Today, we're talking with Yassin Shaar. Yassin is a real estate mogul. A real estate impresario who's taking over the rent-to-own world with a very focused market and we spent a lot of our time talking about how to position Yassin as a market maker.
We talked about a concept where the mechanics are that we’re looking at being a market maker and the specifics are that he's looking for people who have homes they would like to sell.
We know there are people who want to buy homes, rent to own but they can't afford a down payment for whatever reason right now. Then we have investors who would like to buy homes with a presale that people would like to ultimately own.
That triangulation as a market maker is where the opportunity lies.
Listen in, and you'll see how the idea unfolds, and keep in mind, this concept can apply to so many things where there's an opportunity for you to be a market maker.
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Transcript - More Cheese Less Whiskers 067
Dean: Who is this?
Yassin: Hello, hello. Yasin here. How's it going, Dean?
Dean: I'm fantastic. How are you?
Yassin: I'm real excited to be talking to you. I'm super pumped.
Dean: Me too! We got a whole hour to hack some evil schemes here.
Yassin: Okay.
Dean: I know a little bit of the back story since we've had some conversations on Go Go Agent, but for this context, why don't you go ahead and set the whole context for us and then we can jump off from there.
Yassin: Will do. Great, and I'll try to keep it short. When I get excited, I start talking fast and I talk a lot. I'll try to keep it short.
Dean: Okay.
Yassin: I'm in the real estate market, and my niche is rent-to-own lease purchase, right? Very hot market. What I do is basically I work with real estate investors, wholesalers and agents and brokers, and I handle their seller and buyer marketing. In a nut shell, that's what I do.
Dean: Okay. And where do you do that? What market?
Yassin: Today we're in about nine different markets in Cincinnati, Ohio, Las Vegas, Seattle, Saint Louis, Colombia. We're in a bout nine markets.
Dean: You're all over the place. Okay, great.
Yassin: Yeah.
Dean: What's working so far? How would you describe how it works, in your ... Yeah.
Yassin: That's a great question. My story with real estate is interesting. I've been doing this for five years, but I got involved in different projects outside of real estate over the years and then earlier this year I decided to just let go of everything and double down on real estate.
How I started and how I typically do things is I started working with investors and wholesalers. Basically, what I do is I do seller marketing. I go after for sale by owner and for rent by owner, I reach out to them and see if they'd be interested in buying a house for a couple of years and then selling. Basically, I pre-screen the leads over e-mail and text, and once we've pre-screened them I send them over to the clients to close them.
In our world, it's called an assignment. Basically we put the prop on their contract, we first act as the tenant buyers because when I started this I started working with investors and wholesalers, not agents. So, these folks don't have a license. What we do as investors or wholesalers, we put it under contract and we act as the tenant buyers. We pay an earner's fee, $100, whatever, and we have the right to re-assign that contract to someone else. Within 30 days, if there's enough cash flow and the deal, we've got it under contract for 1,200 and we can rent it out for 1,500, we stay in the middle and we sublet it.
Now, if there's not enough in the middle, we just re-assign it to a tenant buyer, someone who doesn't have good credit but they don't want to keep renting, they want to move into a house that they can own, they're tired of renting, so we just give them the contract and we get out of the deal.
Dean: Okay.
Yassin: We make some money.
Dean: How does the actual rent-to-own portion of it work? Walk me through one of the scenarios here.
Yassin: Yeah. That's a good question. Say we find the seller who's trying to sell their house top-dollar because they don't have equity, right? They can't get a realtor because they can't afford a six percent, so they want to sell on their own, but they don't have equity, so they can't negotiate on the price.
Dean: Right.
Yassin: Their house sits on the market for a while, say 30 days or so, and now maybe they want to relocate or something is happening in their life, they just need to move that house.
We come in and say, "Hey, you want 100,000? We're going to give you 100,000, and we're not even going to negotiate on the price. We'll give you exactly what you want, however, you need to give us a couple of years to buy the house. Meanwhile, we'll be renting from you." Right?
So that's how we do it. We get it for 100,000, say, and say the rent is $1,000. It depends if we can make money on it. If we can act as the tenant buyers and we can sublet it for, say, 1,200 a month, so we then do that. That's what's called sandwich lease, we sandwich it. If there's not enough money in the middle, we just say we got it for 100,000, we sell it for 105, and we make the difference.
So, we say, "Hey Mr. Tenant Buyer, I have this contract. If you want it, I'll give it to you for 105," and then we take 5,000 and then we get out of the deal and connect the buyer and the seller.
There are more terms involved, but that's 5,000 to you.
Dean: I got you. So now, when do you get paid? How do you get your 5,000?
Yassin: I charge a monthly fee.
I'm sorry, how do I get paid as the service provider, or how do I get paid as the investor?
Dean: Either way. So, if you come to somebody and you say, "Listen, we're going to buy your house but we're going to do that in a couple of years, so right now we're going to rent it."
I'm looking at the different transactions that you have to negotiate. You have to negotiate with a seller to say, "Instead of selling your house right now, I'm not going to give you 100,000 now, I'm going to sign an agreement to pay you $1,000 a month for the next two years for that."
Yassin: Exactly.
Dean: And then you sell it to me. Do we negotiate the selling price now and close that we're ...
Yassin: Yeah, we set the price right now.
Dean: We set the price at 100,000 now, and we're going to close in two years, and in that time I'm going to pay you $1,000 a month until then.
Yassin: Absolutely.
Dean: So, you get that agreement secured first. Is that what's happening?
Yassin: And I have 30 days to close. Exactly. And I have 30 days to close.
Dean: Okay, 30 days to execute on that. So then in that 30 days, what you're looking for now, is a rent-to-own buyer who wants to buy a house, and you say, "I'll sell this one to you for $105,000, and you rent it for $1,200 a month."
Yassin: Yeah, if it makes sense, absolutely. Yeah.
Dean: Or $1,000 a month, or whatever it is.
Yassin: If they want to stay in the deal, yeah.
Dean: Okay. And then when do you get your 5,000?
Yassin: Right. So, we'll say, "Hey, it's 105, and you need to put $5,000 down payment, which will be applied back towards the purchase price."
Dean: I got you.
Yassin: That's how I make my 5,000.
Dean: Okay, great.
Yassin: Now, if you want to exit the contract, to say it's just at the top of the market, 1,000 is on the higher end of rentals in the area, and so there's not enough money for me to stay in the deal, so I'll say, "Hey, Mr. Tenant Buyer, let me give you that contract, you take the deal, and I'll give it out to you. You give me 5,000 down payment, you put it towards the purchase price, I'll take that, and then I'll connect you with the seller, and I'm out."
Dean: Okay.
Yassin: You deal with the seller.
Dean: Yep.
Yassin: Directly.
Dean: Okay.
Yassin: And that's what typically usually happens. Only 10% of the deals we stay in the middle. 90% we just re-assign them.
Dean: Right, so you just get paid the 5,000 for connecting with the ...
Yassin: Sometimes it's more. It depends on the market. In a good market like Oklahoma City, it's a $5,000 average deal size. In Seattle, we're talking 10, 15, $20,000, depends on the property.
Dean: Sure. Okay. And then what's working now and what's not working? Where do you see the opportunity?
Yassin: I love this question. We've always been limited by how many properties we can get under contract. Our revenue, or the revenue of the client that I'm working with, or sometimes I'm even a partner, it's been how many contracts can I get this month that I can re-assign? Not everyone wants to do a rental. Some people say, "I just want to sell out right."
Dean: Right.
Yassin: So, you're limited by the number of contracts you can get, and in any given market, maybe two, three percent of the available listings on the market are for lease purchase. The amount is huge. There's a lot of people who may not have the best credit score, they can get a loan but they're tired of renting, so the demand, we usually have five to ten buyers for every rent-to-own property we get, but we can't do anything with those buyers because there's just not enough inventory.
What happens is- and this is changing the game now. Since 2012, a hedge fund was found and these folks saw the opportunity and this hedge fund, what they're doing is they're buying properties for cash, off the NLS, and they're selling them back on lease with the option to purchase. These guys solved the supply issue, and they're killing it. Last year they did 3,000 transactions, this year they're on target to do 4,500.
Dean: Yeah. You look at that, if they're paying cash for the properties and they're getting ... There was a company Blackstone that was doing the same thing here in Florida.
Yassin: Exactly. They're backed by Blackstone.
Dean: Okay.
Yassin: This hedge fund is backed by Blackstone.
Dean: Okay, so same thing. What a brilliant move that was. You look at ...
Yassin: They're dominating the market, monopolizing it.
Dean: Because they're taking away the irrationality because they've got the cash and they're getting a pretty good cap rate on the cash just because of the rental rates. A few years ago, they bought over a billion dollars worth of real estate ...
Yassin: Exactly, two billion.
Dean: ... in Central Florida.
Yassin: Wow. Yeah, exactly. So, what's happening is these folks rely on realtors to bring in the tenant buyer.
Dean: Okay.
Yassin: Like an affiliate's program where they say, "Hey Mr. Realtor. You want to do more deals? You want to tap into a gold mine? Here's what you need to do. Bring someone who has these qualifications: a credit score of 550 or more, more than $50,000 a year in household income, blah blah blah, get them to put in an application." Once we approve them, we're going to say, "Hey Mr. Realtor, this client is approved for a house that rents for 1,500 and sells for $200,000. Go find them a house."
Dean: Yeah.
Yassin: Once you find them a house and we approve it, we're going to pay you up front. Now the realtors always used to shy away from rent-to-own because they don't make their commission up front. They only make a leasing commission, and then they need to wait one, two, three years until the tenant buyer exercises their option to get their full commission.
So, for a realtor, they weren't really interested in doing lease purchase, but now the opportunity has opened up.
Dean: Yeah, because now the realtors can get excited about they get paid from the seller, who's somebody's buying now. That makes total sense.
Yassin: This is where I'm pivoting now. I'm pivoting to work with brokers and agents so I can get into business with that hedge fund. So, I'm coming to the broker and agent, I'm saying, "Hey Mr. Agent, here's what we're going to do now."
You teach this a lot, Dean, and you're spot on. The ultimate leverage in a real estate business is a listing, because the listing multiplier. You can get a buyer for that listing, you can get buyers for other listings. All that good stuff. So, what I'm coming and doing right now is I'm saying, "Mr. Broker, here's what I'm going to do. I'm going to help you get listings, and then we can market and bring in a ton of tenant buyers. We'll put one of these tenant buyers into that house, we'll do a nice commission assignment fee on it." But the real goal is to bring in as many tenant buyers as we can and put them through that hedge fund and call on them.
Dean: Yeah.
Yassin: That has now become my focus. Now, my challenge is lead generation companies are a dime a dozen. I'm not the only one who can come to those folks and say, "Hey, let me get you more tenant buyer leads or seller leads." I'm maybe a first mover, but I can see that catching fire. Immediately people start seeing our success and other folks in that. Everyone's going to jump on it.
So, what I'm trying to now build a platform. I've created rentertoowner.com and I'm building a platform where I can list all these houses on my website and what I want it to become is a destination, develop a competitive advantage that I'm not just another agency, I'm not just another marketing company. I actually have a platform where sellers come to us, list their house for rent-to-own, and buyers come to us to get into a rent-to-own house. So, when we work together, Mr. Broker, you're leveraging a platform just like if you're working with Zillow.
So, look at me as a Zillow for rent-to-own. Now I've put myself into a whole different category, at least that's my thinking. That's what I'd like to discuss with you is how can I create a competitive advantage that's defensible. It's nice and everything that I can run some campaigns, get them money, but maybe at some point they will say, "Why do I need you? Maybe I can do this, what you're doing. Facebook ads? That's fine. I'll buy a course or whatever."
Dean: Right.
Yassin: You're too expensive.
Dean: Well, part of the thing that I think you have a neat opportunity is not so much to build an overt platform, and by that I mean something that both sides know that this is a platform, but to create almost a blind platform in that you're triangulating. You're finding people who want to rent to own independently of finding people who want to sell their house, and your wisdom of who those people are, your collective database, is your competitive advantage, right? That's your tool.
Aside from finding rent-to-own sellers, that's a non-issue when you're going to buy the house through the hedge fund.
Yassin: Yeah, I don't need that seller. Yeah, exactly. I can run a buyer lease.
Dean: You don't need to convince the seller to rent-to-own their house.
Yassin: I've been making my money ... I'm sorry, go ahead.
Dean: They want to get their money now. You've got the opportunity to create a dream come true for both sides, because a dream come true for the seller is that they can call you and you'll buy their house. That's a really interesting place to come from. You don't have to find sellers who are also interested in renting to own, because it doesn't matter. You just have to find sellers who are interested in selling their house.
Now, the good news about finding sellers like that is that there's other marketplaces for them because realtors would be completely excited to have. You could refer the seller to a realtor to list the house traditionally. You could also, if you have what the catalyst is here, the market maker opportunity, is when you have a buyer and you have the renter all lined up for the buyer.
I think it's really creating a little marketplace that you're completely in control of. You're a market maker. You're not creating a marketplace. Being the market maker is the competitive advantage.
Yassin: Exactly. Shall we get it into a little bit tactical level?
Dean: Sure, yeah.
Yassin: Is that okay with you?
Dean: Yeah.
Yassin: Okay, let's say, "Hey, I found a broker who wants to work with me in Portland, Oregon." Actually, I was just off the phone with a prospective broker over there and we're talking about the opportunity.
So, that hedge fund is in that market, they're buying property that I just found a broker. Let's get to work. What would be your first step, Dean, to start becoming a market maker in that market?
Dean: You got to separate it on both sides, right? You've got to first of all find buyers who want to rent to own. That's going to be a pretty easy proposition, because those words rent to own are going to be welcome words for somebody who they want to own, they've got a little bit of money, but they don't have the credit to get a traditional mortgage yet, right?
Yassin: Correct.
Dean: That's primarily who is most interested in.
Yassin: Yes sir.
Dean: Now, what do you do with the people who they have good credit and they want to own, but they don't have down payment money? Can you help people like that?
Yassin: That's a very great question. This hedge fund doesn't do the traditional rent-to-own. That's the thing. How they do it is they say, "I will buy the house for cash, I buy it for 100,000, and here's what we're going to do. You're going to rent it. You're not going to put a down payment, actually Dean, so if you don't have a down payment that's fine. We don't want to over burden you with a down payment. You're just going to put two months work of deposit, which is refundable if you don't end up buying the house. I'm going to give you up to five years to exercise your option. Meanwhile, you're just going to be renting. You're going to pay me $1,000, and if you wish to buy in the first year, you're going to pay me 120,000, Dean."
Dean: Yeah.
Yassin: So, now every year, there's going to be an increase in the purchase price and in the rent amount. I suggest, Dean, that you get started working on your credit score and so you can buy the house from us a soon as possible so you don't have to stay renting. They don't take down payment, and they don't apply any rent towards the purchase price. That's kind of give and take. You don't have to put a down payment, but you're not going to get any rent credit. It's a regular lease, but we're going to give you the option to buy it.
Dean: Yeah. If so, perfect.
Yassin: Yeah, there are folks who don't need the hedge fund qualification, but they do have a down payment. That segment they'll need to wait until we get a property under contract that's for rent-to-own, and we can put them into that house.
Dean: Right.
Yassin: It's just inventory. There's a limitation. That's the constraint. The rest of the folks who qualify for the hedge fund, we can just put them through.
Funny enough, about five percent of people we come across, they do qualify for a loan but they just don't know it or they need to do some simple stuff on their credit and they would qualify.
Dean: Yeah.
Yassin: We got someone like that in Colombia. She came in thinking that she needs to go through this rent-to-own program and whatnot, we got her to talk to the mortgage broker and actually the mortgage broker was able to qualify her for a loan. That was awesome. So, we just put her into a house.
Dean: Okay.
Yassin: So, there are three segments. High down payment, doesn't qualify for the hedge fund, that says we put them in a rent-to-own house. No down payment but qualifies for the hedge fund, we put them into the hedge fund, and then there are folks who just qualify for the loan.
Dean: And what would be the qualifications for the hedge fund?
Yassin: That's a good question. 550 credit score or more, $50,000 in household income, you can afford $1,250 in rent or more. The hedge fund buys properties from 100,000 up to 750.
Dean: I got you.
Yassin: That's the range. Properties start the rent at 1,250, and you can't be in a pending bankruptcy. It's okay if you got discharged, but you can't be in a pending bankruptcy. You have not evictions in the past three years, and you have a stable income. You've been in your job for quite a while and stuff like that.
Dean: Yeah, okay. So, there's lots of those people, I'm sure.
Those words rent to own, that certainly is a good word to find them.
Then, on the other side, all you're really looking to do is no different than a real estate agent would be looking for listings. You're just looking for people who are thinking about selling their house, or about to put in on the market, and that's where I would look at it that my approach would be to do the getting listings program that we have in Go Go Agent.
Yassin: Right.
Dean: Pick an area of homes that are ... Let's take Portland, for example, where you are, is to find the specific neighborhoods and areas that have the exact homes that would be the best right in the middle candidates for the rent-to-own program. What would be the things? When Blackstone was buying all the properties here in Florida, they were buying ...
Yassin: I know the exact communities they're buying in.
Dean: They were buying single family homes, three or four bedroom with a garage, and detached homes not older than 1978.
Yassin: Yeah, 10 years. No, they're even now more strict. They're like can't be more than 10 years, usually.
Dean: There you go.
So, you pick the neighborhoods where those houses are and just start the getting listings program there, looking for those people. Then there's a marketplace for those leads regardless. All they need to know is that you have a buyer. When you're looking at it, I would start building everybody who responds to the post cards as a secret inventory that you have of people who are thinking about or are more likely to sell their house in the next 12 months. We overlay that data with a Google map where you can import and then it shows with pins where those homes are, and then when you find the rent-to-own buyers who want to rent-to-own, it's almost like if you've got the hedge fund situation, you don't even necessarily need the listing. You can still get them in another house, you can take that ...
Yassin: That's what I'm doing right now.
Dean: Yeah.
Yassin: I'm running Facebook ads. I picked five listings that are available on the market for sale, and it's like, "Hey, you can lease one of these houses with the option to purchase. Here are the estimated selling prices or whatnot." I'm leveraging what's already on the market. It needs some work, but I'm getting leads anywhere from 10 to 15 dollars. I'm getting that down. That's what I'm getting tenant buyer leads for right now.
Dean: Yeah. Some inventory that you could have would be the HUD homes as well as an opportunity for that, because anybody can bring a buyer for those. Part of the good news is when you've got a nice listing that's already somebody living in it, it's more likely that it's going to be a move-in ready. Is the hedge fund doing any repairs or any updates or anything?
Yassin: No, they don't want to do any. Well, it's simple, I mean, $10,000 or less. They don't get into ...
Dean: We're not going to re-carpet and do ...
Yassin: Yeah, no rehabbing, no rehabbing. Slight cosmetics. A sink, stuff like that, carpeting, yeah. But other than that, they disqualify.
Dean: Yeah. Perfect.
This is kind of like that triangulation with a bit of a moving sidewalk, in that you've already got a potential buyer. Now, will they work with anybody, or have you got a relationship with them?
Yassin: With who? The hedge fund?
Dean: With the hedge fund, yeah.
Yassin: They have an affiliate program. I'm not in direct contact with the hedge fund, it's through the broker or the agent that I work with. They have an affiliates program. You can apply to it as a broker, and then you go from there. Just start bringing some buyers and properties and we'll approve them and we'll pay you.
So, they're actually representing the fund in the transaction.
Dean: Got you.
Yassin: The broker. They're not representing the tenant buyer, because the tenant buyer is not actually the customer. They're bringing them along the journey.
Dean: So great. You're saying there are different things, right?
Yassin: We're very flexible in our go-to market strategy. We can leverage existing listings and market them like even though this is for sale, you can actually get it for a lease with the option to purchase. Here's how.
Dean: Yeah.
Yassin: Then we can go after our own listings, like oil wells. We can create our own oil wells ...
Dean: Yeah, that's right.
Yassin: ... and market in areas that meet the hedge fund criteria, get that listing, and start advertising it as a lease with the option to purchase. That's maybe even a benefit to the seller. You can say, "Hey, Mr. Seller, I actually have a hedge fund who's buying these properties."
Dean: Right.
Yassin: "I have a cash buyer, so if you list with me, I already have a cash buyer and you'll get paid for cash," but we actually then turn it around and advertise it for lease with the option to purchase. Either way, you know what I mean? The goal is to get ...
Dean: Part of the goal is that you don't have to advertise. The great thing about rent-to-own is that you don't have to advertise a specific house. You can advertise that concept as a lead generator, because you can represent a rent-to-own program.
Yassin: That's great.
Dean: Or a book on rent-to-own.
Yassin: Let's dive deeper here.
Dean: Yeah.
Yassin: Can we dive deeper here?
That's been one of the things that I've been going through. Why would I work with you? Why should I go through you when I can go through a realtor who's actually working with a hedge fund?
So, one of the thoughts that I've been going through is look, Mr. Tenant Buyer - let's assume, Dean, you're the tenant buyer. Dean, yes, it's great that we'll work with the realtor, but did you know that most realtors really they just want to close on the deal and get out of the transaction. Statistics show that less than 30% of people who get into rent-to-own houses actually close on it.
That’s where you get into a house and now you have to move out into another house because you couldn't close on it, right Dean? So here's what we do, Dean. When you work with me, not only I connect you with a local realtor, with our preferred local realtor, but I'm going to actually work with you on fixing your credit. I'm going to also connect you with a credit score or recommend a credit repair guy who's going to put an action plan together with you on how long will it take you to actually buy this house and what you need to do to buy this how. What are the things you need to fix on your credit to get into house? We'll be with you along the way, the whole thing. Finding a house, fixing your credit and getting you a mortgage, and that's the value proposition of why should you go with Yasin rather than go straight with a realtor as a program.
Dean: Yeah.
Yassin: What do you think?
Dean: I think that's exactly where ... That's a longer explanation of what I was describing. It's not about needing a specific house to do that, but to be able to talk about this program. It's a service that you're helping people all the way through.
Now, you also then, when they take somebody through this program, you're going to match them with an investor. You don't necessarily even have to say about the hedge fund specifically, right?
Yassin: Absolutely.
Dean: Right.
Yassin: I don't want to open up a whole other side to the business, but once the platform has been established two years down the road, actually I can replace the hedge fund with my own investors.
Dean: Right. You can find investors who want to invest in real estate short-term with no hassles of dealing with tenants like a completely ...
Yassin: I love it.
Dean: You manage that whole process there.
Yassin: Absolutely.
Dean: And what kind of ROI could somebody get on a $200,000 house?
Yassin: I ran through the numbers with my client in New Jersey who's a realtor and investor and we're working on this model. This hedge fund is not in New Jersey, so we're doing the traditional get a proctor on their contract and re-assign it. Cash on cash, on the first year you get four percent cash on cash. If the tenant buyer decides to exercise their option the first year you get nine percent return on your investment, cash on cash. You put 100,000, you get 9,000. Four percent income, rental income, and then five percent on top of that if the tenant buyer exercise their option to actually buy the house.
Dean: For 105,000, or whatever. Right.
Yassin: Yeah.
As an investor, you'll make nine percent cash on cash. You put 100, you'll get nine. That's realtor taxes, vacancy, all that included. We end the financial model on a spreadsheet.
This hedge fund has been doing it for a while. They kind of dialed in. They have sort of an algorithm. I'm sure we can get those numbers up, but they're very selective about the communities. I don't know what they're doing behind the scenes and how they select the community, but I'm sure there is a sweet spot in there where an investor can put 100 and maybe make 15% in a select community versus another one.
Dean: Right.
Yassin: It's going to be a process for us to figure out the algorithm. What are the best investment properties that we can get for lease with the option to purchase? Let's call a turn-key lease option.
Dean: Yeah.
Yassin: So, now we're selling turn-key lease option saying, "Mr. Investor, I found this tenant buyer. This is their situation. We found them a house that you can get 10, 20, whatever the number is, and here's the deal. It's a turn-key deal. And we have a property management that can take that." Yeah.
That's the vision, Dean. The first time I actually put it out there, I'm so glad that you kind of stole it. That's what I'm trying to get, but first I'm like okay, let me focus now. That's the big vision. Have a turn-key, some sort of a business model, but for now, I need to dial in the sales and marketing to get those tenant buyers and all that, and then once I have that dialed in I can then add that piece to the model, the investor turn-key.
Dean: Yeah, so part of it is that there's nothing beneficial about the scale of it because it's just brokering these individual connections. When you start thinking about it at scale, it's just a replication of the micro transaction. You just need to have a system that finds one person who wants to sell their house and one person who wants to rent-to-own, and you've got the hedge fund or an investor who wants to fund on a short-term basis.
That triangulation is where your opportunity is, is to be a market maker, a system that finds those people independent of each other and then matches them up. You're matching them up.
Yassin: Absolutely.
Dean: Because they would not be able to find each other.
Yassin: Exactly.
Dean: It's your magic of knowing that they exist.
Yassin: That's where the competitive advantage is.
Dean: That's your competitive advantage, right.
Yassin: Boom, boom, boom.
Okay, so as you can see, there are so many different sides to this, and I'm committed to cracking the code.
Dean: Yep.
Yassin: Where do you focus right now?
Dean: Yeah.
Yassin: Dean, if you were in my shoes ... Currently I'm in nine different markets working more on the assigned. In three markets we're starting to do this with the hedge fund. We're starting to get results, we're starting to get things off the ground, but I'm more established on the seller side, and that's what's really now making me money.
If you were in my shoes, Dean, where would you start? Would you go after all these sides simultaneously, or would you start with one thing?
Dean: It's one of those things where you need all three to make it work, right? I think if the hedge fund is a viable option ...
Yassin: For now.
Dean: And you have a relationship and they're crystal clear guidelines that you don't have to wonder whether this is going to work out. If you completely understand and they're willing to buy it, you've got that stable. You've got that well that you can go to and you know you're going to put your bucket down and the money's going to come up, because you've met their criteria.
So you've got that stabilized.
Yassin: Under their mercy. Maybe they say, "Hey, we're not buying any more houses in this area," but for now, I agree. For now, we've got that piece dialed in, let's not worry about it.
Dean: Right.
Yassin: For now, let's play their game until we figure the other pieces out.
Dean: So now the two things that you need to focus on are finding the people who want to rent to own and finding the people who want to sell their house, right? So, right now, if you look at the catalyst of all of it is going to be ...
The catalyst is going to be that you have a buyer that wants to rent to own and meets the requirements of the hedge fund.
Yassin: Absolutely. I mean, the sellers are kind of available in the market. They're on the MLS, they're on Craigslist, they're on Zillow.
Dean: Yeah.
But then the next layer of it is that you want to be able to start finding your own sellers because that's going to increase the amount of money that you can make. But in the short-term, initially, you need to be able to find the buyers.
Yassin: Absolutely.
Dean: I would start that engine right now. And that could be Craigslist, it could be print ads, wherever you can find buyers. You could do self things, public notice flyers.
Yassin: Historically, we've been able to get most of the tenant buyers off of Craigslist, but man, now they're super strict. It's not scalable, I can't control it. Sometimes they publish the ad, other times they ghost it. That's where a lot of the people are, that's where we've been able to get, but it's not stable. I'm now doing Facebook ads. Now, I did a competitive analysis, and so there are people out there advertising here's a list of rent-to-own on Ad Words, but they're really monetizing the lease with a credit repair affiliate offer. It's kind of I don't want to say a scam, but it's a way to hook them in.
What I've been finding is there are people on Ad Words running ads, people in the rent zone in Houston, rent zone in Florida, putting ads there. Another way, in my conversations with other folks working with home owners, they've been actually targeting rental properties. They're doing direct mail. They're going after rental properties in the approved communities, and they're sending mailers, post cards.
Dean: Yeah.
I mean, that's a great idea within the apartment complexes where people are renting.
Yassin: Yeah.
Dean: That's certainly a direct way to find them because you know that everybody in there is renting, and if they knew that there was a way for them to rent-to-own, that becomes a really viable lead source.
That's the thing I love about ... If it's at all possible to do direct mail in any situation, I will always use direct mail because it's so targeted.
Yassin: Oh, wow.
Dean: I just think post cards are still an underrated opportunity. Just high ROI.
Yassin: I love it. Let's come up with a campaign here together, and I'll test it out and then report back. Happy to spend 1,000 or two on it and see what happens.
What would be the props activator two and three.
Dean: Yeah, that you want to get people to raise their hand, right? You select a single target market. You can get a list of people who are in apartment complexes that have rent that's similar to what they could get this house for.
Yassin: Right.
Dean: You don't want them to go to a place where the rents are lower.
Yassin: Right.
Dean: Yeah, yeah.
Yassin: Yeah.
Dean: You want to go to some of the higher priced rentals, or get a list of people who are renting homes, already single family homes in those neighborhoods, which you can also get.
Yassin: I can figure out if I do a little bit of Google search, but off the top of your head do you know any list providers or list brokers that can give ...
Dean: Yeah, yeah. My guys who we use are prospects plus.
Yassin: Okay, and they have consumer data?
Dean: Yep, they've got all the data that we need. You find those people, then it's a matter of the post card that you're going to send. It would be a matter of going through the exercise of creating a word pallet for what would be the power words that are amplifiers for this for people, right? Those words rent to own are great words.
Yassin: Yeah.
Low credit's okay, no down payment, stop wasting money on rent.
Dean: Yeah, describe the whole situation, and offer a book that describes a process of how to rent to own. That would be the first thing that I might test. Or, I may even bring in some example properties that they could buy, like different case studies, examples.
Yassin: Would you send them to a website? Like, you send a post card, hey, claim your report and here's what you'll find in this report and here are the benefits with all the power words.
Dean: Yep.
Yassin: And so, would they go to a website, or call this number and we'll mail you a report? What would be the next step for them to take?
Dean: Yeah, to go to a website, just a landing page to leave their name and their address, their contact information. That would be the easy thing. Or, to call and leave their information on a pre-recorded message.
Yassin: Text their number, I can have an automation.
Dean: Yep.
Yassin: Text your address and I'll ...
Dean: Yeah, in your Go Go Agent account, you've already go the ...
Yassin: Exactly. That's what I'm thinking.
Dean: ... voice touch. You've already got everything you need, yeah. You've got the landing page, you've got the voice touch. With voice touch, you can also have people text their email address to you, and it'll automatically put them into your Go Go Agent account and trigger an auto responder. Yeah.
Yassin: Very cool. So, would you send them an actual report?
Dean: You just want to get people to raise their hand.
Yassin: Or keep it digital, Dean?
Dean: I want to get the physical ...
Yassin: I know these are nuances, but I'd love to know what your take on it.
Dean: I want to get their physical address.
Yassin: Okay.
Dean: Now, that's another good thing about mailing post cards is that you can also now even if you just get their name and their email address, you can match the name to the address of the post card that you mail so you know that when Dean Jackson responds that you look on the list and Dean Jackson lives at 22 Graystone, or whatever the address is. You don't have to ask for somebody's address because you have their address already, you know?
Yassin: I'm sorry, I didn't get that.
Dean: Well, compared to if I'm doing Ad Words or Facebook ads, I don't know where those people live, right? Getting their name and their email address isn't enough, because I didn't have their address in the first place. If I mail a post card and you go to a landing page and leave your name and your email address, I already have your mailing address because I sent you the post card.
Yassin: Right. So if we're targeting an apartment building, we know that they live in that apartment building, not necessarily which apartment, but we know that in the building.
Dean: Well, it depends if you're doing a list of owners or whether you're doing a EDDM mailing to apartment complexes or something. That would be different. Whenever you don't know the address, you're going to have to get it, so they'll have to leave their address.
Yassin: Right.
Dean: Either way, because it's so compelling, people are going to be willing to do that.
Yassin: Absolutely, absolutely.
Dean: You can always do a progressive landing page where you can have the first part be their name and their email address and then the second part can be their mailing address, so no matter what, you at least get their name and their email address.
Yassin: Right.
Dean: Yeah.
Yassin: I mean, you can get a little bit more sophisticated with it. The goal is to go simple, but you can have a unique link to each apartment and I can have it generated so if they land on the landing page, it's like a U to N variable, so okay, this is apartment 101.
Dean: Right.
Yassin: Go to link and I can be like okay, they came to this website. Now I can go after them in a multichannel marketing campaign. I can send them more post cards, emails, I have all their contact info.
Dean: Right.
Yassin: Love it, love it.
Dean: Yeah.
Yassin: And then I take the conversation from there. How would you continue the conversation? The way we have it right now is I have a Facebook ad, they go to the landing page with a list of properties, and then there's contact agents on that landing page. They put in their information, name and email, and then on the second page there's set up an appointment. So, they actually schedule an appointment. They book a call, free consultation with the agent. That's how they, if you want to call it, funnel.
Dean: Right.
Yassin: How would you structure the conversation? Would you transition over to a phone?
Dean: I would look at how are you going to get them to take the next step. The next step is potentially going to be to come to, I might do, a rent-to-own workshop at the library so that you're steering people towards something, so they can come and learn about this whole process in one thing, or do it as a webinar. You could test it.
Yassin: What about an automated webinar? Yeah, yeah. Absolutely.
Dean: You can test both. Then, you would do something like the way we do with the buyer stuff for us, a daily tour of rent-to-own homes.
Yassin: Love it.
Dean: Right? Join us for ...
Yassin: That would be cool.
Dean: ... a tour.
Yassin: Yeah.
Dean: Which is really because you're going to show them homes that meet the qualifications, you know? The types of homes that they could buy, but not until they know what the deal is, what the process is that they qualify.
Yassin: Right.
Dean: And then you could have a custom rent-to-own report where it shows them the types of homes that they would be qualified.
Yassin: Right.
Dean: In order to know this, you need to know their income and you need to know their ...
Yassin: Absolutely. Right, so that's the thing. We can't know. What I'm doing right now, is when they get up to the landing page and they opt in, there's a series of questions they need to answer. There's do you have a credit score of 550 or more. We're kind of qualifying them up front. The only way to know if they qualify is to apply.
Dean: I would wait to engage with them a little more, and then qualify them in moving towards their desire to do it rather than up front where you're trying to scrub them. That's what that feels like more than anything. It feels like you're trying ...
Yassin: Actually what's happening is people are lying. I got on the phone with a guy, and it's like I thought you had an income of less than 50,000? He's like well, I didn't feel comfortable telling you that I make ...
Dean: Right.
Yassin: I was like okay. So yeah, and that happened earlier this week. I was thinking about it. Should I just take off all this survey stuff?
Dean: Yeah.
Yassin: Okay, so what you would ask them is once they ... Send them the post card, they've opted in, they got the report, and now I've invited them to a webinar.
Dean: Yeah.
Yassin: On the webinar, I'll say, "Now you need to apply. Here's the deal," and I explain here's all that good stuff and then towards the end of the webinar, on the close, I'll say, "Here's the link. Go ahead and apply." Because this week I'm doing on the weekend I've rented a bus and I'll be taking some folks around the area showing them some of the properties, blah blah blah, but you got to apply." That's where you would ask them to fill out this sensitive information, income and stuff?
Dean: Yes, but I would re-frame. I would test better words than apply. I would use more amplifiers than filters. You're getting the information.
One of the things we do with buyers in a traditional real estate situation is offer people a free home loan report, where rather than insisting that they get pre-approved ... Pre-approved and apply and all things like that make it seem more like you're trying to filter them. But if I say to people, if I can give them a home loan report, where if we say, "Listen, we monitor hundreds of different loan programs to find the best-" This is what we'd say for our home loan report is the best interest rates, the lowest down payments, the lowest total cost loans and we put all of our findings together in a custom home loan report.
Yassin: Love it.
Dean: That sounds like instead of me sitting on one side of the desk saying to you, "Give me your information and I'm going to either approve of you or deny you," it's saying, "I'm going to come over on the same side."
Yassin: No one wants to be at that. Right.
Dean: Yeah, I'm going to come over on the same side of the desk as you and we're going to look at all of these options that are out here for us.
Yassin: Love it.
Dean: Right.
Yassin: I love it.
Dean: So you want to make it seem like ...
Yassin: It's a custom house search. It could be hey, you know, because I need to know a bit more about what fits your criteria. I'd love to know a bit more about you and I'll send you a custom house search, a list of 20 to 50 properties you can check out and if you'd like to schedule a tour I can definitely take you on a tour to see some of those houses.
Dean: Yeah, exactly.
Yassin: Boom. Man, you're a genius.
Dean: Thank you. I've been thinking about this for a long time and experimenting with the words and all that. That's just the psychology of it.
Yassin: Love it.
Yeah.
Dean: I think you got a great opportunity there.
Yassin: Opportunity. Absolutely.
Dean: We're working on something like the down payment assistant. I'm working on a first time buyer program right now, and that is similar, but this rent-to-own is a really nice opportunity for people.
Yassin: I appreciate you giving me your advice and taking some time here. I hope folks listening to this podcast will benefit from this, and I'm always testing, as you've seen in your community Go Go Agent, I'll be testing everything that we've talked about and you can hold me accountable and I'll be posting results in the Go Go Agent forum, so if folks want to see the type of results we've been able to get as a result of this call, check out the forum.
Dean: Perfect. I love it.
Yassin: Love it.
Dean: That's awesome. Very exciting!
Yassin: Alright, I'll take you on the next call, the Go Go Agent call, and I'll let you know how it goes. I appreciate you. You're such a great guy, you're always giving. I have a couple people in my life who are mentors. A great guy among them is a great Travis Seagull. I have a couple people like you who are giving and I just appreciate you for being in my life and for setting some time here aside to give me your advice. I appreciate you giving.
Dean: Awesome. I appreciate it. Thanks, Yasin.
Yassin: Have a great day, buh-bye.
Dean: Thanks, you too. Buh-bye.
And there we have it. That was a fun episode. I think we've got a lot of opportunity for many people to adopt this idea of being a market maker. Any time that you are connecting to people. The mechanics of it - that's why I said at the very beginning - the mechanics are the same whether it is Airbnb, where they are matching people who have homes or rooms that they want to make available in the times that they're not there, and people who are traveling to other areas and don't want to stay in a hotel. That Airbnb interface is being a market maker. I've mentioned it a lot with our lakefront homes in real estate, looking for people who are going to sell their lakefront homes and people who are looking to buy lakefront homes. We've had these same conversations with business brokers, people who are looking for people who want to sell their businesses and at the same time looking for people who want to buy businesses and being a market maker to put these people together.
There's a lot, lot, lot of opportunity like that, lots of different ways to put some details onto those mechanics, but the principles are the same: being exactly what that person wants.
I'm excited that we get to have these kinds of conversations. I'd love to hear about your market maker opportunity. If that's something that you've got, I'd love to have a little series of market maker episodes, and I would encourage you, if that's something that you have, to go to morecheeselesswhiskers.com and, first of all, download a copy of the More Cheese, Less Whiskers book, that way I'll know you're one of us and we'll give you all the announcements every time a new episode comes out. I send a wonderful email out two times a week with a different tip about being a cheese maker, let's call it that, focusing on this philosophy of more cheese, less whiskers. I'd love you to be part of that.
Click on the 'Be a Guest' button, and let me know in that area that you think you might be a good fit for a market maker series, because I'd love to build out the different types of categories here so we can show lots of different opportunities for being a market maker.
That's it for this week. Tune in next time and we'll hatch some more evil schemes have a great week.