How To Build A System in Business feat. Rafael Cortez

Rafael: You don’t need to have a team of 10 people to start working a process. (Justin: Thats right?) The stuff that we just talked about, you can do it if you’re a solo operation. (Justin: Yeah), you understand if you start looking at your business that way you’re gonna make money while you’re busy building the business like it goes it goes both ways. (Justin: I love it dude)

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Justin: Yo, yo, what is up everybody? Welcome back to the science of flipping podcast. And as you see, I am still here talking to some of the best experts in the industry trying to give back to you guys. And if you are not watching this on YouTube, go to YouTube, because I got my man Raf Cortez here Rafael Cortez. What is up brother? How are you?

Rafael: I’m doing amazing man living the dream.

Justin: Man. I appreciate you being on.

Rafael: Thanks for having me, man.

Justin: So listen, we are talking all things real estate in what you are known as an expert in organization processes systems. So let’s kind of dive into that I know you have a step by step process that you talk specific to wholesalers through. Let’s jump into it.

Rafael: Yeah. So first of all, thanks for having me. Number one. But yeah, I think I think one of the things that happens especially in wholesaling, right people, and we see it with students all the time where people get caught up in the hustle stage, you know, for for a long, long time without actually building it that uh, that automation is gonna allow you to step away from the business, but at the end of the day, like what are we looking for, right? Are we looking for another just, you know, higher paying job or, you know, a degree of freedom. And if you step away from your business, and it falls to the ground, it’s not really a business. So that’s kind of where this this whole thing, you know, comes in. But I mean, I found it through trial and error, and then you know, trainings and whatever like this is, this is the process that works very well. I use it to my company all the time. And it’s actually like the blueprint that we’re used to, to operate.

Rafael: So six stages, the first one is gonna be sourcing, and it’s you got to find the deal somewhere, right? We call it sourcing, because it changes it’s not necessarily just you know, PPC marketing, it’s SMS, it’s when you understand things as a as a stage, it’s easy to pivot. (Justin: That’s right). And you know, what, like, what are the actions need to be, you know, put into, right, so the first one is going to be sourcing, this is where cold calling happens, we have pre qualifying and that sort of thing. (Justin: Right)

Rafael: The second one is converting we convert leads to prospects. And that’s where you have a little bit of a deeper conversation with with the leads to see if there’s anything there before spending too much time. So for example, your acquisitions, right? You more than likely you don’t want to talk to 1000 people to figure out, you know, that two are interested it’s not even making a deal, (Justin: right)

Rafael: So the second stage is it’s converting the third one is going to be acquisitions, where you negotiate a deal deal analysis, and that sort of thing. And I’ll break down the importance of them all here in a sec, but goes on. You have one job in acquisitions, that’s get the signature Sean taught me that. You have one job one role. (Justin: That’s right). All right. Cool. Go to town on that. And then dispo right? How do you market the deal? How do you send it out? How do you build your buyers list? And these four pretty, you know, pretty standard, most, most wholesalers stop there. (Justin: Yeah). And I think the last few are really the ones that give you that edge in building that business and stepping out of that. That hustle mentality, hustler is a season, Not a business strategy? (Justin: Yeah), so So the fifth one is gonna be measuring so we track KPIs, there are certain things that you key performance indicators, right. And there are certain things in your business that are going to allow you to to understand how your business is doing. The importance of tracking all of this and your actions and all that stuff, is to understand where you’re at in the deal. More importantly, when you hire somebody, when you bring somebody to help you out into the business, where you’re going to plug them into (Justin: Yep), it’s it’s it’s not uncommon, right to see I hired somebody, you know, she’s, she’s my lead manager, but she’s also doing dispo. Yeah, it was actually coordination and all that stuff. So it kind of breaks the chain of flow how as to how it’s supposed to, (Justin: yep), you know, go. And then the last one is improvement. So we measure and improve on the on the fifth and sixth, and this, these are just awareness sessions. Okay, like, what happened to the deals that we closed last week? Did we leave money on the table? Can we improve any of the stuff that we’re doing? So it’s always a forward thinking mentality of going through it? And I’m telling you, man, like these last two, two stages really come in (Justin: measure and improve, right? with the last two). Yeah. They come in and they just become the glue for the business.

Justin: And then that’s once you start getting some traction, because really the first one (Rafael: Yeah), which is sourcing? (Rafael: Yeah), that literally is everything. (Rafael: Yeah). If you don’t have any source of deal flow, then there’s no measuring and approving any of it. (Rafael: Yeah. But that’s that’s a feel to the to the car). That’s everything. And so I think people need to, you know, in our space as we educate and you have a great following and what you do people want to get to scale way too quickly. I’ve seen it too often, right? They want to measure and they want to improve, but they don’t have any deals. (Rafael: Right). Or the other thing I’ve seen in last almost 10 years now is people have plenty of deals. They have sourced great, (Rafael: Yeah), they don’t have to convert. (Rafael: Yeah), they don’t have that number two about how to convert the deal. (Rafael: Yeah). And that is, if you can’t do those one, or twos and everything else, kind of like well, that’s irrelevant, right? Because you don’t know how to actually do what the business does, which is great opportunity, what you said which you just say it a little different than I say, but it’s the same thing, right? Is your exit strategy to convert more deals? Think outside the box? If it is always a cash offer? You’re always the one trick pony. (Rafael: Yeah), then you might not get as many deals you may not convert as well, because you’re just 70% of ARV minus rehab minus wholesale fee. Like.

Rafael: Yeah, you have to be dynamic, man, it’s, the business has evolved so much in the last hell two weeks.

Justin: That’s right. To week, literally, right.

Rafael: It’s insane. Just the, you know, the offer thresholds, understanding the market and, and I mean, that goes a long way. Right. But also having that grip on, on, on the ability to pivot from one offer to the next and just monetizing more leads. It’s, it’s it’s a whole, you know, science behind it, right. But at the end of the day, it really comes down to that and like it really comes down to understanding okay, what can I come in and do for the seller? How can I convert more stuff and close it because somebody else is gonna come in and do it.

Justin: Yeah, that’s, and that’s gonna be huge, you know? So the process of building out this business to treat it like a business, like you said, hustler is a season. (Rafael: Yeah), it’s not a business model. (Rafael: Yeah). Then you said it perfectly is because you but you have to have the hustler to get going. (Rafael: Yeah, yeah, absolutely. It’s a tool) a 100%. And listen, even in growth in it scale, sometimes you’ll have to jump back into hustler mode because you’re at a place that you’ve never been born. So if you never been to that point before, you have to go back into hustle because you’re at a different level. Right? You go from no deals to making $300,000 a year. (Rafael: Yeah). Well, there’s different challenges making $300,000 a year than just getting started.

Rafael: Yeah, it’s a, you have in in a any business, right in any any business, you’re going to have stages. And I’m not talking about the six that we just went through, but you’re gonna have like levels of business level one business where you have a certain degree of revenue coming in certain amount of employees. Whenever you jump into a next level of the business meaning that you generate the more you create more deals, for example, you jump from, from three deals to eight deals or 10 deals a month. (Justin: Yep), your your processes shift, the the ROI and certain things that the return investment that that you’re having, for example, in marketing is going to shift a little bit. And there’s always a period of, of turbulence, like in between (Justin: a 100%) leads. It’s easy to get lost. Like when you’re there, just be aware of your if you’re growing, you’re scaling the company and you’re actually doing more deals. Understand that it’s not going to be as smooth as when you were running three deals solid. (Justin: That’s right), like clockwork (Justin: a 100%) Yeah, that every shift every level, I’m sorry, just calls for that period of turbulence. And that’s what we kind of think settle for a little bit. (Justin: Yeah) yeah.

Justin: If you have to, you know, give some advice, which is what this podcast is about. But what would you you know, offer up the wholesaler who’s just struggling right now? Like they just can’t figure out they’ve been trying, what what piece of advice would you give that wholesaler?

Rafael: At the beginning, go back to go back to basics. Don’t get too complicated with you know, all the different strategies of, of marketing, it’s easy to get caught up in the noise. That’s one thing, go to one strategy that you feel, I mean, I always recommend cold calling. Sure. It does. It does a lot of things. If you’re a new wholesaler and you start cold calling, you’re gonna start to understand the conversations that you need to have when you negotiate. So it builds that, that tenacity, you’re gonna be okay with rejection. And then you gonna understand the lingo. If you’re good in it, if you generate leads, and go straight to closing and negotiating, but you haven’t ever had a conversation, you’re not ready for that, (Justin: Right) So it builds you up anyways, that’s, that’s what I would put out there. You’re gonna do two things, either get the leads through through paid means or you know, elbow grease, one of the two.

Justin: Thats it. (Rafael: Yeah), Do you have a cheaper way (Rafael: you it give enough time to work.) One of the things I’ve found is people don’t or they underestimate the cost of skip tracing. Yeah. And you love batch. I love batch. There are guys is the best skip tracing (Rafael: 1000%) If someone’s just getting started, they may not have the budget to skip trace the volume that’s needed for cold calling. What how do you recommend yourself for that?

Rafael: One thing that you can do, guys is, is go go to your title company. Go to your title company, ask them for lists. They will put you on on a drip campaign. A lot of title companies do this. I do this specifically for like foreclosure campaigns and whatnot. But now they will give you a list. And a lot of times they have the phone numbers in there. So you can request a list from them. If you don’t do a targeted skip trace, meaning that you’re gonna pull a foreclosure list still from a title company, you can get that from multiple places. Talk to you talk to the reps, they’ll give it to you for free and and have lookup the properties that have equity on those and then skip trace that lower volume one thing that, you know, you can skip trace those but it lists like that, or the smaller elbow grease type of, you know, lead generation that I’m talking about. Door to Door. I mean, even going out to the door and then putting a post-it on it with your phone number. It think about it as almost like Guerilla Marketing. (Justin: Yeah, a 100%) yeah. Yeah. And uh, and yeah, as far as cold calling, you can get lists and with numbers from title companies, they will have those I mean, we have those on a drip campaign. And they’re free, right? Again, you get what you paid for. So the quality of the data is not gonna be amazing. And they they’re gonna have outdated phones and that sort of thing. But you still have you have something to work with.

Justin: Something’s better than nothing. Right? So (Rafael: Yeah), you know, I believe in one thing, and you guys have all heard CIA, right? Of course. Yeah. Not the government agency. But commitment, intention and action. Yeah. In Action above all else, even if it’s imperfect, even if the phone numbers aren’t great. Yeah. Take the action necessary to actually make your goals come alive. Right?

Rafael: Yeah. When you’re when you’re in inaction, it’s easier to get motivated. (Justin: Yep). It’s easire to get excited. How many times have you seen a man that oh, I’m not getting results, I don’t have you know, I’m not getting anywhere with this thing. (Justin: Right) They have one conversation with the seller that gives them the possibility of a closed, the possibility of a deal and now they’re all fired up. They’re fired up.

Justin: It’s amazing, and then that momentum leads into an actual deal. Right? And that’s it. And so, guys, um, Raf is process oriented. I will promise you this is someone that is more brute force. He is the process behind brute force. There’s a necessity for both right? Because brute force can only get you so far. Before you’re just scatterbrained. (Rafael: Yeah). So I know, there’s a lot more people who are probably more brute force than process oriented. You need both, right? And so you need to build a an actual business. So why not start by the right way by trying to build a business versus just brute force hustle, no organization, no process? Take what he’s saying seriously, right? Understand that there should be a process behind every action you’re doing. And that’s what’s really going to help you achieve results.

Rafael: Yeah. And before we sign off, it’s it’s important to understand that you don’t need to have a team of 10 people to start working a process. (Justin: That’s right) The stuff that we just talked about, you can do it if you’re a solo operation. (Justin: Yeah). If you understand and you start looking at your business that way you’re gonna make money while you’re busy building the business like it goes it goes both ways. (Justin: I love it dude).

Justin: Tell people where to find you dude.

Rafael: Social media, RAFAEL CORTEZ CEO My YouTube channel is there so pretty pretty active there.

Justin: I appreciate you come on man (Rafael: Oh, that’s) love it. (Rafael: Thank you so much man) Yeah, man, it’s been great. Guys. Look him up, follow on. very process oriented, very CEO mindset type of stuff. You absolutely need that and again, appreciate you being on man. (Rafael: Thank you man) Right on. See you guys on the next podcast episode. Peace.