The Numbers Always Play Out - Episode 52
Oscar: Well, all right. Christian. We're here, buddy.
Melina: Welcome to "Flippin’ Off," a purpose-driven podcast about flipping houses, and making a difference.
Melina: Hello, hello, hello, everybody. Melina Boswell here, co-founder of New Wealth Advisors Club. And today, happy podcasting today. Today, we are going to be talking about the numbers. Do you know that real estate is nothing more than a numbers game? So today with me in the studio, in the house, I have Andrew Boswell.
Melina: I have Tim Wilkinson.
Melina: Mr. Oscar Solares.
Melina: And David Boswell.
Melina: All right. So today we thought it would be fun to have a conversation about the numbers, and how important it is to understand that real estate investing is just a numbers game. We were actually out in field training a while back, and in the middle of field training, I said, "You know, this is so important for everybody to get. This is just nothing more than a numbers game." There's no secret sauce to this business, it is nothing more than numbers.
So somebody said, "Oh, that is exactly a podcast," so I said, "Cool. Let's do that." So Tim, Oscar, we're gonna let you, Tim, I guess we're gonna start with you. You're gonna start the conversation.
Tim: Start the conversation about the...
Melina: So what about numbers, because you're the numbers guy?
Tim: Right. Well, there's a difference between the numbers, right? The ARV, the repairs, all of those numbers. But today we're talking about the sheer numbers of what it takes to be successful in this business. And we're talking about, like, phone calls, homeowner calls. You know, the more conversations you have with a homeowner, obviously, the more success you're gonna have in this business.
And in my experience, at least, the numbers always play out. You know, like, for me, when I first got started, I wasn't very good at this business. I wasn't very good at the conversations, but if I look back at the numbers at the beginning, I was in the one percentile, right? But after years, after eight years of sort of doing this business, I'm much better, but if you were to compare it all the way through, my numbers have evened out.
And I can pretty much tell you if I talk to 100 homeowners, I can tell you how many contracts we're gonna sign basically.
Melina: Okay. So that's good. So tell us, 100 homeowners, how many contracts are you gonna get?
Tim: Probably around four, we're right around the 4% range.
Melina: Okay. I mean, how many people, I wonder, are out there and they hear 4%? You know, feel sick about that. So maybe...
Oscar: You mean like, "That's it?"
Melina: Yeah. Totally. Seems like it's nothing. So why don't you talk about that? Like, can you back into the numbers and what does that mean, "100 conversations"?
Tim: Right. So Oscar is my business partner here, so he spent, what...was it your second or third year...
Oscar: Second year.
Tim: His second year in the business, he literally tracked all of his numbers from, "I went to so many homeowners, out of 100 homeowners that I went to their house, I talked to a certain number of people." I'll let him share the actual...what his numbers were. "But out of a certain number of homes that I went to, I talked to a certain number of homeowners. Out of a certain number of homeowners I talked to, I was able to create a good follow-up system to follow up with those homeowners.
Out of those homeowners, I was able to sign a certain amount of contracts, and out of those contracts, I was able to close a certain number." So, Oscar, do you wanna share what those numbers were?
Melina: Yeah. Like, how did you get from 100 to 4?
Oscar: So it was actually 820, not the number 100, over the course of a year, and it essentially became how many times do I need to visit a homeowner, maybe the same homeowner, maybe different homeowners. But whatever the case may be, it was 820 visits. Out of those, there was 120 actual conversations that took place. Meaning, it was in-depth enough that there was follow-up that continued to happen, right?
And a lot of people miss that piece, they hear the numbers of 820, 120, you know, 60, 15, right? Which is...and I'll break those down later, but they miss the part that there was on-going conversations with people that were continuous and continued to build a relationship and be able to develop that trust, I think is the best way to put it. So raw numbers, 820, went to 120 conversations, from the 120 conversations, we were able to get 60 contracts.
Melina: So half. Half of the conversations that you had that were meaningful turned into 60...so half of them turned into a contract. That's huge.
Oscar: And then from those, 60 became the contract and 15 of those, I actually acquired. So the 15, 50, 25, is 120 is 15% of the 820, 50% of the 120 is the 60, and then 25% of the 60 is the 15.
Tim: So when you asked from out of 100, how many contracts did we sign, the quick numbers is out of 100 homeowners, 15% or 15 of them turned into a really good conversation.
Melina: Well, that's, I think, a more important thing, because what I heard was 100 conversations, but you didn't really have 100 conversations.
Tim: Well. Yeah. So we started the numbers a little different, right? So he went to 862, is that the number?
Oscar: 820. 820.
Tim: 820, he went to their house and talked to them. And 120 became conversations...
Melina: No, because you didn't talk to 820 people, did you?
Oscar: I visited 820 doors.
Melina: But you did not have 820 conversations?
Oscar: Not at all.
Tim: No. He had 120, which is 15%.
Melina: Right. So I feel like that's very important.
Oscar: So, to your point, the focus is less about how many doors I visited, and more so on how many conversations that I actually had, right? So now, when you look at it from that perspective, right, it's 120 conversations, 50% of those became contracts, right? And then 15 of those ended up being actual deals that I [inaudible 00:06:34].
Melina: Yeah. So the real answer to the question the way I heard it, the way I posed it to you, maybe the way I asked it was, of 100 conversations, you would have 4...so that's not really right. It may be more like 15.
Tim: Out of 100 conversations, we were at like 12 actual deals that we closed. So that 12% is about where we're at. If we're having from the conversation standpoint, but that was in year two...
Oscar: Yeah. I was just gonna say, an important factor there is that it wasn't when I first got involved, right? It wasn't out the gate. I just joined the club. I learned how to do this, and I went out and hit several home runs. Doesn't happen, right?
Melina: Right. So what is the takeaway, then, for that?
Tim: The takeaway is that Google will never get you there. So that's really where the takeaway is. The takeaway is that...and we say this around the club all the time, the information is available. It's available. What got Oscar there was the activity and what got me to a level that's comparative to there is that actually taking the action, and working alongside with somebody like Oscar, who could coach me inside of that...there's no book who could teach me how to have a conversation with a homeowner.
That's the difference between, like, what we do in the club and going to certain online communities or things like that. If you're out there on your own and all you're doing is getting information, like, the information is available. But Google will never get you to the door. They'll never get you in front of the homeowner.
Melina: Right. So I don't know. If I'm David or Andrew and I'm listening to this... I don't know, like, you're young men that are full of energy, full of, like, drive and ready to go. So when you hear Tim and Oscar talk about those numbers, what do you think? Like, what do you feel like you wanna go do? Like, what does your instinct tell you?
David: Have a lot of conversations.
Melina: Right. So Andrew's knocking on the door and David's like, "Have as many conversations." Right? It's like if you have to have 100 and you know that you have to get better at them, what does that tell you? You have to do what? Go have...
Oscar: Conversations, a lot.
Tim: The other number, though, like, we have somewhat steered clear of is the 820, right? Oscar didn't knock on 120 doors and close 15, it was an average. He didn't close 15 out of 100, he might have closed 2 out of this 100 and 20 out of this 100. That was an average across the entire year of 820 doors, and that's a lot of activity.
Melina: It is a lot of activity, or is it? Like, if you break down...
Oscar: Or not.
Melina: I was gonna say if you break down 820 doors over a year, and you figured out it wasn't actually 52 weeks. You actually figured it out over...
Melina: 40 weeks, which means what? It means Oscar took three months off. But anyway...
Oscar: Only because I could.
Melina: Right. So if you look at it that way, like, how many doors, because what we're really talking about is door knocking, so how many doors did you knock?
Oscar: It averaged out to 20 a week.
Tim: 20 a week.
Melina: Is 20 doors a week a lot to knock?
Oscar: No. Not at all. Not at all.
Melina: How many is that a day? I mean, if you go...
Oscar: If you work seven days, it's...
Tim: Like three.
Tim: Two and a half, three a day.
Melina: Yeah. So, I mean, who can't do that?
Oscar: Who keeps themselves from doing that is probably the bigger piece of the puzzle, right? Because I think talking through it like we are right now, it's like a no-brainer.
Melina: Yeah. I mean, I don't know, for me, I'm wanna run out and go knock doors right now on my way home, don't you?
Tim: Again, I mean, I keep going back to the 820, because most people knock 20 doors a week for five weeks, and they think, "Oh, I knocked 100 doors. I haven't got my 15 deals yet." And they quit, because probably more than likely, and it would take Oscar to answer this question. But more than likely, the first 100 doors he knocked had 0 impact. It was probably most of the impact came from the 800 to the 820th door.
Melina: I believe that's completely true. And...
David: I completely agree...
Interviewer: Yeah. And most people can't stay, right?
Oscar: There was a still a development that had to happen, right? A skill set, because we all had the skills and I like to remind people that everybody's had success. They have to remember how they achieve that success, because those skills are probably the same thing that they still need today, but they tend to forget it so we try to...
Melina: Like what? Such as?
Oscar: Well, tenacity, right? The choices that you make, right? Like, for example, if you're at work and your boss says, "This is your deadline," what do you do? Do you wait till the last minute or do you actually plan and strategize and go forward? Now, there's always those that wait till the last minute, right? Because they work well under pressure, right?
Melina: All right. It's not a good plan, though. It's not a good business plan.
Oscar: It's not a good plan, but if you actually position yourself in a way that you're going to chisel away at that, and then you're gonna achieve that success. So, one, you have to stay engaged, you have to be tenacious about it, you have to maintain your drive. Those are things that have to happen, right? But most people just...you know, I've always looked at people in their journey, how they focus so much on where we are today and don't ever really think about where have they been to get to where they are today, right?
So they focus on instant. Well, if you did it, done. I should have it by tomorrow. And that doesn't happen. And so, I like to have them reflect on what did it take to achieve that goal for you. So once they can do that, they reset themselves and now they start becoming better at attaining their goals, right? And it is a numbers game at the end of it. No matter what you do and this business is absolutely a numbers game.
It's about having the conversations, and you had them do an exercise a while back, right? Which I loved because it was all about conversations and have them track their conversations, and I think that it was, like, a silly challenge of, like, 60 conversations.
Melina: In, like, three months.
Oscar: In, like, three months. But you felt the buzz in people, right? That they were actually doing it, they would post it on our group and all that. So it was cool to see people go through that. And there was a lot of activity and a lot of things came from it, a lot of fruit came from it.
Melina: Right. You know, there's just the absolute truth, the universal truth, which is this, activity produces results. And I feel 1,000,000% confident that I have been saying this to people for 10 years that I have been coaching them. Activity produces results, always. I believe that sometimes people take...like, it's so big, they think of 820 doors. So they either wanna take it in, you know, 400 next week, right? Because it seems like, "Oh, I just got to get to that 820, and then...you know, not recognizing, honestly, if you consistently knocked two doors every single day for a year, you would not recognize yourself at the end of the year.
Tim: Right. Or your bank account.
Melina: Right. The problem is, people don't take the time to do two doors, and two doors is so easily attainable, you know. And so, that's always my question. How do I get people to knock two doors every day? What if you just considered it that way, and I can tell you that the students that I have, that we have, that we've been coaching, that have success, that is what they do.
And what starts to happen and, Oscar, I know that the year you tracked this, I know exactly what happened. You literally...you know, we call it "Big Mo," Big Mo showed up.
Oscar: Absolutely. Yeah.
Melina: That's what happens. Momentum.
Oscar: Momentum. Yeah.
Melina: Momentum starts to, it becomes that train, it becomes the steam in the train, and what does a locomotive do? You know, it just...you can't stop it. Once Big Mo gets going, you cannot stop it. Well, you can, you stop it by stopping the activity. But the truth is, is that...
Oscar: You know, I like to say that you stop it by derailing.
Melina: Derailing, that is exactly right.
Oscar: Because that's really what happens to you, is you derail yourself and then all hell breaks loose, and you're trying to figure out what happened, right?
Tim: Well, I'm not sure if this is what the purpose of this conversation was, we were talking about just the numbers.
Melina: Numbers are so boring.
Tim: But when you say "derailing," one thing that I know, for me, is that if I'm not careful and if I don't learn other skills, Big Mo will run me over.
Tim: So, for me, the derailing becomes not learning the next level of leadership, which is, you know, leverage, finding people to...you know, we had this conversation just the other night in a mentorship meeting with a few club members.
And it really comes down to if you're not ready to start leveraging...otherwise, Big Mo will derail you. Big Mo will run you over, you will go deep into overwhelm. Big Mo can overtake you.
Melina: Yeah. And that's what happened, I think, for Oscar, right? If we're being completely honest, that's exactly what happened for you.
Oscar: Yeah. Absolutely. You become overwhelmed and you lose sight of things. So I like the way you put it, where, you know, you're not preparing yourself for that next evolution in your career or in your business. And it's real easy to lose that focus, and a lot of it really has to do...for me, anyways, it had more so to do with being a one...well, I'm not gonna say a one-man team, because it was Rebecca and I, my wife and I. But just the two of us could only handle so much, and we tried to take on too much.
So now, we completely lost sight of everything that was going on, we focused on the things that were important at the time. But, you know, that's why I used the word "derail," right? Because our success actually derailed us, right?
Oscar: So you have to be able to find that balance, and that balance comes from...to your point, Tim, of leverage, right? And the leverage isn't that I'm leveraging other people, but I'm leveraging myself as well, right? Alongside of other people through partnerships and being able to evolve that way. And then the growth becomes exponential, right? I just had a conversation with Frank about this, right?
And we'll see where all that ends up, but it absolutely gets you into overwhelm mode, and now you have to do something about it. And my challenge became I didn't see it coming.
Melina: You didn't see Big Mo running you over.
Oscar: Yeah. My back was turned to the locomotive, right? And it just plowed through me. So now, my head's on a swivel again and I can see everything that's going on, and I know the direction that I need to move on and the things that I need to focus on. So...
Melina: And isn't it better?
Oscar: It is.
Melina: So much better.
Oscar: Yeah. It's better to be a part of a bigger thing, right? And that's really what we talk about, is how do you become a part of a bigger thing so that you can do bigger things, right? Because then, the evolution is inevitable, right? We're gonna continue to grow and build some cool stuff, so.
Melina: Yeah. Yeah. I think that's great. I love the numbers only when it gives me something to aim for. Like, I get that the numbers are important, because you know that it's completely possible. So I think it's great to be able to model your numbers, right? You gave us an exact formula that we know works. So the only question is, are we going to work, right? So I just know this, I know that small, consistent...consistent... I feel like everybody should just sit on that.
Consistent activity is going to absolutely produce results that are measurable, and, like, pretty much guaranteed.
Melina: Right? So here's the question for everybody out there, what are your numbers? Do you know your numbers? I ask people this all the time, "Do you know your numbers? Do you know your numbers? What are the numbers?" You need to know them, because if you don't know them, you're never going to...you'll end up quitting. You will end up quitting.
Tim: What about this number? Because we have a lot of people that we work with, and they're like, "Well, I just...I'm trying to do real estate full-time," let's say. So here's a number for you. What number is that? What number is it gonna take, how much money in deals are you gonna have to make in order to quit that job? Let's talk about that number, because that's an important number, too. Because a lot of times we talk to people and we find out that, first of all, they're much closer than they thought they were, so.
Melina: Yeah. That's a really important thing. Do you know how many people I have mentored and coached that I told them to pick the number, and then I've mentored them and watched them make money? And then in my mind, I'm thinking, "I know they've hit that number." So I go to them and say, "What was your number again? Because I think I remember it." I'm pretty good about remembering people's numbers. And they say, "Well, it was this number," and, "Haven't you made that?" "Yes." "Do you have that in the bank?" "Yes." "Why haven't you made the decision?" "Uhh..." You know? People are more afraid of success than they think. We'd rather be comfortable.
Oscar: And it's interesting how when you pose that question of, "What is your number?"...
Melina: Most people don't know.
Oscar: ...haven't a clue.
Melina: Don't have a clue.
Oscar: They talk about financial freedom, they talk about, "I wanna work for myself." Okay. So what does that look like? And then you get the deer in headlights thing, right? Because people just don't...they haven't thought it out.
Melina: Because they don't believe it. I believe it's because they don't believe it about themselves. They don't believe it's a real possibility.
Oscar: It's a cool thing to say, but...
Tim: I can share this, since I got involved in this business, I have said that one of my biggest goals was to retire my dad, pay off his mortgage. And last year, six months ago, around Christmastime, something really huge for me happened, which was, first of all, my dad was diagnosed with cancer. And It really started me reflecting on like, "Man...it's all stress. I know it's stress," and...
Melina: For your dad.
Tim: Yeah. Like, I know he stresses out a lot. Every time I talk to him, he complains about, like, his job and what's happening there. So anyways, I don't know why, but for some reason, I asked him, you know, "How much do you owe on your house?" And the thing that was the worst for me was realizing that I probably could have paid off his house two years ago. But for eight years I've been saying, "I wanna retire my dad, I wanna pay off his house," but I never got the number.
So this Christmas, for Christmas, I paid off my dad's...my sister and I paid off my dad's house. But it came down to getting that number and just finding it...
Melina: But, Tim, isn't that interesting, because haven't I had this...you have heard me talk about this exact thing, right?
Tim: Absolutely. Right.
Melina: Remember? My goal was always to retire my parents.
Melina: And I didn't know the number. And you know what always happens, is that when you really ask what the number is, because I didn't think to ever ask the number either. It wasn't until my stepdad and my mom were sick, and that's when I realized, "Oh, I need to know what's it's gonna take to retire them." And once I asked the question, I learned what the number was and we retired them eight years ago. I'm sorry, 10 years ago.
Tim: And how soon after you found out the number did you retire them?
Tim: Right, because most of the time, we can actually do what it is we want.
Melina: Absolutely. [Crosstalk 00:22:07]. Yeah. It's because, in my mind, I think I thought retiring them meant, I don't know, buying a $500,000 house or something ridiculous. You know, something that just was completely unattainable, and that wasn't the truth. The truth was, it was a really small attainable number that we were fully capable of doing. So even though I've been mentoring you for 10 years...
Tim: I've heard you tell that story multiple, multiple times.
Melina: And yet you didn't do it.
Tim: I never asked my dad what really is the number, and then when I did and I found out what that number was, I called my sister immediately. I got off the phone with my dad, I called my sister and said, "This is how much they owe. I have enough money to pay it off. Do you have enough money to cover half, that way it's not just me taking this on?" She said, "I can handle that." And we paid off my parents' mortgage.
Male: Very good.
Melina: Awesome. I know.
Melina: We're giving total snaps up for that, because that is awesome. Man, if there's nothing more...if you get nothing more, really know the numbers. It is all a numbers game, isn't it?
Oscar: It's all numbers.
Melina: Everything is about the numbers.
Andrew: Did you see how offended Tim got when you said, "Numbers are boring?"
Oscar: I did.
Tim: I am kind of a numbers guy.
Melina: Except when it comes to your parents' mortgage.
Melina: And just attaining your own goals.
Melina: There's that.
Melina: All right. So well, I think this is a cool conversation. I hope that we inspired everybody out there to know your numbers, know how many numbers. So there's a few things, I think, that are a good take away from today's conversation, and that is this. Number one, how many conversations do you need to have to back into the next number, which is how many deals you're going to have, which will inevitably back into the next number. Which is how much money you're gonna make.
Which brings us to probably the most important number of all where everything needs to start, which is what are your goals, and how much is it gonna take for you to reach those goals? And don't say financial freedom, because financial freedom is a lie, there's no such thing. You have to know the actual number that it's going to take to get you to the position and the place that you wanna be, and you are probably much, much closer than you even know.
Melina: All right. Everybody, have a great day and go figure out your numbers. I hope the next time I see you, you just walk up to me and give me your number. Just tell me whatever number it is, I'll look forward to hearing that.
Oscar: Don't aim low.
Melina: Don't aim low. Aim high or [inaudible 00:24:30]. All right.
Oscar: Think big.
Melina: All right. Boswells, flipping out.