and get more time, he would do it in a heartbeat. But guess what? That’s not an option. If that’s the case, you think about your life, it’s like, okay, that’s the fastest way. You just go ahead..if you have some of these lists that you have and you don’t need to build it, send it to ads, get the marketing people to do their thing, run it, and then the people will raise their hands what they want, and then you can start doing your research from there. That’s the fastest way because it’s time because now you can get to that motivated seller today, in the next minute, in the next hour, tomorrow because you’re giving them messages they want instead of trying to put up signs. Maybe they’ll see your sign, maybe not. Maybe someone will knock on your door, maybe not. But I’ll tell you what, there are three billion users on Facebook. Do you think these people have Facebook? Do you think they’re on Google? Let me ask you a question, who has a dumb phone now, or do most people have smartphones?

PDC: Okay, so you’re saying build an audience on Facebook right now. Is that what you mean by building a list, start building an audience right now? 

ST: (0:55:48.0) Yes. You can build an audience..or you have audiences actually. You can already have audiences that are homeowners and stuff like that. Let’s say you can buy and even add that into Facebook and then you can market to the list. Instead of sending emails and stuff out..sometimes people don’t read emails. You can send it to the list, and you let Facebook do its job. What I’m actually (0:56:11.2 inaudible) is lead generation, and I’m going to tell you, you let Facebook do all the heavy lifting. Why do you want to do all the work? You let them do it. It costs money. Sure, it costs money, but whatever. But it’s the fastest, fastest way, and then what happens is people raise their hand and they want to sell. You’re getting through all this BS. Oh, they want to sell? Now it’s your question. Now you can do your research. What’s the point of researching a sheriff’s list of 500 properties? When you go there, you’re going to lose all the bids and you don’t even know what’s in it because you can’t go inside them. Maybe you might be lucky because there’s other people bidding against you unless you have deep pockets and can outbid everybody, which if you’re new in investing, do you really think you’re going to outbid guys with millions and millions of dollars? You’re not. That’s the reality of it. So it’s a dream. Stop dreaming and start implementing doing stuff that’s going to be actionable. That’s why door knocking is actionable. You’re knocking on people’s door. That’s all..people do that already. That’s a known..since everyone knows it, do you think it works? It worked, but if everyone is doing the same thing, like the guys I worked with, everyone knocked on their door. Everyone does all these things. Why did my thing work? Because I treated them like a person. Knocking on doors is still the best strategy because it’s personal. They know who you are. People only do business with people they like, they know, and they trust, right? They don’t know who you are. All you got to do..they can’t trust you yet. You have to prove to it. So it’s like, boom. But if they kind of see you a lot, you’re starting to build trust in their mind because of all the ads and the marketing. If they start to..and they’re like, “Hey, you done something for someone else too.” Now someone refers you, now you got the trust that’s transferred. All you got to do is get them to like you. It’s so easy. Why? Because you’re trying to do the best thing for them. If you’re one of those guys that are trying to rip people off, it’s hard because you’re trying to scam people and they pick that up. Our bodies have millions of years of evolution now. They pick up things right away. 

(0:57:57.2) Why do people not like car salesmen? What are they trying to do? Sell you lemons. Do you want to buy lemons? No. Why the business model in car sales? People have the prices already. It’s already named. People already know what they’re buying. They’re going to go and they’re going to do it. They’re doing internet shopping. Can you give me a price? I’m going to come in and do it. If not, I’m not even going to come in because I don’t want to sit through an 8-hour long presentation to lower the freakin’ price and something so you can sell it for more money because people don’t want to do it. That’s why when you ask people what’s one of the worst experiences ever, it’s buying a car. You see the difference? But real estate is the same thing. You know what? Actually, that’s also one of most people’s painful things. But not buying real estate in the sense of your thing and my world, it’s getting a mortgage and all that stuff because now because of the mortgage crisis in 2007, which is why I got in the mortgage business..I was an investor all the way until then. Why did I have to do it? Because there were no mortgage bonds to trade. That was a crisis of real estate. This year is looking pretty bad because look at the restaurant business. If a lot of small businesses represent most of America, 80 percent, and out of that 80 percent, maybe a good 30-50 percent of them are restaurants and 50 percent of restaurants you know today don’t exist because of Covid, things have changed, do you really think people are going to buy properties? What’s the best strategy to do? Dean Graziosi gave me this because I actually did an interview with him. If you want to find it, I have it on YouTube. He’s like what’s the best thing to do now in the housing market? He’s going to tell you. He did this framework way back in the 80s and 90s is that you wholesale. You don’t buy and hold. Why? Because when properties are going down, you’re going to lose more things, more tenants, and as you know, with Covid, some people aren’t paying their rent. And they legally don’t have to. That’s a problem. You know what that means? Homeowner landlords are trying to sell their property. Wouldn’t they love you to take that burden off their shoes? I just gave you another thing. Rent rolls. If I was really focused on investing in real estate, which I’m not doing as much now, I’m mentoring and teaching people and I’m doing ads for our investors because a lot of the investors are doing it for that. Some of our investors that I work with one of my partners, they spend $50,000 a month in doing ads. $50,000! Just in ads. That’s not paying us either. On top of it they got to pay us too, which is in the thousands. So I’m going to tell you that. But $50,000 is just paying Facebook. So they’re buying everything.

PDC: That $50,000, how many leads is that buying for them?

ST: (1:00:10.7) Thousands.

PDC: Thousands?

ST: They have a whole team and a company and things like that, and they have professional people to pick up the phone and their closers, hardcore closers. They have their systems and models that, hey, this is a house. They send in their machine, and it spits out what they think the value is. And they have their proprietary models like how much does it cost to fix it because they own their own construction company. So you see, that’s a system. Remember we talked about McDonalds? If you’re a new investor, you want to be a part of this system somehow and start learning how do the gurus do these things. Some of the gurus are teaching it. They have a piece of it, but they don’t have the whole machine. So who do you want to learn from? Someone that’s doing all of it.Those guys are probably not even mentoring. You know what? That’s kind of like the type of people..the source. Other things can do things better than you, and then you can learn from them for that. But that’s why I’m just saying, there’s people doing that, and a lot of those guys that are doing those bigger numbers like that they’re kind of not really like mentoring. But if you work for them, they may because they want to make more money. You see? They’ve got processes. You’ll find out who they are. I think you know who they are in your marketplaces. Who are the monsters in my area? That’s who you want to learn from. Oh, I’m doing 10 deals. They can mentor you. That’s cool. They’ll teach you how to do 10 deals. Remember, you’re a student of whoever is teaching you the best they can do. 

(1:01:22.4) I learned from Grant Cardone as my mentor. Why? I don’t know how to do a billion dollars in sales. Building funnels I learned from Russell Brunson. I don’t know how to do a million-dollar funnel. But I learned. I’m learning because I didn’t do it yet. I’m right there. You see what I’m saying? That’s how you learn. The fastest way. I went straight to the guru, not the coach or the..there’s some that I could do, but it’s too slow for me. But what does that cost? Money. To hang out with Russell Brunson was $30,000. That’s just for the training program. All the trips combined, I spent like $70,000, $75,000. We went on a cruise. It was awesome! I got to shut down all my business and go on a cruise for like six days. That cost me more money than what the cruise fees were, and the cruise fees were like $15 grand or something, $20 grand. You kind of see what I mean? All this stuff on top. But you know what? Best time ever. I networked, and I helped people. Now I’m helping some other people sell Rolex watches. I was like, yeah, I can help you do that. A Rolex watch is like $30 grand. I think the watch I got from ClickFunnels is like $2,000. I love it! I love this watch! It’s like, hey, I’m in. You know what it cost? It didn’t cost $32,000. It cost like a lot. Whatever, $75, $80,000, whatever, and I still pay ClickFunnels today. So that’s what I’m saying. You learn from the gurus, but you know why I learned from it? It wasn’t because of strategies and stuff. It’s also because he’s a kind person, and he taught me how to give back to people. And that’s kind of why I’m doing things like this now. Because actually I charge a thousand dollars an hour to some people and mentor them. So you know, I’m telling you. That’s kind of what it is.

PDC: Love it, man.

ST: What else can I give you to serve?

PDC: Well, Sonny, we’ve talked a lot, man. You gave a lot to my audience. I think we’ll call it good right there. I mean, how can people reach you, Sonny?

ST: At SonnyTran.net. That can send you to a lot of places. I have Financial Sonny on Instagram. We have software coming up. I think one of the things we’re promoting right now is the PredictableLeadFlow.com. It’s just to teach people how to get leads themselves. We’re actually giving the software away free for six months, so you’re saving thousands of dollars just to get it. And we are coaching and mentoring people on how to get leads. It’s six weeks we’re going to do, so live question and answer. So you’re going to get my time, my webinar person’s time, which they charge $50,000 to do a webinar. We have a copy person that professionally builds funnels, and he charges $15,000 to do things. So you’re getting all this genius for a pretty small fee. And we’ll teach you how to generate leads. I think the headline..and you like headlines since you’re a great copywriter..is like..what was it? Now I’ve forgotten the headline! Gosh! Now I’m kind of mad at myself. How a 39-year-old former banker generated tons of leads, or made $20,000, I think. Yeah, $20,000 in a week. I actually did do that through one thing to customers that I know. But yeah, gosh. It’s been fun. Thanks so much.

PDC: Yeah, yeah. And I’ll have..we’ll have a better way to reach out to you and your CRM as well. I’ll give the url.

ST: You know what? To your audience only..so what I do is normally we do a 14-day free trial. I will do a 30-day trial, but they have to kind of reach out to you on that on the CRM if they really want to test drive it. And we’re going to have it with the templates of exactly what we do for real estate investors. We’re going to do one campaign. We’re not going to give you all the campaigns on a trial. That’s reserved for our people that are really actually in our program, and we can do that. I’ll talk to my partner about it, but I said yes to it so pretty much..I’m 50 percent of the other partnership. Because actually I own many CRMs. I don’t own one. But this one is particularly for real estate. 

PDC: Awesome, man. I appreciate that, Sonny. All right, thanks for being on, man. I really do appreciate it.

ST: No problem, man. Thanks guys.

PDC: All right. That’s a wrap, and I hope you enjoyed it. If you did, please go ahead and subscribe to it on iTunes, Hulu Play, Spotify, or whatever you use. It really helps me keep producing these. Just search for the Deals Today Podcast in your podcast directory, podcast app. If you’re not on my daily email newsletter, and you want to be and you want to receive the free 40 Days to Find a Deal seminar, go ahead and go to RealEstateAudios.com/flipping. Again, that’s RealEstateAudios.com/flipping.